CONTINETALE\ CONSTRUCTION CO Vs. BOARD OF TRUSTEES

JUDGEMENT

(1.) THIS Civil Miscellaneous Appeal is filed under Section 39 of the Indian Arbitration act, 1940 questioning the order dated 5. 1. 2000 passed in O. P. No. 14 of 1990 on the file of Ist Additional Senior Civil Judge, visakhapatnam, whereby and whereunder the learned Additional Senior Civil Judge allowed the application filed under Section 30 of the indian Arbitration Act, 1940 and set aside the award dated 25. 9. 1989 and directed the appellant herein to pay seigniorage fee and cess amounting to Rs. 27,84,617. 10 together with interest @ 12 percent from 23. 6. 1988.

(2.) BACK ground facts of the case, in brief, are: visakhapatnam Port Trust (hereinafter referred to as Claimant) invited tenders for execution of C2 and C3 contract works. They are land based works at Lova Gardens, and marine Works and break water construction. Continental Construction Company (hereinafter referred to as the Contractor)submitted tender and the same came to be accepted after due negotiations. The letters of intent for both C2 and C3 contracts were issued on 7. 5. 1971 and agreements were entered into between the parties. The contractor was permitted to use the quarries of the claimant and the claimant agreed to pay value of sized rocks. The contractor agreed to pay royalty to the claimant @ rs. 2. 50/- per 100 cft. However, royalty was to be paid only on quantity of rock actually used on works. While quarrying operations were in progress, demand notices came to be issued by District Revenue Officer under a. P. Minor Mineral Concession Rules demanding seigniorage fee. District Collector, visakhapatnam attached the dumpers of the contractor. Thereupon, the contractor filed w. P. No. 3386 of 1974. The said writ petition came to be allowed on 9. 12. 1974 directing the District Collector to issue appropriate notice to the claimant and the contractor. Accordingly, notices came to be issued to the contractor and the claimant. Ultimately, liability to pay seigniorage fee came to be fastened on the claimant by the Department of Mines and Geology vide proceedings no. 2195/s1/75 dated 14. 9. 1978 of the Director of Mines and Geology, Hyderabad.

(3.) THE claimant filed W. P. No. 4940 of 1978 assailing the order of the Director of Mines and Geology as confirmed by Government of a. P. The said writ petition came to be allowed in part setting aside the penalty and giving liberty to the claimant to recover seigniorage fee if it is permissible according to law. For better appreciation, we may refer the relevant portion of the order and it is thus: