Unforeseen events do not justify non-performance or claiming enhancement of price unless it frustrates the contract.

ORDER

1. THIS APPEAL IS AGAINST THE JUDGMENT DATED 8-1-1998. 2. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:

THE APPELLANT IS A STATUTORY BOARD ESTABLISHED UNDER THE PROVISIONS OF THE TRAVANCORE-COCHIN HINDU RELIGIOUS INSTITUTIONS ACT, 1950. THE APPELLANTS MANAGE TEMPLES IN TRAVANCORE. IN THE COURSE OF MANAGEMENT OF TEMPLES, THE APPELLANT INVITED TENDERS FOR SUPPLY OF POLYTHENE CONTAINERS FOR PACKING ARAVANA DURING THE FESTIVAL IN SABARIMALA TEMPLE. VARIOUS PARTIES SUBMITTED THEIR TENDERS. THE RESPONDENT WAS THE LOWEST TENDERER. THEREFORE, HIS TENDER WAS ACCEPTED FOR THE YEAR 1990-91. A FORMAL AGREEMENT WAS ENTERED INTO ON 12-10-1990. THE RESPONDENT WAS TO SUPPLY 15 LAKH CONTAINERS OF 250 ML AND 1,25,000 CONTAINERS OF 500 ML. CLAUSE 2 OF THE AGREEMENT PROVIDED THAT THE RATE QUOTED IN THE CONTRACT WILL BE FIRM TILL THE CLOSE OF MAY 1991. ON 17-10 -1990 THE RESPONDENT MADE A REPRESENTATION. HE CLAIMED ESCALATION OF PRICE DUE TO INCREASE IN PRICE OF THE RAW MATERIAL AS A RESULT OF THE GULF WAR AND DUE TO DIFFICULTIES IN TRANSPORTATION RESULTING FROM THE RAM JANMABHOOMI AGITATION.

3. IT MUST BE MENTIONED THAT UNDER THE CONTRACT THE MATERIAL WAS TO BE SUPPLIED BEFORE THE END OF SEPTEMBER 1990. THERE WAS SOME DELAY IN SUPPLY. HOWEVER, THE RESPONDENT SUPPLIED THE QUANTITY BY MARCH 1991. INSTEAD OF SUPPLYING ONE LAKH 500 ML CONTAINERS HE SUPPLIED TWO LAKH 250 ML CONTAINERS. THE SAME WAS ACCEPTED BY THE APPELLANTS.

4. IT APPEARS THAT PAYMENT WAS NOT MADE TO THE RESPONDENT. THE RESPONDENT TILED A PETITION IN THE HIGH COURT. THE SAME WAS DISPOSED OF BY THE HIGH COURT BY MERELY ASKING THE APPELLANTS TO SETTLE THE CLAIM OF THE RESPONDENT AND TO CONSIDER THE REPRESENTATIONS OF THE RESPONDENT FOR ESCALATION OF PRICE. PAYMENT AS PER THE ORIGINAL CONTRACT WAS THEN MADE BUT A SUM OF RS 37,864 WAS WITHHELD.

S. THE RESPONDENT THEN INSTITUTED A SUIT FOR RECOVERY OF A SUM OF RS 12,09,946.50 BEING THE PRICE OF THE CONTAINERS @ RS 2.15 PER CONTAINER LESS PAYMENTS ALREADY MADE AS PER THE ORIGINAL CONTRACT. THE AVERMENTS IN THE PLAINT ARE THAT THERE WAS AN ASSURANCE BY THE OFFICERS OF THE APPELLANT THAT THE LOSSES WOULD BE MET. IT IS AVERRED THAT ON SUCH ASSURANCES THE CONTAINERS WERE SUPPLIED. IT IS AVERRED THAT THE APPELLANT NEVER DECLINED THE REQUEST FOR ENHANCEMENT OF RATE. THESE AVERMENTS WOULD INDICATE THAT, EVEN ACCORDING TO THE RESPONDENT, NO CONCLUDED CONTRACT TO VARY THE RATE HAD COME INTO EXISTENCE. THE RESPONDENT THEN GOES ON TO CLAIM THAT THERE WAS PROMISSORY ESTOPPEL AND THAT THE APPELLANTS WERE PRECLUDED FROM DENYING THE CLAIM OF THE RESPONDENT. IT IS ALSO AVERRED THAT THERE WAS A FRESH AGREEMENT BETWEEN THE APPELLANT AND THE RESPONDENT FOR VARIATION OF THE CONTRACT RATE.

6. THE TRIAL COURT ALLOWED A MOST UNUSUAL PRACTICE TO BE ADOPTED. THE RESPONDENT EXAMINED AS THEIR WITNESSES THE PRESIDENT AND A MEMBER OF THE BOARD OF THE APPELLANT AS PWS 2 AND 3 RESPECTIVELY. AS WAS TO BE EXPECTED THEY GAVE EVIDENCE AGAINST THE RESPONDENTS. THIS WAS THE RISK THAT THE RESPONDENT TOOK WHEN IT DECIDED TO EXAMINE WITNESSES OF THE OTHER SIDE. SURPRISINGLY, THE TRIAL COURT THEN PERMITTED THE RESPONDENT TO CROSS-EXAMINE THESE WITNESSES. EVEN AFTER FOLLOWING THIS UNUSUAL PRACTICE, WHICH MUST BE DEPRECATED IN NO UNCERTAIN TERMS, NO EVIDENCE FAVOURABLE TO THE RESPONDENT COULD BE OBTAINED. THE WITNESSES ASSERTED THAT NO CONCLUDED CONTRACT TO VARY THE PRICES HAD COME INTO EXISTENCE. THEY, HOWEVER, ADMITTED THAT THEY HAD TAKEN THE OPINION OF (A) THE LEGAL OFFICER OF THE BOARD, (B) KERALA INDUSTRIAL AND TECHNICAL CONSULTANCY ORGANISATION LIMITED, (C) A FIRM OF M/S MENON & MENON, AND (D) OF A SENIOR COUNSEL.

7. THUS, BEFORE THE TRIAL COURT THERE WAS NO EVIDENCE THAT THE PRICE HAD BEEN VARIED BY ANY ORAL OR WRITTEN AGREEMENT. THERE WAS NO EVIDENCE ON THE BASIS OF WHICH A CONTRACT VARYING THE PRICE COULD BE IMPLIED. SURPRISINGLY THE TRIAL COURT RELIED UPON A STATEMENT OF THE PRESIDENT OF THE BOARD APPEARING IN A NEWSPAPER WHICH READ AS FOLLOWS:

"IN VIEW OF THE IMPOSITION