STATE OF RAJASTHAN Vs. PIPES LTD

JUDGEMENT

(1.) The appellant State of Rajasthan in the instant miscellaneous appeal seeks to quash the order dated October 24, 1996 of the learned Additional District Judge No. 2, Jaipur City whereby award of the Arbitrator dated September 6,1994 was made rule of Court and decree in the sum of Rs. 2.55,752/- was passed together with interest and costs.

(2.) Contextual facts depict that the Public Health Engineering Department, Government of Rajasthan (in short the appellant) had invited tenders for supply of A.C. Pressure Pipes of various size on the terms and conditions narrated in the tender notice. As many as 24 concerns had participated in the tender. Tenders were thereafter opened on April 10,1985, wherein the rates submitted by M/s Shree Pipes Ltd. (in short the respondent) were not found to be lowest, yet it was decided in the meeting of the Store Purchase Committee that 25% of the requirement of AC Pressure Pipes of 150 mm. and above may be awarded to the respondent at the lowest approved rates being the respondent Company situated in the State of Rajasthan. Rate contract was entered into between the appellant and the respondent and a condition of 'price fall' and also included in the terms and conditions of the rate of contract. One M/s Hyderabad Asbestos Cement Products Ltd., New Delhi which was on rate contract for supply of AC Pressure Pipes informed the appellant vide letter dated November 8, 1985 that there was a downward revision in price and, therefore, they are ready to supply AC Pressure pipes on a lower rate. On receipt of the said letter, the appellant had sent a telegram to the respondent on February 15, 1986, wherein it was clarified that if the respondent Company was agreeable to supply AC Pressure Pipes on the rates to be approved by the Government, the respondent may send its acceptance. In response to the telegram, the respondent conveyed their acceptance to supply the goods in pursuance to the condition enumerated in the telegram and accordingly the appellant issued a supply order vide their Order No. 231/GS for supply of AC Pressure Pipes and couplings. While giving the order for supply, the rate quoted therein were at variance with the rate of contract. The respondent supplied the material as was demanded by the appellant but there was some delay in supply of the same.

(3.) During the pendency of the supply of the material M/s Hyderabad Asbestos Cement Products Ltd., New Delhi gave the offer to supply AC Pressure Pipes on lower price at Jaipur Depot charging only RST. It was given out that the Government would be having 4 per cent rate difference on the lower side on account of non-payment of CST. The matter was considered by the Store Purchase Committee of the appellant in its 100th meeting and a decision was taken that the rates of M/s Hyderabad Asbestos Cement Products Ltd. without CST were to be taken as reduced rate which were to be offered to the supplier. Accordingly revised provisional rates were intimated to all Field Officers and suppliers with direction to make recoveries from suppliers on account of previous provisional rates allowed to them for the supplies made on or after January 6, 1986 vide letter dated November 24, 1987. The respondent Company had asked for a reference to the Arbitrator as dispute arose after issuance of the letter dated November 24, 1987. Accordingly the matter was initially referred to the Sole Arbitrator Mr. Justice D.P. Gupta. On his Lordship's sad demise Mr. Justice N.M. Kasliwal, (Retd. Supreme Court Judge) vide order dated December 13, 1993 was appointed as Sole Arbitrator. The Arbitrator gave award on September 6, 1994 and it was made rule of the Court vide order dated October 24, 1996 of the learned Additional District Judge No. 2, Jaipur City which has been called in question in the instant miscellaneous appeal.