STATE OF GUJARAT Vs. NARMADA CEMENT COMPANY LTD

JUDGEMENT

(1.) THE question that has come up for our consideration in this case is whether Clause 26 of the Tender Agreement No. D-3 of 1990-91 would enable the State Government to appropriate any sum of money due and payable to the contractor by way of set off against any claim of the Government arising out of any other contracts with that contractor.

(2.) PETITIONER-COMPANY is engaged in the manufacture of cement. Respondent No. 2 - Executive Engineer, Irrigation Mechanical Division No. 3 invited tender for the supply of ordinary port-land cement and possolone portland cement to the extent of 1,00,000 M. T. as per tender notice No. 4 of 1990-91. In response to the tender notice, petitioner submitted its tender which was accepted and an agreement in Form-D was entered into between the petitioner and the respondent No. 2. Petitioner supplied 40,621-75 MT cement under the contract costing Rs. 6,76,27,702. 31, against which, the respondent made payment of Rs. 6, 52,38,900. 80. Amount of Rs. 23,88,801. 49 was due and payable to the contractor, but was withheld by the respondent No. 2 alleging that the said amount had to be adjusted towards other claims against the contractor. Aggrieved by the same, petitioner has approached this Court.

(3.) LEARNED Single Judge, on facts as well as on law, come to the conclusion that Clause 26 of the Tender Conditions would not empower the respondent authority to withhold and set off those accounts in respect of other claims pertaining to the other contracts. Direction was given to the respondent Authority to release amount of Rs. 18,68,508. 56 with interest at the rate of 18 %. Aggrieved by the order, the State has preferred this Letters Patent Appeal.