BULLUSIRAJ SAIDALI MULLA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) TMT bars are made from billets. These billets have to undergo a manufacturing process. Steel Authority of India Limited, (the respondent) required TMT bars having diameters of 8, 10, 12, 20, 25 and 32 mm. They entered into an agreement with the appellant on 16/6/2011 by which the latter became "the wet leasing agent" of the respondent for the area around Durgapur. The appellant was required to manufacture TMT bars of the above specification from the billets supplied by the respondent, for three years from 20/6/2011 to 20/6/2014. 90% of the weight of billets had to be converted into TMT bars. A minimum of 9684 metric tons were to be manufactured and supplied every month. There was a liquidated damages clause in the agreement whereunder the appellant was liable for a fixed amount for a shortage in supply. The amount was arrived at by a calculation shown in the agreement.

(2.) When the tender for such supply was invited by the respondent on or about 6/10/2010, a condition was prescribed that the bidder should have a valid "BIS" Certificate/licence by the Bureau of India Standards and that the manufactured product should have a BIS Certificate after undergoing the required tests. The appellant possessed this licence and was awarded the contract. But their licence expired on 17/5/2012.

(3.) However, they continued to supply and the respondent continued to receive the billets without the BIS licence after 17/5/2012 upto 27/7/2012. From 28/7/2012, they refused to supply the billets. Many contentions were raised by the appellant. It was said that the respondent was aware of the expiry of the appellant's licence on 17/5/2012 but still continued to accept the supply made by them, on reminding them that they should obtain renewal of the licence forthwith, referring inter alia to the respondent's letters dtd. 25/5/2012, 27/6/2012, 9/7/2012 and 16/7/2012 and the invoice raised by them on 30/6/2012 on a sales order dtd. 27/6/2012. This suspension of supply continued till 20/9/2012.