UNION OF INDIA Vs. EMAMI AGROTECH LTD.

JUDGEMENT

(1.) The challenge in this Petition filed under Sec. 34 of the Arbitration and Conciliation Act, 1996 ("the Act") is to an arbitral award dated February 1, 2020 (" Impugned Award"), which allows a claim made by the Respondent, Emami Agrotech Ltd. (" Emami") against the Petitioner, the Central Railway ("Central Railway").

(2.) The Central Railway had deducted an amount of Rs.48,75,400.00 from the amounts payable to Emami towards purchase of bio-diesel, primarily in reliance upon a "Fall Clause" contained in: (i) the purchase order dated January 19, 2016 issued by Central Railway to Emami ("Purchase Order"); and (ii) the Indian Railways Standard Conditions of Contract ("Standard Terms").

(3.) A brief summary of the factual matrix would be necessary. Pursuant to a tender floated by the Central Railway, Emami made a bid dated October 29, 2015, for supply of 4,100 kilolitres 1 ("KL") of bio-diesel at an "all-inclusive rate" of Rs.45,300.00 per KL. The destinations at which the bio-diesel was to be delivered were Wadi, Daund and Pune (all in Maharashtra). In this bid, the " basic rate" was meant to be Rs.43,142.86 per KL, and Central Sales Tax was to be applied at 5%. In its bid, Emami quoted that it would not charge anything towards freight. Emami emerged as the lowest bidder when the bids were opened on October 30, 2015.