Vigilance Officer, it was revealed that the first respondent had obtained a contract from the South Central Railway for the supply of identical items at a lower rate of Rs.4,648/- per light fitting as against Rs.5,764.71 quoted to the Southern Railways. Letter dated 31.08.2007 was thus issued proposing to exercise the minus (-) 30 Option Clause quoting the aforesaid reason which was followed up letter dated 13.09.2007 proceeding to exercise the option of reduction. The quantity ordered on 03.08.2007 thus stood reduced from 1313 numbers to 707 numbers by MOP Advice No.000669 dated 13.09.2007. This was objected to by the supplier, the first respondent herein, mainly on the ground that the Railways cannot, while invoking the Option clause apply the plus (+) as well as minus (-) options concurrently. According to the first respondent the option clause could be invoked only once and in the present case had been invoked seeking an upward modification on 03.08.2007. This resulted in an arbitrable dispute that was referred to arbitration at the instance of the first respondent in terms of clause 8 of the arbitration agreement. The terms of reference before the Arbitrator were as follows:
