M/S Satyam P & P (Jv) vs Bharat Coking Coal Limited
2022 Latest Caselaw 4278 Jhar

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           IN THE HIGH COURT OF JHARKHAND AT RANCHI
                         W.P.(C) No. 1288 of 2022
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M/s Satyam P & P (JV), Asansol, District- Paschim Burdwan (West Bengal) through its authorized signatory Mr. Parmendra Kumar Shaw ... ... Petitioner Versus

1. Bharat Coking Coal Limited, Dhanbad through its Managing Director

2. The General Manager, Contract Management Cell, Bharat Coking Coal Limited, Dhanbad

3. General Manager, Barora Area, Bharat Coking Coal Limited, Dhanbad

4. Coal India Limited, Kolkata (West Bengal) through its Chairman .... ... Respondents CORAM: HON'BLE MR. JUSTICE RAJESH SHANKAR For the Petitioner : Mr. Ajit Kumar, Sr. Advocate Mr. Rohit Roy, Advocate For the Respondents : Mr. A.K. Das, Advocate Mr. Shivam Utkarsh Sahay, Advocate

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Order No. 09                                                Dated: 19.10.2022

      The present writ         petition has been      filed for quashing the

communication as contained in letters dated 04.02.2022 (Anneuxre-10 to the writ petition) and 16/17.02.2022 (Anneuxre-12 to the writ petition) both issued by the Project Officer, Damagoria Colliery, Bharat Coking Coal Limited (BCCL) whereby the respondents have extended the period for completion of the work relating to Work Order No. BCCL/ XII/GM/HEMM/Borira Patch-A/WO/2020/145 dated 04.08.2020 without the consent or approval of the petitioner as provided in the agreement. Further prayer has been made for issuance of direction upon the respondents to forthwith release the outstanding bills of the petitioner including release of the EMD and the BG as well as the other payments mentioned in the letter of the petitioner dated 07.02.2022 (Annexure-11 to the writ petition) .

2. Learned senior counsel for the petitioner submits that the respondent- BCCL floated e-Tender Notice No. H-HEMM-36 under Reference No. BCCL/CMC/HEMM/e-Tender/2020/129 dated 11.04.2020 for hiring of HEMM for removal of OB and extraction and transportation of coal from L-10, Laikdih (Bottom), Salanpur-C & Salanpur-D seam of Borira patch-A of Damagoria Colliery, CV area BCC having description of work as :- (1) In- situ OB:15.35 Lakh Cubic Meter (LCM), (2) Coal: 7.93 Lakh Metric Ton

(LMT) and (3) Stripping Ratio 1:6.48. The petitioner participated in the said tender and after being declared successful, it was issued LoA on 30.06.2020. Thereafter, the petitioner furnished Bank Guarantee for an amount of Rs.2,61,16,644/-. Though the work order was issued to it on 04.08.2020, the respondent-BCCL provided Environmental Clearance (EC), Consent To Establish (CTE) and Consent To Operate (CTO) for the project only in April 2021 and due to such delay in availability of EC/CTE/CTO, the petitioner was not able to achieve the target of OB as per the schedule provided to it. It is further submitted that the Director of Mines Safety, Sitarampur Region No.-2, Eastern Zone, Directorate General of Mines & Safety (DGMS), vide letter dated 24.08.2021, declared the mines of Damagoria Colliery to be unsafe observing inter alia that no man and/or machinery would be deployed in the said area. As per NIT, the mining area was 3,25,000 square meters (approx.), however due to agitation of private land owners, restriction imposed on certain area by the DGMS and heavy side fall, the remaining actual area for mining work was 2,86,350/- Sq. meters. It is also submitted that out of the total awarded contract period of 548 days, the total working days available to the petitioner for OB removal was 224 days and for coal extraction was 121 days. The total target of OB removal was 51.35 Lakhs Cubic Meters (LCM) to be completed in 548 days and the total actual OB removed in available working days of 224 days was 20.45 LCM which was around 40% of the total target. Similarly the target for coal production for the entire contract period was 7.93 Lakh Metric Tonne (LMT) against which the total actual achieved quantity in the said available period was 1.64 LMT from the upper most active seam (Laikdih bottom). About 1.60 LMT of coal was washed out and about .60 LMT of coal was blocked in private land, DGMS restriction area and heavy side fall in south-western edge of quarry. A request for change of work schedule/stripping ratio for release of withheld quantity of OB was made to the management but it was not accepted even under such changing condition of mining. It is further submitted that during the period between the preparation of the estimate and awarding of the work, excessive amount of water got accumulated in the mines and the said fact was continuously informed to the respondent authorities, however they did nothing to resolve the issues raised by the petitioner.

