- (1.) ANSHUMAN SINGH, J. The assessee Hindustan Housing Factory is a public limited company having its office at Jangpur, New Delhi, which has since been renamed as Hindustan Prefab Limited, New Delhi. This company is wholly owned by the Government of India and is specialised in manufacturing prefabricated housing elements. The U. P. State Electricity Board has constructed a power-house at Obra in the district of Mirzapur. The said Board wanted to construct one thousand quarters in the housing colony at Obra and for the said purpose hollow blocks and battens were proposed to be used. An order was issued by the Superintending Engineer, Obra Thermal Civil Construction Circle, U. P. State Electricity Board dated 15th December, 1973 giving contract for fabricating and supplying of housing elements at Obra which was subsequently made part of a formal agreement dated 26th October, 1980 entered into between the parties. The aforesaid letter dated 15th December, 1973, which was also signed on behalf of the assessee in token of acceptance reads as under : " Sub : Award of fabrication and supplying housing elements for 1,000 Nos. houses at Obra. M/s. Hindustan Housing Factory Limited, Jangpura, New Delhi. D/sir, Your offer No. HHF/df/4843 dated September 24, 1973 modified vide your letter No. HHF/df/4842-A dated October 24, 1973 and subsequent discussion for manufacturing and supplying of components for 500 complete houses and for flooring/roofing elements for another 500 houses has been accepted for an amount of Rs. 22,76,382. 40 approximately. Your offer has been accepted on the basis of your complete acceptance of general and special conditions as per form A of contract, technical specifications as per IS Codes 6051 (Part-I) 1971, 2185-1967, 1786-1961, 432-1960, 456-1960 drawing, etc. , with the following overriding conditions : 1. Rates : Rates quoted are ex-your works near the construction site at Obra including loading into vehicle of the contractor brought inside the works premises. Sales tax, if payable, shall be extra. The condition of insurance charges of your above letter has been withdrawn in your subsequent letter No. HHF/de/4842-A dated October 24, 1973.
(2.) PAYMENT : 25% of the total amount of order shall be payable to you by the Board against bank guarantee/indemnity bond. PAYMENT terms shall be as per form A. Service : Potable water shall be supplied free of cost. Any instruction, corrigenda, addenda, progress schedule to be issued from this office from time to time will also be acceptable to you. This acceptance of tender is for the quoted rates which will be firm till the completion of entire job. The price schedule is enclosed. The time of completion for the above work shall be 12 months reckoned 3 months after the date of issue of this letter of intent, i. e. , December 15, 1973. You are required to deposit an amount of Rs. 68,292. 00 towards 3 per cent initial security. This amount can be deposited either in the form of bank guarantee or in the form of an indemnity bond. The above bond should be submitted within a week of issue of this letter. The draft contract is under preparation in this office and you would be required to sign the agreement when it is ready on non-judicial stamp paper of Rs. 2. 50 in duplicate, the cost of which will be borne by you. You should deposit a sum of Rs. 83 only in the form of bank draft drawn in favour of Member-Secretary, UPSEB Shakti Bhawan, 14, Ashok Marg, Lucknow towards the legal vetting charges of contract documents. Please acknowledge the receipt of this order. " The aforesaid letter also contained a schedule of price for hollow blocks and battens which is as under : " Sl. Item Quantity Rate Amount No. 1. Fabrication and supplying of hollow blocks of nominal size 400 x 200 x 200 mm. for walls. 6,37,200 No. 1. 25 7,24,000. 00 2. Fabrication and supplying of hollow blocks of nominal size 400 x 200 x 100 mm. for partition. 96,040 No. 0. 75 72,030. 00 3. Fabrication and supplying of hollow blocks of nominal size 525 x 260 x 14 mm. for roofs. 3,14,280 No. 1. 85 5,82,522. 00 4. Fabrication and supplying of battens of following nominal sizes for roofs : Size No. Rate 3. 00 M 3,350 11. 00 per R. M. 2. 3 M 3,360 10. 20 per R. M. 1,160 13. 75 per R. M. 3. 2 M 1,200 12. 70 per R. M. 2. 3 M 2,640 10. 10 per R. M. 3. 720 11. 00 per R. M. 3. 3 M 600 12. 70 per R. M. 2. 5 M 1,200 10. 20 per R. M. 2. 480 10. 10 per R. M. 1. 4 M 360 10. 10 per R. M. 3. 7 M 960 12. 70 per R. M. 4. 8 M 320 15. 15 per R. M. 3. 5 M 720 12. 70 per R. M. 4. 4 M 160 15. 15 per R. M. 2. 4 M 80 10. 20 per R. M. 3. 9 M 800 13. 75 per R. M. 3. 6 M 400 12. 70 per R. M. 3. 5 M 720 12. 70 per R. M. 4. 4 M 400 15. 15 per R. M. 4. 8 M 160 15. 15 per R. M. 3. 3 M 240 12. 70 per R. M. 4. 4 M 400 15. 15 per R. M. 2. 0960 11. 00 per R. M. Total 3,35,384. 40 -------------- 22,76,382. 40 Say 22,76,382. 00 (Rupees twenty-two lacs seventy-six thousand three hundred and eighty-two only ). Sd. . . . . . . . . . . . . . . . . . . . . . . " The other conditions of the contract so far as relevant were as under : " 1. The work is to be carried out at Obra Thermal Project Colony, Obra, Mirzapur. 2. All items of work shall be executed in strict accordance with the latest relevant ISI Code and according to the specifications laid down by the Executive Engineer, Orba Thermal Civil Construction Division III, U. P. State Electricity Board, Obra, Mirzapur. 3. If for some reason the Board is unable at any time to issue materials as mentioned hereinafter and the work has to be stopped for want of materials the contractor shall not be entitled to any monetary claim arising out of such circumstances. He shall, however, be granted time-limit extension to the extent of such period as his work remains stopped for want of materials to be issued by the Board. The contractor shall bring such circumstances to the notice of the Engineer-in-charge within twenty-four hours of the arising of such situations. 4. The materials to be issued by the U. P. State Electricity Board, shall be issued at Board's Store at Obra Colony or at Obra Thermal Power Station, Obra, Mirzapur. Nothing shall be paid extra for carriage of materials from the place of storage to site of construction. If any material is consumed in excess of the standard schedule of construction, the cost of the same shall be recovered from the contractor at rates mentioned against each : Material Rate on which excess consumption is to be recovered. 1. Cement Rs. 24 per bag. 2. Steel Rs. 3,200 per M. T. Statement of consumption of the above materials shall be drawn out and submitted for scrutiny at the time of submitting each running bill.
(3.) THE issue of cement and steel shall be regulated on the basis of indent submitted by the contractor or his authorised agent having power of attorney at least 10 days in advance. The contractor shall give proper receipt in respect of all materials issued to him by the Board for use on the works. If the contractor fails to give the receipts, his work will be stopped entirely at his own risk and cost.;