Rajasthan Transport Vs South Eastern Coalfields Limited

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CGHC010089742023 2026:CGHC:31135-DB

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 1380 of 2023

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Rajasthan Transport A Partnership Firm Having Its Registered Office At 408, Indira Commercial Complex, Transport Nagar, Korba 495 677, Chhattisgarh Through Its Partner Nitesh Bohra, S/o Late Shri Pukhraj Jain, Aged About 39 Years, R/o 408- Indira Commercial Complex, Transport Nagar, Korba Chhattisgarh.

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... Petitioner

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versus

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1 - South Eastern Coalfields Limited, Through The Chairman Cum Managing Director, Secl Bhawan, Seepat Road, Bilaspur Chhattisgarh 495006

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2 - The General Manager (Cmc), South Eastern Coalfields Limited, Secl Bhawan, Seepat Road, Bilaspur Chhattisgarh- 495006

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3 - The Chief Manager (M)/sam, Dsb Sub - Area, South Eastern Coalfields Limited, Dhelwadih, Chhattisgarh-495445

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4 - The General Manager (Oprn), South Eastern Coalfields Limited, Korba Area, Post And District Korba, Chhattisgarh 495677

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5 - The General Manager, South Eastern Coalfields Limited, Korba Area, Post And District Korba Chhattisgarh 495677

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VED PRAKASH DEWANGAN Digitally signed by VED PRAKASH DEWANGAN Date: 2026.07.23 18:34:34 +0530

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6 - The Senior Manager (M)/cm, South Eastern Coal Fields Limited, Bagdewa Ug Mine, Korba Area, Post And District Korba, Chhattisgarh 495677

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7 - The Nodal Officer (Despatch), South Eastern Coalfields Limited, Bagdewa Ug Mine, Korba Area, Post And District Korba, Chhattisgarh 495677

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--- Respondents

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(Cause title taken from Case Information System)

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For Petitioner : Mr. Kshitij Sharma, Advocate For Respondents/SECL : Mr. Vaibhav Shukla, Advocate

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Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Rav indra Kumar Agrawal, Judge

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Order on Board

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Per Ramesh Sinha, Chief Justice 22/07/2026

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The petitioner has preferred the present writ petition under Article 226 of the Constitution of India calling in question the communication dated 28.12.2022 whereby the respondents have recovered a sum of ₹52,02,120.19/- from the petitioner's final bill towards alleged shortage of coal transported under the contract executed between the parties. The petitioner seeks quashment of the said communication and a consequential direction to release the deducted amount.

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By way of the present writ petition filed under Article 226 of the Constitution of India, the petitioner has sought the following reliefs:

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"10.1) The Hon'ble Court may kindly be pleased to call for the records pertaining to the subject tender for the kind perusal of this Hon'ble Court.

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10.2) The Hon'ble Court may kindly be pleased to issue such writ / orders quashing and setting aside the impugned letter-dated 28.12.2022 (Annexure P1) issued by the respondent; and

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10.3) The Hon'ble Court may further kindly be pleased to issue such writ / orders / direction to the respondents to release the wrongfully deducted amount of Rs. 52,02,120.19/- from the final bill of the petitioner and complete the formalities for closure of contract with immediate effect.

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10.4) Cost of the petition may also be granted to the petitioner.

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10.5) Any other relief, which this Hon'ble Court deems fit and proper, may also kindly be granted to the petitioner, in the interest of justice."

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The brief facts, as pleaded by the petitioner, are that the respondents floated an e-tender for transportation of coal from Bagdeva UG Mine to Surakachhar Wharf Wall Siding and Bagdeva UG Mine Stock Yard. The petitioner emerged as the successful bidder, pursuant to which the work order dated 13.02.2018 and agreement dated 20.02.2018 were executed. According to the petitioner, during execution of the contract, thirty-six monthly bills were submitted and corresponding reconciliation reports were prepared by the respondent officials indicating that the variation in quantity was within the permissible limit and payments were accordingly released without objection. After completion of the contractual period, however, while processing the final bill, the respondents deducted an amount of

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₹52,02,120.19 by invoking Clause 18 of the Special Terms and Conditions alleging shortage of coal transported.

