Dismissed

S.Tirupathaiah, v. The Singareni Collieries Company Limited.

Telangana HC10 Sept 2024WP/22277/2015

Case brief

AI extract

What is this about?

In this writ petition under Article 226, the petitioner sought to quash the forfeiture of security deposits by Singareni Collieries Company Ltd for alleged failure in contract. The High Court held the writ petition not maintainable as an effective alternate remedy exists under the contract. The Court disposed of the matter with liberty to approach the competent civil court.

What did the court decide?

Petition dismissed with liberty to approach competent Civil Court since effective alternate remedy is available under the contract.

S.Tirupathaiah, Vs The Singareni… — Contract and Commercial Disputes | Telangana HC (2024)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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TUESDAY, THE TENTH DAY OF SEPTET/BER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE MRS JUSTICE SUREPALLI NANDA

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WRIT PETITION NA:22277 OF 2015

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Between:

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S.Tirupathaiah, s/o Bondaiah, aged about 39 years, Contractor, Rio H.No.14-40, Kudurupalli Village, Post and Mandal MahadevpJr, Karimnagar District.

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,..PETITIONER

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ANP

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The Singareni Collieries Company Ljmited , Rep. by its Chariman and llanaginE Director Kothaguden. Khamntam Distri6t.

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2 The Chief General lvlanager (Purchase), Singareni Collieries Company Limited, Kothagudem, Khammam District.

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The General Manager (Conkact Management), Singareni Collieries Company Limited, Kothagudem, Khammam District.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order or direction, especially one in the nature of Writ of Mandamus- i) declare the action of the respondents in forfeiting the Security Deposit / EMI) amount of Rs.5,00,0001 and FSD amount of Rs.50,000t towards the contract executed by the petitioner in terms of work order No.7600003245, dt.1 8-05-201 0 issued by the 2 respondent, as illegal and arbitrary and set aside proceeding No CRP/CMC/CTIC140900449i9586, dt.05-02-2013 and consequential proceeding No.CRP/CIviC/C 1409A0449, dt.13-01-2015, issued by the 3rd respondent. ii) consequently direct the respondents to release the petitioners Security Deposit / FMD amount of Rs.5,00,000/- and FSD amount of Rs.50,0001, pursuant to the work order No. 7600003245, dt.l8-05-2010 issued by the 2 respondent.

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l.A. NO: 1 OF 2015(WPMP. NO: 28744 0F 20151

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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 direct the respondents to consider the petitioner's request for release of security Deposit / EMD amount of Rs.5,00,0001- & FSD amount of Rs.50,000t, pending diSposal of the above writ petition.

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Counsel for the Petitioner : SRI K.VASUDEVA REDDY c o u n s e I ro r th e R es p o " " "'" i S5'Idit fii?,l=jl,I R r E s c o. L rD )

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The Court made the following: ORDER

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HON'BLE^{MRS JUSTICESUREPALLI NANDA}

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WRIT PETITION^{No.22277 OF 2O15}

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ORDER:

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Heard Sri K.^{VasudevaReddy, learnedcounsel} appearang on behalf^{of the petitionerand Sri P' Sr'} Harsha Reddy,^{learned StandingCounselfor Singareni} Collieries appearing^{on behalf of respondentNos'1 to 3'}

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The^{petitionerapproachedthe Court seeking} prayer as under:

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" ... to issue^{a writ or order or direction especially one in} the nature of^{Writ of Mandamus:}

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(i) to declare the^{actionof the respondentsin forfeiting} the Security^{Deposit/EMDamount of Rs'5,00,000/- and} FSD amount of^{Rs.50,000/- towardsthe contract} executed by^{the petitionerin terms of work order No'} 7600003245, dated^{18-05-2010issued by the 2nd} respondent as^{illegal and arbitraryand set aside the} Proceeding^{No.CRP/CMC/CTIC14O9O449195A6'dated:} 05-02-2013^{andconsequential ProceedingNo'} CRP/CMC/C14OgOO44g,^{dated 13-01-2015issuedby the} 3rd respondent,

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(ii) consequently^{direct the respondents to release the} petitioner's Security^{Deposit/EMDamount of} Rs.5,00.000/-^{and FSD amount of Rs'50,000/-pursuant}

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wP 2227? 2015

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to the work order No.7600003245, dt 18-05-2010 issued by the 2'd respondent

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(iii) and pass such other order orders as the Hon'ble Court may deem fit and proper in the circumstances of the case".

