Meganath V

16040141052
BA.LLB (2016-2021)
Moot Court Exercise and Internship
CLAW 224

BEFORE THE HON’BLE SUPREME COURT OF HIND

APPEAL JURISDICTION

CIVIL SUIT NO/ ….. [2021]

FILED UNDER ARTICLE 133 OF

THE CONSTITUTION OF INDIA, 1950

IN THE CASE CONCERNING BREACH OF CONTRACT AND RELATED

ISSUES.
AND
IN THE MATTER BETWEEN:

RAIL TRACK MANUFACTURING

[APPELLANT]
COMPANY (RTMC)

VERSES

COASTAL RAILWAYS TRUST OF

HIND (CRTH)
[RESPONDANT]

MEMORIAL for RESPONDENT

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 TABLE OF CONTENTS

S.NO PARTICULAR PAGE

NO

1. Index 3
2. Statement of Jurisdiction 4
3. Statement of Fact 6
4. Statement of Issues 7
5. Summary of Arguments 8
6. Arguments Advanced 11
7. Prayer Clause 18
8. Case Laws 19

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 INDEX
CASE LAW REFERRED:

HOUSEHOLD FIRE INSURANCE V GRANT – 1879

IN COMMON CAUSE V. UNION OF INDIA [1999 (6) SCC 667]
THAKUR DAS (DEAD) VS SATE OF MADHYA PRADESH ON 14 OCTOBER , 1977

BOOKS REFERED:

1. CONTRACT AND SPECIFIC RELIEF BY AVTAR SINGH

2. INDIAN CONTRACT AND SPECIFIC RELIEF ACTS BY NILIMA
BHADBHADE. VOLUME 1,2

STATUTORY REFERRED:

1.INDIAN CONTRACT ACT 1872

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 STATEMENT OF JURISDICTION
The Respondent humbly submits this memorandum for the petition filed before this
Honorable Supreme Court of Hind. The Respondent has approached this Hon’ble
Supreme Court of Hind under Article 133 of the Constitution of India. Article 133 of
the Constitution of India which reads as follows:

“133. The appellate authority of Supreme Court in appeals from High Courts
regarding civil matters
(1) An appeal shall lie to the Supreme Court from any judgment, decree, or final
order in a civil proceeding of a High Court in the territory of India if the High
Court certifies under Art134A.

(a) That the case involves a substantial question of law of general importance; and

(b) That in the opinion of the High Court the said question needs to be decided
by the Supreme Court
(2) Notwithstanding anything in Art132, any party appealing to the Supreme
Court under clause (1) may urge as one of the grounds in such appeal that a
substantial question of law as to the interpretation of this Constitution has
been wrongly decided
(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by
law otherwise provides, lie to the Supreme Court from the judgment, decree,
or final order of one Judge of a High Court”

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 STATEMENT OF FACTS

 The Coastal Railway Trust of Hind (“CRTH”) invited tenders for the supply of rails
on the 24th of August 2019. The last to submit the bid was the 25th of November
2019 and the bid will be opened on the 15th of December 2019.
 The Rail Track Manufacturing Company (“RTMC”) submitted its offer to the tender.
Clause 7 of the tender provided that the CRTH will not bear the liability of the transit
insurance. The supplier must deliver the concerned goods without any defect. Clause
8 of the tender provided that the CRTH reserves the right to reject the supplies if it is
found defective and recover the freight charges from the supplier.
 Clause 9 of the tender provided that a sum of Rs. 10,00,000 must be deposited as a
security amount along with the offer. RTMC submitted its offer which inter alia had a
specific condition that inspection of the rails will be conducted only at RMTCs
warehouse and refused to accept Clause 7 and Clause 8 of the tender. Subsequently,
adhering to the other terms and conditions of the Tender, RMTC made a payment of
Rs. 10,00,000/- towards security deposit.
 The CRTH issued a revised notification to extend the last date of accepting the bids
and the date of opening the bids. It extended the last date to accept the bids to 31st of
January 2020 and to open the bids to the 15th of February 2020. As the opening of the
Tender was postponed, RTMC submitted a revised offer reiterating its earlier position
that inspection of the rails will be conducted only at RMTCs warehouse and It does
not accept Clause 7 and Clause 8 of the tender.
 The bids were opened on the given date, the bid of RMTC was the lowest. The CRTH
officials started discussing a few terms and conditions of RMTCs bids with RMTC
officials. RMTC clarified its stance on inspection of rails at its warehouse and
communicated that it is not in favour of the inspection of the rail conducted at the
stores of CRTH.
 Upon discussion, it was agreed between the parties that in the event of inspection is
done at the stores of the CRTH then RMTC would charge 18% above the quoted rate.
Moot Problem 2 By a letter dated 21st of March 2020, the CRTH accepted the offer
of the RMTC for the supply of rails but with a condition of transit insurance and
inspection of the rails at the stores and requested RMTC to extend the delivery period
of the rails by 30 days than the earlier mentioned date of 2nd of May 2020.

