TMI Blog1996 (7) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial licence was issued on 5th December 1979. It was agreed between the parties that commercial production in the said plant would commence within a period of 30 months of entering into agreement with effect from 31st December 1979. The said period of 30 months ended on 1st July 1982. The petitioners, however, commenced commercial production of ammonia, which is a fertiliser, from 1st December 1983. (3) The aforesaid scheme is applicable to the petitioners. The Ficc fixed provisional retention price from time to time and in accordance with the scheme, the petitioners were paid difference between the retention price and the selling price. (4) The petitioners claim that sometime after 1986, the cost of production of the petitioner's unit escalated due to increase in price of gas by Ongc, increase in electricity tariff, a revised wage settlement with the Union and various other heads of expenses. The petitioners filed its escalation claims from time to time but the same were not considered by FICC. (5) This petition was filed in February 1992. During the pendency of the writ petition, on 31st March 1992, Ficc declared a final retention price. This fixation wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of about 9 years which approximately comes to ₹ 4.5 crores. Hence, the Retention Price is lower by about ₹ 65 per Mt, and therefore, the subsidy amount is also lower by about ₹ 65 per Mt which totally aggregates to about ₹ 4,5 crores for a total period of about 9 years. After analysing the facts and documents placed before it, the Ficc concluded that while petitioners could be held responsible for delay of 7 months, the Ongc also appears responsible for delay of 4 months. As regards delay of 3 months in the finalisation of the agreement, Ficc concluded that it appears equitable to apportion equally the delay of 3 months between the parlies. In this manner the petitioners were held to be responsible for delay of eight and a half months and Ongc for delay of five and a half months. The contention that the entire delay of 14 months in commencing commercial production ought to have been condoned depends upon examination and analysis of various factual matrix. We find from the report of Ficc dated 31st January 1994 that after examination of all relevant facts it came to the conclusion about the apportionment of 14 months as above. We are afraid that disputed ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction, were referred to the sole arbitration of Sh.B.S.Hegde, Joint Secretary and Legal Advisor, Ministry of Law, Justice and Company Affairs. The arbitrator held that considering various factors it is just, fair and proper that the claimant should be imposed minimum penalty as there was no intentional negligence on their part and delay in production within the specified period was beyond their control and thus penalty of ₹ 8.50 lakhs was imposed on the petitioners as against the huge claims which added with interest would run into crores. Apart from the fact that the observations made in collateral proceedings have no relevance while considering legality of action of Ficc in fixation of retention price, we cannot ignore that the award is under challenge and objections filed by the respondent are pending before the Bombay High Court. Under these circumstances it cannot be held that in view of the observations made in the award the time overrun of entire period of 14 months should have been allowed by FICC. We are,therefore, unable to find fault with the decision of Ficc in allowing cost overrun to the petitioner only for the period of five and a half months. ii) Reimburseme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record to show that the petitioners were ever informed that they would not be reimbursed of the cost of transportation and that the cost of transportation would be fixed on normative basis. It has not been disputed that the cost of transportation claimed by the petitioners was not examined by Ficc to find out and determine the reasonableness of such cost. The petitioners were told that cost of transportation would be 'reimbursed' to them. 'Reimbursement' means in ordinary parlance repayment of what has been spent. According to Black's Law Dictionary, 6th Edition Page 1287 the definition of 'reimburse' is 'to repay that expended'. When the petitioners were informed by letter dated 2nd June 1984 that cost of transportation would be reimbursed, they had legitimate expectation that actual cost of transportation would be reimbursed by Ficc subject to the same being just and reasonable. Nothing has been shown by the respondent justifying the denial of reimbursement of cost of transportation. It was open to respondent to inform the petitioners that the cost of transportation would be fixed on normative basis but that was not done. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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