IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY FIRST DAY OF JUNE TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY Writ Petition No.26751 of 2005 Between: 1.Puskar Juneja and another ..... Petitioners AND 1.National Highways Authority of India, (Ministry of Shipping, Road, transport & Highways), Project Implementation Unit (GQ), NHAI Enclave KM 2/8 NH-5, Hanumanthavaka, Visakhapatnam – 530 040 Rep. by its Project Director and 3 others. .....Respondents Counsel for the Petitioner: Sri G.Vidyasagar Counsel for Respondent No.1: Sri.SS.Varma, SC for National Highways Counsel for respondent Nos.2 to 4: None appeared 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 Mandamus to set aside proceedings No.NHAI/13010/PIU-VSP/CPAP- 1/2005/2851, dated 05-12-2005, of respondent No.1 and declare the action of respondent Nos.1 to 3, in not permitting the petitioners to take away the poclainers and tippers, bearing registration Nos.AP-07-X-4783, AP-07-X-4709, AP-07-X-5086, AP-07-X-4831, AP-07-X- 4950, AP-07-X-4845, AP-07-X-4846, AP-07-X-4911, AP-07-X- 4710, AP-07-X-4951, AP-07-X-4912, AP-07-X-4830, AP-07-X- 4782, AP-07-X-5075, AP-07-X-4910, AP-07-X-4909, AP-07-X- 4908, AP-07-X-5077, AP-07-X-4784 and AP-07-X-4708 (for short ‘the subject vehicles’), as illegal and arbitrary. The petitioners sought for a consequential direction to the respondents to permit them to take away the subject vehicles. Petitioner No.1 was the Executive Director of respondent No.4, which entered into a contract with respondent No.1 for execution of the work relating to construction of a four-lane road from Km 49 to Km 97 of Chambati River, Srikakulam-Visakhapatnam- Bhuvaneshwar Section of National Highway No.5 under Agreement, dated 23-05-2001. The petitioners averred that they own the subject vehicles, the details of which are given herein before, having purchased the same, under hire purchase agreement, from M/s.Tata Engineering and Locomotives Company, Secunderabad. It is the pleaded case of the petitioners that the subject vehicles were supplied to respondent No.4 for being utilized at the above-mentioned contract work. In the course of execution of the contract work, disputes arose between respondent Nos.1 and 4 leading to stoppage of the work by respondent No.4. As respondent No.1 has not allowed the subject vehicles, which are in the custody of respondent No.4 and utilized/intended to be utilized at the contract work, to be taken away, the petitioners filed OS.No.608 of 2004 in the Court of the learned II Additional Junior Civil Judge, Srikakulam (for short ‘the Civil Court’) for an injunction restraining respondent No.4 from preventing them from taking away the subject vehicles. The civil Court has granted temporary injunction in IA.No.800 of 2004. The petitioners filed IA.No.840 of 2004 for providing Police aid and the civil Court has granted an Order directing the Station House Officer, Law and Order, Laveru Police Station, to provide protection to the petitioners from obstruction by the respondents and their followers. Even then, the petitioners could not take away the subject vehicles due to the alleged non-cooperation of the Police. Therefore, they filed W.P.No.22414 of 2005 for appropriate directions to the Police to permit them to remove the subject vehicles. The said Writ Petition was closed by this Court by Order, dated 23-11-2005, on recording the statement made on behalf of the Police that they were not obstructing removal of the subject vehicles. As the petitioners were unable to remove the said vehicles due to the alleged non-Cooperation of Police and the objections raised by respondent No.1 vide its letter, dated 05-12-2005, addressed to respondent No.2, the petitioners filed the present Writ Petition for the above-noted relief. The petitioners pleaded that respondent No.4, allegedly, furnished fake bank guarantees for securing payment of mobilization advance against the equipment, which is one of the reasons for the disputes between respondent Nos.1 and 4. A counter-affidavit has been filed by the Project Director of respondent No.1 wherein it is inter alia pleaded that under Clauses 54.1 and 63.1 (4) of Agreement, dated 23-05-2001, executed between respondent Nos.1 and 4, the equipment with plant and machinery brought to site are exclusively intended for the execution of the work and in the event of default thereof, the employer may sell any of the equipment. It is further averred that petitioner No.1 is the Executive Director of respondent No.4, in whose favour power of attorney was executed by the latter; that respondent