Surya Alloy Industries Limited vs South Eastern Railway & Ors.

The petitioner and the respondents - South Eastern Railway Authority are represented by their respective Counsel.

The subject matter of the instant application as filed under Section 9 of the Arbitration and Conciliation Act, 1996 is the Warrantee Rejection Advice dated 22.08.2026 as issued by the respondents – South Eastern Railway Authority.

At the time of hearing, learned Counsel appearing on behalf of the South Eastern Railway Authority has handed over a server copy of the order dated 30.06.2026 as passed in AP-COM/380/2026 [Surya Alloy Industries Limited v. South Eastern Railway and Ors.] wherein an order for joint inspection was directed in connection with a matter which is almost identical with the instant lis.

Learned Counsel appearing on behalf of the South Eastern Railway Authority submits before this Court that an identical order may be passed in this case also.

Learned Counsel appearing for the petitioner has no objection in the event similar order is passed.

In view of such, this Court while disposing of the instant application under Section 9 of the Arbitration and Conciliation Act, 1996 directs for a joint inspection by the authorized representative of the petitioner and the officers of the South Eastern Railway Authority on 25.11.2026, 26.11.2026 and 27.11.2026 at 11:00 AM onwards. Such order is passed in view of the fact that prior to issuance of the impugned Warrantee Rejection Advice, a copy which is annexed at page no. 74 of the instant application, there was no joint inspection by the parties.

In view of the facts and circumstances, the instant application being an application under Section 9 of the Arbitration and Conciliation Act, 1996 is disposed of by setting aside and quashing the Warrantee Rejection Advice dated 22.08.2026, a copy of which is annexed at page no. 74 of the instant petition by directing the parties to hold a joint inspection on the afore-mentioned days and hours and, thereafter, take necessary steps in accordance with law.

It is further directed that during joint inspection, both parties shall co-operate each other and shall allow random sampling by drawing the entire quantity in lots.

Before parting with, the prayer for setting aside the impugned Warrantee Rejection Advice should not be construed to be on the ground of illegal rejection of the goods by the Railways but is set aside only because the joint inspection did not take place for prima facie qualitative analysis of the materials prior to rejection. If the goods are found to be de hors the specification or inferior or off grade goods, the Railways will be at liberty to reject the same pursuant to the joint inspection. It will also be open to the petitioner to challenge the rejection, if so made after the joint inspection in accordance with the contractual provisions and the law.

It is further directed that in the meantime the South Eastern Railway Authority shall intimate the place of inspection to the petitioner by way of a written communication or through e-mail.

AP-COM 782 of 2026 is, accordingly, disposed of.