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Surya Alloy Industries Limited Vs. Union of India and Ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Judge
AppellantSurya Alloy Industries Limited
RespondentUnion of India and Ors.
Excerpt:
in the high court at calcutta civil appellate jurisdiction (in appeal from an order passed in its ordinary original civil jurisdiction) present: the hon’ble justice jyotirmay bhattacharya and the hon’ble justice shivakant prasad a.p.o.t no.416 of 2016 with g.a.no.3565 of 2016 surya alloy industries limited versus union of india & ors.for the appellant/petitioner : mr.mr.mr.mr.mr.jishnu saha, sr.advocate, raja basu chowdhury, advocate, gautam shroff, advocate, tanoy chakraborty, advocate, abhisekh singh, advocate for the rites ltd : mr.mr.mr.mr.jishnu chowdhury, advocate, chayan gupta, advocate, a. basu, advocate dwip raj basu, advocate. for the rdso : mr.l.k.chatterjee, advocate, ms.aparna banerjee, advocate. heard on : 29.8.17, 31.8.17, 07.9.17 & 14.09.17 judgement on : 22nd.....
Judgment:

IN THE HIGH COURT AT CALCUTTA Civil appellate Jurisdiction (In Appeal From An Order Passed In Its Ordinary Original Civil Jurisdiction) Present: The Hon’ble Justice Jyotirmay Bhattacharya And The Hon’ble Justice Shivakant Prasad A.P.O.T No.416 of 2016 with G.A.No.3565 of 2016 Surya Alloy Industries Limited Versus Union of India & ORS.For the Appellant/Petitioner : Mr.Mr.Mr.Mr.Mr.Jishnu Saha, Sr.Advocate, Raja Basu Chowdhury, Advocate, Gautam Shroff, Advocate, Tanoy Chakraborty, Advocate, Abhisekh Singh, Advocate For the RITES Ltd : Mr.Mr.Mr.Mr.Jishnu Chowdhury, Advocate, Chayan Gupta, Advocate, A.

Basu, Advocate Dwip Raj Basu, Advocate.

For the RDSO : Mr.L.K.Chatterjee, Advocate, Ms.Aparna Banerjee, Advocate.

Heard On : 29.8.17, 31.8.17, 07.9.17 & 14.09.17 Judgement on : 22nd September, 2017 Jyotirmay Bhattacharya, J.This appeal is directed against an order dated 15th November, 2016 passed by the learned Single Judge of this Court in G.A No.16 of 2013 filed in a suit being C.S.No.417 of 2012.

By the impugned order the plaintiff/appellant was directed to deposit a sum of Rs.1 crore with the RDSO before the plaintiff can supply any further goods of its manufacture to any unit of the railways, whether under any existing contract or otherwise.

In other words, prior to such deposit of Rs.1 crore being made by the plaintiff with the RDSO, no nut or bolt of the plaintiff’s manufacture should reach any railway yard or store or unit in any manner whatsoever.

Upon such deposit being made, the plaintiff may resume its supplies to the railways, save as prohibited by the advice of December 5, 2012 issued by RDSO in the impugned letter.

The plaintiff will not be entitled to supply any metal liners or have any manufactured metal liners inspected by any inspecting agency before the quality of the plaintiff’s metal liners is certified to be as per the IRS specifications by RDSO and before the results on the second set of samples conducted by RDSO are released.

The consequence of the failure of the second set of samples to meet the required specifications will be in accordance with the vendor guidelines in force at the time that the samples were drawn.

If the deposit in terms of this order is made by the plaintiff to RDSO, the same will be invested in such manner as RDSO may deem proper.

If, for a period of five years from the date of such deposit, there is any complaint against the plaintiff in respect of any goods supplied to the railways not adhearing to the specifications and such complaint is upheld, the money will stand forfeited.

However, if the plaintiff is entitled to the refund upon there being no such complaint or such complaint not being found to be justified, RDSO will return the sum of Rs.1 crore together after five years of the deposit being made with interest at the simple rate of 4 per cent per annum, irrespective of whatever interest RDSO may have earned on such deposit.

G.A No.16 of 2013 (which is what the petition was ultimately numbered as, since it was moved with a tender number on December 20, 2012) is dismissed with costs assessed at Rs.5 lakh to be paid by the plaintiff to RDSO immediately.

The prohibition contained in the RDSO letter of December 5, 2012 revives and will remain in force, as aforesaid, unless the plaintiff is entitled to have it vacated in accordance with law and as per the provisions of the vendor guidelines effective in 2012.

