JUDGMENT & ORDER : The petitioner, Siliguri Electric Works is a manufacturer and supplier of distribution transformer (Dry and Oil) etc. In response to the notice inviting tender dated 11.12.2013 [Annexure-3 to the writ petition] for supply of ‘Design, Manufacture, Testing at works, Supply & Transportation of 25 KVA, Aluminum wound, 11/0.433-0.250 KV, 3 phase, 50 Hz, Distribution Transformer 200 nos.’ the petitioner quoted their rates. 2. There is no dispute the supply order was issued in favour of the petitioner on 19.05.2014 for 200 nos. of distribution transformers of for an amount of Rs.1,00,33,000.00/- (one crore thirty three thousand). The petitioner had accepted the supply order with its terms and conditions without any reservation. In clause-8 of the said supply order it has been provided that as per contract clause No.20.4 in Section (iii), pre-dispatch inspection shall be conducted by the authorized representatives of the TSECL and all expenses involved due to lodging and boarding of stay outside the state etc. for conducting pre-dispatched acceptance test etc. would be defrayed in terms of the said contract. It is also not in dispute that the said pre-dispatched inspection was to ensure that the materials are supplied in terms of the specification. Further details of the contract [Annexure-7 to the writ petition] do not have any relevance in the present context save that the approved design was made part of the said agreement [pages 103-105 of the writ petition]. 3. The petitioner has stated that pre-dispatched testing was conducted and its report dated 29.09.2014 was communicated to the petitioner and only thereafter those materials were dispatched. The petitioner has averred that the guarantee certificate for a period of 12-18 months were also issued while transporting those transformers to reach the store of the respondents. The respondent No.2 had also received those goods and thereafter the petitioner was requested by the letter dated 15.11.2014 to depute one representative to witness the testing in the store of the respondents. Having received that communication dated 15.11.2014, the testing was carried out on 26.11.2014. During testing suddenly it was located that the machine was not working properly and as a result the testing could not be completed. Thereafter no testing was done. However, the petitioner requested for the testing report by the communication dated 22.12.2014 [Annexure-11 to the writ petition]. 4. Having received that communication dated 15.11.2014, the testing was carried out on 26.11.2014. During testing suddenly it was located that the machine was not working properly and as a result the testing could not be completed. Thereafter no testing was done. However, the petitioner requested for the testing report by the communication dated 22.12.2014 [Annexure-11 to the writ petition]. 4. Suddenly, the petitioner received the show cause notice dated 08.12.2014 issued by the respondent No.2 stating that 200 25KVA transformers as delivered to Electric Store Division of TSECL were not matching with the guarantee technical particulars offered by the petitioner as per the agreement. As a result, the progress of works for which those transformers were required had suffered serious setback. The corporation-respondents also have claimed that they have suffered huge loss within the meaning of clause-21.0 of Section(iii) of the contract. 5. The petitioner was asked to reply the said show-cause. The reply was sent to the respondent No.2 on 09.12.2014 stating that the pre-delivery testing was found satisfactory and the expert deputed by the respondents issued dispatch instruction for physical delivery. Having received the reply dated 09.12.2014 [Annexure-13 to the writ petition] the respondent No.2 wrote another letter on 19.12.2014 denoting that the reply was not satisfactory. Hence, the entire lot of 25KVA transformers was declared rejected for not conforming to the specification and the petitioner was requested to lift the materials within 7(seven) days of the intimation as per clause 21.4 of Section(iii) of the contract, failing which the requisite action will be taken. 6. The petitioner, in response thereto, wrote a letter on 24.12.2014 to the respondent No.2 stating that the petitioner will lift the entire lot of 25KVA DTR within January, 2015 inasmuch as a good number of transport vehicles would be required, but there was scarcity of the appropriate transport vehicles. 