Gauhati High Court
WA/159/2025 on 30 October, 2025
Page No.# 1/11
GAHC010043952025
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/159/2025
1.FOOD CORPORATION OF INDIA,
REPRESENTED BY ITS CHAIRMAN CUM MANAGING DIRECTOR,
BARAKHAMBA ROAD, NEW DELHI 6
2: EXECUTIVE DIRECTOR,
ZONAL OFFICE (NE),
FOOD CORPORATION OF INDIA,
G.S. ROAD, ULUBARI, GUWAHATI, PIN 781007.
3: GENERAL MANAGER,
FOOD CORPORATION OF INDIA,
REGIONAL OFFICE, ASSAM REGION,
GUWAHATI, PIN: 781008.
4: ASSTT. GENERAL MANAGER,
FOOD CORPORATION OF INDIA,
REGIONAL OFFICE, ASSAM REGION,
GUWAHATI, PIN 781008.
........Appellants
-VERSUS -
G B CHOWDHURY HOLDING PVT LTD
A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT SARUMOTORIA,
OPPOSITE DISPUR CAPITAL COMPLEX
, DISPUR, GUWAHATI-6,
REPRESENTED BY ITS DIRECTOR SMT. SUJATA GURUNG CHOWDHURY.
........Respondent
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-B E F O R E -
HON'BLE THE CHIEF JUSTICE MR. ASHUTOSH KUMAR
HON'BLE MR. JUSTICE ARUN DEV CHOUDHURY
For the Appellant(s) : Mr. P.K. Roy, Senior Advocate assisted by Mr. S. Chakraborty,
Advocate.
For the Respondent(s) : Mr. B. Chakraborty, Advocate.
Date of Hearing : 30.10.2025.
Date of Judgment : 30.10.2025.
JUDGMENT & ORDER (ORAL)
(Ashutosh Kumar, CJ)
We have heard Mr. P.K. Roy, learned Senior Advocate assisted
by Mr. S. Chakraborty, learned Advocate for the appellants/Food
Corporation of India (FCI) and Mr. B. Chakraborty, learned Advocate for
the sole respondent.
2. The appellant/Corporation has questioned the judgment
dated 23.01.2025 passed by a learned Single Judge of this Court in WP(C)
No.66/2024, holding that the contract between the appellant and the
respondent was validly discharged on issuance of a No Dues Certificate
and refund of the Security Deposit of the respondent.
Under such circumstances, the imposition of a notice of refund
by way of Demand Notice dated 04.08.2023, was non est, void and
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therefore, liable to be quashed.
The learned Single Judge further directed for refund of the
amount of Rs.2.11 crores, which was deducted from various other
contract dues of the respondent; which was made payable by the
appellant/Corporation within a period of 45 days, failing which, interest
at the rate of 9% would be charged on such amount.
The learned Single Judge, however, declined to direct for the
refund of Rs.25 lakhs, which was not protested to by the respondent
immediately after the discharge of the contract.
3. The necessary facts for disposal of this writ appeal are as
hereunder:
The Food Corporation of India (FCI) had floated a Notice
Inviting e-Tender on 11.03.2015 for transportation handler of food grains
and other articles from ExRailway Siding/Food Storage Depot (FSD)
Changsari to FCI FSD Tangla via weighbridge covering a distance of 90
Km.
4. The respondent was one of the participant tenderers, who was
selected and appointed as the contractor on 20.06.2015. The contract
subsisted for 2(two) years i.e. from 20.06.2015 to 19.06.2017, which was
further extended up to 22.07.2017.
5. After the completion of the contract, the respondent raised
the bill on the basis of the terms of the Contract and the distance; which
was assessed by the Corporation between Changsari to Tangla.
As it appears from the records that during the extended period
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of the contract with the respondent, an attempt was made to again
measure the shortest motorable distance between Changsari to Tangla
via the weighbridge and it was found that the distance was 74 Km.
However, a confusion remained all through whether it was the shortest
viable route. The distance between the two destinations though should
remain invariable, but it depends on various other conditions, namely,
road blockade, diversions, construction, change of course etc.
When this assessment was made, the respondent was not
taken into confidence and he was absolutely unaware of the
methodology of the appellant/Corporation in measuring the shortest
motorable distance from Changsari to Tangla.
