9911796707
TMI Blog2000 (2) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the Supply Act, the appellants frames schemes for generation, distribution and supply of electricity in accordance with the policy of the State and its schemes include rural electrification for the purpose of spreading the benefit of electricity to the rural areas in the State of Maharashtra. The schemes are implemented in the phased manner from year to year. The implementation of such schemes for rural electrification and development of rural areas is a continuous process forming part of the five-year plans of the State. The appellants require supplies of material and equipments of different kinds for their schemes which include conductors of different kinds needed for transmission distribution and supply of electricity. Such conductors were needed in large quantities and the appellants have to place orders according to their estimated requirements every year and from time to time during a year. 4. The appellants had floated tenders for purchase of conductors for its rural electrification schemes sometime in 1982. The respondents (1) M/s. Sterlite Industries (India) Ltd., and (2) M/s. Pravin Trading Corporation (hereinafter referred to as both respondents for short) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply the balance quantity of goods, whereas in the case of M/s. Pravin Trading Corporation, the said respondent supplied in phased manner 13219 kms. of different kinds of conductors by the month of June 1986, i.e. much beyond the contractual period of delivery as against 21000 kms. of different kinds of conductors which had to be delivered by the end of June 1985 and in any event, by 31st May, 1987 till time for completion had been extended. The respondent did not supply any of the goods after June 1986. 6. When it became apparent to the appellants that the respondents were unwilling to perform their respective obligations, under the respective contracts despite repeated requests made by the appellants, the appellants after due notice to the respective respondents terminated their contract in exercise of the powers under the contract reserving their right to recover from the respondents damages and/or compensation for non-supply of balance quantities of the goods under respective contracts. The appellant claimed that they were entitled to receive the said balance quantity of goods under the terms and conditions of the respective contracts and at the price agreed thereunder. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingle Judge. 9. The appellants challenged respective majority awards before the learned Single Judge for adjudication in accordance with law, proceedings and prayed that the respective awards of two arbitrators out of three be set aside and respective minority awards rendered by minority arbitrators be made rule of the Court. 10. Mr. Rustomji, the learned Counsel for the appellant contended that it is a well settled law that measure of damages for failure or refusal to supply goods under the contract is the difference between contract price and the market price prevailing at or around the date of breach of contract. This principle according to him, is clearly enunciated in illustration (a) to section 73 of the Contract Act itself. The learned Counsel further submitted that sub-clause (ii) of Clause 14 of the contract, right was reserved in favour of the appellants to purchase upon such terms and in such manner as the appellants deemed appropriate, equipments similar to that terminated and the respondent were to be held liable to the appellants for any additional costs for such similar equipments and/or for liquidated damages for delay as defined in Article 22 of the General C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damages from the respondents under section 73 of the Indian Contract Act has been excluded. It was open for the parties to include any terms or conditions in the contract of sale and create for themselves any special rights and obligations, such as providing for any special measure for damages in case of contract of purchase and indeed, provisions of section 62 of the Sale of Goods Act recognises such a right of the parties. 12. Alternatively, he further argued that if section 73 of the Indian Contract Act is attracted, then, in order to succeed on the basis of that section, the appellants need to prove damages and loss suffered by them. Learned Counsel further contended that even otherwise, it was incumbent on the part of the appellants under Clause 14(ii) of the Contract to actually purchase the goods, not supplied, from the open market after termination of the contract in order to claim damages. As such, the claim of the appellants was rightly rejected by the two Arbitrators. Mr. Bharucha contended that the approach adopted by the arbitrators cannot be challenged in proceedings under section 30 of the Act. He, therefore, prays for dismissal of both the appeals. 13. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss on damage caused to him thereby, which naturally arose in the usual course of things for such breach. * * * * * What the buyer is deprived of in the usual course of things by non-delivery is the value of the goods at the time and place of the delivery less price payable by him under the contract. This loss of value is the only natural result of the breach, the only kind of damage that ensues in the usual course of things. The quantum of damages on account of the breach of such contract would be the difference between the contract price and the market price of the goods at the time when the contract is broken. The provisions contained in section 73 do not envisage that the buyer must resort to actual purchase and suffer loss before claiming damages. It was so held in Ismail Sait and Sons v. Wilson and Co. A.I.R. 1919 Mad, 1053. Similar view was taken in Vishwanath v. Amarlal A.I.R. 1957 Madh. Bha. 190. The learned Counsel also relied upon the judgment of the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of goods. In fact, section 62 of the Sale of Goods Act is a statutory recognition of this right in the parties. The same rule was laid down by the Division Bench of the Bombay High Court in Sitaram Bindraban v. Chiranjilal Brijlal, in the following words : These decisions, in our opinion, are an authority for the proposition that parties may exclude any of the terms or conditions which the law attaches to the contracts of sale and create by themselves any special rights and obligations that they please such as providing their own measure of damages in case of breach of contract and indeed the terms of section 62 of the Indian Sale of Goods Act recognises the right of parties to vary the ordinary incidence of a contract by express terms of the contract of sale of goods between them. Section 62 runs thus : Where any right, duty or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or course of dealing between the parties, or by usage. If the usage is such to bind both parties to the contract. Now the rule framed by the Association which we have quoted above is clearly a term of the contract be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re actually suffered, otherwise section 73 will become nugatory and party would be penalised though the other party suffered no loss. Thus, even under section 73 of the Contract Act, party claiming compensation is under an obligation to prove the loss suffered on account of breach of agreement by the respondents. In the present case, as found by the Arbitrators in the majority awards the appellants have failed to prove quantum of loss suffered by them. The appellants were, therefore, held not entitled to any damages claimed in the respective statement of claims. According to Mr. Bharucha, learned Counsel for the respondents approach of the Arbitrators cannot be faulted in the proceeding under section 30 of the Arbitration Act as categorical findings have been recorded by the majority arbitrators in the respective awards. The appellants (claimants) have failed to prove that they suffered any loss. It is, therefore, not possible for this Court to examine findings of fact in the present appellate jurisdiction. Consequently, no fault can be found with the approach adopted by the learned Single Judge is the last contention of the appellants. 16. It is not in dispute that appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
