Jammu & Kashmir High Court
M/S Durga Enterprises vs Food Corporation Of India And Others on 30 June, 2025
Author: Moksha Khajuria Kazmi
Bench: Moksha Khajuria Kazmi
HIGH COURT OF JAMMU AND KASHMIR AND LADAKH
AT JAMMU
Case: WP(C) No. 1109/2023
Reserved on: 06.06.2025.
Pronounced on : 30.06.2025
M/S Durga Enterprises
M
....Petitioner/Appellant(s)
Through :- Mr. P.N.Raina Sr. Advocate with
Mr. J. Hamal Advocate.
V/s
Food Corporation of India and others .....Respondent(s)
Through :- Mr. R.K.Gupta Sr. Advocate with
Mr. Ravi Abrol Advocate.
CORAM:
HON'BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE
JUDGMENT
1 In this petition, the petitioner, herein, is seeking the following
reliefs:
(i) A Writ of Certiorari quashing order dated 09.06.2022 issued
by respondent No.1, insofar as it pertains to the petitioner, by
virtue of which the prayer of the petitioner against unlawful
recoveries made by the respondents pursuant to Road
Transport Contracts for FSD New Godown Jammu to FSD
Mirbazar, PEG Ramban, and RH Udhampur to PEG Doda has
been rejected by the respondents.
(ii) A Writ of Certiorari quashing order dated 16.10.2019
issued by respondent No.3, insofar as the same has been made
applicable to the pre-existing contracts i.e prior to 16.10.2019,
for FSD New Godown Jammu to FSD Mirbazar, PEG Ramban
and RH Udhampur to PEG Doda, by virtue of which arbitrary,
2illegal and unwanted recoveries have been made by the
respondents from the running bills and security deposits of the
petitioner.
(iii) A Writ of Mandamus directing the respondents to release
the entire amount of Rs.76,92,578, with interest @ 20% per
month, from the date of deduction until the entire amount is
released in favour of the petitioner which has been illegally,
irrationally and arbitrarily deducted by the respondents while
settling the claims of the petitioner pursuant to contract for FSD
New Godown Jammu to PEG Ramban dated 16.03.2017, Rail
Head Udhampur to PEG Doda, dated 02.02.2018 and for FSD
New Godown Jammu to FSD Mirbazar, dated 02.08.2018
executed between the petitioner and the respondents.
(iv) Any other appropriate writ, direction, or relief as this Court
may deem just and fit.
Factual matrix:
2 The petitioner is one of the partners in a registered partnership firm
engaged in transport and carriage contracts, operating under the name and style
of M/s Durga Enterprise, having its registered office at 45/5, Transport Nagar,
Narwal, Jammu. The petitioner, being a partner in the aforementioned firm and
duly holding a power of attorney on behalf of the other partners, is competent
and authorized to file the present writ petition.
3 It is submitted that respondent No.1, through its official website,
issued e-tender notices dated 26.12.2016, 13.11.2017 and 22.06.2018, inviting
online tenders under the “two-bid system” for the appointment of road transport
contractors for the movement of food stocks from FSD New Godown, Jammu
to various destinations as detailed in the respective tender notices. Pursuant to
3
the issuance of the said e-tender notices, the petitioner submitted its bid and was
awarded contracts for transportation of stocks from FSD New Godown, Jammu
to PEG Ramban,Rail Head Udhampur to PEG Doda, and FSD New Godown,
Jammu to FSD Mir Bazar. Consequent to the acceptance of the petitioner’s
bids, the petitioner was duly appointed as Road Transport Contractor (RTC) for
the aforementioned routes. It is submitted that while issuing the said e-tenders,
respondent No.2 had specified certain parameters including distance in
kilometers, period of contract, estimated contract value, Earnest Money Deposit
(EMD), security deposit, etc., which formed the basis for evaluating bids.
Taking these parameters into consideration, the petitioner submitted its bid,
which was accepted, and the petitioner accordingly commenced transportation
work as per the work orders issued by the respondents.
