TMI Blog2009 (11) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... st the transfer of the right to use the crane which event, as already indicated on the authority of the decision of the apex court in 20th Century Finance Corpn. Ltd. [2000 (5) TMI 980 - SUPREME COURT OF INDIA] 11constitutes the taxable event under article 366(29A)(d) of the Constitution. The terms of the contract also do not visualize any operation of the tankers/trailers by the owners thereof at any point of time during the period of the contract. The above core terms of the contract being vital for determination of the question of control of the vehicles after the same are hired, the conclusion that can reasonably be reached with regard to the transfer of right to use, necessarily, has to be the same, i.e., that by virtue of the contract agreement in question a transfer of the right to use the goods covered by the contract has been contemplated and in the absence of any contrary material had that been affected by and between the parties. Appeal dismissed. - Writ Appeal Nos. 128,133, 134 - - - Dated:- 25-11-2009 - RANJAN GOGOI AND POTSANGBAM A. , JJ. The judgment of the court was delivered by RANJAN GOGOI J. All the writ appeals, having raised a common question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property in any goods for cash, deferred payment or other valuable consideration; (ii) any transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (iii) any delivery of goods in hire purchase or any system of payment by instalments or under financial lease; (iv) any transfer of the use of any goods under an operating lease; (v) any supply of goods by an unincorporated association or a body of persons to a member thereof for cash, deferred payment or other valuable consideration; (vi) any supply, by way of or as part of any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; and such delivery, transfer or supply of any goods shall be deemed to be sale of those goods by the person making the delivery, transfer or supply and a purchase of those goods by the person to whom such delivery, transfer or supply is made, but does not include a mortgage, hypothecation, charge or pledge. The provisions contained in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66(29A)(d) in connection with telephone service provided to a subscriber. The position was further clarified in para 97 of the separate but concurring judgment wherein the parameters for constituting transactions amounting to transfer of the right to use of goods were laid down to be as follows (at page 133 of 3 VST): 97. To constitute a transaction for the transfer of the right to use the goods, the transaction must have the following attributes: (a) there must be goods available for delivery; (b) there must be a consensus ad idem as to the identity of the goods; (c) the transferee should have a legal right to use the goods consequently all legal consequences of such use including any permissions or licences required therefor should be available to the transferee; (d) for the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute, viz., 'a transfer of the right to use' and not merely a licence to use the goods; (e) having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork in actual operation, i.e., loading, unloading and movement required for positioning including waiting time on duty. It specially excluded all runs from one site to other, if the total run in a single move exceeds 20 kms on metal road/15 km on kutcha/cross country road or if the time taken for a single move of less than 20 kms distance on metal road or 15 kms distance on kutcha/cross country road exceeds the normal travelling time computed on an average of 20/15 kmph on metal/kutcha road. 1.11 Operational charges: 'Operational charges' are the charges mentioned below. The operational time charges per working day and hour shall be on pro rata basis and shall be worked out as under: (A) Operational time charges per day = As finalized in the contract. (B) Operational time charges per hour = Operational time charges per day/10 1.12 Empty run: 'Empty run' is the non-operational run of the crane. It is the movement of the crane in which it is not required to undertake loading and unloading or positioning operations. The movement of crane when the total distance from one site to another site is within 20/15 km for metal/kutcha/cross country road re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o work in oil field besides, at any other static or semi-static establishment such as railway station, workshop, stores, etc. It may please be noted that the oil field conditions are generally slushy. Clause 3.1 of the contract agreement is in the following terms: 3.1 Cranes placed 'at the disposal of the ONGC' should be available throughout the contract duration with the required efficiency/ fitness to handle roads up to the designed capacity. Clause 4 of the contract agreement deals with the placement of the crane and the provisions of the said clause are extracted below: 4.1 Bidders shall mobilize the offered crane(s) within 30 days of issue of LOA. 4.2 The crane shall be brought at the place to be nominated by ONGC at the commencement date and taken back on the conclusion/ termination of the contract or rejection/non-acceptance of the crane(s) at contractor(s) cost and ONGC shall bear no cost and will not be held responsible for such transportation. Clauses 5.1, 5.3 and 5.4 of the contract agreement are in the following terms: 5.1 The crane offered by the bidder shall be inspected/documents verified for safe operations and meeting requirements as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contract is deployed for duty of the ONGC. Clause 8 of the contract agreement deals with the operational norms and the relevant sub-clauses are extracted below: 8.1 The employees of the contractor and/or its sub-contractor if any, although working for and at the discretion of the ONGC, shall be and remain the employees of the contractor and such working arrangement shall in no way create or be construed to create an employer-employee relationship between such employees and ONGC. The contractor shall also undertake to replace any of their employee(s) who misbehave(s) with the employee(s) of ONGC or whose continuance may hamper the smooth operation under the contract. 