High Court of Judicature at Madras
Case No : C.S. No. 240 of 2002
Judges: THE HONOURABLE MR. JUSTICE C.V. KARTHIKEYAN
Parties : M/s. Simplex Infrastructure Limited, Chennai Versus M/s. Aban Offshore Ltd., “Janpriya Crest”, Chennai & Another
Date of Judgment : 26-04-2021
Commercial Courts Act, 2015 - Indian Contract Act, 1872 - Section 19 - Companies Act, 1956 - Civil Procedure Code,1908 - Order VII Rule - Permanent injunction - Acceptance Letter - Compensation - Whether claims made in suit are barred by limitation and consequently, whether suit is liable to be dismissed - Whether unviability of a commercial decision of plaintiff would amount to a breach of contract on part of defendants - Whether factors such as wind velocity and grid availability are factors within control of defendants for alleging breach of contract by the defendants - Whether suit is liable to be dismissed for want of any cause of action as against defendants - Whether plaintiff is entitled to seek permanent injunction to restrain defendants from varying the terms of the contract - Whether plaintiff is entitled to maintain a prayer for specific performance and simultaneously seek a consequential prayer for compensation - Whether plaintiff is entitled to seek an alternate relief for compensation when relief sought is for specific performance as well as injunction to restrain the defendants from varying the terms of the contract
Finding of the court: Court would hold plaintiff can complain failure of performance and simultaneously seek consequential relief of compensation only till the filed of suit - Contract stands repudiated thereafter and though applications for amendment with respect to valuation of the suit had been allowed - Court would negate relief for periods subsequent to the filing of the suit – Court hold defendants had guaranteed an output of 18 Lakhs units per annum for a period of 20 years as stated in the issue
Result: Suit is dismissed
Judgment :-
(Prayer: This suit filed under Order VII Rule 1 of CPC read with Order IV Rule 1 of the Original Side Rules, prayed for a judgment and decree against the defendants for,
a).To direct the defendants to perform in accordance with the terms of the contract contained in Letter of Offer dated 15.12.1995, Letter of Acceptance dated 26.12.1995 and Order Acceptance Letter dated 28.12.1995 without varying the terms thereof and consequently pay a sum of Rs.12,49,44,597/- being the compensation towards shortfall in generation for the period between 01.04.1996 to 31.03.2014, together with interest thereon at 24% per annum on Rs.1,61,17,223/- (Rupees One Crore Sixty One Lakhs Seventeen Thousand Two Hundred and Twenty Three only) from the date of plaint, on Rs.36,65,088/- from 01.04.2002, on Rs.33,67,300/- from 01.04.2003 and on Rs.41,55,494/- from 01.04.2004 and on Rs.4,06,97,153/- from 01.09.2013 and on Rs.48,60,000/- from 16.11.2014 till the date of repayment.
b).For a permanent injunction restraining the defendants, their men, agents, servants or any person claiming through or under them, from varying the terms of the contract contained in the Letter of Offer dated 15.12.1995, Letter of Acceptance dated 26.12.1995 and Order Acceptance Letter dated 28.12.1995 during the tenure of the contract.
c).In the alternative to prayers (a) and (b) to declare that the defendants have failed to perform as per the terms of the aforesaid contract and direct the defendants to pay to the plaintiff as sum of Rs.8,84,90,895/- (Rupees Eight Crores Eighty Four Lakhs Ninety Thousand Eight hundred and Ninety Five only) together with interest at 24% per annum on Rs.3,53,69,544/- (Rupees Three Crores Fifty Three Lakhs Sixty Nine Thousand, Five Hundred and Forty Four only) from the date of plaint, on Rs.3,10,316/- from 01.04.2002, on Rs.2,23,302/- from 01.04.2003 and on Rs.2,53,629/- from 01.04.2004 and on Rs.23,37,922/- from 01.09.2013 till the date of repayment.
d). To pay the costs of the suit.)
1. The suit had been filed by the plaintiff, M/s.Simplex Infrastructure Limited, a Company incorporated under the Companies Act, 1956, against the defendants, M/s.Aban Offshore Ltd., and M/s.Aban Energies Ltd., both companies incorporated under the Companies Act, 1956 seeking a judgment and decree in the nature of a direction against the defendants to perform the contract as agreed between the parties and pay a sum of Rs.12,49,44,597/- as compensation towards shortfall in generation of electricity between the period 1996 to 2014 together with interest and for permanent injunction restraining the defendants from varying the terms of the contract or in the alternate to declare the defendants had failed to perform the contract and direct them to pay a sum of Rs.8,84,90,895/- together with interest and for costs of the suit.
2. The plaintiff was carrying on business as Engineers and Contractors. The defendants were carrying on business as manufacturers and suppliers of Wind Electric Generators. They also operated and maintained Wind Electric Generators. The plaintiff proposed to invest in a project which would be commercially viable. The 1st defendant offered to supply Wind Turbines to the plaintiff. The 1st defendant held out that if the plaintiff invested in Wind Turbines, they can draw electricity from the Tamil Nadu Electricity Board and alternatively also sell the electricity to the Tamil Nadu Electricity Board. The 1st defendant guaranteed the life of the Wind Turbines would be a maximum of 20 years. They agreed to operate and maintain the Wind Turbines free of cost for a period of two years from the date of commission and thereafter, at agreed rates for a further period of 18 years. The 1st defendant gave a Letter of Offer on 15.12.1995. They offered to commission, operate and maintain two numbers of Aban Kenetech 410 KW Wind Turbines Model KVS 33. The plaintiff
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