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Judgment
Akil Kureshi, CJ
[1] This appeal is filed by the original respondents. They have challenged the judgment of the learned Single Judge dated 14th July, 2017 in WP(C) No.1373/2016. We have heard learned counsel for the parties for final disposal of the appeal.
[2] This appeal arises in following backgrounds :
The appellants are Food Corporation of India (FCI‟ for short) and its authorities. The respondent was the original petitioner. He was a contractor. The FCI had awarded a contract for transportation of food grains/sugar/allied materials from Railway siding, FSD, Churaibari to FSD, Chandrapur under a work order dated 13th September, 2011 for a specified period. As per the work order, the petitioner had deposited 50% of the security deposit of Rs.22,47,500/- and the rest 50% was deducted from the running bills of the petitioner. Thus, the security deposit of Rs.44,95,000/- of the petitioner was lying with the respondent-FCI. In addition, the petitioner had given a Bank guarantee for a sum of Rs.1,34,85,000/-. According to the petitioner, he executed the said transportation work for the period between 27th April, 2012 to July, 2014 to the full satisfaction of the FCI. The agreement contained a price escalation clause, permitting revision of rates on account of change of the diesel prices. This escalation clause reads as under:
"(b) Revision of rates due to change in diesel prices.
(i) An increase of 0.75 paise per KM/M.T. will be allowed on the base rate for every increase of 40 paise per liter in the price of diesel, in the event of increase in the retail price of diesel by more than 5% as compared to the base rate.
(ii) A decrease of 0.75 paise per KM/M.T. will be effected on the base rate for every decrease of 40 paise per litre in the price of diesel, in the event of decrease in the retail price of diesel, in the event of decrease in the retail price of diesel by more than 2.5% as compared to the base rate.
(iv) The retail price of diesel prevailing on the date of submission of the tender will be taken as the base rate and the rate revision will be allowed from the next quarter commencement dated i.e. 1st Jan., 1st April, 1st July or 1st Oct, following the date of revision of diesel rates. The Diesel rate prevailing at the Indian Oil Corporation outlets at the concerned FCI District Headquarters will be taken into consideration for revision of rates. The Contractor is, therefore, advice to ensure that all the necessary documents are properly furnished in time whenever revision is requested for."
[3] According to the petitioner, there were several escalations in the price of diesel during the contract period on account of which the petitioner was entitled to the revision of rate of transportation on each such occasion. The petitioner made a demand for revision of the contract rate under a letter dated 11th October, 2014. The FCI did not grant the rate revision to the petitioner. The petitioner thereupon made a demand of Rs.21,48,897/- from FCI under a letter dated 22nd November, 2016. Since the FCI did not make the payment, the petitioner filed the said petition.
[4] In response to the notice issued, the FCI had appeared and filed an affidavit resisting the prayer of the petitioner. It was pointed out that the contract period of 2 years between 25th April, 2012 to 24th April, 2014 was extended up to 9th July, 2014. The petitioner had submitted No Demand Certificate pertaining to the contract in question under a letter dated 21st October, 2016 in which it was stated that the petitioner had received the payments from the Area Manager for all the services rendered in connection with the said transportation contract. It was, therefore, contended that the demand letter dated 22nd November, 2016 is an afterthought. The petitioner would be estopped from raising such demand on the ground of waiver. It was also pointed out that the agreement contained a dispute resolution clause which provided that if any dispute arises, the same shall be first referred to a Dispute/Grievance Redressal Committee of the Corporation for settlement of disputes. If the disputes are not settled, the same may be settled in the Court of Law having jurisdiction. It was, therefore, contended that without resorting to the said mechanism the petitioner had approached the High Court. In any case, the petitioner should have approached the Civil Court of competent jurisdiction.
[5] The Writ petition was disposed of by the learned Single Judge by impugned judgment in which after referring to the controversy at hand and the opposition of the FCI to the prayer of the petitioner on the basis of No Demand Certificate, the learned Single Judge held and observed as under :
" * * * *
From the No Demand Certificate(Annexure-B) it transpires that the said No Demand Certificate‟ as issued by the petitioner has clearly certified that the petitioner does not have any further claim whatsoever without arising out of the said contract even which remained unadjusted.
According to this Court, the said 'No Demand Certificate' is unconscionable against the dues as reflected above. The said 'No Demand Certificate' cannot be utilized against the petitioner, for deny him the arrear due on account of the escalated fuel price.
Having observed thus, the respondents are directed to consider the escalated fuel bills in terms of the said Clause XVIII(b) of the contract No.Cont.9/NEFR/TC/CBZ-CDR/2011 dated 25.04.2012 within a period of 3(three) months from today. If it is found that the escalated price has not at all been paid by the respondents in terms of the above clause, the payment shall be made by another one month on the expiry of the said three months. If the payment is not made within the time as prescribed by this court, the said amount shall carry interest @ 7% per annum till payment is made.
With this observation and direction, this writ petition stands allowed to the extent as indicated above and disposed of.
There shall be no order as to costs."
[6] Appearing for the FCI learned senior counsel Mr. S M Chakraborty, submitted that in the face of No Demand Certificate issued by the contractor his prayer for price escalation was not justified. In any case, writ petition should not have been entertained. Only a Civil Court can examine the disputed questions of fact.
