M/S Satyam P & P (Jv) vs Bharat Cooking Coal Limited (A ...
2023 Latest Caselaw 2536 Jhar

         IN THE HIGH COURT OF JHARKHAND AT RANCHI
                 (Letters Patent Appellate Jurisdiction)
                     L.P.A. No. 551 of 2022

         M/s Satyam P & P (JV), a joint venture Consortium, having its
         registered office at Chawda Complex, Opposite Bank of Baroda,
         N.S.B. Road, P.O. - Ranigunj, P.S. Ranigunj, Town - Asansol,
         District - Paschim Burdwan, West Bengal through it's Authorized
         Signatory Mr. Parmendra Kumar Shaw, s/o Shri Prem Nath Shaw,
         aged about 36 years, resident of Kendua Bazar, Kulti, P.O. - Kulti,
         P.S. Kulti, Town - Asansol, District - Paschim Bardhaman, West
         Bengal, 713 343                          ...     ...      Appellant
                               Versus
      1. Bharat Cooking Coal Limited (A Mini Ratna Company), a
         subsidiary of Coal India Limited, service through it's Managing
         Director having office at Koyla Bhawan, P.O. & P.S. Koyla
         Nagar, District Dhanbad, Jharkhand
      2. The General Manager, Contract Management Cell, Bharat Coking
         Coal Limited (A Mini Ratna Company), a subsidiary of Coal India
         Limited, having office at Level-V, Koyla Bhawan, Koyla Nagar,
         P.O. & P.S. Koyla Nagar, District Dhanbad, Jharkhand
      3. General Manager, Barora Area, Bharat Coking Coal Limited (A
         Mini Ratna Company), a subsidiary of Coal India Limited, P.O. &
         P.S. Nawagarh, Dhanbad, Jharkhand
      4. Coal India Limited, through it's Chairman, having office at Coal
         Bhawan, Premises No. 04 MAR, plot No. AF-III, Action Area -
         1A, Newtown, P.O. & P.S. Rajarhat, Kolkata, West Bengal
                                            ...       ...        Respondents
                               ---

CORAM: HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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            For the Appellant        : Mr. Vibhor Mayank, Advocate
            For the Respondents      : Mr. Amit Kumar Das, Advocate
                                     : Mrs. Swati Shalini, Advocate
                               ---
                       nd
 Order No. 04/Dated: 2 August 2023

M/s Satyam P & P (JV) through its authorized signatory has challenged the order dated 19th October 2022 passed in W.P.(C) No. 1288 of 2022 whereby its challenge made to unilateral extension of contract has been rejected.

2. Briefly stated, the Bharat Coking Coal Limited (in short "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) Insitu OB:15.35 Lakh Cubic Meter (LCM), (2) Coal: 7.93 Lakh Metric Ton (LMT) and (3) Stripping Ratio 1:6.48. In connection to the NIT dated 11.04.2020, the BCCL issued LOA dated 30th June 2020 requiring the contractor to furnish Bank Guarantee for Rs. 2,61,16,644/-. Under the contract, the scheduled completion period of the reference work was 548 days and the contract was to be kept alive till 10th February 2022. This is the case set up by the contractor that the work order was issued only on 4 th August 2020 and it commenced work from 12th August 2020. However, on 4th February 2022, before the scheduled date of completion of the contract a notice was issued to the contractor intimating him extension of the period of contract till 31st December 2022. Taking exception to the unilateral extension of completion period for the contract, a representation dated 7th February 2022 was submitted by the contractor but the same was not responded to by the BCCL. Compelled, the contractor approached the writ Court by filing W.P. (C) No. 1288 of 2022 which has not been entertained by the writ Court observing that the contractor may avail of appropriate remedy as permissible in law.

3. In the aforesaid order dated 19th October 2022, the writ Court has referred to rival stand of the parties, thus:

"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."

4. Mr. Vibhor Mayank, the learned counsel for the appellant has made a submission that the writ Court has overlooked the express provisions under Clause 6.6 of the Conditions of Contract under which no unilateral extension of time is conceived.

5. Clause 6.6 of the Conditions of Contract reads as under:

"6.6 When the period fixed for the completion of the contract is about to expire, the question of extension of the contract may be considered at the instance of the Contractor or the Company or both. The extension will have to be bipartite agreement, expressed or implied. The extension of time shall be granted with the approval of 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 reason of the work having been hindered, the Engineer-in-charge with the approval of Competent Authority as mentioned above 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 implied by his actions before and subsequent to the date of completion. Such expression of time shall be without prejudice to Company's right to levy penalty on account of shortfall quantity under clause 6.2 of condition of contract."

6. A glance at the aforesaid clause would disclose that before the expiry of the period of contract the question of extension of the contract can be considered at the instance of (i) the contractor; or (ii) the Company; or (iii) both. It further provides that the extension of the contract shall be through bipartite agreement, express or implied.

