Bangalore District Court
M/S Friends Projects Pvt Ltd vs Indian Oil Corporation Limited on 2 August, 2024
KABC170000982024
IN THE COURT OF LXXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE (CCH-85) (COMMERCIAL COURT),
BENGALURU
DATED THIS THE 2nd DAY OF AUGUST 2024
PRESENT
SRI.RAMAKANT CHAVAN,
B.Com., LL.B.(Spl)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.49/2024
PLAINTIFF:
M/s Friends' Projects (P) Ltd.
Engineers & Contractors,
Having its Regd. office at
C-303, Tower-C, Plot No.F-27
Amrapali Eden Park, Sector-50 Noida,
Gautam Buddha Nagar,
UP - 201 301,
through its Managing Director
Mr.Sanjiv Dixit
(By Sri.E.V. Ramana, Adv.)
AND
DEFENDANTS:
1. Indian Oil Corporation Ltd.,
Head Office
'Indian Oil Bhavan',
G-9, Ali Yavar Jung Marg,
Bandra (East), Mumbai - 400 051
Rep. by its Chairman
2 Com.O.S.No.49/2024
2. Indian Oil Corporation Ltd.,
Karnataka State Office,
Indian Oil Bhavan,
Engineering Department,
2nd Floor, 29, P.Kalinga Rao Road,
Bengaluru - 560 027
Acting through its Executive Director (KASO)
(By Sri.Nikhil Chandra R., Adv.)
Date of Institution 08.01.2024
Nature of suit For recovery of money
Date of First Case 30.03.2024
Management Hearing
Date of commencement of 27.05.2024
recording of evidence
Date on which judgment
02.08.2024
pronounced
Time taken for disposal Years Months Days
1) From the date of First Case 00 04 03
Management Hearing
2) Total duration 00 06 25
LXXXIV Addl. City Civil & Sessions Judge
(CCH-85) Commercial Court, Bengaluru
JUDGMENT
This is a suit filed by the plaintiff for recovery of Rs.28,23,624.68 with interest at 18% per annum from 19.05.2022 till realization plus applicable GST; direct the defendant to comply the Govt. formality if any and cost of the suit 3 Com.O.S.No.49/2024
2. Brief facts of the plaintiff's case are that, the plaintiff is a private limited company engaged in the construction activities of civil nature with various Govt. departments, public and private sector enterprises of repute. The plaintiff has completed all the projects including that of defendant at various locations of Indian Oil Corporation Ltd., across many states of the country, without abandoning any contract till date. Pursuant to the defendant's public tender notice inviting Tender (NIT) No.KASO/ENG/PT/013/12-13 dated 06.11.2012, technical bid opened on 03.12.2012, financial bid opened on 28.12.2012. The defendant accepted the bid of the plaintiff and plaintiff was awarded the contract of "Land Development by Earth Filling and cutting, pitching works for proposed New tank Area" at Devangonthi Terminal Bengaluru. The negotiations took place on 21.01.2023, but the work order was awarded after 09 months i.e. on 09.10.2013. The work was completed by the plaintiff company on 23.06.2014, the defendant No.2 paid a sum of Rs.18,71,753/- after withholding an amount of Rs.28,23,624.68 against the final bill of the plaintiff in lieu of alleged non submission of documents / royalty receipts for procuring earth.
It is further pleaded that since the final bill was not paid to the satisfaction of the plaintiff. The plaintiff company tried to resolve the dispute amicably on many occasions by writing and oral submission with the defendants, but in vain. The clause No.23.1 of the Special Conditions of Contract as mentioned in the tender, the defendants are illegally invoking against the plaintiff. It reads - "The contractor has to obtain necessary statutory 4 Com.O.S.No.49/2024 approval / permission if required, for excavating murram from the selected source, which has to be approved by the IOC. Any payments / royalties in this regards shall be on account of a Contractor and necessary documents / receipts have to be submitted to IOC. Excavation of murram was to be obtained only when it was required. The murram if not procured from the Govt., lease / sources and procured from private sources, the question of submission of royalty receipts did not arise. The defendants had never complained of non completion of work by murram filling as per the contract between the plaintiff company and the defendants. The rate of royalty per CUM (Cubic Meter) was also not mentioned in the work order. The plaintiff company clarifies that - as per the trade practice and the tender documents, the defendants, the rate of royalty for CUM quantity is mentioned in the tender / work order. The same is considered to prepare estimate and also for bidders, if the same was to be factored in by them for quoting prices.
