- (1.) THIS writ application is filed by the petitioner company for issuing a writ in the nature of mandamus commanding the respondent no.1 to release the payment of invoice raised by the petitioner for a total sum of Rs.4,81,54,608. The aforesaid amount was claimed by the petitioner company for execution of work orders and or contracts awarded to it by the respondent no.2 entering into sub-contracts with the petitioner company for manufacturing and supply of additional Berth (Middle Berth) for fitment of the same on longitudinal side of existing AC 3- Tier Railway Coaches and Sleeper Class Rail Coaches running within the jurisdiction of Southern Railway. The petitioner was a company within the meaning of companies Act, 1956 having its registered office at "IMECO House ", Budge Trunk Road, Dakghar, Maheshtala, Kolkata-700141 with its workshop situated at Kharagpur. The respondent no.1 was a company incorporated under the Companies Act, 1956 as a public sector undertaking for manufacturing Rail Coaches, spare parts and Mining Equipments. The Government of India owned 54% of total equity shares and balance 46% was held by public, financial institutions, foreign institutional investors, bank and employees. The respondent no.1 had been designated as "Mini Ratna Category-II " and plays a privotal role and the service core sectors like, defence, rail, power, mining and infrastructure. In other words, the respondent no.1 is a state within the meaning of Article 12 of the Constitution of India having deep and pervasive control of the respondent no.2 on it.
(2.) WITH the objective of increasing passenger carrying capacities it had been decided by the respondent no.3 that the additional Berths(Meddle berths) should be provided on longitudinal side of existing AC 3-Tier Rail Coaches and Sleeper Class Rail Coaches. The above decision was communicated to all General Managers, All India Railways by the competent authority of the respondent no.3 under communication dated April 25, 2007 for taking immediate action of expeditious implementation of that decision under reference to the respondent no.3. The competent authority of the respondent no.3 further informed the General Managers, All India Railways under its communication dated May 22, 2007 that with concurrence of the financial department of the Ministry of Railways that steps were being taken for presenting supplementary demand for grants before the Parliament in its Monsoon Session. The Senior Divisional Mechanical Engineer, Southern Railway and Divisional office awarded contracts for the aforesaid jobs to the respondent no.1 after floating open tender on all India basis by various Zonal Railways. The respondent no.1 entered into sub-contract with the petitioner company for manufacturing and supply of Middle Berths in longitudinal side of 3-Tier Rail Coaches run within the jurisdiction of Southern Railways, amongst other similar sub-contracts in respect of other Indian Railways. The above sub-contract was executed at the office of the petitioner company lying situated at within the territorial jurisdiction of this High Court. The above work was in progress. All on a sudden, competent authority of the respondent no.3 informed the General Managers of all India Railways including the respondent no.4 of its decision with approval of the Hon 'ble Minister to discontinue with the scheme of providing longitudinal Middle Berths in Rail Coaches with immediate effect as also to undertake restoration process immediately for completion of the same within eight months ' time. Meanwhile, the petitioner had manufactured Middle Berths for providing the same on the longitudinal side of existing AC 3-Tier Rail Coaches and Sleeper Coaches. On the basis of the orders placed by the respondent no.1 and submitted its invoices to the respondent no.1 for release of payments for the materials manufactured against their orders. After due verification by the Senior Manager of the respondent no.1 on February 25, 2009 the respondent No.1 submitted, in its turn, raised invoices and submitted the same to the concerned railway authorities on March 6, 2009. The competent authority of the Railway Board informed the General Managers of All India Railways under its communication dated March 13, 2009 that quantification of the work had already done by the contractor(includes the berths and mountings already manufactured but not fitted) till the issue of notification regarding the change in policy might be done by the railways and the contract be foreclosed following the due procedure. It had further been noted by the above communication that based on such quantification, payments to the contracting agency might be released for the work already done till the issue of notification regarding the change in policy. The above communication was issued with concurrence of the Finance Director of Ministry of Railway. The above communication is quoted below: "The General Managers All Indian Railways. ICF, Chennal, RCF, Kapurthala The Director General RDSO, Lucknow Sub. : Provision of longitudinal middle berths in coaches � policy review Ref. : (i) Board 's letter No. 2001/M (C )/137/10 Vol. II Pt. II dated 25.04.2007 (ii) Board 's letter No. 2007/M ( C) /137/9 Pt. Dated 18.02.2009 Further to the Board 's letter dated 18.02.2009 cited as reference (ii) as above, the following clarification is given as some of the zonal Railways have raised certain doubts regarding implementation of the above policy review. (i) The quantification of the work already done by the contractor (including the berths and mountings already manufactured but not fitted) till the issue of the notification regarding the change in policy may been done properly by the Railways and the contract may be foreclosed following the due procedure. (ii) Based on this quantification payment to the contracting agency may be made for the work already done till the issue of the notification regarding the change in policy. (iii) Railway shall follow the instructions issued by RDSO regarding removal of longitudinal side middle berth and restoration of the side upper berth to its original position. (iv) Under no circumstances, the removal of the already fitted berth shall be done through a contract agency and instead the same shall be done departmentally duly ensuring that the coaches are not detained for this purpose and thereby not being available for traffic. (v) Railways shall also follow the instructions to be issued by the RDSO/Railway Board regarding redeployment of these berths to the best advantage of the Railways. 2. This issues with the concurrence of the finance directorate of the Ministry of Railways. Please acknowledge receipt. (Arivan Nautiyal) Director Mechanical Engineering (Coaching) Railway Board. No. 2007/M (C )/137/9Pt. Copy for information to : (1) FA and CAO s � All Indian Railways (2) Dy. Comptroller and Auditor General of India (Railway), 224, Rail Bhawan, New Delhi (with 80 spares). For Financial Commissioner (Railways) Copy to : Sr. PPSs/PSs/PS to CRB, FC, MT, MM, ML, ME, MS, Secretary, EDPM, ED(Coaching) F(X)II and Budget Brach, Railway Board. "
