w w w . L a w y e r S e r v i c e s . i n



Cement Manufacturing Company Limited, Represented by Nirmal Agarwal the Senior Manager- Finance and Accounts v/s Union of India, Represented by the Secretary, Ministry of Coal & Others.


Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209WB1984PLC037758

Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209GJ1984PLC098951

Company & Directors' Information:- AGARWAL COAL CORPORATION PRIVATE LIMITED [Active] CIN = U23109MP2000PTC014351

Company & Directors' Information:- INDIA MANUFACTURING CORPORATION PRIVATE LIMITED [Active] CIN = U24100DL2010PTC198947

Company & Directors' Information:- S I A MANUFACTURING PRIVATE LIMITED [Active] CIN = U74120UP2013PTC057004

Company & Directors' Information:- S K M MANUFACTURING PRIVATE LIMITED [Active] CIN = U17200DL2011PTC223768

Company & Directors' Information:- SENIOR FINANCE PRIVATE LIMITED [Active] CIN = U65923DL1979PTC009558

Company & Directors' Information:- S T S MANUFACTURING PRIVATE LIMITED [Active] CIN = U28112TZ2006PTC012940

Company & Directors' Information:- AGARWAL FINANCE COMPANY PVT LTD [Active] CIN = U45100JH1988PTC013292

Company & Directors' Information:- AGARWAL FINANCE COMPANY PVT LTD [Active] CIN = U65921JH1988PTC013292

Company & Directors' Information:- S M INDIA LTD [Strike Off] CIN = U26942ML1998PLC005541

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Active] CIN = U27109WB1991PTC051461

Company & Directors' Information:- A K MANUFACTURING PVT LTD [Active] CIN = U51909MN1988PTC003110

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- I T A C (INDIA) MANUFACTURING CO LTD [Dissolved] CIN = L51109WB1982PLC034689

Company & Directors' Information:- J D MANUFACTURING CO PVT LTD [Active] CIN = U51909WB1996PTC079825

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Not available for efiling] CIN = U36900WB1991PTC005146

Company & Directors' Information:- B R D MANUFACTURING PRIVATE LIMITED [Active] CIN = U51109WB1997PTC085188

Company & Directors' Information:- R J S MANUFACTURING PRIVATE LIMITED [Active] CIN = U27104DL1997PTC090521

Company & Directors' Information:- B U MANUFACTURING PVT LTD [Active] CIN = U51109WB1982PTC035271

Company & Directors' Information:- M M MANUFACTURING PVT LTD [Active] CIN = U26922WB1993PTC059837

Company & Directors' Information:- J. C. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U21099WB2020PTC236821

Company & Directors' Information:- S B MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U31506WB1999PTC088567

Company & Directors' Information:- K. V. J. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U29308DL2017PTC320213

Company & Directors' Information:- A T E MANUFACTURING CO PRIVATE LIMITED [Amalgamated] CIN = U28999GJ1973PTC002296

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- J P MANUFACTURING AND CO PVT LTD [Strike Off] CIN = U51226WB1982PTC034927

Company & Directors' Information:- D. K. MANUFACTURING (INDIA) LIMITED [Strike Off] CIN = U37200WB2011PLC170403

Company & Directors' Information:- S M MANUFACTURING COMPANY PRIVATE LIMITED [Active] CIN = U34300HR1997PTC057824

Company & Directors' Information:- G K MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U34300PB2012PTC036073

Company & Directors' Information:- P & B MANUFACTURING PRIVATE LIMITED [Active] CIN = U29254TN2010PTC076696

Company & Directors' Information:- B. V. H. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U74999GJ2018FTC100633

Company & Directors' Information:- R A MANUFACTURING COMPANY PRIVATE LIMITED [Strike Off] CIN = U36900HR2012PTC047669

Company & Directors' Information:- UNION COAL CO LTD [Strike Off] CIN = U23109WB1908PLC001791

Company & Directors' Information:- A K R MANUFACTURING PRIVATE LIMITED [Active] CIN = U19200RJ2012PTC041177

Company & Directors' Information:- C N C MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U64204DL2015PTC281449

    WP(C) 47 of 2013

    Decided On, 26 November 2013

    At, High Court of Meghalaya

    By, THE HONOURABLE MR. JUSTICE SUDIP RANJAN SEN

    For the Petitioner: A. Saraf, Advocates. For the Respondent: M.Z. Ahmed, Advocate.