However, the report in that regard was submitted and
accepted on 29.04.2017, holding the shortest motorable distance to be
76 Km and not 90 Km.
6. Though the respondent protested such action of the
appellant/Corporation by submitting various representations, on
29.07.2017 and 25.09.2017, but to no avail.
7. Based on that, recoveries were made from the respondent,
calculated on the newly assessed distance of 74 Km, but such recovery
was limited from 29.04.2017 to the extended period of contract with the
respondent till 22.07.2017. An amount of Rs.25 lakhs was recovered from
the respondent.
Thereafter, the No demand Certificate issued by Area
Manager, FCI was accepted by the Assistant General Manager of the
FCI, who also confirmed and agreed for refund of the security deposit to
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the respondent.
The security deposit of the respondent was also returned to
him.
8. True it is that the respondent did not challenge the imposition
and recovery of Rs.25 lakhs for the reason that it was calculated from
29.04.2017, when the report was submitted about the distance between
2(two) destinations till the extended period of contract with the
respondent.
This obviously meant that the road blocks, hindrances,
diversions were removed and later, at the time of reassessment, the
distance was found to have shortened.
However, it appears that later, in the internal/domestic audit of
the appellant/Corporation (FCI), it was found that the respondent was
wrongly paid the bills raised by him on the basis of the distance between
the two destinations to be 90 Km; since on 29.04.2017, the distance had
been re-assessed at 76 Km.
Thus, a further Demand Notice of Rs.2.11 crores was slapped
on the respondent, which was recovered from the other contractual
dues of the respondent with the appellant/Corporation.
9. This was challenged by the respondent before this Court vide
WP(C) No.66/2024, wherein the learned Single Judge found such
decision of the appellant/Corporation to be absolutely unjustified,
arbitrary and beyond the terms of the contract with the respondent.
10. The learned Single Judge took note of two conditions of the
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tender, namely, Clause B(II) and Clause XVIII(a) of the General
Information to the Tenderers. For the sake of completeness, we deem it
appropriate to extract the afore-noted two Clauses:
"B.(II) The tenderer must get themselves fully acquainted with the size and
location of godowns vis-à-vis loading/unloading points before submission of the
tender. The rates quoted by Tenderer shall be deemed to have been done after
such acquaintance. No Tenderer will be entitled to any compensation arising out
of any misapprehension in this regard. Before tendering, the Tenderer must also
get acquainted with the conditions of route to be taken by him for transportation
of food grains/suger etc. Once the tender is submitted, the Tenderer will be
deemed to have fully acquainted himself with the route and he will not be
entitled for any compensation on account of road blockade, diversions etc. on the
route."
"XVIII.(a) (i) All rates will be treated as firm for the period of the contract. No
escalation whatsoever shall either be claimed or considered except as
provided under sub-clause (b) below.
(ii) The rates for transportation of foodgrains etc. are on the basis of net
weight of foodgrains.
(iii) No separate remuneration will be payable for the distance
covered by the loaded lorries for the return journey, or from garage to
place of loading, or back to garage.
(iv) For the purpose of calculation of transportation charges, the
distance shall in all cases be rounded off to the nearest Kilo Meter.
(v) The distance will be reckoned as fixed by the Chief Engineer,
PWD, or an officer nominated by him, or by the General Manager, or
verified by an officer acting on his behalf and rounded off to the
nearest Kilo Meter, which will be final and binding on the contractor.
(vi) No compensation shall be admissible to the contractor in respect
of detention of trucks at the godown or any other loading/unloading
points or any other place unless such detention is of an extraordinary
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kind. The decision of the General Manager in all such matters shall be
final."
11. A bare reading of the afore-noted Clauses indicate that even
though the distance between 2(two) destinations were provided in the
tender paper but the tenderer had to be satisfied after acquainting
himself by visiting the sites that the correct distance was being agreed to;
for, no tenderer otherwise would be entitled for any compensation arising
out of any misapprehension in this regard regarding the distance. In fact,
a tenderer was also get acquainted with the conditions of the route to
be taken by him for transportation of the goods and once the tender
was submitted, the tenderer would be deemed to have fully acquainted
himself with the route and he would not be entitled for any
compensation on account of road blockade, diversions etc. on the
route.
