IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.5343 of 2009 1. KIRLOSKAR BROTHERS LIMITED, 8, CAMAC STREET, SHANTI NIKETAN, 2ND FLOOR SPACE NO. 1, KOLKATA THROGUH ITS MANAGER (WATER RESOURCES MANAGEMENT) SWAPAN KUMAR BASU. 2. SWAPAN KUMAR BASU SON OF LATE DR. PRAFULLA KUMR BASU, RESIDENT OF 27/N, DWIJEN MUKHERJEE ROAD, KOLKATA P.S. BEHALA, DISTRICT 24 PARGANAS AT PRESENT POSTED AS MANAGER (WATER RESOURCES MANAGEMENT) IN KRILOSKAR BROTHERS LIMITED. Versus 1. THE STATE OF BIHAR 2, THE ENGINEER-IN-CHIEF CUM SPECIAL SECRETARY , PUBLIC HEALTH ENGINEERING DEPARTMENT, NIRMAN BHAWAN CAMPUS, BAILEY ROAD, PATNA. 3. EXECUTIVE ENGINEER, P.H.E. DIVISION, GAYA. ----------- For the Petitioners :- M/S. Madhuresh Prasad & Ranjan Kumar. For the State :- A.C. to AAG III ----- 4 19/02/2010 The respondents State authorities have withheld a sum of Rs.51,51,421/- from the three running accounts bills of the petitioners on the purported ground that the petitioners have failed to deposit the excise duty component. This withholding of the amount is being termed as arbitrary, based on extraneous considerations and an illegal act by the State authorities without any sanction of law. The writ in question is for a direction upon the respondents to release this amount forthwith if not already released and even pay interest at the bank rate on the withheld amount. - 2 - The petitioner Company responded to a notice dated 9.2.2007 which was a notice inviting tender for what is known as augmentation of drinking water supply scheme. The work included creation of water source, construction of pump house, supply and installation of mechanical and electrical instruments, making provisions for raising mains, distribution of net work, ground service reservoir etc. in the town of Gaya. The work was to be carried out on Turnkey basis. The petitioner Company having required expertise responded to the said tender notice. The terms and conditions are detailed in the notice inviting tender. The petitioner Company was awarded the work which is stated to be successfully completed but when it came down to payment of bills, three amounts from the running account bill came to be deducted or withheld, details of which have been furnished in paragraph 26 of the writ application. The reason why these amounts have been withheld is because the respondents authorities were of the opinion that the petitioners have breached clause 2.1 of the tender document. In view of the said provisions, it was incumbent upon the petitioners to get the extended exemption from the - 3 - Customs and Excise Department in respect of water treatment project for supply of drinking water for human and animal consumption in terms of notification nos. 91/2002 CUS and 47/2002-CUS issued on 6.9.2002 by the Ministry of Finance and deposit the excise component in shape of Bank draft as a refund to the State. The petitioners have denied any liability under the said agreement clause. There is also statement that the petitioner never quoted excise component in the price or the financial bid made by him and in view of the same, there was no occasion for the Company to deposit the so called exempted custom and excise amount with the respondent State. The stand of the State, however, is very clear. The terms and conditions of the advertisement categorically lay down that all prices were inclusive of taxes including excise duty and incidental charges. Even in the pre-bid meeting, those aspects were clarified to all the bidders. The effort on the part of the petitioner is to now draw illegal gain and advantage by withholding excise exemption benefit, to which the Company is not entitled to. - 4 - The broad matrix of the dispute has been laid down by the Court above, but there are many other dimensions which are required to be gone into before the issue can be decided one way or the other. There is no adequate material in this regard on the record to facilitate adjudication of the dispute within the parameters of the writ jurisdiction. It is in this background the Court has come to the considered opinion that without expressing any opinion on the merits of the rival claims, the Court would advise the petitioner to go for an arbitration, get the reference made on all these issues and may be the outcome of the arbitral award may settle the issue or the dispute as the contract carries an arbitration clause. In view of the above, the Court refrains from adjudicating the issues raised in the writ application with liberty to the petitioner to seek arbitration under the Arbitration Act. This writ application is dismissed. AMIN (Ajay Kumar Tripathi, J.)