Excelsior Correspondent
SRINAGAR, July 3: Observing that the retrospective recovery based on revised route distances is illegal, High Court has directed the Food Corporation of India (FCI) to refund the recovery amount to the contractor within six weeks.
The contractor-firm M/s Durga Enterprises was awarded the contract by the FCI for movement of food stocks from FSD godown to various destinations with 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.
The aggrieved transporter-firm contends that it 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. However, 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-firm relating to the FSD Mir Bazar contract.
The firm contends these deductions were illegal, unwarranted, and arbitrary as the Model Tender Form (MTF) governing the contracts did not contain any clause permitting remeasurement of distances during the currency of the contract. It is submitted that, the respondents deducted an amount of Rs. 76,92,578 from the petitioner’s freight bills and security deposits, without providing any notice, opportunity of hearing, or explanation to the petitioner as such compelling him to approach the court.
The respondent-(FCI) to legitimize the recovery 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.
According to the respondent-FC I, 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. The original distance from FSD New Godown to PEG Ramban was 170 kilometers. This was later revised to 139 kilometers due to road realignment. The petitioner-firm 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 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”, Justice Moksha Kazmi said.
The court has upheld the decision of remeasurement by the FCI. However, directed for refund of excess amount recovered from the firm prior to respective remeasurement dates. The court said it is established and admitted that an excess amount of approximately 8 Lakhs was recovered from the aggrieved firm.
“The amount shall be paid to the petitioner within a period of six weeks from the date of this judgment. In case of failure, the amount shall carry interest at the rate of percent per annum from the date of this judgment until actual payment”, the court directed.
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