Calcutta High Court
Sailen Seth vs Steel Authority Of India Ltd. And Ors. on 8 January, 1987
Equivalent citations: AIR1988CAL312, AIR 1988 CALCUTTA 312
JUDGMENT Sukumar Chakravarty, J.
1. This appeal has arisen out of the order dated 3-9-86 passed by Sri S.B. Muhuri, learned Assistant District Judge, Burdwan, in Title Suit No. 175 of 1985, whereby the learned Judge rejected the plaintiff's application for temporary injunction.
2. The plaintiff filed the aforesaid Title Suit against the Steel Authority of India Limited (Defendant No. 1) and other defendants, who were the Officers of the Defendant No. 1 company for a declaration that the stoppage of work in Durgapur Branch Stock Yard between the period from June 14, 1984 to July 15, 1984, was due to wrongful, illegal and unwarranted action on the part of the defendants and that the plaintiff was not liable to the defendants for any alleged loss of the defendants arising out of or connected therewith; for accounts in respect of the claim of Rs. 4,63,660/- (four lakhs sixty three thousand six hundered and sixty) demanded by the defendant No. 2 on Jan. 30, 1985, or for any other claim arising out of the stoppage of work during June 14, 1984 to July 15, 1984 and upon such accounting, for refund of the amount which would be found due and payable out of such deduction made upto the date; for permanent injunction restraining the defendants from deducting any amount from the plaintiff's running bills for alleged detention, demurrage, diversion or other charges on account of stoppage of the work as mentioned above and again for permanent injunction restraining the defendants from appropriating the sum of Rs. 4,76,000/- or any part thereof so far deducted from the plaintiffs running bills towards satisfaction of their purported claim on account of the alleged detention, demurrage etc. or for any other claim arising out of the stoppage of the aforesaid work as threatened in the defendants' letter dated Jan. 30, 1985. The plaintiff in the aforesaid suit filed a petition for temporary injunction praying for temporarily restraining the defendants from appropriating the said sum of Rs. 4,76,000/-already deducted from the plaintiffs running bills and from deducting any further sum from the plaintiff's running bills on account of demurrage, detention, diversion or other charges arising out of the stoppage of the work during the period, as aforesaid till the disposal of the suit.
3. Plaintiff's case, in brief, was that the plaintiff was a handling contractor engaged in the job of handling Iron and Steel materials at the Durgapur Stock Yard of the defendant No. 1 Company. The defendants Nos. 2 to 6 were the Officers of the defendant No. 1-company. The plaintff once submitted a tender to the defendant No. 1-company but that tender was rejected and fresh tenders were called by the defendant No. 1-company. The plaintiff moved the High Court at Calcutta under Article 226 of the Constitution of India and through the intervention of the High Court, the defendants were compelled to allow the plaintiff to submit a fresh tender and the said tender being again the lowest, the plaintiff was given the job for a period of two years from May 14, 1984. The job involved the loading and unloading of wagons which arrived at the Durgapur Branch Office Stock Yard of the defendant No. 1-company within the free time allowed. According to the contract the plaintiff as contractor was responsible for demurrage, wharfage and/or any other incidental charges incurred due to the failure of the contractor to make over the wagons to the Plant Authorities within the free time. The demurrage on account of the detention beyond the free time as stipulated in Clause 15(b) of the contract between the parties would be payable by the contractor. The demurrage thus payable would be calculated periodically by the Company and the Contractor would pay to the Company such demurrage immediately on demand. If the contractor would not pay such demurrage within fifteen days from the date of such intimation, the Company would recover such dues on account of demurrage from the pending bills of the Contractor (plaintiff) or the security deposit of the Contractor as per Clause 15(e) of the contract. As per the contract, the contractor would abide by the Labour Laws, Minimum Wages Act and other Laws and Regulations in performance of his work. The Contractor, who was engaged in the handling work i.e. the plaintiff, used to pay the labourers the wages at the rate of RS. 4.25P. per day up to April, 1984. The defendant No. 6, who was the Branch Manager of the Sales Office, with an ulterior motive, issued a letter dated June 6, 1984, directing the plaintiff for making payment to the labourers at the rate of Rs. 