Demurrage charges cannot be recovered under Road Transport Contracts where loading/unloading foodgrains from railway wagons isn't contractor's responsibility

SC held that demurrage charges cannot be recovered under Road Transport Contracts where loading/unloading of foodgrains from railway wagons is not contractor's responsibility. Court distinguished these contracts from Handling and Transport Contracts which explicitly included demurrage liability clauses for loading/unloading duties. The expression "charges" in Road Transport Contracts was interpreted as excluding demurrage liability since Corporation chose not to include specific demurrage recovery provisions. Different contract types serve different purposes based on Corporation's statutory obligations for foodgrain procurement and distribution. Appeal dismissed.

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Issues Involved:
1. Whether demurrages imposed on the Corporation by the Railways can be recovered from the contractors under Clause XII (a) of the contract.
2. Interpretation of the term "charges" within the contractual context.
3. Responsibilities of the contractor regarding loading and unloading of foodgrains.
4. Validity of unilateral recovery actions by the Corporation.
5. Applicability of previous judgments and legal principles to the present case.

Detailed Analysis:

Issue 1: Recovery of Demurrages from Contractors
The primary question was whether the demurrages imposed on the Food Corporation of India (Corporation) by the Railways could be recovered from the contractors under Clause XII (a) of the contract. The Supreme Court upheld the High Court of Tripura's decision that demurrages cannot be recovered as a charge by the Corporation. The Court concluded that the parties did not intend to include liability on account of demurrages as part of the expression "charges" in the contract. The liability of the contractors in the present contracts was distinguishable from other contracts entered into by the Corporation in 2010 and 2018, which had different scopes and objectives.

Issue 2: Interpretation of "Charges"
The term "charges" in Clause XII (a) was debated. The Court noted that the dictionary meaning of "charges" is open-textured and must be understood in the context of the contract. The Court referred to established principles of contractual interpretation, emphasizing that the meaning of terms should be gathered from the contract as a whole and the intention of the parties. The Court found that "charges" did not include demurrages, as there was no provision in the contract requiring contractors to undertake the task of loading and unloading foodgrains from railway wagons.

Issue 3: Responsibilities of the Contractor
The contract specified that the contractor was responsible for supplying trucks for transportation of foodgrains but did not include responsibilities for loading and unloading foodgrains from railway wagons. This was confirmed by the Corporation's own submissions, which justified the imposition of demurrages solely on the contractor's failure to provide trucks on time. The Court concluded that the task of loading and unloading foodgrains was not part of the contractors' responsibilities under the contract.

Issue 4: Unilateral Recovery Actions
The contractor objected to the Corporation's unilateral action of recovering demurrages by withholding the security deposit. The Court noted that the Corporation had failed to follow due process and that the unilateral determination of liability was not permissible. The High Court had directed the Corporation to settle its claims through a civil suit for recovery, which the Supreme Court upheld.

Issue 5: Applicability of Previous Judgments
The Corporation's counsel argued that the dismissal of a Special Leave Petition at the admission stage did not operate as res judicata. The Court clarified that it would not dismiss the Corporation's appeals on preliminary objections and would consider the merits of the case. The Court also examined similar contracts entered into by the Corporation in 2010 and 2018, which included specific clauses for the imposition of demurrages, unlike the present contract. This confirmed that the expression "charges" in the present contract did not include demurrages.

Conclusion:
The Supreme Court dismissed the Corporation's appeals, upholding the High Court's decisions that demurrages could not be recovered from the contractors under the present contracts. The Court allowed the contractors' appeals, setting aside the High Court's judgments that had directed them to avail alternative remedies. The parties were directed to bear their own costs. The decision clarified that the Corporation could pursue other remedies, such as instituting a suit for recovery, if the law enabled them to do so.

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