2019 Supreme(Gau) 551
IN THE HIGH COURT OF GAUHATI
Kalyan Rai Surana, J.
Ghar Construction And Another - Appellants
Vs.
North East Frontier Railway And Others - Respondents
Writ Petition (C) 1494 of 2017, WP(C) 4010 of 2017, WP(C) 1520 of 2017, WP(C) 4107 of 2017
Decided On : 22-04-2019
For the Appellant : Mr. K.K. Goswami, Mr. S.Z. Rahman, Mr. B. Hazarika, Mr. K.K. Goswami
For the Respondent: Dr. B.N. Gogoi, Mr. B. Sarma, SC NF Rly, Mr. B. Sarma
The main legal point established in the judgment is the entitlement of the petitioners to relief due to the failure of the respondents to deliver the auctioned scrap materials within the specified period, and the absence of application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the parties to arbitration.
Headnote:
Scrap Materials - Auction Sale - Arbitration Act - [ARTICLE 226] - [Section 8 of the Arbitration & Conciliation Act, 1996] - [Clause-17 of the General Condition of Sale by e- Auction] - [Clause 7.3 and 11.0 of the Special Conditions of Sale] - The court discussed the issues related to the auction sale of scrap materials, the arbitration agreement, and the relevant clauses of the General and Special Conditions of Sale. The court found that the respondents had failed to deliver the auctioned scrap materials to the petitioners within the specified period, and the petitioners were entitled to relief as per the judgment and order dated 20.12.2016 in a similar case. The court allowed the writ petitions and set aside the impugned letters/orders, providing specific directions for the petitioners to make a fresh application for delivery of materials and for the railway administration to refund the auction purchase money if unable to deliver the materials.
Fact of the Case:
The petitioners, engaged in sale and purchase of railway scrap, filed writ petitions seeking quashing of impugned orders cancelling the sale of scrap materials and for relief from ground rent and interest charges. The respondents had failed to deliver the auctioned scrap materials within the specified period, leading to the petitioners' request for cancellation of the sale and refund of the sale value.
Finding of the Court:
The court found that the respondents had failed to deliver the auctioned scrap materials within the specified period, and the petitioners were entitled to relief as per the judgment and order dated 20.12.2016 in a similar case. The court allowed the writ petitions and set aside the impugned letters/orders, providing specific directions for the petitioners to make a fresh application for delivery of materials and for the railway administration to refund the auction purchase money if unable to deliver the materials.
Issues: The issues involved the failure of the respondents to deliver the auctioned scrap materials within the specified period, the petitioners' request for relief from ground rent and interest charges, and the applicability of arbitration agreement and relevant clauses of the General and Special Conditions of Sale.
Ratio Decidendi: The court's decision was based on the failure of the respondents to deliver the auctioned scrap materials within the specified period, the petitioners' entitlement to relief as per a previous judgment and order in a similar case, and the absence of application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the parties to arbitration.
Final Decision: The court allowed the writ petitions, set aside the impugned letters/orders, and provided specific directions for the petitioners to make a fresh application for delivery of materials and for the railway administration to refund the auction purchase money if unable to deliver the materials.
JUDGMENT :
1. Heard Mr. A. Deb, the learned advocate for the petitioners. Also heard Mr. B. Sarma as well as Dr. B.N. Sarma, the learned Standing Counsel for the N.F. Railway i.e. all the respondents herein.
2. The issues raised in all these four writ petitions filed under Article 226 of the Constitution of India are common, as such, they are taken up together. M/s. Kundu Enterprise is the 1st petitioner in W.P.(C) No. 1520/2017 and W.P.(C) No. 4010/2017, and the 2nd petitioner in the said writ petitions is M/s. Ghar Construction. The 1st petitioner in W.P.(C) No. 1494/17 and W.P.(C) No. 4107/2017 is M/s. Ghar Construction, and the 2nd petitioner in the said two writ petitions is M/s. Sree Steel.
3. By filing W.P.(C) No. 1520/17, the petitioners are seeking quashing of the impugned order dated 10.04.2015, by which the respondents had sought to cancel the sale of lot at the risk and cost of the petitioners on failure to take delivery of scrap materials within extended delivery period, and for a further direction to the respondents to deliver the auction purchased scrap stores without charging ground rent and in addition to pay interest at the rate of 24%. During the pendency of the writ petition, the respondents had cancelled the sale and, as such, the petitioners have filed W.P.(C) No. 4010/2017 to challenge the impugned order dated 14.12.2016/ 25.03.2017, by which the respondent authorities had cancelled the sale of lot with forfeiture of earnest money/ total sale value of lot mentioned therein.
4. By filing W.P.(C) No. 1494/17, the petitioners are seeking for quashing the impugned order dated 07.05.2015, by which the respondents had sought to cancel the sale of lot at the risk and cost of the petitioners on failure to take delivery of scrap materials within extended delivery period, and for a further direction to the respondents to deliver the auction purchased scrap stores without charging ground rent and in addition to pay interest at the rate of 24%. During the pendency of the writ petition, the respondents had cancelled the sale and, as such, the petitioners have filed W.P.(C) No. 4107/2017 to challenge the impugned order dated 14.12.2016/ 25.03.2017, by which the respondent authorities had cancelled the sale of lot with forfeiture of earnest money/ total sale value of lot mentioned therein.
5. All the petitioners are proprietary concerns engaged in sale and purchase of railway scrap and other materials. The N.F. Railway establishment holds auction sale of scrap and other waste materials from time to time, at various places. The sale and purchase is governed by "auction notice" as well as "General Conditions of Sale of Scrap Materials Through e-Auction". The petitioner No.1 in WP(C) No. 1520/2017 and WP(C) 4010/2017 was declared as highest bidder pertaining to Lot No. RPAN-C-R-Fitting-2014-01 at Rangapara, and that in the said two writ petitions, the petitioner No.2 was declared as the highest bidder pertaining to Lot No. RPAN-C-R-Fitting-2014-03 at Rangapara. The petitioner No.1 in WP(C) No. 1494/2017 and WP(C) 4107/2017 was declared as highest bidder pertaining to Lot No. MJBT-14-15-02-MJBT, located at Mazbat, and that in the said two writ petitions, the petitioner No.2 was declared as the highest bidder pertaining to Lot No. MJBT-14-15-GVR, located at GVR Station Yard.
6. In all the cases, the payment of the balance bid amount was paid belatedly with late fine and upon payment. As pr documents annexed to these writ petitions, the sale release orders were issued as under:-
| Name | Bid dated | Release order | Delivery date |
| Kundu Enterprise | 20.11.2014 | 30.12.2014 | 08.01.2015 |
| Ghar Construction | 20.11.2014 | 30.12.2014 | 08.01.2015 |
| Ghar Construction | 20.11.2014 | 29.12. | |