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The respondents, on the other hand, contend that the monthly payments were merely interim in nature and, under Clauses 8.7 and 8.8 of the General Terms and Conditions, were always subject to final reconciliation. According to them, after final reconciliation dated 29.05.2022, it was found that there was an alleged shortage of 767.68 tonnes of coal attributable to the petitioner, making it liable for recovery under Clause 18 of the contract. The respondents have also raised a preliminary objection regarding maintainability of the writ petition on the ground that the agreement contains a dispute resolution mechanism by way of arbitration and that the controversy involves disputed questions of fact incapable of adjudication in writ jurisdiction.

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Learned counsel appearing for the petitioner would submit that the deduction of ₹52,02,120.19 is wholly arbitrary and contrary to the reconciliation reports issued by the respondents themselves throughout the execution of the contract. It is contended that all thirtysix reconciliation reports recorded that the variation remained within the permissible limit and payments were approved accordingly. It is further argued that Clause 18 of the agreement has no application to the facts of the present case and that the respondents are estopped from taking a contrary stand after having accepted the petitioner's performance during the entire contractual period.

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It is further submitted that the action of the respondents is arbitrary and violative of Article 14 of the Constitution. According to the petitioner, the dispute essentially concerns arbitrary exercise of power by a State instrumentality and, therefore, falls beyond the realm of a mere contractual dispute and beyond the purview of arbitration, warranting interference by this Court under Article 226 of the Constitution of India.

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Per contra, learned counsel appearing for the respondents submits that the writ petition is not maintainable as the dispute arises entirely out of contractual obligations and the agreement itself provides an effective alternative remedy by way of arbitration under Clauses 13 and 13A of the agreement. It is submitted that adjudication of the petition would necessarily require determination of disputed questions of fact regarding reconciliation of coal dispatched and coal received, correctness of monthly reconciliation statements, applicability of Clause 18 and interpretation of Clauses 8.7 and 8.8 of the contract.

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It is further contended that the monthly reconciliation sheets relied upon by the petitioner were merely interim documents and were never intended to constitute final certification. After final reconciliation, shortage of 767.68 tonnes of coal was found, resulting in recovery strictly in accordance with Clause 18 of the contract. Since the dispute involves interpretation of contractual provisions and appreciation of evidence, the respondents submit that the controversy falls squarely within the domain of the arbitral tribunal

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and is beyond the scope of judicial review under Article 226 of the Constitution of India.

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We have heard learned counsel for the parties and perused the material available on record.

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The admitted position is that the dispute arises from a commercial contract executed between the parties. The principal controversy revolves around the correctness of the reconciliation statements, applicability of Clause 18, interpretation of Clauses 8.7 and 8.8 of the agreement, and the legality of the deduction made after final reconciliation. Determination of these issues would necessarily require examination of contractual terms, appreciation of documentary evidence, reconciliation records and factual adjudication as to whether the alleged shortage of coal actually occurred and whether the recovery has been effected in accordance with the contract.

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It is equally not in dispute that the agreement executed between the parties contains a specific dispute resolution mechanism under Clauses 13 and 13A, providing for settlement of contractual disputes through a structured mechanism culminating in arbitration. Once the parties have consciously agreed to resolve their disputes in the manner stipulated under the agreement, this Court would ordinarily decline to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India, particularly where the controversy involves disputed questions of fact and interpretation of contractual provisions. Clauses 13 and 13A of the Agreement read as under:

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“13. Settlement of dispute

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It is incumbent upon the contractor to avoid litigation and disputes during the course of execution. However, if such disputes take place between the contractor and the department, effort shall be made first to settle the disputes at the company level.

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The contractor should make request in writing to the Engineer-in-charge for settlement of such disputes/ claims within 30 (thirty) days of arising of the cause of dispute/ claim failing which no disputes/ claims of the contractor shall be entertained by the company.

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Effort shall be made to resolve the dispute in two stages.

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In first stage dispute shall be referred to Area CGM,GM. If difference still persists the dispute shall be referred to a committee constituted by the owner. The committee shall have one member of the rank of Director of the company who shall be chairman of the committee.

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If differences still persist, the settlement of the dispute shall be resolve in the following manner:

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Disputes relating to the commercial contracts with Central Public Sector Enterprises / Govt. Departments (except Railways, Income Tax, Customs & excise duties)/ State Public Sector Enterprises shall be referred by either party for Arbitration to the PMA (Permanent Machinery of Arbitration) in the department of Public Enterprises.