It is further pleaded that all the samples of the murram used in the work as produced from the private sources for completion of the work, the said samples were approved by the defendants after ascertaining the procured earth sample was from open market and the same was to be used for completion of the work. The defendant's site Engineers were clearly informed by the plaintiff that there was no royalty applicable on such procurements. The defendants never mentioned the source of supply in the requisition Form for sending the sample of soil to the laboratory for the test. The Engineers of the defendants gave 5 Com.O.S.No.49/2024 nod for the work based on these facts. The murram obtained from the private sources was first tested, i.e. the same of murram was taken by the defendants brought from the open market by the plaintiff company and sent to the authorized department of the defendants and test was conducted of the said murram. Only if the department felt the quality of murram was good, the defendants would allow the plaintiff company to use the murram in filling the earth.
It is further pleaded that the plaintiff company by its letter dated 18.02.2017 requesting the GM of the defendants to refund the withheld amount against the alleged royalty in view of the undertaking given by the plaintiff on 28.08.2014, indemnifying the defendants and it had been approximately 10 years, no liability of royalty has bee raised by any of the statutory authority till now. The plaintiff company imported and supplied thousands of Truck loads of earth of about One Lakh CUM of quantity in about 8 months time. Furnishing undertaking was not the work order condition and the demand of undertaking was an additional document requirement by the defendants. The plaintiff company had complied with all the terms and conditions of the work order. The defendants had unlawfully retained the amount in the name of royalty. The project was completed and handed over the same to the defendants.
It is further pleaded that the arbitration clause in the WO No.23983512 dated 09.10.2013 was deleted by the defendants for the reasons best known to them from the work order. The plaintiff company was not aware of such deletion of the clause.
6 Com.O.S.No.49/2024The plaintiff company realized such a deletion when the amount was withheld and when the defendants pleaded before the court in AC No.33/2016 that the contract did not contain the arbitration clause. The plaintiff company was always in belief that the contract contained a valid arbitration clause. The plaintiff's belief that there was an arbitration clause in the contract between the defendants and itself based on the Article 3 - Clause No.3.1.
It is further pleaded that the plaintiff filed an arbitration petition as per the said clause for appointment of Arbitrator. An Arbitrator was appointed. The CMP No.127/2016 was disposed off on 25.01.2016. The defendants not willing to settle the dispute. They have filed a Review Petition and it was disposed of by adjudicating that the court cannot appoint the Arbitrator and recalled the appointment of Sole Arbitrator. The Sole Arbitrator terminated the arbitration proceedings on 29.11.2016. The plaintiff company gave representation to the defendants to release the withheld amount by way of letter dated 14.10.2017 and 26.07.2018. The plaintiff company received the letter from the defendants on 05.06.2018 and 01.10.2018 in which they still insisted for Royalty Receipts which is impossible to submit in spite of the fact brought to the notice of the defendants.
It is further pleaded that the defendants are calling upon the documents which are not in the possession of the plaintiff company, but, never questioned when the work was being done. After obtaining the indemnity bond from the plaintiff company, retained the amount without any valid reason by these defendants. Even after disposal of CMP referred above, the 7 Com.O.S.No.49/2024 plaintiff company was giving representations to the defendants to consider the Indemnity Bond. Once again the plaintiff company had given representations on 18.06.2019 to the defendants and they replied the same on 01.07.2019 giving an untenable reply.
