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ARTICLE · 27 MARCH 2025

Bombay HC: Invocation Of 'Fall Clause' In Railway Contracts

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The Single Bench of the Bombay High Court in the case of Union of India through PCMM Central Railway v. Emami Agrotech Limited, [Arbitration Petition No. 458 of 2021]...

IndiaTransport
Ranjit Shetty
Ranjit Shetty
Tejas Gokhale
Tejas Gokhale
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The Single Bench of the Bombay High Court in the case of Union of India through PCMM Central Railway v. Emami Agrotech Limited, [Arbitration Petition No. 458 of 2021], decided on February 26, 2025, inter alia held 'Fall Clause' cannot be invoked by simply comparing a price arrived under one bargain with another price arrived at under a different bargain, without any adjustment of varying factors.

Facts in Brief:

1. Emami Agrotech Limited ("Emami") agreed to supply to Central Railway 4100 (four thousand one hundred) Kilo Liters ("KL") of bio diesel inter alia under following terms and conditions:

  1. "All inclusive" rate of Rs. 44,000 (Rupees forty-four thousand) per KL ( Break-up- Basic Rate of Rs. 41,904.76 (Rupees forty-one thousand nine hundred four and seventy-six paise) + Central Sales Tax 5 (five) % ).

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