Telangana High Court
G.Shankar vs The Singareni Collieries Company … on 19 June, 2025
THE HON'BLE SRI JUSTICE PULLA KARTHIK
WRIT PETITION No.259 of 2025
ORDER:
This Writ Petition, under Article 226 of the Constitution of India,
is filed seeking the following relief:
“…to issue an appropriate Writ, Order or Direction more
particularly one in the nature of Writ of Certiorari call for the records
pertaining to the Speaking Orders vide proceedings in
Ref.RG.I/PER/C/54/6588 and Ref.RG.I/PER/c/54/6589, dated 09-
12-2024 issued by the 2nd respondent and quash the same by
declaring as illegal, arbitrary, void ab-initio and against the principles
of natural justice and consequently direct the respondents to release
an amount of Rs.55.59 Lakhs towards transport bill, Rs.10.00 Lakhs
towards EMD & Security Deposit and Rs.100.69 Lakhs 5% retained
amount from the running bills of the contract to the petitioner along
with the interest from the date of closing/ expiry of the contract and
pass…”
2. The brief facts of the case are as follows:
2.1. The petitioner is a Contractor with vast experience in the
Transport business. In response of the Tender Enquiry Notice issued by
the respondent Company dated 02.01.2015, he had submitted his offer
and after conducting due negotiations, he was duly awarded the
Transport Contract vide Work Order No.7600005755 dated 02.01.2015,
for transportation of coal from Medipalli Opencast Project to different
CHPs, on weight basis for a period of two years, and thus, the contract
period is valid up to 01.01.2017. Thereafter, an agreement was entered
between him and the respondent Company dated 06.01.2015. Pursuant
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the understanding arrived at the time of negotiations and successfully
executed the transport work awarded to him. In compliance of the
terms of the Work Order dated 02.01.2015, the petitioner had completed
the transportation work without any remarks.
2.2. While so, respondent No.3 issued proceedings dated
03.05.2016, for recovery of an amount of Rs.55,59,000/- from his
pending bills on the allegation that the coal loaded lorries were diverted
to destination other than GDK-1, CHP. The respondent Company also
lodged a complaint, against the lorry owner, lorry driver and others, who
alleged to have diverted the coal and forged the registers, before the
Anthergaon Police Station vide Crime No.59 of 2016, registered for the
offenses punishable under Sections 420, 406, 409, 468 and 471 of the
Indian Penal Code. The police conducted investigation and filed a
charge sheet vide C.C.No.55 of 2017 on the file of the Junior First Class
Magistrate, Godavarikhani. The failure of the respondents to adduce
the evidence before the trial Court resulted in acquittal of the accused
therein, vide judgment dated 31.08.2018.
2.3 It is the further case of the petitioner that aggrieved by the
recovery proceedings dated 03.05.2016, the petitioner filed
W.P.No.16640 of 2016 before this Court, and during the pendency of the
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W.P.No.259 of 2025said writ petition, respondent No.2 issued proceedings dated
08/14.02.2019, whereby, the petitioner was directed to remit an amount
of Rs.81,35,837/- and Rs.20,00,000/- towards penalty, equivalent to
twice the of security deposit, apart from that, the petitioner was also
blacklisted from participating in the respondent Company’s tenders for a
period of two years.
2.4. Aggrieved by this proceedings, the petitioner also filed
W.P.No.4444 of 2019 before this Court. Eventually, both the writ
petitions were heard together, and this Court, vide separate orders dated
01.07.2024, set aside the aforesaid orders dated 03.05.2016 and
08/14.02.2019, on the ground that the said orders were issued in utter
violation of principles of natural justice, as the petitioner was never
given an opportunity of hearing, and remitted the matter back to the
respondents, directing them to re-consider the subject issue objectively
and uninfluenced by their earlier decisions dated 03.05.2016 and
08/14.02.2019, re-examine the whole issue afresh and pass appropriate
orders in accordance with law. Thereafter, the petitioner submitted his
representation to the respondents, seeking to comply with the aforesaid
orders of this Court, and in pursuance thereof, the respondent Company
sent a letter dated 12.09.2024, calling for appearance on 17.09.2024.
However, only after filing Contempt Cases vide C.C.Nos.2396 of 2024
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and 2397 of 2024, the respondents have passed the present impugned
order dated 09.12.2024, stating that the request of the petitioner for
release of the forfeited amount does not merit consideration. Hence, the
present writ petition.
3. Heard Sri Pulimamidi Shashidar Reddy, learned counsel for the
petitioner and Sri P. Sri Harsha Reddy, learned Standing Counsel for the
respondents.