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It is the specific case of the petitioner that the petitioner was assigned contract for excavation, loading transportation and delivery of sand from Godawari river to KTK-I Incline for a period of two years in the year 2010. As per the work order, bills were to be released for every 10 days. However, the respondents have not released the bills even after lapse of three months and though the petitioner made a representation to the respondents on 21.02.2011, the respondents failed to release any bills for the period from 0l.O4.zotl to 03.06.2011. Aggrieved by the same, the petitioner stopped supplying the material to the respondents. As a result, the respondents forfeited the Security Deposit/EMD of Rs.5,00,000/- and FSD amount of Rs.50,OO0/-. Aggrieved by the action of the respondents, the present writ petition is filed.

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wP_22277,2015

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4 Co u nter affid^{vit hsbeen fil} on behalf^of e o nts rti I re n N a

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15, extracted^hereunder:

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"9. In reply^{to paras 4 & 5, it ls submittedthatas per the} Order dated^{18-5-2010, the petitionerhas to supply of} 5,7O,oOo/- CuM^{Sandfrom KurudpallySand Quarryof} Godavari River^{of KTK.1 Incline of the Respondent} Company. It^{is submitted that the performanceof the} petitioner in supplying^{the sand duringthe contractual} period of two^{years started from 28'06'2010'is as} follows:

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a) Quantity^{of Sand warded:}

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5'7O'OOO^CUM

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b) Sand suPPlied^{form quarry} to Bunkers

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: 75'732'241^Cum

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c) Sand suPPlied^fromquarry to Yard

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45,943.059^Cum

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d) Total Sand^suPPliedto Bunkers &^Yard

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1.21,675.3OO^CuM

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It can be seen^{from the abovethat duringthe} contractual^{period of two years startedfrom28-06-2010} and ended by^{27-06-2012, the petitionerhas supplied} only L,2L,675.3^{CuM of sand as against the awarded} quantity of 5,70,000^{CuM whlch is just 21olo of the} awarded^quantity.

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'r1O. It is submitted^{that the representations submitted} by the^{petitioner for refund of EMDand FSD amounts'} were taken^{into considerationand aftercritically}

\P 22277 2015

examining overall circumstances including reasons Submitted by petitioner, the Respondent Company came to a conclusion that the forfeiture of Security Deposit Amount of Rs.5.00,000/- and FSD amount of Rs.50,000/in addition to levylng of penalties as per terms of the order dated 18.05.2010 is appropriate and justified and accordingly a reasoned order was issued to the petitioner vide No. CRP/CME/ C'T / CL409OO449 / 9 586, dated 5- 2-20 1 3 intimating the forfeiture of EMD and FSD amounts in addition to levying of penalties as per the terms and conditions of the order dated 18.05.2010. The relevant clauses of the terms and conditions of the order dated 18.5.2010 are as under:

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"4. The contractor should deposit a sum of Rs.50,000/(Rupees Fifty thousand only) in the office of Chief GM (purchase), towards as further security deposit (by Demand Draft only) within two weeks from the date of award of the work. The EMD of Rs.5,00,000/- will be converted into Security Deposit. These deposits will bear no interest and the same will be refunded only after 2 months from the date of expiry of the contract period and on satisfactory completion of the work.,'

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"fa. If the contractor fails to fulfill the contractual obligations and the transport work is stopped due to failure on the part of the contractor, the security deposit and the EMD amounts will be forfeited and also the contract will be terminated. In case of the work pertaining to transportation of sand, in addition to the

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EMD and Security deposit,^{the balance 5olo held by the} company will also be forfeited.^{Furtherin case the said} amounts are not sufficient to^{meet the expendlture for} engaging other agencies,^{such additional expenditure,} including that on account of^{publishing the fresh} notification and the higher^{rate, if any, payableto another} contractor, will be deducted^{from the bills of other} contracts, if any. of the defaulted^contractor."

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It is submitted that the^{reasons stated by the} Petitioner for non-supply^{of required sand, such as Sakala} lanula Samme, Medaram^{Sammakka SarakkaJatara;} Pranahita Pushkara Utsavalu^{and Mahasivaratri Utsavalu} at Kaleswaram and extremists^{bandh calls etc., have no} relevance and no hurdle^{for executionof contract work' It} is submitted that the contention^{of the Detitioner} h n will b natural calam es and ctrcum stan bevo the control of anv^{individual, isnotco} eat since the reasons as stated by the^{petitioner havebeen critically} examined and thereafter^{only as per the terms and} conditions of the Order,^{a decision was taken for forfeiture} of EMD and FSD amounts^{the decisionso taken by the} Respondent Company, is^justified.