(3.) BY another communication dated June 22, 2010 the competent authority of the Railway Board directed the Chief Mechanical Engineer of India Railways for an early reconciliation and settlement of pending bills. The above communication is quoted below: "Government of India Ministry of Railways (Railway Board) No. 2007/M(C )/137/9/Pt New Delhi, dated 22.06.2010 The Chief Mechanical Engineers, All Indian Railways. Sub. : Payment towards contracts for retrotifment of longitudinal middle berths in GSCN and GACCN Coaches. Ref. : Board 's letters of even No. dated 18.02.2009 and 30.03.2009 Attention is invited to guidelines issued vide Board 's letter dated 30.03.2009 referred to above regarding discontinuance of the scheme of longitudinal middle berths, wherein it was clearly indicated that payments are to be released to the contractors for all such berths which had been fitted on the coaches as also for those which had been manufactured till the date of notification of Board guidelines i.e. 30.03.2009, even if the same were not fitted in the coaches. Reports from various quarters indicate that the comprehensive quantification of the berths manufactured and consequent payments on this account have still not been reconciled/released on many of the Railways. Railways were once again advised vide Board 's letter No. 2010/M (C)/142/2 dated 13.05.2010 to communicate the fund requirements to meet this liability. Some of the Railways have communicated that they are still to come to a conclusive figure and that the bills raised by some contractors are under dispute and subject to reconciliation. Considering that policy directives were issued more than a year back and such berths have been physically removed from the coaches, it is once again requested for an early reconciliation and settlement of the pending bills. Action taken in this context may kindly be advised. (Arvind Nautiyal) Dir. Mech. Engg. (Chg.) Railway Board. " Thereafter, RITES Ltd. a Government of India enterprises, issued inspection certificate dated August 31, 2010 to the respondent no.1 in respect of supply of retrenchment of longitudinal Meddle Berth and 590 GSCN(Sleeper) coaches manufactured by the petitioner company during the period from October 2008 to December 2008 and December 2008 to January 2, 2009 respectively after conducting inspection at the workshop of the petitioner company situated at post office Rakhagungle, Vill- Sadatpur, Kharagpur, District West Midnapore, West Bengal. On August 27 and 28, 2010(at page 38 of this writ application) the Senior Divisional Engineer, Southern Railway object the Chief Engineer(CME) Southern Railway for arrangement of a fund of Rs.5.56 crores for the purpose of settlement of above dues the above communication is quoted below: "Southern Railway Thiruvananthapuram Division Mechanical Branch, Thiruvananthapuram- 695014 Date : 28.09.2010 No. V/M.CW/271/MB E/MAS Sub. : Retro fitment of longitudinal middle berths in GSCN and ACCN coaches at Nagercoil coaching depot. Ref. : This office letter of even No. dated 01.03.2010 A contract was awarded to M/s. BEML Ltd., Bangalore for the fitment of longitudinal middle berths in 589 GSCN coaches and 126 ACCN coaches. During the course of the execution, both the works were short closed vide Railway board letter No/ 2007/M( C) 137/8/Pt. Dated 18.02.2009. The status of the contract at the time of foreclosure of contract is furnished below : Type of coach No. of coaches awarded as per agreement No. of coaches fitted Material already supplied Balance quantity GSCN 589 146 18 425 ACCN 126 6 34 86 In the meantime Railway board vide No. 2007/M(C )/137/9 Pt. dated 30.03.2009 has advised that the payment can be made to the contracting agency for the berths and mountings already manufactured but not fitted till the issue of notification. As such the firm was advised to submit the RITES inspection certificate for the finished products manufactured prior to the cancellation of contract i.e. prior to 24.02.2009. Now the firm M/s. BEML has submitted the RITES certificate for the finished products for 425 coach sets for GSCN coaches and 86 ACCN coach sets with indication of manufacturing date prior to the foreclosure date and the material is readily available at the firm 's vendor 's shop. The financial implication for the settlement of material cost for the balance quantity of material available at the firm 's vendor shop is as follows : I. Retro fitment of longitudinal middle berths in SCN coaches. Material cost for 1 coach set Rs. 1,10,070 Material cost for 425 coach sets Rs. 1,10,070 x 425 = Rs. 4,67,79,750 II. Retro fitment of longitudinal middle berths in ACCN coaches. Material cost for 1 coach set Rs. 1,02,400 Material cost for 86 coach sets Rs. 1,02,400 x 86 = Rs. 88,06,400 Total financial implication for settling material cost for GSCN and ACCN coaches under allocation 23-2131-03 = 4,67,79,750 + 88,06,400 = 5,55,86,150/- When the issue is once settled, the consignments are to be disposed and this huge quantity of such berths are not required for this division this can be better utilized on at work. In this connection Railway Board letter No. 2007/M (C)/137/9Pt. dated 30.03.2009 may please be referred. Hence, it is requested to CME that kindly advised the disposal of the berths including the mountings which is to be accepted form the vendors as per the Railway board directives. Additional fund of Rs. 5,56 cores is required to effect the payment of this materials. So Head quarters may kindly provide necessary funds in the appropriate head of account (23-2131-03). (P.A. Salahudheen) Sr. Divisional Mechanical Engineer " ;