Himachal Pradesh High Court

Bali Ram Thakur vs The Union Of India And Another on 27 December, 2022

Bench: Tarlok Singh Chauhan, Virender Singh

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

                                                        CWP No.            8073 of 2021





                                                       Reserved on: 28.09.2022
                                                       Decided on : 27.12.2022





    Bali Ram Thakur                                                       ...Petitioner

                                             Versus





    The Union of India and another                                        ...Respondents


    Coram

The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. The Hon'ble Mr. Justice Virender Singh, Judge.

    Whether approved for reporting?1        No.



    For the petitioner:                 Mr. P.S. Goverdhan, Advocate.




    For the respondents:                Mr. Balram Sharma, Deputy Solicitor
                                        General of India.





    Virender Singh, Judge.

Petitioner-Bali Ram Thakur, by virtue of the

present writ petition, filed under Article 226 of the

Constitution of India, has sought the indulgence of this Court

to issue the appropriate writ, order or direction, claiming the

following substantive reliefs:

Whether Reporters of local papers may be allowed to see the judgment?

"(a) To issue necessary writ, order and direction to the respondents to refer the dispute arisen between the parties to the committee of the Arbitrator with further direction to follow the procedure as

.

contemplated under Sections 325 to 330 of the

Cantonment Act, 2006, in view of clauses 25 and 30 of agreement dated 1.8.2021 Annexure P-2.

(b) To issue necessary writ and order thereby

quashing impugned order dated 14.12.2021, Annexure P-12, being wrong and illegal.

(c) To issue necessary writ, order or direction to the respondents thereby allowing the petitioner to collect

the fee at the toll barriers as per the terms of the agreement and further to complete the tenure of the contract/agreement dated 1.8.2021 Annexure P-2, till its expiry i.e. 31.3.2022, and to restore the possession

of the toll barrier in favour of the petitioner.

(d) To quash and set aside the notice dated 14.12.2021 Annexure P-13, notice dated 7.12.2021, Annexure P-15 and notice dated 27.11.2021, Annexure P-16, being wrong and illegal."

2. The petitioner has invoked the extra ordinary

jurisdiction of this Court, on the ground, that the respondents

had floated the tender, through e-auction, on 4th March, 2021,

for collection of the toll, from the vehicles, entering in the

limits of Cantonment Board Subathu, Tehsil and District

Solan, H.P., for the period, commencing from the intervening

night of 31st March, 2021 to 1st April, 2022.

3. The petitioner participated in the tender process and

had been declared as successful bidder. Accordingly, the

contract was awarded to him. The codal formalities were

completed and formal agreement (Annexure P-2), in this

regard, was reduced into writing on 1st August, 2021.

4. After commencement of the contractual period,

according to the petitioner, the toll collection, for the first

month, remained as normal, but, thereafter, due to the

restrictions imposed by the Central Government, and, followed

by the State Government, in the wake of COVID-19 pandemic,

collection of the toll had drastically come down, resulting huge

financial losses to the petitioner.

5. Despite suffering the huge losses, according to the

petitioner, he was under contractual obligation to pay the

tender amount to the respondents in a periodical manner, as

per Clause 1 of the agreement, dated 1 st August, 2021.

Although, the petitioner was regular in payment of the

installment in advance, but, due to the COVID-19 restrictions,

he could not pay the said amount within time. Due to the

imposition of the curfew, the petitioner represented to the

respondents to consider the loss being suffered by him, but, the

said representations were not considered by them.

6. Vide letter dated 10th May, 2021, the petitioner wrote

a letter to respondent No. 2 to permit him to either close the

toll barriers or to compensate the losses. The said letter was

also not responded by respondent No. 2. Thereafter, the

petitioner has made various communications, vide letters,

dated 3rd June, 2021, 8th August, 2021, 11th June, 2021, 21st

June, 2021 and 27th July, 2021. Instead of acceding to the

requests made by the petitioner, as referred to above, the

respondents had kept on demanding the installments from the

petitioner. Thereafter, he had again made representation on

4th August, 2021.