7. The learned counsel for the appellant has laid stress on the language under Clause 6.6 which provides that the extension of time shall be valid provided the contractor accepts the same.

8. On a literal construction of the expressions used in Clause 6.6, there cannot be any doubt that first paragraph of Clause 6.6 envisages unilateral extension of the contract at the instance of the Company.

Under Clause 6.6, this is the exclusive right of the competent authority whether or not to grant extension of time. This is also not in dispute that the period for completion of the contract was by 10th February 2022 but the subject work was not completed by due date and, constrained thereof, the BCCL extended the period for completion of the contract by 31st December 2022. The plea set up by the contractor is that the reference works were not completed on account of the circumstances beyond its control such as delay in obtaining consent to operate by the BCCL, hindrances at the work site and, more importantly, a direction issued by the Directorate General of Mines Safety, Eastern Zone at Sitarampur under which the BCCL was directed not to deploy men and/or machine in the area bounded by Point 1 (137167E, 101949N), Point 2 (137236 E, 101993N), Point 3 (137261E, 101944N) and Point 4 (137200E, 101899N) of Damagoria Colliery until the contraventions as pointed out in the notice are rectified and the said order is vacated in writing. The BCCL has taken a stand that the letter dated 24th August 2021 issued by the Directorate General of Mines Safety did not prohibit deployment of such number of persons as may be required for systematic rectification of the violations. According to the BCCL, the said order in fact permitted mining operations under the supervision of an Assistant Manager, Overman and Sirdar.

9. In the letter dated 24th August 2021, the Directorate General of Mines Safety has made the following observation and issued directions as mentioned hereinabove:

"............................................. During the inspection, it was found that contravention under Regulation 106(2) & (5) of the Coal Mines Regulations 2017 read with Condition No. 10.6 of permission letter No. 5576, dated 28.07.2020 in the area bounded by Point 1 (137167E, 101949N), Point 2 (137236 E, 101993N), Point 3 (137261E, 101944N) and Point 4 (137200E, 101899N) was not complied. Hence, in the said area bench height was not rectified till date even after lapse of nine (09) months time since issue of the Notice.

In view of the above, by virtue of the powers conferred on the Chief Inspector of Mines (also designated as Director-General of Mines Safety) under Sub-section 2 of Section 22A of the Mines Act, 1952, and by virtue of the authorization granted to me by the Chief Inspector of Mines (also designated as Director-General of Mines Safety) under Section 6(1) of the Mines Act, 1952, I hereby convert the abovesaid Notice 10 Prohibitory Order.

No men and/or machine shall be deployed in the area bounded by Point 1 (137167E, 101949N), Point 2 (137236 E, 101993N), Point 3 (137261E, 101944N) and Point 4 (137200E, 101899N) of Damagoria Colliery until the contraventions as pointed out in the Notice as above are rectified and the order is vacated in writing.

However, this order does not prohibit employment of such number of persons as may be required systematic rectification of above- mentioned violations. No mining operations shall be carried out in shift unless an Assistant manager, Overman and Sirdar are appointed for supervision. Benches shall be reduced from top downwards only. No person/machine shall be deployed at the toe of the highwall/spoil heap.

A copy of this order is being forwarded to the Central Government as required under Sub-section (5) of Mines Act, 1952. You are requested to paste a copy of this order at conspicuous places in the above mine for a period of less than three weeks or till the vacation of the order, whichever is earlier.

Please acknowledge receipt of this order."

10. This is the law settled by the Hon'ble Supreme Court that the writ Court shall not interfere with the decision of the employer, provided that the said decision is arbitrary or actuated with malice.

11. In "Silppi Constructions Contractors v. Union of India" (2020) 16 SCC 489 the Hon'ble Supreme Court has observed as under:

"19. This Court being the guardian of fundamental rights is duty- bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.

20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters

of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."

12. The writ Court has rendered an opinion that it was the responsibility of the contractor to make arrangements for dewatering and drainage and, therefore, hindrances caused due to accumulation of water at the work site was not a ground for the contractor to seek closure of the contract.

13. The provisions under Clause 6.6 seem to have been incorporated in the NIT to enable the company to continue with the work beyond the stipulated date of completion for the reason of the work having been hindered. Now taking note of the various grounds raised by the contractor including hindrances in completion of the contract within the stipulated time, no exception can be taken to extension of time for completing the reference work by 31 st December 2022.

14. In view of the discussions hereinabove, we do not see any ground to interfere with the writ Court's order and, accordingly, L.P.A. No. 551 of 2022 is dismissed.

(Shree Chandrashekhar, J.)

(Anubha Rawat Choudhary, J.) Mukul