Karnataka High Court
M/S. Drn Infrastructure vs The State Of Karnataka on 9 April, 2018
Bench: Chief Justice, B M Shyam Prasad
W.P.No.50161/2017
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 09TH DAY OF APRIL, 2018
PRESENT
HON'BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE
AND
HON'BLE MR.JUSTICE B M SHYAM PRASAD
WRIT PETITION NO.50161 OF 2017 (GM-MM-S)
BETWEEN:
M/s. DRN INFRASTRUCTURE
ENGINEERS AND CONTRACTORS,
NAYAK'S HOUSE, DOOR NO.110,
3RD FLOOR, DOLLARS COLONY,
GOKUL ROAD, HUBBALLI-580 030.
REP. BY ITS GPA HOLDER,
MR. ARUN KUMAR NADGOUDA. ... PETITIONER
(BY SRI R.G. KOLLE, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REP. BY ITS CHIEF SECRETARY,
VIDHAN SOUDHA, BENGALURU,
BENGALURU - 560 001.
2. THE ADDITIONAL CHIEF SECRETARY
DEPARTMENT OF PUBLIC WORKS,
PORTS & INLAND WATER TRANSPORTS,
BENGALURU - 560 001.
3. THE PRINCIPAL SECRETARY TO GOVT.,
DEPARTMENT OF COMMERCE & INDUSTRIES,
VIKASA SOUDHA,
BENGALURU - 560 001.
W.P.No.50161/2017
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4. THE DIRECTOR & COMMISSIONER
DEPARTMENT OF MINES AND GEOLOGY,
KHANIJA BHAVAN,
RACE COURSE ROAD,
BENGALURU - 560 001.
5. THE SENIOR GEOLOGIST &
COMPETENT AUTHORITY
DEPARTMENT OF MINES AND GEOLOGY,
RAICHUR - 584 101.
6. THE CHIEF ENGINEER
KARNATAKA ROAD DEVELOPMENT
CORPORATION LTD.,
MILLER TANK BED AREA,
TIMMAIAH ROAD CROSS,
BENGALURU - 560 052. ... RESPONDENTS
(BY SRI VIKRAM HUILGOL, HCGP)
---
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECT THE OFFICIAL RESPONDENTS TO COLLECT AND
DEDUCT ROYALTY PURSUANT TO AN EARLIER GOVT.
NOTIFICATION DTD:23.6.2007, TILL THE COMPETITION OF
WORK CONTRACT IN TERMS OF IN TENDER REFERENCE
AND WORK ORDER DTD:8.8.2013 PRODUCED AT
ANNEXURES-A AND B RESPECTIVELY, IN RESPECT OF
MINOR MINERALS LIKE MURRAM, GRAVEL, SAND, ORDINARY
BUILDING STONES EXTRACTED FROM PRIVATE PATTA
LANDS AND GOVT,. LANDS AS PER RULE 36, SCHEDULE-II
WHICH IS BEING CREDITED TO THE ACCOUNT OF R-5
SENIOR GEOLOGIST, IN TURN TO THE ACCOUNT OF STATE
TREASURY/EXCHEQUER & ETC.
THIS PETITION COMING ON FOR PRELIMINARY
HEARING THIS DAY, THE CHIEF JUSTICE, MADE THE
FOLLOWING:
W.P.No.50161/2017
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ORDER
The petitioner, who has been awarded the contract of "Reconstruction of Jalahalli to Gugal Road via Arkera, Sunkeshwarahala (MDR) CH. 0.000 to 71.250 Km. in Deodurga Taluk, Raichur District", under the work order dated 08.08.2013, has preferred this writ petition on his grievance against charging and collecting enhanced/revised rates of royalty from 01.03.2014, pursuant to the Government Notification No.CI 81 MMN 2014 dated 18.02.2014.
It is submitted on behalf of the petitioner that the respondent No.6 - Chief Engineer used to make payment of running account bills by way of adjustment and deducting/collecting the admissible royalty payable to the Government in respect of extraction of murrum, gravel, sand, ordinary building stones etc., from private patta land as also the Government land, such being non-specified mineral and governed by the Karnataka Minor Mineral Concession Rules, 1994; and the recovered amount was being credited to the account of the respondent No.5 - Senior Geologist. W.P.No.50161/2017 -4-
The grievance of the petitioner is that the respondent No.6 - Chief Engineer, without any prior notice, started collecting and deducting higher/revised rates of royalty under the said notification dated 18.02.2014.
