IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SECOND DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO : 5741 of 2005 Between: M/s.Sri Shiridi Sai Balaji Constructions, rep., by its Managing Partner B.Bhagyalakshmi, w/o B.Appa Rao, r/o Srikakulam, Srikakulam District. ..... PETITIONER AND 1 The Superintending Engineer, Panchayati Raj Circle, Srikakulam. 2 The Executive Engineer, Panchayat Raj Division, Parvathipuram, Vizianagaram District. 3 The Executive Engineer, Panchayati Raj Division, Vizianagaram, Vizianagaram District. .....RESPONDENTS Counsel for the Petitioner:MR.CH.SATISH KUMAR Counsel for the Respondents: AGP FOR PANCHAYAT RAJ & RURAL DEV. The Court made the following : ORDER: At the interlocutory stage, the writ petition is taken up for hearing and disposal with the consent of the learned counsel for the parties. This writ petition is ﬁled for a writ of mandamus to declare the action of the respondents in seeking to recover the seigniorage charges for ordinary earth from out of the bills payable for executing the contract works covered by Agreement No.11/2004-05, dated 19.08.2004 entered into by respondent No.1 with the petitioner, as illegal and contrary to Government Memo No.1885/SRSB.1(2)/2003-04, dated 08.02.2003. The petitioner is a registered contractor of the Government of Andhra Pradesh. In pursuance of a tender notiﬁcation issued by respondent No.1 for ﬁve items of work, namely, 1) Road from Kurupam – Kemiseela R&B Road at 5/2 KM to Ravikonda 2) Road from Madalingi to Pujariguda 3) Road from Pedamariki R&B Road to Tamannadoravalasa 4) B.T. to the Road from Dokisila R&B Road to Telunaiduvalasa and 5) B.T. to the Road from Gochakka R&B Road to Tekulova, the petitioner ﬁled it’s tender and emerged as the lowest bidder. It’s price bid was accepted and Agreement, dated 19.08.2004 was entered into by respondent No.1, in pursuance of which, it has executed the above-mentioned works. When the petitioner submitted bills in the month of February, 2005, certain recoveries were eﬀected which included recovery towards seigniorage charges for ordinary earth. The petitioner raised an objection to such recovery on the ground that the Agreement does not envisage recovery of seigniorage charges on ordinary earth and that this position is clariﬁed by Memo No.1885/SRSB.1 (2)/2003-04, dated 08.02.2003 issued by the Secretary to Government, Irrigation Department, Government of Andhra Pradesh to the Chief Engineer, SRSP stage II & FFC, Warangal. As the respondents did not accede to the request of the petitioner to refund the amounts withheld, the present writ petition is filed. This Court by order, dated 24.03.2005, granted interim direction to the respondents not to withhold seigniorage charges on ordinary earth. The Executive Engineer, Panchayat Raj Division, Parvathipuram, Vizianagaram – respondent No.2 ﬁled a counter-aﬃdavit, wherein he inter alia admitted that the petitioner executed the above mentioned works. He, however, stated that in the data prepared by the department, Rs.13/- per cubic metre has been fixed for seigniorage charges for earth work as per G.O.Ms.No.331, Industries and Commerce (Mines-I) Department, dated 21.06.2000; that by amendments made to the Andhra Pradesh Minor Mineral Concession Rules, 1966 (for short ‘the Rules’) vide G.O.Ms.No.466, dated 24.08.2000, seigniorage charges for ordinary earth are ﬁxed at Rs.13/- per cubic metre to be paid to the Government by duly deducting the same from the contractor’s work bills. He justiﬁed the deduction of seigniorage charges at Rs.13/- per cubic metre for earth as per Clause 41 of Agreement, dated 19.08.2004. He has taken the stand that the seigniorage charges for earth is included in the rate quoted by the petitioner and under Clause 41.1 of the Agreement, the rates quoted by the contractor shall be deemed to be inclusive of sales tax and other levies, duties, royalties, cess, toll, taxes of Central and State Governments, local bodies and authorities and that the contractor will have to pay for the performance of the contract. He referred to Clause 41.1 of the Agreement with reference to Sl.No.7 of the Special Conditions of Agreement to the eﬀect that seigniorage charges will be deducted from the work bills of the