UNION OF INDIA Vs. PANIPAT FOODS LIMITED

JUDGEMENT

(1.) On 14tn of April 1980 there was an agreement between the petitioner Union of India and the respondent M/s. Panipat Foods Ltd. with respect to the supply of tinned vegetable fruits/Dehydrated foodstuff. The contract provided for extension of time in delivery period on payment of liquidated damages. According to the respondent, owing to accute shortage of power and non allocation of diesel in Haryana, the respondent could not make the supply on or before 14th of May 1980 and the respondent made a request for extension of time upto 14th of June 1980 and the same was agreed to by the petitioner-Union of India on payment of liquidated damages of 0.2% per month. The respondent by its letter dated 10th of June 1980 requested the petitioner to grant another extension of one month's time from 14th of June 1980 to 14th of July 1980.

(2.) By letter dated 20th of June 1980 the petitioner granted extension subject to payment of liquidated damages upto 30th of June 1980. The respondent supplied 30 metric tonnes of fruit products as against 50 metric tonnes agreed to by it. According to the respondent, if extension had been granted upto 14th of July 1980 they would have supplied the balance 20 metric tonnes. After 30th of June 1980 the petitioner did not serve any performance notice upon the respondent. On 15th of November 1980 the petitioner issued a notice cancelling the contract and floated what is called the risk purchase inquiry on 16th of March 1981. The respondent also made an offer and that was ignored and the risk purchase was made.

(3.) The petitioner-Union of India claim Rs. 47,306.38 as the loss on account of the breach committed by the respondent and because of the risk purchase.