[7] On the other hand, learned senior counsel Mr. A K Bhowmik, opposed the appeal contending that the FCI did not dispute the price escalation clause, did not dispute that the diesel prices had gone up on numerous occasions during the period of contract and lastly, had never claimed that the price escalation was already paid to the petitioner. That being the position, the claim of the petitioner can be said to be admitted. When there is no dispute about the claim, the FCI which is the State within the meaning of Article 12 of the Constitution, cannot take a technical or an unreasonable stand only in order to avoid its liability of making payment.
[8] In our opinion, the No Demand Certificate issued by the contractor could not have been ignored by a brief reference of the same being unconscionable. We have reproduced the relevant portion of the judgment of the learned Single Jude. As noted, after recording the controversy and after taking note of the principal opposition of the FCI that the petitioner having already issued a No Demand Certificate, cannot raise any further claim from FCI, all that the learned Single Judge in the impugned judgment has recorded is that according to the Court, such No Demand Certificate was unconscionable and the same, therefore, cannot be utilised against the petitioner to deny him the arrears arising out of the escalation of fuel cost.
[9] On 21st October, 2016 the petitioner had written to the Area Manager, FCI, stating that along with the said letter he is enclosing No Demand Certificate in the prescribed format. In relation to the transportation contract in question, he requested that security deposit of Rs.44,95,000/- may be refunded since he had satisfactorily completed the contract. Along with his letter he had enclosed a No Demand Certificate in prescribed format. On his part his declaration was as under :
"I/We, Abhijit Paul, Contractor/Supplier, B. K. Road, Banamalipur, Agartala to the General Manager(R), Shillong do hereby acknowledge to have received payment from the Area Manager, Agartala for all the articles supplied/services rendered by me/us in connection with transportation of food grains from Railway Siding/FSD Churaibari to FSD Chandrapur, appointment made by General Manager(R), Shillong bearing No.Cont.9/NFER/TC/CBZ-CDR/2011 dt. 25.04.2012 and certified that I/We have further claim whatsoever with or arising out of the said contract which remain unadjusted.
Signature of Two witnesses :-
Samir Paul.
Parimal Ch. Pal.
- Sd -
Signature of Contractor
Received from General Manger, FCI Shillong the sum of Rs.44,95,000/-(Rupees forty four lakh ninety five thousand)only being the amount in refund of total security deposit which was deposited/deducted as follows :-
Deposited at Regional Office, Shilling vide DD No.420504 Dt.27-02-2012. = Rs. 4,49,500.00
Converted EMD as Security = Rs. 7,98,000.00
Amount deducted from admitted carriage bills @ 10% at District Agartala. = Rs.22,47,500.00
TOTAL Rs.44,95,000.00
(Rupees forty four lakh ninety five thousand) only.
- Sd -
Signature of Contractor
The second part of this document contains a certificate from the Area Manager, FCI which reads as under :
"This is to certify that :-
(1) There was no breach by contractor of any terms and Conditions of the contract and no damage, loss and expenses were suffered by the corporation due to contractor‟s negligence or unworthy man like performance.
(2) The contractor has not been held responsible of any loss, wastage and damage to grains during loading/unloading transport storage etc, and no recovery is due from him/her on that account.
(3) No demurrage was incurred due to delay or negligence on the part of the contractor in loading/unloading and removal of corporation goods within the free time allowed.
(4) The Contractor has not been responsible for any loss or damage to articles of the dead stock including gunnies and other government property.
(5) All claims of the contractor have since been settled and none is pending."
[10] Thus the contractor as well as FCI both mutually agreed that the contractor has received full payment for the services rendered by him in connection with the transportation contract and that the FCI has no claim of damage, loss or expenses against the contractor. The emphasis supplied by the counsel for the petitioner to the last sentence of his declaration of the said certificate that "I/me have further claim whatsoever with or arising out of the said contract which remain unadjusted" is futile. There is obvious typographical error and a word no‟ is missing. This is not supplying an error in a statute but reading a term of an agreement in its meaningful manner by referring to the entire document and the context in which the certificate was issued.
[11] It was only after giving such a declaration and certificate of no demand that the petitioner made a further demand of payment of Rs.21,48,897/- under a letter dated 22nd November, 2016. In the writ petition, though he should have, he made no mention of the said No Demand Certificate. In this appeal, we are not concluding whether after having issued the No Demand Certificate, the demand for fuel cost escalation could have been made. We are only suggesting that no foundation was laid in the petition for ignoring such an important declaration by the petitioner. If his case was that collection of the certificate by the FCI was unconscionable and that despite his own declaration to that effect, such a certificate did not bind him, one he had to lay a foundation in the petition and two more importantly, approached a competent Civil Court which alone can go into the questions of facts. Even otherwise, ordinarily, disputes arising out of contractual relations are best left to be judged by the Civil Courts. More so, in the present case when the petitioner is faced with the certificate of no demand issued by him which he does not dispute and in the petition did not even claim that it was under force, duration, coercion or compulsion or some such similar factor which would make such a declaration wholly unconscionable. In absence of any such foundation, the learned Single Judge could not have made a declaration to this effect without any discussion. Without stating so, the learned Single Judge has applied the principles laid down by the Supreme Court in case of Central Inland Water Transport Corporation Ltd. and another Vs. Brojo Nath Ganguly and another reported in AIR 1986 SC 1571. However, in order to apply the test of unconscionability of admission, there had to be full material on record and full consideration of such material.
[12] In the result, appeal is allowed. The judgment of the learned Single Judge is reversed. Writ petition stands dismissed. It would, however, be open for the original petitioner to resort to remedy as available in law before a Civil Court of competent jurisdiction.
With these observations, appeal is disposed of. Pending application(s), if any, also stands disposed of.