BINANI METALS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS APPEAL HAS BEEN FILED BY M/S BINANI METALS WORKS LTD., DEFENDANT IN SUIT NO.77/1979 FILED BY THE UNION OF INDIA AGAINST IT FOR THE RECOVERY OF RS.49,500/-. THE APPELLANT AND RESPONDENT ARE HEREINAFTER DESCRIBED AS DEFENDANT & PLAINTIFF RESPECTIVELY FOR THE PURPOSES OF CONVENIENCE. THE SUIT WAS FILED BY THE UNION OF INDIA, RESPONDENT HEREIN AGAINST M/S BINANI METALS LTD., APPELLANT HEREIN. IT WAS CONTENDED THAT THE GOVERNMENT HAD REQUIRED ZINC BASED ALLOY INGOTS FOR DIE CASTING CONFORMING TO "BSS/1004/ALLOY `A' OR I.S.713/1966/ALLOY-I SIZES AS PER DRAWING ATTACHED" AND IT ISSUED A NOTICE INVITING TENDER BY ADVERTISEMENT. THE PLAINTIFF HAD CONTENDED THAT THE DEFENDANT M/S BINANI METAL WORKS LTD. HAD SUBMITTED ITS TENDER DATED 17TH JANUARY, 1969 FOLLOWED BY LETTER DATED 6TH FEBRUARY, 1969. THE DEFENDANT'S TENDER BEING LOWEST WAS ACCEPTED BY ADVANCE ACCEPTANCE OF LETTER DATED 17TH FEBRUARY, 1969 FOLLOWED BY FORMAL ACCEPTANCE LETTER DATED 29TH FEBRUARY, 1969. THE PLAINTIFF CONTENDED THAT A CONCLUDED CONTRACT CAME INTO EXISTENCE FOR THE SUPPLY OF 90 METRIC TONNES OF MATERIAL AT THE RATE OF RS.3,700/-. AS THE DEFENDANT FAILED TO SUPPLY THE STORES WITHIN A STIPULATED TIME, IT WAS ALLEGED THAT THE DEFENDANT COMMITTED BREACH OF CONTRACT WHICH WAS CANCELLED VIDE LETTER DATED 1ST NOVEMBER, 1969 AT THE RISK AND COST OF DEFENDANT. THE PLAINTIFF CONTENDED THAT DURING THE PERIOD THE PRICE OF THE STORE HAD GONE UP AND THE RATE OF ZINC BASED ALLOY INGOTS HAD RISEN AS HIGH AS RS.4,250/- PER METRIC TONNE; THAT THERE IS AN INCREASE IN PRICE OF MATERIAL BY RS.150/- PER METRIC TONNE. THE PLAINTIFF FURTHER CONTENDED THAT IT HAD PLACED AN ORDER FOR SIMILAR STORES AT THE RATE OF RS.4,250/- WITH THE DEFENDANT FIRM AGAINST TENDER OPENED ON 2ND JULY, 1969. THUS A CLAIM OF GENERAL DAMAGES AMOUNTING TO RS.49,500/- WAS MADE IN THE PLAINT ON ACCOUNT OF THE VALUE OF THE STORES GOING UP.

(2.) THE DEFENDANT REPUDIATED THE CLAIM OF THE PLAINTIFF ON THE GROUND THAT THERE WAS NO CONCLUDED CONTRACT BETWEEN THE PARTIES. IT WAS CONTENDED THAT THE OFFER OF THE DEFENDANT WAS CONDITIONAL; THAT THERE WERE PROPOSALS AND NEGOTIATIONS BETWEEN THE PARTIES BUT THE DEFENDANT NEVER UNDERTOOK TO SUPPLY 90 METRIC TONNE OF ZINC BASED ALLOY INGOTS AT THE RATE OF RS.3,700/- OR RS.4,000/- PER METRIC TONNE. IT WAS ALLEGED THAT THE PLAINTIFF NEVER ACCEPTED THE CONDITIONS SET DOWN BY THE DEFENDANT AND, THEREFORE, NO CONTRACT CAME INTO EXISTENCE. AS SUCH, THERE WAS NO QUESTION OF MAKING SUPPLIES WITHIN ANY DATE OR WITHIN 31ST MAY, 1969. THE DEFENDANT FURTHER PLEADED THAT IN VIEW OF THE FACT THAT IT WAS UNDER NO OBLIGATION TO SUPPLY THE ZINC BASED ALLOY AND INGOTS, THE CANCELLATION OF THE ALLEGED CONTRACT BY THE PLAINTIFF BY LETTER DATED 1ST NOVEMBER, 1969 WAS MEANINGLESS AND WAS TO NO EFFECT. A CONTRACT WHICH DID NOT EXIST COULD NOT BE CANCELLED.

(3.) THE DEFENDANT FURTHER SUBMITTED THAT EVEN OTHERWISE, THE FACTORY OF THE DEFENDANT REMAINED CLOSED DUE TO STRIKE BETWEEN THE PERIOD FROM 15TH APRIL, 1969 TO 17TH JANUARY, 1970 DUE NOTICE WHEREOF WAS GIVEN TO THE PLAINTIFF VIDE GENERAL CIRCULAR DATED 22ND APRIL, 1969. THE STRIKE CONTINUED BEYOND 60 DAYS AND AS SUCH A FORCE MAJOR CLAUSE AUTOMATICALLY CAME INTO ACTION AND THE DEFENDANT STOOD EXONERATED FROM ANY LIABILITY FROM THE CONTRACT IN QUESTION.