Orissa High Court
Odisha Mining Corporation Ltd vs Sri D.K. Nayak on 1 August, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.31 of 2018
(Through hybrid mode)
Odisha Mining Corporation Ltd. .... Appellant
Mr. A.R. Dash, Advocate
Mr. A. Mahanta, Advocate
-versus-
Sri D.K. Nayak .... Respondent
Mr. U.K. Samal, Advocate
CORAM: JUSTICE ARINDAM SINHA
ORDER
01.08.2022
Order No.
8. 1. Mr. Mahanta, learned advocate led by Mr. A.R. Dash,
learned advocate appears on behalf of appellant. Mr. Mahanta
submits, impugned is judgment dated 15th December, 2017
made by the Court below upholding award dated 18th July,
2016 in favour of respondent contractor. He refers to agreement
dated 3rd June, 2011 between his client and respondent, clause-
52 and several sub-clauses thereunder. Nature and scope of
work provided, he submits, was for the agency to transport 3
lakh cubic meter of low grade dump located near Jagar Quarry
and feed to the installed screen and crusher plant having
average hauling distance of 1.5 kms., to produce fines. The
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spurious materials were to be segregated. The fines were to be
shifted to Central Stock Yard, while the spurious materials to
the designated dump. In breach of this condition, being an
essential condition, respondent set up the screening and crusher
plant at zero distance from Jagar Quarry. By reason of this
breach, running bills of respondent were held up on settlement.
Mr. Mahanta relies on section 54 in Contract Act, 1872 to
submit respondent not having fulfilled its obligation under the
contract, was not entitled to payment. Respondent thereafter
shifted screening operation as required but soon after
abandoned the work. In the circumstances, claims of
respondent in the reference, should not have been allowed. The
award was in violation of mandatory provisions in sub-section
(3) of section 28, Arbitration and Conciliation Act, 1996 in not
taking into account terms of the contract applicable to the
transaction. On query from Court Mr. Mahanta submits, there is
no provision in the agreement requiring his client to identify the
spot, where the screen and crusher plant was to be set up.
2. Drawing attention to clause 71 of the contract Mr.
Mahanta submits, inter alia, termination of contract was
provided, thereby. The contractor abruptly abandoned the work.
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3. Mr. Samal, learned advocate appears on behalf of
respondent contractor. He submits, screen and crusher plant
was set up at the place indicated by appellant through its
Manager (Mining) as per clause-13 of the agreement. This is
because forest clearance by appellant had not been had on any
site in its leasehold to, be used to set up the plant. Later, on
requirement upon clearance had, the plant was shifted. His
client then was told to stop production by letter dated 17th
December, 2011, of the Regional Manager, tendered as Ext.22
in the reference.
4. Court had made query of appellant regarding whether it
was relying on the average hauling distance requirement under
nature and scope of work, provided for in clause-52 as an
essential term. Nothing could be demonstrated for finding that
it was. Clause 52.2(a) simply talks about average distance as
shown in anneuxre-1 to the agreement. Annexure-1 gives
information sheet of Gandhamardan Iron Ore Mines. Relevant
information regarding average hauling distances are extracted
and reproduced below.
"INFORMATION SHEET OF GANDHAMARDAN IRON ORE
MINES
1. Weighted average distances:
a) Low grade dump to screen & crusher plant- 1.5 KM
b) Screen & crusher plant to stock yard via W/B-1.0 KM
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c) Screen & crusher plant to OB dump- 1.5 KM
d) Dump No.II to Dump No.I- 1.0 KM"
5. On further query from Court, necessity on average
hauling distance could not be demonstrated on behalf of
appellant, considering also that admittedly the screen and
crusher plant was set up at zero distance of the acquiring site,
the fines segregated from spurious materials and hauled to
Central Stock Yard by respondent. In the circumstances, the
indication by information of hauling distances cannot be found
to be an essential term of the contract, to hold breach thereof by
respondent. It also appears that initially the screen and crusher
plant was set up at a place indicated by appellant itself.
6. The other contention is regarding abandonment of work
to be seen as wrongful termination of the contract by
respondent. On perusal of clause 71 providing for, inter alia,
termination it is found that in event of completion or
termination, respondent was obliged to do certain things like
clearing out the site. On default, the clause provided for
appellant to have done so at expense of the contractor. On
query from Court response was, no counter claim was filed in
the reference by appellant.
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7. Perused impugned judgment. There is no reason to
interfere. It is confirmed.
8. The appeal is disposed of.
(Arindam Sinha)
Judge
Sks