13.35P. per day which was said to be the minimum wages for the labourers. The defendant No. 6 made it known to the labourers Union that he had directed the plaintiff to pay to the labourers the minimum wages at the rate of Rs. 13.35P. per day. The aforesaid rate, according to the plaintiff, was arrived at without any reasonable basis and in total disregard to the total materials in the record in the matter. Immediately thereafter the plaintiff by his letter sought for a clarification regarding the basis of such minimum wages but to no success. The defendant No. 6 again by his letter dated June 8, 1984, asked the plaintiff's confirmation about his readiness to make payment to the labourers at the aforesaid rate. Being thus supported and instigated by the principal employer (defendants) the aspiration of the labourers became high. The labourers became restive and insisted upon payment at the aforesaid rate of Rs. 13.35P. per day. The defendant No. 6 by another letter dated June 12, 1984, directed the plaintiff to make payment at such rate to the labourers. To purchase peace, the plaintiff agreed to pay the labourers at that high rate on ad hoc basis but taking advantage of the situation, the labourers insisted that they would not resume work unless their other demands were immediately met. In such a situation the plaintiff was constrained to stop the handling work on and from June 14, 1984 upon due notice to the defendants by his letter dated June 13, 1984. Thereafter the defendant No. 6 by his letter dated July 5, 1984, directed the plaintiff to resume work immediately failing which it was threatened that appropriate steps would be taken against the plaintiff by awarding the contract to other person. Thereupon the plaintiff filed a writ petition before the High Court and through the intervention of the High Court the defendants withdrew the letter dated June 6, 1984 and June 8, 1984, whereby the plaintiff was directed to make payment of the wages at the enhanced rate and as per the direction of the High Court the handling work was resumed with effect from July 16, 1984. There was thus stoppage of work in between the period. from June 14, 1984 to July 15, 1984. The plaintiff suffered enormous damage because of the unreasonable demand of the workers at the instigation of the defendant No. 6. According to the plaintiff, it is the defendants who were responsible for the stoppage of the handling work by the plaintiff during the aforesaid period at the Stock Yard.
4. In spite of the aforesaid facts, the defendant No. 6 by his letter dated Jan. 30, 1985, informed that because of the stoppage of the work for the aforesaid period, the defendants had to pay to the Railways a sum of Rs. 4,63560/- towards demurrage or the detention charge for the wagons which could not be unloaded during the aforesaid period So the defendant No. 6 held the plaintiff responsible for the aforesaid demurrage and made a demand of the aforesaid amount from the plaintiff. The plaintiff sent a letter in Feb., 1985 denying his reponsibility for payment of the said amount. The defendant's however, started deducting Rs. 68,000/- per month from the running bills of the plaintif in spite of protest against such deduction. Sometime in April, 1985, the defendant No. 2 supplied the plaintiff the statement dated July 16, 1984. According to the plaintiff, even assuming that the stoppage of work was not justified, out of the total claim of Rs. 4,63,560/-only Rs. 48,375/- could be attributable under Clause 15 of the Contract. Up to the end of Oct., 1985, the defendants deducted Rs. 4,76,000/- which was in excess of the amount claimed by the defendants on account of demurrage. On enquiry, the plaintiff came to know that the defendants claimed a further sum from the defendants (plaintiff?) on account of diversion charges and that the defendants would go on deducting the said sum from the running bills of the plaintiff. The plaintiff denied his liability in any way for the said diversion charges. Being so threatened with further deduction, the plaintiff instituted the suit in Nov. 1985 for the reliefs, as already stated, and filed the petition for temporary injunction, as already mentioned.
5. The defendants filed the written statement and the petition for temporary injunction was also opposed by the defendants by filing the written objection.
6. The learned Judge on consideration of the pleadings and the application for temporary injunction and the objections supported by the respective affidavits and other materials placed before him, rejected the plaintiff's petition for temporary injunction on the ground of balance of convenience and inconvenience although the learned Judge found some sort of prima facie case in favour of the plaintiff.
