UNION OF INDIA Vs. CIMMCO LTD.

JUDGEMENT

(1.) This writ petition impugns an order of the Appellate Authority for Industrial and Financial Reconstruction ("AAIFR") dated 7.5.2013 dismissing the appeal of the Union of India, through the Railway Ministry, (hereafter "Railways") against an order of the Board for Industrial and Financial Reconstruction ("BIFR") dated 12.3.2012, concerning certain concessions to be provided by the Railways to Cimmco Birla Ltd. ("CBL"), the respondent, in terms of a Sanctioned Scheme for rehabilitation sanctioned by the BIFR as regards CBL.

(2.) The BIFR had declared CBL as a sick company under Section 3(1)(o) of the Sick Industrial Companies Act, 1985 ("SICA") on 21.8.2002. On 11.3.2010, the BIFR sanctioned a revival scheme for CBL after inviting suggestions/objections from all stakeholders by circulating a Draft Rehabilitation Scheme ("DRS"). The dispute today concerns the application of Clause 11.6 of the Sanctioned Scheme, which envisages a certain concession by the Ministry of Railways vis- -vis CBL as regards tenders floated by the Railways for supply of wagons, the business in which CBL is engaged. Clause 11.6 states as follows:

(3.) Previously, a tender had been floated by the Railways in September, 2009 for 17,670 wagons. While on 1.2.2010, when the tender was opened by the Railways, CBL was ineligible under the terms of the tender, with a view to develop an additional source of supply, the Railways complied with Clause 11.6 and placed an order for 10% of the total tendered quantity, outside the tender. The question in the present case relates to a second tender floated by the Railways on 23.6.2011 for the manufacture and supply of 15,700 wagons. CBL, along with other manufactures, participated in the bid, and after evaluation of the bids, contracts were awarded to the various bidders including CBL, for the supply of 353 wagons.