When the respondent authorities failed to provide adequate land to the petitioner, they asked it to work on side patch. The petitioner gave its consent to work on such extension area for which administrative approval was granted by the respondent authorities on 07.4.2021. Thereafter, the petitioner deployed machineries and till first day of October, 2021, it excavated 77000/- cubic meters of OB in the administratively approved extension area. However, no work order was issued for the same. Thus, the petitioner could not prepare and forward the bill for the said work. The work of the administratively approved extension area was fixed at the same rate to that of the NIT and as per the calculation of the petitioner for having extracted 77000 cubic meter of OB, an amount of Rupees 68 Lakh is still due to be paid by the respondent authorities immediately. As per the NIT, the allotted period of work was 548 days and the work order specified that the same was valid till 10.02.2022, however the Project Officer, Damagoria Colliery, BCCL, vide notice dated 04.02.2022, unilaterally extended the time for completion of the said work on the ground of hindrance caused to the petitioner for a further period of 324 days commencing from 11.02.2022 to 31.12.2022 in exercise of the power conferred under Clause 6.6 of the General Terms & Conditions of the Contract without taking any consent and/or approval from the petitioner. Clause 6.6 of the General Terms & Conditions of the Contract provides that when the period fixed for completion of the contract is about to expire, the question of extension of contract may be considered at the instance of the Contractor or the Company or both. The extension will have to be by way of a bipartite agreement, expressed or implied which is to be granted with the approval of the Accepting Authority of the tender. In case the Contractor does not apply for grant of extension of time within 30 (thirty) days before the stipulated date of completion of contract and the Company wants to continue with the work beyond the stipulated date of completion for reasons of the work having been hindered, the Engineer- in charge with the approval of competent authority (Accepting Authority of the tender) can issue extension of time even in the absence of application from the Contractor. Such extension of time is valid provided the Contractor accepts the same either expressly or impliedly by his actions before and subsequent date of completion. Such extension of time shall

be without prejudice to the Company's right to levy penalty on account of shortfall quantity under Clause 6.2 of condition of contract. It is also submitted that the petitioner, vide letter dated 07.02.2022, expressly denied such unilateral extension of time so granted by the respondent-BCCL vide the impugned letter dated 04.02.2022. However, the respondent authorities further proceeded to issue another letter dated 16/17.02.2022 whereby they again stood on their illegal ground and are continuing with the said decision of unilateral extension of time granted by them vide letter dated 04.02.2022. The petitioner, vide its letter dated 25.02.2022, again informed the Project Officer, Borira Patch, Damagoria Colliery, BCCL regarding not accepting such unilateral extension of time and categorically denied such extraction and transportation of coal as well as removal of OB as per proposed extension of time. Due to huge accumulation of water in the mines, it was still not possible to dewater the mines in the extended period of contract and to extract coal. The respondents themselves admitted that the fault of hindrances was on their part, however they unilaterally extended the time so that they could show that even after extension of time, the petitioner was not able to complete the contract and thus shifted the burden upon the petitioner so as to unlawfully penalize it. The contract period has already expired and since there is no possibility of work in the said project, the respondent authorities cannot withhold the EMD of the petitioner and/or encash the BG lying with them and thus both are required to be returned to it immediately.

