A contract must be honored as written unless a mutual agreement to change its terms is established; unilateral alterations after contract performance are impermissible.

JUDGMENT

The petitioner is a company incorporated under the Companies Act , and the grievance highlighted by the petitioner in this writ petition relates to the alteration in the terms of contract with regard to the price at which the supply of Calcined Petroleum Coke was to be made by the petitioner to the 1^st respondent.

2. The facts that led to the filing of the writ petition are as follows:

2.1 As per Ext.P1, the 1^st respondent, which is a public sector undertaking controlled by the 2^nd respondent, tender for the supply of 18009 metric tons of Calcined Petroleum Coke. The petitioner submitted a tender in response to the same, and ultimately, it turned out to be the successful bidder. Accordingly, Ext.P4 purchase order was issued by the 1^st respondent in favour of the petitioner for the supply of the goods. As per Clause (1), which deals with the price of the Calcined Petroleum Coke [hereinafter referred to as CPC], the price was fixed as Rs.74,000/- per metric ton on FOR basis. It was also stipulated that, the said price shall be fixed and firm, during the tenure of the contract, and the tenure shall be for a period of ten months from 01.04.2023. The said clause further provided that, however, in case of any balance quantity to be supplied at the end of this period, then this quantity shall be supplied within the span of another three months, at the same price and terms and conditions, on mutual agreement. In such cases, petitioner cannot seek any escalation in the price within the validity of this period. Thus, according to the petitioner, Clause (1) of Ext.P4 purchase order clearly stipulates for the supply of the CPC, after the tenure is over, in respect of the quantity that ought to have been supplied during the tenure, at the same price as well as the same terms and conditions.

2.2. In this case, the petitioner affected the supply of 1650 metric tons during the tenure of the agreement, which is for the period from 01.04.2023 to 31.01.2024. Out of the balance quantity, the petitioner supplied 860 metric tons during February, 2024. It is also the case of the petitioner that, before affecting the supply of 860 metric tons during the month of February, prior intimation about the despatch of the goods was issued to the 1^st respondent by way of emails. Such emails are Exts.P47 to P75, which are produced along with the reply affidavit, and the dates of the said documents range from 03.02.2024 to 28.02.2024. The supplies made by the petitioner as per Exts.P47 to P75 were received by the 1^st respondent without raising any objections.

2.3. Thereafter, the petitioner was served with Ext.P10 communication from the 1^st respondent on 08.04.2024, wherein it was mentioned as follows:

“We had placed a purchase order referred above for supply of CP Coke with a delivery period of 10 months. The validity of the above purchase order was over on 31.01.2024. But you have supplied the material after the validity period.

We had finalized new tender and rate as per new tender is Rs.46,600 per MT which is lower than the purchase order placed with you. Being PSU, our auditors are not agreed to extend the validity of the purchase order beyond 31.01.2024.

Based on the above, we request you to accept our new tender rate of Rs.46,600/MT for the supply of CP Coke after the validity period immediately.”

2.4. The petitioner objected the proposal to reduce the price to RS 46,600 per metric ton, by issuing Ext.P40. In the subsequent communications also the petitioner re