Remanded

M/s. Tharu and Sons, v. The Union of India

Andhra Pradesh HC21 Jul 2023WP/4008/2022

Case brief

AI extract

What is this about?

Constitution Bench heard a writ petition challenging non-payment of guaranteed Assured Off-Take and arbitrary invocation of non-existent Force Majeure clause. Court found force majeure alien to the contract but remanded matter to authorities for adjudication considering all grounds.

What did the court decide?

Petition disposed with proceedings set aside; remanded to respondent authorities to decide afresh after addressing all petitioner's grounds within four weeks.

M/s. Tharu and Sons, Vs The Union of… — Contract and Commercial Disputes | Andhra Pradesh HC (2023)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

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(Special Original Jurisdiction)

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FRIDAY, THE TWENTY FIRST DAY OF JULY

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A
% z

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TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI^%

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WRIT PETITION NO: 4008 OF 2022

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Between:

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M/s. Tharu and Sons, Rep. by its Manager, Mr. P. Dileep, aged about 56 years, O/o 2nd Floor, Kalamassery Service Co-Operative Bank Building, North Kalamassery, Near Metro Pillar No. 250, Kalamassery, P.O., Ernakulam Dist., Kerala - 683104. Rio. GF-8, Surya Lakshmi Apartment, Chintha Chetla Bazar, Ayodhyanagar, Vijayawada - 520003, Andhra Pradesh.

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..Petitioner

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AND

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The Union of India, Rep.by Secretary, Ministry of Railways, Rail Bhavan, Raisina Marg, New Delhi -110001.

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The Indian Railway Board, Rep.by its Chairman, Rail Bhavan, Raisina Marg, New Delhi-110001

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The General Manager, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Chief Mechanical Engineer, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Deputy Chief Mechanical Engineer, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Chief Rolling Stock Engineer, Secunderabad, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Senior Divisional Mechanical Engineer, BZA (Vijayawada Division),South Central Railways, Vijayawada. Andhra Pradesh.

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The Divisional Railway Manager, South Central Railways, Vijayawada Division, Vijayawada. Andhra Pradesh.

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Respondents

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the following actions.

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A.The Action of the Respondent No.6 issuing Proceedings No.M.13/C86W/Mech Ldy/BOOT-BZA. dt.09.12.2021 denying guaranteed payments to the Petitioner under 75percent assured off-take clause, in violation of the Policy Guidelines and Special Conditions under Proceedings No.2009/M(C)/165/6 dt.14.01.2011, which were set out in Tender Notice No.B/MS.142/I/BOOT-BZA/2017-18. Tender Document No. DRM-M-BZA-102017-18. dt.19.08.2017. Contract Agreement No. Mech/01/201819,dt.02.11.2018.Subsidiary Agreement No. Mech/ 01/2018-19 /BOOT Laundry/BZA dt.15.02.2019, and the Clarifications issued by 2nd Respondent vide Proceedings No.2017/EnHM/26/04 dated 03.07.2020 directing all Railway

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Divisions to be followed/continued to make payments where Assured Off-Take Clause is provided in contract.

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B. The action of the Respondents 6 to 7 issuing Letters No. M.3I3/286/Tenders/CorrespondenceNol-IV dated 02.04.2020, and Letter No.B/MS.142/I/BOOT Laundry-BZA/2017-18. dt.03.04.2020 Invoking the Force Majeure Clause for Indefinite Period without there being any such Clause in entire Guidelines and Conditions of Boot Laundry Policy, Tender Notice, Tender Document and Contract Agreements entered into with the Petitioner herein, with an intention to evade their liability to make the guaranteed payments under 75% Assured Off-Take clause and there by illegally driving the Petitioner to Arbitration without properly considering the Representation dt.19.10.2021 submitted by the Petitioner in compliance of the Orders dt.31.08.2021 and dtl6.09.2021 passed in W.P.No.18600 of 2021 by this Hon'ble Court.