4 The petitioner executed the awarded works and submitted freight
bills from time to time, which were duly verified and cleared by the respondents
in accordance with the distances mentioned in the tender documents and
appointment orders. It is submitted that till July 2019, the respondents complied
with all terms and conditions of the contracts. However, for the first time in July
2019 after the completion of the contract related to the route from FSD New
Godown, Jammu to PEG Ramban, respondents raised certain claims and
adjusted alleged recoveries against the running bills of the petitioner relating to
the FSD Mir Bazar contract. As per the petitioner firm, these deductions were
illegal, unwarranted, and arbitrary. It has been submitted that the Model Tender
Form (MTF) governing the contracts did not contain any clause permitting
remeasurement of distances during the currency of the contract. Moreover, the
respondents neither informed the petitioner regarding any remeasurement
4
exercise nor disclosed the methodology adopted for the same. Despite this, the
respondents, in a wholly arbitrary and unjustified manner, proceeded to deduct
substantial amounts from the petitioner’s freight bills on the alleged ground of
remeasurement of distances. It is submitted that, the respondents deducted an
amount of ₹76,92,578 from the petitioner’s freight bills and security deposits,
without providing any notice, opportunity of hearing, or explanation to the
petitioner. These deductions were allegedly based on the remeasurement of
distances for the following routes:
(i) FSD New Godown, Jammu to PEG Ramban,
(ii) FSD New Godown, Jammu to FSD Mir Bazar, and
(iii) Rail Head Udhampur to PEG Doda.
5 It is stated that such action on the part of the respondents is
arbitrary, violative of the principles of natural justice, and dehors the terms and
conditions of the contract, particularly in the absence of any provision
permitting unilateral remeasurement during the subsistence of the contracts. The
petitioner, vide representation dated 23.12.2019, addressed to Respondent No.3,
objected to the remeasurement of distances and its application to running
contracts on the ground that such action was arbitrary and beyond the scope of
the Model Tender Form (MTF). There exists no clause under the MTF that
provides for the remeasurement of distances during the subsistence of a running
contract. This objection was also brought to the notice of Respondent No.2
through a collective representation dated 13.06.2020 submitted by various Road
Transport Contractors (RTCs), including the petitioner herein. In response to
the said representation, respondent No.2, through a communication dated
05.06.2020 addressed to respondent No.1, categorically stated that tenderers
quote rates based on distances specified in the tender enquiry, and that reduced
5
variations in distance are not to be applied to running contracts. It was further
stated that even enhanced distances are not taken into consideration during the
subsistence of the contract, except in cases of infrastructural development where
the route change significantly impacts the distance. Respondent No.2 further
recommended that changes in distance should not be implemented in general
cases, and that such changes should be restricted to instances involving major
variations due to infrastructural developments such as new tunnels or alternate
routes. Despite this, respondent No.3, without seeking approval from the
competent authority, arbitrarily and suo motu applied revised distances to
ongoing contracts, effectively altering the terms of the Notice Inviting Tender
(NIT), which is an integral part of the MTF. Any change in the NIT amounts to
a modification of the MTF, which respondent No.3 was not competent to effect
unilaterally. Moreover, the respondents themselves admitted before the
Comptroller and Auditor General (CAG), in response to a query regarding
remeasurement of distances, that there was no clause in the contract (MTF) or
policy of FCI permitting remeasurement of distances during the term of the
contract, and that any modification must be supported by mutual agreement
between the parties.Despite this admission, the respondents subsequently
introduced a fresh clause in the later NITs providing for remeasurement of
distances in the last weeks of March and September each year clearly
demonstrating that such a clause was not part of earlier contracts like the one in
question. Therefore, it is evident that in the absence of such a clause in the
present case, the respondents could not have resorted to remeasurement of
distances.