7. When no response was given by respondent No. 2,

the petitioner was compelled to issue legal notice, dated 20 th

September, 2021, requesting the respondents to settle the

dispute by holding a meeting. The respondents were also

requested to refer the matter for arbitration as per Clause 30

of the agreement, dated 1 st August, 2021. Instead of adhering

to Clause 30, the respondents, according to the case set up by

the petitioner, replied the notice on 30 th September, 2021, in

which, the claim of the petitioner has been disputed and also

refused to adhere to comply with Clause 30 of the agreement

on the ground, that the claim of the petitioner, is not a matter,

which could be referred to the arbitration.

8. When respondent No. 2 had not adhered to Clauses

25 and 30 of the agreement, in stricto sensu, the petitioner

filed a petition under Section 9 of the Arbitration and

Conciliation Act, 1996, seeking the interim relief, before the

learned District Judge, Solan. The said petition was dismissed

by the learned District Judge on 14 th December, 2021, on the

ground of maintainability.

9. After the decision rendered by the learned District

Judge on 14th December, 2021, respondent No. 2 had forcibly

taken the possession of the toll collection barrier from the

petitioner without serving any notice upon him. The said act

is stated to have been done, by respondent No. 2, in violation

of the terms and conditions of the agreement (Annexure P-2),

as, instead of serving a notice upon the petitioner, they had

issued notice, dated 14th December, 2021, through whats app

message. The petitioner has informed this fact to the police

vide Annexure P-14. Now, according to the petitioner,

respondent No. 2 is threatening to re-auction the toll collection

barrier to some third person.

10. It is the further case of the petitioner that he had

already paid a sum of ₹ 68 lakh to the respondents till

November, 2021, which includes a sum of ₹ 14 lakh, as

security deposit.

11. Alleging against respondent No. 2, that the terms

and conditions of the agreement, dated 1 st August, 2021, have

not been adhered to, it has been pleaded that the respondents,

instead of compensating the petitioner, had taken the stand

that the matter is not liable to be referred to the Arbitrator.

As such, the said action of respondent No. 2 is stated to be in

dereliction of the provisions of Articles 325, 326 and 327 of the

Cantonment Act, 2006.

12. Similarly, the decision of the learned District Judge,

in dismissing the application under Section 9 of the

Arbitration and Conciliation act, is also stated to be in

violation of Sections 325 to 330 of the Cantonment Act, 2006.

13. On all these submissions, the petitioner has sought

the reliefs, as referred to above.

14. The writ petition has been contested by the

respondents by taking the preliminary objections qua the

maintainability of the writ petition and that the petitioner has

not approached the Court with clean hands. The factual

position regarding the auction of the barrier points of Subathu

Cantonment for collection of vehicle entry fees has not been

disputed. It has also not been disputed that the contract for

collecting the entry fees from the intervening night of 31 st

March, 2021 to 1st April, 2022 had been awarded to the

petitioner and possession of the barrier point was handed over

to him and the terms and conditions were reduced into writing

on 1st August 2021.

    15.      Elaborating
                   r       the   terms   and     conditions         of    the

agreement, it has been pleaded that the contract amount of

₹ 1,33,10,000/-, had to be paid, in six equal installments, as

per the timeline, mentioned in the agreement, but, the

petitioner could not comply with the said time schedule and

stopped the payment of the installments with effect from 1 st

August, 2021 to 15th August, 2021 on the plea to compensate

the loss caused to him due to COVID-19 restrictions.

16. According to the stand taken by the respondents,

assurance was given to him to compensate the loss, but,

despite the said assurance, the petitioner has failed to deposit

the installments, as per the agreement. When the petitioner

failed to make the payment, as such, he was asked by

respondent No. 2, vide letter, dated 30 th September, 2021, to

make payment of outstanding dues, failing which, the contract

would be terminated.