No.4, who committed default in the execution of work, tried to take away the poclainers and tippers without the knowledge of respondent No.1; that the petitioners have filed OS.No.608 of 2004 in the Civil Court for a temporary injunction against respondent No.4 and; that when respondent No.1 came to know that the petitioners, without impleading it in the said suit, tried to take away the vehicles and equipment, it has addressed letter, dated 05-12-2005, to respondent No.2- Superintendent of Police to protect its interests. Respondent No.1 has asserted its rights under Clauses 54.1 and 63.1 (4) referred to above to keep the subject vehicles and equipment in its custody. It is further averred that the subject vehicles, claimed by the petitioners, are located in the contractor’s work site at Ranasthalam, Srikakulam District, in view of their seizure by respondent No.1 due to fraudulent activity of respondent No.4 and that as per the Division Bench Judgment, dated 16-09-2005, of the Delhi High Court, the tippers belonging to the petitioners shall continue to remain under the possession of respondent No.1, which shall be subject to the outcome of the disputes between the appellant and the contractor. At the hearing, Sri G.Vidya Sagar, learned Counsel for the petitioners, submitted that the action of respondent No.1, in seeking to prevent the petitioners from taking away the subject vehicles, is illegal and high handed and that the letter addressed by it to respondent No.2 in this regard needs to be invalidated. The learned Counsel further submitted that the vehicles and the equipment, which were actually used on work site by respondent No.4, alone could be detained by respondent No.1, but the tippers and poclainers, which are subject matter of this Writ Petition, were not at the work site of respondent No.1 and therefore, the said respondent has neither power nor authority to prevent the petitioners from removing the same. Opposing the above contentions, Sri S.S.Varma, learned Standing Counsel for National Highways Authority of India representing respondent No.1, submitted that the subject vehicles were intended to be used on the work site and that whether they were actually found in work site or otherwise, respondent No.1 is entitled to detain them and keep them in its custody till the disputes between respondent Nos.1 and 4 are settled. The learned Standing Counsel further submitted that arbitration proceedings between respondent Nos.1 and 4 are already in progress and that subject to the result of those proceedings, further action will be taken with respect to the subject vehicles. In support of his submissions, he has placed reliance on Order, dated 25-02-2010, passed by the Supreme Court i n KPM Builders Private Limited vs. National Highways Authority of India and others[1]. In the light of the respective stands taken by the parties, it is necessary to refer to the pleadings of the parties. In paragraph 5 of the affidavit filed in support of the Writ Petition, the petitioners have pleaded that the 20 poclainers and tippers, whose numbers were given in the prayer portion thereof, were leased out to respondent No.4. In paragraph 10, it has been averred that respondent No.4 has taken the said vehicles belonging to the petitioners on day-to-day lease and that as per Agreement, dated 23-05-2001, respondent No.4 proceeded to carry out the assigned job. In Paragraph 15 thereof, it is specifically averred that admittedly, the poclainers and tippers, belonging to the petitioners, are in the contractor’s (respondent No.4) site, even as per letter, dated 05-12-2005, addressed by respondent No.1 to respondent No.2 and therefore, respondent No.1 cannot invoke Clause 61 of the said Agreement. From the above specific averments of the petitioners, it is quite evident that all the tippers and poclainers, which were stated to have been supplied by them to respondent No.4, are intended for execution of the contract between respondent Nos.1 and 4. With this specific fact in minds, the relevant Clauses, on which respondent No.1 placed reliance, need to be considered. Clauses 51 (1), 51 (2), 51 (3), 54.1, 61.1 and 63.1 (4) of the Contract entered into between respondent Nos.1 and 4 read as under: 51.1: The employer shall make advance payment to the contractor of the amounts stated in the Contract Data by the date stated in the Contract Data, against provision by the Contractor of an Unconditional Bank Guarantee in a form and by a bank acceptable to the Employer in amounts and currencies equal to the advance payment. The guarantee shall remain effective until the advance payment has been repaid, but the amount of the guarantee shall be progressively reduced by the amounts repaid by the Contractor, interest will not be charged n the advance payment. 