Case Note & Summary
The petitioner, Prakash Khampariya, a toll contractor, entered into a contract with the Executive Engineer, National Highway, Nagpur, for collection of toll on a bridge. Due to heavy rains and floods between 13/07/1994 and 24/07/1994, the flow of traffic on the bridge was reduced to a large extent, resulting in less collection of toll. The petitioner claimed rebate under Clause 7 of the contract, which provides for rebate on prorata basis for closure due to act of God or natural calamities. The respondent No.1 rejected the claim and imposed penalty by order dated 21/11/1997 without giving any personal hearing or opportunity to the petitioner. The petitioner challenged this order by way of writ petition. The court examined Clause 7 and Clause 8 of the contract. Clause 7 entitles the agent to rebate for closure due to natural calamities, while Clause 8 restricts any compensation for change in traffic pattern. The court noted that the S.D. Engineer's communication confirmed that traffic was closed due to floods. The court held that the reduction in traffic due to floods amounts to closure under Clause 7, and Clause 8 does not bar the claim. The impugned order was set aside as it violated principles of natural justice. The court directed the respondent No.1 to decide the petitioner's claim afresh after giving an opportunity of hearing, within three months. The petition was allowed.
Headnote
A) Contract Law - Force Majeure - Rebate for Natural Calamity - Clause 7 of Contract - The petitioner, a toll contractor, claimed rebate for 13 days when heavy rains and floods reduced traffic on the bridge. Clause 7 provides rebate on prorata basis for closure due to act of God or natural calamities. The court held that the reduction in traffic due to floods amounts to closure within the meaning of Clause 7, and the petitioner is entitled to rebate. The impugned order rejecting the claim without giving opportunity of hearing was set aside. (Paras 2-5) B) Administrative Law - Natural Justice - Opportunity of Hearing - The respondent No.1 passed the impugned order dated 21/11/1997 without giving any personal hearing or opportunity to the petitioner to justify the claim. The court held that such order violates principles of natural justice and is liable to be set aside. (Para 3) C) Contract Law - Interpretation of Clauses 7 and 8 - Clause 8 restricts rebate for change in traffic pattern, but Clause 7 specifically covers closure due to natural calamities. The court held that Clause 8 does not override Clause 7, and the petitioner's claim falls under Clause 7. (Paras 3-4)
Issue of Consideration
Whether the petitioner is entitled to rebate under Clause 7 of the contract for reduction in toll collection due to heavy rains and floods, and whether the impugned order rejecting the claim without hearing is sustainable.
Final Decision
The petition is allowed. The impugned order dated 21/11/1997 is quashed and set aside. The respondent No.1 is directed to decide the petitioner's claim for rebate afresh after giving an opportunity of hearing to the petitioner, within three months from the date of the order.
Law Points
- Contract interpretation
- force majeure
- rebate
- natural calamity
- toll collection
- opportunity of hearing