The said impugned order was passed in a suit for declaration and injunction filed by the plaintiff/appellant against the defendant/respondent herein.

Following reliefs were claimed by the plaintiff in the said suit.

a) A decree for a declaration that the inspection carried out by the defendant No.2 at the stores of the West Central Railway depot at Bhopal on 24th April, 2012 in respect of supplies made by the plaintiff in or about November, 2011 is illegal dehors the contract between the plaintiff and defendants and null and void and not binding on the plaintiff; b) A decree for a declaration that the impugned letter No.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railway in respect of supplies made by the plaintiff is illegal dehors the contract between the plaintiff and defendants and null and void; c) A decree for a permanent injunction restraining the defendant Nos.2 and 3 from taking any step or further steps pursuant to the impugned Letter No.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railway in respect of supplies made by the plaintiff and/or pursuant to the said inspection; d) A decree for a permanent injunction restraining the defendant Nos.2 and 3 from taking any punitive steps against the plaintiff pursuant to the impugned Letter Nos.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railways in respect of supplied made by the plaintiff; e) A decree for a permanent injunction restraining the defendant Nos.2 and 3 from taking any punitive step against the plaintiff pursuant to the impugned Letter Nos.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued by the defendant No.2 pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railways in respect of supplies made by the plaintiff; f) A decree for a permanent injunction restraining the defendants from seeking to stop production at the plaintiff’s factory and inspection of materials manufactured pursuant to existing contracts in any manner pursuant to the impugned Letters No.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railway in respect of supplies made by the plaintiff g) A decree for a mandatory injunction directing the defendant No.2 to forthwith withdraw the impugned Letter Nos.QA/CT/Metal liner/Confidential/1 and QA/CT/Metal liner/Confidential/2 both dated 5th December, 2012 issued pursuant to inspection carried out by the defendant No.2 at the stores of the West Central Railways in respect of supplies made by the plaintiff; h) A decree for damages which the plaintiff reasonably assess at Rs.1 crore alternatively an enquiry into damages and a decree for such sum as may be found due and payable upon such enquiry; i) Receiver; j) Injunction; k) Attachment; l) Costs; m) Further and other reliefs.

After filing the said suit the plaintiff/appellant filed an interlocutory application praying for the following interim reliefs.

a) An order be made restraining the respondent Nos.2 and 3, their men, servants and agents from in any way proceeding with the opening and testing of second set of samples as specified in their letter dated 5th December, 2012 forming annexure “J” hereof and/or taking any steps and/or further steps on the basis of the said letter dated 5th December, 2012; b) An order be made restraining the respondents from giving effect and/or further effect to both the letters dated 5th December, 2012 being Annexures “I” and “J” thereof; c) An order of injunction be issued against the respondent Nos.2 and 3 restraining them from in any way interfering with the manufacture, production, inspection and supply of contracted goods in respect of the contract which are subsisting by and between the petitioner and other zonal Railways; d) Ad-interim order in terms of above; e) Pass such further order or orders and/or direction or directions be given as this Hon’ble Court may deem fit and proper.

Though initially certain interim relief was granted to the plaintiff/appellant by the learned Trial Judge for a limited period and the same was subsequently extended from time to time but ultimately the plaintiff’s said interlocutory application was disposed of by the impugned order in the manner as mentioned above.

The cause of action of the said suit arose with the issuance of a letter dated 5th December, 2012 by Director/QAC/Mod of RDSO whereby as per clause 20 of general guidelines for vendor development, QC-G-7.1-1 Rev.2, the plaintiff company was advised to stop all further production of Metal Liner to drg.

No.RT-3740 at its firm as precautionary measures to avoid production and supply of potentially inferior product with immediate effect.

The said letter was issued as while testing the fiRs.set of samples manufactured by the plaintiff company by RDSO, it was found that the fiRs.set of samples of the plaintiff company found not conforming to the norms of IRS specification for metal liner.

The plaintiff was intimated that no further inspection will be carried out and the final decision will be taken based on outcome of the results of second set of sample which was to be opened and tested as per the provisions of clause 20 of general guidelines for vendor development, QC-G-7.1-1Rev.2 which remain effective from 5th September 2011.

It is alleged by the plaintiff that the plaintiff is registered as Part-I listed vendor with the RDSO and by virtue of its registration as such with the RDSO, the plaintiff company is entitled to supply various safety items and also other than safety items manufactured by it as per the drawing or specification of the RDSO, to the Railway Authorities as per contract.

