I.P. Mukerji, J. - (1.) This is an application under Section 34 of the Arbitration and Conciliation Act, 1996. The award dated 19th August, 2013 passed by a former judge of the subordinate judiciary is under challenge.
(2.) A very interesting point is involved. On 21st October, 2008 the petitioner Bharat Sanchar Nigam Limited concluded a contract with the respondent Star Battery Limited. The respondent was to supply 542 items of battery described as SMF VRLA 600 AH to the petitioner at or for the gross consideration including duties and taxes, of Rs. 10,40,23,149.46/-. The delivery schedule was four months from the date of issuance of the purchase order and also according to the monthly delivery date mentioned in the contract document. It was also provided that any extension of supply beyond the scheduled date of delivery would attract clauses 12 and 24 of the bid document.
(3.) Clause 24 is important. The whole determination of the arbitral reference depends on interpretation of this clause. It is set out below: "24. Fall Clause 24.1. the prices once fixed will remain valid during the scheduled delivery period except for the provisions in clause 12.1 of Section-III. Further, if at any time during the contract. (a) it comes to the notice of the purchaser regarding reduction of price for the same or similar equipment/service; And/or (b) the prices received in a new tender for the same or similar equipment/service are less than the prices chargeable under the contract, the purchaser, for the purpose of delivery period extension, if any will determine and intimate the new price, taking into account various related aspects such as quantity, geographical location etc. and the date of its effect for the balance quantity/service to the vendor. In case the vendor does not accept the new price to be made applicable during the extended delivery period and the date of its effect, the purchaser shall have the right to terminate the contract without accepting any further supplies. This termination of the contract shall be at the risk and responsibility of the supplier and the purchaser reserves the right to purchase the balance unsupplied quantity/service at the risk and cost of the defaulting vendor besides considering the forfeiture of his performance security. 24.2 (a) the vendor while applying for extension of time of delivery equipment/services, if any, shall have to provide an undertaking as "we have not reduced the sale price, and/or offered to sell the same or similar equipment/service to any person/organisation including Department of Central/State government or any Central/State PSU at a price lower than the price chargeable under the contract for schedule delivery period. (b) In case undertaking as in Clause 24.2 (a) is not applicable, the vendor will give the details of prices, the name (s) of purchaser, quantity etc. to the purchaser while applying extension of delivery period.";