LexBRITISH MACHINARY SUPPLIES COMPANY versus UNLON OF INDIA AND ORS.
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A BRITISH MACHINARY SUPPLIES COMPANY v. tJNlON OF INbIA AND ORS. DECEMBER 17, 1992 B (KULDIP SINGH AND P.B. SAWANT, JJ.] Handbook of Import-Eiport Procedures, 1980-81-Paragraphs 72, 151 and 152-G.P. Sheets/Colls-linport of-Through canalised agency Steel Authority of India (SA1L}-f'ricing Committee increasing the price-Supply C ·of materials at increased price p;evalent on date of ;elease-Not on date of registratio"n with SAIL ..... Validity of..:.....Price increase-Whether arbitrary and discriminatory-Non-supply of Materials by SAIL due to foreign supplier in- . ,, •. . . . . voking force'majeur clause in the contract-Effect of. The appellant applied to the Steel Authority of India Limited D (SAIL) for supply of 600 Metric tonnes of G~P. Sheets/Coils of 0.45 m.m. gauge. SAIL registered the demand of the appellant for 300 metric tonnes only. Thereafter S,,.IL sent a telegram offering the appellant 62 metric tonnes. The appellant accepted the offer and complied with the for- malities. The supplies were to be made latest by 31.3.1981. But it was E not m·ade as Scheduled. On 16.12.1981, a meeting of the Pricing Com- mittee resolved to increase the price of the imported G.P. Sheets/coils by about Rs~800 per metric ton and this was communicated to SAIL on 8.2.1982. . Meanwhile on 12.1.1982 SAIL further offered 59 metric tonnes of F G.P. Sheets/Coils. On 1.2.1982 the appellant accepted the offer and complied With the other formalities. On 16.3.1982 SAIL wrote to the appellant that the Government of India has decided to increase the release price of G.P. Sheets/Coils imported, by Rs. 800 per metric ton. On 19.4.1982 SAIL olTered another 211 metric tonnes of G.P. G SheefS/Coils at increased price. The appellant accepted the offer but protested against the increase in price @Rs. 800 metric ton. Later SAIL informed the appellant that the foreign suppliers had invoked force majeur clause in the contract due to fire and had not H supplied 62 metric tonnes of G.P. sheets/coils and therefore the said 690 BRITISH MACHINARY CO. v. U.0.1. 691 supply could not be made. As regards the imcrease in price, SAIL A informed the appellant that it was binding both on SAIL as also actual users like the appellant. The appellant pointed out that certain concerns were supplied the material even after 8.2.1982 and were not charged the increase in price of Rs. 800 per metric ton, and the appellant should also be supplied material without being charged the increase in price. B Since SAIL refused to do so, the appellant filed Writ Petition before the High Court and contended that the appellant having registered the demand and opened its letter of credit prior to 8.2.82, it was not liable to pay the increased price; that SAIL was treating the appellant dis- criminately and that the increase in price itself was arbitrary. The High Court rejected all the three contentions and dismissed the. Writ Petition. C Aggrieved by the High Court's judgment, the appellant preferred the present appeal. In addition to the contentions raised before the High Court, it was contended before this Court that had the material been supplied D to the appellant in time by SAIL when it was · supplied to others, the increase in price would not have affected it. Dismissing the appeal, this Court HELD: 1. SAIL being only a canalising agency has to abide by the E decisions on pricing taken from time to time by the Pricing Committee. SAIL has no authority to fix the price. In fact, if it releases items at prices other than the price fixed by the Pricing Committee, it would be committing a breach of the Government Policy. Hence at the time of the release of an item SAIL has to release it at the price fixed by the F Pricing Committee. The application made by the appellant for registering itself for the imported G.P. sheets/coils makes it clear that the appellant is bound by the said policy. Admittedly, the release of the material in favour of the appellant is after 8.2.1981. [696-D,F] 2.1. The Pricing Committee met on 8.12.1981 for the first time to G consider the increase in the price wherein a tentative decision to increase the price by Rs. 800 per metric ton was taken. It again met on 16.12.1981 to finally approve the said decision and it was resolved formally that the price would be increased by Rs. 800 per metric ton. The minutes of the meeting were circulated by the Ministry of'Steel and Mines on H 692 S
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