ENFIELD INDIA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Plaintiff in this suit has sought a decree for recovery of Rs.7,88,247.00 as price of the motorcycles supplied to the Union of India with interest@ 18% per annum and pendente lite and future interest. It has a lso soughtdeclaration to the effect that no valid and binding contract came into existencebetween the parties and in the alternative to declare that the contract, if any, stoodfrustrated and the plaintiff stood discharged of its obligations and the demand ofthe defendant for alleged general damages and/or risk purchase damages is illegal,not maintainable and for injunction restraining the Union of India from enforcingany such alleged demand of damages.

(2.) The facts averred in the plaint leading to the filing of the present suit, inbrief, are that in response to invitation to tender issued by the Director General ofSupplies & Disposals, New Delhi, the plaintiff submitted its tender dated July 19,1976, which was purported to be accepted vide advance acceptance of tender letterNo. October 8,1976 and the formal acceptance letter dated October 12, 1976, wasissued. The plaintiff made supplies of motorcycles, in pursuance to the saidacceptance of tender, of the value of Rs. 7,88,24 7/- in between the period December9,1977 to February 27,1979. It is pleaded by the plaintiff that the defendant had notpaid the price of the said motorcycles supplied by the plaintiff. Plaintf had thenaverred that tender of the defendant was vague and the contract had not come intoexistence as contemplated by provisions of Articles 298 & 299 of the Constitutionof India and one of the conditions of the contract being that same is subject togeneral conditions of the contract as contained in Form DGS&D-68(Revised) makesthe term arbitrary and hit by Article 14 of the Constitution. It is averred thatplaintiff is entitled to have the price of the vehicles already supplied because thatsupply was not made gratuitously and defendant is legally bound to reimburse theplaintiff with regard to the price of the said vehicles in terms of Section 70 of the Contract Act.

(3.) It is alleged that defendant had raised a claim to the tune of Rs. 35,51,283/20P claiming the same as general damages for breach of contract on the part of theplaintiff in not supplying the remaining quantity of the motorcycles contemplatedby the alleged contract. This demand has been raised vide letter dated August 8,1980. It is pleaded that the defendant had later on claimed damages to the tune ofRs. 59,36,051 /21P. It is averred that the alleged contract provided for risk purchaseand thus, the defendant is not entitled to have any general damages and defendanthas not shown that the defendant had suffered any damages on effecting any riskpurchase. It is further pleaded that defendant had required the supply of thesemotorcycles for its own consumption and had not taken the said supply for resaleand thus, the defendant was not entitled to have damages on account of anyvariation occurring in the price of the motorcycles agreed upon and the increase inprice taking place due to market fluctuations. So, after serving the notice underSection 80 of the Code of Civil Procedure the plaintiff instituted the present suit.