C.M.I. LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The instant appeal has been filed under Sec. 37 (1)(B) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996) being aggrieved by the Judgment dtd. 9/11/2016 passed in Arbitration Case No.76/2014 by the 10th Additional District Judge, Jabalpur (M.P.); whereby the application filed by the appellant under Sec. 34 of the Act of 1996 has been dismissed and the Arbitration Award dtd. 20/1/2014 has been confirmed. The learned Arbitrator has rejected the claim of the appellant; wherein the quashment of recovery notice of Rs.49,80,049.06 towards risk purchase amount was sought to be recovered.

(2.) The appellant is a Public Limited Company incorporated under the Companies Act, 1956, engaged in the production of signalling and Telecom cables, having its registered office at 501-503, New Delhi House, 27, Barakhamba Road, New Delhi. The appellant is a small scale industry, registered with National Small Industries Corporation (N.S.I.C.) and under Micro Small and Medium Enterprises Development (MSMED) Act, 2006. Since, the Railways is the only purchaser of the material produced by the appellant, the appellant/Company is solely dependent on the payment received from the Railway for running the industry. The production is chalked out by the company keeping in view the flow of the funds from various Railway Zones and by taking the said funds, supplies were made to the various purchase orders.

(3.) The brief facts, which are necessary for the just and proper adjudication of the case, are that on 26/5/2010, West Central Railway, Jabalpur (for short "WCR") floated a tender for supply of signalling cables and invited offers from the interested parties. The appellant was one of the bidders in the said tender. The tender was opened on 26/5/2010; wherein the appellant has been declared successful bidder. The terms and conditions of contract, as per the tender documents, include the IRS conditions (Indian Railway Standard Conditions of Contract). After appellant having been declared as a successful bidder, on 20/7/2010 advance acceptance letter was issued to the appellant by the respondents. A purchase order dtd. 7/9/2010 was also issued to the appellant for supply of 170 kms. PVC Armoured signalling cables 12 Core X 1.55 mm sq. valued at Rs.1,87,67,451.94.