17. Aggrieved from the said notice, the arbitration case

was filed by the petitioner before the District Judge. In the

said proceedings, reply was filed and a committee was

constituted by the Board to assess the actual compensation to

be given to the contractor in terms of the provisions contained

in Clause25 of the contract/agreement in compliance of Court's

order, as communicated by the Cantonment Board Legal

Advisor, vide his letter, dated 21st October, 2021.

18. The said committee, after hearing both the parties,

furnished his report, dated 6th December, 2021, holding therein

that the petitioner was entitled to get relief of 35 days, as

calculated therein, during which, there was no vehicular traffic

and the said amount has been assessed by the Committee, as

₹ 12,76,301/-. The said amount is stated to be in addition to

the amount, which the petitioner had collected during those 35

days.

19. The District Judge, after going through the said

report, had dismissed the said arbitration case on 14 th

December, 2021. Thereafter, the physical possession of the

said barriers was taken on 14th December, 2021 at 6.30 p.m.

However, in compliance of the order, dated 23 rd December,

2021, passed by this Court, the physical possession was again

handed over to the petitioner on 24 th December, 2021 at 3.40

p.m., but, the petitioner had willingly stopped the collection of

the entry fee and again handed over the physical possession of

the said barrier of the Cantonment Board on 18 th January,

2022 at 6.00 p.m.r

20. The said action, according to the respondents, was

taken by the petitioner, in view of the letter dated 7 th January,

2022, issued by the Government of India, Ministry of Defence,

whereby collection of vehicle entry fees has been stopped to be

collected, by the Cantonment Boards, with immediate effect.

21. As regards the restrictions imposed by the

Government in the wake of COVID-19 pandemic, it has been

pleaded that the State Government of Himachal Pradesh

declared Corona Curfew after more than a month with certain

conditions on 5th May, 2021, where inter-state and intra-state

movement of public transport vehicles was restricted only up

to 50% and subject to SOP issued by the Transport

Department, however, the operation of the public stage and

contract carriage was suspended only with effect from 10 th

May, 2021, except essential services, vide order dated 8th May,

2021. The said restrictions remained in force up to 14 th June,

2021. The said period of 35 days was duly considered by the

Committee. As such, the compensation for the said period was

given to the petitioner.

22. Reiterating their stand that the petitioner has failed

to make the payment of the installments, as per the

agreement, Annexure P-2, it is the further stand of the

respondents that the question, with regard to the losses, which

have been suffered by the petitioner, has duly been considered

by the Subathu Cantonment Board. The meeting, in this

regard, was convened, but, the petitioner did not turn up even

after lifting of the COVID-19 restrictions.

23. The writ petition has further been contested by the

respondents on the ground that even after lifting the corona

curfew restrictions in the State, the petitioner continued

earning huge commercial gain from the said barrier. It has

not been disputed that the petitioner has not served legal

notice, dated 20th September, 2021, but, the said notice was

duly replied, vide letter, dated 30th September, 2021.

24. Reiterating that the grievances of the petitioner, if

any, fall within the purview of Clauses 24 and 25 of the

contract agreement (Annexure P-2), it is the stand of the

respondents that the matter would be placed before the Board

in its general/regular meeting.

25. So far as the prayer of the petitioner, qua referring

the matter to the Arbitrator, is concerned, it has been opposed

on the ground that as per Clauses 22, 24 and 25 of the contract

agreement, the said prayer cannot be accepted.

26. Filing of the case, by the petitioner, before the

learned District Judge, Solan, against the respondents, has

not been disputed. The compensation, as per Clause 25 of the

contract agreement, has already been given to the petitioner.

On the basis of the report submitted by the Committee, the

benefit of ₹ 12,76,301/-, has already been given to the

petitioner. The learned District Judge, Solan, has, thereafter,

dismissed the petition, on 14th December, 2021.

27. The physical possession of the three barriers in

Cantonment Board, Subathu, is stated to have been taken by

the respondents, as per the procedure. The petitioner is

required to deposit the remaining amount with the

respondent, as per the agreement, failing which, the stand has

been taken by the respondents, to initiate the proceedings,

under Section 324 of the Cantonment Act, 2006.