As per the contract entered into between West Central Railways and plaintiff company, the plaintiff company manufactured huge quantity of metal liners as per the drawing and/or specification of RDSO bearing drawing no.RT-3740 metal liners and supplied its products to the consignee namely the Railway authorities after its products were tested and certified to be in conformity with RDSO specification and design by Rites Limited a Government of India enterprise.

As per the contract, the plaintiff was required to supply its product to the Railway authorities which accepted the delivery of such supplies only after the plaintiff’s product are certified to be in conformity with specification of RDSO.

Such certification was the design and/or made by Rites Limited after it being satisfied about its product conforming to the standard specification and/or design of RDSO.

Such Satisfaction was recorded by the Rites only after holding several tests on sample checking such as dimension test, hardness and surface test elongation and bent test etc., by Rites Limited at the factory i.e.the place of manufacture of the plaintiff’s company.

Such tests were conducted by the Rites Limited with reference to the gauge approved by the RDSO which was retained with the plaintiff’s company as per the general guidelines for vendORS.On the basis of such test report issued by the Rites officials, the Railway authorities accepted the supplies of metal liner made by the plaintiff company sometime in the year 2011-12 and such supplies were not only used by the Railway authorities but also payment was made by the railway authorities to the plaintiff’s company without raising any dispute and/or complaint with regard to its product not being manufactured in conformity with the RDSO specification.

The Railway authorities which was the ultimate user of those supplies neither made any complaint about the defect in its product supplied to it by the plaintiff company nor ever demanded replacement of such supplies by its products manufactured in conformity of the RDSO specification nor the Railway authorities took any step for refund of the price paid to the plaintiff for any breach of contract made by the plaintiff nor any step was taken by the Railway authorities for cancellation of the contract on account of any breach on the part of the plaintiff company.

In this factual matrix, presently we are not required to consider the rights and obligations of the plaintiff company vis-à-vis the rights and obligations of the railways authority.

In the present case, we are required to consider the rights and obligation of the plaintiff vis-à-vis the rights and obligations of the RDSO with reference to the guidelines of the vendor development as the impugned action of the RDSO is based on the guidelines of the vendor development.

Undoubtedly the RDSO has the authority to test the supplies of the plaintiff’s product not only in couRs.of its manufacture but also after the products are supplied and used by the Railway authorities during the warranty period.

As per the vendor’s guidelines the RDSO is the authority which is empowered not only to downgrade the vendor from List-I to list II but also may delist any company if the RDSO is satisfied on test of second set of samples do not conform the specification and/or design approved by RDSO.

The RDSO is also authorised to upgrade such downgrade company after being satisfied that the conditions for upgradation have been fulfilled by the downgraded company within the stipulated period.

It is provided in 20.1.6 of the vendor’s guidelines that if the fiRs.set of samples fails to meet the acceptance criteria as decided by RDSO, the second set of samples will be tested exactly in the same way as the fiRs.set was tested with a difference to witnessing of the opening of the sample in the presence of the representative of the vendor firm.

20.1.7 of the said guideline provides that in case the fiRs.sample passes the criteria laid down, no further communication will be required with any party.

Normally correspondence may be made to inform if there is any non-conformity of specification so that, corrective action is taken by the firm.

The consequences of failure in the test of fiRs.set of sample is provided in 20.2.1 which runs as follows:“20.2.1:- Failure of fiRs.set: (i) The firm will be advised by the RDSO to stop all further production.

No inspection will be carried out till the testing of second set is done.

(ii) The firm will also be informed to depute their authorized representative to witness the opening of the second set of samples on the appointed date and place.

(iii) The second set of samples will be opened and tested on the appointed date or later as the convenience of RDSO.

(iv) Further couRs.of action will be decided on the outcome of the results of the second set.” Failure on test of second set of samples is provided in 20.2.3 which runs as follows: “20.2.3 Failure of the second set:- If the second set of samples also fails the specified criteria, the entire lot will be considered as failed and action shall be taken as per 20.2.4.” Following actions may be taken by RDSO as per 20.2.4 “20.2.4 In the event of failure of both sets of samples, the corrective action will be as detailed below.

The firm shall be given reasonable time to submit representation if any.

After scrutiny of test result and firm’s representation if any following action shall be taken20.2.4.1 Part I FirMs.(i) Depending upon gravity of test results, one of the following action will be taken: (a) The firm shall be downgraded to Part-II.

The production and inspection of such firms can be resorted only after satisfactory quality audit.