While questioning such actions of the respondents, learned counsel for the petitioner has referred to the decision of the Hon'ble Supreme Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA vs. ITD CEMENTATION INDIA LIMITED: (2015) 14 SCC 21 as also the decision of the Hon'ble Delhi High Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA vs. AFCONS INFRASTRUCTURE LTD & AFCONS PAULING (INDIA) LTD: O.M.P. 206 OF 2013 decided on 28.01.2015.
Learned counsel for the petitioner has argued that in view of the interpretation put by the Hon'ble Courts in the decisions aforesaid, the respondents are not entitled to collect and deduct royalty in terms of the new Government notification until completion of the aforesaid work contract; and they are under an obligation to collect and deduct the W.P.No.50161/2017 -5- royalty only in terms of the earlier Government notification dated 23.06.2007 that was in operation, and would only be applicable, to the contract in question.
In this writ petition, the petitioner has also prayed for the direction to the respondents to refund the excess amount of royalty collected from its running account bills together with interest at the rate of 15% p.a. During the course of hearing, when we queried the learned counsel for the petitioner as regards dispute redressal mechanism in the contract in question, learned counsel frankly referred to the arbitration clause in the contract in question that reads as under:
"4. Arbitration (Clause 24) 4.1 The procedure for arbitration shall be as follows:
(a) In case of dispute or difference arising between the Employer and the Contractor relating to any matter arising out of or connected with this agreement it shall be settled in accordance with the Arbitration and Conciliation Act, 1996. The disputes or differences shall be referred to a Sole Arbitrator. The Sole Arbitrator shall be appointed by agreement between the parties; failing such agreement, by the W.P.No.50161/2017 -6- Appointing Authority (any one of the Organizations as per list enclosed in Annexure).
(b) Arbitration proceedings shall be held at ........ Karnataka, India.
(c) The cost and expenses of arbitration proceedings will be paid as determined by the Arbitrator. However the expenses incurred by each party in connection with the preparation, presentation, etc., shall be borne by each party itself.
(d) Performance under the contract shall continue during the arbitration proceedings and payments due the Contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings."
Learned counsel would, however, argue that in the present matter, the respondents have not taken any steps for appointment of the Sole Arbitrator despite the petitioner's notice dated 05.12.2014. Learned counsel would reiterate the submissions that in view of the decisions aforesaid, the recovery of excess amount of royalty remains impermissible and the amount recovered is required to be refunded.
Having given thoughtful consideration to the submissions made, we are not persuaded to entertain this matter in the writ jurisdiction. This is essentially for the reason that in the contract in question, admittedly, this nature dispute W.P.No.50161/2017 -7- is envisaged to be settled in accordance with the Arbitration and Conciliation Act, 1996, by reference to the Sole Arbitrator, who could be appointed by agreement between the parties and failing such agreement, by the Appointing Authority, as specified in the annexure to the agreement.
It remains rather indisputable that the matters involved in the decisions referred by the learned counsel for the petitioner arose out of the respective arbitral awards and not by way of writ petitions. When the contract in question contains arbitration agreement and the dispute pertains to the particular deductions in the running account bills; and the claim is of the refund with interest, we are clearly of the view that all the relevant aspects need to be gone into in the appropriate forum and for that matter, by the Sole Arbitrator, as envisaged in the contract in question.
The petitioner's representation dated 05.12.2014 (Annexure-C) had been rather vague and uncertain, where the petitioner only stated that the royalty amount was being deducted as per new notification in the interim payments and W.P.No.50161/2017 -8- the request was made to 'compensate suitably'. Neither any specific claim was made nor even a request was made to refer the matter to arbitration. That being the position, it is difficult to construe the said letter dated 05.12.2014 as being a specific demand for arbitration.
For what has been stated above, we are not persuaded to entertain the matter in the writ jurisdiction.
However, we would hasten to observe that the option of taking recourse to appropriate remedies in accordance with law always remains open for the petitioner and for that matter, it is made clear that dismissal of this writ petition will not be of any impediment in the petitioner taking recourse to the appropriate remedies in accordance with law.
With the observations foregoing, this petition stands dismissed.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE ca