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C. The Action of the Respondents in not making the guaranteed payments to the Petitioner under Assured Off-Take clause as per contractual terms by acting arbitrarily without implementing the "Policy Guidelines and Special Conditions issued by 2nd Respondent under Proceedings No. 2009/M(C)/165/6 dt.14.01.2011, uniformly in all BOOT Laundry Contracts, and there by violating the Contractual terms, and discriminating the case of the Petitioner under the guise of illegal invocation of Force Majeure Clause, which is not existing in Petitioner's Contract, while Other Railway Divisions under 2nd Respondent ie; East- Coast Railway; South East Central Railway; etc; in identical contracts to the Petitioner's contract, are making Payments as guaranteed under 75% assured off-take clause to BOOT Laundry Contracts, without invoking Force Majeure Clause and there by illegally driving the Petitioner for Arbitration;

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As illegal, arbitrary, discriminative, unjust, unreasonable, without jurisdiction, contrary to law and violative of fundamental rights under Art. 14, Art. 15, Art. 16, Art 21. of Constitution of India, And Set-a-Side the Proceedings No. M.13/C & W/ Mech Ldy/BOOT-BZA dt.09.12.2021; and Proceedings No.M.313/286/Tenders/CorrespondenceNal-IV, dt.02.04.2020 issued by 6th Respondent and Proceedings No.B/MS.142/Boot Laundry/BZA/201718, dt.03.04.2020, issued by the Respondent No.7; by Consequently directing the Respondents to forthwith pay the guaranteed payment under the clause of Assured Off-Take of the volume of 75% of average daily requirement to the petitioner from dt. 23.03.2020 to till date, along with interest for the delayed payment as per the Guidelines & Conditions of Boot Laundry Policy, Tender Notice, Tender Document & Contract Agreements entered into with the Petitioner herein and as per Clarifications issued by 2' Respondent vide Proceedings No. 2017/EnHM/26/04 dated 03.07.2020.,as the case may be.

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IA NO: 1 OF 2022

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to Suspend the Proceedings No.M.13/C and W/Mech Ldy/BOOT-BZA. dt.09.12 .2021, Proceedings No.M.313 / 286 / Tenders/ Correspondence/ Vol-IV, dt.02.04.2020 issued by 6th Respondent and Proceedings No.B/MS.142/Boot

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Laundry/BZA/2017-18 dt.03.04.2020 issued by the Respondent No.7, pending disposal of the above Writ Petition, and pass such other order or orders as are deemed fit and proper in the circumstances of the case.

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Counsel for the Petitioner: SRI. DEVALARAJU ANIL KUMAR

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Counsel for the Respondents 1 to 8: SRI Y V ANIL KUMAR

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(CENTRAL GOVERNMENT COUNSEL)

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The Court made the following: ORDER

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W n1 NO. 4008 of 2022

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HON'BLE SRI JUSTICE RAVI CHEEMALAPATI

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WRIT PETITION No. 4005 of 2022

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ORDER:

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This Writ Petition is filed under Article 226 of the Constitution of

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India for the following relief:

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" issue an appropriate Writ, order or direction more particularly one in the nature of writ of Mandamus, declaring the following actions:

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A. The action of the respondent No.6 in issuing Proceedings No.M.13/C&W/Mech Ldy/BOOT-BZA, dt.09.12.2021 denying guaranteed payments to the petitioner under 75% assured off-take clause, in violation of the "Policy Guidelines and Special Conditions under Proceedings No.2009/M(C)/165/6 dt. 14.01.2011, which were set out in Tender Notice No.B/MS.142/1/BOOT-BAZ/2017-18, Tender Document No.DRM-M-BZA-10-2017-18, Tender Document No. DRMM-BZA-10-2017-18; dt. 19.08.2017; Contract Agreement No. Mech/0.1/ 2018-19/BOOT Laundry/BZA, dt. 15.02.2019, and the clarifications issued by 2nd respondent vide Proceedings No. 2017/EnHM/26/04 dated 03.07.2020 directing all Railway Divisions to be followed/ continued to make payments where Assured Off-Take Clause is provided in contract;

