Starshine Logistics (Regd. Firm) Rep. by its Partner/Authorised Signatory Suresh Gatt Reddi, Chennai vs Tamil Nadu Civil Supplies Corporation Represented by its Managing Director, Chennai

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Mad) 1790

G. R. SWAMINATHAN
Starshine Logistics (Regd. Firm) Rep. by its Partner/Authorised Signatory Suresh Gatt Reddi, Chennai – Appellant
Versus
Tamil Nadu Civil Supplies Corporation Represented by its Managing Director, Chennai – Respondent

Advocates appeared:
For the Petitioner:Mani Sundar Gopal, Advocate. For the Respondent:R. Shunmugasundaram Advocate General, Assisted by A.G. Shakeenaa, Standing Counsel.

Judgement Key Points

What is the extent to which market fluctuations or increased costs can excuse performance under Section 56 of the Indian Contract Act? What is the court's stance on the applicability of the doctrine of frustration when the fundamental basis of the contract remains unaltered? What is the permissible scope of arbitral clauses in contract matters brought to the High Court under Article 226 in a State instrumentality dispute?

What is the extent to which market fluctuations or increased costs can excuse performance under Section 56 of the Indian Contract Act?

What is the court's stance on the applicability of the doctrine of frustration when the fundamental basis of the contract remains unaltered?

What is the permissible scope of arbitral clauses in contract matters brought to the High Court under Article 226 in a State instrumentality dispute?

JUDGMENT

Common Order:

1. Tamil Nadu Civil Supplies Corporation issued tender notification dated 20.12.2021 for the supply of 4 Crore nos. of Fortified RDB Palmolein oil pouches. The tender opening date was announced as 06.01.2022. The petitioners herein submitted their tenders in response to the said notification. They emerged as successful tenderers. The offers made by the petitioners were accepted by the respondent Corporation on 13.01.2022. As per the terms of the contract, the tenderers were to supply the following quantities in two spells.

Petitioner in W.P.No.8522 of 2022	65,00,000
Petitioner in W.P.No.8521 of 2022	80,00,000
Petitioner in W.P.No.5994 of 2022	1,00,00,000
Petitioner in W.P.No.7681 of 2022	90,00,000
Petitioner in W.P.No.8657 of 2022	65,00,000

2. Except the writ petitioner in W.P.No.5994 of 2022 (M/s.Arunachala Impex Private Limited) the other tenderers effected supplies under both spells. Clause 17(d) of the tender notification is as follows:

“17(d) : The Tamil Nadu Civil Supplies Corporation reserves the right to vary the quantity finally ordered to be purchased to the extent of 25% either way of the requirement of RBD Palmol

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2022 Supreme(Mad) 1790

G. R. SWAMINATHANStarshine Logistics (Regd. Firm) Rep. by its Partner/Authorised Signatory Suresh Gatt Reddi, Chennai – AppellantVersusTamil Nadu Civil Supplies Corporation Represented by its Managing Director, Chennai – Respondent

What is the extent to which market fluctuations or increased costs can excuse performance under Section 56 of the Indian Contract Act?

What is the court's stance on the applicability of the doctrine of frustration when the fundamental basis of the contract remains unaltered?

What is the permissible scope of arbitral clauses in contract matters brought to the High Court under Article 226 in a State instrumentality dispute?

G. R. SWAMINATHAN
Starshine Logistics (Regd. Firm) Rep. by its Partner/Authorised Signatory Suresh Gatt Reddi, Chennai – Appellant
Versus
Tamil Nadu Civil Supplies Corporation Represented by its Managing Director, Chennai – Respondent