Delhi High Court
New Delhi Municipal Council vs Manohar Stone Crushing Co. & Anr. on 1 October, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 341/2006
% 1st October, 2018
NEW DELHI MUNICIPAL COUNCIL
..... Appellant
Through: Ms. Malvika Trivedi and Mr.
Pawan Kr. Bansal, Advocates.
(9810096538)
versus
MANOHAR STONE CRUSHING CO. & ANR.
..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This Regular First Appeal under Section 96 of the Code
of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit
impugning the Judgment of the Trial Court dated 21.12.2005 by which
the trial court has dismissed the suit for recovery of an amount of
Rs.19,04,094/- claimed as damages by the appellant/plaintiff, from the
respondent no.1/defendant no.1/seller/supplier of stone dust and stone
grit on account of breach of contract by respondent no. 1/defendant
no.1 in failing to supply the contracted quantity of stone dust and
stone grit.
2. The facts of the case are that the respondent
no.1/defendant no.1, in response to the tender for supply of stone grit
and stone dust by the appellant/plaintiff, communicated its acceptance
vide Letter dated 11.05.1992 alongwith the 'Schedule of Items' and
their quantities. Therefore, vide acceptance Letter dated 11.05.1992, a
contract was entered into between the parties whereby the respondent
no.1/defendant no.1 had to supply stone grit and stone dust to the
appellant/plaintiff. The appellant/plaintiff pleaded that the respondent
no.1/defendant no.1 supplied only 47 cubic meter of stone dust till
13.05.1992, instead of the agreed contracted quantity of 11,760 cubic
meters. As per the contract, the respondent no.1/defendant no.1 had a
period of six months commencing from 11.05.1992 for supplying the
contracted quantity of stone dust and stone grit. The value of the
supply by the respondent no. 1/defendant no. 1 was a total amount of
Rs. 23,11,190/-. The appellant/plaintiff further pleaded in the plaint
that vide Letters and Show Cause Notices dated 10.06.1992,
24.06.1992, 17.07.1992, 22.07.1992 and the final Notice dated
06.08.1992, the respondent no.1/defendant no.1 was asked to resume
supply, but the respondent no.1/defendant no.1 failed, and
consequently, the appellant/plaintiff rescinded the contract. On the
rescission of the contract, the security deposit of the respondent
no.1/defendant no.1 was forfeited, and the respondent no.1/defendant
no.1 was black-listed for a period of one year vide
appellant's/plaintiff's Letter dated 19.10.1993. The appellant/plaintiff
pleads that ultimately for the supply of the balance quantity of the
material another, Tender Notice dated 07.12.1992 was issued and the
respondent no.2/defendant no.2 was found to be the successful
tenderer who supplied the quantity at a total amount of Rs. 34,03,705/.
Respondent no.2/Defendant no.2 completed the supply by 15.02.1994.
Appellant/Plaintiff pleaded that it suffered a total loss of
Rs.11,02,479/- on account of the difference of price as per the contract
with the respondent no.1/defendant no.1 and the higher price paid to
respondent no.2/defendant no.2. An amount of Rs. 2,20,496/- was
claimed being an entitlement to vary the quantity equivalent by 20%
in terms of the tender. Another amount was claimed of Rs. 2,31,119/-
being 10% of the total contract awarded to the respondent
no.1/defendant no.1 as per Clause 2 of the Conditions of Contract.
Thus, a total amount of Rs. 19,04,094/- was claimed from the
respondent no.1/defendant no.1 in the suit.
3. The respondent no.1/defendant no.1 contested the suit
and filed its written statement seeking dismissal of the suit. The main
defence of the respondent no.1/defendant no.1 was that the contract
stood frustrated because the Hon'ble Supreme Court, vide its orders
stopped all the stone crushers w.e.f 15.08.1992, and therefore, the
stone crusher of the respondent no.1/defendant no.1 was closed.
Hence, the respondent no. 1/defendant no. 1 could not supply the
contracted quantity.
4. Though the trial court has framed many issues and
decided the same, in my opinion, this appeal can be decided primarily
on the aspect of frustration of the contract. This Court, in deciding the
present appeal, is giving reasons which are different from those given
by the trial court, as this Court is empowered to do so under Order
XLI Rule 24 CPC. The judgment of this Court can be sustained on
totally independent reasoning which is not found in the judgment of
the trial court.
5. Section 56 of the Indian Contract Act, 1872 reads as
under:-
"56. Agreement to do impossible act.--An agreement to do an act
impossible in itself is void.
Contract to do act afterwards becoming impossible or
unlawful.--A contract to do an act which, after the contract is
made, becomes impossible, or, by reason of some event which the
promisor could not prevent, unlawful, becomes void when the act
becomes impossible or unlawful.
