9911796707
TMI Blog2013 (3) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... to the arbitral forum. The tribunal has been constituted and, as the parties inform, the pleadings are in the process of being filed. 2. At the ad interim stage of these petitions, the Port's prayer for an order in the nature of attachment before judgment was declined. However, two special officers were appointed for the purpose of ensuring the removal of all machinery, equipment and material belonging to the contractor from berth Nos. 2 and 8 of the Haldia Dock Complex as expeditiously as possible. The machinery and equipment include six mobile harbour cranes - those over-sized metal chairs that stand out in modern ports and seem to be waiting for some gigantic Gulliver to occupy them - which have taken considerable time to be dismantled and relocated at the berths or elsewhere in the Haldia Dock Complex. The ad interim order permitted the contractor to remove all its machinery, equipment and material without there being any fetters as to the use thereof and the special officers were only to supervise the dismantling of the cranes and the removal of all machinery, equipment and material of the contractor from the Dock Complex. On appeals preferred from the common order of Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made by the court and amicably arranging for the contractor's machinery, equipment and material to be relocated within the Haldia Dock Complex so that the two berths were available for use by the Port. The two berths are now functional, though the mechanised services are no longer available with the big chairs having been folded up by the contractor and made ready to be carried away by ships. In the euphoria of the sudden camaraderie between the parties in their hour of physical separation, these matters remained adjourned for a couple of weeks for the parties to suggest an amicable solution. But the parties could not be afforded any more time in view of the time-frame chalked out for these matters. A couple of days of lawyers' cease-work in the midst of the hearing and another day wasted by the Port have, regrettably, carried the judgment to two days beyond the deadline. 5. Following a global tender for the supply, operation and maintenance of cargo-handling equipment at berth Nos. 2 and 8 of the Haldia Dock Complex, a letter of intent was issued by the Port to the contractor on April 29, 2009. An agreement was executed between the parties on October 16, 2009. The agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per month by way of revenue. The letter threatened that the contractor would suspend the operations from September 8, 2012 if the Port did not address the issues raised by the contractor. 7. The Port carried a petition under Section 9 of the said Act to this court which was disposed of upon an agreement being arrived at between the parties as recorded in a consent order of September 12, 2012. The Port conceded to have all dry bulk cargo to be allotted to the two mechanised berths, if such berths were free. The contractor agreed that the additional work promised would help it recover its cost of investment and ensure more efficient functioning at the port. 8. The first sign that the agreement as recorded in the consent order would not be permitted to be implemented was in the form of another contractor at the Haldia Port seeking to prefer an appeal from the order of September 12, 2012. Though such other contractor's legal misadventure met with the obvious fate of rejection, it was evident that the additional work would not be permitted to be allocated to berth Nos. 2 and 8 in view of the opposition by the other contractors functioning at the port. The Port's apparent helple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te nor the Superintendent of Police had taken any initiative to control the lawlessness that prevailed at or around the Haldia Dock Complex. The court concluded on the basis of the material before it as follows: It is not disputed that the extent of cargo handled at berths 2 and 8 by the mechanized cranes is double the extent of cargo handled at the berths which are manually operated. Disruption in cargo handling operations at the said berths by persons with interest of their own to derail the petitioners (the contractor herein) and thereby forcing a situation to abandon the operations at the HDC cannot be totally ruled out. 10. The contractor declares that it put in the several lakhs of rupees for the police bandobast to be made, but to no avail. It says that some of its officers were abducted from Haldia, made to come to Calcutta and board Mumbai-bound trains by persons acting at the behest of those who wanted the mechanised operations at the port to be scuttled so as to perpetuate their hegemony over the cargo-handling operations at Haldia. The Port, the contractor bemoans, was lacking in its effort and intent, despite such goings-on, to facilitate a contractor engaged by it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's claim being in damages, the contractor had quantified it and it is such amount that the contractor should be required to secure since it has no known assets beyond the machinery and equipment now relocated at the Haldia Dock Complex and the company was incorporated as a single purpose vehicle for conducting the cargo-handling operations at Haldia. 