# PPS International v. Union of India & Ors

- **Citation:** (2023) 5 ILRA 775
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-04-10
- **Case number:** Writ-C No. 38168 of 2018
- **Bench:** Mahesh Chandra Tripathi, Syed Qamar Hasan Rizvi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/pps-international-v-union-of-india-ors-50290
- **Pages:** 23

## Headnote

(A) Civil Law - The Competition Act, 2002 -
Sections 3, 3 (3) (a), 4 (2) (a) (i) , 4 (2)
(a) (ii) 4, 19 (1) (b), 26(2) & 53 (1) & (2) -
power of High Courts to exercise judicial
superintendence over court and tribunal
decisions is part of the Constitution's basic
776 INDIAN LAW REPORTS ALLAHABAD SERIES
structure - Tribunals' decisions are subject
to the High Court's Writ jurisdiction under
Article 226/227 - Tribunals also have the
power to test the vires of subordinate
legislations and rules. (Para -27 )

(B) Civil Law -The Competition Act, 2002 -
Section 53-T - Appeal to Supreme Court -
against
"any
order
passed
by
the
Appellate Tribunal" - Once the respondent
had lost the Reference made on similar
allegation of excessive pricing on the
same materials on record before the CCI,
which are referred in the impugned orders
- thereafter, the Appeal and Review
Application preferred by the CORE before
the NCLAT have also been dismissed - the
findings
recorded
by
the
CCI
have
attained finality - then the issue involved
in the writ petition stood settled and
covered
by
the
CCI
order
and
proved/affirmed by the NCLAT.(Para - 29)

Modification Advice/Orders and Demand Orders
- alleging excessive pricing and violation of Act,
2002 - CORE filed time-barred appeal and
review application against order - dismissed by
NCLAT - appeal not yet filed - order reached
finality
-
Quashing
of
-
Modification
Advice/Orders & Demand Notice for Purchase
Orders - authorities to make payments with
18% interest. (Para - 3,13)

HELD:-Respondent/CORE loses reference to
excessive pricing allegations on the same
material before the CCI. Appeal and review
dismissed. CCI's findings reached finality if
order not challenged under Section 53T of
Act, 2002. Issue settled by the CCI's order.
Modification Advice/Orders & Demand Notice
for Purchase Orders set aside. (Para -
33,34)

Writ Petition allowed. (E-7)

List of Cases cited:

## Text

_Characters 0–39,953 of 79,143. This is a partial read: ask again with offset=39953 for what follows._

5 All. PPS International Vs. Union of India & Ors.
775
Revenue Act, 1901 deals with land revenue
and the jurisdiction of Revenue Officers in
the State. The Act does not regulate
building activity. The Revenue Authorities
are not concerned with planning or
development. The contention is thus devoid
of merit.

19. Counsel for the petitioner
contended that Section 10 of the Act
imposes unreasonable restriction on the
right of a person to raise constructions over
his land. According to him, it is violative of
Articles 14, 21 and 31A of the Constitution.
The contention does not appear to have any
force. Section 10 is not a permanent clog
on right of any person to raise construction
in areas falling under the jurisdiction of the
Authority constituted under the Act. The
construction activity only gets regulated by
the regulatory steps that are taken by the
Authority to ensure proper planning of the
area so that it does not predudicially affect
the industrial development or interests of
the general public there. The Regulations
framed by the Authority in exercise of its
power under Section 19 of the Act contains
specific provisions as regards the manner in
which permission for raising construction
could be obtained. It does not ban the
development or construction activity, but is
only a power to regulate.

20. Article 31A is not at all attracted
to the facts of the instant case. The
contention that the impugned notification
has the effect of acquiring the land of the
petitioner without paying compensation,
does not merit acceptance, inasmuch as, the
impugned notification issued under Article
243-Q, notifying ''industrial township' and
the limits of the lands included therein,
does not have the effect of acquiring such
lands or any building or structure standing
over it, but only subjects the same to the
regulatory measures prescribed by the
Authority to achieve the objective of
planned development of the area.

21. Concededly, the petitioner had
raised constructions without obtaining
previous approval of the Authority. The
impugned order specifically records that
the constructions raised were prejudicially
affecting the planned development of the
area. These findings of fact are not under
challenge. Consequently, we find no merit
in the writ petition.

22. Accordingly, the writ petition is
dismissed. No order as to costs.
----------
(2023) 5 ILRA 775
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.04.2023

BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE SYED QAMAR HASAN RIZVI, J.