6
6 It is further submitted that, under Section 62 of the Indian Contract
Act, novation of a contract requires mutual agreement between the parties. In
the present case, the petitioner was neither informed nor consulted regarding
any such remeasurement, rendering the unilateral imposition of revised
distances illegal. Consequently, the recoveries made on this basis are beyond
the scope of the contract and unsustainable in law. The distance mentioned in
the e-tender notice is a vital factor, as the estimated bid for transportation is
based on the specified distance. The rates quoted by an RTC account for the
entire transportation cost, including subcontractor charges, which are fixed
based on volume and distance. Any change in distance during the contract
period disrupts this arrangement, causing undue hardship to the contractor.
Aggrieved by the conduct of respondent No.3, the petitioner approached the
Grievance Redressal Cell (GRC) vide letter dated 26.05.2022. Although the
GRC’s decision dated 09.06.2022 acknowledged that distance is a critical factor
in quoting rates, yet it failed to address the petitioner’s core grievance i.e., the
legality of remeasuring distances during the currency of a contract. It is stated
that the action of respondent No.3 in imposing recovery is illegal, arbitrary, and
violative of the principles of natural justice. No prior notice or communication
was made to the petitioner either before or after the remeasurement. The GRC’s
finding is legally untenable, especially in light of categorical admissions made
by respondents No.1 and 2 through communications dated 03.09.2020 and
05.05.2020 respectively, wherein they confirmed that distance could not be
remeasured during the subsistence of a contract. Since there is no clause in the
MTF permitting remeasurement during the contract period, any such act is ultra
vires the contract and cannot form the basis of recovery. Section 62 of the
7
Indian Contract Act mandates that any amendment or novation of contract terms
requires consent from both parties which condition is clearly absent in this case.
7 In support of the petitioner firm’s case, Mr. P.N. Raina, learned
Senior Counsel appearing for the petitioner, relying upon the judgment of the
Supreme Court in Suresh Kumar Wadhwa vs. State of Madhya Pradesh and
others, (2017) 16 SCC 757, submits that a party to a contract has no right to
unilaterally alter the terms and conditions of the contract. He further submits
that additional terms or conditions can be added only if both parties agree to
such alterations or additions. In this context, he has referred to paragraphs 26
and 27 of the said judgment, which are reproduced hereunder:
“26. Equally well settled principle of law relating to contract is
that a party to the contract can insist for performance of only those
terms/conditions, which are part of the contract. Likewise, a party
to the contract has no right to unilaterally “alter” the terms and
conditions of the contract and nor they have a right to “add” any
additional terms/conditions in the contract unless both the parties
agree to add/alter any such terms/conditions in the contract.
27. Similarly, it is also a settled law that if any party adds any
additional terms/conditions in the contract without the consent of
the other contracting party then such addition is not binding on the
other party. Similarly, a party, who adds any such term/condition,
has no right to insist on the other party to comply with such
additional terms/conditions and nor such party has a right to
cancel the contract on the ground that the other party has failed to
comply such additional terms/conditions”.
8 Vide order dated 01.05.2023, this Court granted liberty to the
petitioner to submit a representation seeking review of the GRC’s decision
dated 09.06.2022 and the respondents were directed to consider the same.
8
9 The respondents have filed their objections/counter affidavit to the
present writ petition and submitted that the impugned order dated 16.10.2019
was issued by the Divisional Office, Jammu, conveying revised distances as per
the directions from the Regional Office, Jammu, vide communication dated
15.03.2019. The contracts awarded under the prevailing scheme of Road
Transport Contracts of FCI are on Rs./MT/KM basis. Therefore, it is essential
that distances are periodically reassessed to safeguard the financial interests of
the Corporation.
10 It is submitted that Clause XVIII (a)(v) of the Model Tender Form
(MTF) provides that distances will be reckoned as fixed by the Chief Engineer,
PWD, or an officer nominated by him, or by the General Manager, or verified
by an officer acting on his behalf, and rounded off to the nearest kilometer,
which shall be final and binding on the contractor and that FCI Zonal Office
(North), vide letter dated 23.01.2017, referring to FCI Headquarters’
instructions dated 21.07.2016, advised that the shortest motorable road between
the dispatch and receipt points should be regularly assessed at the time of
awarding contracts. The distance mentioned in the NIT was based on the
previous assessment.
