JAGSON INTERNATIONAL LIMITED Vs. HINDUSTAN AERONATICS LIMITED

JUDGEMENT

(1.) AS per the case put forward by Jagson International Ltd, hereinafter referred to as the petitioner, they entered into an agreement on 26.4.1991 for the repair of Domier 228 Aircraft bearing registration No. A5-RGB at Paro Airport, Bhutan with Hindustan Aeronautics Ltd. Kanpur Division, hereinafter referred to as the respondent No. 1. AS per clause 4 of the agreement the cost of repair of the said aircraft was fixed at Rs. 61.50 lakhs which included the scope of work as mentioned in para 1 of the agreement. The said agreement also provided the following items for which no extra charges were payable by the petitioner : 1. Cost of structural items required to be replaced as per Annexure-1 2. Transportation of items, tools and jigs etc required for repair at Bhutan excluding those mentioned in para 3 above. 3. Travelling and daily allowance for HAL team. 4. Fuel cost for ground run, local flight testing at Bhutan and ferry flight Jagson International Ltd. Vs. Hindustan Aeronatics Limitd & Ans. 81 from Bhutan to Delhi/Kanpur.

(2.) AS per the case of the petitioner under the said agreement it was also agreed between the parties that the petitioner would pay extra cost for repair/replacement of any item which would be found damaged during the course; of repair and which would not .have been ascertained at the time of executing the agreement on the basis of actual labour/material consumed plus 10% of t said cost. In accordance with the agreement the petitioner paid to respondent No. 1 Rs. 61.50 lakhs towards full and final settlement of consolidated amount as agreed upon between the parties with regard to the repair of the aircraft. In addition to the aforesaid payment of Rs. 61.50 lakhs the petitioner has also paid further sum of Rs. 45 lakhs to respondent No. 1 in the bonafide belief that the same represents the cost of items used by respondent No. I which was not identified by the experts during inspection/investigation of the aircraft and the said items did not form part of the consolidated amount of Rs. 61.50 lakhs. Despite the payment of the contractual amount of Rs. 61.50 lakhs and additional amount of Rs. 45 lakhs, the respondent failed to deliver the aircraft, after repairing the same to the petitioner. On the contrary, the petitioner was shocked and surprised to receive letter dated 20.3.92 from respondent No. I whereby respondent sent an invoice dated 10.3.92 for Rs. l,94,27,684.00 towards various jobs carried out by respondent No. 1 on the said aircraft. Along with the said letter dated 10.3.92 the respondent also enclosed a statement and claimed balance of Rs. 3,07,92,734.00 . Respondent No. 1 instead of sending the aircraft sent another invoice dated 27th March, 1992 for Rs. 39.07.487.00 being the cost of materials issued for repair of the said aircraft.

(3.) GROUP 1 comprises mainly of hardware and structural items. These are imported items and have no specified shelf life and include such items as nuts, bolts, screws, brackets, skins, sections etc, as listed in Annexure-A attached with the report. The date of purchase of these items could not be established with referenced to the purchase invoices as they were not produced by the respondent. The price of these items has been computed by the respondent from October, 1991 Price Catalogue of M/S Domier - the suppliers. As the prices in the printed price list are in D.M the conversion rate of the D.M. into rupees has been done as Rs 18.55 per D.M. prevailing in March, 1992. The items covered in this group number 920 and have been priced at Rs. 5.16 lakhs.