Writ-C No. 38168 of 2018

PPS International ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Vivek Kumar Singh, Sri Fuzail Ahmad
Ansari, Sri N. Sinha, Sr. Advocate Sri Navin
Sinha

Counsel for the Respondents:
Sri Rajnish Kumar Rai, Sri Sudarshan Singh

(A) Civil Law - The Competition Act, 2002 -
Sections 3, 3 (3) (a), 4 (2) (a) (i) , 4 (2)
(a) (ii) 4, 19 (1) (b), 26(2) & 53 (1) & (2) -
power of High Courts to exercise judicial
superintendence over court and tribunal
decisions is part of the Constitution's basic
776 INDIAN LAW REPORTS ALLAHABAD SERIES
structure - Tribunals' decisions are subject
to the High Court's Writ jurisdiction under
Article 226/227 - Tribunals also have the
power to test the vires of subordinate
legislations and rules. (Para -27 )

(B) Civil Law -The Competition Act, 2002 -
Section 53-T - Appeal to Supreme Court -
against
"any
order
passed
by
the
Appellate Tribunal" - Once the respondent
had lost the Reference made on similar
allegation of excessive pricing on the
same materials on record before the CCI,
which are referred in the impugned orders
- thereafter, the Appeal and Review
Application preferred by the CORE before
the NCLAT have also been dismissed - the
findings
recorded
by
the
CCI
have
attained finality - then the issue involved
in the writ petition stood settled and
covered
by
the
CCI
order
and
proved/affirmed by the NCLAT.(Para - 29)

Modification Advice/Orders and Demand Orders
- alleging excessive pricing and violation of Act,
2002 - CORE filed time-barred appeal and
review application against order - dismissed by
NCLAT - appeal not yet filed - order reached
finality
-
Quashing
of
-
Modification
Advice/Orders & Demand Notice for Purchase
Orders - authorities to make payments with
18% interest. (Para - 3,13)

HELD:-Respondent/CORE loses reference to
excessive pricing allegations on the same
material before the CCI. Appeal and review
dismissed. CCI's findings reached finality if
order not challenged under Section 53T of
Act, 2002. Issue settled by the CCI's order.
Modification Advice/Orders & Demand Notice
for Purchase Orders set aside. (Para -
33,34)

Writ Petition allowed. (E-7)

List of Cases cited:

1. U.O.I. Vs Tantia Construction Pvt. Ltd., 2011
(5) SCC 697

2. ABL International Ltd. Vs E.C.G.C.I. Ltd. ,
2004 (3) SCC 553

3. M/s K.J. Hospital Vs M/s Technomed
International & ors. , Writ Petition No. 7031 of
2018

4. L. Chandra Kumar Vs U.O.I., (1997) 3 SCC
261

(Delivered by Hon'ble Mahesh Chandra
Tripathi, J.)

1. Heard Sri Fuzail Ahmad Ansari,
learned counsel for the petitioner and Sri
Sudarshan Singh, learned counsel for the
respondents.

2. Pleadings have been exchanged and
with consent of learned counsel for the
parties, this writ petition is being finally
disposed of under the Rules of the Court.

3. Present Writ Petition under Article
226 of the Constitution of India is preferred
seeking following reliefs:-

"A. issue a writ, order or
direction in the nature of certiorari to quash
the impugned Modification Advice/Orders
dated 12/13.09.2018 in respect of Purchase
Order No.CORE/S/1271/5530/20478 dated
27.02.2018,
Purchase
Order
No.CORE/S/1271/5226/20473
dated
12.01.2018
and
Purchase
Order
No.CORE/S/1271/4054/20177
dated
13.09.2013 as well as quash the Demand
Notice dated 26.09.2018 in respect of
purchase order dated 13.09.2013.

B. issue a writ, order or direction
in the nature of mandamus directing the
respondent authorities to make the entire
payments of the petitioner
forthwith
alongwith 18% interest from the actual date
of dues of the petitioner.

C. issue a writ, order or direction
which this Hon'ble Court may deem fit and
proper under the circumstances of the case.
5 All. PPS International Vs. Union of India & Ors.
777

D.
award
the
cost
to
the
petitioner."

4. The brief facts of the case are that
the
petitioner
is
a
partnership
firm
registered under the Partnership Act, 1932
and engaged in business of supply of
specialized electrical equipments imported
from Europe to the Indian Railways. The
petitioner firm is an agent of Arthur Flury,
Switzerland, which is an international
company engaged in the business of
manufacturing several specialized electrical
equipments to be used worldwide in the
electrification of railways as well as in
other fields also. The petitioner firm inter
alia procures "Short Neutral Section
Assembly" also called "Phase Break",
which is approved by the Research Design
and Standard Organization (RDSO). This
equipment is used to separate two different
phases on 25 KV overhead traction of
Railways. It is further stated that there is
only one approved source for this item in
RDSO approved list i.e. M/s Arthur Flury
AG Switzerland, the original equipment
manufacturer, which sells this product
through its authorised Indian distributor i.e.
the
petitioner
firm.
The
Central
Organization for Railway Electrification is
an organization established by Ministry of
Railways, Government of India in the year
1979
for
carrying
out
the
railway
electrification over the entire network of
Indian Railways. In terms of Railway
Board's
letter
bearing
No.RE
(S)14/11/82/0012Pt.
dated
14.11.2017,
SNS Assembly is a centralised procurement
item of CORE, where demand of all Zonal
Railways is consolidated and procured.

