Jharkhand High Court

M/S Goyal Trading Company vs Central Coalfields Limited on 2 February, 2024

Author: Ambuj Nath

Bench: Ambuj Nath

                                                   1



             IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                     First Appeal No. 30 of 2014

            1. M/s Goyal Trading Company, a sole proprietorship Firm,
               Through its sole Proprietor Sri Mahabir Prasad Rungta
            2. Mahabir Prasad Rungta                ---         ---   Appellants
                                             Versus
            Central Coalfields Limited, Ranchi      ---         ---  Respondents
                                                   ---

For the Appellant: M/s Pandey Neeraj Rai, Rohit Ranjan Sinha, Advocates For the Resp.-CCL:M/s Amit Kr. Das, Sahay Gaurav, Shivika Tiwari, Advocate

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PRESENT Hon'ble Mr. Justice Ambuj Nath

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            Reserved on: 20.09.2023                         Pronounced on: 02.02.2024
                                               ---
Ambuj Nath, J:     Appellants M/s Goyal Trading Company and Mahabir Prasad Rungta

have filed this appeal against the judgment and decree dated 31.08.2013 (Decree signed on 18.09.2013), passed in Money Suit No. 07/2001, whereby and wherein the learned Civil Judge, Senior Division-I, Bermo at Tenughat has decreed the suit of the plaintiff-Respondent M/s Central Coalfields Limited, Ranchi and directed the Defendants-appellant Company to pay a sum of Rs. 28,67,369.50P to the plaintiff-Respondent Company which being the balance principal sum adjudged with simple interest at the rate of 10% p.a. pendentelite up to realization of balance of principal sum decreed along with the cost of the suit.

2. For the sake of brevity, parties shall be referred in their original capacity in the Money Suit No. 07/2001.

3. Plaintiff-Central Coalfields Limited, having its registered office at Darbhanga House, P.S. Kotwali, District Ranchi and its place of business at Kathara Washery, District Bokaro, had filed the Money Suit against the Defendants-Goyal Trading Company and Mahabir Prasad Rungta for realization of Rs. 1,34,16,915.88p only with interest pendentelite and future at the rate of 18% p.a. along with the cost of the suit and other relief (s), as the plaintiff may be found entitled to under the law and equity.

Case of the plaintiff, as pleaded in the plaint, is that the plaintiff is a Government Company within the meaning of section 617 of Indian Companies Act, 1956 having its registered office at Darbhanga House at Ranchi and its place of business at various places including in Kathara Area, Bokaro within the local limits of jurisdiction of this court. Defendant no. 1 is a Proprietorship Firm of which defendant no. 2 is the proprietor and defendants are engaged in

manufacture of briquettes from slurry and sludges. On 08.02.1989, the plaintiff Company invited tender for lifting and collecting of slurry for the purpose of manufacture of briquettes in Kathara Washery in the process of washing coal by way of rivulets and deposited in the River Bank. The said tender was invited by Tender Notice No. GM(KTA)/SOM/142/T-89/105 of 1989. Defendant No. 1 submitted their tender which was accepted on 04.04.1989 on the terms and conditions contained in the work order no.

GM(KTA)/SOM/57/Slurry/MPW/89/1616 dated 20/22.01.1990. As per the terms and conditions of the work order, defendants were allowed to collect slurry for converting it into briquettes within the premises of the plaintiff and the conversion factor was to be taken as 1.52 tonnes of slurry for 1.00 tonne of briquettes. In addition to that, defendants had further agreed to pay other charges including royalty, cess, sales tax, excise duty, etc. on the slurry for a sum of Rs. 375/- per tonne of slurry along with all other statutory charges and taxes. The sale of slurry on 'as is where is" basis only was awarded to the defendants vide letter dated 22.01.1990 communicating the sanction by the competent authority and the sale of 22,500 metric tonnes of slurry per annum was agreed. The period of contract of lifting was valid up to 31.03.1990. After expiry of the contract, defendants entered into further agreement in 1992 for collection of slurry from Kathara Washery on the same terms and conditions for the quantity of 21,600 MT at the price of Grade 'C' Coal for a period of one year. It was made clear to the defendants that the said contract was only for the sale of flowing slurry and they will have no claim for ash, cinders, breeze, etc. left during the course of manufacturing of briquettes and this will be the entire property of the Management. Both the parties entered into litigation with regard to the ownership of the ash left after preparation of briquettes. Defendants filed a writ petition before the High Court of Judicature at Calcutta being W.P No. 3919 of 1990, claiming that they were entitled to collection of ash from the contract awarded to them. Vide order dated 12.11.1990, Calcutta High Court gave liberty to the defendants to remove ash from the contracted area, subject to the condition that all removal of ash shall be duly accounted for by measuring the quantity. Defendants were also directed to deposit cash amount of Rs. 5.00 lakh in any nationalized bank and was further directed to file the original receipt regarding the deposit with the Registrar of Calcutta High Court within a period of 7 days from the date of the order. The said order was passed in consonance with the order passed by the Hon'ble Supreme Court in Civil Appeal No. 3778 of 1989. In pursuance of the order passed by Calcutta High

Court, the plaintiff permitted the defendants to remove the appropriate ash, subject to the condition that all removal shall be duly accounted for by measuring the quantity and by way of security for satisfying the claim.

