049A

IN THE

HONORABLE SUPREME COURT OF THE REPUBLIC OF AMARLONI

AT PRABRAMA

IN THE MATTERS OF

MS ABHIMANS PRAHUL (REPRESENTED BY HERSELF)

PETITIONER

v.

THE REPUBLIC OF AMARLONI (REPRESENTED BY SECRETARY OF FINANCE MINISTRY )

RESPONDENT

SPECIAL LEAVE PETITION NO.: 1504/2017

[UNDER ARTICLE 136 OF THE CONSTITUTION OF THE REPUBLIC OF AMARLONI READ WITH

ORDER XVI, RULE 1 OF THE SUPREME COURT RULES, 1966]

AND

ASHWIMAJA PVT. LTD. (REPRESENTED BY MRS. PRANKER SAHA GUPTA)

APPELLANT

V.

KYSKA LED PVT. LTD. (REPRESENTED BY MR. AKSHRAV NEGI)

C.A. NO.:- 587/2017

[UNDER ARTICLE 133 OF THE CONSTITUTION OF THE REPUBLIC OF AMARLONI READ WITH

ORDER XV, RULE 1&3 OF THE SUPREME COURT RULES, 1966]

ALL CLUBBED AND BROUGHT UNDER ARTICLE 142 OF THE CONSTITUTION OF THE

REPUBLIC OF AMARLONI READ WITH ORDER XLVII, RULE 1 OF THE SUPREME COURT

RULES, 1966

ON BEHALF OF THE APPELLANTS

INDEX OF AUTHORITIES..........................................................................................................iv

STATEMENT OF FACTS.............................................................................................................vi

STATEMENT OF JURISDICTION............................................................................................viii

ISSUES FOR CONSIDERATION.................................................................................................ix

SUMMARY OF ARGUMENTS.....................................................................................................x

ARGUMENTS ADVANCED.........................................................................................................1

PRAYER OF RELIEF.....................................................................................................................8

iii
 INDEX OF AUTHORITIES

Cases

2 App. Cas. 666...............................................................................................................................7

A.P Aggarwal v. Govt. Of NCT of Delhi, AIR 205, 2000 ,SC (India).............................................1

AK Gopalan v. State of Madras, AIR 1950 SC 27..........................................................................2

Amrit Banaspati Co. Ltd. v. Union of India, AIR 1966 ALL 104...................................................6

BACARDI U.S.A., INC. and MHW, Ltd., Appellants, v. GALLO WINE DISTRIBUTORS, LLC

d/b/a Premier Wines & Spirits, Inc., Appellee., No. 3D02-1699...............................................5

Bharat Sanchar Nigam Limited and Another v. BPL Mobile Cellular Ltd. and Others, (2008)

13 SCC 597 at Para 47.................................................................................................................6

Bishambar Dayal Chandra Mohan v. State of U.P. & Ors, 1982 AIR 33......................................3

Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256.....................................................................7

E. P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555...............................................................1

Globe Motors Inc., et al. v TRW Lucas Varity Electric Steering Ltd., et al. [2016] EWCA Civ

396...............................................................................................................................................5

Jayantilal Ratanchand Shah v. RBI & Ors, JT 1996 (7).................................................................3

Lumdsen Club v State of Punjab, AIR 1954 SC 634.......................................................................4

iv
Madan Mohan Pathak v. UOI & Ors., 1978 SCR (3) 334..............................................................3

Mercury Metal Corporation v. AP Backward Classes Co-operative Financial Corporation

Ltd. Hyderabad and Another, 2009 SCC OnLine AP 811 : (2010) 3 ALD 290 (DB) at Para

42.................................................................................................................................................6

Navjyoti Co-operative Group Housing Society v. Union of India, AIR 155 1992 SC(India).........3

Neelima Misra v Harinder Kaur Paintal And Others (AIR 1990 SC 1402)....................................1

Olga Tellis and ors Vs. Bombay Municipal Corporation and ors SCC 545 1985 SC(India).........2

World Online Telecom Ltd v I-Way Ltd, [2002] EWCA Civ 413...................................................5

Yick Wo v. Hopkins, 118 U.S. 356...................................................................................................4

Books

M.P JAIN, INDIAN CONSTITUTIONAL LAW,PAGE 910,(7 TH EDITION 2014....................................2, 4

v
 STATEMENT OF FACTS

About 30% of the population of the Republic of Amarloni [hereinafter “Amarloni”] did not

have bank accounts and 20% of the bank accounts were inactive. The country is suffering

from problems of economic divide, lack of awareness, lack of money, black money and

corruption. The Government of Amarloni [hereinafter “Government”] introduced a scheme

to incentivize rural population to open bank accounts. However, this incentive was limited to

one account per household. To curb the problem of unaccounted money in circulation in the

economy, the Government vide Notification No. 146/2016 in the Gazette of Amarloni

