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2021 Supreme(Mad) 2574

IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. Subramaniam, J.
M/s. Lakshminarayanan Mining Company, Bangalore – Petitioner
Versus
The Chairman, Chennai Port Trust, Chennai & Another – Respondents
WP Nos. 29218 to 29222, 29177, 29365, 29366 & 29916 of 2010 & M.P. Nos. 1 to 1 of 2011, 1 of 2012, 1 of 2013, 1 of 2014, 1 & 1 of 2015 & WMP Nos. 25971, 26210, 29805, 36913 of 2016, 2184, 5109, 6063, 25349 to 25352 of 2018 & 5842, 5847, 6238 of 2019 & 5054 of 2020
Decided On : 25-11-2021

Advocate Appeared:
For the Petitioner:S.R. Rajagopal, S.R. Raghunathan, Prahalad Bhat, Rahul Balaji, Advocates.
For the Respondent:R. Sankara Narayanan, Additional Solicitor General of India assisted M.R. Dharani Chander, Advocate.

Headnote:

Constitution of India, 1950 – Article 226 - Indian Contract Act - Sections 32 and 56 - Port Trust Act, 1963 - Permit for transporting - Illegal mining - Export of Iron Ore - Petitioner is engaged in business of Mining of Iron Ore in the State of Karnataka and exporting same - Export of Iron Ore had been made to several countries outside India through Port at Chennai - Petitioner had sought allotment of Iron Ore Staking Transit Area from Chennai Port Trust - Chennai Port Trust is a Body created under Port Trust Act, 1963 - Based on application submitted by petitioner, Chennai Port Trust had issued allotment sanctioning certain Metric Tonnes Iron Ore Staking Transit Open Area - Petitioner had deposited a sum as security deposit towards 50% of charges of total Open Area Capacity Metric Tonnes and furnished a Bank Guarantee certain sum to cover the allotment period - Bank Guarantee was extended - Petitioner had exported certain Metric Tonnes - Whether original contract was absolute or conditional and having regard to terms of bargain, it must be held to be conditional – Held, This being factum, this Court do not find any infirmity in respect of decision taken by Chennai Port Trust that 'Force Majeure Clause' stipulated in the contract, cannot be applied as the names of petitioners are also listed in the list of illegal mining operators by State of Karnataka - Chennai Port Trust has taken decision after collecting information’s and materials from Department of Mining and Geology, Government of Karnataka - Writ petitioners are not entitled to invoke benefit of 'Force Majeure Clause' or the 'Doctrine of Frustration' for grant of complete exoneration with reference to terms and conditions stipulated in allotment order - Other disputes regarding the quantum or otherwise, petitioners are at liberty to approach Competent Civil Court of Law for purpose of redressal of their grievances in manner known to law - With the abovesaid liberty, all writ petitions fail and stand dismissed - Connected miscellaneous petitions are also dismissed.

ORDER :

(Prayer: WP 29218 of 2010 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the first respondent in issuing the communication dated 30.09.2010 in Ref.No.MEE/V1/2130/2009/Dy.CME(OH) and quash the same and consequently direct the respondents to invoke/apply the Force Majeure Clause and not to invoke the Security Deposit and Bank Guarantee furnished by the petitioner in furtherance of Allotment Order No.9/2010 dated 31.01.2010.)

1. The communication dated 30.09.2010 and 07.10.2010 declining the request of the petitioners to reconsider the proportionate drop in MGT under 'Force Majeure Condition', is under challenge in all these writ petitions.

2. In view of the fact that the issues raised are common in all these writ petitions, the petitioners are heard together and a common order is passed. WP No.29218 of 2010 is taken as a lead case.

3. The petitioner is engaged in the business of Mining of Iron Ore in the State of Karnataka and exporting the same. Export of Iron Ore had been made to several countries outside India through the Port at Chennai. The petitioner had sought the allotment of Iron Ore Staking Transit Area from Chennai Port Trust. Chennai Port Trust is a Body created under the Port Trust Act, 1963.

4. Based on the application submitted by the petitioner, the Chennai Port Trust had issued allotment letter dated 31.01.2010, sanctioning 30,000 Metric Tonnes Iron Ore Staking Transit Open Area. The petitioner had deposited a sum of Rs.16,65,000/- as security deposit towards 50% of charges of the total Open Area Capacity of 30,000 Metric Tonnes and furnished a Bank Guarantee of Rs.3,66,30,000/- to cover the allotment period upto 31.12.2010. The Bank Guarantee was extended upto 31.03.2011. The allotment was made for a period of 11 months ended on 31.12.2010. The petitioner was obligated to export minimum guaranteed throughput of not less than 3,30,000 Metric Tonnes for the entire Iron Ore Staking Transit Area of 30,000 Metric Tonnes capacity during the allotment period ending 31.12.2010. The second respondent had levied a license fee of Rs.92/- per Metric tonne as per the scale of rates towards handling of iron ore, pollution and cleaning charges. If there is any shortfall in the minimum guaranteed throughput at the end of the allotment period, the petitioner is required to compensate the second respondent by paying the licence fee of Rs.92/- per Metric Tonne as well as a sum of Rs.23/- per Metric Tonne towards marine charges. In the event of default, the first respondent-Chennai Port Trust had stipulated that the Bank Guarantee would be encahsed.

5. The petitioner till 31.08.2010 had exported 2,23,000 Metric Tonnes. That is more than the prorata minimum guaranteed throughput as on 31.08.2010. The Government of Karnataka, who issued the Mining Licence issued two orders dated 26.07.2010 and 28.07.2010 banning the export of Iron Ore extracted from the mines in Karnataka State for a period of six months and issuance of mineral dispatch permit for transporting for the purpose of export until further orders. Consequently the entire business activities of the petitioner came to halt.

6. The petitioner approached the High Court of Karnataka and made a contention that the illegal embargo by the Government Orders by the Government of Karnataka was an unforeseen circumstances and thus 'Force Majeure Condition' in Clause 14 of the allotment order must be applied. However, the petitioner could not able to succeed and all the writ petitions filed by number of mining owners were dismissed with certain directions to the Government of Karnataka. Thus, the petitioner could not able to continue the export. Under these circumstances, the Chennai Port Trust proposed to encash the Bank Guarantee furnished by the petitioner and thus the petitioners are constrained to move these writ petitions.

7. The learned counsel appearing on behalf of the petitione

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