JUDGMENT

A. K. Patnaik, J.-This is an appeal by way of special leave under Article 136 of the Constitution against the judgment dated 27.04.2006 of the Division Bench of the Andhra Pradesh High Court in Civil Miscellaneous Appeal No.322 of 2005 (for short `the impugned judgment').

2. The facts in brief are that in August, 1999, the appellant invited tenders for supply of fresh fruits for its troops for the period from 01.10.1999 to 30.09.2000 and respondent No.2 amongst others submitted tenders and the tender of respondent No.2 was accepted. The respondent No.2 started supply of fresh fruits on 01.10.1999 and stopped the supply on 06.06.2000. On 13.06.2000, the appellant issued a notice to respondent No.2 to show-cause why action should not be initiated for such non-supply of fresh fruits. The respondent No.2 submitted its reply dated 20.06.2000 saying that the prices of all variety of fruits had increased and that it was impossible on its part to perform the contract and that the appeals made by the respondent No.2 were not considered by the authorities. The appellant then rescinded the contract with respondent No.2 by letter dated 29.06.2000 and informed the respondent No.2 that