5. The CORE floated an online global
tender on their website for supply of 28 sets
of SNS Assembly (Phase Breaks). The
petitioner firm also participated in the
global tender floated by the CORE and
submitted
their
quotation
in
Indian
currency for the imported material from AF
Switzerland. The petitioner quoted the
price on the basis of its previous year
purchase directly from AF Switzerland in
foreign currency. The petitioner made an
offer on fixed price basis, which means that
any fluctuation on account of foreign
currency or custom duty has to be borne by
petitioner
only.
The
petitioner
also
disclosed its price on the basis of
calculation on the current Swiss Franc rates
at the time of bidding and also submitted
the proforma invoice from AF Switzerland,
which is claimed to be same price on which
the CORE bought the material directly
from AF Switzerland some years back. It is
also claimed that Arthur Flury Switzerland
- AF prices remained same from the years
2011 till 2018 in foreign currency as it had
a policy of fixed prices for final customer
and re-seller gets the discount on these
prices. The bid was opened on 18.10.2017
and the petitioner's offer was accepted by
the Competent Authority. Consequently,
legally bounded purchase order was given
to the petitioner for supply of 28 sets of
SNS Assembly (Phase Breaks) vide their
purchase order dated 12.1.2018 with
detailed terms and conditions for total
value of Rs.2.31 crores. It is undisputed
that full material was supplied by the
petitioner firm. The copy of the challancum-tax invoice showing receipt of articles
on 15.3.2018 has also been brought on
record as Annexure No.7 to the writ
petition.

6. Meanwhile, another global tender
was advertised by the CORE on their
official website and solicited online global
bids, which were opened on 29.11.2017 for
supply of 238 sets of SNS Assembly (Phase
Breaks). The petitioner firm had again
778 INDIAN LAW REPORTS ALLAHABAD SERIES
participated in the said global tender.
Finally, the Members of the Tender
Committee accepted the offer of the
petitioner and recommended to procure 176
sets, out of total tender quantity of 238 sets.
It is also claimed that the decision of the
Tender Committee was accepted by the
Higher level Purchase Officer i.e. Principal
Chief
Material
Manager
of
CORE.
Thereafter, the respondent issued the
purchase order dated 27.2.2018 with
detailed terms and conditions for supply of
170 sets for Rs.14.64 crores. It is not
disputed that in response of the purchase
order dated 27.2.2018, the petitioner
supplied the entire articles through various
Challan-cum-Tax
Invoices
dated
26.6.2018, which is appended as Annexure
No.9 to the writ petition. After supply of
the materials instead of clearing the
outstanding amount to the petitioner firm,
the second respondent sent a letter dated
17.05.2018 apprising the petitioner that
they have invoked "Book Examination
Clause" for the present order as well as the
previous order of 2013, which has already
attained finality and the payments have also
been made to the petitioner in January,
2018 itself, as the respondents felt that the
petitioner has made an abnormally high
profit while importing the material from
AF Switzerland. Thereafter, the CORE has
issued impugned modification advice dated
12/13.9.2018, whereby, modification has
been made in respect of purchase orders
dated 27.2.2018, 12.1.2018 and 13.9.2013.
Consequently, the impugned demand order
dated 26.9.2018 has been issued, whereby
the amendment has been issued by the
CORE for lower rates after results of book
examination due to discovery of new rates
of customs bills of entry @ CHF 6400 for
each
set
vide
customs
letter
dated
22.6.2015 and the petitioner firm was
required
to
deposit
Rs.5,19,47,553.80
within 15 days. In case of default to deposit
the said amount within stipulated time, the
recovery would be made from the pending
bills.

7. Record further reveals that in
respect of the purchase order dated
13.9.2013, the bank guarantee which was
given by the petitioner, was invoked by the
CORE. Consequently, the matter was
referred to the Arbitrator and finally, an
award was given in favour of the petitioner
firm directing the CORE to pay the bank
guarantee amount to the petitioner within
30 days from the date of award i.e.
21.09.2017. It is not disputed that the said
award has not been subjected to challenge
by the CORE and the same has attained
finality. Meanwhile, the respondents issued
a notice to the petitioner on 17.5.2018 for
producing books and records in tender
under "Book Examination Clause-IRS
3300" qua the articles supplied by the
petitioner in view of purchase order dated
13.09.2013 as well as purchase order dated
12.01.2018. Even though against the
purchase order dated 13.09.2013 the
respondents had already paid the amount
and it was a closed contract. Said notice
was responded by the petitioner through its
response dated 30.05.2018. Thereafter, the
respondents issued a letter to the petitioner
on 14.06.2018 and reiterated the earlier
demand of supplying the documents. In the
notice dated 17.05.2018 the respondent had
alleged that the petitioner is taking
unreasonable higher profits. Consequently,
the second respondent had preferred a
complaint dated 12.06.2018 under Section
19 (1) (b) of the Competition Act, 2002
before
the
Secretary,
Competition
Commission of India alleging that the
petitioner flouted the provisions of Sections
3 and 4 of the Act, 2002. The said
complaint was treated as a Reference Case
5 All. PPS International Vs. Union of India & Ors.
779
No.05 of 2018 (Central Organisation for
Railway Electrification Office of the
Principal Chief Materials Manager 1,
Nawab Yusuf Road, Civil Lines, Allahabd,
U.P vs. M/s PPS International, Greater
Noida, UP). Finally, the CCI by its
judgment and order dated 27.8.2018 had
proceeded to decide the reference holding
that no case is made out against the
petitioner.