11 It is further submitted that as per order issued by the FCI, the
measurement of distance is required to be conducted biannually (twice a year)
during the last weeks of March and September with the revised distances
becoming applicable from 1st April and 1st October, respectively. In special
circumstances, such as the opening of new tunnels or roads, revised distances
become applicable from the date of such developments. It is submitted that the
9
petitioner’s representation was considered by the Grievance Redressal
Committee (GRC), Zonal Office (North), in its meeting held on 09.06.2022.
The GRC noted that earlier, flat-rate contracts were floated irrespective of
distance; that post the 2011 revision of the MTF, contracts are awarded on per
MT/KM basis; that since rates are quoted per MT/KM, the distance is a critical
component in determining freight charges; that once remeasured, it is
incumbent upon the Corporation to regulate payments accordingly; and if
documentary evidence of structural changes is produced, the corresponding
revised distance may be applied from the date of such changes.
12 It is submitted by the respondents that the price bid under the MTF
format contains a column for rate per MT/KM but does not mention distance.
The contracts are awarded and accepted on that basis alone. The revised
distances were adopted to reflect route changes, including new roads and
tunnels, and not implementing them would have caused financial loss to the
Corporation. According to the respondents, the total recovery of Rs. 5,75,322/-
in respect of the contract from FSD New Godown Jammu to PEG Ramban (for
the period 16.03.2017 to 15.03.2019) was made. This included Rs. 4,78,177/- in
compliance with a CAG audit para; andRs. 97,145/- on account of revised
distances, which was recovered from the bills of another contract (FSD NG
Jammu to FSD Mirbazar) as the original contract had expired. It is submitted
that the FCI regularly measures distances through its internal committees to
ensure compliance with MTF provisions and to prevent undue enrichment of
contractors due to outdated distances. The measurement is carried out without
the need for contractor involvement as per the terms of the contract. The
communication dated 05.06.2023 merely apprised higher authorities of the
10
variance in distances. It also clarified that distances in the NIT were indicative,
used solely for calculating the value of the contract and EMD/Security Deposit.
This was not a recommendation to alter the Regional Office’s decisions. It is
further submitted that the communication dated 03.09.2022 from Zonal Office
(North) regarding insertion of a clause in the NIT for six-monthly measurement
did not nullify the decision of the Regional Office, Jammu. The GRC remained
the competent authority for deciding such matters and that the decision of the
GRC dated 09.06.2022 clearly held that revised distances would be applicable
from the date of re-measurement, unless a structural change is documented for a
prior period. In such case, the change in distance would apply from the date of
the change itself.
13 It has been submitted that the petitioner was informed to submit
claims, if any, in accordance with the GRC decision vide letter dated
12.01.2023, but no claim was filed by the petitioner thereafter and that the
decision of the GRC was implemented uniformly for all contractors to
safeguard public funds. No mala fide or arbitrary action was taken.
Communication dated 16.10.2019 conveyed the revised distances to all
concerned contractors. Clause XX(f) of the MTF provides the procedure for
filing grievances, which the petitioner firm followed by filing representations
dated 26.05.2022 and 13.05.2023. The same were duly considered and rejected
by passing speaking orders. The order dated 25.05.2023 disposing of the
petitioner’s second representation has not been challenged in the present writ
petition, rendering the petition infructuous. The respondents have submitted
that the reliance on the NIT distances is misconceived. These distances are not
binding for payment calculation but are only indicative. The actual payment is
11
determined on the Rs./MT/KM rate and the shortest motorable road, as per the
MTF and FCI guidelines.
14 It is submitted that the operations of different FCI regions are not
comparable. Jammu & Kashmir is a consuming region with limited dispatch
centers, whereas Punjab is a procuring region with multiple dispatch centers.