4. Learned counsel for the petitioner submitted that the allegation of
the respondents is that during the execution of the contract, it was
established by the vigilance enquiry that the petitioner had diverted 72
trips of coal to unknown destination. However, no record is available to
show that when the enquiry was conducted and under what basis, the
enquiry was concluded. Nothing is elicited from the speaking order
except an erroneous conclusion that 72 trucks were diverted to an
unknown destination. In fact, with regard to the allegation of diversion
of 72 trips of coal loads lorries, the Company had lodged a complaint
and the police registered an FIR vide Crime No.59 of 2016 for the
offenses punishable under Sections 420, 406. 409, 468, 471 of the
Indian Penal Code, and after conducting an investigation, they have filed
a charge sheet in C.C.No.55 of 2017 on the file of the Judicial First
Class Magistrate, Godavarikhani, which ended in acquittal of the
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accused therein, as the respondent Company failed to adduce evidence.
Therefore, the conclusion of the respondents about diversion of 72 trips
is not having legal scrutiny and without evidence on record.
5. It was further submitted that the petitioner has submitted bills
along with relevant documents, which clearly goes to show that he had
transported excess in weighment and there is no liability on the part of
the petitioner. Further, the respondents failed to appreciate the
proceedings of the Chief General Manager, RG-1 Area, dated
04.05.2017, wherein, it was decided that as per the recommendation of
the Committee on allowable variation in weighment between the
dispatch point and the receiving end, weighment of coal admittance
tippers bases on lead distance. Based on the said recommendations,
the quantity of coal to be recovered from the petitioner is 400 Kgs per
trip as allowable variation in weighment. Therefore, the allowable
variation is 586.474 Kgs, for the difference quantity of coal for 930 trips
with more than 400 Kgs. After deducting 372 Kgs towards +/1 400 Kgs
variation per trip, net quantity of coal to be recovered is only 214.474
Kgs, and the amount would come to Rs.8,28,648.60 @ Rs.3,900/- per
ton. As such, the respondents ought to have proposed to recover from
the petitioner only an amount of Rs.8,28,648.60. However, the
respondents arrived at a conclusion, without any basis, evidence on
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record and without considering any of the submissions made by the
petitioner. Thus,the action of respondent No.2 in rejecting the
application of the petitioner, without following the audi alteram partem
principle is in utter violation of principles of natural justice. Therefore,
learned counsel for the petitioner prayed this Court to pass appropriate
orders in the present writ petition by setting aside the impugned order
dated 09.12.2024. Reliance has been placed on the decision of the
Hon’ble Apex Court in Om Kumar and others v. Union of India 1.
6. Per contra, learned Standing Counsel for the respondents
vehemently contended that the writ petition is not maintainable and is
liable to be dismissed in limine, especially as the dispute arises out of a
contract, and specially as per Clause-10 of the terms and conditions of
work order, in case of disputes, the parties have to approach the Civil
Court at Khammam and Karimnagar. However, without first
approaching the Civil Court, the petitioner has filed the present writ
petition, and therefore, the same is liable to be dismissed. It was further
submitted that the petitioner was awarded the contract for
transportation of coal from Medipally Open Cast Project (MOCP) to Coal
Handling Plants (CHPs) of respondent company, on weight basis for a
period of two years, vide purchase order No.76000055 dated
1 (2001) 2 SCC 386
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02.01.2015, and an agreement dated 06.01.2015 was also executed, to
the effect that the petitioner would perform all the works allotted to him
in accordance with the specification. However, during the period of
execution of the above contract work, on 30.03.2016, in third shift, after
taking the load of coal at the MOCP, the lorry bearing registration No.AP
15 TB 9099 was sent to GDK-I CHP at about 01:50 AM, but did not
report enroute at the check post/GDK-1 CHP. Thereafter, a
Departmental Vigilance Enquiry was conducted and it was established
that the coal loaded in 72 trips, i.e., 1426.820 MTN, was not unloaded
at the CHP and might have been diverted to an unknown destination.
The value of pilferage of coal in the verified three months, i.e., January
2016 to March 2016, came about Rs.55,59,318/-. As such, it was clear
that the petitioner had violated the contractual obligations as stipulated
at penalties Clauses 4.3 and 4.4 of the Work Order dated 02.01.2015.
7. It was further submitted that the petitioner was categorically
informed vide letter No.RG1/MOC/G-13/CT/1289 dated 03.05.2016,
about the entire issue and proposed for recovery from the running bills.