7. The respondent No.2 did not give any reply. But on 22.01.2015, the petitioner wrote another letter to the respondent No.2 for extending the warranty period for 6(six) months so that the petitioner can comply the supply order as per specification. It was also noted in the said letter dated 22.01.2015 [Annexure-16 to the writ petition] that for such replacement, the respondents may also deduct some amount, as it would be agreed, from the bill. It was also noted in the said letter dated 22.01.2015 [Annexure-16 to the writ petition] that for such replacement, the respondents may also deduct some amount, as it would be agreed, from the bill. The petitioner has averred in para-19 of the writ petition that the respondents extended the time till the last week of February, 2015 orally and necessary arrangement was made for lifting. By 12.02.2015 all the transformers were lifted from the store of the respondents. 8. The petitioner further, by a letter dated 05.02.2015, wrote to the respondent No.2 that they have preferred an appeal before the Chairman-cum-Managing Director (CMD, in short) of the Corporation by their correspondence dated 13.01.2015. The respondent No.2 was asked not to decide the contract finally till the appeal is determined. Thereafter, the petitioner sought 6-8 months time to supply the goods after rectification of the defects in the transformers, earlier supplied and they had also requested to waive liquidated damage and penalty. The petitioner did not get any response but by the notice under No.F.20(40)/DGM (MM)/ESD/351-62 dated 22.05.2015, the petitioner’s firm was informed that the earnest money to the extent of Rs.2,75,800/- would be forfeited and the petitioner has to explain why they should not be debarred for at least three years in the Corporation. The petitioner-firm has averred in para-26 of the writ petition that in the contract/agreement there is a clause for debarring for any period. But the respondents, according to the petitioner, did not give any importance to clause 1.25 of Section(iii) of the contract/agreement where it has been clearly provided that the contractor shall be liable to repair/replacement of any defect. Clause 1.26 provides about the defects which could not be detected during inspection, testing etc. Further, in clause 21.4 of the contract/agreement it is provided that the materials supplied if found are not conforming to specification shall be taken back by the supplier. 9. The petitioner has also asserted that even though there is a provision for arbitration, but the respondents had decided to take drastic action against the petitioner. The petitioner had renewed the prayer for rectification of defects and to deliver 200KVA DTR after clearance by inspection. 9. The petitioner has also asserted that even though there is a provision for arbitration, but the respondents had decided to take drastic action against the petitioner. The petitioner had renewed the prayer for rectification of defects and to deliver 200KVA DTR after clearance by inspection. In para-27 of the writ petition, the petitioner has averred as under: “That, again the respondent is in violation of contract agreement section III Clause 1.25, Clause, 21, 21.4, Clause 35, Section IV and Clause 16.0 (b) of the agreement and the same has been taken arbitrarily and with malafide intention and as such, the notice No.F.20(4)/DGM(MM)/ESD/351-62 dated 22/5/2015 issued by the respondent No.2 is liable to be quashed.” 10. Mr. K.N. Bhattacharjee, learned senior counsel has appeared for the petitioner and having laid all the relevant facts has contended that clause-21.3 provides that no testing charge would be recovered for the first testing. In case the repaired/replaced supplied item failed again on testing, the charges for testing together with all incidental expenses incurred by the purchaser shall be borne by the supplier. If after testing, some defects were pointed out, the respondents shall give opportunity to the petitioner to repair/replace the materials and after repair/replacement if the replaced item do not conform to the specifications, the petitioner could be asked to take back the supplied items. For purpose of reference, the relevant provisions in respect of the inspection after receipt of the store are reproduced hereunder: “21.1 The purchaser shall have option to test the samples selected at random from the supply affected to ensure that the supplies conform in quality and workmanship to the relevant specifications and also conform to the approved sample. 21.2 Fifteen days advance intimation will be given to the suppliers to depute representative to witness the tests and if the materials failed, the testing will be carried out in absence of their representative on the schedule date. If the materials fail, in above random sample testing, the lot will be rejected. 