Chattisgarh High Court
Rama Steel And Trade Private Limited vs National Thermal Power Plant Limited (N ... on 3 February, 2022
Author: P. Sam Koshy
Bench: P. Sam Koshy
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NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Writ Petition (C) No. 543 of 2022
Rama Steel And Trade Private Limited Through Its Authorised
Representative Mr. Rajesh Yadav Having Its Registered Office And
Head Office At Mehar House 109/1/B, Girish Ghosh Road, Room No-
302, 3rd Floor, Belurmath, Howrah-711202.
---- Petitioner
Versus
1. National Thermal Power Plant Limited (N T P C) Through The
General Manager, Sipat Super Thermal Power Project, Post Office
Ujwal Nagar, District Bilaspur, Chhattisgarh
2. Additional General Manager, Contracts And Materials Department,
National Thermal Power Plant Limited, Sipat Super Thermal Power
Project, Post Office Ujwal Nagar, District Bilaspur, Chhattisgarh
3. Jasvinder Pal Singh, Senior Manager, Contracts And Materials
Department, National Thermal Power Plant Limited, Sipat Super
Thermal Power Project, Post Office Ujwal Nagar, District Bilaspur,
Chhattisgarh
---- Respondents
For Petitioner : Mr. Siddharth Dubey, Advocate
For NTPC : Mr. Rohit Sharma, Advocate
Hon'ble Shri Justice P. Sam Koshy
Order On Board
03.02.2022
1. The instant writ petition has been filed aggrieved of the order dated 05.06.2021 passed by the respondents refusing permission to the petitioner to lift an additional 20% quantity of scrap material pertaining to Lot No.105. The petitioner has further prayed for an appropriate direction to the respondents to issue an appropriate sale order and 2 delivery order to the extent of additional 20% of the original approximate (estimated) quantity of scrap material that the petitioner was awarded the work order for lifting of scrap.
2. The facts of the case in brief are that the petitioner is an establishment dealing in the business of iron, steel and other metal products. The petitioner participated in a bid for auction conducted by Metal and Scrap Trade Corporation Limited for and on behalf of the seller i.e. NTPC Ltd, Sipat. The auction was conducted for sale of scrap material as assigned auction no. MSTC/RPR/NTPC LIMITED/9/20 KM from Bilaspur/19-20/28473[235422]. The bid opening date and closing date was 16.12.2019. The petitioner had successfully bidden for two lots i.e. Lot No.105 pertaining to miscellaneous ferrous material and Lot No. 114 pertaining to scrap idler for conveyor belt.
3. The sale intimation letter in respect of both the aforementioned lots was sent to the petitioner via email on 16.12.2019. The petitioner who was the successful bidder for the said two lots was expected to complete the requisite formalities. The final acceptance letter of the petitioner was issued by NTPC vide email dated 29.12.2019. All the requisite security deposits and other sureties were submitted by the petitioner as per the demand of the respondent NTPC.
4. So far as the lifting of scrap material from Lot No.114 is concerned, the same went as per schedule without any grievance and there was no dispute from the said lot. However, as far as Lot No.105 is concerned, the petitioner was required to lift the scrap materials in 4 installments. However, in view of the lock down that was clamped on account of Covid-19 pandemic, the lifting of scrap as per schedule 3 could not be carried out. On account of the delay in execution, the respondents imposed penalty of an exorbitant amount of more than rupees 38 lakhs. Subsequently, by way of a negotiation between the parties, the penalty amount was reduced to rupees 3.5 lakhs. The petitioner thereafter was granted permission to lift the balance of scrap in terms of the original agreement between the parties. The petitioner was granted a revised schedule for lifting of the entire left over scrap to the extent of the approximate quantity for which the bid auction was finalized in favour of the petitioner. The petitioner as per the revised schedule lifted the entire approximate (estimated) quantity of scrap weighing 804.91 Metric Tons as permitted in the remaining two installments. Subsequently, petitioner made a claim before the respondents on 4th of June, 2021 seeking permission from the respondents for lifting an extra 20% of scrap from Lot No.105. The claim for this extra 20% of the estimated quantity made by the petitioner was in the light of the terms and conditions agreed upon between the parties. According to the petitioner, Clause 7.1 mentions that the quantity in actual may turn out to be more or less than the estimated quantity and in the event of the quantity turning out to be more the estimated quantity, the buyer can lift the allotted quantity +/- 20%. On the basis of this Clause to the agreement, the petitioner had raised their claim stating that Lot No. 105 was much more than 20% of the estimated quantity and therefore the petitioner may be permitted to lift an additional 20% of scrap from the said lot. It is this demand of petitioner for additional 20% of the estimated quantity which has been refused by the respondents vide Annexure P-1 dated 07.06.2021 which has led to the filing of the present petition.
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5. According to the petitioner, the refusal of their demand for lifting of scrap to the additional quantity of 20% in terms of Clause 7.1 of the special terms and conditions by the respondents is highly unjustified, unreasonable and totally irrational. According to the petitioner, it is also violative of Article 14 of the Constitution of India inasmuch as the respondents are permitting lifting of 20% additional quantity scrap if available to all other contractors and successful tenders but they have denied it only to the petitioner. According to the petitioner, they were unable to lift the required quantity as agreed upon within the stipulated period because of the impact of Covid-19 pandemic. According to the petitioner, during this time there was a total standstill position of the entire man and machinery on account of the lock down imposed in the entire country. Thus, it was beyond the control of petitioner and therefore they should not be deprived of their rightful claim which they would have been otherwise entitled for had there been no pandemic.