It is further pleaded that the plaintiff was under a bonafide impression that royalty amount would be released as the defendants are Govt. entities. The defendants never denied payment of royalty and kept the same in abeyance even after receipt of Indemnity Bond, because of Covid-19, the plaintiff company could not approach the defendants, later the plaintiff company issued a legal notice on 04.02.2020 in spite of service of notice, the defendants had not replied. Once again the plaintiff requested for release of the amount on 30.03.2022 for this the defendants replied on 19.05.2022 that royalty amount withheld with them will be payable on submission of necessary documents. The plaintiff company once again gave a representation on 15.03.2023 for the similar cause, the defendants have replied the same through email on 29.03.2023. The defendants have not denied the payment of royalty, but, sought for production of documents, which cannot be produced.Prior to the institution of the suit, the plaintiff company has filed PIM No.319/2023, but the defendants did not appeared, non starter report has been issued on 31.10.2023. Hence, the plaintiff company is constrained to file this suit.
3. After service of summons, the defendants put their appearance through their counsel and filed written statement. The defendants have denied most of the plaint averments. It is 8 Com.O.S.No.49/2024 further contended that the suit of the plaintiff company is barred by law of limitation, the plaintiff company ought to have been filed within Three years from the date when the money became due and payable by the defendants or within Three years from the date when the defendants last acknowledged its liability to pay such money to the plaintiff company.
It is further pleaded that the case of the plaintiff company is that the suit claim amount became due and payable in the year 2014, when the defendants allegedly, unlawfully withheld the suit claim amount while releasing the balance Final Bill amount. The plaintiff company has consistently contended that the defendants unlawfully withheld the suit claim amount. Nowhere it is stated that the defendants have ever unconditionally admitted or acknowledged their liability to pay the suit claim amount within Three years from 2014 until 2017. Hence, the plaintiff company is not entitled to lead any evidence. Hence, pray for dismissal of the suit.
4. Based on the above, this court has framed the following:
ISSUES
1. Whether the plaintiff proves that the royalty was not applicable on the earth material procured by them from open market, under the Contract?
2. Whether the plaintiff proves that withholding his sum of Rs.28,23,624.68 by the defendants in the name of so called royalty, is unlawful when the plaintiff submitted indemnity bond 10 years ago?9 Com.O.S.No.49/2024
3. Whether the plaintiff further proves that the defendants are liable to pay the interest at the rate of 18% p.a., on their dues?
4. Whether the suit is barred by law of limitation?
5. Whether the plaintiff is entitled for the reliefs sought?
6. What order or decree?
5. To prove the case, the plaintiff's Managing Director is examined as PW1 and got marked some documents at Ex.P1 to P19 and Ex.D1 to D6 are marked during cross examination of PW1. But, the defendants have not adduced any oral evidence.
6. The learned counsel for the plaintiff has filed his written arguments. Heard the learned counsel for the defendants.
7. My findings on the above issues are:
Issue No.1: In the affirmative Issue No.2: In the affirmative Issue No.3: In the affirmative Issue No.4: In the negative Issue No.5: In the affirmative Issue No.6: As per the final order for the following REASONS
8. Issue Nos.1 to 3: The burden of proving Issue Nos.1 to 3 lies on the plaintiff company. The Managing Director of the plaintiff has filed his affidavit and he is examined as PW1. He has 10 Com.O.S.No.49/2024 narrated the contents of the plaint in his affidavit. He has produced some documents at Ex.P1 to P19 i.e. original of schedule rates including SCC and GCC, copies of testing of Murram, copy of approval of Murram, copy of form of contract, certified copies of CMPs, Review Petitions, replies by the IOCL, DLSA report, copy of Indemnity Bond, letter of acceptance, email communications, certificate U/Sec.65B of the Evidence Act.
