Orissa High Court
Narayan Prasad Shaw vs State Of Odisha And Others ..... Opp. ... on 12 July, 2018
Equivalent citations: AIR 2018 ORISSA 189, (2018) 2 ORISSA LR 559(1)
Author: Vineet Saran
Bench: Vineet Saran
HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No. 15130 of 2008
In the matter of an application under Articles 226 and 227 of
AFR
the Constitution of India.
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Narayan Prasad Shaw ..... Petitioner
-Versus-
State of Odisha and others ..... Opp. Parties
For Petitioner : M/s. Niranjan Panda-I,
S.K. Acharya, M.K. Panda,
and (Miss) S. Mazumdar,
Advocates
For Opp. Parties : Mr. R.K. Mahapatra,
Government Advocate
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P R E S E N T:
THE HONOURABLE THE CHIEF JUSTICE MR. VINEET SARAN AND THE HONOURABLE DR. JUSTICE B.R. SARANGI
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DECIDED ON : 12.07.2018
------------------------------------------------------------------------- 2 DR. B.R. SARANGI, J The petitioner, who is a 'C' class contractor, has filed this writ application challenging illegal deduction made by the opposite parties from the bill amount raised, after final measurement of work, purportedly towards payment of royalty for earth work.
2. The factual matrix of the case, in hand, is that to protect the saline water of Bay of Bengal, Bijaypatna- Dhamara Saline Embankment was constructed. To combat the increasing force of high tide in the Bay of Bengal, as well as for the communication purpose, the Government in Department of Water Resources floated tender for the work "Raising and Strengthening to Bijaypatna Dhamara Saline Embankment from RD 15.00 to 17.00 km for 2007-08". The value of the tender was Rs.11,97,399/- and for the purpose of tender earnest money of Rs.12,000/- was to be deposited. The date and time for sale of tender paper was from 15.11.2007 to 26.11.2007 up to 15.00 hours., and the date of receipt of tender paper was from 15.11.2007 to 26.11.2007 up to 15.00 3 hours. The date of opening of tender paper was 27.11.2007 at 11.00 hours and stipulated period of completion was 75 days.
3. In pursuance of the Invitation for Bids issued vide tender call notice no. 04/2007-08, the petitioner, along with others, submitted his bid. The petitioner, having satisfied the requirements stipulated in the detailed tender call notice, was selected, being the lowest bidder, to complete the work at Rs.9,33,826.00, which is 22.01% less than the cost estimated by the Department. Consequentially, the tender of the petitioner was accepted, after following all the legal formalities, and he was communicated, vide letter dated 06.12.2017, to submit certain documents for drawl of agreement. After fulfilling all the conditions, an agreement was executed on 04.01.2008, vide Agreement no. 298 F 2 of 2007-08. Consequent thereof, the petitioner, vide letter no. 57 dated 05.01.2008 issued by the Executive Engineer-opposite party no.3, was communicated with the work order, wherein it was stipulated that the date of commencement and completion of work would be treated as 05.01.2008 and 19.03.2008 respectively. In the memorandum of the agreement, the 4 estimated coast was shown as Rs.11,97,399/-, but the agreement amount was shown as Rs.9,33,826/-. The percentage to be deducted from bills as security deposit was shown as 3%. The memorandum would show the deduction of income tax from the bills at 2% and sales tax at 4%. There was no other mention of deduction other than the above noted deductions. After the completion of work within the stipulated period, i.e., by 19.03.2008 under the supervision of the Departmental Engineers, the final measurement was made on 08.04.2008, as recorded in the final bill, vide M.B. No. 5249 at page 126-137. The total earth work, after completion of project, was recorded to be 25,118.98 Cum., instead of total proposed agreement quantity measuring 25,382.60 Cum. The amount finalized, after final measurement, was Rs.9,24,127/-, i.e. @ 3,679/100 Cum., but the petitioner has received a sum of Rs.4,88,737/-. When a query was made, it was informed to the petitioner that the opposite party no.3 deducted a sum of Rs.3,51,665/-, from the total amount of works executed, towards royalty of the earth work under OMMC Rules, 2004. Hence this application.
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4. Mr. N. Panda, learned counsel for the petitioner states that the petitioner is not liable to pay royalty under the Odisha Minor Minerals Concession Rules, 2004 (for short "OMMC Rules, 2004") for construction/repair/ strengthening the saline embankment to protect the agricultural field from saline water and as such, there was no condition for deduction of royalty @ Rs.14/- per cubic metre of earth work. Therefore, deduction of Rs.3,51,665/- made from the final bill of the petitioner towards royalty cannot sustain in the eye of law and the same has to be refunded to the petitioner. It is further contended that the work was executed by Irrigation Department to strengthen the saline embankment at Dhamara to prevent the damage of agriculture due to saline water of Bay of Bengal, and at the same time the embankment facilitates communication of nearby villagers and carrying out smooth agricultural works. The ordinary earth extracted from nearby Government land was used by the Government for construction of such saline embankment, thereby no royalty is payable. Consequentially, the deduction thereof made cannot sustain in the eye of law. Reliance has 6 been placed on circular no. 37229/R dated 28.07.2003, wherein it has been provided that when earth is removed from the canals or nearby government land to be utilized in the construction of canal-embankment, such earth is not liable to levy of royalty. In these view of the matter, it is contended that the petitioner is not liable to pay royalty, which has been deducted from his final bill, and claims for refund of the same.