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 The RMTC vide its letter dated 22nd of March 2020, rejected the proposal of the
CRTH and declined its request to extend the delivery date thereof. The RMTC
requested the CRTH to return the security deposit amount of Rs. 10,00,000. 22nd of
March 2020 being declared as Janta Curfew by the Government of Hind, the letter of
RMTC rejecting the proposal did not reach the CRTH office.
 However, on the same day of accepting the offer of the RMTC, the CRTH issued a
purchase order dated 21st March 2020 for the supply of Rails on the terms and
conditions specified therein. The CRTH communicated to the RMTC that if the
supply of the rails were not made as per the purchase order then the security deposit
would be forfeited as risk purchase would be made at the cost of the RMTC.
 The RMTC contested that there was no concluded contract between the parties and
requested the CRTH to refund the security deposit. Also, RMTC cited the government
lockdown due to the ongoing pandemic as one of its reason for not being able to
supply the goods, even if it presumes that there was a concluded contract, which in
truth was not the case.
 The CRTH filed a suit against the RMTC for damages for breach of contract in the
Civil Court of Harappa. The RMTC filed a suit for recovery of security deposit along
with interest, cost, and other consequential reliefs before the Civil Court of Harappa.
Both the suits were clubbed together before the trial and the Civil Court of Harappa
vide its judgement dated 25th of June 2020 decreed in favour of the Respondent in the
suit of damages for breach of contract and dismissed the suit of recovery of the
security deposit on the grounds that the CRTH had accepted the offer of the RMTC
and issued a purchase order in relation to the same resulting in the conclusion of the
contract between the parties and as the RMTC did not perform its part by supplying
the rails as per the concluded contract, the CRTH was entitled to damages for breach
of obligations by the RMTC.
 The court rejected the Force Majeure defence of RMTC.Moot Problem 3 The RMTC
appealed against the trial court’s order in the High Court of Aryavrat. The High Court
vide its judgment dated October 10, 2020, upheld, and confirmed the Trial Court’s
Order.
 Being aggrieved, the RMTC filed the present appeal before the Supreme Court of
Hind against the Judgment of the High Court of Aryavrat.

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 STATEMENT OF ISSUES

1. Whether the RMTC committed a breach of contract?

2. Whether the CRTH is entitled to recover the amount as claimed in the suit
from the RMTC?
3. Whether the Appellant was entitled to a refund of the security deposit with
interest as claimed?
4. Whether the defence of Force Majeure would stand ?

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 SUMMARY OF ARUGUMENTS

I. WHETHER THE RMTC COMMITTED A BREACH OF

CONTRACT?

The RMTC has submitted a Breach of Contract. At the point when at least two parties to the
agreement are restricting under the commitment to perform explicit terms and conditions
given under the agreement and when one party has neglected to satisfy the commitment, it
turns into a violation of agreement. Thus, RMTC has neglected to play out the terms and
conditions referenced in their agreement, RMTC is committed a breach of contract .

II. WHETHER THE (CRTH) IS ENTITLED TO RECOVER THE

AMOUNT AS CLAIMED IN THE SUIT FROM THE RMTC?

A party can claim compensation from the party who did not perform his obligations
under the contract CRTH is entitled to recover the amount as claimed in the suit from
the RMTC. The aggrieved party has the right to claim compensation for the loss
suffered by the breach of contract. Therefore, CRTH is entitled to recover the amount
claimed in the suit from the RMTC.

III. WHETHER THE APPELLANT WAS ENTITLED TO A REFUND OF

THE SECURITY DEPOSIT WITH INTEREST AS CLAIMED?