8.2 The contractor shall do all acts and deeds as and when required and necessary for rendering services against this contract whether expressly provided in the contract or not and whether directly related or incidental thereto. No extra charges shall be payable to the contractor for attending to all jobs and liaison work. 8.3 The crane is being hired for work in oil field conditions, which in addition to normal operations of oil fields include hazardous situation like blow out in wells. In such hazardo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be governed by the relevant clause. 8.11 The crane are required to be placed at the disposal of ONGC on monthly rate basis. Normal working hours will start from seven hours for 10 hours duty everyday with (half) hour as lunch break. However, these timings are subject to change and the cranes could be asked for services beyond these working hours at the sole discretion of the ONGC. 8.12 The contractor is required to provide the crane for all days in a calendar month, excepting for 4 (four) days (maintenance off days). The four days shall be called maintenance off days and will be used by the contractor for maintenance of the crane. However, ONGC reserves the right to engage the crane during the maintenance off days depending upon the exigencies of work. The contractor is allowed to accumulate the off days (if not availed) up to a maximum of 15 days at any point of time during the enforcement of the contract, in case the cranes are engaged beyond 26 days in a calendar month for exigencies of work. 8.14 The contractor shall make his own arrangement at his cost for shelter, food, night stay and other requirements of their staff/representatives, etc., at a convenie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y fit), viz., driver, crane operator / rigger-slingers / khalasi / handymen / cleaners, etc., shall be provided by the contractor at his own cost along with the crane. The staff should be skilled/experienced in the line for proper/ safe operation of crane such as loading/unloading/slinging dunnage placement, etc. The experience of the crew should not be less than three years. However, even if during currency of contract, if ONGC is not satisfied with the performance of any of crew member, the contractor shall be required to replace the same. Clauses 9.10 and 9.14 of the contract agreement being relevant are extracted hereinbelow: 9.10 Fueling of the crane shall be carried out prior to reporting for duty and the contractor shall ensure adequate fuel for at least 24 hours of work of each crane. 9.14 The contractor or his staff/crew shall ensure that the log books supplied by the ONGC Transport Department are properly maintained and recorded date-wise as per columns given in the log book and are properly signed by the authorized officer of the ONGC immediately on the same day who must record the name, designation, bill code and CPF No. in the log books. The contractor or hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its operations. Under clause 3.1 such cranes are to be placed at the disposal of the ONGC and should be available throughout the duration of the contract. Under clause 4 the cranes are to be brought to the places nominated by the ONGC on the date of commencement of the work and are to be taken by the contractors on the termination of the contract. Under clause 5.1 the cranes offered by the contractor are to be inspected by the ONGC along with the documents pertaining to the cranes. Under clause 5.3 once a particular crane and its documents have been approved for service of the ONGC the same cannot be changed during the period of the contract except on being rendered defective. Under clause 8.1 of the contract agreement though the contractor is required to provide employees for operation of the crane such employees are to work as directed by the ONGC. Under clause 8.3 of the contract agreement a crane though hired for work in oil field conditions may also be required to work in other hazardous situations at the discretion of the ONGC. Refusal to work in such hazardous situations as directed by the authorized representative of the ONGC could lead to de-hiring of the crane. Under cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd though the normal period of deployment is 10 hours in a day, such deployment at the discretion of the ONGC may be for any period beyond the normally contemplated 10 hours. The deployment of the crane in oil field operations as well as other hazardous situations is at the sole discretion of the ONGC. Though the cranes are operated by the crew provided by the contractor such crew while operating a crane is under the effective control of the ONGC and its authorities. Therefore, under the contract though the normal operational time is 10 hours in a day, the ONGC is entitled to deploy the cranes, if required, for the entire period of 24 hours to perform duties, the kind of which and the locations whereof is to be decided by the ONGC. The mere fact that after the operation of the crane is over on any given day the crane may come back to the owner/contractor will hardly be material to decide as to who has dominion over the crane inasmuch as the crane can be recalled for duty by the ONGC at any time. Under the contract the crane is to be operated for 26 days in a month and the remaining four days are to be treated as maintenance off days. Though the crane is not operational on the maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract. In fact, the nonavailability of the tankers/trailers on any given day for deployment in connection with the operational requirements of the ONGC entails payment of penalty and liability for damages on the contractor. The above recitals are sufficient to indicate that the core terms of the contract in respect of other vehicles are essentially similar to those embodied in the contract agreements relating to hiring of cranes. The above core terms of the contract being vital for determination of the question of control of the vehicles after the same are hired, the conclusion that can reasonably be reached with regard to the transfer of right to use, necessarily, has to be the same, i.e., that by virtue of the contract agreement in question a transfer of the right to use the goods covered by the contract has been contemplated and in the absence of any contrary material had that been affected by and between the parties. The learned counsel for the appellants/writ petitioners has placed two judgments of a learned single judge of this court both dated February 27, 2009 in WP(C) No. 4492 of 2006 (R.P. Kakoti v. Oil Natural Gas Commission [2009] 22 VST 136) and Civil Rule No. 3997 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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