The firm can return to Part-I list only after completion of one year period from date of delisting provided all other conditions are fulfilled.

(b) Firm shall be temporarily delisted for 6 months from date of stoppage of production and Inspection or three months from the date of issue of ordeRs.whichever is later.

After completion of period of delisting, firm shall be restored to Pt.

II status only after satisfactory quality audit.

The firm can return to Part-I list only after completion of one year period in Part-II provided all other conditions are fulfilled.

The criteria for defining gravity of test result is available with QA Civil Directorate of RDSO.

(ii) A special quality audit of the firm shall be arranged either by deputing nominated official of RDSO or based on scrutiny of test results and production/quality control records.

The list of non-conformities or deficiencies shall be given to the firm on the basis of special quality audit.

The firm will submit corrective action taken and the internal Test Report (ITR) of their product after rectifying the non-conformities and deficiencis, as pointed out in the special quality audit.

On submission of compliance report and ITR, the firm’s premises shall be visited again by a Dy.

Director/Director of RDSO to confirm whether the desired corrective action has been taken and if everything is found satisfactory, the production and inspection shall be allowed to resume.

(iii) If the corrective action taken and the internal Test Report (ITR).as submitted by the firm, are not found satisfactory, the firm shall not be given any more chance, instead, the firm shall be de-listed for one year and status will be restored to Pt.II after one year of de-listing, if the ITR is found satisfactory and all other criteria are fulfilled.

It will not however, be taken as a fresh case.

20.2.4.2 Part-II firMs.If the second sample falls, the firm shall be temporarily de-listed for a period of one year from date of stoppage of production and inspection or six months from date of issue of ordeRs.whichever is later.

Special quality audit will be carried out as detailed in 20.2.4.1 ii) above, if the firm is able to rectify deficiencies as pointed out in the technical audit and its ITR is found satisfactory, it shall be restored to Pt.

II List after completion of period of delisting.

If the corrective action taken and the internal Test Report (ITR) submitted by the firm after one year are not found satisfactory, the firm shall not be given any more chance and it shall be delisted for one year, I.e., one year temporary de-listing.

And once de-listed it can return to Pt.

II list only after completion of one year of delisting, provided it has taken corrective action ITR is found satisfactory.

It will, however, not be treated as a fresh case.

20.2.4.3 Once downgraded to Pt.

II, the firm can return to Pt.

I list only after completion of one year period, in Part-II provided all other conditions are fulfilled.

20.2.4.4 Appellate Authority: The appeal against decision of the directorate can be preferred to ADG/RDSO within 30 days of communication of order.

ADG/RDSO may review the case based on records in light of points of appeal.

20.2.4.5 Restoration of de-listed firMs.The firms temporarily delisted due to failure of samples as tested under consignee end policy can be processed by RDSO for restoration as Part-II Vendors on Vendor’s request after completion of minimum stipulated period of and two stage satisfactory quality audit as required under the policy.

Regarding taking penal action, RDSO will intimate concerned railway for taking action as per Penalty Clause in Para 20.2.6 The action regarding restoration of the firm as Part-II Vendor will be independent of the penal action to be taken by the Railways.

However up gradation of such firms from Part-II to Part-I will be considered only after completion of penal action (Ref Para 20.2.6) by Railways in terms of Railway Board’s policy Guidelines.

20.2.4.6 Special Quality Audit of the firm: In case of failure of both the sets, a special quality audit will be conducted by the RDSO at the level of Dy.

Director.

Special Quality Audit of the de-listed firm shall normally be carried out within a period of 2 months after submission of corrective action taken and initial Test Report (ITR) of their product by the firm after rectifying all the deficiencies and non-conformities.

The Executive Director has the discretion of allowing AIE/ARO to carry out the assigned work.” Presently, we are not concerned with the consequence of the failure at the test of second set of samples.

As such, test is yet to be done or even if it is done, no penal action having been taken by RDSO for such an eventuality till date.

We need not consider the legality of any anticipated action that may be proposed by the RDSO against the plaintiff herein.

Here is the case, where the corrective and punitive action was taken by the RDSO as according to RDSO, the fiRs.set of samples fails to meet the acceptable criteria as decided by RDSO.

The plaintiff company was thus advised to stop all further production.

The plaintiff company was intimated that no further inspection will be carried out till the test of second set is done.

The plaintiff’s firm was also informed to depute their authorized representative to witness the opening of the second set of samples on the appointed date and place.

The plaintiff was also informed the date when the second set of sample was to be opened.