51.2: The contractor is to use the advance payment only to pay for Equipment, Plant and Mobilization expenses required specifically for execution of the works. The Contractor shall demonstrate that advance payment has been used in this way by supplying copies of invoices or other documents to the Engineer. 51.3: The advance payment shall be repaid by deducting proportionate amounts from payments otherwise due to the Contractor, following the schedule of completed percentages of the works on a payment basis. No account shall be taken of the advance payment or its repayment in assessing valuations of work done, variations, price adjustments, compensation events, or liquidated damages. 54.1: All Contractor’s equipment, temporary works and materials provided by the Contractor at the site of the Works shall be of the capacity and quality approved by the Engineer and shall be deemed to be exclusively intended for the execution of the works. All these shall be operated/used and maintained in a manner acceptable to the Engineer. The Contractor shall not remove the same or any part thereof, except for the purpose of moving it from one part of the site to another, without the consent of the Engineer. Provided that consent shall not be required for vehicles engaged in transporting any staff, labour, Contractor’s Equipment, Temporary Works, Plant or materials to or from the site. 61.1: All materials on the Site, Plant, Equipment, Temporary Works and Works are deemed to be the property of the Employer, if the Contract is terminated because of a Contractor’s default. 63.1 (4): The Employer may expel the Contractor therefrom without thereby voiding the Contract, or releasing the Contractor from any of his obligations or liabilities under the Contract, or affecting the rights and powers conferred on the Employer or the Engineer by the Contract, and may himself complete the Works or may employ any other Contractor to complete the Works. The Employer or such other Contractor may use for such completion so much of the Contractor’s Equipment, Plan, Temporary Works and materials, which have been deemed to be reserved exclusively for the execution of the Works, under the provisions of the Contract, as he or they may think proper, and the Employer may, at any time, sell any of the said Contractor’s Equipment, Temporary Works and unused Plant and materials and apply the proceeds of sale in or towards the satisfaction of any sums due or which may become due to him from the Contractor under the Contract.” The above Clauses would support the case of respondent No.1 that the equipment provided by the contractor shall not be removed except for the purpose of moving it from one part of the site to another without the consent of the Engineer of the employer and the employer may, at any time, sell any of the contractor’s equipment and unused plant and materials and apply the sale proceeds in or towards satisfaction of any sums due or which may become due to him from the contractor under the contract. Under Clause 61 of the Agreement, all materials on the site, plant, equipment, temporary works and other works are deemed to be the property of the employer, if the contract is terminated because of a contractor’s default. Even though it is not the pleaded case of the parties that the subject vehicles were actually at the site, from the pleadings of the petitioner, it is quite evident that they were in the custody of respondent No.4, whether actually at work site or at its separate premises, and that they were intended for being used in execution of the contract between respondent Nos.1 and 4. In the face of this undisputable position, it is not open to the petitioners to contend that respondent No.1 cannot exercise any power or control over the subject vehicles. The case in KPM Builders Private Limited (cited supra), which was disposed of by the Supreme Court, arose out of a similar dispute. A perusal of the Order passed therein would show that when respondent No.1 seized the machinery and equipment from the premises of the owner i.e, KPM Tyres Private Limited apart from the equipment at the work site, Writ Petition (c) No.6065 of 2005 was moved before the Delhi High Court and by Order, dated 23-08- 2005, a learned single Judge has allowed the said Writ Petition and directed respondent No.1- NHAI to remove its security guards from the office