Judgment Text

1.This instant writ petition is directed against the impugned letter dated 11.05.12 No. SC/NCDP/FSA/LOA/12/248 available at Annexure-XII (Page 92) of the writ petition.

2. The petitioner’s case in nut shell is that 'an application under Article-226 of the Constitution of India for a writ in the nature of certiorari and/or a writ in the nature of Mandamus and/or any other appropriate Writ, Direction or Order challenging the impugned Clauses 4.5, 9.1, 9.2 and 15 of the contract agreement dated 4.2.2009 entered into between the respondent No. 3 as well as the invoices for compensation dated 18.08.2011 and 10.05.2012 and Termination Notice dated 29.05.2012 for short lifting of coal and the impugned orders dated 28.02.2013 confirming the same.

3. The petitioner has filed the writ petition challenging the Clauses 4.5 (for compensation for short lifting) and Clauses 9.1, 9.2 (price of coal) of the contract agreement and Clause 15 (for Termination of agreement) dated 04.02.2009 entered into between the petitioner and the respondent No. 3 for the supply of coal. The petitioner vide the instant Writ Petition is also challenging the impugned Invoices for payment of compensation for short lifting of coal for the year 2010-11 and 2011-12 as well as the orders dated 28.02.2013 passed by the respondent No. 3 dismissing the appeals for waiver of compensation for the short lifting of coal for the year 2010-11 and 2011-12. The petitioner is also challenging the impugned Notice for Termination of contract dated 29.05.2012 issued by the respondent No. 4 for supply of coal by the respondent No. 3 which was agreed vide the agreement with the respondent No. 3, for the reason of short lifting of coal for the year 2010- 11, 2011-12 as well as the order dated 28.02.2013 passed by the respondent No. 3 confirming the said order of Termination on appeal filed before it. The petitioner vide the instant Writ Petition is also challenging the impugned actions of the respondent authorities in illegality and arbitrarily invoking the Bank Guarantee furnished by the petitioner company as security deposit without giving any notice to the petitioner and without providing any reasons for invoking of the Bank Guarantee furnished by the petitioner as a security deposit. The petitioner vide this instant writ petition is also challenging the impugned actions of the respondent authorities in increasing the price of coal by more than 60% w.e.f. 27.02.2011 putting high economic pressure on the petitioner making the purchase unviable.

4. It is the case of the petitioner that a reading of various Clauses of the contract agreement would also show that the contract agreement is nothing but a devise to favour the respondent No. 3 as per each and every Clause. In case, the petitioner fails to fulfil its obligations, strict penalty of compensation and termination is prescribed and even the respondent No. 3 is permitted to hike the price of coal as per its whims and fancy. Further, the agreement is a standard format of contract agreement as devised by the respondent No. 3. No party whatsoever is allowed to impose any conditions of its own in the agreement and has to accept the agreement as it is. There is no scope for the petitioner or any other person entering into contract with the respondent No. 3 to disagree with any of the terms of the contract, otherwise the contract cannot be entered into which shows the superior bargaining power of the respondent No. 3 in entering into the terms of the agreement. It is the contention of the petitioner that the respondent No. 3 failed to appreciate in its orders dated 28.02.2013 that the impugned Clauses of the contract agreement are absolutely illegal, without jurisdiction, not tenable in law and thereby all actions undertaken pursuant there to are liable to be set aside and quashed.

5. The petitioner also challenged the impugned actions of the respondent authorities on the ground that it was a contributory negligence on the part of the respondent authorities owing to which short lifting of coal occurred and the petitioner cannot be penalized for the same.

6. It is the case of the petitioner that the said actions of the respondent authorities are without jurisdiction, in violation of the principles of natural justice and fair play enshrined in the Constitution of India.

7. Being aggrieved by the demand notice for compensation for an amount of Rs. 74, 24,699.91p, the petitioner approached this Court by way of this instant writ petition.

8. At the outset I mentioned that since WP(C) No. 47 of 2013 and WP(C) No. 243 of 2012 are similar in nature involving the same facts and circumstances of law as well as common submissions given by the learned senior counsel for the parties, therefore, the judgment delivered in WP(C) No. 243 of 2012 is reproduced herein below.

