TECHMA ENGINEERING ENTERPRISE Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an application under Section 9 of the Arbitration and Conciliation Act, 1996 as amended. The petitioner company has a business of manufacturing and export of Railway Track Components, Railway Track Fittings, Fish Plate etc. In terms of an electronic tender notice no.CETPSER2016006 inviting tenders for manufacture and supply of Electric Rail Clips Mk-III conforming of IRS specification No.T-31-1992, corrigendum No.3 of Jan 16 and as per RDSO's drawing No.T-3701, Alt. 5 for 60 kg/52 kg rail and sleeper the petitioner company submitted his bid on 20th September, 2016 and his offer was accepted in terms and conditions stated in the tender document and subject to the IRS Conditions of Contract applicable and other terms and conditions of the tender document and security deposit to the tune of Rs.10,00,000/- as per clause 13 of the said letter was deposited and was accepted. The bank guarantee bond was furnished in terms of the tender document by the petitioner company undertaking to pay the amounts due and payable under this guarantee without any demur, merely on a demand from the Government stating that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the Government by reason of breach by the said Contractor(s) of any of the terms or conditions contained in the said agreement or by reason of the Contractor(s) failure to perform the said Agreement. The railway authority sought for consent by its letter dated 22.08.2017 annexure Q with regard to proposal for modification of price variation formula due to change of commodity in WPI and change of base year against P.O. No.CE/TP/SER/2016/006/a/10038 dated 22.02.2017 for supply of ERC MK-III to Drg. No.T-3701 with the contention that due to non availability of certain commodity in WPI with the change of base year from 2004-05 to 2011-12, the Railway has proposed the following revision in price variation formula in respect of ERC MK-III to Drg. No.T-3701 against the subject contract and requested the petitioner company to convey its consent for further deliberation of the railway in respect of methodology of payment against PV Bill and modification of PV formula for obtaining approval of Competent Authority. However, the proposed new formula will come into effect only after issue of modification advice. The petitioner company by its letter dated 5.9.2017 communicated a letter to Deputy Chief Engineer/TP South Eastern Railway, Garden Reach, Kolkata - 700 043 concerning the applicability of proposed PVC formula and expressed that after checking and calculation it is found that this modified formula is not sufficient to cover up the prices of raw materials from opening of tender to offer the finished product for inspection and accordingly the petitioner company was unable to accept the proposal as made by the Railway Authority and for which the railway issued a letter of termination of contract in favour of the petitioning creditor but the formal cancellation order was not issued and yet to be issued in due course. Thereafter the Railway Authority communicated its letter dated 26.09.2017 to the Manager, Union Bank of India, Dharmatolla Branch, requesting to remit the guaranteed amount of Rs.10,00,000/- in favour of FA and CAO/S.E. Railway/ GRC immediately treating this as urgent. This is how the petitioner has suffered threat in respect of his tender having been accepted for supply of Electric Railway Clips and for manufacturing of the same for supply to its consignee railway but all on a sudden such tender and the order has been cancelled by the Railway Authority.

(2.) The learned Counsel for the petitioner invites my attention to various tender documents with regard to instructions/remarks which provides as under:

(3.) My attention is further invited to price variation formula as Clause 9.0 to its note in particular which provides that any offer with different PVC formula or quoting different base month or linkage with different indices or fixed rate etc. as compared to the PVC formula provided with the tender will be summarily rejected.