Allowed

M/s Trishul Industries v. The State of Bihar

Patna HC5 Oct 2024CWJC/9195/2024

Case brief

AI extract

What is this about?

Coal supply contracts: petitioners were blacklisted and security deposits forfeited allegedly for violating contract terms by exceeding the monthly scheduled quantity. The court followed its earlier judgment in M/s Bhagwati Coke Industries, holding that penalty applied only to under-utilisation of the annual contracted quantity, not monthly use, set aside the blacklisting order and allowed the wri

What did the court decide?

Order of blacklisting set aside; security forfeiture reversed; agreements to continue unless expired or lawfully rescinded.

M/s Trishul Industries Vs The State of Bihar — Mining and Natural Resources | Patna HC (2024)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.9195 of 2024

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M/s Trishul Industries through its proprietor Sunil Kumar Singh, Male, aged about 48 years, S/o Devendra Narayan Singh, having its registered office at Dhamni Gola, Nabinagar Road, P.S. Barun, District Aurangabad, Bihar824112 and resident of Rajputan Mohalla, Ward No. 33, Dehri on Sone, Rohtas, Bihar-821307.

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... ... Petitioner/s

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Versus

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The State of Bihar through its Principal Secretary, Department of Mines and Geology, Government of Bihar, Vikash Bhawan, Patna.

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The Principal Secretary, Department of Mines and Geology, Government of Bihar, Vikash Bhawan, Patna.

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Bihar State Mining Corporation Limited through its Managing Director having registered office at Room No. 164, Vikas Bhawan (New Secretariat), Bailey Road, Patna-800015.

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The Chief Executive Officer, Bihar State Mining Corporation Ltd. Bihar, Room No. 164, Vikas Bhawan (New Secretariat), Bailey Road, Patna800015.

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The Deputy General Manager, Gaya Cluster, Bihar Industrial Area Development Authority, Gaya.

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The Area In Charge, Industrial Area, Bihar Industrial Area Development Authority, Gaya.

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... ... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No. 9197 of 2024

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======================================================

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M/s Baba Vishwanath Industries though its Authorized Signatory Rakesh Kumar, Male, Aged about 23 years, S/o Praween Singh, having its registered office at Village- Bhopatpur, P.o. - Siris, P.s - Barun, District- Aurangabad, Bihar - 824112 and resident of Village - Devkund, P.O. - Rampurchay, P.S. - Devkund, District- Aurangabad, Bihar, 824120.

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... ... Petitioner/s

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Versus

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The State of Bihar through its Principal Secretary Department of Mines and Geology, Government of Bihar, Vikash Bhawan, Patna.

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The Principal Secretary, Department of Mines and Geology, Government of Bihar, Vikash Bhawan, Patna.

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Bihar State Mining Corporation Limited through its Managing Director having registered office at Room No. 164, Vikash Bhawan (New Secretariat), Bailey Road, Patna- 800015.

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Patna High Court CWJC No.9195 of 2024 dt.05-10-2024 2/5

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The Chief Executive Officer, Bihar State Mining Corporation Ltd. Bihar, Room No. 164, Vikash Bhawan (New Secretariat), Bailey Road, Patna800015.

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The Deputy General Manager, Gaya Cluster, Bihar Industrial Area Develoment Authority, Gaya.

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The Area-In-Charge, Industrial Area, Bihar Industrial Area Development Authority, Gaya.

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... ... Respondent/s

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===================== Appearance :	=================================
(In Civil Writ Jurisdiction Case	No. 9195 of 2024)
For the Petitioner/s :	Mr. Amit Shrivastava, Sr. Advocate Mr.Puneet Siddhartha, Advocate Mr. Aryan Sinha, Advocate Mr. Zeeshan Khan, Advocate
For the State :	Mr. Arvind Ujjwal, SC 4
For the Mines :	Mr. Naresh Dikshit, P.P. Ms. Kalpana, Advocate
For the BIADA :	Mr. Gyan Shankar, Advocate
(In Civil Writ Jurisdiction Case	No. 9197 of 2024)
For the Petitioner/s :	Mr. Amit Shrivastava, Sr. Advocate Mr.Puneet Siddhartha, Advocate Mr. Aryan Sinha, Advocate Mr. Zeeshan Khan, Advocate
For the State :	Mr. Arvind Ujjwal, SC 4
For the Mines :	Mr. Naresh Dikshit, P.P.
For the BIADA : =====================	Mr. Gyan Shankar, Advocate =================================

