IDL EXPLOSIVES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellant-writ petitioners say that notwithstanding the "price fall clause" in the appellant company's agreement for supply of explosives to Coal India Limited, the appellant company is entitled to obtain the contract price and not any lower price for the supply that it effects under the relevant agreement.

(2.) There is no dispute that the agreement between the parties provides for particular rates at which explosives of certain categories would be supplied by the appellant company to CIL. However, by virtue of the price fall clause, CIL demanded that the appellant company was bound to supply explosives at a lower rate to CIL since one of the unsuccessful bidders has been found to supply similar material to Northern Coalfields Limited at such lower rate.

(3.) The writ petition was dismissed by the Single Bench on the ground that the writ petitioner company entered into the agreement with its eyes wide open and since it did not protest the clause before entering into the agreement, it had to abide by such clause. Indeed, the writ petition carried a challenge to Clause 7.2 of the contract which is the essence of the price fall clause as incorporated in the agreement. However, without prejudice to the appellants' contention that Clause 7.2 is harsh, oppressive and could not have been included in the contract, the appellants say that the price fall would not apply to the appellant company by the reason of the exception carved out in Clause 7.3 of the contract.