Consequently, the operational logistics and tendering procedures necessarily
vary from region to region and that the decision to revise the distances was
implemented uniformly across all contractors operating during the relevant
period. No individual contractor, including the petitioner, was singled out for
differential treatment. The allegations of arbitrariness or discrimination are
misconceived and baseless. According to the respondents, the writ petition is
liable to be dismissed, as it challenges a policy decision taken in public interest
and in accordance with the terms of the contract. Furthermore, the petitioner has
failed to assail the final order dated 25.05.2023, passed by the GRC in response
to the petitioner’s representation, rendering the petition legally untenable.
15 Learned counsel for the respondents, in support of their case, has
relied upon a decision dated 06.03.2018 rendered by this Court in OWP No.
1370/2017, titled M/s S. Surinder Singh & Another v. FCI & Others and
connected matters, which is squarely applicable to the present case.In the said
case, a similar issue regarding the re-measurement and revision of
transportation distances has been considered. This Court, while referring to the
decisions of the Supreme Court in Kerala SEB v. Kurien E. Kalathil, (2000) 6
SCC 293, and Central Bank of India v. Devi Ispat Ltd., (2010) 11 SCC 186,
has held that the interpretation and implementation of contractual clauses
12
cannot be the subject matter of a writ petition. The Supreme Court emphasized
that disputes concerning the interpretation of the terms and conditions of a
contract must be adjudicated by a civil court or through arbitration, if such a
mechanism is provided under the contract. Further, the writ Court also relied
upon the decision in Rajasthan State Industrial Development and Investment
Corporation v. Diamond and Gem Development Corporation Ltd., (2013) 5
SCC 427, reiterating that contractual disputes fall outside the scope of writ
jurisdiction. The Court observed that the impact of distance reduction could be
better examined by an expert committee.It has been reported that the decision
rendered in the aforesaid case has not been challenged before any forum and
has, therefore, attained finality.
16 In Surinder Singh‘s case (supra), while dismissing the writ
petition, this Court noted that the petitioners had the remedy of approaching the
Grievance Redressal Committee (GRC). Paragraphs 17 and 18 are relevant to
the context and are reproduced below:
“17) In view of the aforesaid order dated 04.08.2017, the meeting
of the Grievance Redressal Committee was held on 13.11.2017 by
which the claim of the petitioner was rejected by the respondents.
However, the fact remains that the aforesaid order has been passed
by the Grievance Redressal Committee without affording
opportunity of hearing to the petitioners. The petitioners had a
remedy to approach the Grievance Redressal Committee under
Clause XX of the contract. However, instead of resorting to the
aforesaid remedy, the petitioners have rushed to this Court.
Therefore, it is not necessary to deal with other contentions made
by the parties.
13
18) In view of the preceding analysis, no interference is called for
with the decision of the respondents. However, it would be open to
the petitioners to approach the Grievance Redressal Committee, if
they so advised in terms of Clause XX of the agreement. Needless
to say that in case the petitioners approach the Grievance
Redressal Committee, the aforesaid Committee shall decide the
dispute by a speaking order within a period of three weeks from
today”.
