ASIA BROWN BOVERI LIMITED Vs. EMCO TRANSFORERS LIMITED

JUDGEMENT

(1.) The Government of India (Ministry of Foreign Trade) dated 7/01/1970 made a scheme for encouraging supply of indigenously manufactured electrical goods to the State Electricity Boards to enable them to obtain indigenously goods like switch gears and communication equipment at an international comparable price. The heads of the assistance under the scheme inter alia are: "(a) Import replenishment as per Volume II of the Red Book. (b) Cash assistance at the rates' mentioned in various instructions issued by Government. (c) Drawback of Customs and control excise duties. (d) Rebate of central excise duties on the finished products. (e) Concessional supplies of steel as otherwise permissible on exports (which has been agreed to in principle and further details of which will be communicated separately). Procedure for claiming such cash assistance was: "1. Suppliers should be registered with the Engineering Export Promotion Council, under the Scheme of registration.

(2.) For cash assistance the Certificate will have to be produced from the Customs or Central Excise authorities as indicated in the application along with treasury challan of Rs.50/-. 2. The petitioners in this case are concerned with the tender covered by Credit No. IN 377 which was floated together with Credit No. IN 242 and IN 604. The tender did not stipulate any price variation clause. However, at a later stage i.e. in March 1974, a price variation clause was introduced in bidding documents issued in relation to the following equipments in the tender in question: Maximum Ceiling. 1. Power Transformer 15% 2. Switchgear including Control Panels 15% 3. Transmission Line towers 10% 4. Power Conductors 15% 5. Power Cables 15% 6. Shunt Capacitors/Reactors 10% 7. Synchronous condensers 10% 8. PLCC, Telemetering and Load Despatch equipment 15%

(3.) It was stated therein that the tender opening dates in the above cases should be extended so that at least 21 days would be available with the bidders for submission of bids. On 24/05/1971, a meeting was held under the Chairmanship of the then Secretary of Ministry of Industrial Development and Internal Trade for the purpose to discuss and elaborate the salient features of the said scheme. The petitioner submitted tenders for electrical controlgear, switchgear as well as power line carrier communications equipment between December 1973 and February 1975. The said contracts were registered with the bankers. A contract was concluded in relation to IN 377 credit. Except one contract, according to the petitioner, all contracts were 'firm' since the tender was submitted prior to March 1974 which contained price variation clause at the time when they were concluded. It is not in dispute that cash assistance was to be allowed to the extent of 25% of the FOR destination value. After the supply commenced, the petitioner and various State Electricity Boards agreed to price variation clause pursuant to or in furtherance of price variation formula contained in the said contract. The petitioner applied to the Central Electricity Authority (CEA) for the issuance of the said pro forma from time to time which was allowed. The details of the contracts entered into by the petitioners would appear from the following: STATEMENT RELATING TO PARTICULARS OF - 377 CONTRACTS ENTERED INTO BY PETITIONERS <FRM>JUDGEMENT_418_ILRDLH9_2002Html1.htm</FRM>