9. In the cross examination of PW1, it is forthcoming that he has not produced any documents to show that he is the MD of the plaintiff company. He has admitted that the amount claimed in the suit was due from the defendants in the month of June 2014. He has admitted that the defendants withhold the amount for non production of documents relating to royalty. The royalty if payable was to be paid to the Govt. and not to the plaintiff company. He has not produced any document to show that the royalty is not applicable for murram procured from open market. He has produced document to show that the Site Engineer has clearly informed that there was no royalty payable to such procurements i.e. Ex.P2 and P3.
10. It is further forthcoming that, the plaintiff company had initiated arbitration proceedings in CMP No.127/2015 in the year 2016 except the present suit. According to him, there is a clause in pre bid meeting regarding furnishing indemnity for release of royalty, it is in Ex.P18. He has denied that the defendants never asked for execution of indemnity. Ex.P18(h) is the final bill. He has identified the Ex.D1 to D6 i.e. the Service Entry sheets and details of bill. According to him, he has not 11 Com.O.S.No.49/2024 received all these pages along with email. He has denied the other suggestions.
11. The defendants have not adduced any oral evidence. But, cross examined PW1 and got marked Ex.D1 to D6.
12. The learned counsel for the plaintiff has submitted his written arguments basing on the plaint averments, evidence of PW1 and documents referred above. He has pointed out towards the defense made out by the defendants. The defendants have floated tender enquiry on 06.11.2012, pre bid meeting was held on 26.11.2012 and finalized on 28.12.2012. The work order was placed after 10 months i.e. on 09.10.2013. Tender was prepared inconsistently and unilaterally. No proposal for amendment was permissible by the bidder as per clause No.36 of Ex.P1. The defendants were not sure about applicability of royalty, therefore, they added a condition of furnishing Indemnity Bond to cover the liability of royalty. As per the pre bid meeting - "it was informed that the successful tenderer shall be required to indemnify IOCL from all claims from statutory bodies, local bodies on the above amount "that is royalty". The defendants wanted additional undertaking from the bidder to cover the royalty liability, but, never enquired about the same during the work in progress. He has pointed out towards the Clause No.23 of Ex.P1 - the contractor has to obtain necessary statutory approval / permission if required, for excavating murram from the selected source which has to be approved the IOC. Any payments / royalties in this regard shall be on account of contractor and necessary documents / receipts have to be submitted to IOC.
12 Com.O.S.No.49/202413. He has further pointed out towards Six RA bills paid by the defendants and Seventh bill, which is final bill. But, they never enquired about source of procured from open market and all material samples were passed by the laboratory / defendants. No liability by any competent authority was ever raised during and after the currency of contract till today. The same cannot be raised by any competent authority as the murram was not procured from Govt. / leased price of land / query. He has pointed out towards the Ex.P18(h). The contract was successfully completed and the bank guarantees of security deposit was released on 30.08.2015. He has pointed out towards the Clause No.4.4.0. The defendants have safeguarded their interest alone. In the said clause the defendants would charge 24% p.a. for delay in completion of the work. But, the plaintiff company is claiming interest at the rate of 18% p.a. He has pointed out towards the clause No.9 of Ex.P1 and Ex.P6 to P7.
14. In regard to point of limitation is concerned, he has stated that the plaintiff company moved to Hon'ble High Court of Karnataka for appointment of Arbitrator on 30.06.2015 and the CMP came to be disposed of on 11.11.2006. Sole Arbitrator appointed in AC No.33/2016 and it came to be disposed of on 29.11.2016. The plaintiff made representation calling upon the defendants to make the payment of balance amount on 14.10.2017 and reply has been given as per Ex.P9 on 05.06.2018, and once again on 26.07.2018 and replied the same on 01.10.2018 as per Ex.P10. Once again on 18.06.2019 and replied as per Ex.P11 on 01.07.2019, another representation on 13 Com.O.S.No.49/2024 31.10.2022 replied as per Ex.P12 on 19.05.2022, one more representation dated 15.03.2023 and replied by the other side as per Ex.P13 on 29.03.2023. In all these communications, the defendants have admitted their liability to pay the amount. He has pointed out towards the Sec.14 of the Limitation Act. The time taken i.e. 518 days from 30.06.2015 to 29.11.2016 or 500 days from 30.06.2015 to 11.11.2016 would be benefited to the plaintiff company. Hence, the suit of the plaintiff company is in time. The defendants have not led their evidence, simply they have filed the written statement. The defendants have not produced any documents to show that, why the amount of the plaintiff company is withheld. The defendants are withholding the amounts for almost Ten years. The defendants have earned lot of interest on the said amount.