premises of the appellant i.e., owner and release its machinery. In the Letters Patent Appeal, filed before the Division Bench by respondent No.1, a Commissioner was appointed to list the machineries lying both at the work site and outside the work site. On the basis of the report of the Commissioner, the Division Bench inter alia directed that the machinery/equipment lying within the contract site shall continue to remain with the appellant and shall be subject to the outcome of any adjudication and that the machinery/equipment found to be lying outside the contract site shall be released by the appellant/respondent No.1. Feeling aggrieved by the said order, the owner has filed a Civil Appeal wherein the Supreme Court inter alia held as under: “8. There is no privity of contract between NHAI and the appellant. Before allegedly hiring the machineries/equipments to the Contractor, the appellant did not notify NHAI that its machineries/equipments were being hired to the contractor or given to the use of the Contractor and that it was the owner of any particular machinery. The appellant was aware of the contract between NHAI and the contractor as also its terms, in particular clause 61 of the General Conditions. In spite of it, it did not require NHAI to exclude its machineries from the operation of Clause 61, before the termination of the contract. It also did not produce the alleged contract entered into by it with the Contractor, providing that at the end of each day’s work, the machineries were to be returned to the appellant. In these circumstances, we are of the view that the writ petition against NHAI was misconceived. NHAI had not entered into any contract or arrangement with the appellant, nor given any assurance to it in regard to the machineries, nor owed any duty or obligation towards the appellant. Nor can NHAI’s action in taking over the machineries at site in pursuance of a specific contractual term with the contractor can give rise to any public law remedy to a third party against NHAI. If the appellant had entered into any contract with the Contractor and if it has any enforceable rights in that behalf, it is open to the appellant to enforce such rights against the Contractor. But, that cannot obviously, be done in a writ proceedings. As noticed above, as far as NHAI is concerned, it owes no duty or obligation towards the appellant. Appellant cannot come in the way of NHAI enforcing its rights as against the contractor.” Even though certain aspects, such as direction of the Delhi High Court to the appellant to release the equipment, outside the work site, were sought to be relied upon by the learned Counsel for the petitioners, I am unable to see how the Order of the Supreme Court would come to the aid of the petitioners. On the contrary, Para 8 of the said Order extracted as above constitutes a ratio, which clearly laid down that there is no privity of contract between the petitioner and respondent No.1 and that the owner of the equipment can work out his remedies only against the contractor, to whom he has supplied the vehicles for being deployed in the contract work. The learned Counsel for the petitioners, however, sought to rely on the fact that the Delhi High Court directed release of the equipment, which was lying outside the work site. But, this submission overlooked the fact that it was the case of the owner of the equipment before the Delhi High Court that even the equipment and machinery, which was lying in its premises, was also seized. In the instant case, as already noted above, none of the equipment and machinery in the custody and control of the petitioners was seized by respondent No.1. Obviously, the equipment and machinery were either at the work site or in the premises of respondent No.4 for being used on work site as and when the necessity arose. In the light of the above facts, I am unable to accept the submission of the learned Counsel for the petitioners that respondent No.1 cannot be allowed to hold the vehicles and equipment except those that were available at actual work site. At any rate, as observed by the Supreme Court, the petitioners have to work out their remedies against respondent No.4 before appropriate forum. For the above-mentioned reasons, I do not find any merit in the Writ Petition and hence, the same is dismissed. As a sequel to dismissal of the Writ Petition, WPMP.No.34379 of 2005, filed by the petitioners for interim relief, is disposed of as infructuous. ______________________ (C.V.Nagarjuna Reddy, J) 21st June, 2011 lur [1] Civil Appeal No.3300-3301 of 2009