3. On the contrary, learned counsel for the respondents submits that the petitioner was given notice for final measurement of the work so that the penalty and the amount, if any, due to it, could be calculated, but the petitioner deliberately did not send any reply despite the notice. As such, the final measurement has been done by the respondent-BCCL and the process of preparing the final bill is in progress. It is further submitted that on the basis of final bill, the respondents will have to find out whether any amount is payable to the petitioner after deducting all the penalties. Further, if any amount is found recoverable from the petitioner, the same will be recovered from it or its EMD will be forfeited. The prohibitory order was issued by the Director of Mines Safety, DGMS,

Sitarampur Region No. 2, Eastern Zone only for a part of the land due to high bench height as an excessive bench height occurred due to bench slide of middle bench and the cause of this bench slide was illegal mining. Under Clause 12(xii) of the General Terms & Conditions of the Contract, it was the sole responsibility of the petitioner to make security arrangement to prevent theft of coal which it failed despite issuance of several notices causing increase in bench height occurred due to bench slide of middle bench caused by illegal extraction of coal and, therefore, the prohibitory order issued by the DGMS was also attributable to the negligence of the petitioner. It is also submitted that the petitioner commenced the execution of work on 12.08.2020 but it did not deploy requisite machineries and manpower for which it was issued letter No. 691 dated 13.08.2020 by the Project Officer, Damagoria Colliery. The required approval for EC/CTE/CTO was obtained within short time of commencement of the work. The benefit of the period, which was consumed for obtaining the EC/CTE/CTO, was allowed to the petitioner in view of Clause 6 of the agreement and the same was entered into the Hindrance Register as "HINDRANCE" which was duly accepted by the petitioner. The site was handed over to the petitioner by the Project Officer/Engineer-in-charge, Damagoria Colliery vide letter No. BCCL/DC/PO/2022/653 dated 05.08.2022 and shortage of land due to bench slide and other factors was compensated by providing additional land which was administratively approved. The petitioner never had any resource to quantify the amount of water accumulated in the mine in the year 2018 and despite instructions to visit the site for taking into consideration all prevailing factors at the site for the work, it participated in the bid and therefore, it is not open for the petitioner to raise such grievances after committing breach of contract by failing to perform the works as per work order. Dewatering and drainage arrangement was the sole responsibility of the petitioner as per Clause 3(m) of the Special Notes and Additional Terms & Conditions of the Notice Inviting Tender. It is further submitted that for some period, certain local disturbances were created by the land-losers which has been duly recorded in the 'Hindrance Register' maintained in terms of Clause 6.4 of the General Terms & Conditions of the Contract and benefit of the same

has already been extended to the petitioner. This apart, the major part of the land over which mining operations are required to be carried out was hindrance-free and despite having adequate land for mining operation, the petitioner failed to perform. It never showed any seriousness in execution of the work and did not deploy requisite man-power and machineries for execution of the work. The petitioner never deployed requisite plant and machineries despite grant of extension of time in terms of Clause 6.6 of the General Terms & Conditions of the Contract and as such the notices for final measurement were issued but it did not choose to appear and as such, the final measurement has already been taken in its absence. The petitioner has been provided full opportunity to prepare its own estimate after site visit and thereafter to participate in the tender. The area of additional patch was administratively approved mainly for safety reasons and also to meet the shortfall of coal arising out of geographical disturbances and the same was under active stage of appropriate approval but in the meantime, the petitioner refused to avail the extension of time allowed to it. It is also submitted that the petitioner has raised several disputed questions of facts seeking adjudication of such dispute arising out of a non-statutory contract for which appropriate remedy with the petitioner is to approach the civil court of competent jurisdiction.