21.3 No testing charges would be recovered for the first testing. In case the repaired/replaced supplied item fail again on testing, the charges for testing together with all incidental expenses incurred by the purchaser shall be borne by the suppliers. If the materials fail, in above random sample testing, the lot will be rejected. 21.3 No testing charges would be recovered for the first testing. In case the repaired/replaced supplied item fail again on testing, the charges for testing together with all incidental expenses incurred by the purchaser shall be borne by the suppliers. 21.4 The materials supplied against the order and not conforming to the specifications shall have to be collected by the supplier at his cost, on refunding the amounts paid therefore, within 7 days of intimation of failure of these materials on testing.” 11. Clauses 1.25, 1.26 and 14.2, according to Mr. Bhattacharjee, learned senior counsel, are relevant in the context. The petitioner ought to have been provided with opportunity to replace the defective materials before determining the contract. Clauses of the contract/agreement as referred are as under: “1.25 “Guarantee period”/”Maintenance Period” shall mean the period during which the Contractor shall remain liable for repair or replacement of any defective part(s) of the works/Supplies performed under the contract. 1.26 “Latent Defects” shall mean such defects caused by faulty designs, material or workmanship which cannot be detected during inspect, testing etc, based on the technology available for carrying out such tests. ** ** ** ** ** ** ** ** ** ** ** ** 14.2 The materials found detective within the above guarantee period shall be repaired/replaced by the supplier free of cost within three month of receipt of intimation. If the defective materials are not repaired/replaced within the specified period, the purchaser shall recover an equivalent amount plus 15% supervision charges from any of his bills or from the performance guarantee deposit.” 12. For termination of the contract, the respondents were supposed to give 15(fifteen) days notice in writing to the supplier communicating the decision to terminate the contract under Clause-36.1 of the contract/agreement. But in the notice dated 08.12.2014 [Annexure-12 to the writ petition] no such time-frame was set up regarding termination. It was the notice, according to Mr. Bhattacharjee, learned senior counsel, under clause-21.0 of Section(iii) of the contract agreement. But on scrutiny it is found there is a clause in the notice as under: “Therefore, you are hereby asked to explain why action shall not be taken against your firm for beach of contracted specification as well as inflicted time over run to complete the supply. Bhattacharjee, learned senior counsel, under clause-21.0 of Section(iii) of the contract agreement. But on scrutiny it is found there is a clause in the notice as under: “Therefore, you are hereby asked to explain why action shall not be taken against your firm for beach of contracted specification as well as inflicted time over run to complete the supply. Your reply in this regard should reach to this office within 7(seven) days.” 13. Mr. Bhattacharjee, learned senior counsel has drawn attention of this court to the subsequent notice dated 22.05.2015 [Annexure-21 to the writ petition]. For purpose of the reference, the entire text of the said notice is reproduced hereunder: “Tripura State Electricity Corporation Limited (A Govt. of Tripura Enterprise) Office of the Deputy General Manager (Material Management) Electrical Stores Division, Arundhatinagar, Agartala –799003, Tripura Tele Fax: 91-381-2373009; E-mail:dgmmaterial@gmail.com No.F.20(40)/DGM (MM)/ESD/351-62 Dated : 22/05/15 Notice Whereas, as agreement for Design, Manufacture, Testing at works, Supply & Transportation of 25 KVA, Aluminum wound, 11/0.433-0.250 KV, 3 phase, 50 Hz, Distribution Transformer between the DGM(MM), Electrical Store Division and M/S Siliguri Electric Works, 266/2 George Mahbert Road, Subhash Market, Siliguri was made vide agreement no: DGM(MM)/MMD/2014-15/08, dtd 27.06.2014. and, Whereas, as per terms and condition of above agreement, pre-despatch inspection and dispatch clearance for 25 KVA, Aluminum wound, 11/0.433-0.250 KV, 3 phase, 50 Hz, Distribution Transformer was made on 29.09.2014. and, Whereas, you have delivered 200 nos. 25 KVA, Aluminum wound, 11/0.433-0.250 KV, 3 phase, 50 Hz, Distribution Transformer against above agreement as well as supply order no.AGM/DP & C/DT/TSECL/13-14/683-88, dtd 19.05.2014 at Electrical