2016 Supreme(AP) 619
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
Challa Kodanda Ram, J.
S.R.C. Company, Engineers and Contractors – Appellant
Vs.
Union of India and Ors. – Respondents
Writ Petition Nos. 9895 of 2008, 2195 of 2009 and 6732 of 2009
Decided On : 25-11-2016
For the Appellant : C. Raghu, Counsel
For the Respondent: C. Balajee, Counsel
Headnote:
Constitution of India - Petitioner is a qualified and accredited contractor and has undertaken execution of works of the first respondent-Railways - Petitioner being a successful pursuant to tender notification was issued with a letter of acceptance of Gauge conversion of track Earth work and construction of minor bridges - Present Writ Petition is filed - On enquiry the petitioner came to know that final bill has been withheld on account of claim of the respondent with respect to fee payable to the Government of Maharashtra on the material used in carrying out the tender works - Petitioner is liable for payment of fee which is deductable from the bills in terms of Schedule-A attached to the contract agreement, only a sum Cubic Meter is liable to be paid – Held, Schedule A obligates fixing of liability - One may also note that Schedule relates to quantity of work and in relation rate of royalty would be deductable from the running bills as specified combined reading of Clause and Schedule A would make it clear that while Clause specify that the contractor would bear liability on account of seigniorage fee at the notified rates by the State of the Schedule A specifies the rates at which the deductions to be made from the contractors running bills - It is not uncommon that in a contract ad hoc deductions are made from time to time subject to settlement of the amounts payable in final bills - Purpose of Schedule A is limited to the extent of amount deductable at specified rates towards fee/royalty on ad hoc basis subject to the determination of final amount payable - Argument of the learned Counsel for the petitioner that Clause casts liability on the petitioner only when there is incremental increase in the rate of royalty/seigniorage fee during the currency of the contract though appears to be attractive, is liable to be rejected on proper interpretation of Clause of the Agreement - Petitions merit no consideration and are accordingly dismissed.
Challa Kodanda Ram, J.
1. All these three Writ Petitions can conveniently be disposed of by this common judgment as they involve common grievance and questions of fact. For the sake of convenience, the facts and contentions in Writ Petition. No. 2195 of 2009 are referred to for adjudication of these Writ Petitions.
2. Brief facts of the case are that; The petitioner is a qualified and accredited contractor and has undertaken execution of works of the first respondent-Railways. The petitioner being a successful tenderer pursuant to tender notification dated 09.11.2006 was issued with a letter of acceptance on 12.01.2007 for execution of 'Purna-Akola Gauge conversion of track from JG to BG, Washim, Akola Section, Earth work and construction of minor bridges and miscellaneous works between km. 762.00 to 750.00 between Barsitakli and Sivnishivpuri stations'. Thereafter an agreement was entered into on 12.06.2007. The petitioner has completed the works successfully. However, being aggrieved with non-payment of final bill whereby certain amounts are withheld, the present Writ Petition is filed. On enquiry, the petitioner came to know that final bill has been withheld on account of claim of the respondent with respect to seigniorage fee payable to the Government of Maharashtra on the material used in carrying out the tender works.
3. It is the case of petitioner that in terms of Clause 41(1) of the agreement, though the petitioner is liable for payment of seigniorage fee, which is deductable from the bills in terms of Schedule-A attached to the contract agreement, only a sum of Rs. 50/- per Cubic Meter is liable to be paid. It is the further case of petitioner as articulated by the learned Counsel for the petitioner, Sri C. Raghu that vide notification dated 15.12.2006, the State of Maharashtra has stipulated seigniorage charges at Rs. 100/- per brass (one Brass = 100 Cubic feets) for the material such as earth, sand, coal etc., used in construction of the minor bridges, roads, rail tracks, buildings etc., however, the respondent consciously restricted the same to Rs. 50/- per cubic feet in terms of agreement and Clause 41(1) of the agreement would authorize the first respondent to collect the seigniorage fee only when there is variation of the rates after execution of agreement and during the pendency of the agreement. Elaborating the same, learned Counsel would submit that inasmuch as, by the date of agreement, notification dated 15.12.2006 of the Government of Maharashtra having been in place and there being no variation, the respondent cannot take away the rights of the contractors contrary to the terms and conditions of the Agreement entered into and therefore collection of seigniorage fee over and above 50/- per cubic feet is impermissible. To buttress his argument, learned Counsel placed reliance on the decision of the Apex Court in Jos hi Technologies International Inc v. Union of India (2015) 7 SCC 728.
4. A counter affidavit has been filed by the first respondent. The learned Counsel appearing for the first respondent submits that the Writ Petition itself is not maintainable in view of the relationship between the parties being contractual in nature and there being alternative remedy of arbitration clause in the agreement. He placed reliance on the decision of the Division Bench of this Court in M/s. MRKR- MBGEC, Rep. By C. Manohar Reddy v. Chief Administrative Officer, Construction, South Central Railway, Secunderabad 2006 (3) ALT 274 wherein it was held that in view of the arbitration clause, Writ Petition is not maintainable and the parties have to necessarily settle any of the disputes between them only in terms of the agreement entered into. Learned Counsel for the first respondent further submits that the petitioner had not made the State of Maharashtra as necessary party to the Writ Petition inasmuch as the