8. The petitioner has preferred the
present writ petition in the year 2018
seeking aforementioned reliefs. After filing
the writ petition, a time barred Appeal
dated 11.10.2019 was filed by the CORE
before
the
National
Company
Law
Appellate Tribunal, New Delhi under
Section 53 (1) & (2) of the Act, 2002
against the judgment and order dated
27.8.2018 and the same was registered as
Competition Appeal (AT) No.79/2019
(Central
Organization
for
Railway
Electrification vs. M/s PPS International).
Notice was also issued to the petitioner, in
which
petitioner
had
filed
its
response/objection on 12.12.2019. Finally,
the appeal was dismissed by the NCLAT
by its judgment and order dated 23.1.2020.
Against the said order, a review application
was preferred by the CORE before the
Appellate Tribunal, which was registered
as Review Application No.01/2020 in
Competition Appeal (AT) No.79/2019. The
said review application was also rejected
by the Appellate Tribunal on 13.4.2022.

9. Initially, present matter was taken up
on 28.11.2018 and on the said date, a
Division Bench of this Court had proceeded
to pass an interim order in favour of the
petitioner to the following effect:-

"Heard Sri Navin Sinha, learned
Senior Advocate assisted by Sri Vivek
Kumar Singh, learned counsel appearing
for the petitioner and Sri Rajnish Kumar
Rai, learned counsel for the respondents.

By means of this writ petition, the
petitioner has come to this Court raising a
grievance that for the supply of material
imported by the petitioner to the Railway, a
contract was entered into between the
petitioner and the Railways and rates were
fixed. After contract was acted upon,
materials were supplied and payments were
also made by the Railway to the petitioner.
But suddenly an order was passed issuing a
show cause to the petitioner stating therein
that petitioner is charging inflated rates,
why rates should not be revised. Thereafter,
the petitioner made a representation, which
was not considered and the Railway
straightway went before the Competition
Commission of India as provided under the
Competition Act, 2002. The said act has
been enacted to provide, keeping in view of
the economic development of the county,
for the establishment of a Commission to
prevent practices having adverse effect on
competition,
to
promote
and
sustain
competition in markets, to protect the
interests of consumers and to ensure
freedom to trade carried on by other
participants in markets, in India, and for
matters connected therewith.

The Competition Commission
rejected the claim of the Railway by
passing an order that no inflated rates have
been presented by the petitioner for the
Railway to revise the same.

It is to be noted that against the
order of Competition Commission, the
Railway had the freedom to approach the
Tribunal constituted under the Act, which
they chose not to and unilaterally revised
the rates by passing an order dated
12/13.9.2018 and consequently, has issued
a demand notice on 26.9.2018 for a sum of
Rs.5,19,47,553.80/-.
780 INDIAN LAW REPORTS ALLAHABAD SERIES

It is to be further noted that once
the
Competition
Commission
already
decided the claim of the Railway, prima
facie, we are of the view that without filing
an appeal, unilaterally rates could not have
been revised.

The
matter
requires
consideration.

Mr. Rajnish Kumar Rai, learned
counsel for the respondents prays for and is
allowed three weeks' time to file counter
affidavit.

List this case after expiry of the
aforesaid period.

Considering the aforesaid, no
coercive steps shall be taken against the
petitioner pursuant to the order dated
26.9.2018 (Annexure No.4 to the writ
petition)."

10. Again on 23.1.2023 the Court had
directed the parties to bring on record the
reference filed by the CORE before the
CCI and consequently, supplementary
affidavit was filed on 29.1.2023 bringing
on record the certified copy of the
Reference Case No.05 of 2018 filed by the
CORE and order passed in Review
Application
No.01/2020
as
Annexure
Nos.SA-4 & 5 to the supplementary
affidavit.