contractor for the materials used on the work and the same shall be recovered at the rates prevailing as on the date of recording of measurements in the Measurement Books irrespective of agreement date. He further stated that in the preamble of SSR 2003-04, under Clause II, the basic rate for earth work for SS20B done by the machinery was given as Rs.20.10 per cubic metre and if it exceeds 1000 cubic metres, revised rate was Rs.16.24 per cubic metre as per G.O.Ms.No.134, dated 12.05.2002 and that the said revised rate was adopted in the tender duly adding the seigniorage charges at Rs.13/- per cubic metre and other applicable items added to the earth work rate. At the hearing, Sri Ch.Satish Kumar, learned counsel for the petitioner submitted that the amendment introduced to Rule 10 of the Rules vide G.O.Ms.No.466, dated 24.08.2000 by including ordinary earth in Sl.No.8 under Column (2) of Schedule-1, speciﬁcally has not been incorporated in the Agreement and, therefore, the respondents are not entitled to recover any seigniorage charges on ordinary earth. He ﬁled a copy of purported standard agreement in order to show that Clause 100, which pertains to seigniorage charges containing a table with six items, does not include ordinary earth, but Sl.No.6 of it only relates to Gravel/Earth work for embankment. Opposing the said contention of the learned counsel for the petitioner, the learned Assistant Government Pleader for Panchayat Raj invited my attention to Agreement, dated 19.08.2004 entered into between the petitioner and respondent No.1, by producing the entire copy of Agreement in a book form and, in particular, page 67 of it and submitted that the Agreement incorporated the amendments brought out to Rule 10 of the Rules by G.O.Ms.Nos.331 and 466, dated 21.06.2000 and 24.08.2000 respectively. On the basis of this material, he submitted that since the Agreement has been entered into subsequent to the amendments introduced by the above-mentioned two G.O.s, by which, seigniorage charges on ordinary earth are liable to be paid, the petitioner’s liability to pay seigniorage charges on ordinary earth cannot be questioned. The learned counsel for the petitioner relied upon Order, dated 06.03.2003 passed by a Division Bench in Writ Petition No.3688 of 2003 - M/s.Lakshminarayana Contractors, Nellore v. Government of Andhra Pradesh; Order, dated 29.08.2003 in Writ Petition No.18156 of 2003 - K.Hanumantha Rao v. The Superintending Engineer, R&B Circle, Karimnagar and others and Common Order, dated 01.09.2006 in Writ Petition No.12202 of 2006 and batch - M/s.Maytas Infra Private Limited v. The Superintending Engineer, Irrigation and Command Area Development, Mahaboobnagar in support of his contention that in the absence of a clause in the Agreement, the petitioner cannot be made liable to pay the seigniorage charges on ordinary earth. The learned Assistant Government Pleader relied upon the order passed by a Division Bench of this Court in MRKR- MBGEC represented by C.Manohar Reddy v. Chief Administrative Oﬃcer, Construction, South Central Railway, Secunderabad [1] and contended that since the dispute arises under a commercial contract, the petitioner is not entitled to invoke the writ jurisdiction. I have carefully considered the respective submissions of the learned counsel for the parties. I n M/s.Laxminarayana Contractors’s case, wherein a similar issue was raised, the Division Bench allowed the writ petition on the short ground that the learned Government Pleader for Irrigation and Command Area Development Department placed communication, dated 08.02.2003 issued by the Secretary to Government, Irrigation Department and admitted that recovery of seigniorage charges is not covered under the agreement for the work undertaken by the petitioner therein. Thus, having been based on the concession given by the respondents, no ratio is laid down in the said order. In K.Hanumantha Rao’s case, undoubtedly, an identical issue arose for consideration. The writ petition was allowed on the ground that the agreement therein does not contain any clause fastening liability on the petitioner therein to pay seigniorage charges on ordinary earth. In the said order, the issue whether a clause similar to the one contained at page 