M/s Murugan Consultants Pvt. Ltd And Ors vs M/s. Bharat Coking Coal Limited And Ors

Nobody appears on behalf of the petitioners.

The petitioners have preferred this writ petition for quashing the order dated 30.03.2012 whereby, Earnest Money Deposited by the petitioners have been forfeited. It is averred in the writ petition that coal was purchased through E-auction conducted by the Coal India Limited for sale of coal in different collieries for ready stock or anticipated stock after raising during the process. The process is regulated by the Terms and Conditions of Spot E-auction Scheme of 2007 as finalized by Coal India Limited for all coal companies. It is averred in the writ petition that after the auction purchase, the delivery orders are handed over to the successful bidders and after a couple of weeks the issue of allotment orders with 45 days validity period for supply of coal from the respective collieries has been made and this procedure is followed in the normal and ideal course. The petitioner’s company have involved in coal transaction and for this purpose undertakes and auction coal through the E-auction scheme, when the auction process has completed the petitioners along with D.O/S.O (Delivery Order)/S.O. (Sale Order) letter approached the respondent-company for allotment of coal from the stocks. It is averred in the writ petition that the amount of coal sanctioned in the D.O/S.O letter was not delivered by the respondent-company on majority of instances. In spite of lacunas on the part of the respondent-company the earnest money deposited was forfeited for not lifting the coal within the validity period of 45 days. It has been averred in the writ petition that the petitioners has given many representation but nothing has been done. All of a sudden, by an order dated 30.03.2012, the respondent-BCCL has forfeited the EMD by way of invoking the clause 9.2 of terms and conditions and spot of E-auction Scheme, 2007. Aggrieved with this the petitioners have filed this writ petition. The terms and conditions of spot E-auction Scheme, 2007 is annexed as Annexure-1 to the writ petition.

Learned counsel for the respondent-BCCL has submitted that the BCCL has rightly invoked the clause 9.2 of terms and conditions of E-auction Scheme, 2007. He further submits that in view of clause 11.12 of the said scheme, the writ petition is fit to be dismissed, which is quoted herein below:-

“11.12. In the event of any dispute, Bidder/Buyer is necessarily required to represent in writing to the General Manger (Sales) of the concerned coal company, who would deal with the same in a period of one month from such representation. Thereafter, if required the matter be determined by the Director-In-Charge of Marketing of the concerned coal company. Any interpretation of any clause of this will be subject to clarification by CIL, which will be deemed as firm and final. All disputes arising out this scheme, or in relation thereto in any form whatsoever shall be dealt exclusively by way of arbitration in terms of the Arbitration and Conciliation Act, 1996. The arbitration shall be conducted at Calcutta at a place to be notified by CIL. The arbitration shall be appointed by the Chairman and Managing Director, CIL upon written request in this behalf. The award rendered by the Arbitration shall be final and binding on the parties. (The place of arbitration & nomination of arbitrator be varied appropriately in view of the Coal Company involved)”.

Learned counsel for the respondent-BCCL submits that similar matter of EMD forfeiture namely, the case of Giriraj Garj vs. BCCL had been filed before the co-ordinate Bench of this Court for appointment of Arbitrator being Arbitration Application No.11 of 2016 and same had been dismissed by the Hon’ble Court and after that the matter has been travelled up to the Hon’ble Supreme Court vide Civil Appeal No.1695 of 2019 as reported in (2019) 5 SCC 192 where the dispute has been referred to an Arbitrator. Relevant Paragraph Nos.6 to 7.4 of the said judgment is quoted herein below:-

In the instant case, the learned Single Judge in the impugned order has erroneously taken the view that an arbitration clause would not stand incorporated in the individual sale orders entered into by Respondent 2 Coal Company and the appellant. The individual sale orders emanate out of the

2007 Scheme. The sale orders specifically state that they would be governed by the guidelines, circulars, office orders, notices, instructions, relevant law, etc. issued from time to time by Coal India Limited or Bharat Coking Coal Ltd., etc. As a consequence, the arbitration clause (i.e. Clause 11.12) in the 2007 Scheme would stand incorporated in the sale orders issued thereunder.

Clause 7 in the sale orders falls under the “single contract case” where the arbitration clause is contained in a standard form document i.e. the

2007 Scheme, to which there is a reference in the individual sale orders issued by Respondent 2 Coal Company.

7.1. The arbitration clause in the 2007 Scheme clearly states that:

“All disputes arising out of this scheme or in relation thereto in any form whatsoever shall be dealt exclusively by way of arbitration in terms of the Arbitration and Conciliation Act, 1996.” (emphasis supplied)

Russell in his commentary on arbitration has interpreted these words as follows:

“Disputes “in connection with”, “in relation to”, or “regarding” a contract. These words, which are frequently encountered and are to be given the same meaning, were at one time given a restricted interpretation, but are now well established as having a broad meaning … They may also be sufficient to catch disputes arising under another contract related to the contract containing the arbitration clause.” (emphasis supplied)

7.2. In Renusagar Power Co. Ltd. v. General Electric Co. this Court observed that expressions such as “arising out of”, or “in respect of”, or “in connection with”, or “in relation to”, the contract are of the widest amplitude, and content. In Doypack Systems (P) Ltd. v. Union of India this Court observed that expressions such as — “pertaining to”, “in relation to” and “arising out of”, are used in the expansive sense, and must be construed accordingly.

7.3. The words “in relation thereto” used in Clause 11.12 of the 2007 Scheme indicate that the clause would apply to all transactions which took place under the 2007 Scheme. This would include the sale transactions in the present case.

7.4. In view of the above discussion, the view taken by the learned Single Judge is erroneous, and is hereby set aside. The appeal is allowed.

In view of the above clause 11.12 of the said scheme and aforesaid judgment, this Court is not inclined to exercise its jurisdiction under Article 226 of the Constitution of India. Accordingly, the writ petition stands dismissed with liberty to the petitioners, if so advised, may invoke the arbitration clause for redressal of his grievance.