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In case of parties other than Govt. Agencies, the redressal of the dispute may be sought through Arbitration (THE ARBITRATION AND CONCILIATION ACT, 1996 as amended by AMENDMENT ACT of 2015).

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13A. Settlement of disputes through Arbitratio n

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If the parties fail to resolve the disputes/differences by in house mechanism, then, depending on the position of the case, either the employer/owner or the contractor shall give notice to other party to refer the matter to arbitration instead of directly approaching Court. The contractor shall, however, be entitled to invoke arbitration clause only after exhausting the remedy available under the clause 13.

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In case of parties other than Govt. agencies, the redressal of disputes/differences shall be sought through Sole Arbitration as under.

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Sole Arbitration:

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In the event of any question, dispute or difference arising under these terms & conditions or any condition contained in this contract or interpretation of the terms of, or in connection with this Contract (except as to any matter the decision of which is specially provided for by these conditions), the same shall be referred to the sole arbitration of a person, appointed to be the arbitrator by the Competent Authority of CIL / CMD of Subsidiary Company (as the case may

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be). The award of the arbitrator shall be final and binding on the parties of this Contract.

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(a) In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his/her award being set aside by the court for any reason, it shall be lawful for the Competent Authority of CIL / CMD of Subsidiary Company (as the case may be)to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid.

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(b) It is further a term of this contract that no person other than the person appointed by the Competent Authority of CIL / CMD of Subsidiary Company (as the case may be) as aforesaid should act as arbitrator and that, if for any reason that is not possible, the matter is not to be referred to Arbitration at all.

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Subject as aforesaid, Arbitration and Conciliation Act, 1996 as amended by Amendment Act of 2015 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the Arbitration proceedings under this clause.

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The venue of arbitration shall be the place from which the contract is issued.

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Applicable Law:The contracts shall be interpreted in accordance with the laws of the Union of India.

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Contracts with partnership firm/joint Venture/Consortium:

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The Partnership firm /Joint Venture/ Consortium is required to submit written consent of all the partners to above arbitration clause at the time of submission of bid.”

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The Hon’ble Supreme Court in Kerala State Electricity Board v. Kurien E. Kalathil , (2000) 6 SCC 293, held that interpretation and implementation of contractual clauses are matters for the civil court or arbitral forum and not for determination in writ jurisdiction reads as

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under:-

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“10. We find that there is a merit in the first contention of Mr Raval. Learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subjectmatter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature.

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A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies.”

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In the case of Joshi Technologies International Inc. v. Union of India , (2015) 7 SCC 728, after considering the entire law relating to maintainability of writ petitions arising out of contracts, Hon'ble

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Supreme Court, held that where determination of contractual rights involves appreciation of disputed facts and interpretation of contractual terms, the High Court should ordinarily refuse to entertain a writ petition, especially where an efficacious contractual remedy is available.

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Similarly, in State of U.P. v. Bridge & Roof Co. (India) Ltd. , (1996) 6 SCC 22, the Hon’ble Supreme Court held that disputes arising purely from contractual obligations involving interpretation of terms and conditions cannot ordinarily be adjudicated in writ proceedings and should be relegated to the remedies available under the contract.

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Applying the aforesaid principles to the facts of the present case, this Court finds that the entire controversy centers around interpretation of contractual clauses, correctness of reconciliation statements and final reconciliation, and liability arising therefrom. These are questions requiring detailed evidence which cannot appropriately be undertaken in proceedings under Article 226 of the Constitution of India.

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In view of the nature of the controversy, the disputed questions of fact involved, and the availability of an efficacious contractual remedy by way of arbitration, this Court is of the considered opinion that the present writ petition is not maintainable. The issues sought to be raised by the petitioner are beyond the permissible scope of judicial review under Article 226 of the Constitution of India and fall squarely within the jurisdiction of the arbitral forum constituted under the agreement.

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Accordingly, the writ petition is dismissed leaving it open to the petitioner to avail the remedy available under the arbitration clause contained in the agreement. It is made clear that this Court has not expressed any opinion on the merits of the rival claims, and all questions are left open to be decided by the competent arbitral tribunal in accordance with law.

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No order as to costs.

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Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice

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ved

Rajasthan Transport v. South Eastern Coalfields Limited

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Rajasthan Transport v. South Eastern Coalfields Limited

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