17 Pursuant to the order dated 22.05.2025, the respondents have filed
an affidavit stating that the petitioner firm participated in the tendering process
initiated through e-NIT dated 26.12.2016 for transportation of food grains from
FSD New Godown, Jammu to PEG Ramban. The petitioner’s bid was accepted
vide order dated 17.03.2017, and the contract period was from 16.03.2017 to
15.03.2019. Initially, the distance from FSD New Godown, Jammu to PEG
Ramban was shown as 170 km. However, this distance was revised to 139 km
vide order dated 29.05.2017, which was accepted by the petitioner firm, and
bills were raised accordingly. Subsequently, as per the Corporation’s circulars,
guidelines, and instructions, the distance to PEG Ramban was remeasured by a
committee on 12.09.2018, in pursuance of the direction dated 10.09.2018. The
revised distance was found to be 137 km due to road realignment, construction
of flyovers, and new culverts caused by the ongoing construction of the four-
lane National Highway. Thereafter, payment was made to the petitioner at the
revised distance of 137 km. However, the petitioner had continued raising bills
based on the earlier distance of 139 km. As a result, the Corporation recovered a
total amount of ₹5,75,322 in two instalments,Rs.4,78,177 based on a CAG
report and Rs.97,145 for the period from 12.09.2018 to 15.03.2019.As per the
decision of the Grievance Redressal Committee (GRC), the revised distance
14
was to be applied from the date of remeasurement, not from the beginning of
the contract. Therefore, the petitioner is entitled to a refund of ₹4,78,177 for
transportation from FSD New Godown, Jammu to PEG Ramban. It is further
submitted that the petitioner also participated in another e-NIT for
transportation of food grains from FSD New Godown, Jammu to FSD Mir
Bazar. Upon being declared successful, the petitioner was appointed as the
regular RTC vide order dated 14.08.2018 for the contract period from
14.08.2018 to 13.08.2020. Initially, the distance was shown as 220 km. During
the contract, the Corporation remeasured the distance as per applicable
circulars, guidelines, and the MTF, and found it reduced to 211 km due to
similar reasons i.e realignment, flyovers, and culverts related to highway
expansion. The Corporation applied the revised distance of 211 km with effect
from 01.04.2019 and continued till 16.06.2020. Consequently, it recovered
₹55,05,197 from the petitioner. However, as per the GRC’s directions, the
revised distance should have been implemented from the date of actual
remeasurement, i.e., 19.05.2019. Therefore, the petitioner is entitled to a refund
of ₹2,87,477 for the period from 01.04.2019 to 18.05.2019.Further, the
petitioner also participated in the tender for transportation of food grains from
Railhead Udhampur to PEG Doda and was appointed as the RTC vide order
dated 26.02.2018 for the contract period from 02.02.2018 to 01.02.2020. The
original distance was recorded as 105 km. Upon remeasurement on 26.04.2019,
the distance was found to be reduced to 102 km due to road changes. However,
recoveries were made with effect from 01.04.2019, which is prior to the
remeasurement date. It is submitted that in line with the GRC decision, the
revised distance should be applicable from 26.04.2019. Hence, the petitioner is
15
entitled to a refund of Rs.27,802 for the period from 01.04.2019 to
25.04.2019.The total recovery affected by the Corporation from the petitioner’s
freight bills and security deposits is Rs.65,10,874. As per the order dated
16.10.2019, the Corporation recovered Rs.59,35,552 for revised distances
concerning FSD Mir Bazar and PEG Doda with effect from 01.04.2019.
However, as per the GRC’s decision, the revised distances must be applied from
the date of re-measurement and not from 01.04.2019. Accordingly, the
petitioner is entitled to a total refund of Rs7,93,456.It is further submitted that
the amount of ₹5,75,322 for PEG Ramban was recovered prior to the issuance
of the order dated 16.10.2019, since the contract for Ramban had already
expired on 15.03.2019.
18 Heard learned counsel for the parties and perused the material on
record including the record produced by the respondents.
19 From the pleadings of the parties and upon perusal of the material
on record, the following issues arise for consideration:
Issue No. (i): Whether the remeasurement of distances during the currency
of the contracts was contrary to the terms of the contract (MTF)?
20 The petitioner’s case rests heavily on the contention that there is no
express clause in the Model Tender Form (MTF) permitting unilateral
remeasurement of distances during the subsistence of a contract. However, the
respondents have relied upon Clause XVIII(a)(v) of the MTF, which stipulates
that the distance shall be reckoned as fixed by the Chief Engineer, PWD, or an
officer nominated by him, or by the General Manager or an officer acting on his
behalf, and that such measurement, once verified and rounded off to the nearest
16
kilometer, shall be final and binding on the contractor. Furthermore, the
Grievance Redressal Committee (GRC), vide its decisions dated 09.06.2022 and
25.05.2023, has upheld the authority of the Food Corporation of India (FCI) to
periodically reassess distances in view of infrastructural developments and
relevant policy circulars. Therefore, when Clause XVII(a)(v), Note (2) of the
tender document, and the applicable guidelines are read in conjunction, the
remeasurement of distances is not outside the scope of the contract. Moreover,
as per the order dated 16.10.2019 issued by the Divisional Office, Jammu,
revised distances were conveyed pursuant to the Regional Office’s directions
dated 15.03.2019. For clarity, it is appropriate to reproduce the communication
dated 15.03.2019 addressed by the General Manager, FCI to the Execution
Director (North) FCI Zonal Office, Noida, which provided directions regarding
the remesaurement of distances:
“The Executive Director (North)
Food Corporation of India
Zonal Office(North), Noida.
