2026:BHC-OS:3303 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION rrpillai ARBITRATION PETITION NO. 221 OF 2023 Union of India, through Principal Chief Engineer / Deputy Chief Engineer, having office At Central Railway, represented by Dy. CE/TP, Central Railway, CSMT, Mumbai. … Petitioner Vs.

M/s. Bridge Track And Tower Pvt. Ltd.

(earlier known as M/s. Manish Forgings Pvt. Ltd.), a private ltd. company having its office at 6^th floor 18 R. N. Mukherjee Road, Kolkata- 700 001.

And also having address at:-

Shed No. 2, Plot No. 10, Sector-A, Urla Industrial Estate, Raipur- 492 221. … Respondent Mr. Chetan C. Agrawal a/w Saurabh Gori for the Petitioner/Applicant.

Mr. Aseem Naphade a/w Deepanjali Mishra a/w A. P. Singh i/b A. P. Singh & Co. for the Respondent.

CORAM : GAURI GODSE, J RESERVED ON : 17^th OCTOBER 2025 PRONOUNCED ON : 4^th FEBRUARY 2026 Digitally signed by RAJESHWARI RAJESHWARI RAMESH RAMESH PILLAI PILLAI Date:

15:09:37 +0530 JUDGMENT:

1. This arbitration petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), to set aside the arbitral award passed by the sole arbitrator. The claim in the arbitration is based on a purchase order placed by the petitioner with the respondent (claimant) for the fabrication and supply of 344 fans weighing 60 kg, shaped switches, as per the contract between the parties. By the arbitral award, the respondent’s claim is granted for non-payment of Rs. 24,93,462/- towards the cost of supply of 45 sets of contract goods, and the PVC amount of Rs. 6,38,932/-, which was withheld by the respondent.

Basic Facts:

2. The petitioner had placed a purchase order with the respondent for the fabrication and supply of 344 sets of 60 kg, overriding fan-shaped switches. The petitioner placed another purchase order for the supply of 1014117 ERC. The petitioner alleged that, without supplying the goods, the respondent, in collusion with some railway staff, fabricated the record showing delivery of the goods and fraudulently received the payment. Hence, criminal proceedings were initiated, and the CBI in Pune commenced an investigation. A charge sheet was filed for the offence of forgery and cheating. By relying on Clause No. 2401 of the Indian Railways Standard Conditions of Contract (“IRS terms and conditions”), the petitioner withheld the amount payable to the respondent towards the first purchase order.

3. The arbitral tribunal opined that, under Clause No. 2401 of the IRS terms and conditions, before withholding or retaining any payable amount, the petitioner was required to notify the contractor of such withholding or retention. Since the petitioner failed to submit any evidence to prove that a show cause notice or an intimation was served upon the respondent, the onus of proving the same was not discharged, and thus the petitioner was not entitled to withhold the amount on the ground of pending adjudication of the criminal proceedings. Being aggrieved by the award directing the release of the payment, the original respondent has filed this petition to set aside the award.

4. The following are the admitted dates and events regarding the contract between the parties:

a) On 22^nd July 2011, the petitioner floated a tender for the fabrication and supply of 60 kg (UIC) overriding fan- shaped switches. The respondent submitted a quotation in response to the tender. The petitioner issued a letter of acceptance to the respondent on 17^th November 2011. Accordingly, the petitioner issued a purchase order on 9^th February 2012 for the fabrication and supply of 60 kg (UIC) fan-shaped overriding switches. The contract value of the purchase order was Rs. 1,98,21,758/-. The second purchase order dated 17^th July 2012 was issued by the petitioner for the supply of 10,14,117 Elastic Rail Clips (“ERC”).

b) Thus, based on the letter of acceptance dated 17^th November 2011, two purchase orders were placed. The first purchase order was on 9^th February 2012, and the secon