Jharkhand High Court
Mandeepa Enterprises (A ... vs The State Of Jharkhand on 21 November, 2024
Author: Deepak Roshan
Bench: Deepak Roshan
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C). No. 5646 of 2023
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Mandeepa Enterprises (A Proprietorship Firm), having its office at Unit-G-1,
Tulip Garden, Dashodron, Rajarhat, Main Road, opposite State Bank of India,
Kolkata-700136, through its proprietor, namely, Madan Satya Das, aged about
38 years, son of Late Satya Girish Das, resident of Unit G-1, Tulip Garden,
Dashodron, Rajarhat, Main Road, opposite State Bank of India, P.O. & P.S.
Rajarhat, District Kolkata-700136 (West Bengal). .......Petitioner
-: Versus:-
1.The State of Jharkhand, through its Secretary, Road Construction
Department, having its office at Jharkhand Mantralaya (Project Building),
P.O. Dhurwa, P.S. Jagannathpur and District Ranchi, PIN 834004
(Jharkhand).
2.Engineer-in-Chief, Road Construction Department, Government of
Jharkhand, having its office at Jharkhand Mantralaya (Project Building), P.O.
Dhurwa, P.S. Jagannathpur and District Ranchi, PIN 834004 (Jharkhand).
3.Chief Engineer (Communication), Road Construction Department,
Government of Jharkhand, having its office at Jharkhand Mantralaya (Project
Building), P.O. Dhurwa, P.S. Jagannathpur and District Ranchi, PIN 834004
(Jharkhand).
4.Executive Engineer, Road Construction Department, Road Division,
Saraikela-Kharsawan, P.O. & P.S. Saraikela, District Kharsawan, Jharkhand.
5.National Highway Authority of India, through its Chief General Manager
Medi, having its office at Regional Office, 301-A, 3rd Floor, Pal Heights, Plot
No. J/7, Jaydev Vihar, Bhubneshwar, Odisha-751013. .....Respondents
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CORAM: HON'BLE MR. JUSTICE DEEPAK ROSHAN
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For the Petitioner : Mr. Sumeet Gadodia, Advocate
Mr. Prakhar Harit, Advocate
Ms. Sanya Kumari, Advocate
For the State : Mr. Gaurav Raj, AC to AGG-II
For the NHAI : Mrs. Sweety Topno, Advocate
Mr. Amrit Raj Kishu, Advocate
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07/Dated: 21.11.2024
Heard learned counsel for the parties.
2. The present writ petition has been filed for following reliefs:-
"(i) For issuance of an appropriate writ, order or direction, including writ of
certiorari for quashing the Letter no.1009 dated 03.10.2023 (Annexure-11)
issued by the Respondent No.4, wherein the demand towards instalment of
toll has been raised upon the petitioner belonging to Kandra- Chowka Toll
Plaza for the Period from 16.07.2021 to 24.09.2023 in a most arbitrary and
illegal manner without taking into consideration the admitted force majeure
events as described under Clause 25 of the Request for Proposal (RFP)
document which entitled the petitioner to forego instalment during the period
of force majeure;
(ii) For issuance of further appropriate writ, order or direction, including
writ of mandamus, directing the Respondent No.2 to recompute the demand
towards instalment of toll belonging to Kandra-Chowka Toll Plaza after
taking into consideration Clause 25 of the RFP document and to compute the
foregone remittance of the petitioner by taking into consideration the actual
toll collected by the petitioner and deposited in the government treasury
during subsistence of the force majeure events".
3. The period in question is for the following period:-
(i) 16.07.2021 to 28.02.2022
(ii) 21.05.2022 to 19.11.2022
(iii) 01.03.2022 to 20.03.2023
(iv) 01.12.2022 to 01.01.2023.
4. It appears that the petitioner company is a proprietorship firm which
has been assigned a work after being successful for collection of the toll of
Kandra-Chowka Toll Plaza, situated at Kandra-Chowka Road. The other
factual matrix are not in dispute.
5. The contractual terms which has to be interpreted is quoted herein
below:-
Force Majeure Clause:
In the entire argument advanced by and between the Petitioner and
Respondent- State of Jharkhand, there is a clause pertaining to Force Majeure
Event being Clause 25, which reads as under:-
"(a) NON-FORCE MAJEURE EVENT:
An event (i) which involves diversion of traffic of any kind, including but not limited
to any diversion ordered/implemented by local authority or any State/ Central
Government for a period not exceeding 15 days in continuation; or (ii) where the
road users opt to access/travel through the existing alternate free User Fee (toll)
roads due to deteriorated road conditions/maintenance of road section. This may
result into bypassing of User Fee Plaza/User Fee Collection Booths and use of any
part of the said Section of the State Highway by the users.