15. During his arguments, he has relied upon the following decisions -
V.Madhava Das Vs The State of Karnataka & Ors.
W.P.No.20035-20036/2013 dated 16.05.2013 "4. The learned counsel for the petitioner has placed reliance on the Division Bench judgment of this Court in W.P.No.80817/2009 dated 02.09.2009 wherein, following an earlier decision of this Court in G.V.Kumar and others vs. State of Karnataka and others in W.P.Nos.31384- 31266/1994 dated 31.10.1994, this Court has laid down the principles relating to payment of royalty by contractors and the same is extracted hereunder:-
(a) Where providing the material (subjected to royalty) is the responsibility of the contractor and the Department provides the contractor with specified borrow areas, for extraction of the required construction material, the contractor will be liable to 14 Com.O.S.No.49/2024 pay royalty charges for the material (minor mineral) extracted from such areas, irrespective of whether the contract is a item rate contract or a lump sum contract. Hence deduction of royalty charges in such cases will be legal. For this purpose non-execution of mining lease is not relevant, as the liability to pay royalty arises on account of the contractor extracting material from a Government land, for use in the work.
(b) Where under the contract the responsibility to supply the material (minor minerals) is that of the Department/employer and the contractor is required to provide only the labour and service for execution of any work involving use of such material, and the unit rate does not include the cost of material, there is no liability on the contractor to pay any royalty.
This will be the position even if the contractor is required to transport the material from outside the work site, so long as the unit rate is only for labour or service and does not include the cost of material.
(c) Where the contractor uses material purchased in open market, that is material purchased from private sources like quarry lease holders or private quarry owners, there is no liability on the contractor to pay any royalty charges.
(d) In cases covered by paras (b) and (c) the Department cannot recover or deduct any royalty from the bills of the contractor and if so deducted, the Department will be bound to refund any amount so deducted or collected to the contractor.
(e) Subject to the above, collection of royalty by the Department or refund thereof by the Department will be governed by the terms of contract.
(f) Nothing stated above shall be construed as a direction for refund in regard to any particular contract. The Department or authority concerned shall decided in each case, whether royalty is to be deducted or if any royalty is already deducted, whether it should be refunded, keeping in view the above principles and terms of the contract".
5. Having regard to the above and the same having been upheld by a Division Bench judgment of this Court in 15 Com.O.S.No.49/2024 the case of Office of the Director of Department of Mines and Geology v. M.Mohammed Hajee in W.A.No.830/2006 disposed of on 25.09.2006, the present petitions are allowed in terms as above and on the principles stated hereinabove as prayed for. The respondents are directed not to deduct royalty from the bills of the petitioner if the petitioner has not quarried any Government land for the purpose of raw materials used in the works executed by him. In the event of any deductions made, the same shall be refunded."
Golayya Vs The State of Karnataka & Ors.
W.P.No.80817/2009 dated 02.06.2009 and Office of the Director & Ors. Vs M.Mohammed Hajee W.P.No.830/2006 dated 25.06.2006 In similar matters, this Court in G.V.Kumar and Ors. Vs State of Karnataka & Ors. in WP No.31384-31266 of 1994 disposed of on 31.10.1994 has laid down the principles relating to the payment of royalty by the contractors.