Store Sub-division vide invoice no 174, 175 dtd 24.10.2014, 179, 180, 181, 185 dtd 27.10.2014, 186 dtd 28.10.2014 & 189, 190, 191 dtd 31.10.2014. and, Whereas, during physical verification at Electrical Store Sub-division by a group of expert Electrical Engineers of TSECL is presence of your local representative it is found that the effective core area, core diameter, size of winding wire for H.T. type of insulation of HV winding, internal & external dia of HV coil, fixed loss, load loss, total loss, internal dimensions of tank, reinforcement of tank side, phase-to-phase bushing clearance of HV, size of each fin of radiators, total oil-filled weight, weight of complete transformer are not as per specification of NIT. and, Whereas, you were asked to show cause vide letter no.F.20(40)/DGM(MM)/ESD/2294-99, dtd 08.12.2014 why action shall not be taken against your form for breach of contracted specification & time schedule and, Whereas, the reply furnished by you is not at all satisfactory and acceptable. and, Therefore, TSECL is rescinding the agreement for failing to supply materials as per specification and within specified time. The C.P.G. amounting Rs.2,75,800.00 (only E.M.D.), vide D.D. no: 000144, dtd 26.12.2013 of HDFC Bank, deposited by you are forfeited. Now, you are asked to explain within 7(seven) days i.e within 28.05.2015 why your firm will not be “de-barred” for at least 3(three) years from TSECL. (M. Saha) Electrical Stores Division Arundhutinagar, Agartala To Siliguri Electric Works Deputy General Manager(MM) 266/2 George Mahbert Road Subasah Market, Siliguri” 14. It is apparent from the said notice that the reply furnished by the petitioner was not satisfactory and hence it was not accepted by the respondents. By the said notice, the contract/agreement had been rescinded and the petitioner was given an opportunity to explain why the firm shall not be debarred for at least three years from the Corporation. It appears that the petitioner had filed the reply on 27.05.2017 elaborately traversing the allegations but finally as the petitioner-firm had submitted that the contemplated action was not maintainable inasmuch as pre-dispatch testing was done by the authorized Engineer of the Corporation and there had been no occasion to reject the transformer by the said authorized Engineer. Only after such pre-dispatch inspection the materials were dispatched. According to the petitioner, the result which was recorded during the testing in the store was not acceptable as the machine could not be tested. Therefore, the unilateral decision as disclosed in the letter dated 22.05.2015 to forfeit the earnest money of Rs.2,75,800/- was, in the context, unjustified, illegal and beyond the scope of agreement. The petitioner-firm cannot be debarred in the circumstances of the case and if it is so done it will be a gross illegality. On 04.06.2015 by another communication [Annexure-23 to the writ petition] the petitioner-firm had reiterated their stand in the following words: “In this connection, may we point out some of the clauses of contract agreement where there are ample clauses/scopes of allowing rectification/replacement of DTR as we are agreeing from long since and for this reason we had returned back the DTRs for doing so? But there is no scope of debareness of our firm and forfeited of EMD at this point of stage. On the contrary, there is no direct clause of termination/de-barred and forfeiture of EMD at this stage. Contract agreement section-III, clause 1.25 (PAGE-22) Where it has been stated that contractor shall be liable to repair/replacement of any defect of works, clause 1.26 (latent defects) stated about the defects which can not be detected during inspection, testing etc. Page-22 clause 21, 21.4 (inspection after receipt of store) Materials supplied which are not conforming to specification shall be collected by supplier. Page-31 clause 35 (L.D. Clause) L.D. Clause may also be imposed on due reason. Section IV page 44 & 45 Clause 16.0(b) (test & inspection). In case of any defect/defective workmanship observed at any stage, the same shall be pointed out to the firm for taking remedial measures. We have no objection about rejection of materials. As per provisions of contract agreement, we must get chance of taking remedial measures. At the last stage, there a provision of Arbitration as per section-III, Page-26 Clause-16 and page 32 Clause-38. Without maintaining stage wise action and left out the positive way, you are going to take drastic action which is not at all reasonable & desirable like a reputed Govt. Organization, TSECL. However, you are requested once again to issue order for rectification of defects and delivery of 200 nos. 25 KVA DTR after due inspection as proposed vide our memo no.SEW/TSECL/53-XXXVII/042 dated 06.05.15.” 