Delhi High Court
M/S Naryanan Consultancy vs Indian Oil Corporation Ltd. And ... on 23 March, 2009
Author: S.Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 24.02.2009
Pronounced on: 23.03.2009
+ W.P. (C) 18968/2006
M/S NARYANAN CONSULTANCY ..... Petitioner
Through: Mr. R.P. Bhatt, Sr. Advocate with
Mr. S. Udaya Kr. Sagar and Mr. Venayagam,
Advocates.
versus
INDIAN OIL CORPORATION LTD. AND ORS. ..... Respondents
Through: Mr. Prabhat K. Srivastava &
Ms. Shweta Mishra, Advocates.
Ms. Geetanjali Mohan & Ms. Vaishnavi,
Advocates for Resp-3-4.
Ms. Ruchi Gaur Narula, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers Yes
may be allowed to see the judgment?
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be Yes
reported in the Digest?
S.RAVINDRA BHAT, J.
%
1. The Writ Petitioner in these proceedings under Article 226 of the
Constitution of India seeks various directions against the first respondent
(Indian Oil Corporation Ltd, hereafter called "IOC") to pay service charge of
Rs.15,69,597/- with interest and also pay further service charge amounting
to Rs. 2,00,70,000/- and settle its bill dated 9.9.2004. Similar directions to
settle the petitioner's claim towards payments are also sought.
2. Briefly the necessary facts are that the IOC erected a link line (chord
line) between Baroda - E Cabin to Chhaya Puri Railway Station of Western
Railways in 1971. This line was used by the IOC to transport rakes booked
from Bajwa to north of Vadodra and were directly dispatched thus reducing
11 Kms. Apparently, in spite of this, the Western Railways incorrectly
continued to charge more freight by including the 11 Kms. distance. The
question of refund of excess freight charges had been engaging the attention
of IOC and the Western Railways. The petitioner claims that being aggrieved
by Railway's inaction in regard to refund of such excess payments, the IOC
entered into contract with it for consultancy service to secure settlement of
such outstanding claims. The consultancy contract, entered into on 1.7.2001
was valid for one year and extendable with mutual consent of the parties.
Clause 2 of the contract defined the scope of service; the petitioner as
Consultant was responsible for pursuing the matter with the Railways and
getting IOC's claims settled. The petitioner was entitled to charges for the
service rendered, in accordance with the Schedule - A to the contract; the
same is in the following terms: -
Sr. No. Items of Works Schedule of Charges
1 Claim for compensation of (c) Rupees One Thousand
missing tank wagons and per Tank Wagon.
shortage/leakage claims. (d) Rupees Seven Hundred
per Tank Wagon.
(a) Cases beyond and upto
31.03.1997
(b) Cases after 31.03.1997
2 Reduction/Abolition/Refund of (a) i) 9 % of amount
freight charges from Railways realized from the
on - Railways within 4
months.
(a) Regular Claims (ii) 8% of amount
realized from the
Railways beyond 4
months but less than
7 months.
(iii)7% of amount
realized from the
Railways beyond
7 months.
(b) Repudiated and Time (b) 15% of amount realized
Bar/Suit Bar Claim. from the Railways.
3 Refund of amount wrongly 15% of the amount realized
recovered by the Railways or or abolished or withdrawn or
any debit raised by the adjusted/credited by the
Railways for various services Railways and accepted by the
such as siding charges/shunting IOC.
charges/To pay surcharge/cost
of Railway staff/penalty
overloading/wagon
registration/shunting-siding
charges/Electrification/overhead
maintenance etc./debit
raised/recovered on various
grounds by the Railways
including reconciliation of
accounts etc.
4 Freight audit of dispatching 15% of the amount realized
locations under Western from the Railways.
Region/IOC.