The plaintiff failed to fulfill the conditions and terms of the contract The appellant is
not entitled to a refund of the security deposit with interest as claimed. Although the
appellants contend there was never a contract, they have agreed to the terms and
conditions of the Tender and made a payment of Rs. 1000000 towards security
deposit., It is humbly contended to the Hon’ble Supreme Court that the Appellant is
not entitled to a refund of the security deposit with interest.

IV. WHETHER THE DEFENCE OF FORCE MAJEURE WOULD

STAND?

The defense of ‘force majeure’ is applicable in situations where performance of a

contract is impossible. Hence, the defense of Force Majeure would not stand. And,

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 everyone in Hind is well aware of the Covid-19 pandemic which is going on for
months and the Janata curfew which was pre announced.

ARGUMENT ADVANCED

1.Whether the RMTC committed a breach of contract?

The Respondent humbly submits that Under Section 2(h) of the Indian
Contract Act defines a contract as an agreement which is enforceable by law. For
a contract to be legally binding it must contain four essential elements:
 an offer.
 an acceptance.
 an intention to create a legal relationship.
 a consideration (usually money).
In contract law, breach of contract, also called breach of agreement, refers to
the violation of any term or condition of a binding agreement. It generally occurs when at
least one party doesn't full fill his or her commitments under the contract.
 Anticipatory breach of contract
An anticipatory breach is when one of the parties to the contract acknowledges
that they won’t be able to full fill their side of the contract by the agreed upon
time.

So, this usually happens when the breaching party notifies the other party of their inability to
full fill their contract obligations.

This is meticulously clear from the fact that the Key elements for a legally
binging contact has done.
 an offer – RMTC has participated in the Tender. The bids were opened on 15th of
February 2020. The bid of RMTC was the lowest. CRTH has invited the RMTC
officials for negotiation. The CRTH officials started discussing a few terms and
conditions of RMTCs bids with RMTC officials.

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  an acceptance - Upon discussion, it was agreed between the parties that in the event of
inspection is done at the stores of the CRTH then RMTC would charge 18% above
the quoted rate.
 an intention to create a legal relationship - CRTH issued a purchase order dated 21st
March 2020 for the supply of Rails on the terms and conditions specified and
discussed during the negotiation.
 a consideration – This will be grant after distribution of rails.

Relevant case law

HOUSEHOLD FIRE INSURANCE V GRANT - 1879
Case Summary

Jurisdiction(s): UK Law

Household Fire Insurance v Grant [1879] 4 Ex D 216

Contract – Postal Rule – Acceptance – Communication – Meeting of Minds – Valid Contract

Facts

The defendant, Mr Grant, applied for shares in the complainant’s company, the Household
Fire Insurance. The complainants allotted shares to Mr Grant and they completed this
contract by posting him a letter with notice of the allotment. However, this letter never
reached Mr Grant and it was lost in the post. Mr Grant never paid for the shares as a
consequence. When the Household Fire Insurance company went bankrupt, the liquidator
asked the defendant for payment of the shares. Mr grant refused to pay, as he did not believe
he was a shareholder nor was there a binding contract in his mind.

Issues

The court held that the liquidator was entitled to recover this money, as there was a binding
contract between Mr Grant and the Household Fire Insurance company. This decision was
appealed. The issue in the appeal concerned whether there had been an acceptance of the
share offer and if there was a legally binding contract.

Held

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The appeal was dismissed and it was held that there was a valid contract between the parties
for the shares. The postal rule was affirmed, which states that acceptance is effective when it
is mailed, as long as the parties consider the post as an acceptable way of communicating.
This rule is true even though the letter never arrived to Mr Grant. Lord Justice Thesiger
stated that posting acceptance creates a ‘meeting of minds’, which created a binding contract.
Lord Justice Bramwell dissented, arguing that the postal rule can hinder transactions and that
acceptance should only be effective once the letter arrives.

There is implied action of contract has been concluded between the parties. It is
observed from the leading case: Household fire & Accident insurance Vs Grant, 1879 the
rule is true that the postal acceptance creates a ‘meeting of minds’, which created a binding
contract. Thus RMTC is bound to deliver the rails as per the mentioned date in Purchase
order. The Appellant cited that the government lockdown due to the ongoing pandemic
supply ofgoods has not been done. On considering the pandemic situation the CRTH in the
purchase order stated that to extend the delivery period of the rails by 30 days than the earlier
mentioned date of 2nd of May 2020. With all these relaxation, the appellant has failed to
supply the goods.