15. Mr. Bhattacharjee, learned senior counsel has fairly submitted that no order debarring petitioner-firm after the reply has yet been communicated to the petitioner. Even no such claim has been recorded in the reply filed by the respondents. However, he has submitted that in the given context, the petitioner-firm cannot be debarred when the petitioner-firm had categorically stated that they were agreeable to replace the transformers if the warranty period was extended by 6-10 months. As consequence, the petitioner-firm has urged this court for quashing the order of rescission. The petitioner has further urged to command the respondents to allow them repair/replace the materials which were found defective. To reap such relief, the show-cause dated 22.05.2015 [Annexure-21 to the writ petition] has been challenged in this writ petition. 16. From the other side [the respondents], Ms. The petitioner has further urged to command the respondents to allow them repair/replace the materials which were found defective. To reap such relief, the show-cause dated 22.05.2015 [Annexure-21 to the writ petition] has been challenged in this writ petition. 16. From the other side [the respondents], Ms. S. Deb Gupta, learned counsel has categorically submitted that the supply of non-specified transformers has been clearly accepted by the petitioner. Ms. S. Deb Gupta, learned counsel has referred to the memorandum dated 19.11.2014 [Annexure-R/3 to the reply filed by the respondents] to demonstrate the extent of deviation from the specification. For purpose of reference, the record of the physical parameters of the supplied materials vice the specification* and the note during the physical verification which are laid in a table, as reproduced hereunder: Verification of Physical parameters of 11/0.433 KV 25 KVA Transformer Supplied by Siliguri Electric Works, Siliguri, (SI No-17183) Sl. No of GTP Particulars (As per GTP Specification) Siliguri Electric Works, Siliguri or GTP As noted during Physical Verification 9 CORE (e) Core area (i) Gross 51.263 sq.cm (ii) Effective 49.468sq.cm 41.46 sq.cm (f) Core Diameter 83 mm 76 mm (g) Core length (leg centre) 210 (i) Insulation between bottom of core & base (press board) 2mm 2mm (j) Size of core base channel (Cut channels are not acceptable) 75x40 mm ISMC 75x40 ISMC 75x41 (k) Core height (inclusive of base channel and insulation in between) 598mm 530mm (l) No. of dimensions of steel channel used for clamping of core – 4Nos. 75x40 mm ISMC 75x40mm – 2 nos. 6mm ISMC 75x40mm – 2 nos. 6mm (m) Size & NO. of:- (i) Core bolts 12mm-4 nos 12mm-4 nos (ii) Tie rods -12mm, 4 nos 12mm, 4 nos 12mm, 4 nos 12 WINDINGS: (a) Material (Aluminium) Aluminium (b) Size of winding wires for (i) H. T 1.0 mm 0.9 mm (with super enamel insulation) (iii) L.T (not less than 21.94 sq mm) 8.2x3.5mm 8.2x3.5mm (c) Type of insulation of (i) HV winding DPC Super Enamel Vernish (ii) LV winding DPC (d) Internal & external dia, of (i) HV coil 142/200mm 142/178mm (ii) LV coil 89/121mm (e) No. of Coils/Phase (i) HV = 4 Nos. 4 4 (iii) LV = 1 No 1 1 (g) Height of (i) LV coil 357mm (ii) HV coil 80mm 80mm (i) Resistance/Phase at 750C (a) HV 110.72ohm (b) LV 0.129ohm j) Dia of Copper wire used for Delta formation (the dia should be around 1.5 times that of winding Adequate As per Tender Specification 13 Fixed losses at normal ratio at 75 0 C (KW)(Max) 62W 720 watt at 75 0 C 14 Load losses at normal ratio at 75 0 C (KW)(Max) 492W 624 watt at 75 0 C 15 Total losses at normal ratio at 75 0 C (KW)(Max) 554W 696 watt at 75 0 C 16 Tolerance on losses at normal ratio between HV & LV windings at 75 0 C (No positive tolerance) No positive tolerance * the records will prevail. 17. Ms. S. Deb Gupta, learned counsel appearing for the respondents has submitted that the petitioner-firm does not have any right to approach for judicial review as they have admitted the supply of defective transformers in deviation of the specification. The petitioner-firm had lifted all the transformers from the store of the respondents before filing the writ petition. Ms. S. Deb, Gupta, learned counsel has submitted that the security deposit has been sought to be forfeited as serious breach of the conditions of the supply has taken place causing damage to the Corporation. 18. If the petitioner were aggrieved by any decision of the respondents, in terms of clause-16.0 of the contract/agreement [extract of which is part of Annexure-R/1 to their reply] may ask for reference to the arbitration. 