7. Being aggrieved by the said order of the learned Judge the plaintiff has preferred this appeal.
8. Mr. Roy appearing on behalf of the appellant-plaintiff has challenged the order of the learned Judge on the ground that the prima facie case, balance of convenience and inconvenience and the question of irreparable injury in this particular case deserved that the temporary injunction, as prayed for, should be allowed. Mr. Roy while drawing our attention to the relevant provisions of the contract has submitted that he would confine his submission for getting the temporary injunction with regard to any other further deduction from the running bills and that he would not press the prayer for temporary injunction for the amount already deducted and appropriated by the defendants. According to Mr. Roy the defendants are not at all entitled to deduct any amount on account of diversion charges from the plaintiff's running bills keeping the contract alive between the parties. Mr. Roy has further submitted that the defendants did not demand from the plaintiff any amount on account of diversion charges and without giving any intimation to that effect to the plaintiff, the defendants by their first letter dated 6th Dec., 1985 intimated the plaintiff that they would deduct Rs. 3,34,989/- from the plaintiff's running bills on account of rebooking or diversion charges after the institution of the suit in Nov., 1985. According to Mr. Roy, the defendants are not legally entitled either by the contract or by any other statutory provision to make any deduction from the running bills on account of diversion charges. Mr. Roy has further submitted that if the defendants are at all entitled to get any compensation of damage for breach of any terms of the contract, the remedy lies elsewhere but not in deducting such alleged amount from the plaintiff's running bills when the contractual terms did not permit so and when such amount is not a liquidated damage according to the contract.
9. Mr. Mitra appearing for the respondents-defendants has supported the impugned order of the learned Judge. Mr. Mitra's first submission is t hat there is no prima facie case at all in the instant suit which according to him, is not maintainable as Section 41 of the Specific Relief Act stands us a bar to bring such suit for perpetual injunction of this nature and, accordingly, in such a suit, if instituted, the plaintiff cannot get the temporary injunction having the same nature of relief like that of perpetual injunction. According to Mr. Mitra the contract between the parties is not enforceable and the breach of the contract can be compensated by adequate money and, accordingly, the plaintiff cannot bring the suit of this nature for getting the permanent injunction, as prayed for.
10. Mr. Mitra's further submission is that although in Clause 15(b) the diversion charge has not been specifically mentioned, the incidental charge as mentioned in the said clause would bring the diversional charge under the ambit of Clause 15(b) of the contract and accordingly, like the demurrage charges, the defendants can deduct the diversion charges also from the plaintiff's running bills. Mr. Mitra's last submission is that the question of balance of convenience and inconvenience and the irreparable injury does not go in favour of the plaintiff to get the temporay injunction in a suit of this nature. According to Mr. Mitra, the granting of injunction would cause more inconvenience to the defendants in realising the diversion charges if the plaintiff fails to succeed in the suit.
11. We have given due consideration to the submissions of the learned Advocates on both sides keeping in view the impugned order of the learned Judge and the relevant papers and documents placed before us. At the very outset it may be mentioned here that the present suit is not a suit for permanent injunction alone. This is a suit praying for some distinct declarations with the consequential relief like the permanent injunction as already described while delineating the facts in brief. Such being the position Mr. Mitra's submission with regard to the maintainability of the suit itself cannot sustain. The suit, as framed, appears to be maintainable. The question may arise whether in a suit of this nature the permanent injunction, as prayed for, can be at all invoked. There is no dispute that there is a written contract between the parties. Mr. Mitra has not submitted that all clauses of the contract are not enforceable. It is true that Section 14, Clause (a) of the Specific Relief Act provides that a contract for the non-performance of which compensation in money is an adequate relief cannot be specifically enforced. Section 41, Clause (e) of the Specific Relief Act provides that an injunction cannot be granted to prevent the breach of a contract, the performance of which would not be specifically enforced. The plaintiff has prayed for the permanent injunction in the suit so that the defendants may be restrained from deducting any amount from the plaintiff's running bills and has prayed for the temporary injunction for restraining the defendants from deducting from the plaintiffs running bills any amount on account of diversion charges till the disposal of the suit. If it is found that the deduction of any amount on account of diversion charges is a breach of any term of the contract which is enforceable then Section 41 would not stand as a bar. It has already been stated that the contract which envisages several clauses stipulating the statutory obligations between the parties can be legally enforceable by the aggrieved party. Furthermore, the question may arise whether for non performance of any term of the contract in the instant case, compensation in money would be the adequate relief. It has already been stated that the contract contains some terms also with regard to the statutory obligations arising out of the Contract Labour (Regulations and Abolition) Act, l970. The compensation in money value may not be the adequate relief for breach of any term of such contract. So on due consideration of the different clauses of the contract itself having the statutory obligations, we do not find that Section 41 prima facie bars the institution or the present suit. In the facts and circumstances of the instant case, as mentioned above, the principles of law as enunciated in the case of Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. , as referred to by Mr. Mitra. has got no scope of application in this case.
