Back
2016 Supreme(Cal) 412
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
SHIVAKANT PRASAD, J.
THE PHOSPHATE COMPANY LIMITED – Petitioner
Versus
EMIRATES TRADING AGENCY LLC – Respondent
CS No. 133 of 2008
Decided on : 27-09-2016
Advocate Appeared:
For the Plaintiff : Mr. Ajoy Krishna Chatterjee, Sr. Adv. Mr. A.P. Agarwalla, Adv.
For the Defendant : Mr. K. K. Thaker, Mr. Avinash Kankani, Adv., Mr. Indradeep Basu, Ms. Sreenita Ghoshdastidar, Advs.
Headnote:
CONTRACT - BREACH - DAMAGES - SALE OF GOODS - MEASURE OF DAMAGES - DIFFERENCE BETWEEN CONTRACT PRICE AND MARKET PRICE - NO MARKET PRICE PROVED - NOMINAL DAMAGES NOT AWARDED - SUIT DISMISSED.
Fact of the Case:
Plaintiff sued the defendant for breach of contract for non-supply of sulphur. The defendant pleaded 'Force Majeure' as a defense. The trial court held that there was a concluded contract and that the defendant was liable for breach of contract. However, the trial court did not award any damages to the plaintiff as the plaintiff failed to prove the market price of the sulphur on the date of the breach.
Finding of the Court:
The court held that the plaintiff was not entitled to damages as claimed on the allegation of breach of contract for non-supply of the commodities.
Issues: 1. Whether there was a concluded contract between the parties in respect of the subject matter of the suit alleged to have been entered into on 21st October, 2007? 2. If there was a contract, was the same frustrated by supervening impossibility of procuring cargo from NIGC, Iran due to sanctions imposed on Iranian Banks by US Government as alleged in paragraph 23 of the written statement? 3. Is the plaintiff entitled to the relief sought for? 4. To what other reliefs, if any, is the plaintiff entitled to?
Ratio Decidendi: 1. The court held that there was a concluded contract between the parties. 2. The court held that the contract was not frustrated by supervening impossibility of procuring cargo from NIGC, Iran due to sanctions imposed on Iranian Banks by US Government. 3. The court held that the plaintiff was not entitled to damages as the plaintiff failed to prove the market price of the sulphur on the date of the breach.
Final Decision: The suit was dismissed without any order as to costs.
SHIVAKANT PRASAD, J.
1. This is a suit for a decree for Rs. 3,73,75,000/- with interest upon judgment @ 12% per annum on account of breach of contract against the defendant.
2. Plaint case in brief is that at all material times the plaintiff carried on and still carries on business of producing and selling Single Super Phosphate a chemical fertilizer and sulphuric acid an intermediate product from its factory at Rishra in the State of West Bengal. Bright Yellow NIGC Sulphur Crude in bulk (hereinafter referred to as the “said commodity”), the basic raw material for producing sulphuric acid which in turn is also used in production of Single Super Phosphate.
3. M/s. Kesoram Rayon, a unit of Kesoram Industries Ltd., The Jay Shree Chemicals & Fertilizers a unit of Jay Shree Tea & Industries Ltd. and used to purchase the said commodity for their manufacturing requirements and the plaintiff used to co-ordinate with each other for import of the said commodity.
4. By a letter/communication dated 27th September, 2007 addressed to the defendant, the said M/s. Kesoram Rayon for itself as well as on behalf of the said Jay Shree Chemicals & Fertilizers and the plaintiff expressed intention to purchase 10,000 MTs. of the said commodity of the specifications contained in the said letter for shipment in end October/early November, 2007 with discharge rate of 1,500 MTs. per day, the discharge port being Haldia requesting the defendant to send its best offer indicating C & F Haldia Port rates at the earliest.
5. In response to the said letter dated 27th September, 2007 of M/s. Kesoram Rayon, the defendant by a FAX message dated 16th October, 2007 submitted its firm offer for supply of the said 10,000 MTs of the said material plus minus 10% on the terms and conditions and at the rate as mentioned in the said message.
6. By a FAX message dated 20th October, 2007 (Exbt.- E) the said M/s. Kesoram Rayon for itself, M/s. Phosphate & Co. Ltd. (plaintiff) and M/s. Jayshree Tea & Co. Ltd. gave a counter offer to purchase such specified quantity of the said commodity at a price of US$ 271 per Metric Ton, C & F Haldia/Calcutta at buyers option, the other terms being as per the offer of the defendant as contained in its FAX message dated 16th October, 2007. (Exbt.- B)
7. In the said FAX message dated 20th October, 2007, M/s. Kesoram Rayon sent to the defendant giving written confirmation to purchase 4750 Mts. of the said commodity for itself; 1250 MTs. for the plaintiff and 4000 MTs. for Jayshree Tea & Co. Ltd. with written confirmation by the respective companies to follow and requested the defendant to send a formal offer for the same.
8. Pursuant thereto, the defendant by a FAX message dated 21st October, 2007 (Exbt.- F) sent to the plaintiff confirmed to sell and supply to the plaintiff 1250 MTs. plus minus 10% of the said commodity having the specification mentioned therein @ US $ 271.00 PMT (US Dollar two hundred and seventy one only) CNF free out Haldia, India with payment on CAD (Cash Against Documents) or against irrevocable L/C payable at sight basis and on other terms and conditions as contained in the said message including the discharge rate to be 1500 MTs. per day and the defendant expressed its intention to have a formal order confirmation from the plaintiff. According to plaintiff, the said discharge rate was contrary to the rate of discharge of 1000 MTs. per day as provided in the earlier correspondence and the plaintiff corrected the discharge rate from 1500 MTs. per day to 1000 MTs. per day and re-faxed the same to the defendant by signifying the acceptance of the same by endorsing the acceptance and contended that there is a concluded contract by and between the parties for purchase and sale of the said 1250 MTs. of the said commodity which would be evident from the subsequent conduct of the parties.
9. It is further contended tha