19. Ms. S. Deb Gupta, learned counsel has further submitted that no decision has yet been taken for debarring the petitioner. The respondents have clearly stated that the petitioner-firm could not satisfy the respondents in respect of deviation when the deviations were/are of substantial nature, as it would be evident from the table reproduced above. True it is that in the reply there is no averment whether the petitioner has been debarred as contemplated or not. The respondents have clearly stated that the petitioner-firm could not satisfy the respondents in respect of deviation when the deviations were/are of substantial nature, as it would be evident from the table reproduced above. True it is that in the reply there is no averment whether the petitioner has been debarred as contemplated or not. However the respondents have averred in para-30 in the reply as follows: “That the petitioner intentionally did not supply the transformers as per specification as a result larger involving public money and delaying the availability service, facilities or goods e.g. a delay in commissioning a power shortage, retardation of industrial development, hardship to the general public and substantial cost escalation. It is mentioned that NIT No.- ESD/25/2013-14 as follows: Delivery shall be completed within 4 (Four) Months w.e.f. 26/05/2014. The 1st lot of quantity i.e. 100Nos shall be supplied within two months and 2nd lot of quantity i.e 50Nos. shall be supplied within 3 months and the balance of quantity i.e. 50Nos. will be supplied within delivery period. The conduct of the petitioner not to supply as per specification is hardship to the general public and substantial cost escalation.” 20. Having regard to the submission made by the learned counsel appearing for the petitioner-firm and the respondents, this court is confronted with a solitary question whether there is manifest arbitrariness in the action of the respondent-corporation which is undoubtedly an instrumentality of the state. Clause-14.2 has been extensively referred to support the contention of replacing the defective transformers as supplied and later on, rejected. Clause 14.2 as reproduced provides that if the materials are found defective within the guarantee period shall be repaired and replaced by the supplier free of cost within 3(three) months of receipt of the intimation. If the defective materials are not repaired/replaced within the specified period, the purchaser shall recover an equivalent amount + 15% supervision charges from any of his bills or from the performance guarantee deposit. What can be termed as the ‘defective materials’ and the ‘guarantee period’? For this purpose reference has been made to Clause-1.25 which provides that guarantee period or maintenance period shall mean the period during which the supplier shall remain liable for repair or replacement for any defective part(s). What can be termed as the ‘defective materials’ and the ‘guarantee period’? For this purpose reference has been made to Clause-1.25 which provides that guarantee period or maintenance period shall mean the period during which the supplier shall remain liable for repair or replacement for any defective part(s). Latent defects in terms of Clause-1.26 of the said contract/agreement shall mean such defects which are caused by faulty designs, material or workmanship and which are not detected during inspection, testing etc. 21. Be that as it may, nowhere the petitioner has averred that the defects as identified during inspection or testing in the store, it has been claimed to have caused by the faulty designs, materials or workmanship. Defects could not be detected during inspection or testing based on the technology. Thus according to this court no advantage can be derived by the petitioner-firm from Clause-14.2 as reproduced above. However, the said observation shall not deprive the petitioner-firm to ask for reference to arbitration to settle any dispute arising out of the said contract. But under the facts and circumstances of this case, this court is not inclined to invoke the jurisdiction under Article 226 of the Constitution of India. That apart, since there is no decision in respect of debarring the petitioner-firm for 3(three) years as yet, this writ petition is pre-mature for issuance of any writ. However, if the respondents do take a decision, adverse to the petitioner, the petitioner shall be at liberty to approach this court. Subject to what has been observed above, this writ petition stands dismissed. There shall be no order as to costs.