A contract can be frustrated by an event that makes it impossible for the parties to perform their obligations under the contract.

JUDGMENT :

A.S. Chandurkar, J.

1. The appellants are the original defendants who are aggrieved by the decree passed in Special Civil Suit No.99/2009 on 10.04.2012 whereby the suit for recovery of the losses suffered by the plaintiff on account of breach of the contract has been partly decreed and the defendants have been directed to pay an amount of Rs.2,16,53,217.36 with interest @9% per annum from the date of filing of the suit till realisation of the decreetal amount.

2. The facts relevant for deciding the appeal as can be gathered from the pleadings of the parties are being referred to. The parties are described as per their status in the trial Court. According to the plaintiff, it is a partnership firm engaged in undertaking contracts of civil and electrical works. The firm is registered as Class-I contractor with the Public Works Department of the State of Maharashtra and claims to be an expert in undertaking construction and road works. In 2002 the first defendant -Maharashtra Industrial Development Corporation (MIDC) issued a tender notice calling bids for the proposed construction of roads with surface dressing at Transport Nagar, Akola Industrial area. The plaintiff submitted its bid and on 30.01.2003 five bids that were received came to be opened. The bid submitted by one - Phenix Engineers and Contractors was the lowest at 38.59% below the tender estimated rates. The bid submitted by the plaintiff was the second lowest being 28.49% below the tender estimated rates. On 12.05.2003 the MIDC issued a letter to the plaintiff informing it that the tender submitted by the plaintiff was accepted by the MIDC. The plaintiff was accordingly directed to deposit security amount of Rs.10,06,520/- as well as additional security amount in the sum of Rs.20,12,040/-. These amounts were directed to be deposited within seven days from the date of the said letter and the plaintiff’s representative was directed to remain present with all necessary documents. According to the plaintiff, by virtue of this communication the bid submitted by the plaintiff was accepted. The work that was awarded to the plaintiff was of an urgent nature and hence with a view to commence the same immediately, the plaintiff took steps and mobilized its staff, labourers as well as the requisite plant and machinery at the site. It is then the case of the plaintiff that pursuant to the letter dated 12.05.2003 the plaintiff through its representative sought to submit the requisite bank guarantees on 23.05.2003. The MIDC however neglected to accept the said bank guarantees and on 28.05.2003 the MIDC informed the plaintiff that though the said bank guarantees were sought to be presented on 27.05.2003, the same could not be accepted till 30.05.2003. The MIDC stated that after receiving instructions from the superior Officers the bank guarantees would be accepted

3. It is then the case of the plaintiff that in the meanwhile the contractor who had submitted the lowest bid namely Phenix Engineers filed Writ Petition bearing No. 2059/2003 in this Court challenging the allotment of the tender in favour of the plaintiff. The plaintiff was impleaded as respondent no.5 in the said writ petition. On 15.05.2003 this Court passed an ad-interim order in terms of prayer clause (ii) of the writ petition thereby restraining the MIDC from issuing the work order to the plaintiff. The plaintiff was not aware about filing of the aforesaid writ petition and passing of the interim order. Hence with a view to complete the work expeditiously the plaintiff had organized its engineering staff, labourers as well as plant and machinery on the work site for commencing the work. After getting knowledge of the ad-interim order passed in the writ petition, the plaintiff met the Officers of the MIDC and informed the officers of the MIDC that it had already organized its engineers along with labourers, plant and machinery at the work site. The MIDC moved Civil Application No.5349/2003 praying that the ad