(b) FORCE MAJEURE EVENT:
Except as stated in clause (a) above, Force Majeure event means an event or
circumstances or a combination of events and circumstances referred to in this
clause which are beyond the reasonable control of the Party or Parties to this
Contract and which party could not have prevented or reasonably overcome with the
exercise of its reasonable skill and care in relation to performance of its obligations
pursuant to this Contract and which are of the nature, without limitation of those
described below:
(i) Publicly declared strike by registered and recognized association of Transporters
exceeding 7 days. The date of going on strike and withdrawal or start of movement
of traffic will be inclusive for the purpose of calculation of 7 days under this clause.
(ii) Floods/Earthquake having materially adverse impact i.e. complete blockade of
road.
(iii) Act of war, invasion, armed conflict or act of foreign enemy, unexpected call up
of armed forces, blockade, embargo, revolution, riot, sabotage, terrorism or act of
such threat, or any other political or social event having material adverse impact on
the performance of obligations of the parties thereof.
(iv) Expropriation, acquisition, confiscation or nationalisation of the User Fee
collection
(v) Any change in law which has a material adverse effect on the obligation of the
parties hereto.
(vi) Any decision or order of a court or tribunal, which has a material adverse effect
on the performance of obligations of the parties to this contract.
(vii) Suspension of traffic on the said section of State Highway/said bridge or any
part thereof, exceeding 15 (fifteen) days at a stretch.
(viii) Any event or circumstances of a nature analogous to the foregoing.
Either party to this Contract shall be entitled to suspend or excuse performance of
his obligations, including remittance of instalments by the Contractor to the
Authority for the period of continuance of the Force Majeure event, under this
Contract to the extent that such performance is impeded by an event of Force
Majeure prevailing continuously for more than 7 (seven) days at a time.
(c) PROCEDURE FOR FORCE MAJEURE:
(i) NOTICE:
(1) If a party claims relief on account of a Force Majeure event, then the Party
claiming to be affected by the Force Majeure event shall, as soon as reasonably
practicable and in any event within 7 days of becoming aware of the Force Majeure
event, give notice giving details of the effects of such Force Majeure on the Party's
obligations under this Contract to the other Party in writing, including the dates of
commencement and actual/likely date of cessation of such Force Majeure and its
effects, with necessary supporting documents and data.
(2) The Party receiving the claim for relief under Force Majeure shall, if wishes to
dispute the claim, give a written notice of the dispute to the Party making the claim
within 30 days of receiving the notice of claim.
(ii) CONSULTATION AND DUTY TO MITIGATE:
(1) The Party claiming relief under Force Majeure shall, at its own cost, take
reasonable steps to remedy and mitigate the effects of the Force Majeure event and
restore its ability to perform its obligations under this Contract as soon as
reasonably possible. The Parties shall consult with each other to determine the
measures to be implemented to minimise the losses of either Party as a result of the
Force Majeure event.
(2) The party affected by Force Majeure shall keep the other Party informed of such
efforts to remedy and make reasonable efforts to mitigate on a continuous basis and
shall provide written notice of the resumption of performance hereunder.
(3) Notwithstanding anything contrary to the specifically stated in this Contract no
party shall be relieved of its obligations under this Contract by reason of
impossibility of performance or any other circumstances whatsoever not beyond its
control.
(4) Any Party claiming cessation of the event of Force Majeure may, if the other
party has not served a notice of resumption of performance, give notice to the other
party, of cessation of such event, notifying the date of alleged cessation and unless
the party to whom such notice is given does not dispute the same within 30 days of
the receipt of such notice the Force Majeure event shall be deemed to have ceased to
consequences thereof and shall be deemed to have come to an end or the date so
notified.
(5) The relief under Force Majeure will be calculated on the basis of average
collection per day, arrived based on the agreed weekly remittance. The difference in
collection per day during force majeure and average amount of collection per day,
arrived based on the agreed weekly remittance multiplied by number of days of force
majeure will be payable to the contractor.
(iii) TERMINATION DUE TO FORCE MAJEURE:
If any event of Force Majeure shall continuously impede or prevent a Party's
performance for longer than 60 days from the date of commencement of such Force
Majeure event, the parties shall decide through mutual consultation, either the terms
upon which to continue the performance of this Contract or to terminate this
Contract by mutual consent. If the parties are unable to agree on such terms or to
terminate the Contract by mutual consent within 90 days from the date of
commencement of such Force Majeure event, either Party may issue a Notice to
terminate this contract.
(iv) The Authority is authorised specifically to settle claims for force majeure
events."
6. On the strength of above terms and conditions of the contract, learned
counsel for the petitioner has raised the following issues:-
1. Whether the Force Majeure clause is available to the writ petitioner
or not ?
2. Whether the petitioner is entitled to pay actual collected amount or
the license fee, as per the agreement or not?
7. Learned counsel has further relied upon the judgment of High Court of
Delhi in the case of Halliburton Offshore Services Inc. Vs. Vedanta Limited
& Anr., reported in 2020 SCC Online Del 2068.