Despite such intimation was given to the plaintiff, the plaintiff did not send its authorized representative to witness the opening of second set of samples on the appointed date and place.

Since the metal liner supplied by the plaintiff failed to meet the acceptable criteria as decided by RDSO, RDSO after conducting the test on fiRs.set of samples issued the impugned notice advising the plaintiff company to stop all production until the test of second set of sample is conducted by RDSO.

Thus, competence of the RDSO to issue the impugned notice cannot be challenged, if it is found that the metal liners supplied by the plaintiff to the Railway authorities failed to meet the acceptable criteria as decided by RDSO.

But, in this case, we find from pleading of the respective parties that though RDSO claimed that the metal liner supplied by the plaintiff company failed to meet the acceptance criteria as decided by RDSO on the test conducted by RDSO on the fiRs.set of samples but neither the method which was adopted by RDSO while conducting such test on the fiRs.set of samples was ever disclosed to the plaintiff company nor the details of such test results was communicated to the plaintiff company as it was required as per 20.1.7 of the vendor’s guidelines.

Unless the details of the test result is communicated to the plaintiff, the corrective steps to rectify the defects in its supply cannot be taken by the plaintiff.

The default on the part of RDSO in this regard cannot be lost sight of, as non-compliance of this part of the guidelines by RDSO, disentitled the RDSO to take any penal action against the plaintiff.

It was contended by learned counsel appearing for the appellant that vendor’s guidelines have no statutory force and as such, any step which had been taken by RDSO on the strength of any provision contained in the vendor’s guidelines, cannot be upheld as legal and valid.

We, however, cannot accept such contention of the learned counsel appearing for the appellant, as we find that enlistment of the vendor with the RDSO is a condition precedent for recognizing the vendor’s right to participate in the auction and/or bid to be held and/or floated by the Railway authorities for supply of various safety or nonsafety items to it by the vendor.

In the present case the vendor got itself enlisted with the RDSO as authorized vendor and was included in List-I of the RDSO’s vendORS.As per 2.5 of the said guideline an undertaking was required to be submitted by the firm stating that the contents of the general guidelines for vendor development had been read and understood by their firm and their firm agreed to abide by the stipulation laid therein.

Once such undertaking is given by the plaintiff company for getting it registered as a listed vendor with RDSO, the plaintiff company is stopped from challenging the effectiveness and binding effect of the guidelines upon the plaintiff company as the plaintiff company cannot blow hot and cold at the same time.

In other words after enjoying the benefits under the said guidelines, the plaintiff company cannot challenge its effectiveness in the manner as it is sought to be done by the learned counsel appearing for the appellant.

We, thus, hold that the general guidelines for vendor development is binding upon the plaintiff company even though it has no statutory force.

Let us now consider in this background as to how far the action of the RDSO in issuing the impugned notice can be supported in the facts of the instant case.

Such action of RDSO are to be tested with reference to the guidelines for vendor development.

Since we have held above that notwithstanding the test conducted by the Rites, on the products manufactured by the plaintiff company and the products are certified to be in conformity with the RDSO guidelines and/or specification, still then RDSO has the authority to verify the quality of the vendor’s product by conducting test on fiRs.set of samples and second set of samples within the stipulated time and the decision of the RDSO will supersede the decision of the Rites in case a contrary test result is arrived at by RDSO after conducting test on fiRs.set of samples and second set of samples.

Though RDSO claimed that the metal liners supplied by the plaintiff company failed to meet the acceptance criteria as decided by the RDSO in the test conducted on the fiRs.set of samples by RDSO but the method which was adopted by RDSO while conducting such test has not been intimated to the plaintiff company nor even the test result was communicated to the plaintiff company as per the provision of the general guidelines for vendor development.

Even the gauge with reference to which such test was conducted by RDSO has also not been disclosed to the plaintiff.

Unless RDSO discloses the method which was adopted while conducting the test on fiRs.set of samples and further unless the test results are communicated to the plaintiff/appellant, the correctness of the test result and/or conclusion which was arrived at by the RDSO relying on which the impugned notice was issued by RDSO, cannot be verified either by the plaintiff or by the Court.

The dispute as to whether the Rites issued the conformity certificate after conducting test on the sample products at the factory site of the plaintiff or not is immaterial for the present purpose as apparently a contrary report is coming forward from another expert body viz RDSO.

When two contradictory reports are coming forward to the Court and when both the reports are coming from two different expert body, it will not be proper to accept any of such reports without verifying the correctness of such reports by an independent expert.