11. In this backdrop, Sri F.A. Ansari,
learned
counsel
for
the
petitioner
vehemently contended that in the most
arbitrary manner, the respondent had
resorted to the "Book Examination Clause"
contained in Indian Railway Standard
Condition of Contract for procurement of
materials and the same could not be
invoked as it was not the part of tender
condition. Unless the Railways specifically
mention the "Book Examination Clause -
Special Condition of Contract" and takes
the consent of the bidders, they cannot
invoke this "Book Examination Clause" at
any point of time. The contracts were
awarded after inviting online global tender
from worldwide companies and settled
after the rates and other terms and
conditions were negotiated by the Tender
Committee.
Accordingly,
with
proper
justification of the prices the same were
approved
by
the
Purchase
Tender
Committee. He submitted that admittedly,
the petitioner's bid stood the lowest and
technically
suitable
bid.
The
"Book
Examination Clause" was not included in
the earlier contract of the year 2013. Even
though the same stood concluded with full
and final payments in the month of
January, 2018 after the arbitration award
was passed by the arbitrator in favour of
the petitioner on 21.9.2017. Thereafter, no
other issues were ever raised by the CORE
in respect of any exorbitant price or making
any undue profits by the petitioner firm.
The entire action of the respondent
authorities was arbitrary with malafide
reasons as they did not give any notice in
respect of the purchase order dated
27.2.2018 and in most arbitrary manner,
they had deducted the amount from the
bills of the petitioner. The same is also in
violation of principle of natural justice.

12. Sri F.A. Ansari further submitted
that in the notice dated 17.05.2018 the
respondent had alleged that the petitioner is
taking unreasonable higher profits without
there being any basis for the same. It is
factually incorrect as the rates were
finalized
through
proper
negotiation
between
the
parties
and
after
due
deliberations the price offered by the
petitioner firm was duly accepted by the
respondent authorities. Accordingly, the
purchase order was issued in favour of the
petitioner firm. Moreover, the second
respondent had filed detailed complaint
5 All. PPS International Vs. Union of India & Ors.
781
dated 12.06.2018 before the CCI, registered
as Reference Case No.05/2018 under
Section 19 (1) (b) of the Act, 2002, against
the petitioner alleging contravention of
provisions of Sections 3 and 4 of the Act,
2002. On the said complaint/reference the
enquiry was made by the CCI on the basis
of material filed by the respondent and
passed an order on 27.8.2018 and rejected
the complaint/reference. He submitted that
while preferring the reference against the
petitioner the CORE has alleged before the
CCI, on the basis of purchase orders, to the
effect that the petitioner's monopolistic
position of single approved source has
increased the rates in recent 12 years
without
any
significant
inflation
in
Switzerland. In support of his submission,
he has placed reliance on the Reference
Case No.05/2018, wherein the CORE had
alleged the excessive pricing viz. "But later
on it was revealed vide "Custom's letter
dated
C.
No.VIII/12/ACC-Import/GrVA/Misc./841/2013 dated 22.06.2015 that
M/s PPS International has imported the
material @ CHF 6400 and jacked up
prices taking benefit of its monopoly
situation." Further, it has been stated in the
last paragraph that "From the above it
becomes clear that M/s PPS International
has misused its dominant position to jack
up prices artificially. In the view of above it
is requested that a case of misuse of its
dominant position to artificially jack up
prices may be registered upon M/s PPS
International".

13. Learned counsel for the petitioner
has also drawn attention on the impugned
Modification
Advice/Orders
dated
12/13.09.2018 in respect of (i) P.O.
No.CORE/S/1271/5530/20478; (ii) P.O.
No.CORE/S/1271/5226/20473
and
(iii)
P.O. No.CORE/S/1271/4054/20177 as well
as Demand Order dated 26.09.2018 in
respect
of
P.O.
No.CORE/S/1271/4054/20177, which state
that the amendment has been issued for
lower
rates
after
results
of
book
examination due to discovery of new rates
of customs bills of entry @ CHF 6400 for
each set. The reference is also drawn on the
chart supplied by the CORE to the CCI
through reference case dated 12.06.2018,
wherein the CORE has leveled the same
allegation of excessive pricing on the basis
of same material against the petitioner. The
CORE had also alleged violation of Section
3 (3) (a), 4 (2) (a) (i) and 4 (2) (a) (ii) of the
Act, 2002. He has also placed reliance on
paras 17, 18 and 19 of the order passed by
the CCI. He submitted that after filing the
present writ petition and the observations
of this Court in the interim order dated
28.11.2018, the CORE preferred a time
barred Appeal before the NCLAT under
Section 53 (1) and (2) of the Act, 2002 on
11.10.2019
against
the
order
dated
27.08.2018 passed by the CCI. The
aforesaid appeal filed by the CORE was
dismissed by the NCLAT, New Delhi vide
its judgment and order dated 23.01.2020 on
the ground of delay as well as on merits
also. Against the said order a Review
Application was filed by the CORE and the
same was also dismissed by the NCLAT on
13.4.2022. While dismissing the review
application the NCLAT observed that it is
open to the aggrieved party to prefer Civil
Appeal before Hon'ble Supreme Court
against the judgment dated 23.1.2020. He
submitted that till date no appeal is filed
and therefore, the order dated 27.1.2018
passed by the CCI has attained finality and
findings therein are not amenable to
scrutiny of this Court which has been
upheld by the NCLAT vide order dated
23.1.2020 and 13.4.2022 (review order)
which is not subjected to challenge before
the Apex Court under Section 53-T of the
782 INDIAN LAW REPORTS ALLAHABAD SERIES
Act, 2002. He submitted with utmost
respect that once the remedy has not been
availed by the CORE even at this belated
stage then this Court does not inhere the
power to sit in appeal or to interfere or
upset the findings recorded by the CCI in
its order dated 27.1.2018.