12. The learned Judge in the impugned order has observed that 50 : 50 prima facie case has been made out. From the pleadings it appears that the plaintiff has made out a prima facie case for coming to the court for trial for the prayer for declaration as also for the injunction. It will be decided at the time of the trial at whose action or inaction, as the case may be, the stoppage of work took place during the period in question. It, however, appears that the plaintiff has made out a prima facie case for coming to the court for getting a declaration with regard to aforesaid stoppage of work. We have minutely gone through the relevant terms of the contract. The defendants by their letter dated 30th Jan., 1985, intimated the plaintiff that the defendants had paid to the Railways Rs. 4,63,560/- towards demurrage/detention charges for the wagons which could not be unloaded by the plaintiff during the period of the stoppage of work and that as per Clause 15 of the contract, the contractor was liable for the said demurrage/detention and/or any other incidental charges incurred due to the plaintiff's failure to make over the wagons to the Plant Authorities cither empty or loaded, as the case may be, within the free time as per the contract. So the defendants also are relying on Clause 15 of the contract for realisation of demurrage charges from the plaintiff. Clause 15(a) of the contract provides as follows :
"Unloading and loading of wagons must be completed within the free time allowed irrespective of the No. of Wagons (including rake loads), placed on our account. The contractor shall be responsible for all the demurrage, wharfage and/or any other incidental charges incurred due to his failure to make over the wagons to the plant authorities either empty or loaded as the case may be, within the free time allowed. All charges incurred in connection with booking or taking delivery of the materials shall be borne by the Contractor himself; and all such sundry expenses arc deemed to be covered by the rates given in the attached schedule of rates."
Clause 15(e) of the contract provides also as follows : --
"(e). The demurrage thus payable by the contractor will be calculated periodically by the Company and the Contractor shall pay to the company such demurrage immediately on demand. If contractor does not pay within 15 days from the date of such intimation Company shall be recovering such dues from the pending bills/security deposit."
It is to be noted that nowhere in Clause 15(a) the rebooking charge or diversion charge has been specifically mentioned. It is true that "any other incidental charges" incurred due to the contractor's failure to make over the wagons would have to be also borne by the Contractor in addition to the demurrage and wharfage charges. Mr. Mitra has submitted that the said incidental charges would include the diversion or rebooking charges. Clause 15(a), however, does not support such submission of Mr. Mitra. "Any other incidental charges" have got their close reference to the demurrage/wharfage charge. The diversion or rebooking charge is a major charge and it cannot be termed as incidental charge having its close reference to the demurrage/wharfage charges. It should be also noted that Sub-clause (a) of Clause 15 enables the defendant No. 1-Company to recover the demurrage charge only from the contractor's running bills if the contractor fails to pay within 15 days from the date of the demand of such demurrage charge by the defendant No. 1-Company. Sub-clause (e) of Clause 15 does not mak any reference to any other charge save and except the demurrage charge. Such being the position, the plaintiff has made out a prima facie case for coming to the court for trial to show that the defendants under the contract are not entitled to deduct any amount on account of diversion or rebooking charges from the plaintiffs running bills under Clause 15 of the Contract. The learned trial Judge in his entire judgment has not discussed about the defendants' eligibility to deduct any amount on account of the diversion charges from the plaintiffs running bills. We, therefore, are of the view that the plaintiff has succeeded in making out a prima facie case.
