HC Upholds NCLAT’s Order Annulling Respondent’s Excessive Pricing Claim Against Material Supplied By Petitioner

Case Details: PPS International v. Union of India - [2023] 153 taxmann.com 348 (HC-Allahabad)

Judiciary and Counsel Details

• • Mahesh Chandra Tripathi & Syed Qamar Hasan Rizvi, JJ.
  • Vivek Kumar Singh, Fuzail Ahmad Ansari, N. Sinha, Sr. Adv. & Navin Sinha for the Petitioner.
  • Rajnish Kumar Rai for the Respondent.

Facts of the Case

In the instant case, Respondent No. 2 (Core) an organization under the Ministry of Railways floated global tenders for the supply of certain sets of SNS Assembly. The petitioner’s bids were accepted and consequently, purchase orders were given to the petitioner on 12-1-2018 and 27-2-2018.

Admittedly, the petitioner had supplied the entire material as per purchase orders but instead of clearing the outstanding amount to the petitioner, the second respondent sent a letter to the petitioner that they had invoked the ‘Book Examination Clause’ for the said order as well as the previous order as respondent felt that the petitioner had charged unreasonable higher profit.

Consequently, the respondent issued a demand order requiring the petitioner to pay a certain amount on the basis of a lower rate. The respondent also filed a complaint before CCI alleging that the petitioner flouted provisions of sections 3 and 4 of the Competition Act, 2002.

CCI held that no case of violation of section 4 was made out against the petitioner. Appeal and revision filed against the order of CCI were dismissed. The petitioner filed a writ petition seeking the quashing of the demand order and direction to respondents to make the entire payment to the petitioner.

High Court Held

The High Court observed that as the respondent had lost reference made on a similar allegation of excessive pricing on the same materials on record before the CCI, and thereafter, the appeal and review application preferred by the respondent before the NCLAT had also been dismissed and findings recorded by the CCI had attained finality, then issue involved in instant writ petition stood settled and covered by CCI’s order and approved/affirmed by the NCLAT.

The High Court held that in the aforesaid facts and circumstances, the writ petition deserved to be allowed and the impugned orders, as well as demand notice, were liable to be set aside.

List of Cases Referred to

• • Union of India v. Tantia Construction (P.) Ltd. [2011] 5 SCC 697 (para 14)
  • ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. [2004] 3 SCC 553 (para 14)
  • K.J. Hospital v. Technomed International [Writ Petition No. 7031 of 2018, dated 20-4-2018] (para 14)
  • L. Chandra Kumar v. Union of India 1997 taxmann.com 1023 (SC) (para 27).