Judgment

HEGDE, J.: The appellant is a company. It entered into a contract with the Union of India on November 17, 1959 for fabrication of tank Shells at Kalai Kunda. The fabricated Shells were to be rolled through the tracks allotted by the Air Force authorities. After the manufacture of shells, the appellant applied for permission to roll the Shells. The permission asked for was wanted on March 24, 1960. The appellant was asked to roll those Shells through the airfield and the rolling was to be done on Sundays and Mondays which were not flying days. In pursuance of the said permission the appellant rolled some Shens on February 28, 1962. While the Shells were being rolled, a shell hit a parked aircraft on the apron. The Air Force authorities assessed the damage caused to the plane at Rs. 51,414/-. Thereafter the appellant was called upon to pay the said amount. The appellant denied its liability to pay the amount demanded. Then the authorities threatened the appellant that they would deduct the amount in question from its bills. The appellant protested against the threatened deduction. Thereafter the Union of India referred the dispute to Col. J. S. Sandhu on August 13, 1962, nega