One Jugnu Construction Company was agitating similar relief before the Hon'ble Supreme Court, claiming that ash or residuary left after manufacture of briquettes belonged to the manufacturers. The issue before the Hon'ble Supreme Court was finally decided, on remand by the learned Single Judge of Patna High Court, Ranchi Bench in C.W.J.C. No. 1232 of 1988 in which it was inter-alia held that Jugnu Construction was not entitled to take ash or residuary. The said Jugnu Construction filed L.P.A. No. 153 of 1998 (R) before the Patna High Court, Ranchi Bench which was dismissed on 25.09.1998. As the issue was finally decided by the Division Bench of Patna High Court that the manufacturers of briquettes had no right to remove appropriate residuary including ash, the plaintiff raised a Bill against the defendants and sent the same vide letter No. PO (KTW) 5635 dated 15.10.1998, but no payment was made by the defendants. Subsequently, plaintiff filed a petition before the Calcutta High Court for recovery of a sum of Rs. 33,67,369.50 paise being the value of remains of briquettes during the period 08.07.1993 to 28.01.1998 besides interest @ 18% p.a. upto 1998 amounting to Rs. 43,38,358.10 paise vide G.A. No. 4718 of 1998. Calcutta High Court finally disposed of the writ application filed by the defendants as well as G.A. No. 4718 of 1998 on 15.05.2001 and passed an order in favour of the plaintiff, holding that ash/remains of briquettes are the property of Central Coalfields Limited and plaintiffs are entitled to encash the bank guarantee and are also entitled to realize the amount due against the defendants. Plaintiff have made a total claim of Rs. 1,34,16,915.88 paise, as per the details given in the account at the foot of the plaint and the cause of action for the suit arose within the jurisdiction of this court on 11.03.1998 when C.W.J.C No. 1232 of 1988 on the same line was finally decided by the Ranchi Bench of Patna High Court, holding that the ash or residuary is the property of the company and contractors were not entitled to remove the same. On 25.09.1998 L.P. A No. 153 of 1998 (R) was dismissed and on 15.05.2001 final order was passed by the Calcutta High Court in W.P. No. 3919 of 1990 and G.A. No. 4718 of 1998, holding that the plaintiff was entitled to recover claim from the defendants on various subsequent dates. Thereafter, the plaintiff requested the defendants to make payment. 25.11.2001 was the last date on which demand was made by the plaintiff, but payment was not made by the defendants. The suit was valued at Rs. 1,34,16,915.88 paise for the purpose

of court fee. Finally, it was prayed that a decree for a sum of Rs. 1,34,16,915.88 paise be passed in favour of the plaintiff and against the defendants. It was further prayed that a decree for the costs of the suit, interest pendentelite and future @18% p.a. in favour of the plaintiff and against the defendants along with other relief or relief (s), which the plaintiff may be found entitled to.

4. Defendants appeared on notice and have filed contesting written statement.

Case of the defendants is that the suit of the plaintiff is not maintainable in its present form and it is barred by law of limitation and also under the provisions of Specific Relief Act and the plaintiff had no cause of action for the present suit. Defendants have denied the facts stated at para-3 and 4 of the plaint regarding invitation of tender dated 08.02.1989 for collecting flowing slurry at Kathara Washery and for lifting of slurry for the manufacturing of briquettes in Kathara Washery and the defendants have submitted their tender which was accepted on 04.04.1989 on the ground that slurry gets collected outside the washery premises i.e. factory area and the appropriate authority is the State Government instead of Central Government. It has been pleaded that Kathara Washery was registered under the Factories Act, 1948 and slurry was sold by the plaintiff to different purchasers for removing it and once it was taken by the purchaser, plaintiff had nothing to do with slurry. The fact that the defendants were allowed to collect slurry for converting it into briquettes within the premises of the plaintiff at the conversion factor of 1.52 tonnes of slurry for every 1.00 tonne of briquette on the price of Rs. 375/- per tonne of slurry, was also denied and it has been stated that the defendants were purchasing the flowing slurry "as on where is basis" after paying price of 1.52 tonnes of slurry against 1.00 tonne of briquettes. It was further pleaded that the defendants were burning the slurry at their place. Thus, they were the owner of ash content remaining outside and the plaintiff has no right over ash content. It was further pleaded that the defendants were entitled to refund of Rs. 10.00 lakh deposited in the Hon'ble supreme court. The defendants being the owner of the ash content, were entitled to remove the remaining quantity of ash contents as its owner and if the ash are destroyed, the plaintiff will be liable to pay the damage for the remaining quantity of ash to the defendants. It has been mentioned that the agreement clause referred in plaint as Clause 30 is illegal and has been cunningly changed by the plaintiff during pendency of litigation for ownership of ash remains of briquettes. According to these defendants, for the purpose of collecting slurry from the slurry pond to the manufacturing site,

