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2011 Supreme(Ori) 455
IN THE HIGH COURT OF ORISSA
V. Gopala Gowda, B.N. Mahapatra, JJ.
ORISSA INDUSTRIES LTD. - APPELLANT
Versus
ROURKELA STEEL PLANT AND OTHERS - RESPONDENT
OJC No. 7558 of 2001
Decided On : 14-09-2011
Y. Das, N.C. Mohanty, R. Sahu-3, P.K. Behera and B.B. Panda in OJC No. 7558 of 2001 and Ramesh Sahoo, B.P. Mohapatra, N.C. Patnayak and S. Pradhan in W.P.C 20857 of 2010, for the Appellant; S.K. Padhi, D. Mohapatra, B.K. Sahoo, S.K. Mahapatra and N.P. Mohanty in OJC No. 7558 of 2010 and Goutarn Mishra and D.K. Patra in W.P.(C) No. 20857 of 2010, for the Respondent
The main legal point established in the judgment is that disputed questions arising out of contractual obligations are not maintainable in a writ petition and should be addressed through appropriate contractual remedies.
Headnote:
Sick Industrial Companies (Special Provisions) Act - Contractual Dispute - 22(3) of SIC Act - Recovery of Dues - [Sick Industrial Companies (Special Provisions) Act] - [Contractual Dispute] - [22(3)] - The court discussed the contractual dispute between the parties and the applicability of Section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985. It held that the disputed questions arising out of contractual obligations are involved in the present writ petition and therefore the same is not maintainable. The court emphasized that a party cannot be permitted to dispute the contractual obligations by invoking extra-ordinary jurisdiction. It also clarified that it has not examined the merits of the case of either of the parties with regard to their respective monetary claim against each other and action taken for recovery of the same.
Fact of the Case:
The Petitioner, a company incorporated under the Indian Companies Act, 1956, supplied refractory bricks to Rourkela Steel Plant (RSP). RSP alleged that the collapse of a converter was due to the bricks supplied by the Petitioner and withheld 50% of the dues. The Petitioner claimed that RSP illegally withheld Rs. 17.61 lakhs and that it had been declared a sick industry by the Board for Industrial and Financial Reconstruction (BIFR).
Finding of the Court:
The court found that the present case involves disputed questions arising out of contractual obligations and therefore the writ petition is not maintainable. It clarified that it has not examined the merits of the case of either of the parties with regard to their respective monetary claim against each other and action taken for recovery of the same.
Issues: The issues involved in the case were: (i) Whether disputed questions of fact are involved in the present case, for which the writ petition is not maintainable? (ii) Whether opposite party-RSP is justified to issue FAX Message to its other unit situated at Bhilai, Bokaro, Durgapur for release of Rs. 33.46 lakhs claimed to be receivable from the Petitioner? (iii) Whether any direction can be issued to opposite party-RSP to pay Rs. 17.61 lakhs along with interest ' 20% since 25.09.1989 amounting to Rs. 1,51,80,307/- as claimed by the Petitioner?
Ratio Decidendi: The court held that the disputed questions arising out of contractual obligations are involved in the present writ petition and therefore the same is not maintainable. It emphasized that a party cannot be permitted to dispute the contractual obligations by invoking extra-ordinary jurisdiction.
Final Decision: Both the writ petitions were disposed of with the observation that the court has not examined the merits of the case of either of the parties with regard to their respective monetary claim against each other and action taken for recovery of the same.
JUDGMENT :
B.N. Mahapatra, J. - In both the writ petitions, the Petitioner is one and the same. In O.J.C. No. 7558 of 2001, the Petitioner has made a prayer for quashing Annexure-9 by which the D.G.M. (F and A), Rourkela Steel Plant, Rourkela sent a fax message to the E.D. (F and A), B.S.P., Bhilai, G.M. (F and A), B.S.L., Bokaro and the G.M. (F and A), D.S.P., Durgapur requesting them to recover Rs. 33.46 lakhs from the pending bills of the Petitioner Company if any and pass on the credit to the Rourkela Steel Plant, Rourkela (for short 'RSP'). Further prayer of the Petitioner is to direct the opposite party-RSP to pay Rs. 17.61 lakhs along with interest at the rate of 20% since 25.09.1989 amounting Rs. 1,51,80,307/- . In W.P.(C) No. 20857 of 2010 the prayer of the Petitioner is for a direction to opposite party No. 2-General Manager (F&A), Durgapur Steel Plant, AT/PO: Durgapur to release the withheld amount due to the Petitioner Company within a specified period.
Since the issue involved in both the writ petitions are interrelated, they are disposed of by this common judgment.
2. The facts of the Petitioner's case in a nut shell are that the Petitioner is a Company incorporated under the Indian Companies Act, 1956. The Petitioner has a refractory unit at Lathikata where refractory bricks of high Magnesium quality are manufactured. The refractory bricks of such nature are generally used in blast furnaces in different factories all over the world. Since its bricks can withstand high temperature under high pressure such bricks are of high demand in industrial sector. During the course of its business, the Petitioner-Company had supplied such bricks to RSP as per their orders. RSP at no point of time raised objection to the quality and specification of the bricks supplied by the Petitioner Company to RSP. All of a sudden, the Petitioner Company received a letter on 09.02.1989 issued by RSP wherein it was indicated that the L.D. Converter No. 5 had collapsed after 89 blows and the said converter was built up by the Magnesium bricks supplied by the Petitioner Company. On such allegation, the officials of the Petitioner Company as well as RSP hold a meeting and agreed to go for a chemical analysis of the supplied bricks to ascertain the quality and accordingly on 25.02.1989 the minutes were recorded fixing the modalities for conducting such chemical analysis. Pursuant to such meeting, a joint verification was conducted to ascertain the quality of the bricks supplied and accordingly on 02.03.1989 the Scientist of RSP conducted the chemical analysis of the bricks supplied in their Research Laboratory and certified that the bricks supplied by the Petitioner Company were as per the specifications and quality. They further pointed out that the collapse of the Converter might have been for other reasons. The said chemical analysis report is annexed as Annexure-5 to the writ petition. However on 25.09.1989 RSP intimated the Petitioner Company that 50% of the landed cost of the bricks used in L.D. Converter No. 5 was to be withheld and an independent enquiry committee was to look into the matter and on the basis of its report the question of withholding of 50% amount would be decided. Accordingly, Rs. 17.61 lakhs was withheld by RSP from the bills of the Petitioner-Company.
3. Mr. R. Sahu, Learned Counsel appearing for the Petitioner-Company submits that though an independent enquiry was conducted, till date the result of the said enquiry has not been made known to the Petitioner Company. By withholding Rs. 17.61 lakhs due to the Petitioner, the Petitioner has been made to sustain huge loss and the books of account of the Petitioner's banker shows an outstanding loan of Rs. 1,51,00,307/- at the rate of 20% interest on Rs. 17.61 lakhs since the date of withholding, i.e., 20.09.1989. Despite several representations made by the Petitioner Company to RSP, the opposite party Company maintained stony silence over the matter. The Petitioner Company r
