BESCO LIMITED (WAGON DIVISION) Vs. UNION OF INDIA

JUDGEMENT

(1.) The present petition/objections are filed under section 34 of the Arbitration and Conciliation Act 1996 for setting aside the Award dated 15.2.2016 passed by the Sole Arbitrator.

(2.) Some of the brief relevant facts are that the respondent on 23.10.2013 issued a tender inviting offers from manufacturers for supply of various types of wagons. The total number of wagons required were 11728. The criteria for allotment to any tender or was stipulated. The petitioner made an offer against the above tender and quoted its rates. The petitioner was not the L-1 tenderer. The respondent issued a counter-offer vide letter dated 2.4.2014 to the petitioner for a total quantity of 1890 wagons at specified rates/prices. On 2.4.2014 the petitioner accepted the counter-offer and conveyed its acceptance for the supply of 1890 wagons consisting of 1080 BOXNHL, 710 BCNHL and 100 BOBRNHSM1 wagons. Subsequently, contract dated 29.4.2014 was awarded for manufacture of the said 1890 wagons to the petitioner.

(3.) As per the contract the said quantity of 1890 wagons was to be released to the petitioner in two tranches. The first tranche consisted of supply of 945 wagons. The said second tranche of 945 wagons was to remain withheld and was to be released to the petitioner at the end of six months from the date of receipt of the order upon fulfillment of criterias regarding timely delivery etc. The petitioner successfully completed the supply for the first tranche of 945 wagons. Thereafter on 29.10.2014 the petitioner requested the respondent for release of the withheld quantity of the second tranche of the contract. The respondent on 18.11.2014 released 50% of the second tranche i.e. 473 wagons. On 23.12.2014 the respondent issued to the petitioner the balance order for the second tranche of 472 wagons. In addition on account of its timely performance for the first tranche the petitioner were also issued an order for 208 additional wagons which had been diverted from other manufacturers. However, the petitioner informed the respondent that on account of various hurdles including non-availability of free supply of CTRBs, acute shortage of funds and non-receipt of payments against the supply of wagons the execution of the contract had become totally unworkable. The petitioner hence stated its inability to accept the order for additional 208 wagons which had been offered to them by diversion from other firms. The respondent on 30.1.2015 issued a letter to the petitioner stating that the refusal of the petitioner to accept the additional quantity of 208 wagons was not acceptable to the Ministry. The respondent took the stand that the said allocation of additional quantity was as per accepted terms and conditions of the contract dated 29.4.2014.