The same is extracted hereunder:
(a) .....
(b) ....
(c) Where the contractor uses material purchased in open market, that is material purchased from private sources like quarry lease holders or private quarry owners, there is no liability on the contractor to pay any royalty charges.
16. Per contra, the learned counsel for the defendants has submitted his arguments and he has pointed out towards the defense made by the defendants. He has mainly submitted his arguments, letter of authority is not produced by PW1 and no 16 Com.O.S.No.49/2024 documents also produced for his authorization. It is a matter of tender. He has pointed out towards the pleadings of the parties. He has admitted that royalty payment is withheld by the defendants. No documents have been produced by the plaintiff company to prove the Issue No.1. He has pointed out towards Sec.3 and 36 of the Karnataka Minor Mineral Concession Rules - 1994. He has also pointed out towards the Ex.D6. Payment of royalty is mandatory, no documents have been produced by PW1. Hence, the royalty is withheld. He has also drawn my attention towards the Clause 23.3 of Ex.P1 - Agreement. Indemnity Bond was never asked by the defendants. The amount withheld by the defendants pertaining to royalty in the year 2012-13. The suit of the plaintiff company is barred by limitation. The plaintiff company has not filed the suit in time. The conditional AOD does not give birth or continuation of limitation.
17. During his arguments, he has relied upon some decisions held in W.P.No.7127/2024 in Suvarna Karnataka Railway Catering Vendors Association Vs The Chairman, The Railway Board, Ministry of Railways & Anr. and Com.Appeal No.61/2021 in C.Krishnaiah Chetty & Sons Pvt. Ltd. Vs Deepali Company Pvt. Ltd. & Ors.
18. After going through the written arguments submitted on behalf the plaintiff and after hearing the other side and also gone through the evidence of the witnesses and pleadings of the parties, there is no dispute between the parties regarding supply of murram. The defendants have paid Six RA bills and One final bill i.e. Seventh bill. It is also one of the admitted fact that the 17 Com.O.S.No.49/2024 defendants have withhold a sum of Rs.28,23,624.68. One more admitted fact that the defendants called for a Tender in the year 2013 dated 09.10.2013, and the plaintiff had applied, same is accepted by the defendants.
19. The disputed facts are, the defendants are demanding the documents pertaining to payment of royalty for supply of murram. There are several letter correspondence between the parties. The say of the plaintiff is that, it has arranged and supplied the murram from the outsiders and supplied the same to the defendants. The question of payment of royalty does not arise, since the plaintiff had not taken murram from the Govt. It is also submitted on behalf of the defendants that they have withhold the amount payable to the plaintiff relating to royalty.
20. I have gone through the documents produced on behalf of the parties. The Ex.P1 is the schedule of rates, the Ex.P2 is the testing of murram for land development, Ex.P3 is also Test Report of the year 2014, Ex.P4 is the copy of the approval of murram by the defendants dated 02.12.2013, the Ex.P5 is the Form of Contract, Ex.P6 is the copy of the orders passed in Misc.Ptn No.127/2015 by the Hon'ble High Court of Karnataka, the Ex.P7 is the copy of the Review Petition No.205/2016 and disposed of on 22.06.2016. The Ex.P8 is also one of the copy of the orders passed in CMP No.127/2015. The Ex.P9 is the letter issued by the defendants dated 05.06.2018, Ex.P10 is the letter dated 01.10.2018 by the defendants, Ex.P11 is the another letter dated 01.07.2019, Ex.P12 is the letter by the defendants dated 19.05.2022, Ex.P13 is also letter dated 29.03.2023 to the plaintiff.
18 Com.O.S.No.49/2024The Ex.P14 is the PIM application, Ex.P15 is the copy of the Indemnity Bond executed by the plaintiff. Ex.P16 is the letter of acceptance by the defendants dated 09.10.2013, Ex.P17 is the copy of emails, Ex.P18 is the email communications dated 29.05.2023.
