- (1.) Aggrieved by impugned order dated 09.04.2013 in W.P.(C) No. 6860 of 2012 in and by which the learned Single Judge found the writ petition not maintainable holding that there are serious disputed questions of fact involved in the matter and also declined to order retesting of Self Contained Self Rescuer (SCSR) units contained in the batch numbered as ARAL, the appellants have approached this Court by filing the present Letters Patent Appeal.
(2.) The appellant no. 1 has claimed that it is a leading manufacturer of safety products such as Self Contained Self Rescuer (SCSR) which is an emergency system for escape from hazardous areas containing smoke, toxic gases, oxygen deficiencies etc. The appellant no. 2 is a subsidiary of M/s Draeger Safety Asia Pte Limited (appellant no.1 herein). The respondent no. 1Central Coalfields Limited (C.C.L.) floated a global tender for supply of Oxygen Type Self Contained Self Rescuer and in response thereof, the appellant no. 1 submitted its offer in Offer No. CCL/T&C/303/0809 dated 12.03.2009. The Supply Order dated 14.09.2009 was issued in favour of the appellant no. 1 for supply of 5000 units of DGMS approved SCSRs of 30 minutes duration with quick starting system and 5000 units of carrying belt for the said equipment and also 25 Rapid Leak Tasting Machine. The appellant no. 1 thereafter, submitted the performance bound/performance bank guarantee for an amount of INR 1,09,36,623/issued by ABN AMRO Bank, Singapore branch which was subsequently kept operational till 15.08.2020. In terms of the Supply Order dated 14.09.2009, the appellant no. 1 supplied materials in 3 batches numbered as ARAN, ARAM and ARAL, all containing SCSR units. As required under the contract the samples totalling 77 in number from the 3 batches being ARAN, ARAM and ARAL were sent to Indian School of Mines, Dhanbad for laboratory testing and these 77 samples cleared the test conducted at I.S.M., Dhanbad. Thereafter, 74 samples of SCSRs from the batches of ARAN, ARAM and ARAL were sent for conducting the Practical Performance Test at Mines Rescue Station, Sitarampur, Eastern Coalfields Limited. It is stated that the sample from the batches of ARAL failed the Practical Performance Test and subsequently respondent no. 1 issued letters dated 29/30.07.2011 and 16.08.2011 directing the General Manager (MM) to separate the 2541 number of SCSRs in batch of ARAL and further directed the General Manager (MM) to advise the appellant no. 1 to replace the entire quantity of batch ARAL. Thereafter, the respondent no. 1 vide letter dated 02.09.2011 directed the appellant no. 1 to replace 2541 numbers of SCSRs contained in batch ARAL. The appellant no. 1 vide letter dated 04.02.2012 responded by offering retesting of the samples at the cost of appellant no. 1 and vide letter dated 24.04.2012 appellant no. 2 also proposed a schedule for retesting of the samples of batch ARAL. However, by letter dated 04.07.2012 the offer of the appellant no. 1 for retesting of batch ARAL was rejected by respondent no. 1 stating that there is no provision in the Supply Order for retesting and on 10.07.2012, the respondent no. 1 invoked the performance bond/bank guarantee amounting to INR 1,09,36,623/for not replacing the 2541 SCSR units of ARAL batch. Thereafter, the respondent no. 1 issued a letter to Singareni Collieries Co. Ltd. to hold back the payment of the appellant no. 1 and also issued a letter dated 28.08.2012 directing the appellant no. 1 to replace the defective materials. Aggrieved, the appellants approached this Court by filing W.P.(C) No. 6860 of 2012.
(3.) In the writ proceeding, the respondents filed counteraffidavits and supplementary counteraffidavits raising objection as to the maintainability of the writ petition stating that, since the entire dispute between the parties are based on disputed questions of fact and the dispute has arisen out of contract therefore, the writ petition was not maintainable. It is stated that Clause 17 of the Supply Order specifically stipulates that in case of unsatisfactory test result even for a single sample either at the laboratory or in the Practical Performance Test, the entire batch of supply shall be rejected. The said provision was included in the Supply Order on the basis of the guidelines issued by the Director General, Mines Safety. The SCSR units supplied by the appellants are life saving equipments which are provided to the workmen in the mines for their safety. The equipments are procured on the direction of Director General, Mines Safety under the Mines Act and as per DGMS Circular and therefore, the respondents under any circumstances cannot compromise with the quality of the Self Contained Self Rescuers. In order to ascertain the quality of SCSRs supplied by the appellants, joint sample test was done on random basis and 38 samples were sent to the General Manager (rescue service), Mines Rescue Station, Sitarampur for the Practical Performance Test in presence of both the parties. Since, the test results did not conform to the prescribed standard and it was found that the samples from batch ARAL were defective pieces, the appellants were directed to replace the entire batch in terms of Clause 17 of the agreement. However, the appellants did not replace the defective batch and since, it had already realized excessive payment from Central Coalfields Limited, the respondents forfeited the dues and invoked the bank guarantee furnished by the appellants. It is also stated that under Clause 5(B) of the agreement, the respondents are entitled to claim liquidated damages besides invoking bank guarantee and therefore, it has filed money suit claiming the liquidated damages for deliberate breach of contract committed by the appellants.;