Hence the RMTC has committed a breach of contract.

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2.Whether the CRTH is entitled to recover the amount as claimed in the suit from the
RMTC?
The Respondent humbly submits that it is clear from the discussion of issue
no.1 is that the appellant/Petitioner has committed a breach of contract as the RMTC/
appellant did not perform its part by supplying the rails as per the concluded contract.
 There are several remedies for breach of contract, such as award of damages, specific
performance, rescission, and restitution. In courts of limited jurisdiction, the main
remedy is an award of damages.
 The term “damages” is not defined under the Indian Contract Act, 1872. However, in
common parlance, it means an award of money to be paid by a defaulting party to a
non-defaulting party as compensation for loss or injury caused on account of the
defaulting Party’s breach of the terms and conditions of the contract.

In a leading cases,

In Common Cause v. Union of India [1999 (6) SCC 667], the Supreme Court extracted
the definition of the word “damages”, as propounded by Mc Gregor at para 127 as
follows:

“Damages are the pecuniary compensation, obtainable by success in an action, for a wrong
which is either a tort or a breach of contract, the compensation being in the form of a lump
sum which is awarded unconditionally.”

The appellant/petitioner has accepted the terms and conditions regarding

transit insurance and the event of inspection of Rails is done at the stores of the CRTH
based on the discussion made between the both parties, on 21st of march,2020 the purchase
order has been issued in favour of Appellant/ RMTC and the contract has been concluded

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 thereof. On 22nd march,2020 the appellant/ petitioner in a letter rejected the proposal of
CRTH which is clear act of breach of contract.

Section 73 of the Indian Contract Act, 1872 provides compensation for loss or damage
caused by the breach of contract. When a contract has been broken, the party that suffers
from such infringement is entitled to receive compensation for any loss or damage resulting
from such infringement. Such compensation shall not be given for any remote and indirect
loss or damage sustained as a result of the breach.

Hence it is clear from above discussion is that the appellant/ petitioner had
committed a breach of contract and there is a provision under sec 73 of the Indian Contract
Act, the non-defaulting party can claim the damages foe infringement act in a concluded
contract, thus the CRTH is entitled to recover the amount as claimed in the suit from the
Appellant/RMTC. It is humbly submits that the honourable supreme court may conform
the judgement of the High Court of Aryavrat and allow the damages claimed by the
respondent.

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3.Whether the Appellant was entitled to a refund of the security deposit with interest as
claimed?

The Respondent humbly submits that a security deposit is any money a

landlord takes from a tenant other than the advance payment of rent. The security
deposit serves to protect the landlord if the tenant breaks or violates the terms of the
lease or rental agreement. It may be used to cover damage to the property, cleaning,
key replacement, or back rent. A security deposit is intended as a measure
of security for the recipient, and can also be used to pay for damages or lost property
The contractor is required to deposit with the owner a sum stated as a
percentage of the cost of the work in order to safeguard the interests of the owner in
the event of improper performance of the contract.

Relevant case law

Thakur Das (Dead) By L. Rs vs State Of Madhya Pradesh on 14 October, 1977

The petitioner Thakur Das son of Lila Ram Sindhi who died pending the petition, was a
licensed dealer in food grains having obtained a licence under the Madhya Pradesh Food
grains Dealers Licensing Order, 1965 (for short 'the order') issued under section 3 of the
Essential Commodities Act, 1955 ('Act' for short). The licence enabled him to store for sale
and sell food grains set out in Schedule I to the Order. By the terms of the licence the licensee
was obligated to maintain a register of daily accounts in the prescribed form for each of the
food grains for which the licence was issued and there was a further obligation to complete
the accounts for each day on the day to which they relate unless prevented by reasonable
cause, the burden of proving which would be upon him. The licensee had to deposit at the
commencement of licence, the amount of security deposit as provided by clause (6) of the
Order. Clauses (8) and (9) conferred power on the licensing authority-Collector of the

