LexEXECUTIVE DIRECTOR, STEEL AUTHORITY OF INDIA & ORS. versus TYCOON TRADERS & ORS.
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[2014] 3 S.C.R. 838 A EXECUTIVE DIRECTOR, STEEL AUTHORITY OF INDIA & ORS. B c v. TYCOON TRADERS & ORS. (Civil Appeal No. 4026 of 2014) MARCH 26, 2014 [GYAN SUDHA MISRA AND PINAKI CHANDRA GHOSE, JJ.) CONTRACT: Contract becoming unenforceable impossible-Contract for removal of iron ore fines-Granted in 2007 -- Renewed in 2009 -- Principal Chief conservator of Forests declining to grant permission for lifting and transporting of iron ore fines D by plying vehicles as the area was declared as 'Tiger Reserve' -- High Court holding that contract stood frustrated and it was illegal for SAIL not to refund entire amount -- Held: Contract is unenforceable and further, it is a/so hit by s.38(v) of Wildlife (Protection) Act -- High Court was correct in allowing the writ E petition, and there is no reason to interfere - Wild life (Protection) Act, 1972 - s.38(v). In an e-auction for removal of iron ore fines, respondent no.1, being the successful bidder deposited the required amount and security deposits in March 2007. F The contracted was revalidated till November 26, 2009. However, the Principal Chief Conservator of Forests declined to grant permission for lifting the iron ore fines by plying vehicles as the area was declared as 'Tiger Reserve'. The High Court allowed the writ petition of G respondent no.1 holding that the contract itself stood frustrated and could not have been performed by the respondent even if it desired to do so, and further held that in case of frustrated contract, parties must be H 838 EXECUTIVE DIRECTOR, STEEL AUTH. OF INDIA v. 839 TYCOON TRADERS restored to their original position and, as such, it was A illegal for SAIL not to refund the entire money received by it from the respondent. Dismissing the appeal, the Court HELD: The contract is unenforceable and further, the contract is also hit by s.38(v) of the Wildlife (Protection) Act, 1972 as amended in 2006 and, as such, the object B of the contract is forbidden by law. Therefore, the said c contract is unlawful and cannot be given effect to. The High Court was correct in allowing the writ petition, and there is no reason to interfere with its order. [para 8-9] [842-F-H] CIVIL APPELLATE JURISDICTION : Civil Appeal No. D 4026 of 2014. From the Judgment and Order dated 21.02.2012 of the High Court of Karnataka at Bangalore in WP No. 38280 of 2011. Dr. Rajiv Dhawan, Anurag Sharma, Prashant Kumar, Joseph Pookkatt, AP & J Chambers for the Appellants. Shushil Kumar Jain, Satish G., H. Chandra Sekhar, AV. E Manavalan, V.N. Raghupathy for the Respondents. F The Judgment of the Court was delivered by PINAKI CHANDRA GHOSE, J. 1. Leave granted. 2. This appeal has been filed against the order dated February 21, 2012 passed by the High Court of Karnataka in G W.P. No.38280/2011. 3. The facts of the case reveal that on February 19, 2007, Steel Authority of India (for short 'SAIL') had advertised for E- auction of 1.00 lakh metric tons of iron ore (fines) from H 840 SUPREME COURT REPORTS [2014] 3 S.C.R. A Kemmanagundi mines. On March 13, 2007, auction was held and respondent No.1 was declared as the successful tenderer. It would be evident from the sale order dated March 16, 2007 that the price was agreed upon at Rs.1, 132/- per metric ton plus VAT of 4% aggregating to Rs. 11,32,00,000/- plus VAT of 4%. s The appellant duly paid 176 lakhs being 15% of the total sale value on March 15, 2007. Out of the said amount, Rs.58.86 lakhs being 5% of the total sale value was retained as Security Deposit and a sum of Rs.117.74 lakhs was kept for adjustment along with the final instalment. The balance payment was to be c made in two monthly instalments with the grace period of 30 days with interest at the rate of 6% per annum. The entire material was to be lifted within four months from the date of the sale order. 4. On May 26, 2010, SAIL informed the respondent that D the contract was revalidated by letter dated July 27, 2009 till November 26, 2009 for a period of four months commencing from July 27, 2009 and that the said contract had expired on the lapse of the said period. It is also not in dispute that on November 9, 2009, SAIL had addressed a letter to the Principal E Chief Conservator of Forests (Wildlife) and Chief Wildlife Warden, Karnataka, for renewal of permission granted for lifting and transporting iron ore fines through Bhadra Wildlife Sanctuary. The Principal C
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