1974 (9) TMI 122 - SC - Indian Laws

Summary

Issues:
1. Interpretation of a contract clause regarding payment at controlled rates for supplied articles.
2. Determination of whether a notification controlling the price of milk entitled the contractor to be paid at a higher rate.

Analysis:
1. The case involved a dispute over the interpretation of a contract clause stating that the contractor shall be paid at controlled rates for the supplies made. The appellant had supplied milk to a hospital at a specified rate, but later claimed entitlement to a higher rate based on a notification controlling the price of milk issued during the contract period. The defendants argued that there was no strict control of milk prices by the government, and the appellant could not benefit from the controlled price.

2. The Division Bench of the High Court held that the notification did not control the price of milk but only fixed a maximum price, allowing sellers to sell at lower rates. However, evidence presented by both parties indicated that the price of milk had indeed increased in the market after the notification. The court noted that the contract clause's reference to payment at controlled rates implied a control over the price of the supplied articles, which encompassed fixing a maximum price.

3. The Supreme Court, in its judgment, emphasized that the fixation of a maximum price by the government constituted a form of price control. The court reasoned that the agreement's language regarding payment at controlled rates for supplied articles aligned with the notification fixing the maximum price of milk. It concluded that the appellant was entitled to be paid at the rate decreed by the trial court, which was based on the controlled price specified in the notification.

4. Ultimately, the Supreme Court allowed the appeal, setting aside the Division Bench's decree and reinstating the decree passed by the single Judge. Since the respondent did not appear in court, no costs were awarded. The judgment clarified the interpretation of the contract clause in light of the notification controlling the price of milk, affirming the appellant's entitlement to payment at the controlled rate specified in the agreement.