DAYA ENGINEERING WORKS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The essence of the grievances raised by the writ petitioner in the present writ application is in respect of certain deductions made by the Indian Railways from the running bills of the writ petitioner and also in quantifying the amounts due for such deductions.

(2.) The essential facts to enable the Court to ascertain the controversy that has arisen between the parties in the present proceeding may be recapitulated. By a contract agreement executed by and between the writ petitioner and the authority of the railways dated 17.11.94, the petitioner was awarded a contract: for manufacture and supply of 1,50,000 number of B.G. Concrete Sleepers and 4,500 number of P.S.C. sleepers at a rate of Rs.527/- per sleeper. The contract executed by the parties visualise the costs of inputs like H.T.S., special cement, wages etc. at a rate stipulated in the agreement. The terms of the agreement also visualise variation of prices of 'the sleepers in the event of increase in cost of inputs. According to the petitioner, he had manufactured and supplied 1,16,000 numbers out of the contracted quantity of sleepers and had received 90% payment against the aforesaid supplies. According to the petitioner, all was well between the parties and sanction was also accorded for payment to the petitioner at the revised rate of Rs.629.77 per sleeper against the agreed rate of Rs.527/- as contemplated under the agreement. The petitioner alleges that by a letter dated 11.8.95 issued by the authority of the railways, the petitioner was intimated the decision of the authority that henceforth the H.T.S. wires, one of the major inputs used in the manufacture of concrete sleepers, was to be supplied by the approved contractors of the railways at a price agreed to between the railways' and such contractors. In the aforesaid communication, it was also mentioned that the new rates stipulated would be effective from 8.11.94. Along with the said letter, an office memorandum dt. 2.1.95, to the same effect was enclosed. As it had become necessary to refix the prices of concrete sleepers in terms of the revision of rates as aforesaid, the petitioner was invited to a negotiation to be held on 18.8.95 in the office of the Chief Engineer (Construction)-II NF Railways. The petitioner participated in the aforesaid negotiation in the course of which a dispute arose between the parties regarding the date of operation of the revision of rates in respect of HTS wires, in the said negotiation, the petitioner agreed to resolve the matter by the process of arbitration in the terms of the arbitration clause in the agreement. Pending final decision of the matter, a communication dated 12.9.95 was issued by the railway authorities stating that until the dispute is resolved between the parties, the contracted rate of Rs.527/- was to continue to remain in force. Subsequently, an amount of Rs.2,00,000/- was adjusted from 3 (three) running bills of the contractor i.e. the petitioner and the total amount recoverable having been computed at Rs.28,04,678\- for the period from 8.11.94 to 24.4.95 and such computation having been communicated to the petitioner by a letter dated 25.6.96, the instant approach has been made to this Court seeking invocation of powers under Article 226 of the Constitution.

(3.) An affidavit has been filed on behalf of the respondent-railways and the precise stand taken in the said affidavit is that the writ petition is not maintainable in view of the arbitration clause contained in l:he agreement between the parties. According to the railways, by virtue of Clause No. 26.4.2 (III) the revision of rates of HTS wires and the altered mode of procurement of the said inputs was binding on the petitioner. The aforesaid clause may be conveniently extracted hereunder: