THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION No : 24516 of 2008 Between: M/s. ABC Engineering Works Having Office at Block No. G20, Plot No.23, 24, II Road, Jawahar Auto Nagar, Vijayawada, Rep., by its Managing Partner Sri G. VenkateshwaraRao ..... PETITIONER AND The Singareni Collieries Companu Ltd., Rep. By its Chairman & Managing Director, Red Hills, Hyderabd and two others. .....RESPONDENTS Counsel for the Petitioner: MR. B.VijaysenReddy Counsel for the Respondent No.: Mr. Nandigama Krishna Rao The Court made the following : THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.24516 OF 2008 ORDER: Pursuant to the tender floated by the respondents – Singareni Collieries Company Limited - for execution of OBR work at Manuguru OCP-IV Project, the petitioner was declared as the successful bidder and accordingly the work order dated 5.4.2006 was issued in its favour for Blast Hole Drilling, Controlled Blasting with Shock Tube Initiation, Excavation, Loading, Transportation, Dumping, etc. It is stated that the petitioner firm had commenced the work in November, 2006 and it could achieve 99% of the target in removing OBR till December, 2007. However, since January, 2008 onwards there was decline in reaching the targets since the respondents failed to adopt revision of explosive price on par with the price fixed by the Coal India Limited from time to time. It is pleaded that as per the terms agreed upon in the agreement entered into with the respondents, the petitioner had entered into a separate agreement with an Explosive supplier. However the price of the explosives was being paid to the supplier by the respondents by deducting the said amounts from the running bills of the petitioner firm. While so in August, 2007 while revising the prices of explosives, Coal India Limited fixed different rates for various sectors in India on the basis of the local conditions prevalent and on account of the same, the petitioner’s explosive supplier had slowed down the supply of explosive materials. Due to delay in supply of explosive materials since August, 2007, the excavation work was slowed down resulting in reduction of the petitioner’s work. In the circumstances, the petitioner had requested the respondents to revise the price of explosives on par with Coal India Limited price and also sought extension of time for completion of the balance work by rescheduling the work. However, the respondents failed to consider the said request, but continued payment to the petitioner’s explosive supplier at the rate of Rs.16,399/- per ton by deducting the same from the running bills of the petitioner. Since the petitioner company was compelled to pay differential price to the explosive supplier, it had incurred huge losses and there was delay in execution of works. Though the delay was for the reasons beyond the control of the petitioner, the respondents did not consider the petitioner’s request for extension of time nor the revised rates for explosives were approved. On the other hand, the respondents issued the show-cause notice dated 29.10.2008 alleging poor performance and threatening penal action. The petitioner submitted its reply dated 31.10.2008. In spite of the same, the respondents were contemplating to levy penalty. Hence, the present writ petition seeking a declaration that the action of the respondents in not revising the rates of explosives as stipulated in the work order dated 5.4.2006 on par with Coal India Limited price and in not extending the time without imposing penalties by rescheduling the work awarded to the petitioner as arbitrary and illegal. In the counter-affidavit filed on behalf of the respondents – Singareni Collieries Company Limited - it is contended that the writ petition itself is not maintainable since the dispute arises out of a non- statutory contract and that apart the contract provides that the disputes between the parties shall be decided only by the Civil Court of competent jurisdiction. On merits, it is contended that as per the terms and conditions of the agreement, the petitioner himself elects the explosive supplier and he has to procure the explosives from the said supplier. It is also contended that the terms and conditions of the contract envisaged that the price of explosives will be limited to the system basic price of SMS and accessories as per the prevailing rate contract price of the Coal India Limited or as per the invoice price whichever is less. The allegations made against the explosive supplier have been denied and it is alleged that the petitioner had deliberately did not make the supplier a party to the writ petition. The plea of the petitioner that the delay in execution of the works was for the reasons beyond its control has been denied and it is stated that in spite of the repeated letters addressed by the respondents to improve the performance the petitioner failed to achieve the scheduled targets. Heard the learned counsel for the petitioner as well as the learned Standing Counsel appearing for the respondents. The first question that arises for consideration is whether it is open to the petitioner to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India for redressal of its grievance. This Court in W.P.No.17919 of 2004, dated 5.10.2004, had an occasion to consider the very same question while considering the validity of the termination of the contract awarded to the petitioner therein by the Singareni Collieries company Limited for Blast Hole Drilling, Blasting, Excavation, Loading, Transportation, Dumping, etc. of Over Burden at Gowthamkhani Open Cast Project, Kothagudem. After hearing both the parties and after taking into consideration all the relevant aspects, it was held by this Court that the rights and liabilities of the parties were regulated by the terms and conditions specified in the work order issued in favour of the petitioner therein and the validity of the termination of the contract which was essentially founded on a dispute between the parties pursuant to the contract entered in between them was not amenable to the writ jurisdiction. While considering the contention of the petitioner therein that the interference in exercise of writ jurisdiction under Article 226 of the Constitution of India was permissible as the action of the respondents was arbitrary and unfair and was vitiated by consideration of the factors extraneous to the material on record, it was held as under : “I am unable to agree with the said contention of the learned counsel. All the allegations made by the petitioner even if established, would amount to breach of terms and conditions of the contract, but cannot be termed as ‘arbitrary exercise of power’. Thus, the relief sought in this writ petition is nothing but enforcement of terms and conditions under the contract. Nothing has been placed before this Court to show that the matter involves enforcement of any statutory right and that the contract has been entered into between the parties in exercise of any statutory power. The law is well settled that in a case of concluded contract voluntarily entered into between the parties and particularly where the conditions were not regulated by any statute as such, the obligations which arise out of such contract cannot be dealt with under Article 226 of the Constitution of India except where the decision making process is found to be vitiated by mala fides, unreasonableness and arbitrariness.” The said order in W.P.No.17919 of 2004 has been upheld by a Division Bench in WA.No.1692 of 2004. Apparently the petitioner herein is also similarly situated and the dispute raised also arises out of a contract for the very same work awarded by Singareni Collieries Company Limited. The material on record shows that the work order in favour of the petitioner deals with the scope and nature of the work, the quantities and value of the work, work completion schedule, payment terms, rates of payment as well as penalty for delay in works. Thus it is clear that the rights and liabilities of the parties are regulated by the terms and conditions specified in the work order itself. The action proposed by the respondents in the show-cause notice for imposing penalties is only in terms of the specific conditions incorporated in the contract. As a matter of fact, after issuing the show-cause notice, the petitioner has submitted its explanation and so far no final order as such has been passed by the respondents. In the circumstances, as on today there is no cause of action and the Writ Petition itself is premature. At any rate, for the reasons stated above, it is not open to the petitioner to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. Accordingly, granting leave and liberty to the petitioner to work out the appropriate remedy as available under law, the Writ Petition is dismissed. No costs. ______________ G. ROHINI, J. Dt. 20.08.2009 gbs