On or about May, 7, 1981, Alliance Mills (Lessees) Private Limited (hereinfter referred to as the 'Company') the petitioner no. I herein, entered into a contract with the Assistant Director (Supplies), Director of Supplies & Disposals, acting on behalf of the Union of India, for supplying hessian cloth worth Rs. 4,42,145/- to the Commandant, Central Ordinance Depot, Kanpur. Under the terms of the contract, the goods were to be delivered by June 30, 1981. According to the Company, it manufactured the goods as per specification and offered the same for inspection by the Inspecting Authority, as stipulated in the contract on June 11 and June 20, 1980. After obtaining certificate of such inspection, the Company despatched the goods to the consignee on June 30, 1981. The Company then submitted its bills in the prescribed form to the Director-General of Supplies & Disposals and received payment thereof on July 18, 1981. Thereafter, on or about January 16, 1982, the Company received a telegram from the consignee intimating that the goods sent by it had been provisionally rejected, pending final decision. The telegram was followed by a letter dated February 24, 1982 whereby the Compan