UNION OF INDIA Vs. BAKSHI STEEL LIMITED

JUDGEMENT

(1.) Union of India invited the tenders for manufacturing and supply of Malleable Cast Iron Inserts to IRS Specification T-32-1984. The tenders received upon this offer, were opened on 5.2.1991 and the order was placed on M/s. Bakshi Steel Limited, respondent herein vide letter dated 9th August, 1991. The terms and conditions of the contract were governed by Indian Railway Standard Conditions of the Contract. The awarded contract was for the supply of 56 lacs numbers of MCI Inserts which quantity was subsequently reduced to 42 lacs in terms of clause 10 of the contract. According to Union of India, the payment was to be made at the rate that would be finalized against the ensuing tenders by the Board or existing rates, whichever is lower. The counter offer given was accepted and order for the supply was placed upon the respondent.

(2.) According to the respondent as well, the terms and conditions were accepted vide letter dated 14th September, 1992 issued by the respondent to the petitioner. However on 12.11.1992, the railways department wrote to the contractor in exercise of its power under Clause 10.1 for additional quantity of MCI Inserts equivalent to 25 per cent of the quantity ordered. Vide letter dated 14.11.1992, the respondent in response to the aforesaid letter once again unequivocally and without demur as done earlier, accepted the offer of the petitioner and the additional quantity was also directed to be supplied. The contractor respondent had accepted the conditions of letter dated 12.11.1992. The final bill was submitted and on 2.11.1995, the contractor demanded payment of additional sum money against the first tender on the ground that the price variation clause in the 2nd tender was more favourable. This demand of the respondent was reiterated in subsequent letters dated 5.2.1996 and 30.04.1996. On 30.04.1996, the contractor invoked the arbitration clause and demanded reference to arbitration.

(3.) In pursuance to the demand of the contractor respondent, Mr. J.D. Kalla was appointed as an Arbitrator before whom the contractor filed the claims on 16th July, 1998. Mr. J.D. Kalla, Arbitrator gave the award whereby he awarded a sum of Rs. 28, 46, 337/- along with 18 per cent interest from the date of the claim to the contractor. Objections against the said award were filed in OMP 252/1998 by the UOI before this court. The award was set aside by the High Court with the consent of the counsel for the parties vide its order dated 31st July, 2001 and the matter was referred to Sh. J.K. Mehra (Retired Judge of this court) as a Sole Arbitrator. Sole Arbitrator again passed the award dated 30.01.2004 in favour of the contractor. Notice of award was issued and received by the railway board on 4.2.2004 resulting in filing of the present objections under Section 34 of the Arbitration & Conciliation Act, 1996.