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2020 Supreme(Telangana) 866
IN THE HIGH COURT OF STATE OF TELANGANA
KUNURU LAKSHMAN, J.
Sushee Hitech Projects Pvt. Ltd. - Appellant
Versus
Singareni Collieries Co. Ltd. and Ors. - Respondents
WP No. 8397 of 2020
Decided On : 24-11-2020
For the Appellant : D. Prakash Reddy for Avinash Desai.
For the Respondents: J. Sreenivasa Rao, SC.
Point of law: complicated questions of facts, which cannot be decided in a writ jurisdiction under Article 226 of the Constitution of India.
Headnote:
Constitution of India,1950 – Articles 226, 14 and 226-B - Companies Act, 1956 - Violation of terms of agreement - Disaster Management - Declaration of prevalence of normalcy in Country by Disaster Management Authority - Petitioner Projects Limited, private company incorporated under the Companies Act, 1956 - It engaged in business of mining contracts - Respondent No.1 has awarded the work of 'drilling, excavation, loading, transportation, dumping, spreading and levelling overburden with hired HEMM in combination with conventional equipment area during a period of 84 months', vide Order - Clause 2.3.2 deals with Penalty for lagging behind monthly schedule - case excavated quantity is less than 90% of the monthly scheduled quantity, penalty shall be levied week or part thereof on value of incomplete quantum of work subject to force majeure conditions - Force majeure conditions - Calendar months of scheduled period shall be treated as one quarter. Later on every 3 months period shall be treated as one quarter - quarter the contractor excavates over scheduled quantity, such surplus excavated quantity over and above 100% of scheduled quantity shall be considered to assess the shortfall made in the immediate previous quarter –
Finding of the court : Petitioner instead of availing the alternative dispute resolution mechanism, filed the present writ petition. Admittedly, the petitioner is seeking to enforce the contractual obligations. In the concluded contract, the parties are not entitled to maintain a writ petition - There are several facts sought to be adjudicated by this Court in the present writ petition - respondents' authorities have decided not to impose penalties during the lockdown period counter, it is also specifically mentioned by the respondents' authorities that in view of the decision taken by the respondents' authorities not to levy penalties and to refund penalties recovered during said period, refund of amount is being made for the penalties imposed during the lockdown period - respondents' authorities have considered entire fact-situation including restrictions imposed by both the Central and State Government during lockdown period - There are several aspects which are to be decided as they are complicated questions of facts, which cannot be decided in a writ jurisdiction under Article 226 of the Constitution of India - reliefs sought by the petitioner is to issue a direction to the respondents to consider period from declaration of prevalence of the normalcy in Country by Disaster Management Authority, Government of India, as a force majeure condition under Work Order Prevalence of normalcy is not in the hands of human being –
Result :writ petition is dismissed
ORDER :
Kunuru Lakshman, J.
1. The petitioner herein filed the present writ petition under Article 226 of the Constitution of India seeking the following reliefs:
(a) the action of respondents in not considering the period from February, 2020 till declaration of prevalence of normalcy in the Country by the Disaster Management Authority, Government of India, as a force majeure period due to spread of COVID-19 as illegal;
(b) recovery of monthly penalty on shortfall quantity during force majeure period i.e., from the month of February, recovering quarterly penalty at the end of 5th Quarter i.e., April, 2020 as illegal and in violation of terms of agreement dated. 30.1.2019;
(c) direction to the respondents to consider the period from February, 2020 till the declaration of prevalence of normalcy in the Country by the Disaster Management Authority, Government of India, as a force, majeure condition under the Order No. 7600007644, dated 31.1.2019;
(d) restrain the respondent from recovering any penalty till the declaration of prevalence of normalcy in the Country by the Disaster Management Authority, Government of India; and
(e) direction to the respondents to refund the penalty amount of Rs. 33,88,769/- recovered illegally from the petitioner towards monthly penalty from the month of February and the quarterly penalty from the bills of the petitioner contrary to the terms of the contract.
2. Heard Mr. D. Prakash Reddy, learned Senior Counsel, representing Mr. Avinash Desai, learned Counsel for the petitioner, and Mr. J. Srinivasa Rao, learned Standing Counsel for the respondents.
3. The facts germane to filing the present writ petition are as follows:
(a) The petitioner, M/s. Sushee Hitech Projects Limited, private company incorporated under the Companies Act, 1956. It engaged in the business of mining contracts. Respondent No.1 has awarded the work of 'drilling, excavation, loading, transportation, dumping, spreading and levelling etc., of 2568.200 LBCM of overburden with hired HEMM in combination with conventional equipment at JVR OC-II Project, KGM area during a period of 84 months', vide Order No. 7600007644, dated 30.1.2019.
(b) The relevant and important clauses of the said agreement are as follows:
(i) Clause 1.12 deals with 'Force Majeure Conditions', which is as under:
"The following shall be treated as force majeure conditions
* War, Strikes, lockouts, law & order problem
* Natural calamities like Flood, Fire and Epidemics
* Non availability of Explosives
* Non supply of Diesel by SCCL
* Interruption of work due to Fog
* Rains
* Riots or Civil commotion
* Non-availability of land
* Production loss due to interruption of work for the reasons not attributable to either SCCL or the contractor
* Time delay in completion of works by SCCL connected to OB removal work."
(ii) Clause 2.3.2 deals with Penalty for lagging behind monthly schedule, which is as under:
(a) In case excavated quantity is less than 90% of the monthly scheduled quantity, penalty shall be levied @ 1% per week or part thereof on the value of incomplete quantum of the work subject to force majeure conditions. Force majeure conditions, if any, in each month shall be taken into account and such period shall be added to the completion schedule to decide actual work completion date. Penalties, if any, shall be recovered from running account bills.
(b) The monthly penalties shall be reconciled on quarterly basis. The first 3 calendar months of the scheduled period (even if the work starts in the middle of the month) shall be treated as one quarter. Later on every 3 months period shall be treated as one quarter. If in the subsequent quarter the contractor excavates over and 100% of the scheduled quantity, such surplus excavated quantity over and above 100% of scheduled quantity shall be considered to assess the shortfall made in the immediate previous quarter. In case the shortfall is
