ORIENTAL MANUFACTURERS Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India is filed by the petitioner, a company under the Companies Act 1956, with a prayer to issue a writ of mandamus or a writ in a nature of mandamus or any other writ, order or direction calling upon the respondent authorities to reimburse the petitioner with the amount encashed under the Bank Guarantee or to restore the bank guarantees themselves, thereby restoring the position before encashment of bank guarantee.

(2.) Respondent No. 2 is a Ordnance Factory and is governed under the aegis of Ministry of Defence, Union of India and a bid was submitted upon one tender floated by respondent No. 2 for a De-watering Centrifuge and Acid Centrifuge by letter dated 5.12.2011. Facts about eligibility and qualification of the petitioner of fulfilling the terms and condition of the contract and acceptance of both tenders for price bid of approximately Rs. 37.55 lacs are not in dispute. Since the petitioner manufactured the customized machine as per tender invited by respondent no.2 for inspection at the premises of the petitioner was a pre-requisite to dispatch of the machine. That inspection of both machines at the premises of the petitioner was carried out and approval for dispatch was given by the representative of respondent no.2. Further, both the machines were delivered to the factory of the respondent no. 2 on 23.2.2013 and the installation and commissioning of the machines was to be done at a later date upon intimation by respondent no.2. Accordingly, respondent no. 2 intimated the petitioner for a joint meeting on 3.6.2013 regarding action plan for erection and commissioning of the said machines and certain formalities were to be completed before commissioning of the machining actually could be undertaken. Subsequently even before erection and commissioning could be undertaken a letter dated 12.4.204 was written by respondent no. 2 to the petitioner that the machines were not performing upto the specification and satisfaction and, accordingly, the petitioner was requested to take back both the machines for suitable modifications upon submission of bank guarantees for both the machines equivalent to the amount of money paid by respondent no. 2 to the petitioner till date i.e. 90 % of the contract value. Again service report was prepared by representative of the petitioner and it was noted that de-watering centrifuge was not performing as per the requirement of respondent no.2 and problem still persists.

(3.) Thus, a letter dated 14.6.2014 was written by respondent no.2 pursuant to a joint meeting dated 5.5.2014 and it was decided by the petitioner to take back a part of the de-watering centrifuge for suitable repairing correction etc. so as to solve the problem and bank guarantees was accordingly submitted.