Since, the Railway is most vital source of communication for the people of India, we are of the view, that if defective metal liners being a safety item are supplied by the vendor to the Railway authorities and such defective safety items are used in the railway track, use of such safety items may ultimately cause railway accidents bringing disasters to the railway passengers and their family membeRs.All possible steps should be taken to avoid such untoward incidents.

In a case where the Court finds that public interest is in conflict with the private interest, the Court while considering an interlocutory application seeking some interlocutory reliefs by the private individuals, should think twice if not thrice, before passing such interim relief to the private individuals as to whether grant of such relief may likely to jeopardize the public interest.

When public interest is in conflict with private interest, the Court must see that the public interest is not scarified for the sake of private interest and at the same time the Court should also see that the private interest is not ignored at the whims of the authority discharging public duties.

Thus, a balance has to be drawn so that both the public interest and the private interest are secured.

Keeping in mind the aforesaid guidelines, we are of the view that the metal liner supplied by the plaintiff company to the Railways are required to be tested by an independent expert on the subject so that while considering the correctness of the conclusion drawn by the RDSO relying on which the impugned order was issued by RDSO, the Court can arrive at a correct conclusion after considering the expert’s opinion.

Though we were thinking for an independent test of the Metal liner supplied by the plaintiff to the Railway authority, by an independent expert for his opinion as to the quality of such supplies, but after we were informed that no sample products is now available with the Railway authority, we are now of the view that such exercise cannot be materialised by this Court.

Even in the absence of the sample product, the RDSO will not be able to conduct any second test, and if second test is impossible, then follow up actions as per guidelines, cannot be taken by the RDSO.

Thus we feel that the dispute relating to the test result of fiRs.set of samples and/or taking penal action against the plaintiff, if the plaintiff supplies are found to be not in conformity with the RDSO specification and design in the second test, have now become purely academic.

We thus hold that further exercise as contemplated under the guidelines has now become meaningless.

We thus dispose of this application by directing the RDSO to consider the performance of the plaintiff/appellant with reference to its present products with this rider that notwithstanding pendency of the suit, the RDSO is free to take the penal action against the plaintiff/appellant as per the extant RDSO guidelines as it stands now after it has undergone several amendments, if the present supplies of the plaintiff’s metal liners are not found to be in conformity with the IRS design and specification in the light of the contract entered or to be entered between the plaintiff and the Railway authority for such supplies.

RDSO is thus injuncted from taking any penal action against the plaintiff/appellant on the basis of test result of fiRs.set of samples as the correctness of the test result drawn by RDSO cannot be verified by the Court in the present set of facts and also for the reason that entire supply has been utilized without any complain from the user thereof and no untoward incident occurred due to use of these supplies during the warranty period, which leads this Court to presume prima facie that the supplies were in conformity with the order placed by the Railway authority with the plaintiff.

The restriction which was imposed upon the plaintiff/appellant on further production of Metal liner and/or its supplies to Railway authority by the RDSO vide the impugned notice will be kept in abeyance till the disposal of the suit.

The RDSO is directed to refund the security deposit of Rs.1 crore, if already deposited by the plaintiff with the RDSO, together with the interest accrued thereon to the plaintiff within two weeks from date.

Direction for payment of costs by the plaintiff to the RDSO stands set aside.

The impugned order is thus modified.

The appeal is allowed.

The appeal and the application filed in connection therewith are disposed of.

Urgent photostat certified copy of this judgment/order, if applied for, be given to the parties as expeditiously as possible.

(Jyotirmay Bhattacharya, J.) (Shivakant Prasad, J.) Later: After the Judgement is pronounced, Mr.Chatterjee, learned counsel appearing for the RDSO, prays for extension of time for filing written statement by giving the explanation as to the reasons which prevented the RDSO from filing such written statement within the stipulated time.

Such prayer for extension of time for filing written statement is opposed by Mr.Basu Chowdhury, learned counsel appearing for the plaintiff/appellant.

Considering the nature of the dispute and the public interest involved in this litigation, we feel that some extension should be given for filing written statement by the RDSO.

Accordingly, we extend the time for filling written statement till one week after the reopening of the Court after the puja vacation.

If the other defendants also want to file written statement in the suit, they may do so within the time as fixed above.

It is made clear that the time limit, which is so fixed by this Court for filing written statement by the RDSO, is peremptorily fixed by this Court and under no circumstance further extension would be provided to the said defendant.

(Jyotirmay Bhattacharya, J.) (Shivakant Prasad, J.)


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