Relevant paragraph No.63 of the above judgment is quoted herein
below:-
"63. It is under this factual backdrop that the ground of Force Majeure taken in
March, 2020 would have to be adjudged. The grounds taken to invoke the Force
Majeure clause are that due to outbreak of COVID-19 experts from France who may
be required cannot travel to India. Since the Force Majeure clause in the contract
covers epidemics and pandemics, the Contractor claims that its non-performance is
justified and the invocation of Bank Guarantees is liable to be stayed. There is no
doubt that COVID-19 is a Force Majeure event. But was this event the cause of the
non-performance?"
8. It has been submitted by learned counsel for the petitioner that the
COVID-19 situation is no doubt is a Force Majeure and accordingly the
obligation of the parties has to be worked out in accordance with the terms
and conditions of the contract.
9. Learned counsel further submitted that for the period 21st May, 2021 to
19th November, 2021, the Government of India had imposed Excise Duty on
the following products which resulted into droppage of movement of traffic.
(i) Flat-rolled products of stainless steel, of a width of 600 mm or
more.
(ii) Other bars and rods of stainless steel, angles, shapes and sections
of stainless steel.
(iii) Bars and rods, hot-rolled, in irregularly wound coils, of other alloy
steel.
10. It has further been submitted that NHAI has granted the benefit for the
said period for which reference has been made to Annexures 27, 28 and 29 of
the Additional Rejoinder Affidavit.
11. Referring to the various paragraphs of the counter affidavit, learned
counsel for the State has disputed the above fact and submitted that there was
no total restriction; rather flow of the vehicle was there. Once there is no total
restriction rather the flow of vehicle was there then the clause of Force
Majeure is not available to the petitioner.
12. It has been further submitted that it is a contractual matter and as such
the writ petition is not maintainable. However, he fairly admitted before this
Court that the issue involved in this writ application is squarely covered by the
judgment rendered in W.P.(C) No.5591 of 2023.
13. Having heard learned counsel for the parties and from perusal of record,
it appears that following fact stands admitted: -
During the impugned period i.e. 15.03.2020-28.02.2023 there was
various orders restricting the movement of traffic. Relevant memo have been
annexed as Annexure-6 series which are as follows: -
(i) Memo No.1747 dated 26.06.2020
(ii) Memo No.880 dated 01.10.2020
(iii) Memo No.1 dated 18.04.2021
(iv) Memo No.431 dated 16.09.2021
(v) Memo No.434 dated 30.10.2021
14. It further appears that considering the COVID-19 situation, the
department has initiated the process for realisation of only collected amount
not the contractual amount but that recommendation although has travelled
from one authority to another authority but that has not been given effect.
15. It further appears that denying the application of Force Majeure the
liability has been created by the impugned Letter No.1009 dated 03.10.2023
(Annexure-11).
16. It is further evident from the documents annexed in the pleading that
there was less collection than the contractual amount for which the petitioner
was held liable under the contract.
17. It is an admitted fact the Government of India imposed Excise Duty on
various steel products due to which movement of traffic was dropped and
under similar Force Majeure clause, NHAI has extended the benefits under
Annexures 27, 28 and 29.
18. So far as issue of maintainability raised by the learned counsel for the
State is in their affidavit concerned; the law is now well settled that once issue
has to be decided then the Writ Court is under obligation to decide the same
and then only remit the matter. Issue which is required to be determined
cannot be delegated to the authorities and since the issue was required to be
decided by this Court, the writ petition has been entertained.
19. It is also evident from record that the petitioner has remitted the
contractual amount and only default has been made during the impugned
period.
20. From the marshalling of above facts and the legal position, it appears
that
i. The pandemic situation is no doubt Force Majeure.
ii. There was a restriction in the movement of traffic and as such there
was less collection and the less collection is totally attributable to the
Force Majeure.
iii. It further appears that in similar situation the central government as
well as some other state i.e. State of Rajasthan etc. has accepted the
clause of Force Majeure and only the actual collected amount has been
realised.
iv. It further appears that the Government of India imposed Excise Duty
on various steel products due to which movement of traffic was
dropped and under similar Force Majeure clause, NHAI has extended
the benefits under Annexures 27, 28 and 29.
21. Having regards to the aforesaid discussion and the factual matrix
coupled with the settled legal position, the impugned letter No.1009 dated
03.10.2023 issued by the Executive Engineer Road Construction Dept., Road
Division, Seraikella-Kharsawan (Respondent No.4); deserves to be, and is,
hereby, quashed and set aside.
22. Consequently, the matter is remitted to the authority to raise the fresh
claim applying the Force Majeure clause and it is hereby declared that for the
impugned period i.e. 16.07.2021 to 24.09.2023, the petitioner will be liable to
pay actual collected amount only.
23. Concerned authorities are hereby directed to conclude the proceeding
and raise the final demand within five weeks from the date of
receipt/production of a copy of this order.
24. With above observation and direction, the present writ petition stands
disposed of. Pending I.A., if any is also closed.
28. In view of the disposal of the main writ petition, pending I.A. also
stands disposed of.
(Deepak Roshan, J.)
Vedanti/Amardeep/