28. In compliance to the order passed by the learned

District Judge, Solan, the respondents had constituted the

Committee, to assess the actual losses suffered by the

petitioner, which submitted its report, dated 6 th December,

2021. The petitioner was also member of the said Committee

and signed the report, without any protest.

29. Highly relying upon Clause 30 of the contract

agreement, it is the stand of the respondents that the stand

taken by the petitioner, in the present petition, is not based

upon the actual and factual position.

30. Placing reliance on the report of the Committee,

dated 6th December, 2021, it is the stand of the respondents

that they had already published the e-auction notice on 15 th

December, 2021, for the contract, for the period 1 st January,

2022 to 31st March, 2022, as per Clause 4 of the contract

agreement, dated 1st August, 2021, as the petitioner has failed

to deposit the installments, despite repeated demands made by

the Cantonment Board.

31. On all these submissions, a prayer has been made to

dismiss the writ petition.

32. To controvert the stand taken by the respondents,

the petitioner has filed rejoinder, denying the stand, as taken

by the respondents, in the reply.

33. In the rejoinder, the factum of constitution of the

Committee has been denied. The petitioner, in the rejoinder,

has also denied that the alleged Committee, so constituted by

the Board, had assessed the losses suffered by the petitioner

and filed its report, dated 6th December, 2021, in the Court of

the learned District Judge, Solan. Moving a step further, the

petitioner has taken the plea that no such report has been

signed by him.

34. In view of the above factual position, it seems that

the relationship of the parties, in the present writ petition, is

governed by the contract agreement, which has been executed

between the petitioner and the respondents on 1 st August,

2021. The said agreement was for the period from 1 st April,

2021 to 31st March, 2022. The schedule of payment of the

contract fees has duly been mentioned in the contract

agreement (Annexure P-2).

35. Thus, the dispute, which has arisen, in this case, has

to be resolved, as per the provisions of this document.

36. As per Clause 24 of the contract agreement, in case

of a natural calamity or on account of corona curfew due to

COVID-19 pandemic, if the Government is promulgating

complete lock-down, as per the provisions of Disaster

Management Rules, 2005, then, the request of the contractor

would be placed before the Board, for consideration.

37. Clause 25 of the contract agreement provides that it

was for the Board to constitute a Committee, which would give

its report, regarding the grievances raised and to compensate

the contractor.

38. In terms of Clause 30 of the contract agreement, if

any dispute arises between the parties, which is within the

purview of this agreement, then, the matter could be referred

to the Arbitrator.

39. Clause 30 of the contract agreement, provides that

beyond this agreement, if there is any dispute/claim/any

question between the parties/any construction, commission or

omission of any kind or any other matter of any kind, which

may arise between the parties in any manner whatsoever,

Arbitrator i.e. an arbitral committee, can be constituted, under

Section 327 of the Cantonment Act, 2006. The decision given

by this arbitral committee will be the final decision and both

the parties will be bound to accept the decision.

40. The petitioner, as per Clause 24 of the contract

agreement, has moved the applications, on 6th May, 2021, as

well as 3rd June, 2021, demanding the compensation, on

account of the restrictions/lock-down, imposed by the State

Government, due to the COVID-19 pandemic. Apart from this,

he has moved the representations for extending the payment

schedule of the installments, as per the contract agreement,

Annexure P-2.

41. On 20th September, 2021, vide notice (Annexure P-8),

a request has been made, to respondent No. 2, to call a

meeting, within fifteen days, in pursuance of the letter, dated

9th May, 2021. The relevant portion of the notice, is

reproduced, as under:

"That you are hereby required to settle the matter and call a meeting within 15 days from the receipt of this notice so that the request of my client as requested in the letter dated 09/05/2021 be considered as assured verbally earlier and take a sympathetic view for compensating the loss suffered by my client due to the operation of law and for no fault on his part besides take note of the threats of the officials and I do hereby require not to indulge in any illegal activity of forcible

possession of the toll collection as the same shall be defended at your cost and risks, in case of default on your part in that case the matter be referred to arbitration as per the terms of the agreement and in

.

default this notice be considered as a demand notice

for arbitration proceedings."