13. The Port founds its case of lien on several clauses of the primary agreement and the special and the general conditions appended thereto, though there is only a solitary clause in the general conditions that uses the word lien . The Port refers to clause 1.12 of the primary agreement embodied in the tender documents that provides that the contractor shall not remove or replace any equipment installed without the previous permission of the Port; clause 1.24 that gives the Port the right to inspect all equipment supplied by the contractor and obliges the contractor to take such action with regard thereto as directed by the Port; clause 1.28 that records the Port's obligation to provide general security in the Dock area but mandates the contractor to provide localised security for its equipment and other infrastructure; clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es authorised Extra Work , Excess Work and Temporary Work . 1.7 Temporary Work means all temporary work of every kind required in or about the execution, completion, operation or maintenance of the work and includes (without thereby limiting the foregoing definitions) all temporary erections, scaffolding, ladders, timbering, soaking vats, site offices, cement and other godowns, platforms and bins for stacking building materials, gantries, temporary tracks and roads, temporary culverts and mixing platforms. 1.8 Extra Work means those work required by the Engineer for completion of the Contract which were not specifically and separately included in the scope of work of the tender. Excess Work means the required quantities of work in excess of the provision made in the scope of work.' 16. The case of lien that is now asserted by the Port was not made out at the ad interim stage before the trial court, though the Port says that it was urged in course of the appeal. The word lien , significant as it is, is not used in the Port's immediate response to the October 31, 2012 notice of termination issued by the contractor and the contractor's request therein for its machinery and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance. It is not denied by the Port that bank guarantees of a total value of about Rs. 4 crore have been encashed by the Port. 18. The second limb of the contractor's submission on the issue of lien is that all its machinery and equipment are hypothecated to its bankers. Copy documents appended to the contractor's affidavit reveal the hypothecation to be of July, 2009 and the application for registration of the charge to be of August, 2009. A copy of a certificate dated September 3, 2009, evidencing registration of the charge under Section 125 of the Companies Act, 1956, has been made over by the contractor and not taken exception to by the Port. The contractor says that since the hypothecation was created prior to the agreement of October 16, 2009 between the parties herein and since, in view of the deeming provision in Section 126 of the Companies Act, the Port had due notice of the bank's prior charge over all movables, machinery and equipment of the contractor, the lien that the Port now asserts cannot, in any event, be exercised. 19. Based on the Port's new-found understanding of its right to exercise its perceived lien over the contractor's machinery and eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transporters coming into possession of the last lot of goods, the receiver had already been appointed and the general lien of the transporters stood obliterated thereby. The court of appeal reversed the judgment on the ground that the relevant order for transportation had been placed by the company prior to the receiver being appointed and the receiver's rights were no higher than the company's rights and were subject to the charge in favour of the transporters that crystallised upon the order being placed on the transporters by the company, a debt being due from the company to the transporters and the transporters being in possession of the goods. 20. A judgment Mancakjee Pallanjee v. S.A. Meyappa Chetty AIR 1914 LB 265 has been placed by the Port for the proposition that the subsequent incumbrancer in possession would be entitled to exercise its lien unless it was proved that it had notice of the previous encumbrance. A decision Abdul Habib v. Maung Tun Kyaing AIR 1931 Rangoon 201 is cited for the same proposition. Two pronouncements of this court Kanhaiyalal Jhanwar v. Pandit Shirali Co. AIR 1953 Cal 526 and Co-Operative Hindusthan Bank Ltd. v. Surendra Nath Dey AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil construction. The definition of constructional plant cannot be read in isolation and has to be understood with reference to the definitions of work , temporary work , extra work and excess work in clauses 1.6, 1.7 and 1.8 of the general conditions. It is true that if the words of a contract imply something, the court has little authority to read it down or infer what the plain words do not suggest. Yet, common sense and logic cannot be given a complete go-by in the interpretation of the terms of a contract, particularly when the window for another implication is available upon the provisions being made applicable subject to their relevance to the primary agreement. It is not for nothing that the Port did not assert any lien over the contractor's machinery and equipment, though it refused to release the same without the compensation claimed by it being made good. Again, too much need not be read into the Port's response to the pre-bid query relating to lien which appears at page 200 of the Port's petition since the answer was vague and, though the Port did not specifically refer to clause 4.19 of the general conditions which it ought to have in the context, it dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractor and the contractor's obligation to take such action with regard thereto as directed by the Port, under clause 1.24 of the primary agreement, cannot be read to allow the Port any modicum of authority to retain the machinery and equipment of the contractor till its claim in damages is discharged. Indeed, clause 1.34 of the primary agreement permits the contractor to remove its equipment from the port premises on the expiry of the period of the contract or the early termination thereof; that would mean that the contractor has the right to remove its machinery and equipment from the premises upon the termination of the agreement. Clause 7.9 of the special conditions obliges the contractor to ensure that the equipment required to be supplied and installed for the work are in commission; but upon there being no further work to be undertaken when the agreement has been terminated and the termination accepted, such obligation of the contractor is no longer relevant. There is no doubt that the termination of the agreement has been accepted by the Port, though the Port may be entitled to claim damages for the perceived wrongful termination of the agreement by the contractor. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrespondence disclosed in the petitions and affidavits to emphasise that vested interests were at work even before the contractor got a toe in at the Port premises. In particular, the contractor places the communication between the Port and other authorities and how the Port's letters depicted the state of affairs at the Haldia Dock Complex in the month and a half leading up to the termination of the agreement by the contractor. In the Port's letter of September 18, 2012 to the officer-in-charge of the Haldia Police Station, it spoke of a group of about 200-250 workers employed by other contractors at the Haldia Dock Complex having gathered in front of an office of a port manager and shouting slogans against KoPT Haldia Bulk Terminals Pvt. Ltd. The letter referred to a political leader as the officer-bearer of a trade union who joined in with another sizable number of agitators, protesting against KoPT's decision to take vessels at Berth No. 2 and 8 on priority The agitators were aggrieved since their employers are apprehending reduction in their business volume for which they have already given indication of terminating them from the service. The complaint of the Port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion at Haldia. 30. The contractor maintains that it would be a travesty of justice to infer from the admitted documents that the contractor abandoned the work for commercial reasons. The contractor emphasises that it had to give in to the unreasonable demands of the influential locals and the Port gave little support to its contractor to deal with a situation that was extraneous to the work contemplated under the agreement and which was not conducive to ensure the efficient functioning of the Port. 31. On the basis of the material now available, it cannot be accepted that merely commercial reasons prompted the contractor to abandon the agreement. To begin with, a prima facie finding on such question would, in any event, not further the Port's claim for retaining the contractor's machinery and equipment before its claim in damages is satisfied. But even if the Port's argument on such score is taken to be merely to suggest a basis to the Port's claim for damages, the Port has failed to establish the same. While there is no evidence of the Port's complicity with the vested interests at the Haldia Dock Complex, it is equally unfair of the Port to foist the blame on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a statement of public policy in its sound adherence to the rules of natural justice that are fundamental to any judicial process. But it is only the principle of Order XXXVIII Rule 5 of the Code that has to be imported in a similar situation under Section 9 of the 1996 Act; for there is no other statement of the underlying public policy for such purpose in the general law of the land. Notwithstanding such legal concession, it must be appreciated that Order XXXVIII of the Code is the prescription that is necessary under Section 94(b) of the Code for the exercise of such authority by a civil court in seisin of a suit. The opening words of Section 94 of the Code mandates the rules under the Code to prescribe as such if the powers under its several limbs are to be exercised in course of a civil suit. Section 9 of the 1996 Act, however, empowers a court to grant an interim measure for securing the amount in dispute in the arbitration and also grant such interim measure of protection not covered by clauses (a), (b), (c) and (d) of Section 9(ii) of the Act. The closing words of Section 9 of the Act, that the court shall have the same power for making orders as in any proceedings befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the Port has suffered loss does not imply that it is entitled to recover it from the contractor. If such is the prima facie assessment on the basis of the material now brought by the parties, the Port falls well short of the quality of claim that it has to demonstrate to be entitled to the high order that it seeks. Further, the balance of convenience does not warrant that the contractor's machinery and equipment be either left to rot and wither in value or be directed to be sold in distress. 35. The contractor is entitled to remove its machinery and equipment from the Haldia Dock Complex, subject, however, to any customs or like claim in respect thereof. The Port will have no authority to stop the removal of the contractor's machinery, equipment and material from the Haldia Dock Complex. The three joint special officers appointed by the order of December 13, 2012 and the appellate order of December 19, 2012 will oversee the removal of the mobile harbour cranes and all other machinery, equipment and material of the contractor from the Haldia Dock Complex, subject to any valid claim of the customs made through a competent authority. The joint special officers will see ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