Subject: – Regular assessment of road distances for the purpose of
payment of road freights to transport contractors- reg.
Ref: – 1. FCI ZO(N), letter no.S&C/15(6)/GRC/Cont/NZ/2017/27dated
17.10.2017.
2. FCI ZO(N), letter no. S&C/32(19)/Misc./Cont/NZ/14 dated 23.01.2017.
Madam,
Kindly refer to FCI ZO(N) communications cited under reference
above in references to FCI Hqrs letter dated 21.07.2016 regarding
enhancement/reduction in distances of road transport contracts where it has
been mentioned that “shortest motorable road between dispatch and
receipt point is required to be assessed regularly while awarding the
contracts”. Further, vide letter dated 17.10.2017, it has been advised that
concern of reduction/enhancement in distance of road transport contract may
be finalized at RO level. However, no specific time period or interval has been
specified for measuring the distances.
Due to on going process of development and re-alignment of highways,
regular changes are observed in distances on fresh measurements due to which
17need has been felt to fix some regular interval during contract period for
measurement of distances in order to reduce the complexities and disputes.
Accordingly, the matter has been examined in this office in consultation with
finance division and below guidelines have been issued to all D.Os in J&K
region for strict compliance. The same note shall also be appended in all
tender notices now onwards for clarity to bidders: –
“Under the provisions of clause XVIII.a.v. of the MTF, District Office
concerned shall get the distances measured by committee of officers in the
last weeks of March and September every year and the same shall be
applicable for freight payments from the 1st April and 1st October resp. In
case of special circumstances like opening of new tunnels of roads, the
new distances shall be measured immediately and applicable from the
date of opening of such roads/tunnels.”
Further, it is also suggested that similar procedure should be followed in other
regions as well and Z.O/HQ may consider issuing necessary direction to this
effect.
Dy. General Manager
For General Manager(J&K)
21 Under the current scheme of Road Transport Contracts awarded by
the FCI, where contracts are executed and payments made on per Rs./MT/KM
basis, periodic reassessment of distances is imperative to safeguard the financial
interests of the Corporation and to ensure equitable payment corresponding to
actual distances. On a plain reading of Clause XVIII(a)(v) of the MTF, the
consistent decisions of the GRC, and the above authoritative circular, it is clear
that the FCI is legally entitled and contractually authorized to remeasure and
revise road distances during the contract period.
22 The original distance from FSD New Godown, Jammu to PEG
Ramban was 170 kilometers. This was later revised to 139 kilometers due to
road realignment. The petitioner accepted this revised distance without protest
and submitted bills accordingly. This indicates the petitioner’s acceptance of the
revised measurement and reduced freight charges. Subsequently, the distance
was again revised from 139 kilometers to 137 kilometers. Although the
18
petitioner objected to this second revision, the earlier conduct of accepting a
similar revision without protest amounts to acceptance of FCI’s authority under
the contract to remeasure distances. The legal position is clear that a party
cannot accept benefits under a contract and later challenge its terms. In
Rajasthan State Industrial Development and Investment Corporation v.
Diamond & Gem Development Corporation Ltd., (2013) 5 SCC 470, and in
State of Maharashtra v. Digambar, (1995) 4 SCC 683, the Supreme Court
has held that once a party accepts the contractual terms and derives benefit, it is
estopped from later challenging them. In Union of India v. N.K. (P) Ltd.,
(1972) 1 SCC 858, the Supreme Court has held that the conduct of parties is
significant in interpreting commercial contracts.