21. There is no evidence on behalf of the defendants as stated supra. The defendants have approved the murram and Test of murram is also done by the plaintiff, there is no dispute. It is also accepted by the defendants.
22. I have gone through the decisions relied upon by the learned counsel for the plaintiff. The principles laid down in these decisions are well founded. The decisions come to the aid of the plaintiff.
23. Therefore, in view of the discussions made supra, it is clear that the defendants have withhold an amount of Rs.28,23,624.68 in the name of so called royalty, which is unlawful, when the plaintiff also submitted Indemnity Bond. Therefore, I am of the opinion that the plaintiff company is able to prove Issue Nos.1 and 2 referred above, by placing cogent evidence. In regard to rate of interest is concerned, the plaintiff has sought interest at the rate of 18% p.a. The interest claimed by the plaintiff company is higher side. But, the dispute between the parties is commercial in nature, it fetches interest. It is the say of the plaintiff company is that, as per General Conditions of Contract - Ex.P1 at Clause No.4.4.0, in the said clause the defendants would charge 24% interest per annuam for delay in 19 Com.O.S.No.49/2024 completion of work. But, the plaintiff company is claiming interest at the rate of 18% p.a. on the withheld amount. By considering this clause, the plaintiff company has sought the reasonable interest. Therefore, the plaintiff company is entitled for interest. Accordingly, I answer the Issue Nos.1 to 3 in the affirmative.
24. Issue No.4: The defendants have taken a defence that the suit of the plaintiff company is barred by law of limitation. As stated supra, the defendants have not led in any evidence and no documents have been produced. The Ex.D1 to D6 have been confronted. In regard to the point of limitation is concerned, as submitted by the learned counsel for the plaintiff in his written arguments that, the suit is not barred by limitation, the plaintiff moved to the Hon'ble High Court of Karnataka in the year 2015 for appointment of an Arbitrator and the matter came to be disposed on 11.11.2016. He has pointed out towards the Ex.P6 to P8 referred above. After disposal of CMP No.127/2015 and AC No.3/2016, the plaintiff made a representation calling the defendants to make payment of balance amount on 14.10.2017 and same was retained on the name of royalty and the defendants have replied as per Ex.P9 on 05.06.2018. The defendants also replied to the representation dated 26.07.2018 as per Ex.P10 on 01.10.2018 and also one more representation on 18.06.2017 and same is replied by the defendants as per Ex.P11 on 01.07.2019, another representation by the plaintiff in the year 2022 on 31.10.2022, same was also replied by the defendants as per their reply - Ex.P12 on 19.05.2022. The defendants also replied as per Ex.P13 on 29.03.2023. According 20 Com.O.S.No.49/2024 to the plaintiff, in all these communications the defendants have admitted their liability to pay. The learned counsel for the plaintiff has also pointed out towards provisions of Sec.14 of the Limitation Act. After going through these communications, Ex.P9 dated 05.06.2018, it states that "We have gone through your letter dated 14.10.2017 and relevant enclosures. We once again reiterate that the above amount will be refunded on the submission of the receipts of documents towards payment of royalty. Your immediate action is solicited". In Ex.P10 dated 01.10.2018, it reads "Our Karnataka State office had however cleared the final bill. However, since the royalty receipts were not submitted by you the final bill was prepared with clear mention of withholding of amount which has been accepted by your authorized representative and signed jointly". "An amount of Rs.28,23,624.68 to be withheld in lieu of non submission of document / receipts for having paid the royalties as per Clause No.23.1 of Special terms and conditions of the contract, till date and the same will be refunded on submission of necessary documents / receipts, at a later date."
