1. With the consent of the parties this Writ application is being disposed of at the stage of admission itself as counter affidavit has been tiled on behalf of the concerned Railway and rejoinder thereto filed.Pleadings are completed.

2. Heard the parties.

3. The challenge in this Writ application is to the communication dated 24.3.2008 of the East Central Railway under the signature of Senior Divisional Engineer (2), East Railway, Danapur directing the petitioner to abide by the instructions issued to commence the work, deposit performance guarantee and execute the agreement within seven days, failing which action as provided under clause 62 of the General Conditions of Contract, 2001, to terminate the contract and get it completed and other actions would be taken against the petitioner. The other actions which are contemplated are forfeitures of earnest money and other punitive action. This communication is Annexure 1 to the Writ application.

4. Mr. Rajiv Kumar Verma,learned Senior counsel appearing in support of the Writ petition has raised a very short and concised point that the aforesaid communication, as contained in Annexure 1, is wholly without jurisdiction, unenforceable and illegal because notwithstanding the alleged letter of acceptance issued by the Railway dated 6.3.2008 (Annexure 4) there is no concluded contract as between the parties and in absence thereof the petitioner is not bound by any agreement nor clause 62 of the General Conditions of Contract, 2001, can apply.

5. It appears that East Central Railway.Danapur Division, issued on 14.9.2007 a notice inviting tender (Annexure 2) in relation to extension of heavy repair bay etc. for main line EMU shed at Jhajha. The approximate cost of the total work involved was assessed at about Rs. 3.26 crores and earnest money that was required to be deposited with the tender was Rs. 6,52,870.00.The period within which the work had to be executed by nine months and the date of opening tender was 25.10.2007.

6. The petitioner, who were reputed contractor with experience and financial capability having worked for Railway earlier intended to respond to the NIT and as such down loaded the tender form, which was available on the Railway website. The Writ petitioner then filed their tender paper along with their letter dated 16.10.07 (Annexure 3) along with earnest money of Rs. 6,52,870/-. In the said letter ( Annexure 3) covering their tender in para 9 thereof they stated thus :

"Sales Tax kindly note that all the fabricated members fabricated and sent from West Bengal shall fall under Central Sales and there shall be no deduction of any provincial Sales Tax from out components."

7. The Railway having received the tender of the petitioner communicated their alleged acceptance letter through letter dated 6.3.2008 (Annexure 4) but in the said communication with regard to Sales Tax they stated thus :

"The payment is subject to deduction of Income Tax with surcharge as applicable and works contract, Sale Tax (Bihar) as per extent rule and submission of current and valid STCC."

8. Your condition regarding Sales Tax has been accepted by the Railway as under-

Sl.no .

Tenderers Comments/conditions

Remarks of Railway

9

Sales Tax : Kindly note that all the fabricated members fabricated and sent from West Bengal shall fall under Central Sales and there shall be no deduction of any provincial sales tax from our components.

As per tender, the work is to be done at JAJ. Hence, state sales tax is applicable. However, this will be regulated as per statutory provisions.

9. The petitioner received the said communication of alleged acceptance of their offer, as contained in Railway letter dated 6.3.08 (Annexure -4) on 11.3.2008 and immediately by their letter dated 20.3.2008 (Annexure 5) they responded clearly stating thus :

"We are in receipt of your letter No.W-7/107/Misc/Open/KEU/07-08, dt. 06.03.2008 received on 11.3.2008 purported to be acceptance of our offer again