Dipak Prakas Kundu, J. - (1.)The writ petitioner company is a small scale industry registered with the National Small Industries Corporation (for short NSIC) and is engaged in the business of manufacturing and supplying various items of stores to the Central Government's purchase organisation such as posts for telegraphs, railways, defence, etc. It has been stated in the writ petition that all the directors of the petitioner company are the citizens of India.
(2.)It is the case of the petitioner company that it entered into an agreement with the Contract/ Purchase Office, Department of Defence Supply, Ministry of Defence, Govt. of India, South Block, New Delhi, representing the President of India, for supply of 'bracket channel iron 4 wires and 8 wires telegraphs Al' against the Contract Purchase Officer's S.O. No. 4(13)/8/80/DS/CPO LMN 1500, dated 29.11.1980. It has been stated by the writ petitioner that the order was for supply of 30,000 pcs. and 4,108 pcs. bracket channel (Annexure 'B' of the writ petition).
(3.)The writ petitioner further stated that the writ petitioner delivered goods worth about [Rs.] 2(two) lakhs in favour of Defence Department out of total order of about [Rs.] 13 lakhs, but the respondent authority withheld payment against the bills of the writ petitioner arbitrarily on the ground of security deposit. It is the case of the writ petitioner that the writ petitioner requested the CPO to deduct the security deposit from the bill till NSIC, Delhi, forwarded the competency certificate to them. The writ petitioner further averred that by a letter dated 29.11.1983 (Annexure 'F' of the writ petition) the office of NSIC sent to the CPO Department of Defence (Supplies) the competency certificate in favour of the writ petitioner and also requested CPO to waive the security deposit clause in connection with the said supply. The writ petitioner stated that in spite of instructions of NSIC regarding release of security deposit amounting to Rs. 32,485 and balance 5% of original bills amounting to Rs. 9,529.51, the respondent authorities wilfully neglected to make the payment and as such the respondents acted arbitrarily and with the motive of unfairness against the writ petitioner with regard to the said transaction. The petitioner stated that on 12.6.1984 the directors of the petitioner company sat with the respondent authority and discussed over the issues involved relating to supply of the balance quantity, payment of security deposit and also 5% balance bill. On 10.4.1985, a thorough discussion was he'd between the writ petitioner and the respondents. In the course of the discussion the respondents assured that they would confirm the increase rate of contract price shortly. But, unfortunately, in spite of repeated reminders, the respondents did not implement the assurance. The respondents by their letters dated 27.10.1983 and 16.5.1984 (Annexure 'H' of the writ petition) rejected the request for 5% balance payment against bill and the security deposit.

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