42. Although, this notice has been replied by the

respondents on 30th September, 2021, wherein a stand has

been taken, that the issue raised by the petitioner, falls under

Clauses 22, 24 and 25 of the contract agreement, a specific

stand has been taken by the respondents that the matter

cannot be referred to the Arbitrator, in terms of Clause 30 of

the contract agreement, as the dispute, so raised, by the

petitioner, squarely falls within the purview of Clauses 22, 24

and 25 of the contract agreement (Annexure P-2).

43. Bare perusal of Clauses 24 and 25 of the contract

agreement (Annexure P-2), which governs the relationship of

the parties, clearly demonstrates that in case of natural

calamities and the lock-down, on account of COVID-19

pandemic, the application moved by the contractor would be

placed before the Board and the Board can constitute the

Committee, which may compensate the contractor.

44. Clause 30 of the contract agreement does not cover

the situation, which has been mentioned in Clause 24, as the

opening line of Clause 30 provides that 'any dispute out of the

contract can be referred to the arbitration'.

45. On the application of the contractor, a Committee

was constituted, consisting of two ex-elected members of

Subathu Cantt., representatives of respondents and the

contractor himself. The committee, so constituted, had

submitted its report on 6 th December, 2021, which was duly

signed by the petitioner himself.

r The relevant portion of the

report, is reproduced, as under:

"PROCEEDINGS OF MEETING HELD ON 06.12.2021 UNDER THE CHAIRMENSHIP OF .

RAVI SHARMA IN CONNECTION WITH ASSESSMENT OF LOSS CAUSED TO VEHICLE

ENTRY FEE CONTRACTOR SH. BALI RAM DUE TO CORONA CURFEW DURING MAY AND JUNE 2021.

The following members attended the meeting.

1. Sh. Ravi Sharma, House No. 92, Subathu Cantt. Ex-Elected Member & presently President, Gugga Mari Comittee, Subathu.

2. Sh. Sunit Gill, House No. 496, Ex-Elected Member, Subathu Cantt.

3. Sh. Jatin Garg rept. Of CA, Cantt. Board, Subathu

4. Sh. Bali Ram vehicle entry fee contractor himself

In continuation of earlier proceedings dated 23.11.2021 and 30.11.2021, the above committee members met today and discussed the matter at length. The contractor Sh. Bali Ram and Sh. Jatin

Garg representative of CA, Cantt. Board, Subathu have argued their sides in respect of settling the issue. The contractor has claimed 90 days rebate for the period of Corona Curfew, but he did not produce any

authentic document in support of his claim except an

written application dated 06.12.2021 addressed to CEO, Cantt. Board Subathu. This application was perused and discussed at length. The contractor

failed to prove his claim of compensation for 90 days and other part of his application is not tenable.

xxx xxx xxx

In view of the above documents the committee is of the view that the contractor is entitled to get relief only for 35 days as calculated above during which the vehicle traffic did not ply. Therefore the committee assessed the claim of rebate to the contractor Sh. Bali

Ram, on the basis of total contract of Rs.

1,33,10,000/- which comes to Rs. 12,76,301/- + recovery whichever the contractor has collected from the toll barriers during 35 days."

46. When the petitioner has moved the application,

which was considered by the respondents and constituted the

Committee by associating the petitioner himself, then, it

cannot lie in the mouth of the petitioner that he is entitled to

get the matter referred to the arbitrator, as per Clause 30 of

the contract agreement.

47. At the cost of repetition, the dispute, which has been

raised by way of the applications, claiming compensation, on

account of the losses suffered by him, due to the restrictions

imposed in the wake of COVID-19 pandemic, clearly falls