- (1.)Leave granted.
(2.)These appeals impugn the final judgment and decree dated 21st March, 2012 passed by the High Court of Judicature at Madras in OSA No. 44 & 45 of 2012 and M.P. No. 1 of 2012, whereby the letters patent appeals of the Union of India were dismissed. The appellant had entered into agreements with the respondents on 30th January, 1983 and 30th March, 1984 for supply of mono block concrete sleepers (in short "Sleepers"). The agreements were renewed from time to time under which the Union of India agreed to pay specified rates for supply of each sleeper. The agreements/contracts also provided that the rates payable shall be based on certain standard rates of principal raw materials, such as cement, High Tensile Steel (HTS) wires, molded steel, etc. The contracts further provided that whenever the cost of the principal raw materials increased or decreased, the contract price for sleepers shall also correspondingly be increased or decreased with effect from the date of such increase or decrease. The agreements/contracts also provided for escalation, subject to certain conditions prescribed under Clause 11 of the Contract. The contracts/agreements further provided that the respondents must exercise utmost economy in the purchase of raw materials and that the escalation will be admitted on the basis of actual price paid for the respective raw material. This was subject to the ceiling on the price. As per Clause 12.2(c), ceiling was fixed "in the case of raw materials not covered by either of the above, the lowest price (for destination) arrived at on the basis of at least three quotations obtained by the Contractor for each supply from various established sources of supply of the respective raw materials".
(3.)The respondents/contractors purchased HTS wires from established sources in terms of the various clauses of the contract. The material was used in the manufacture of sleepers. Payment for the sleepers was made by the contractors at the lowest price quoted by the suppliers. The quotation was also scrutinized alongwith the supporting documents. The Railway authorities release the payment to the respondent contractors only upon their satisfaction, upon scrutiny of all the relevant documents.