defendants have invested huge amount of money and hence, the claim of the plaintiff at the rate of slurry for remaining ash is illegal and not maintainable at all. These defendants have not denied the statement made in para-31 and 32 of the plaint in which the plaintiff had claimed that the defendants lifted remains of briquettes from Kathara Washery to the tune of 7,442.80 MT. The issue was finally decided by the Division Bench of Patna High Court, holding that the defendants had no right to remove appropriate residue including ash and the plaintiff had raised a bill against the defendants and sent the same to the defendants vide letter no. PO (KTW) 5635 dated 15.10.1998. As far as the order passed in G.A. No. 4718 of 1998 and W.P. No. 3919 of 1990 by Calcutta High Court is concerned, it has been pleaded that it was an ex-parte order and it has wrongly been observed therein that the petitioners are lifting ash for the purpose of manufacturing of briquette which is not correct. In view of the aforesaid facts, it was prayed that the suit be dismissed along with cost to these defendants.

5. On the basis of the pleadings of the parties, following issues were framed for just and final decision of the suit.

i. Is the suit maintainable in its present form?

ii. Has the plaintiff any cause of action for the suit?

iii. Is the suit barred by the law of limitation?

iv. Whether the remains of Briquettes / Ash / residue after preparation of Briquettes from slurry by the defendants are the property of the defendants? v. Whether the defendants are entitled to remove the remains of Briquettes / Ash / residue?

vi. Whether the plaintiff is entitled for a decree for realization for Rs. 1,34,16,915.88p with interest pendentelite and future? vii. To what other relief or reliefs the plaintiff is entitled?

6. In order to prove its case, plaintiff has adduced both oral and documentary evidences, while defendants have adduced only oral evidence.

7. Plaintiff has examined one witness namely, Jata Shankar Singh as P.W-1. He is the Project Officer of Central Coalfields Limited. Defendant has examined the following witnesses:

Shailesh Shankar Awasthi has been examined as D.W-1. Basant Singh has been examined as D.W-2.

Rishideo Singh has been examined as D.W-3.

Mahavir Prasad Rungta has been examined as D.W-4. He is the defendant himself.

Ras Bihari Mishra has been examined as D.W-5. He is the staff of the defendant Company.

8. Following documents have been adduced by the plaintiff in evidence.

Exhibit 1: Letter No. PO/KTW/5035 dated 15.10.98 (demand letter (marked on alongwith bill dated 15.10.98 as well as Annexure showing admission) lifting statement of the remains of Briquettes (Ash) from Kathara Washery ) attached with Ext.1 V.O.D. 28/6/06.

Exhibit 1/1: Letter of intent for sale of flowing slurry vise No.GM (marked on (KTA) /50(M) (57/slurry/KTW/89/1051 dt. 4/4/89 Admission)

Exhibit 2 : Proposal for fixing of price of Ash by F.Ds vide No. (marked CS/FD/98/7/9/47 dated 5.7.98.

U/s-74 of Evid. Act)

Exhibit 3: Photocopy of order dated 12.11.90 passed by Hon'ble High (marked on Court of Calcutta in M/S Goyal Trading Co.& Anr. Vs. admission) Coal India Ltd. & Ors.

Exhibit 3/1: Photo copy of order passed by Hon'ble High Court of (marked on Calcutta dated1 5.5.2001 passed in W. P. No. 1919 of 1990 admission) as well as G.A.No. 4718/1998.

Exhibit 4 : Memorandum and Articles of Association of Central (marked U/s- Coal fields limited.

74 Evidence Act)

Exhibit 4/1: General terms of conditions of C.C.L. Kathara Area (on admission) purported agreement of defendants company.

Exhibit ½: Letter No. GM(KTA)SO) (M)/T/92/3764-73 dated (on admission) 27.8.1992 subject order for collection of slurry from Kathara washery -- to M/S Goyal Trading Co.

9. On the basis of the evidences - both oral and documentary - available on the record, learned Civil Judge, Senior Division-1, Bermo at Tenugthat decreed the suit of the plaintiff and directed the defendants to pay a sum of Rs. 28,67,369.50 paise which being the balance principal sum adjudged with simple interest @10% p.a. pendentelite up to realization of balance of principle sum decreed along with cost of the suit.

10. Being dissatisfied with the judgment and decree passed by the learned Civil Judge, Senior Division-I, Bermo at Tenughat, the defendants have preferred the present appeal.

In order to come to the just and final decision and in order to avoid repetition, this case will be discussed issue-wise.

11. Issue No. 4 and 5:

Both these issues are interlinked by the same questions of facts and law. As such, both these issues will be discussed together. Defendants had entered into a contract with the plaintiff Company for collecting flowing slurry at Kathara Washery in the process of washing of coal by rivulets for the purpose of manufacturing of briquettes in Kathara Washery. The defendants were allowed to collect slurry for converting it into briquettes within the premises of the plaintiff. As per conversion factor, defendants had to pay for 1.5 tonnes of slurry for every 1.00 tonne of briquettes. In addition to the above, defendants had agreed to pay other charges including royalty, cess, sales tax, excise duty, etc. The price of slurry was Rs. 375/- only per tonne. It is the specific case of the plaintiff that the residue left after manufacturing of briquette including ash and other residues were the property of the plaintiff and the defendants had to pay additional cost of residue ash. Defendants have denied and stated that as per the contract, defendants were owner of the residue left behind after preparation of the briquettes. It has been pleaded that the defendants are the owner of the ash content remaining on the site and the plaintiff had no claim over ash content.

12. Same issue was raised and contested between the different parties involved in manufacturing of briquette, whether remaining ash was the property of the Firm providing slurry or that of the manufacturer. After series of litigation, contested between the parties, such as Jugnu Construction and others, this issue was finally laid down to rest and it was held that residue ash belonged to the Company which supplied the slurry for manufacturing of briquettes.

13. From perusal of Clause 30 of the terms and conditions of the contract between the parties, it appears that this Clause 30 stipulates that "the purchasers will have no claim for Ash, Cinders, Breeze etc. left during the course of manufacturing of briquettes and this will be entire property of management".

14. Despite of the specific terms of the contract, defendants have raised objection and claimed residue Ash to be their property. This matter was agitated before Calcutta High Court in W.P. No. 3919 of 1990 which was brought by the defendants for declaration that the Ash was their property. However, the Calcutta High Court vide order dated 15.05.2001, dismissed the writ petition filed by the defendants and allowed G.A. No. 4718 of 1998 filed by the plaintiff Company.

15. From the aforesaid facts, it is apparent that even by the terms and conditions of the contract, as per the general trade practice, Company providing

slurry for manufacturing of briquettes to the purchaser, remains the owner of the residue including Ash, Cinders, etc. and defendants had to pay the price of the residue Ash which was removed by them. Accordingly, both these issues are decided in favour of the plaintiff.

16. Issue No. 6: Whether the plaintiff is entitled for a decree for realization for Rs. 1,34,16,915.88p with interest pendentelite and future?

I have already come to the finding that the plaintiff Company providing slurry for manufacturing of briquettes to the purchaser, defendants herein, remains the owner of the residue including Ash, Cinders, etc. and defendants had to pay the price of the residue Ash which was removed by them.

17. Mr. Pandey Neeraj Rai, learned counsel appearing on behalf of the appellants, submitted that the plaintiff has arbitrarily out of blue without any cogent reason, raised a claim of Rs. 33,67,369.50 paise being the value of remains of briquettes during the period 08.07.1993 to 28.01.1998 along with interest up to 1998 amounting to Rs. 43,38,358.10 paise.