25. Even after going through the Ex.P12 dated 19.05.2022 by the defendants, it reads - "We once again reiterate that the amount withheld shall be released once you submit payment receipt of royalty or submission of No Due Certificate from the concerned Govt. Department in the absence of which, your request of release of withheld of payment cannot be entertained". Ex.P13 is the another letter by the defendants themselves to the representation of the plaintiff dated 29.03.2023, it reads - "It is once again reiterate that the amount 21 Com.O.S.No.49/2024 withheld from the final bills is only on account of non submission of statutory payment receipt by you and the same shall be released only after proof of payment receipt of royalty or No Due Certificate from the concerned Govt. Department is submitted to IOC".
26. These communications clearly go to show that the amount sought in the plaint is withheld by the defendants only on the ground that non production of receipts or documents for payment of royalty. It is the specific case of the plaintiff since beginning that it has not purchased royalty from the Govt. But, it purchased from the private. In such circumstances, there were no receipts or documents regarding payment of royalty. Therefore, the plaintiff could not produced the same. Therefore, it is clear that the amount sought in the plaint, is withheld by the defendants, only on the ground referred above. The decisions relied upon by the learned counsel for the plaintiff referred above, are aptly applicable to the suit on hand.
27. I have also gone through the decisions relied upon by the learned counsel for the defendants. The facts and circumstances of the decided cases and the facts of the case on hand are different. These decisions do not come to the aid of the defendants. I have also gone through the provisions of Rule 3 and 36 of the Karnataka Minor Mineral Concession Rules, 1994. Therefore, in view of the discussions made supra and in view of the decisions relied upon by the learned counsel for the plaintiff referred above, the suit of the plaintiff company is in time. Accordingly, I answer the Issue No.4 in the negative.
22 Com.O.S.No.49/202428. Issue No.5: The plaintiff company is entitled for an amount of Rs.28,23,625/-. Accordingly, I answer the Point No.5 in the affirmative.
29. Issue No.6: In the result, I pass the following :
ORDER Suit of the plaintiff is hereby decreed with cost.
The defendants are liable to pay Rs.28,23,625/- with future interest at the rate of 6% p.a. The defendants are directed to repay the amount as ordered within Three months from the date of this order.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/Or. XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer typed by her directly on the computer, corrected and then pronounced by me in the open court on this the 2nd day of August 2024) (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.
ANNEXURE List of witnesses examined for the plaintiff:
PW1 Sanjiv Dixit 23 Com.O.S.No.49/2024 List of documents marked for the plaintiff:
Original of schedule rates including SCC and GCC Ex.P1 issued by IOC referred to as document No.2 in the plaint Copy of Testing of Murram referred to as document Ex.P2 No.3 in the plaint Copy of Test report of Murram referred to as document Ex.P3 No.4 in the plaint Copy of approval of Murram referred to as document Ex.P4 No.5 in the plaint Ex.P5 Copy of form of contract referred to as document No.7 Ex.P6 C/c of CMP No.127/2015 referred to as document No.8 C/c of the Review Petition in 205/2016 referred to as Ex.P7 document No.9 in the plaint C/c of the CMP No.127/2015 referred to as document Ex.P8 No.10 Ex.P9 Reply by IOCL referred to as document No.12 Ex.P10 Reply given by IOC referred to as document No.14 Copy of reply given by IOC referred to as document Ex.P11 No.16 Copy of the reply given by IOC referred to as document Ex.P12 No.19 Copy of the reply given by the IOC referred to as Ex.P13 document No.21 C/c of the report given by DLSA, Bengaluru in PIM Ex.P14 No.319/2023 referred to as document No.22 Ex.P15 Copy of the indemnity bond dated 28.08.2014 Ex.P16 Letter of acceptance dated 09.10.2013 24 Com.O.S.No.49/2024 Ex.P17 Email communication dated 12.05.2015 Ex.P18 Email communication dated 29.05.2023 Ex.P19 Certificate U/Sec.65B of the Evidence of the Act List of witnesses examined for the defendants:
NIL List of documents marked for the defendants:
Ex.D1- D6 Final bill page Nos.1/5, 2/5, 3/5, 4/5, 5/5 and details (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.