67 of the Agreement in the instant case incorporating G.O.Ms.Nos.331 and 466 existed and if so, what was the eﬀect of the said clause has not been considered. I n M/s.Maytas Infra Private Limited’s case also, the learned Judge, who went into the issue whether earth and ordinary earth are one and the same or diﬀerent from each other and found that they are two diﬀerent items, did not go into the issue whether two G.O.s, by which, amendments are made, are referred to in the Agreement therein or not and what is the effect of their incorporation. Therefore, in my considered opinion, the facts in the instant case as pleaded by the parties are at variance with the cases, which were decided by this Court as referred to above. With regard to the Division Bench order of this Court in MRKR-MBGEC’s case (1 supra), a batch of cases was referred to the Division Bench by a learned Single Judge, who diﬀered with the ratio of decision, dated 23.03.2005 rendered by another learned Single Judge in Writ Petition No.21401 of 2004 and batch. The Division Bench dealt with three diﬀerent contracts, under which, seigniorage charges on ordinary earth in two cases and ordinary sand in one case, were sought to be recovered. The said action was questioned on an identical ground, namely, the agreements entered into by the contractors with the South Central Railway did not envisage recovery of seigniorage charges on ordinary earth. The Division Bench having analysed various agreement clauses, agreed with the learned Single Judge, who referred the cases to the Division Bench, that the Clauses are very widely worded and there is no warrant to limit the scope of the agreement clauses to exclude ordinary earth/ordinary sand from being subjected to levy of seigniorage charges. The Division Bench also found that on the basis of Memo, dated 15.12.2004 issued by the Principal Chief Engineer, South Central Railway, whose opinion was relied upon by the writ petitioner in support of its contention that seigniorage charges are not leviable on ordinary earth/ordinary sand, it is not possible for placing a restrictive interpretation on the relevant clauses of agreements providing for levy of seigniorage charges. Having recorded the said ﬁndings, the Division Bench, however, declined to adjudicate the issue on merits on the ground that the disputes arose out of commercial contracts pure and simple and that in view of the judgment of the Supreme Court in State of Uttar Pradesh v. Bridge and roof Co. (India) Ltd[2], the petitioners therein were relegated to avail the common law remedy of civil suit or remedy of arbitration provided under the agreement. Having carefully considered the pleadings of the parties and the submissions of the learned counsel, I have no reason to take a view diﬀerent from the view taken by the Division Bench in the matter of remedy to be availed by the petitioner. The question whether the amendments to Rule 10 of the Rules introduced by the above mentioned two G.O.s have been incorporated in the Agreement in all respects or they are made applicable only to the extent of enhancement of rates and not with reference to inclusion of ordinary earth for the ﬁrst time, are the matters, which require to be interpreted by the civil Court/the Arbitrator (in case the remedy of arbitration is available) with reference to the terms of the contract. Since the contract in the instant case is a purely commercial contract, no public law issues are required to be adjudicated. The dispute raised by the petitioner is purely personal to it. I am, therefore, of the view that the remedy of a civil suit/arbitration if available, is a more eﬃcacious and appropriate remedy for the petitioner for adjudication of the dispute raised by it in this writ petition. Therefore, without going into the merits of the case and following the order of the Division Bench in MRKR-MBGEC’s case (1 supra), the writ petition is dismissed with liberty to the petitioner to avail the remedy as indicated above. As a sequel to dismissal of main petition, interim order, dated 24.03.2005 is vacated, WPMP.No.7589 of 2005 is dismissed and WVMP.No.1943 of 2005 is disposed of as infructuous. C.V.NAGARJUNA REDDY, J 22nd JULY, 2008. kvni [1] 2006(3) ALT 274 [2] (1996) 6 SCC 22