18. On the point of value of the remains of briquettes during the aforesaid period, the plaintiff have adduced both oral and documentary evidence. After the issue was finally decided by the Division Bench of Patna High Court that the defendants had no right to remove residuary including Ash, the plaintiff raised a bill against the defendants and sent the same vide letter no. PO (KTW) 5635 dated 15.10.1998 to the defendants, but no payment was made by the defendants. This letter along with the bill has been marked Ext.-1, from perusal of which, it appears that the plaintiff was entitled to realize Rs. 32,37,855.30 paise for 7442.80 MT of remains of briquettes which the defendants had removed from Kathara Washery. The plaintiff has pleaded the aforesaid facts at para-31 and 32 of the plaint. The defendants in their written statement have denied para-wise claim of the plaintiff, as pleaded in their plaint. However, at paragraph-20 of the written statement, it has been pleaded "that statement made in para-26, 27, 28, 29, 30, 31 and 32 are in connection with M/s Jugnu Construction and not for these defendants. Therefore, statement is confusing." From the plain reading of the averments made in para-31 and 32 of the plaint, it is evident that the plaintiff has pleaded that the defendants had lifted remains of briquettes from Kathara Washery to the tune of 7442.80 MT, for which a bill was sent to them vide letter no. PO(KTW) 5635 dated 15.10.1998, but no payment was made by the defendants. The aforesaid averments made at para-31 and 32 of the plaint are not in connection with M/s Jugnu Construction, but it is with regard to the claim of the plaintiff which the plaintiff have raised against

the defendants and defendants have not specifically denied it. The plaintiff have also adduced oral evidence in support of this fact. Jata Shankar Singh (P.W-1) has supported the case of the plaintiff and has stated at para-17 of his deposition that between January 1991 to July 1993, the total 7442.80 MT of briquettes was lifted by the defendants, the value of which comes to Rs, 33,67,369.50 paise, which the defendants are liable to pay. This witness has been cross-examined at length. However, from perusal of his cross- examination, it transpires that this witness has not been cross-examined on the point that the defendants had lifted 7442.80 MT of briquettes, value of which was Rs. 33,67,369.50 paise. Defendants have also adduced oral evidence. Witnesses have mostly stated that the contract between the parties was with regard to the purchase of slurry for the manufacturing of briquettes and the residue of slurry was dumped by the defendant Company at the places narrated by the plaintiff. The averment of the defendant's witnesses is contrary to their case where the defendants have contested tooth and nail that the residue of briquettes was their property.

19. From the aforesaid oral and documentary evidence, it is evident that the plaintiff have been able to show that the defendants have lifted 7442.80 MT of briquettes and they are liable to pay to the plaintiff the cost of the aforesaid residue which was valued at Rs. 33,67,369.50 paise along with interest. This issue is also decided in favour of the plaintiff. The plaintiff is entitled for the relief claimed.

20. Issue No. 1, 2 3 & 7:

All these issues are interlinked by the same question of facts and law. Accordingly, all these three issues shall be discussed together.

21. Mr. Pandey Neeraj Rai, learned counsel appearing on behalf of the appellants submits that the plaintiff had raised a bill against the defendants vide letter no. PO (KTW) 5635 dated 15.10.1998 for payment of Rs. 32,37,855.30 paise against 7442.80 MT of remains of briquettes, whereas the present suit was filed on 10.12.2001 i.e. after three years from which the demand was made. As such, the suit was hopelessly barred by limitation.

22. Mr. Amit Kumar Das, learned counsel appearing on behalf of the plaintiff submitted that after the plaintiff had made a demand for payment of residue left after preparation of briquettes, defendants had denied that the residue was the property of the plaintiff for which they had filed writ petition before the Calcutta High Court vide W.P No. 3919 of 1990 which was finally decided on 15.05.2001 in favour of the plaintiff. Thereafter, the plaintiff have

filed the present suit after the issue that the residue of slurry belonged to the plaintiff was finally decided and as such, it cannot be said that the suit was barred by limitation.

23. Defendants have taken a stand that the residue left after preparation of briquettes was their property. Though, the plaintiff raised a bill against the defendants claiming Rs. 33,67,369.50 being the value of the remains of briquettes during the period 08.07.1993 to 28.01.1998, defendants preferred a writ petition before the Calcutta High Court for a declaration that the briquettes were their property. However, the Calcutta High Court vide order dated 15.05.2001, finally decided that the residue left after preparation of briquettes was the property of the plaintiff. Thereafter, plaintiff have filed this suit. Accordingly, the period of limitation will start from the date on which ownership of the residue of the remains after manufacturing of briquettes was decided and as such, I am of the opinion that the present suit is not barred by limitation.

23. I have already come to the finding that the defendants are liable to pay for the Ash and other residue remains left after manufacturing of briquettes. Accordingly, I come to the finding that the plaintiff has got cause of action for the present suit.

Defendants have not pointed out any structural defect in filing of the present suit in the present form. Accordingly, the present suit is maintainable in its present form. These issues are decided in favour of the plaintiff and against the defendants. The plaintiff is entitled for the relief claimed.

24. In view of the aforesaid findings, it is hereby:-

Ordered That this appeal is dismissed with cost. The judgment and decree passed by the learned Civil Judge, Sr. Division-I, Bermo at Tenughat dated 31.08.2013 is affirmed. Let a decree be accordingly drawn.