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B. The action of the Respondents 6 to 7 issuing Letters No.M.313/286/ Tenders/Correspondence/Vol-IV dated 02.04.2020 and Letter No.B/MS.142/1/BOOT Laundry-BZA/2017-18, dt. 03.04.2020 invoking the Force Majeure Clause for "Indefinite Period"without there being any such Clause in entire Guidelines & Conditions of Boot Laundry Policy, Tender Notice, Tender Document & Contract Agreements entered into with the petitioners herein with an intention to evade their liability to make the guaranteed payments under 75% Assured Off-Take Clause and thereby illegally driving the petitioner to Arbitration without properly considering the Representation dt. 19.10.2021 submitted by the petitioner in compliance of the Orders dt. 31.08.2021 & 16.09.2021 passed in W.P.No.18600 of 2021 by this Court;

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W. P. 9'10. 4008 of 2022

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C. The action of the respondents in not making the guaranteed payment to the petitioner under Assured Off-Take clause as per contractual terms acting arbitrarily without implementing the "Policy Guidelines and Special Conditions issued by 2nd respondent under proceedings No. 2009/M(C)/165/6 dt. 14.01.2011, uniformly in all BOOT Laundry Contracts, and thereby violating the Contractual terms and discriminating the case of the Petitioner under the guide of illegal invocation of Force Majeure Clause, which is not existing in petitioner's Contract, while other Railway Divisions under^2nd respondent i.e. East-Coast Railway, South East Central Railway etc., in identical contracts to the petitioner's contract, are making payments as guaranteed under 75% assured off-take clause to BOOT Laundry Contracts, without invoking Force Majeure clause and thereby illegally driving the petitioner for Arbitration;

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As illegal, arbitrary, discriminative, unjust, unreasonable, without jurisdiction, contrary to law and violative of fundamental rights under Articles 14, 15,16 and 21 of the Constitution of India "

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The short grievance of the petitioner is non-payment of 75% of

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the average daily requirement known as assured off-take from the laundry, guaranteed under BOOT Laundry Contract, by invoking a non-existent Force Majeure Clause, despite the fact that the similar situated contractors of other Railway Divisions were paid amount towards assured off-take.

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Heard Sri Deva/araju Anil Kumar, learned counsel for the petitioner and Sri Y.V.Anil Kumar, learned Central Government counsel for respondents.

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Sri Deva/araju Anil Kumar, learned counsel, would submit that, as

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per Para-1 of Standard Guidelines and Special Conditions, payment of 75%

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'WP. NO. 4008 of 2022

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of the minimum workload is guaranteed to the contractor towards assured off take, however, the authorities by invoking Force Majeure clause, which is not at all a part of the contract, have rejected the claim made by the petitioner for payment of assured off take. The learned counsel for the petitioner would submit that, in the event of contradictions, special conditions of the contract prevail over the general conditions. The other divisions of Railway such as South East Central Railway and East Coast Railway have made payments to the contractors under Assured off take clause, however the respondent authorities have denied the payment to the petitioner, who is similarly situated, thus the petitioner was discriminated, which is impermissible under Constitution. The learned counsel for the petitioner would further submit that while answering the question raised in Lok Sabha regarding Mechanized Boot Laundries, it has been answered that bills were processed as per Minimum assured clause. Despite bringing all the facts to the notice of the authorities and also that Force Majeure Clause is alien to laundry contracts, they rejected the petitioner's claim contrary to the special conditions of the contract and that too without considering the grounds urged in the representation. Hence prayed to allow the writ petition.

