UNION OF INDIA Vs. K H RAO

JUDGEMENT

(1.) THIS is a defendant's appeal directed against a judgment and decree of the Mysore High Court.

(2.) ON 16/09/1949, the plaintiff, K. H. Rao, entered into an agreement (Ex. D-2) with the defendant (Union of India) through its Military Head Quarter, Madras Area, contracting to supply onions for the period. October 1, 194 9/03/1950, at the supply depots of the defendants in Bangalore, Cochin, Coimbatore and Wellington, at the rates mentioned in the Schedule to the agreement. The supply was to be made in such quantities as may be required from time to time by the defendant, not exceeding lbs. 45,000 a month for the Bangalore, Depot lbs. 3,000 for the Coimbatore Depot, lbs. 5,000 for the Wellington Depot and lbs. 5,000 for the Cochin Depot. Under the agreement, there was a security deposit of Rs.4,300 made by the defendant. This deposit was liable to forfeiture only in the event of any breach or non-performance of the contract by the plaintiff. Clause (7) of the agreement provided that if there was failure on the part of the plaintiff to perform the contract, the defendant was at liberty to make purchases of the onions elsewhere at the risk of the plaintiff. Clause (8) empowered "the Officer sanctioning the contract" to rescind the contract by written notice to the plaintiff in the six contingencies referred to in that clause, one of which was that such rescission could be made by that officer if the plaintiff declined, neglected or delayed, in complying with any demand or requisition or if he in any other manner failed to perform or observe the conditions of the contract.

(3.) ON 5/03/1953, the defendant informed the plaintiff's bankers that a sum of Rs.18,228/14/5 was debited against the plaintiff towards damages payable by him for the breach of the contract.