12. It appears that the respondent did not disagree or raise any
objection with respect to the distance cited in the tender i.e. 90 Km,
which was agreed to by the respondent without a demur.
13. The respondent discharged his contract successfully and,
therefore, the period of contract was further extended for a little more
than 1(one) month. During this extended period of contract, some steps
were taken for reassessment of the shortest motorable route between the
2(two) destinations in which it was found that the distance would be 74
Km and not 90 Km.
This assessment was post the discharge of the contractual
obligation of the respondent. The assessment did not disclose that such
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reduced distance was always available to a motorist/transporter
between the 2(two) destinations.
14. The communication between the various authorities of the
Corporation indicate that an assessment was made with respect to the
distance, taking into account the diversions, road blocks and road
conditions permitting the big size lorries to ply for such distance.
This, therefore, presupposes that the distance between the two
destinations was not always 74 Km or 76 Km but because of diversions
existing earlier, the appellant/Corporation, on a safer side, had assessed
the distance to be 90 Km with which the respondent as a tenderer did
not have any objection.
15. The question with which the learned Single Judge was
confronted with, was whether after the completion and discharge of the
contractual obligation, such reassessment of distance was permissible
and whether after such assessment, the distance could be modified to
the disadvantage of the respondent/tenderer.
16. Clause XVIII(a), referred to above, would not justify any
escalation or reduction under any count and such terms of the contract,
though heavily loaded in favour of the Corporation, could not have
been used to the disadvantage of the tenderer/respondent.
17. In contractual obligations, the principle of contra proferentem
applies and, therefore, the learned Single Judge in his assessment found
that it was absolutely unjustified for the appellant/ Corporation to have
recovered Rs.2.11 crores from the respondent as excess payment
because of the wrong assessment of the distance.
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18. The learned Single Judge concluded that the distance was
provided in the tender paper by the appellant/Corporation which was
never objected to by the respondent.
19. It was also not clear to the learned Single Judge as to under
what authority or under which provision of the contract, a fresh
assessment of the distance of the 2(two) destinations was undertaken by
the authorities of the appellant/Corporation and for what purpose.
20. Be that as it may, fortunately, for the respondent, initial
deductions were made from the date when such report of lesser
distance between the two destinations was submitted and, therefore, the
respondent in his wisdom and fairness did not object to the same.
21. The later demand notice after 5½ years of the discharge of the
contract and return of the security deposit of the respondent, was found
to be totally unjustified.
The manner in which the money was recovered from the
respondent was also castigated upon.
22. Under such circumstances, the learned Single Judge directed
for refund of Rs.2.11 crores to the respondent within a period of 45 days,
failing which, the appellant/Corporation would be liable for 9% interest
thereupon.
23. There is another side to the coin which also need to be noted
by us. If the distance between the 2(two) destinations where the goods
were transported by the respondent under the contract was less than 90
Km, the respondent was over-paid as the bills were raised on the basis of
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per metric ton goods/per Km, which might amount to unjust enrichment.
But in the present case, there is nothing on record to indicate that for the
period that such distance was billed for and paid by the
appellant/Corporation, it was not 90 Km but 74 Km.
24. There is a fair chance of distance of 90 Km, being the correct
distance between the 2(two) destinations so far as the shortest
motorable route is concerned, or else, such an assessment would not
have been made by the appellant/Corporation in the first instance.
With the repair of the roads and removal of hindrances and
road blockades, the distance may have lessened. That, but would not
justify any recovery for the earlier bills raised and paid to the respondent.
25. It does not appear to be a case of unjust enrichment of the
respondent and even if it does, the appellant Corporation would be
blamed for the same.
26. The reasoning of the learned Single Judge appears to us to be
unassailable.
27. It is trite now that in appellate jurisdiction, if two views are
possible, it would not be necessary to substitute the other view unless the
view adopted by the learned Single Judge is found to be perverse or
illogical.
28. Taking into account the facts in the afore-noted perspective,
we do not find any reason to interfere with the judgment of the learned
Single Judge.
29. We, however, modify the impugned judgement only to the
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extent that if the refund to the respondent has not been made uptil now,
the same shall be done positively, within a period of 60(sixty) days,
without incurring any liability to pay interest thereupon.
30. With the above observation and direction, the writ appeal
stands disposed off.
JUDGE CHIEF JUSTICE
Comparing Assistant