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~9 `W cR NO. 4008 of 2022

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S. Sri Y.V.Anil Kumar, learned Central Government Counsel, on counter vehemently opposed the claim made by the petitioner and also the maintainability of the writ petition on the ground that this Court while exercising jurisdiction under Article 226 of the Constitution of India cannot adjudicate the disputes arising out of contractual obligations. Further, the agreement contains an arbitration clause. The petitioner, without invoking arbitration clause, has filed this writ petition. The learned counsel would further submit that the authorities have rightly invoked Force Majeure clause in view of the unforeseen circumstances that had erupted on account of Covid-19 pandemic since there was complete cessation of laundry operations during the relevant period. There are no valid and justifiable grounds raised in this writ petition warranting interference with the proceedings impugned in this writ petition.

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Perused the material available on record. In the representation submitted by the petitioner there is a categorical mention about the payment made to another similarly situated Laundry Services in relation to the contract of similar nature but relates to other Divisions of Railway, by invoking assured off-take clause contained in the Boot Laundry agreement. Invocation Force Majeure clause, in case it is non-existent in the

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~,9 W..cI NO. 4008 of 2022

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agreement, is impermissible under law. Further, the Ministry of Railways, Railway Board, by issuing circular dated 03.07.2020 had clarified that where assured off-take is provided in Boot laundry contract; the same can be followed/continued in short to medium run.

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The impugned order does not contain any explanation as to the reason why the petitioner is not entitled for payment of assured off take, which allowance was extended to the similarly situated persons by the other Divisions of the same department. The only reason offered for nonpayment is invocation of Force Majeure clause. As already stated supra, the authorities cannot invoke the said clause, if it is not found in the agreement.

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However, as the authorities have not answered all the grounds raised by the petitioner in the representation, instead of going into the merits of the matter, this Court feels it appropriate to remand the matter to the original authority for better adjudication of the^matter by considering and answering all the issues raised by the petitioner, keeping in view the extension of benefit to the similarly situated contracts^{of other} Divisions.

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'WP. NO. 4008 of 2022

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Accordingly, the Writ Petition is disposed of. The proceedings No.M.13/C&W/Mech Ldy/BOOT-BZA, dated 09.12.2021 issued by the^6th respondent is set aside and the matter is remanded directing the respondent Nos. 5 & 6 to consider and answer all the grounds raised by the petitioner in his representation and decide the matter afresh by passing a reasoned order and communicate the same to the petitioner within a period of four (04) weeks from the date of receipt of copy of the

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order. There shall be no order as to costs.

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As sequel thereto, miscellaneous petition, if any, pending shall stand closed. Interim orders, if any, shall stand vacated.

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SDI- K. SRINIVASA RAJU ASSISTANT REGISTRAR

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//TRUE COPY//

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l SECTION OFFICER

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To, 1. The Secretary, Union of India, Ministry of Railways, Rail Bhavan, Raisina Marg, New Delhi -110001.

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The Chairman, Indian Railway Board, Rail Bhavan, Raisina Marg, New Delhi110001

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The General Manager, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Chief Mechanical Engineer, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Deputy Chief Mechanical Engineer, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Chief Rolling Stock Engineer, Secunderabad, South Central Railways, Rail Nilayam, Secunderabad. Telangana State.

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The Senior Divisional Mechanical Engineer, BZA (Vijayawada Division), South Central Railways, Vijayawada. Andhra Pradesh.

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The Divisional Railway Manager, South Central Railways, Vijayawada Division, Vijayawada. Andhra Pradesh.

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One CC to SRI. DEVALARAJU ANIL KUMAR Advocate [OPUC] 10.One CC to SRI. Y V ANIL KUMAR (Central Government Counsel) [OPUC] 11.Three CD Copies

Madhu

HIGH COURT

DATED:21/07/2023

ORDER

WP.No.4008 of 2022

c of ANON
2 a Nov 2023
Current Section *-
y
,

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DISPOSING THE WP WITHOUT COSTS

M/s. Tharu and Sons, v. The Union of India

Case brief

What is this about?

What did the court decide?

M/s. Tharu and Sons, v. The Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

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