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District in this case--to cancel the licence and to forfeit the security in the event of
contravention of any condition of licence. The Food Inspector on a visit to the licensed
premises on 13th August 1972 found certain irregularities in the accounts and submitted a
report on the basis of which the licensing authority issued notice dated 21st August 1972 to
the licensee calling upon him to show cause within 24 hours why the licence should not be
cancelled, the security deposit may not be forfeited and the seized food grains may not be
confiscated. Ultimately the licensing authority directed confiscation of the seized food grains,
cancelled the licence issued in favour of the licensee and forfeited the security. deposit. The
licensee appealed to the judicial authority constituted under s. 6C of the Act, being the
Sessions Judge, Mandsaur, against that part of the Order by which the seized food grains
were ordered to be confiscated. The judicial authority was of the opinion that 'in the facts and
circumstances of the case cancellation of the licence and the forfeiture of
the security deposit is quite sufficient and it is not just to confiscate the grains worth Rs.
50,000/- for the alleged contravention' and directed that the seized food grains be sold to
some licensed dealer at controlled price and the price so realisee be refunded to the licensee.
The State of Madhya Pradesh and the Licensing Authority preferred a revision application to
the High Court against the order of the judicial authority. The High Court disagreed with the
opinion of the Sessions Judge and held that in the facts and circumstances,of the case
confiscation was just and proper and accordingly set aside the order of the appellate authority
and restored the order of the Collector. Two contentions were raised before the High Court
and the same were canvassed before us. It was contended : (1) the judicial authority
constituted by the State Government under s. 6C of the Act to hear appeals against the order
of confiscation that may be made by the licensing authority under S. 6A not an inferior
criminal court subordinate to the High Court and amenable to the revisional jurisdiction of
the High Court under s. 435 read-with s. 439 of the Code of Criminal Procedure; (2) in the
facts and circumstances of this case, the High Court was not justified in interfering with the
order of the appellate authority who had exercised its discretion one way merely because the
High Court took a different view of the matter, Section 6A of the Act confers power on the
Collector to confiscate any essential commodity which is seized in pursuance of an order
made under S. 3 in relation thereto. Clause II of the Order enables the licensing authority to
seize stocks of foodgrains etc. which are held in contravention of the provisions of the order
or of the conditions of licence issued thereunder. Before confiscating such seized essential
commodity, s. 6B confers a duty on the licensing authority to give a notice informing the
person to whose detriment the action is proposed to be taken, the grounds on which it is
15
proposed to confiscate the essential commodity and further give him an opportunity to make
a representation within a reasonable time as may be specified in the notice and also give a
reasonable opportunity of being heard in the matter. Section 6C provides for an appeal
against the order of confiscation. The State Government is required to appoint a judicial
authority to entertain and bear appeals against the order of confiscation. The appellate
authority so constituted has power to modify or annul the order of confiscation. Madhya
Pradesh State Government has appointed a judicial authority for the purposes of s. 6C but the
notification constituting the authority was not placed on record. The licensee preferred an
appeal in the Court of Sessions Judge, Mandsaur Division, Mandsaur, and no one questioned
that the Sessions Judge presiding over the Sessions Court at Mandsaur was competent
judicial authority for the purposes of S. 6C.

If the Sessions Judge presiding over the Sessions Court is the judicial authority, the question
is : would it be an inferior criminal courts subordinate to the High Court for the purposes
of ss. 435 and 439 of the Criminal Procedure Code ? At the one and of the spectrum the
submission is that the judicial authority appointed under s. 6C would be person a designata
and that if by a fortuitous circumstance the appointed judicial authority happens to be the
Sessions Judge, while entertaining and heating an appeal under s. 6C it would not be an
inferior criminal court subordinate to the High Court and, therefore, no revision application
can be entertained against his order by the High Court. While conferring power on the State
Government to appoint appellate forum the Parliament clearly manifested its intention as to
who should be such appellate authority. The expression "judicial" qualifying the 'authority'
clearly indicates that that authority alone can be appointed to entertain and heat appeals
under s. 6C on which was conferred the judicial power of the State. The expression " judicial
power of the State" has to be understood in contradistinction to executive power. The framers
of the Constitution clearly envisaged courts to be the repository of the; judicial power of the
State. The appellate authority under s. 6A must be a judicial authority. By using the
expression "judicial authority" it was clearly indicated that the appellate authority must be
one such pre- existing authority which was exercising judicial power of the State. If any other
authority as persona designata was to be constituted there was no purpose In qualifying the
word authority" by the specific adjective "judicial". A judicial authority exercising judicial
power of the State is an authority having its own hierarchy of superior and inferior court, the
law of procedure according to which it would dispose of matters coming before it depending
up-on the- nature of jurisdiction exercised by it acting in judicial manner. In using the