5. Mr. R.K. Mohapatra, learned Government Advocate appearing for the State opposite parties contended that the petitioner is liable to pay royalty @ Rs.14/- per cubic metre, which is in force from 01.09.2007 as per clause-60 of the special condition of the contract and as per OMMC Rules, 2004. Therefore, necessary deduction of royalty has been made @ Rs.14/- per cubic metre from the bill of the petitioner, and as such the authorities have not committed any illegality or irregularity so as to warrant interference of this Court in the present application. It is further contended that as per Rules 24(ii) and 28(ii) read with Schedule (ii) of the OMMC Rules, 2004, which has been given effect from 01.09.2007, the rate of royalty has been prescribed @ Rs.14/- 7 per cubic metre, which the petitioner is liable to pay in consonance with the circular dated 02.02.2008.
6. We have heard Mr. N. Panda, learned counsel for the petitioner, and Mr. R.K. Mahapatra, learned Government Advocate for the State opposite parties, and perused the records. Pleadings having been exchanged between the parties, with the consent of learned counsel for the parties this writ petition is being disposed of finally at the stage of admission.
7. The facts delineated above are undisputed, but only question is to be considered whether the petitioner is liable to pay royalty, which has already been deducted from his bill amount, after completion of the work. Admittedly, the Invitation for Bids issued vide tender call notice No. 4/2007- 08, including the detailed tender call notice, does not indicate with regard to payment of royalty by a bidder. The agreement, which has been executed between the petitioner and opposite party no.3, prescribes special conditions in Clauses-17, 58 and 60, which are reproduced below:-
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"17. All the materials including cement and reinforcement steel required for the work will be arranged by the contractor in time. Including carriage of the same to the site of work, at his own cost. All taxes, fees, royalty, tollage and ferry charges including sales tax and income tax etc. as applicable from time to time, shall be borne by the contractor for which no extra payment will be made by the department. The rate as for finished items of works including cost of carriage, fees, royalty, tollage and all taxes as mentioned above. All the materials supplied by the contractor must confirm to the standard specification and be got approved by the Engineer-in-charge.
58. Any royalty or any other taxes if any, for executing the work will be borne by the contractor.
60. Royalty involved will be deducted at the current rate."
From the above clauses, it is evident that the royalty involved would be deducted at the current rate. Therefore, the contention raised by learned counsel for the petitioner, that the petitioner is not liable to pay royalty, is not acceptable.
8. In State of Gujurat (Commissioner of Sales Tax, Ahmedabad) v. Variety Body Builders, AIR 1976 SC 2108 the apex court held intention has to be primarily gathered for the terms and conditions which are agreed upon by the 9 parties. The entire document with all the relevant and material clauses throwing light upon the real intention of the parties and the real nature of the transaction must be given weight.
9. In Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362, the apex court held that when words of contract are clear and unambiguous there is no scope for drawing upon hypothetical considerations or supposed intentions of the parties.
10. In C.I.T. Punjab, Haryana, J and K., H.P. and Union Territory of Chandigarh v. Panipath Woollen and General Mills Co. Ltd. Chandigarh, AIR 1976 SC 640, the apex Court held that the court in order to construe an agreement has to look to the substance or the essence of it rather than to its form. A party cannot escape the consequences of law merely by describing an agreement in a particular form though in essence and in substance it may be a different transaction.
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11. The petitioner having been held to be liable to pay the royalty, now question comes for consideration the quantum of royalty to be paid by him for the work undertaken. Certainly, as per the provisions contained in Rules 24(ii) and 28(ii) read with Schedule (ii) of the OMCC Rules, 2004, the rate of royalty of minerals has been prescribed. The rate fixed, as per the notification dated 31.08.2004, per cubic metre of ordinary clay was Rs.10/-, but the same has been revised to Rs.14/- w.e.f. 02.02.2008, the date on which the circular under Annexure-C/3 has been issued. Admittedly, the petitioner was issued with the work order to execute the work on 05.01.2008, i.e., prior to issuance of circular dated 02.02.2008 and, as per Clause-60, royalty involved would be deducted at the current rate, meaning thereby the rate prevailing at the time of issuance of work order, i.e., Rs.10/- per cubic metre. Therefore, the petitioner's liability to pay royalty has to be calculated @ Rs.10/- per cubic metre, keeping in view clause-60 of the agreement itself. Although by the time the work order was issued, the rate of royalty was Rs.10/- per cubic metre, but 11 the calculation has been done @ Rs.14/- per cubic metre and deduction has been made. Therefore, this Court is of the considered view that calculation of royalty @ Rs.14/- per cubic metre, as has been done towards the work undertaken by the petitioner, is contrary to Clause-60 of the agreement itself. Therefore, the opposite parties are directed to re-calculate the royalty at the current rate of Rs.10/- per cubic metre and revise the amount of total deduction made from the bill of the petitioner and refund the balance amount to the petitioner forthwith, after adjusting the amount towards royalty, within a period of three months from the date of filing of certified copy of this order.
12. In view of the aforesaid observation and direction, the writ petition is allowed in part. No order to costs.
Sd/-
( VINEET SARAN ) CHIEF JUSTICE Sd/-
( DR. B.R. SARANGI ) JUDGE The High Court of Orissa, Cuttack.
Dated the 12th July, 2018 GDS/AJAYA True Copy Sr. Steno