9. Mr. A Saraf, the learned senior counsel appearing for on behalf of the petitioner submitted that the petitioner and the respondent entered into agreement. Though there was a Clause to revise the rate from time to time but the revised rate was too high and went to 60%, hence the petitioner could not lift the coal as desired by the respondent. As a result, the respondent issued an impugned letter demanding compensation for a sum of Rs. 74, 24,699.91p/- and the petitioner to pay the same within a period of 90(ninety) days from the date of receipt of the letter.

10. The learned senior counsel further contended that the rate revised was purely arbitrary, one sided and without considering the welfare of the petitioner and needs to be set aside. In support of his submissions, the learned senior counsel relied on (1995) 5 SCC 482 LIC of India and Another versus Consumer Education research Centre and Others. The learned senior counsel further contended that, when the petitioner failed to lift the coal from the site, the respondent subsequently sold the same, so there was no loss to the respondent. Hence the question of compensation is unwanted, so the petition may be allowed.

11. On the other hand, Mr. MZ Ahmed, the learned senior counsel appearing for on behalf of the respondent submitted that the petitioner is bound by the contract agreement and further contended that the price of coal had increased and revised due to the scarcity and other factors which were beyond the control of respondent.

12. The learned senior counsel also contended that since the petitioner failed to lift the coal, the respondent sold the same and argued further that the petitioner is barred by the principle of estoppel. In support of his submission, the learned senior counsel relied on (2003) 2 SCC 355 B.L. Shreedhar Others vrs K.M. Munireddy (Dead) and Others and (2010) 12 SCC 458 H.R. Basavaraj (Dead) and Another vrs Canara Bank and Others.

13. After hearing the submissions advanced by the learned counsel for the parties, it is clear that there was an agreement between the parties for supply of coal by the respondent and the petitioner to lift the same. It is also apparent that, there was a Clause in the agreement that the price may be revised from time to time. In the case of LIC of India and Another versus Consumer Education research Centre and Others reported in (1995) 5 SCC 482 (Clauses 33 & 34), it is observed that :

'33. In Lloyds Bank Ltd v Bundy inequality of the bargaining power was enunciated by Lord Denning, M.R. and held that one enters into a contract on terms which are very unfair or transfers property for consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity…. The one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bring to other… One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the strains in which he finds himself. It would not be meant to suggest that every transaction is saved by independent advice. But the absence of it may be fatal.

34. In A. Schroeder Music Publishing Co. Ltd. V Macaulay (formerly Instone) House of Lords considered and held that a party to a contract would be relieved from the terms of the contract. In the course of his speech learned Lord Diplock outlined the theory of unreasonableness or unfairness of the bargain to relieve a party from the contract when the relative bargaining power of the parties was not equal. In that case the son writer had contracted with the publisher the term more onerous to him favourable to the publisher. The song writer was relieved from the bargain of the contract on the theory of restraint trade opposed to public policy. The distinction was made even in respect of standard forms of contract emphasising that when the parties in a commercial transaction having equal bargaining power have adopted the standard form of contract, it was intended to be binding on the parties. The court would not relieve the party from such a contract but the contracts are between the parties to it, or approved by any organisation representing the interests of the weaker party, they have been directed by that party whose bargaining power, either exercised along or in conjunction with others providing similar goods or services, enables him to say: 'If you want these goods or services at all, these are the only terms on which they are obtainable. Take it or leave it.'

14. After perusal of the above observation given by the Apex Court keeping in mind that the bargaining power is solely in the hand of the respondent, I am of the opinion that, it is not proper

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to revise the rate to such an extent which may cause difficulty to other parties to comply with the agreement, exactly what had happened in this instant case. However, it also remained open that since the petitioner had entered into an agreement, he is bound by the contract agreement and to come out from the agreement by giving proper notice. 15. The most important question involved in this instant case which is an admitted fact as submitted by both the learned counsel for the parties is that, when the petitioner failed to lift the coal allotted to him as per the agreement and the same was subsequently sold. If it is so, I am of the opinion that the respondent has not incurred any loss, therefore, just to slap notice of demand upon the petitioner to pay Rs. 74,24,699.91p/- as compensation has no logic and not proper. 16. Therefore, in my view the impugned order dated 11.05.12 and subsequent demand notice for compensation cannot survive, hence, the same is set aside. 17. Accordingly, the petition is allowed and the matter stands disposed of.
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