14. In support of his submission,
learned counsel for the petitioner has
placed reliance upon the judgment of Apex
Court in Union of India vs. Tantia
Construction
Pvt.
Ltd.
and
ABL
International Ltd. vs. Export Credit
Guarantee
Corporation
of
India
Limited. He has also relied upon a
Division Bench judgment of Madras High
Court in M/s K.J. Hospital vs. M/s
Technomed International and others.

15. On the other hand, Sri Sudarshan
Singh, learned counsel for the respondents
has vehemently opposed the writ petition
and submitted that the petitioner firm is an
agent of Arthur Flury, Switzerland since 1st
May, 2008. The Arthur Flury, Switzerland
(AF) is an international company, which is
engaged in the business of manufacturing
several specialized electrical equipment to
be used worldwide in the electrification of
Railway as well as in another field also.
The
CORE
invited
an
international
competitive bid for procurement of Neutral
Phase Assembly Break for 347 sets. After
opening of the tender in February, 2013 the
petitioner's offer stood technically suitable
lowest offer. Consequently, the CORE
invited the petitioner firm for negotiation
with the highest authority and after
negotiation
the
petitioner's
bid
was
accepted. Consequently, a Letter of Intent
for the legally binding contract was issued
by the Purchase Authority vide letter
No.CORE/S/1271/4054 dated 20.08.2013
for supply of 282 sets out of total tendered
quantity of 347 sets and issued a purchase
order.
Further,
several
tenders
were
opened; the company participated and
regularly supplied the equipment. There is
IRS condition in the contract between the
parties, which is essential condition of
contract and it manifestly provides that the
contract will be governed by IRS General
and Special Condition of the bid document.
It is submitted that the Ministry of
Railways issued Government order/letter
No.82/F(F.Ex)24.1/CLW/11 New Delhi
dated 16th November, 1982 imposing the
condition on the commission payable to the
Indian agents of foreign firms.

16. He further submitted that in IRS
condition, books and account examination
is part of the contract and after examining
the books and account of the petitioner, the
respondent
found
that
the
petitioner
concealed the actual rate of the equipment
and the petitioner firm had obtained
purchase order by giving false documents
regarding actual price of material to be
supplied by M/s Arthur Flury, Switzerland.
The alleged document submitted by the
petitioner has been brought on record as
Annexure CA-4 to the counter affidavit.
Consequently, the recovery was made after
the actual price of material imported from
M/s Arthur Flury, Switzerland was found to
be on much lower side as CHF 6400, CHF
7200 & CHF 7200 against the order rate
CHF 8600, CHF 8580 & CHF 8580. The
said recovery was done by invoking "Book
Examination Clause" as mentioned in Para
3300 of IRS conditions of contract. He has
placed reliance on Para-42 of the counter
affidavit filed by the CORE, wherein it has
been stated that in case of any dispute there
is a provision of arbitration clause - 2900
IRS conditions as mentioned in the
contract.
After
the
amendment
in
Arbitration and Conciliation Act, 1996 the
5 All. PPS International Vs. Union of India & Ors.
783
condition clause 2900 was accordingly
amended by the Railway Board and the
same
is
applicable
being
statutory
amendment.