13. Next comes the question whether consideration of the balance of convenience and inconvenience and the question of irreparable injury in this case disentitles the plaintiff to get the temporary injunction. It is the settled principle of law that mere making out a prima facie case would not entitle the plaintiff to get the temporary injunction unles the question of balance of convenience and inconvenience and the irreparable injury merits the granting of temporary injunction.
It should also be borne in mind that the injunction is an equitable relief and it should be granted even for a temporary period after due consideration of the parties' convenience and inconvenience.
14. It is an undisputed fact that the defendants have still got the contract alive and are allowing the plaintiff to do his job according to the contract. It is also an undisputed fact that under the terms of the contract having the statutory obligations the liability of making payment to the labourers has been assigned to the contractor as per the terms of the contract itself. Mr. Roy at the time of his submission has urged before us that any deduction of the amount from the plaintiffs running bills, as is being done by the defendants, would cause difficulty to the plaintiff to make payment of wages to the labourers and, accordingly, the plaintiff would not be in a position to do the job according to the contract. It is true that in the petition for temporary injunction such specific allegation has not been made. The terms of the contract having the statutory obligations with regard to the payment of wages also show that the liability of making payment of wages to the labourers is upon the Contractor (plaintiff) as per the contract, itself, although under the statutory obligations the principal employer was to make the payment of the wages to the labourers. Be that as it may, during the pendency of the contract if the contractor's running bills are not paid or if any considerable amount is deducted from the plaintiff's running bills which is not specifically and apparently permissible under the terms of the contract, such deduction from the plaintiff's running bills or non payment of the bills would undoubtedly cause a considerable inconvenience to the contractor (plaintiff) in performing his contractual job. The nonpayment of wages to the labourers within the statutory time for want of any amount of money, would cause also various inconvenience to the labourers themselves who might agitate and may place the contractor or even the principal employer in great difficulties. So even if the injury to the plaintiff at this stage may be compensated by money value at the last stage but the inconvenience which may crop up from withholding the temporary injunction may dislocate the contractor's job as well as the principal employer's function to a great extent and thereby may cause great inconvenience which may not be compensated by money value. Having considered, in that light, we find also the probability of irreparable injury if the temporary injunction with regard to the further deduction from the plaintiffs running bills is not allowed. Inconvenience likely to arise from the withholding the temporary injunction, in our view, will be greater than that likely to arise from granting it. So the due consideration of the question of balance of convenience and inconvenience and irreparable injury rather impels us to grant the temporary injunction with regard to the deduction of any further amount on account of diversion charges from the plaintiffs running bills. While arriving at our aforesaid finding for the purpose of temporary injunction, we have not lost sight of the fact with regard to the defendants' approach to deduct further amount from the plaintiffs running bills on account of diversion charges. The contract itself shows that the plaintiff would be liable for demurrage/wharfage charges etc. in connection with the Branch Office Stock Yard of the defendant No. 1 at Durgapur. As regards the deduction of the amount on account of demurrage charges which has already been effected, Mr. Roy has not pressed the prayer for temporary injunction with regard to the said amount as it has already been deducted and appropriated. We do not find any ground also for allowing the plaintiff's prayer for temporary injunction with regard to any further deduction on account of demurrage charges on proper calculation of the sum by the defendant because Clause 15(a) of the Contract enables the defendants to make such deduction on account of demurrage charges from the plaintiffs running bills. It is an undisputed fact that the defendants are not going to deduct any further amount on account of demurrage charges from the plaintiffs running bills but they have threatened by their letter dated Dec. 6, 1985 to deduct the amount on account of diversion and rebooking charges from the plaintiff's running bills. Mr. Roy has submitted that the court should interfere so that the defendants with whom the plaintiffs running bills are lying for payment be not allowed to make the deduction on account of diversion charges from the plaintiff's running bills. We have already stated that the contract, apparently as it is, does not prima facie entitle the defendants to make deduction of any amount on account of diversion or rebooking charges from the plaintiff's running bills under Clause 15(e) of the Contract. The letter dated Dec. 6, 1985, intimating the defendants' decision to deduct the diversion charges from the plaintiffs running bills has also not been in accordance with Clause 15(e) of the contract even if it be assumed for the sake of argument that diversion charges like the demurrage charges can be deducted from the plaintiffs running bills. The defendants have not produced any letter to show that the plaintiff was given the stipulated time for making the payment of the diversion charges as stipulated in Clause 15(e) of the contract. It is also interesting to note that after the institution of the suit in Nov., 1985, the defendants sent the letter dated Dec. 6, 1985 communicating their decision to deduct the diversion charges from the plaintiffs running bills.
