IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.3909 of 2008 M/S PANNA LAL KANHIYA LAL BANSAL, a Proprietary concern having its Head Office situated at AK-97, P.O.: Shalimar Bagh, Delhi-110088 through its Proprietor, Kanhiya Lal Bansal, S/o late Panna Lal Bansal, Resident of AK-97, P.O.& P.S.: Shalimar Bagh, District: Delhi-110088 VERSUS 1. The East Central Railway having its Zonal Office situated at Hajipur, District-Vaishali through General Manager. 2. The Chief Administrative Officer (Construction Organization) East Central Railway (Construction Organization) having its Office at Mahendru Ghat, Patna. 3. The Chief Engineer (Construction/Headquarters), East Central Railway, Mahendru Ghat, Patna. 4. The Dy. Chief Engineer (Construction/Track Supply), East Central Railway, Mahendru Ghat, Patna. ----------------- Advocate for the Petitioner : Mr. S.D. Sanjay, Advocate. Mr. Akash Chaturvedi, Advocate. Advocate for the Respondents : Mr. N.K. Agrawal, Sr. Advocate. Dr. Kumar Uday Pratap ------------------- 08 30.09.2008 The petitioner had entered into an agreement for supply of Elastic Rail Clip (ERC) to Railway. The raw materials as per the agreement were purchasable from any Railway approved source. One of the sources available locally to the petitioner was Rashtriya Ispat Nigam Limited (RINL), which had its depot in Delhi itself. Petitioner’s case has been that though as per the agreement he could purchase the raw material from any Railway approved source, he was restricted in this regards by subsequent conduct of the Railway forcing him to procure it only from RINL. This create a great problem for the petitioner, inasmuch as, for a considerable period raw material was not available at Delhi at their depot, partly they could have lifted from outside Delhi, which involved additional taxation. Petitioner sought permission to lift raw material from other Railway 2 approved source, which was not granted. It had raw material from other approved source, which was inspected and approved but then deliveries were not accepted because of which petitioner diverted it to other regions. Petitioner was given extension upon payment of liquidated damages but then letter of extension was refused and the contract was cancelled with risk and cost Clause. Petitioner submits that Railway may have the authority to cancel the contract but could not impose the risk and cost Clause, inasmuch as, they had unauthorizedly restricted the right of the petitioner under the contract to procure raw material from any source approved by Railway. The freedom of choice of source from amongst approved suppliers was restricted to only one. Which act was itself unauthorized and even that source was not in a position to deliver the raw material at Delhi itself. It was further submitted that even when raw material from other sources was made available for inspection, inspected and approved by the Railway still the product was not inspected. Thus, it is submitted that even though there was delay on part of the petitioner he was not solely responsible and that being so the risk and cost Clause could not be invoked against him. On behalf of Railway, it is sought to be asserted that there were no restrictions on purchase of raw material. The petitioner did not keep up to schedule and now was attempting to escape consequences. Mr. N. K. Agrawal, learned senior counsel appearing for the Railway very fairly produced the original file dealing with the matter. I have perused the file, as well. From the communications on 3 record and the notings in file one does get an expression that Railway initially was restricting the source on the ground that permitting another source would create accounting complications as the best price was fixed with reference to RINL, Visakhapatnam, again it is clear that stocks of raw material from another source was unaccepted but what had happened thereafter is not clear. Lastly, it is clear that a decision was taken to permit purchase of raw material from source other than the RINL. But one thing is also apparent that the petitioner was for one reason or the other much delayed in his schedule or delivery. To what extent Railway was responsible for the delay or to what extent petitioner was prevented are questions which cannot conveniently be decided by this Court in these summary proceedings with certainty. Mr. Agrawal has pointed out that in the agreement there is an arbitration Clause for settling such disputes. In my view, it is proper that the parties refer the matters for settlement out side the Court by arbitration, which would be competent to examine the records in detail and come to some definite finding on basis of the records and other materials. The Arbitrator would be competent to deal with all questions that the petitioner may seek to raise within the scope of the arbitration Clause, if such arbitration is called for. This Court in view of the disputed questions of facts is unable to entertain this writ petition. It leaves it to the petitioner to seek remedy by way of arbitration or any other appropriate remedy that it may be advised. Mr. S.D. Sanjay, learned counsel for the petitioner prays for an interim protection. In my view, the prayer cannot be accepted on 4 two grounds. Firstly, the Arbitrator under Arbitration and Conciliation Act now is competent to grant interim reliefs and consequently once this Court finds it difficult to entertain the writ petition, it is not competent to grant an interim relief. The original file of the Railway is returned. The writ petition is thus not entertained, in view of the observations and directions as contained above and is dismissed as such. Trivedi/ ( Navaniti Prasad Singh, J.)