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CORAM: HONOURABLE THE CHIEF JUSTICE

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and HONOURABLE MR. JUSTICE PARTHA SARTHY

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ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

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Date : 05-10-2024

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The impugned orders forfeited the security deposit and blacklisted the petitioners for three years on the ground of violation of the terms of contract. The contract itself was for supply of coal, which identical matter was considered by us in CWJC No. 1114 of 2024 and analogous case (M/s Bhagwati Coke Industries Pvt. Ltd. vs. The State of Bihar and Ors.) in

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Patna High Court CWJC No.9195 of 2024 dt.05-10-2024 3/5

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which we looked into the agreement and found that there is a specification of an Annual Contracted Quantity (ACQ) and a Monthly Scheduled Quantity (MSQ), the latter of which is 1/12^th of ACQ. The question agitated was whether the agreement stipulated the actual utilisation equivalent to the MSQ in each of the months in a year; especially as to whether there was a prohibition in exceeding the MSQ.

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On facts, it is to be noticed that the supply of coal was not regular and the contention of the petitioners was also that in many months, there was no supply and they had to lockdown their manufacturing unit for want of coal. In certain months, the deficiency in supply of the either months were made up; in which months the units functioned overtime for utilisation of the coal supplied. The restriction in the agreement was also that there should not be any shortage in use of the 100% of the ACQ and there was no restriction to the use of MSQ in a month.

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We held so in Paragraph Nos. 9 and 10 of the aforementioned judgment:-

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9. The specific contention of the purchaser/ petitioners is that that the petitioners’ Unit had to work overtime during the months in which the supply was made and remained idle when there was no supply of coal. Considering the fact that the requirement was to supply a specified quantity of

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Patna High Court CWJC No.9195 of 2024 dt.05-10-2024 4/5

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coal annually and the rigor of compensation falling on the purchaser, as specified in the agreement only on under-utilization of 100 per cent of the ACQ in a whole year; we cannot find the purchaser to be at fault for using coal as and when it was supplied, which resulted in the monthly utilization exceeding the monthly scheduled quantity.

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10. Reading the agreement as a whole, we can only understand that the contract was to supply specified quantity annually. There was also stipulation of a monthly scheduled quantity, the non-supply of which would not prejudice the Corporation since such short supply would always depend on the supply of coal from the Coal Companies. The purchasers also could not have raised a grievance against the non-supply or short supply in any month coming within an year. The penalty of compensation also is confined to shortlifting of coal as per the ACQ and not as per the MSQ. The revision of the ACQ to be supplied to each purchaser would also depend upon the utilization of the purchaser in the preceding year and not of every month. We also have to look at Schedule-1 of the agreement which specifies the ACQ, the mode of transport; being by road and also indicates that the supply will be as per the availability.

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In the present cases also, the ground stated for blacklisting and for forfeiture of security amount was similar to that indicated hereinabove.

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In such circumstances, following the aforesaid judgment, we set aside the order of blacklisting. We also make it clear that unless the agreement has expired by reason of efflux of time, it has to continue until rescinded by either party as per the terms of the agreement.

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Patna High Court CWJC No.9195 of 2024 dt.05-10-2024 5/5

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The writ petitions stand allowed.

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Interlocutory application, if any, shall stand closed.

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(K. Vinod Chandran, CJ)

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( Partha Sarthy, J)

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Sujit/-

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AFR/NAFR	NAFR
CAV DATE
Uploading Date	05.10.2024
Transmission Date

M/s Trishul Industries v. The State of Bihar

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M/s Trishul Industries v. The State of Bihar

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