Thereafter, the petitioner submitted his representation on 11.05.2016 to
the Chief General Manager, RG-1 Area, requesting to stop recovery
temporarily from the running bills on the plea that certain amounts of
the petitioner, i.e., Future Security Deposit (FSD), Security Deposit (SD)
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and EMD are available with the respondents. However, the said request
of the petitioner is contrary to Clauses 4.3 and 4.4 of terms and
conditions of work order, which stipulate that the Contractor will be
held responsible for any shortage of coal and the cost of such coal will
be recovered from the Contractor’s bills at the market prices prevailing
at the relevant time. Further, the petitioner was also issued three more
proceedings dated 03.05.2016, 15.06.2016 and 29.06.2016, stating that
during the vigilance enquiry, it was noticed that 2086.11tonnes of coal
was less transported and its value is Rs.81,35,837/-, which will be
recovered from the running bills; that Rs.55,59,000/- is recoverable
towards the cost of 72 coal loaded lorries that were diverted to
destination other than GDK-1 CHP, as per the departmental vigilance
enquiry; that in addition to recovery of Rs.55,59,000/-, the
transportation charges will also be recovered from the petitioner. It was
further submitted that Clause 4.3 stipulates that the Company has
every right to forfeit the Security Deposit and also has the right to
impose further penalties equivalent to twice the amount of Security
Deposit, apart from blacklisting the Contractor. It was submitted that
in consideration of the representation of the petitioner, the amount of
Rs.56,16,398.57 was recovered in three installments, instead of a single
recovery towards the cost of coal lost and the transportation charges.
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Further, the petitioner had nowhere condemned the diversion of lorries
to other than specified destinations. Hence, the contention of the
petitioner that he was not informed about the recovery of an amount of
Rs.55,59,000/- is false and baseless.
8. It was further submitted that C.C.No.55 of 2017 on the file of the
Judicial First Class Magistrate, Godavarikhani, was disposed of vide
judgment dated 31.08.2018, for want of evidence only, and thus, the
mere acquittal of A1 to A7 does not come in the way of the respondents
for taking necessary action against the petitioner as per the terms and
conditions of purchase order, for illegal transportation of 72 trips of coal
loaded lorries from MOCP to unknown places, during his contract period
from January 2016 to March 2016. It was further submitted that the
petitioner filed W.P.No.16640 of 2016 challenging proceedings dated
03.05.2016, wherein, it was proposed to recover an amount of
Rs.55,59,00/- and also filed W.P.No.4444 of 2018 before this Court,
challenging the proceedings dated 8/14.02.2019, wherein, he was
advised to remit the an amount of Rs.81,35,837/- and Rs.20,00,000/-
towards penalty equivalent twice to the amount of Security Deposit and
proposed to blacklist the company for a period of two years. Both these
writ petitions were allowed setting aside the impugned orders therein,
directing the respondents to re-examine the whole issue against in
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conformity with the principles of natural justice. It was further
submitted that as per the order of this Court dated 01.07.2024, vide
letter No.RG1/GMO/G-4/924 dated 12.09.2024, the petitioner was
informed to appear in the office of the General Manager, RG-1 area, on
17.09.2024 at 04:00 PM, to examine the representation in respect of
release of bill amounts, FSD, SD and EMD. Accordingly, the petitioner
submitted his representation dated 20.09.2024, requesting to release
the pending bill amount against the work order. Later, a Committee is
constituted to examine the representation submitted by the petitioner,
and once again, vide letter dated 08.11.2024, the petitioner was advised
to appear before the Committee on 08.11.2024 at 04:00 PM. As such, it
is clear that he was provided an opportunity to appear and to show
cause as to why action according to the terms and conditions cannot be
initiated against the petitioner. The petitioner appeared before the
Committee on 08.11.2024 and expressed his views for release of bills.
On considering the same, the present impugned order dated 09.12.2024
was issued. It was further submitted that as per Clause 10 of the Work
Order/agreement, the petitioner has to approach the Civil Court of
competent jurisdiction in case of any disputes. However, without
approaching the Civil Court, the petitioner has filed the present writ
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petition, which is not maintainable. Therefore, it was prayed to dismiss
the present writ petition.
9. Having heard the learned counsel for the respective parties and on
perusal of the record, this Court is of the considered view that the main
dispute between the parties pertains to a serious allegation of breach of
contract, i.e., diversion of coal loaded lorries to unknown destination
other than GDK-1 Coal Handling Plant; calculation of lost/under
delivered quantity of coal and its value; and release of outstanding
amounts to the petitioner. These issues involve seriously disputed
questions of fact that need to be adjudicated by adducing and evaluating
the evidence, which cannot be done under Article 226 of the
Constitution of India. The Civil Courts are the appropriate forum for
resolution of disputes of this nature. Further, it is relevant to note that
as per Clause 10(d) of the Work Order dated 02.01.2015, executed
between the petitioner and the respondent company, the disputes
arising out of the contract shall be resolved through the competent Civil
Court at Khammam District.
10. In view of availability of an alternative remedy, this Court deems it
appropriate to dispose of the present writ petition, granting liberty to the
petitioner to approach the competent Civil Court for redressal of his
grievance, as expeditiously as possible, preferably within a period of four
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(04) weeks from the date of receipt of a copy of this order, and the Civil
Court shall adjudicate the matter on its own merits.
11. Accordingly, the Writ Petition is disposed of.
Miscellaneous applications, if any, pending in this writ petition,
shall stand closed. No costs.
_________________________________
JUSTICE PULLA KARTHIK
Date: 19.06.2025.
GSP