Principal cannot recover demurrage absent express provision; liable for detention charges for extraordinary delays.

The appellant (contractor) was appointed by the Food Corporation of India (FCI) to transport food grains from Dharmanagar to Agartala for two years

The contractor filed a suit claiming detention charges at ₹800/day for trucks delayed at FCI depots due to inadequate storage space

FCI contested the claim and filed a counterclaim for railway demurrage charges, alleging the contractor failed to supply sufficient trucks to clear wagons

The Trial Court partly decreed the contractor’s suit, awarding ₹600/day for delays exceeding a 6-day "cut-off" period, but dismissed FCI’s counterclaim for demurrage

Both parties appealed the judgment

1. Whether the detention of trucks at the FCI depot beyond the road movement permit period constituted an "extraordinary kind" of delay entitling the contractor to compensation

2. Whether the Trial Court was justified in fixing a 6-day cut-off period for determining "extraordinary detention" when the road movement permits were valid for only 3 days

3. Whether FCI is legally entitled to recover railway demurrage charges from a road transport contractor in the absence of a specific contractual clause

The court primarily applied the terms of the Tender Agreement, specifically Clause XVIII(a)(vi), which stipulates that no compensation is admissible for detention of trucks unless the detention is of an "extraordinary kind"

It further relied on the precedent set by the Hon’ble Supreme Court in Food Corporation of India & Ors. v. Abhijit Paul (2023) 15 SCC 40, which established that in road transport contracts lacking specific recovery clauses, the Corporation cannot recover railway demurrage charges from contractors as "charges" or "expenses"

The High Court found that FCI admitted to a shortage of storage capacity via Exhibit 22, yet continued to issue road movement permits with 3-day validity

The Court reasoned that since FCI knew it lacked unloading space, detaining trucks beyond the 3-day permit period was entirely attributable to the Corporation and thus qualified as "extraordinary" under Clause XVIII(a)(vi)

The High Court critiqued the Trial Court’s arbitrary 6-day cut-off, holding that any delay beyond the initial 3 days should be compensable

Regarding FCI’s counterclaim, the Court noted that the witness (DW-1) admitted the agreement lacked a demurrage clause and that the High Court had previously held in WA No. 25 of 2016 that such charges cannot be claimed without contractual provision

Finally, the Court observed that the Trial Court had ignored several material exhibits (Exhibits 29, 43, 47, etc.) which documented specific claims for detention, necessitated a remand for proper financial reassessment

It held that FCI cannot claim railway demurrage in the absence of a contractual clause

The Court set aside the Trial Court’s 6-day cut-off and remanded the matter to re-determine detention charges using a 3-day cut-off and to consider the previously ignored exhibits

The Trial Court was directed to deliver a fresh judgment within four months