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compact expression "judicial authority" the legislative intention is clearly manifested that
from amongst several pre-existing authorities exercising judicial powers of the State and
discharging judicial functions, one such may be appointed as would be competent to
discharge the appellate functions as envisaged by s. 6C. There is one in built suggestion
indicating who could be appointed. The concept of appeal inheres hierarchy and the appellate
authority broadly speaking would be higher than the authority against whose order the appeal
can be entertained. Here the appellate authority would entertain appeal against the order of
Collector, the highest revenue officer in a district. Sessions Judge is the highest judicial
officer in the District and this situation would provide material for deter-mining appellate
authority. In this connection the legislative history may throw some light oh what the
legislature intended by using the expression "judicial authority". The Defence of India Rules,
1962, conferred power on certain authorities to seize essential commodities under certain
circumstances. Against the seizure an appeal was provided to the State Government whose
order was made final. By the amending Act No. 25 of 1966 Sections 6A to 6D were
introduced in the Act. This introduced a basic change in one respect, namely, that an order of
confiscation being penal in character, the person on whom penalty is imposed is given an
opportunity of approaching a judicial authority. Earlier appeal from executive officer would
lie to another executive forum. The change is appeal to judicial authority. Therefore, the
expression clearly envisages a pre-existing judicial authority his to be appointed appellate
authority under s. 6C. When the provision contained in s. 6C is examined in the background
of another provision made in the order itself it would become further distinctly clear that pre-
existing judicial authority was to be designated as appellate authority under s. 6C. A seizure
of essential commodity on the allegation that the- relevant licensing order is violated, would
incur three penalties : (1) cancellation of licence; (2) forfeiture of security deposit; and (3)
confiscation of seized essential commodity, apart from any prosecution that may be launched
under s. 7. In respect of the first two penalties an appeal lies to the State Government but in
respect of the third though prior to the introduction of s. 6C an appeal would lie to the State
Government, a distinct departure is made in providing an appellate forum which must qualify
for the description- and satisfy the test of judicial authority. Therefore, when the Sessions
Judge was appointed a judicial authority it could not be said that he was persona designata
and was not functioning as a Court.

It was next contended that in the facts and circumstances of this case the High Court should
not have interfered with the order made, by the Sessions Judge setting aside the confiscation

17
of the seized food grains. Section 6A confers a discretionary power on the Collector to
confiscate seized essential commodity if the seizure is on account of contravention or
violation of an order made under s. 3 in relation to the commodity. The Act envisages two
independent proceedings against a person charged with contravention or violation of an order
made under s. 3 in relation to an essential commodity. Under s. 6A the Collector can
confiscate the seized commodity. Under S. 7 'such contravention is made punishable. As s.
7 stood at the relevant time, even where a prosecution is launched it was not absolutely
obligatory upon the court to forfeit the property in respect of which the relevant order had
been contravened. It was left to the discretion of the Court to direct forfeiture of the whole or
part of the commodity brought before the Court in respect of which an offence appeared to
have been committed. Since the subsequent amendment in 1974 the discretion of the Court in
this behalf is taken away and it is made obligatory upon the Court to forfeit the property in
respect of which an offence appears to have been committed under s. 7. Therefore, either the
Collector can order the confiscation and yet s. 6D permits infliction of any punishment to
which the person convicted thereby is liable under the Act irrespective of the fact that the
Collector has ordered confiscation under s. 6A. The dichotomy is that Collector can proceed
to seize the essential commodity and cancel the licence and forfeit the security deposit. A
prosecution can be launched and the Court will halve to deal both with the question of
punishment and forfeiture of the property in respect of which an offence appears to have been
committed. Further, even if the Collect for confiscated the property it would be still open to
the competent authority to launch prosecution and the Court would have to deal with the
person who is charged with the offence but in such a situation of question of forfeiture of the
property would not arise because the Collector has already confiscated the same. In the case
before us the prosecution is not launched. The Collector directed confiscation of the seized
food grains. The Sessions Judge set aside the order of confiscation holding that in view of the
penalty &cancellation of licence which would deny the licensee an opportunity to carry on a
business of food grains and the forfeiture of security deposit, it would be unjust to inflict
further penalty in the form of confiscation of food grains worth Rs. 50,000/-. It appears from
the judgment of the High Court that the price so worked out was the price on which
confiscated food gains were sold at the controlled rate. The contention is that if the appellate
authority which had power, to annul or modify the order has annulled the order of
confiscation, would the High Court be justified in interfering with such order in exercise of
its revisional jurisdiction merely because it was of the opinion that confiscation was justified.