6. Per contra, learned counsel appearing for the respondent NTPC opposing the petition submits that the nature of claim is not one which can now be decided exercising the writ jurisdiction of this Court and the writ petition should be rejected at the threshold itself being devoid of merits and also being not maintainable at this juncture. According to the counsel for NTPC, the nature of work awarded to the petitioner was one where time was the essence of contract. The work was in respect of lifting of the scrap which is generated in the respondent establishment in the course of power generation. The scrapes which are generated in the course of power generation are stocked in different lots and each lot is given a number and those lots have to be 5 lifted periodically so that the subsequent scrap which is generated can be stocked and auctioned to. Therefore, time becomes an essential factor for lifting of the said scrap and the lifting of scrap cannot be delayed inordinately as that can cause various practical difficulties and inconvenience to the respondent establishment.
7. It was also the contention of learned counsel for respondents that the petitioner is entitled for lifting of the scrap to the extent of the approximate estimated quantity that was disclosed in the auction notice itself. In the instant case, the approximate estimated quantity reflected in the auction notice was 804.91 MT. The same was to be lifted in 4 installments. The same was also to be lifted within a specified duration of time. In the instant case, the petitioner lifted the scrap initially in two installments and thereafter there was an inordinate delay on their part so far as lifting of the balance of scrap is concerned. Because of the delay, the respondent Management had also imposed a heavy penalty in terms of the agreement entered into between the parties. Subsequently, the petitioner again approached the respondent Management for sympathetically considering their claim both in respect of lifting of balance of scrap and also for reconsidering the imposition of heavy penalty. After much deliberation and discussion, the authorities sympathetically considered the claim of petitioner and permitted to lift the balance of scrap material to the extent of the approximate estimated quantity reflected in the auction notice. At the same time, the respondents also had reduced the penalty imposed substantially. The petitioner was granted further stipulated time and the quantity specifically mentioned to be lifted in two remaining installments. The petitioner 6 did lift the said quantity of scrap in terms of the sale letter and delivery order.
8. According to the respondents, there was no agreement or consensus that had arrived at permitting the petitioner to lift an additional quantity of 20% in terms of Clause 7.1. Therefore, the petitioner cannot now turn around and claim something that was not negotiated or agreed upon in the second phase when they had approached for lifting of balance of scrap and for reduction of penalty. It was also the contention of the respondents' counsel that even otherwise the terms and conditions agreed upon between the parties have a specific Clause of arbitration for settlement of disputes as would be evident from Clause 3.0.
9. Learned counsel for respondents further on instruction submits that since it is a matter of sale of scrap which is periodically generated in the establishment, the lot no.105 is no longer in existence as the lots keep changing from time to time after it is auctioned and a fresh lot is made. Now that the lots have all been rearranged and fresh lots have been stocked, it would not be practically possible for the respondents in permitting the petitioner to lift the additional 20% of the scrap.
10. Further contention of the counsel for respondent NTPC is that in any case the petitioner cannot have an indefeasible right for claiming the additional 20% of scrap as in the auction notice itself the approximate (estimated) quantity reflected was 804.91 MT which the respondents have permitted the petitioner to lift. Therefore, the petitioner cannot claim for a writ in respect of the discretionary right of the respondents. Thus, counsel for the respondent NTPC prayed for rejection of the writ petition on this ground also. 7
11. Having heard the contentions put forth on either side and on perusal of records, admittedly the auction notice which was floated was for an approximate (estimated) quantity of 804.91 Metric Tons. This in other words means that the successful bidders would be entitled to lift the scrap of a particular lot and they will not have to either pay more or get any refund in the event of the quantity of scrap becomes +/- 20%. This further means that the estimated quantity which the petitioner has obtained was 804.91 MT. Rest is only a matter of eventuality. In the instant case, the petitioner was permitted to lift 804.91 MT which was the estimated quantity. Thus, the petitioner was permitted to left the quantity of scrap to the extent of the estimated quantity and the price that was quoted therein. The petitioner has not been made to lift less than the estimated quantity.
12. Another fact which is admitted from the pleadings is that undoubtedly for whatsoever be the reason there has been a delay on the part of the petitioner in accomplishing the task as per the schedule at the first instance. Yet another admitted position as would be reflected from the pleadings is that the petitioner was also penalized for the delay caused. There was further deliberation between petitioner and respondents and finally the petitioner was permitted to lift the balance of scrap to the extent of 804.91 MT. Even at that point of time, there was no claim raised by the petitioner for lifting of 20% additional quantity of scrap.
13. Given the said facts and circumstances of the case, it would not be appropriate for this Court now venture into the dispute and decide whether the petitioner would be entitled for the additional 20% quantity of scrap. Moreover, since the respondent NTPC have already 8 refused, thereafter the claim of petitioner becomes a disputed claim. Hence, in the event of a dispute, in terms of the conditions of the contract, the matter is one which has to be resorted to by way of arbitration.
14. Given the said facts more particularly considering the fact that the nature of claim arises out of a contractual dispute where there is a specific agreement entered into between the parties and the agreement also having a Clause as to how the disputes have to be resolved, the exercise of writ jurisdiction at this juncture is totally uncalled for. Thus, reserving the right of the petitioner to avail other appropriate legal remedies available to them if they so want, the writ petition at this juncture stands rejected.
Sd/-
(P. Sam Koshy) Judge Khatai