Compensation for loss through non-performance of act known
to be impossible or unlawful.--Where one person has promised to
do something which he knew, or, with reasonable diligence, might
have known, and which the promisee did not know, to be impossible
or unlawful, such promisor must make compensation to such
promisee for any loss which such promisee sustains through the
non-performance of the promise."
6. It is undisputed that as per the contract entered into
between the parties, i.e. the Tender Notice proved as Ex.PW1/2/
Ex.PW1/5, it was mandatory for a supplier to have its own stone
crusher. Therefore, effectively the stone dust and stone grit which was
to be supplied by a supplier had to be from its own stone crusher.
Since the stone crushers were prohibited from stone crushing activity,
vide the order of the Hon'ble Supreme Court w.e.f. 15.08.1992, hence,
in the opinion of this Court, the contract of supply stood frustrated as
per Section 56 of the Indian Contract Act. Hence, once the contract
stood frustrated, the respondent no.1/defendant no.1 cannot be held
guilty for the breach of contract.
7(i). The issue of breach of contract in the present case can be
divided into two parts. Firstly, the breach till 15.08.1992, and
secondly, the breach post 15.08.1992 and till the completion of the
period of supply of 11.11.1992. So far as the second period is
concerned, there is no issue or question of breach of contract by the
respondent no.1/defendant no.1 as the contract stood frustrated after
15.08.1992 as discussed above, but the issue is that can the respondent
no.1/defendant no.1 be held guilty of breach of contract for non-
supply of the contracted stone dust and stone grit prior to 15.08.1992
i.e. from 11.05.1992 to 15.08.1992.
7(ii). As regards to this aspect of whether there is any breach of
contract by the respondent no.1/defendant no.1 for non-supply of the
contracted quantity prior to 15.08.1992, it has to be seen as to whether
there was any specific contracted quantity which the respondent
no.1/defendant no.1 had to supply under the subject contract.
Admittedly, the contract does not specify any monthly or period
specific supply of stone dust and stone grit. No doubt, learned counsel
for the appellant/plaintiff is prima facie right in arguing that in terms
of para 3 of the Additional Conditions and Specifications found in the
Schedule of Quantities, the respondent no.1/defendant no.1 had to
supply the material proportionately within the time allowed, however,
in my opinion, this clause is completely vague because
'proportionately' can mean either every month, or once every two
months. Hence, the supply could be made by the respondent
no.1/defendant no. 1, either a total of three times in the contracted
period of six months, or the supply could be made proportionately i.e.
twice, once within the first three months period, and the remaining
(half) supply within the subsequent three months period ending on
11.11.1992 i.e. the expiration of the stipulated six month period.
Therefore, in the opinion of this Court, such a vague clause cannot be
interpreted in favour of the appellant/plaintiff to argue that there was
necessarily a fixed quantity of supply every month up till 15.08.1992,
and for such deficient supply, the respondent no.1/defendant no.1 can
be held guilty for breach of contract.
8 Another important aspect to be noted is, that the very
same Clause 3 of the Additional Conditions and Specifications in the
Schedule of Quantities, specifically provides that the contracted
supply, in the alternative to proportionate supply, can also be supply
as per the requirements and directions of the Engineer-In-Charge of
the appellant/plaintiff as informed to the respondent no. 1/defendant
no. 1. Admittedly, no such direction has been filed and proved on
record of the Engineer In-Charge of the appellant/plaintiff, that the
contracted quantity had to be supplied in what quantitative and
proportionate manner, and in what amounts during the six month
period ending on 11.11.1992. Therefore, even on this ground, it
cannot be argued by the appellant/plaintiff that there was a particular
fixed quantity which was to be supplied by the respondent
no.1/defendant no.1 prior to 15.08.1992.
9. In fact, any doubt in this regard is removed because the
appellant/plaintiff has not pleaded any such case in its pleadings or in
its evidence that the respondent no.1/defendant no.1 is guilty of breach
of contract in not having supplied a particular contracted quantity till
15.08.1992, or such particular contracted quantity had to be supplied
by the respondent no.1/defendant no.1 in terms of the contract by
15.08.1992. Therefore, since there do not exist any pleadings or
evidence of the appellant/plaintiff to any entitlement to a particular
proportionate supply of a particular quantity till 15.08.1992, therefore,
in my opinion, it cannot now be argued on behalf of the
appellant/plaintiff for the first time in this appeal that the respondent
no.1/defendant no.1 should be held guilty of deficient supply upto
15.08.1992.
9. In view of the aforesaid discussion, in my opinion, there
is no merit in the appeal. Dismissed.
OCTOBER 01, 2018/ib VALMIKI J. MEHTA, J
