CHANDRA SON OF PRADIP CHANDRA Vs. UNION OF INDIA THROUGH THE CHAIRMAN, RAILWAY BOARD, RAIL BHAVAN, NEW DELHI

JUDGEMENT

(1.) THE petitioner is a Company that, inter alia, manufacturers disinfectives. Pursuant to tender issued by the Controller of Stores, East Central Railway, petitioner agreed to supply deodorant bio floor of IRS 7 -11/74 specifications. Its tender was accepted and, accordingly, orders placed by the Railways to supply the same which was manufactured by the petitioner under the brand name CUTOZEM -311. Petitioner was to supply 28,031 litres thereof in jars of 25/50 litres and was to deliver the same within 45 days of the letter of acceptance which was dated 29.3.2006. Petitioner, accordingly, entered into agreement with the Railways for the said supply. One of the conditions of the contract was that there would be a pre -delivery inspection by RITES Limited. RITES Limited is Railways Inspection and Testing Services Limited, a Company wholly owned by Government of India and does various works for the Railways. Petitioner, accordingly, prepared the entire consignment and offered it to RITES for testing. RITES took random samples from the consignment as already readied on the 10th of June, 2006. In their report, while drawing sample, they have clearly mentioned that the date of manufacturing of the consignment was 29th of May, 2006 and was manufactured in May, 2006. The test report was prepared and submitted as according to the specifications. The consignments were then sent to the Railways as directed and each of the jars contained labels as per law required. The label is contained in Annexure -10. Apart from other information given, the label clearly stated that the date of manufacture was May 2006 and the date of expiry was April 2007 that is one year period. Now, it appears that Railways having received the consignment chose not to reject the same. They started using the same. It seems thereafter samples were taken by the Railways and sent to the National Test House, Ghaziabad. It is not in dispute that the samples were ultimately tested by the National Test House in July/August, 2007. It is not in dispute that RITES were also asked by the Railways to associate with the test. RITES refused to associate with the test and informed Railways accordingly clearly stating that the test was being carried out after the expiry of the goods so supplied and they would not associate with the test. Even after test, the test report does not say that it does not conform to the Railways specification. The report ultimately states that the sample is not as per Railways standard. Bet that as it may, almost 50% of the stocks, as received by the Railways more than a year back, have already been consumed. Not only was the balance, which was lying with the Railways, was rejected but as full payment has been, by then, made to the petitioner, petitioner was directed to refund the amount received by it failing which from its bills by the Railways anywhere in India, the deductions would be made. Subsequently, interlocutory application has been filed by the petitioner showing as to how mere recovery of about Rs. 5 lacs, his payment by the Railways worth over Rs. 50. lacs had been stopped.

(2.) HEARD the parties and with their consent, as pleadings are complete, the writ petition is being disposed of at the stage of admission itself. There are a few things which are not in dispute. Petitioner was given order. In the order, one of the conditions was pre -delivery inspection. Pre -delivery inspection was done and there was no difference in the quality. Petitioner categorically states that on the containers, at the time of delivery itself, both the month of manufacturing and the month and the date of expiry were printed. This is not denied. To the contrary is accepted in the counter affidavit. As noted above, the expiry is shown to be April, 2007.

(3.) PETITIONER 'sshort submission is that the expiry being April 2007, the sample itself was taken late in April, 2007 but tested in July 2007 which is long after the expiry of the life of the product, as supplied. This fact was recognised by RITES Limited also who refused to participate in the retesting specifically on this ground itself. This report of the National Test House is now made the basis for rejecting the entire consignment and that too more than a year after it was delivered. Petitioner 'sfurther submission is that in terms of Clause 1502 and the note appended thereto, the rejection was not valid in law whereas on behalf of Railways, reliance was placed on Clauses 3202 and 3203 to justify the rejection even at that late stage.