3. The petitioner claims to have followed up and "chased" 38,305 claims
for the period 20.10.1996 to August, 2002. The initial term of the contract,
which ended in end of June, 2001 was extended by mutual consent by a
year. It is asserted that out of the 38,305 claims pursued, the petitioner was
able to successfully secure settlements of 14,348 claims; 23,957 such claims
continued to be pending. It is further alleged that IOC was beneficiary to the
extent that Rs.14.7 Crores were settled out of a total quantum of Rs.33.92
Crores. The petitioner, therefore, claims that having regard to the progress
achieved, the IOC should have ensured that its dues were paid.
4. The petitioner has filed copies of statements showing claims for refund
for various periods when the consultancy contract subsisted between the
parties. It also has placed reliance upon tabulated claim statements and
several documents in support of its demand that the dues should be properly
paid. It refers to and relies upon letters dated 28.9.2004, 1.11.2004,
3.1.2005, 18.1.2005, 31.3.2005 & 24.11.2005 etc. in support of the
allegation that by its efforts IOC benefitted to the tune of Rs.15.32 Crores
despite which, its proper dues have not been paid.
5. The petitioner contends through its senior counsel, Shri R.P. Bhat, that
all the facts necessary to afford relief in these proceedings exist with records
and though facially the dispute pertains to facts in reality the IOC cannot
deny having benefitted from the efforts exerted by it. It is contended that
having availed all the services and obtained the refund of substantial
amount, the IOC cannot refuse to honour the petitioner's bills dated 1.9.2003
and 9.9.2004 for Rs.15,69,597/- and Rs.2,00,70,000/-, respectively.
6. Reliance is placed upon the decision of the Supreme Court in ABL
International v. Export Credit Guarantee Corporation of India Ltd. 2004 (3)
SCC 553 to say that whenever a State or State agency acts unreasonably,
and contrary to public good in any aspect of its functioning including in the
contractual domain, it does so contrary to the mandate of Article 14 of the
Constitution of India. The Court, under Article 226 of the Constitution, can in
such cases make appropriate orders to mould the relief and secure ends of
justice. Reliance is also placed on the judgment reported as Mahabir Auto
Industries v. Indian Oil Corporation 1990 (3) SCC 752, to contend that every
facet of state functioning has to be informed by reasons and free from the
vice of arbitrariness.
7. The IOC in its return, does not dispute entering into a consultancy
contract with the petitioner on 14.6.2001 or that its terms were extended. It,
however, states that out of the claims to an extent of Rs.33.92 Crores,
Rs.1,31,95,854/- were realized during April-May, 2003. The IOC contends
having paid Rs.19,79,378/- to the petitioner in June, towards consultancy
charges. It submits that a further amount of Rs. 1,04,63,983/- was realized
in September, 2003 after expiry of the consultancy contract. According to
the IOC, the railway authorities informed it (the IOC) on 23.7.2004 that
claims to the extent of Rs.14.7 Crores had been processed for adjustment,
yet no such amount was disbursed and the IOC was constrained to prefer
claims. This amount has not been realized till date. As a result, the IOC did
not pay consultancy charges to the petitioner. It is further submitted that
the amounts realized, especially after the consultancy contract ended, were
through the independent efforts of the IOC with the Western Railways and
the petitioner, therefore, cannot claim credit.
8. The IOC points to the Clause 1 of the agreement, which spells out the
tenure i.e. one year. During the period the IOC was entitled to terminate the
contract after giving 30 days notice. It is contended that such being the
case, the entitlement of the petitioner has to be proved in regard to the
amounts realized after the contract ended.
9. The Western Railways too has filed the counter affidavit. Apart from
generally denying the facts, it states that disputes between the IOC and itself
towards refund of alleged excess claims are sub judice and pending before
the Railway Claims Tribunal, Ahmedabad and that the said Tribunal is the
most appropriate forum to adjudicate the dispute. It has produced the copy
of the claim filed before the Tribunal, whereby the IOC has claimed a
direction for payment of Rs.18,36,25,964/- as refund for the period 20.10.96
to 30.9.99 with interest. It is contended that this Court should not take
cognizance of the disputes sought to be raised since writ proceedings are not
appropriate for adjudication of the facts.
10. The above discussion would show that there is no serious dispute
about facts pertaining to the consultancy contract or its terms. The
petitioner's mandate was to follow up with the claims for refund lodged by
the IOC with the Western Railways. The IOC admits having received some
refund. It concedes paying a sum of Rs. 19,79,378/- as consultancy charges,
to the petitioner. However, its contention is that, vis-à-vis amounts received
after the expiry of the consultancy period/contract, the petitioner cannot
lodge any claim towards such fees or charges. It avers, besides, that as
regards the other claims that were allegedly processed by the petitioner,
disputes are pending adjudication before the Railway Claims Tribunal.
11. Now, the jurisdiction of the Courts under Article 226 is recognized to be
of wide amplitude. Long ago in Dwarka Nath v. I.T.O. AIR 1966 SC 81, the
Supreme Court held that Article 226 confers a wide power on the High Courts
to reach out to injustice, wherever it is found. The court held that High Courts
can also issue directions, orders or writs in the nature of prerogative writs
and that the provision enables the High Courts to mould the reliefs to meet
the peculiar and complicated requirements of this country.
12. The Courts have further expanded the scope of the writ remedy by
holding that wherever an agency performs a public function or a part of its
functions are relatable what are termed as "public law duties" regardless of
the origin of such duties i.e. statutory or non statutory, such actions can be
scrutinized by judicial review under Article 226 of the Constitution (see Binny
Ltd. v. V.V. Sadashivan & Ors. 2005 (6) SCC 657). In the decision of the
Supreme Court in ABL International cited by the petitioner, the Court no
doubt stated that where essential facts are capable of adjudication by the
High Court under Article 226, it would be inequitable to relegate the
aggrieved party to the remedy of a Suit or civil proceedings. The Court also
relied upon certain previous decisions.
13. This Court is, of course, mindful of the authority of the Supreme Court
in ABL International (supra) and Mahabir Auto Industries - also cited on
behalf of the petitioner. Yet the facts of this case disclose that the question
of what is payable to the petitioner is not admitted by the respondents.
Concededly 38,305 claims were preferred by it. The Railways does not admit
to having allowed all of them; even the IOC does not concede to the Railways
having settled even the claims mentioned by the petitioner. It only admits to
having received a small part of the total claim of Rs.33.92 Crores. Further
disputes between the IOC and the Western Railways are pending
adjudication before the Railways Claims Tribunal. There, is therefore, dispute
on the essential facts.
14. In these circumstances, it would be imprudent and inexpedient for this
Court to examine the feasibility and soundness of the petitioner's claim.
Besides, assuming that the Court can consider the dispute, it would be also
at some stage necessary to delve into the facts particularly as to the
petitioner's claim for entitlement of the amounts received after the contract
with IOC ended. The IOC has entirely disputed the petitioner's right to
receive any consultancy charges or the amounts received after its contract
ended. According to the IOC such amounts were received by independent
initiative exerted on its part. It is evident that though this Court's jurisdiction
to examine and decide on questions of facts may not be entirely ousted and
in given circumstances if deemed appropriate, relief can be granted, yet the
facts presented in these proceedings are not such that they can be
appropriately or conveniently examined. They would necessarily involve
recording of evidence and consideration of arguably voluminous documents
and materials, for which Article 226 proceedings would be inappropriate.
Lastly, the petitioner has approached this Court after a considerable delay.
Even according to its averments, the payments were due sometime in
October-November, 2002; yet it has chosen to prefer the present
proceedings in December, 2006. In the circumstances, this is not an
appropriate case for exercise of jurisdiction under Article 226 of the
Constitution of India.
15. For the above reasons, the Writ Petition cannot succeed; it is,
therefore, dismissed. There shall, however, be no order as to costs.
S. RAVINDRA BHAT
(JUDGE)
MARCH 23, 2009
/vd/