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 It is clear from the above citation that when the contractor is bound under
the concluded contract it is right of the non-defaulted party to claim the damages or forfeited
the security deposit for infringement of duties by defaulted party.

In the present circumstances the Appellant/ RMTC has participated in the

tender to supply of rails and offer has been given to the CRTH, after discussion and
acceptance of terms and conditions by both the parties, the purchase order has been issued to
Appellant/ RMTC by CRTH on 21ST of March,2020. On very next date the Appellant/ RMTC
has rejected the proposal, due to Janata curfew the letter has not reached the CRTH. But
when the contract is been concluded the reject of proposal is a part of breach of contract
under sec 73 of the Indian contract act can claim damages or forfeited the security deposit.

Hence it is humbly submits that the Appellant was not entitled to a refund of
the security deposit with interest as claimed. This is to prevent the Appellant/RMTC to
avoid the habit of rejecting the proposal after the conclusion of contract.

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4.Whether the defence of Force Majeure would stand?

The Respondent humbly submits that as per Black’s law dictionary,

‘Force Majeure’ is an event or effect that can neither be anticipated nor controlled. It
is a contractual provision allocating the risk of loss if performance becomes
impossible or impractical, especially as a result of an event that the parties could not
have anticipated or controlled. 

The term ‘Force Majeure’ is not defined anywhere but derives its
reference from the Indian Contract Act, 1872 which contemplates that if the contract
contingent on the happening of an event which becomes impossible, then the
contract becomes null and void. The Indian Contract Act 1872 (hereinafter the
“Contract Act”) regulates “Force majeure.” Where there is an explicit or implied
clause in a contract stipulating ‘Force Majeure’ occurrences, it shall be regulated by
Chapter III dealing with the contingent contracts and, more precisely, Section 32 —
that is, a term or condition enforceable upon the occurrence of an uncertain future
event (contingent) and provides for its consequences. 

In a leading case law,

The celebrated judgment of

M/s Halliburton Offshore Services Inc vs Vedanta Limited
 O.M.P.(I)(COMM.) No. 88/2020 was one of the earliest judgments wherein the High
Court of Delhi specifically held COVID-19 to be a force majeure event. However, the
court has stated that whether COVID-19 would justify non-performance or breach of a
contract has to be examined on the facts and circumstances of each case and only in
genuine cases where the party was prevented or could justify its non-performance

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because of the epidemic/pandemic. The judgment also holds that a force majeure clause
has to be interpreted narrowly and if there is a breach from before the COVID-19
period, then the party will not be entitled to take the benefit of the Force Majeure
clause.

In the present circumstances, the appellant/RMTC cited the government

lockdown due to the ongoing pandemic as one of its reason for not being able to supply
the goods, even if it presumes that there was a concluded contract. Initially
appellant/RMTC didn’t state the plea of ‘Force Majeure’, after conclusion of contact.
With no reason the appellant has rejected the proposal of CRTH. Though appellant/
RMTC is a manufacturing company must have sufficient raw material for
manufacturing of Rails. On receiving the purchase order dated 21 st of march 2020, the
appellant starts the work then for a delay to supply of good the appellant may claim the
clause of ‘Force Majeure’ for not delivering of goods on a stipulated date as mentioned
in Purchase order. But immediately on receiving of purchase order the appellant has
rejected the proposal.
Hence it is clear from the above citation and present circumstances the
clause of Force Majeure has to be interpreted in a narrow sense based on the
situation of the case. It is humbly submits the appellant/ RMTC cannot claim the
defence of Force Majeure.

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 PRAYER

In the light of the facts used, Questions presented, Argument Advanced, it is mostly Humbly
and respectfully prayed that this Hon’ble court may be pleased to adjudge, declare and held
that
 The Appellant in his case committed the breach of contract and the Respondent who
is entitled to receive the recover amount claimed for the suit.

 The Appellant filed the Appeal is dismissed and he is not entitled to a refund of the
security deposit with a interest of claim.

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