17. It has been further submitted that
while submitting the offer on behalf of M/s
Arthur Flury, Switzerland, the petitioner
has given proforma invoice in which higher
CHF rate was quoted by the petitioner but
at the time of supplying the material they
have paid only CHF 6400, CHF 7200, CHF
7200 per unit respectively in purchase
orders dated 13.9.2013, 12.1.2018 and
27.2.2018. Further the petitioner has
declared
in
their
calculation
sheet
submitted during the negotiation that they
were claiming a profit of 2% over and
above the offered prices in the tender i.e.
CHF 8600, CHF 8590 and CHF 8590 in
purchase orders dated 13.9.2013, 12.1.2018
and 27.2.2018 respectively, whereas the
actual prices of these material were CHF
6400, CHF 7200 and CHF 7200. The
petitioner had misrepresented the actual
prices and on the basis of fraud, they have
obtained the purchase order on high rate by
concealing the material fact. Due to this
difference of prices the Book Examination
as per IRS-3300 has been conducted and
modified advices have been issued for
reduction in the rates of all three purchase
orders and bills have been passed on
reduced rates. Since for these three
purchase orders, supply of material has
already been completed and all bills have
been paid, a recovery notice of Rs.5,19,47,
553.80 has been served on the petitioner for
depositing the said amount. The CORE had
filed the case in CCI challenging the
monopoly and abuse of dominant position
of the petitioner under Sections 3 & 4 of
the Act, 2002. It is not right to link CCI
case with recovery made by invoking
"Book Examination Clause", which is
statutory in nature. Learned CCI has not
considered the issue of difference of rates
quoted by the petitioner in the tender and
rates at which the material was actually
imported by them. Therefore, both the
cases i.e. invoking "Book Examination
Clause" and complaint file at CCI are
different and CCI case should not be linked
with the present case. As mentioned in
these purchase orders, this contract is
governed by IRS conditions, General
conditions
&
Special
conditions
of
Contract. In para no.26 of General
Condition of Contract as well as in Para
2900 of IRS Conditions, it is clearly
mentioned that in the event of any question,
dispute or differences arising the same shall
be referred for approval of arbitrator by
GM/CORE/Allahabad. Once the parties
entered into the contract then they cannot
go beyond the conditions of the contract in
view of principles of judicial discipline.
Therefore, the present writ petition is not
maintainable for contractual dispute and the
same is liable to be dismissed on this
ground.

18. Heard rival submissions and
perused the record.

19. Before proceeding to consider the
rival submissions, it would be appropriate
to re-produce the relevant provisions of the
Act, 2002:-

"3.
Anti-competitive
agreements.-

1. No enterprise or association of
enterprises or person or association of
persons shall enter into any agreement in
respect of production, supply, distribution,
storage, acquisition or control of goods or
provision of services, which causes or is
likely to cause an appreciable adverse
effect on competition within India.
784 INDIAN LAW REPORTS ALLAHABAD SERIES

2. Any agreement entered into in
contravention of the provisions contained
in sub-section (1) shall be void.

3. Any agreement entered into
between enterprises or associations of
enterprises or persons or associations of
persons or between any person and
enterprise or practice carried on, or
decision taken by, any association of
enterprises or association of persons,
including cartels, engaged in identical or
similar trade of goods or provision of
services, which-

a.
directly
or
indirectly
determines purchase or sale prices;

b. limits or controls production,
supply, markets, technical development,
investment or provision of services;

c. shares the market or source of
production or provision of services by way
of allocation of geographical area of
market, or type of goods or services, or
number of customers in the market or any
other similar way;

d. directly or indirectly results in
bid rigging or collusive bidding, shall be
presumed to have an appreciable adverse
effect on competition.

4. Abuse of dominant position.-

1. No enterprise shall abuse its
dominant position.

2. There shall be an abuse of
dominant position under sub-section (1), if
an enterprise or a group,-

a. directly or indirectly, imposes
unfair or discriminatory-

i. condition in purchase or sale of
goods or service; or

ii. price in purchase or sale
(including predatory price) of goods or
service.

Explanation.- For the purposes of
this clause, the unfair or discriminatory
condition in purchase or sale of goods or
service referred to in sub-clause (i) and
unfair or discriminatory price in purchase
or sale of goods (including predatory price)
or service referred to in sub-clause (ii) shall
not include such discriminatory condition
or price which may be adopted to meet the
competition.

53A. Appellate Tribunal.- The
National Company Law Appellate Tribunal
constituted under Section 410 of the
Companies Act, 2013 (18 of 2013) shall, on
and from the commencement of Part XIV
of Chapter VI of the Finance Act, 2017, be
the Appellate Tribunal for the purposes of
this Act and the said Appellate Tribunal
shall-

(a) hear and dispose of appeals
against any direction issued or decision
made or order passed by the Commission
under sub-sections (2) and (6) of Section
26, Section 27, Section 28, Section 31,
Section 32, Section 33, Section 38, Section
39, Section 43, Section 43A, Section 44,
Section 45 or Section 46 of this Act; and

(b) adjudicate on claim for
compensation that may arise from the
findings of the Commission or the orders of
the Appellate Tribunal in an appeal against
any finding of the Commission or under
Section 42A or under sub-section (2) of
Section 53Q of this Act, and pass orders for
the
recovery
of
compensation
under
Section 53N of this Act.

53B.
Appeal
to
Appellate
Tribunal.- (1) The Central Government or
the State Government or a local authority
or enterprise or any person, aggrieved by
any direction, decision or order referred to
in clause (a) of section 53A may prefer an
appeal to the Appellate Tribunal.