23 Accordingly, the petitioner’s earlier conduct of accepting the
revised distance and corresponding freight charges constitutes a waiver and
legal estoppel. Therefore, the present challenge to the recovery orders, based on
a similar revision in distance, is not sustainable. Since the contracts were
awarded on a per MT/KM basis, the respondent-FCI was empowered to
remeasure the distances. It was incumbent upon the respondent-FCI to do so in
order to safeguard the public exchequer. Accordingly, the petitioner’s challenge
to the remeasurement of distances during the currency of the contracts is devoid
of merit and is hereby rejected.
24 Regarding the judgment cited by Mr. P.N. Raina in Suresh Kumar
Wadhwa‘s case (supra), there is no dispute about the legal proposition that a
party to the contract can insist on performance only of those terms and
conditions which are part of the contract. Likewise, a party has no right to
19
unilaterally alter or add terms or conditions without mutual agreement.
However, in the present case, there is no alteration of the terms and conditions
of the contract. Clause XVIII (a)(v) specifically states that the distance will be
reckoned as fixed by the Chief Engineer, PWD, or an officer nominated by him,
or by the General Manager, or verified by an officer acting on his behalf, and
rounded off to the nearest kilometer, which shall be final and binding on the
contractor. Moreover, the distance from FSD New Godown, Jammu to PEG
Ramban was initially 170 kilometers and was subsequently revised to 139
kilometers due to road realignment. The petitioner accepted this revised
distance without protest and submitted bills accordingly. This conduct clearly
indicates the petitioner’s acceptance of the revised measurement and the
resultant reduced freight charges. Therefore, the legal proposition laid down in
Suresh Kumar Wadhwa‘s case (supra) is not applicable to the present case.
Issue No. (ii): Whether the recoveries made retrospectively, i.e., for
periods before the actual remeasurement, were legal and
justified ?
25 The respondents, in their affidavit and counter submissions, have
admitted that recoveries in certain cases were made from 01.04.2019, even
though the remeasurement was carried out at later dates. The GRC, in both its
decisions, has clearly held that revised distances should be applied only from
the date of actual remeasurement, unless there is concrete evidence of earlier
structural changes. Accordingly, the respondents have conceded that the
following amounts were erroneously recovered prior to the remeasurement
dates:
20
Route Date of Period of contract Period of excess Amount to be
remeasurement recovery refunded
FSD Jammu 12.09.2018 16.03.2017 to 12.09.2018 to Rs.4,78,177
to PEG 15.03.2019 15.03.2019
Ramban
FSD Jammu 19.05.2019 14.08.2018 to 01.04.2019 to Rs.2,87,477
to FSD Mir 13.08.2020
Bazar 18.05.2019
Railhead 26.04.2019 02.02.2018 to 01.04.2019 to Rs.27.802
Udhampur to 01.02.2020 25.04.2019
PEG Doda
Total refund Rs.7,93,456
26 Since the recoveries made prior to the actual remeasurement dates are
contrary to the GRC’s findings and policy guidelines, as such the petitioner is entitled
to refund of Rs.7,93,456.
27 In view of the above findings, there is no perversity in the impugned
orders. However, since it is established and admitted by the respondent-FCI that an
excess amount of Rs. 7,93,456/- was recovered prior to the respective remeasurement
dates, this Court deems it appropriate to dispose of the writ petition by directing the
respondent-FCI to refund to the petitioner a sum of Rs. 7,93,456/- (Rupees Seven
Lakh Ninety Three Thousand Four Hundred Fifty Six only), being the excess amount
recovered. Ordered accordingly. The said amount shall be paid to the petitioner
within a period of six (6) weeks from the date of this judgment. In case of failure, the
amount shall carry interest at the rate of 6% per annum from the date of this judgment
until actual payment.
Record produced by the respondents in terms of order dated 22.05.2025 be
returned back.
(MOKSHA KHAJURIA KAZMI)
JUDGE
Jammu
30.06.2025.
Sanjeev
Whether order is reportable: Yes/No