15. Having given our due consideration to all the facts and circumstances, as discussed above, we are of the view that the learned trial Judge has not been justified in rejecting the plaintiff's petition for temporary injunction as a whole. The defendants should be restrained temporarily till the disposal of the suit from making the deduction of any amount on account of diversion/rebooking charges from the plaintiffs running bills.
16. The appeal, is accordingly, allowed in part and the impugned order is set aside and the petition for temporary injunction is disposed of with a direction that the defendants be temporarily restrained from deducting any amount on account of diversion/rebooking charges from the plaintiff's running bills till the disposal of the suit. We make no order as to costs.
17. In view of the disposal of the appeal, as aforesaid, the order dated Dec. 22, 1986, stands vacated. No order need be passed on the application dated 7/1/81 for taking note of subsequent event and in view of the disposal of the appeal, as aforesaid, the said application is deemed to have been disposed of. Preparation of formal decree is dispensed with. Let this order be communicated to the court below as expeditiously as possible.
Gobinda Chandra Chatterjee, J.
18. I agree but I want to add a few words of my own, My Lord has already held that the suit is maintainable by overruling the contention of Mr. Mitra. Once it is held that the suit is maintainable, then there is no good reason as to why the prayer of injunction, as made out by Mr. Roy here before us, should stand disallowed. The prayer is simple and modest too. The prayer is for a temporary injunction restraining the defendants from "deducting any further sum from the running bills on account of demurrage or deduction............". If this prayer is not allowed inevitably that would give rise to a considerable labour unrest and agitation in the area leading ultimately to an irreparable loss to the plaintiff. Mr. Mitra has repeatedly canvassed before us that at no point of time hereinbefore, neither before the trial Judge nor at any stage here in High Court, the plaintiff had made out any case of irreparable injury. We find that the plaintiff had made out such a case substantially at para 44 of the injunction petition. Para 44 runs thus :
"Your plaintiff/petitioner has already suffered considerable financial constraints on account of deduction of the said sum of Rs. 4,76,000/- and if any further sum is deducted from the running bills that will ultimately cause the petitioner to stop the business at the stock yard for the remaining period of the contract."
19. The apprehension, as expressed by the plaintiff-appellant at para 44 of the injunction petition, is not imaginary one. It is based on hard facts for it is the admitted case on the record that there has a labour unrest and agitation so much so that the work had to be stopped for a long period of one month. We are, therefore, inclined to accept the view that unless the deductions are stopped at this stage here and now, labour unrest and agitation would crop up at a very near future. At one stage of his argument Mr. Roy went so far as to hint at the idea that unless the prayer is allowed there would be an utter disregard to the constitutional framework of our country. Mr. Roy perhaps hinted at social justice and public welfare. We are impressed by this argument of Mr. Roy and we hold that unless the injunction petition is allowed in the form it has been presented in a modified way by Mr. Roy, the society will suffer at large in the form of labour unrest and agitation. I hold that in the overall facts and circumstances of the case equity demands that an order of temporary injunction in the form as already granted by My Lord above should issue in conformity with the facts and circumstances of the case.
20. Prayer for stay of operation of this order is rejected.