(2) Every appeal under subsection (1) shall be filed within a period of
sixty days from the date on which a copy of
the direction or decision or order made by
the Commission is received by the Central
Government or the State Government or a
5 All. PPS International Vs. Union of India & Ors.
785
local authority or enterprise or any person
referred to in that sub-section and it shall
be in such form and be accompanied by
such fee as may be prescribed:

Provided
that
the
Appellate
Tribunal may entertain an appeal after the
expiry of the said period of sixty days if it
is satisfied that there was sufficient cause
for not filing it within that period.

(3) On receipt of an appeal under
sub-section (1), the Appellate Tribunal
may, after giving the parties to the appeal,
an opportunity of being heard, pass such
orders thereon as it thinks fit, confirming,
modifying or setting aside the direction,
decision or order appealed against.

(4) The Appellate Tribunal shall
send a copy of every order made by it to
the Commission and the parties to the
appeal.

(5) The appeal filed before the
Appellate Tribunal under sub-section (1)
shall be dealt with by it as expeditiously as
possible and endeavour shall be made by it
to dispose of the appeal within six months
from the date of receipt of the appeal.

53T.
Appeal
to
Supreme
Court.- The Central Government or any
State Government or the Commission or
any statutory authority or any local
authority or any enterprise or any person
aggrieved by any decision or order of the
Appellate Tribunal may file an appeal to
the Supreme Court within sixty days from
the date of communication of the decision
or order of the Appellate Tribunal to them:

Provided that the Supreme Court
may, if it is satisfied that the applicant was
prevented by sufficient cause from filing
the appeal within the said period, allow it to
be filed after the expiry of the said period
of sixty days."

20. So far as the "Book Examination
Clause-IRS 3300" is concerned, the same is
incorporated in the letter of the Railway
Board dated 27.01.1983, which includes
"Book Examination Clause - Special
Conditions
of
Contract".
The
Book
Examination
Clause
is
reproduced
hereinafter:-

"BOOK
EXAMINATION
CLAUSE

(i) The Contractor shall whenever
called upon and requiring to produce or
cause to be produced for examination by
any Government Officer duly authorised in
that behalf any cost or other account book
of
account,
voucher,
receipt,
letter,
memorandum, paper or writing or any copy
of or extract from any such document and
also, furnish information anywise relating
to such transaction and produce before the
duly
authorised
Government
Officer
returns verified in such manner as may be
required relating in any way to the
execution of this contract or relevant for
verifying or ascertaining the cost of
execution of this contract (the decision of
such Government Officer on the question
of relevancy of any document, information
or return being final and binding on the
parties).

The obligation imposed by this
clause is without prejudice to the obligation
of the Contractor under any statute, rules or
orders shall be binding on the Contractor.

(ii) The Contractor shall, if the
authorised Government Officer so requires
(whether before or after the prices have
been finally fixed), afford facilities to be
Government Officer concerned to visit the
Contractors works for the purpose of
examining the processes of manufacturer
and estimating or ascertaining the cost of
production of the articles. If any portion of
the work be entrusted or carried out by a
sub-contractor or any of its subsidiary or
allied firm or company, the authorised
786 INDIAN LAW REPORTS ALLAHABAD SERIES
Government Officer shall have the power
to examine all the relevant book of such
sub-contractor or any subsidiary or allied
firm or company shall be open to his
inspection as mentioned in clause (i).

(iii) If on such examination, it is
established that the contract price is in
excess of the actual cost plus reasonable
margin of profit, the purchaser shall
have the right to reduce the price and
determine the amount to a reasonable
level.

(iv) Whether a contract provided
for book examination clause the Contractor
or its agency bound to allow examination
of its books within a period of 60 days from
the date the notice is received by the
Contractor, or its agencies calling for the
production of documents as under clause (i)
above. In the event of Contractor's or his
agencies failure to do so, the contract price
would
be
reduced
and
determined
according to the best judgment of the
purchase which would be final and binding
on the Contractor and his agencies."

(emphasis supplied)

21. We have proceeded to examine
the record in question and find that the
CORE is an organization under the
Ministry of Railways and is entrusted with
the responsibility to carry out railway
electrification over the entire network of
the Indian Railways. The CORE inter alia
procures SNS Assembly also called 'Phase
Break' for various Railways Zones from
M/s Arthur Flury AG Switzerland, which
sells this product through its authorised
Indian distributor (petitioner firm). In terms
of Railway Board letter dated 14.11.2017,
SNS Assembly is a centralised procurement
item of CORE, where demand of all Zonal
Railways is consolidated and procured. The
petitioner entered into an agreement with
M/s Arthur Flury AG. The CORE floated
the online global tender on their website for
supply of 28 sets of SNS Assembly (Phase
Breaks).
The
petitioner
firm
also
participated in the global tender. The bid
was opened on 18.10.2017 and the
petitioner's
bid
was
accepted.
Consequently, the purchase order was
given to the petitioner on 12.1.2018 for
supply of 28 sets of SNS Assembly (Phase
Breaks) for Rs.2.31 crores.