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It is submitted that^{the writ petition itself is not} maintainable at the outset and^{is liableto be dismissed m} Iimini. It is submitted^{that clause 30 of the sald} contract/work order^{is extracted hereunder "In all cases} of disputes. the^{decision of the companv shall be}

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\rP 22277 20ls

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final. Failino this the matter wi be referred to Civil Court. The courts of Kothagudem (Khammam District) in the State of Andhra pradesh only shall have i urisdiction t deal with a d decide anv leoal ma rord tsDute wha ever arrs inq out o this contra ct includino disoutes aris no on forfe ure of EMD and Sec ritv DeD it". As per this clause if there is any dispute and whatsoever nature the Civil Court at Kothagudem Khammam will have jurisdiction to deal with and this also includes disputes arising on forfeiture of EMD and Security Deposit. The terms of the contract are agreed by both the parties to the contract and have entered into. Hence the terms of the contract are binding on both the parties, and as such the petitioner is bound by Clause 30 of the said contract. The petitioner has to approach the competent Civil Court as per this clause and the writ petition is not maintainable in view of caluse above said. The Hon'ble Apex Couft and also this Hon,ble Court in a catena of decisions held that the writ petition is not maintainable in contractual matters and for the enforcement of terms of contract between the parties,,.

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As per the observations of the Apex Court in judgment dated 2O.O4.2O21 reported in (2O21) O SCC 771 in M/s. Radhakrishnan Industries Vs. State of Himachal Pradesh, which referred to the Judgment of the Apex Court in Whirlpool Corporation Vs. Registrar of Trade Marks reported in (1998) 8 SCC 1 and the said

wP 2r277-;'i;

view having been reiterated in a recent full Bench judgment reported in 2O2L SCC Online SC 801 in "Magadh Sugar & Energy Ltd, vs. State of Bihar and others". The principles governing the exercise of^writ jurisdiction by the High Court in the presence of an alternate remedy had been summarized in the^said Judgment at para 28 and the same is^extracted hereunder:

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"28. The principles of law which emerge^{are that:} (i) The power under Article 226 of the Constitution to issue writs can be exercised not only for^the enforcement of fundamental rights, but for any^other purpose as well;

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(ii) The Hioh Court has the discretion not to entertain a writ^petition. One of the restrictions otaced on the oower of the^{HiqhCourtis where an} effective alternate remedv is available to^the aqqflev Derson;

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(iii) Exceptions to the rule of alternate remedy arise where (a) the writ petition has been filed for^the enforcement of a fundamental right^protected by^Part III of the Constitution;^(b) there has been a^violationof the principles of natural^{justice; (c)} the order^or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged;

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(iv) An alternate remedy by itself does not divest^the High Court of its powers under Article 226 of^the Constitution in an appropriate case^{though ordinarily, a} writ petition should not be entertained when^an efficacious alternate remedy is^{provided by law;}

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\tP 22271 2015

(v) When a riqht is created bv a statute, which itself^prescribes the remedv or procedure for enforcino the riqht or liabilitv, resort must be had to that oarticular statutory remedv before invokinq the discretionarv remedv under Article 226 of the Constitution. This rule of exhaustion of sta rv remedies is a rule of olicv, conve naence and iscretion ; and

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(vi) In cases where there are disouted ou stions h a d declin iurisdi on in a writ ition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.,,

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This Court opines that the present case falls under 28(ii) and (v) and first part of (vi) of the above referred Judgment of the Apex Court.

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Takino into consideration :

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i) The aforesaid facts and circumstances of the case, ii) The observations of the Apex Court in the judgment referred to and extracted above,

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iai) The submissions put forth by the learned counsel appearing on behalf of the petitioner and the learned Standing Counsel appearing on behalf of the respondents,

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(iv) Duly taking into consideration the averments made at para Nos. 9, 1O and 15 of the of the counter

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wP 22177 2015

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affidavit filed on behalf of the^{respondents (referredto} and extracted above),

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(v) The writ^petition is disposed^{of giving liberty to} the petitioner to approach^{the competent Civil Court for} the relief^{prayed for in the present writ petition since,} petitioner has a remedy to approach^{the competentcivil} court as^per clause 30^{of the subject contract entered} into between the^{petitioner and therespondent} company, and since disputed^{questions of facts cannot} be gone into in writ^{petition. However,there shall be} no order as to costs.