4. Heard learned counsel for the parties and perused the materials available on record. The petitioner has sought interference of this Court under Article 226 of the Constitution of India in a matter relating to issuance of letters dated 04.02.2022 and 16/17.02.2022 by the Project Officer, Damagoria Colliery, BCCL whereby it has been granted extension of time of 324 days w.e.f. 11.02.2022 to 31.12.2022 for extraction and transportation of coal and removal of OB. The petitioner has also sought direction of this Court upon the respondents to release its outstanding bills as well as the EMD and the BG.

5. In the case of Joshi Technologies International Inc. v. Union of India & Others reported in (2015) 7 SCC 728 : 2015 SCC, the Hon'ble Supreme Court has held as under:-

"69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to

the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised.

At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, "normally", the Court would not exercise such a discretion:

69.1. The Court may not examine the issue unless the action has some public law character attached to it. 69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration.

69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination.

69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances.

70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under:

70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness.

70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discriminations.

70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred.

70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the

conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business.

70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages.

70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.

70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.

70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary.

70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness.

70.11. The scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of

purely contractual disputes".

6. In the aforesaid case, it has been held by the Hon'ble Supreme Court that there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of facts, however the power of judicial review is normally not exercised in the matter falling within the domain of contractual obligations and in doubtful cases the parties may be relegated to adjudication of their rights by resorting to remedies provided for adjudication of purely contractual disputes. If there are serious disputed questions of facts which are of complex nature and require laying of evidence for their determination, writ petition is not maintainable to avoid contractual obligation. Commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract cannot be regarded as a justification in not complying with the terms of contract which the parties had accepted with open eyes. Where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. If the contract between private party and the State/its instrumentality and/or an agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India invoking its extraordinary jurisdiction.

7. The claim of the petitioner is that it has suffered several hindrances while executing the work as per the work order due to which it failed to achieve the target of extraction and transportation of coal and removal of Over Burden (OB). It faced hindrances such as delayed obtaining of Environmental Clearance (EC), Consent To Establish (CTE) and Consent To Operate (CTO) by the BCCL, local disturbance made by the villagers in extraction of coal who had not been paid compensation/employment, the area of the extraction getting blocked due to heavy side fall resulting into reduction of the actual/remaining area for mining, blocked area due to DGMS restrictions and excess water accumulation in the mines during the relevant period of time and hence it was not possible for the petitioner to make extraction of coal from the mines.

8. The respondents have denied all the claims of the petitioner by contending that the petitioner was solely responsible for preventing theft of coal, however it failed to make necessary security arrangement causing bench slide of middle bench due to which the bench height got increased and the prohibitory order was issued to the petitioner by the DGMS. It has further been contended that though there was some delay in obtaining EC/CTE/CTO and disturbance made by the land losers, but the benefit for the said period has already been given to the petitioner by extending the time for extraction in view of Clause 6.6 of the General Terms and Conditions of the Contract. Dewatering and drainage arrangement was the sole responsibility of the contractor and as such the petitioner cannot take an excuse of accumulation of water in the mines. Moreover, the participants of the NIT were advised to visit the site prior to bidding for the project and as such it would be presumed that the petitioner was well aware of the situation prevailing in the mines and thus it cannot raise such grievance after committing breach of contract. It has also been claimed by the respondents that the petitioner never deployed requisite plant and machineries despite grant of extension of time and thus the notices for final measurement of the work were issued to it.

9. Thus, there are allegations and counter allegations by the petitioner and respondents against each other. In the case in hand, there is no public law element involved. The parties have raised serious disputed questions of facts which require laying of evidence for effective adjudication which can appropriately be raised before a fact finding adjudicatory forum/court of competent jurisdiction. Mere ground that the petitioner was facing the difficulty in executing the awarded work cannot be a sufficient reason to entertain the present writ petition.

10. In view of the aforesaid factual and legal position, I do not find any ground to entertain the present writ petition. The petitioner is, however, at liberty to seek appropriate contractual remedy as permissible in law.

11. The writ petition is, accordingly, dismissed with aforesaid liberty.

(Rajesh Shankar, J.) Ritesh/AFR