[hereinafter “Notification”] notified ceasure of legal tender of Rs. 500 notes and Rs.1000

notes with effect from September 09, 2016 by virtue of Section 26(2) of the Reserve Bank of

Amarloni Act, 1934 [hereinafter “RBA Act”]. Ms. Abhimans Prahul challenged the

constitutionality of Section 26(2) of the RBA Act, 1934 before the High Court of Chishra

stating that this section is ultra vires the Legislature and confers legislative powers to an

executive authority. She also challenged the constitutionality of the notification on the ground

that it violates her constitutional Right to Property. The High Court of Chishra dismissed the

petition. Aggrieved by the order of the High Court of Rajasthan, she filed Special Leave

Petition No. 1504/2017 before the Supreme Court of Amarloni.

Kyska LED Pvt. Ltd. [Hereinafter “Kyska”] entered into negotiations with Ashwimaja

Pvt. Ltd. [Hereinafter “Ashwimaja”] for supply of electrical fittings by Kyska to

Ashwimaja. There was an agreement in December 2015 which was signed by Ashwimaja.

Meanwhile, Kyska started following terms and conditions of the contract and consequently

signed it. Then a new agreement was circulated in May 2016 which was not signed by any

party but was being negotiated. Kyska started performing the remaining contract and raised

vi
invoices against Ashwimaja on the basis of both the agreements. All such invoices were paid

by Ashwimaja. Due to outbreak of fire, Kyska cannot supply due consignments in time.

Ashwimaja claims damages as per second agreement i.e. at 50% of the consignment value but

Kyska refuses to pay any damages claiming Force Majeures which was a clause in both the

agreements. Later it agrees to pay the damages as per the first agreement i.e. at 20%.

Ashwimaja sues Kyska in Supreme Court of Amarloni for damages at 50% when its appeal

was put down by High Court of Prampur.

vii
 STATEMENT OF JURISDICTION

Ms. Abhimans Prahul., Petitioner in Special Leave Petition No. 1504 of 2017 has approached

the Supreme Court of Amarloni under Article 136 of the Constitution of Amarloni, 1950 to

be read with Order XVI, Rule 1 of the Supreme Court Rules, 1966.

Ashwimaja Pvt. Ltd. in Application No. 587 of 2017 has appealed to the Supreme Court of

Amarloni under Article 133 of the Constitution of Amarloni, 1950 to be read with Order XV,

Rule 1 & 3 of the Supreme Court Rules, 1966.

ALL THE AFORESAID MATTERS HAVE BEEN CLUBBED AND BROUGHT BEFORE THIS HON’BLE

COURT UNDER ARTICLE 142 OF THE CONSTITUTION OF AMARLONI, 1950 TO BE READ WITH

ORDER XLVII OF THE SUPREME COURT RULES, 1966.

The parties most humbly submit to the jurisdiction of this Hon’ble Court.

viii
 ISSUES FOR CONSIDERATION

I. WHETHER THE NOTIFICATION ISSUED BY THE GOVERNMENT IS VIOLATIVE OF

ARTICLE 14, 19(1)(g), 21 AND 300(A) OF THE CONSTITUTION OF AMARLONI?

II. WHETHER SECTION 26(2) OF RBA ACT, 1934 IS ULTRA VIRES TO THE

CONSTITUTION OF AMARLONI?

III. WHETHER ASHWIMAJA CAN CLAIM DAMAGES AS PER THE SECOND AGREEMENT?

ix
 SUMMARY OF ARGUMENTS

I. THE NOTIFICATION ISSUED BY THE GOVERNMENT IS VIOLATIVE OF ARTICLE

14, 19(1)(g), 21 AND 300(A) OF THE CONSTITUTION OF AMARLONI.

The notification is arbitrary in nature because it discriminates between holders and non-

holders of bank account and thus violative of the Fundamental right to equality under Article

14.

This notification violates this right with the inconvenience caused to people to trade freely

due to demonetising large currency notes which are generally used in trade.

It violates right to life by violating right to livelihood which is one of the major components

of Article 21 and by not following the provision of “due process of law”.

It is compulsory acquisition of public debt and hence violative of constitutional right to

property as under Article 300A of the Constitution of Amarloni.

II. SECTION 26(2) OF RBA ACT, 1934 IS ULTRA VIRES TO THE CONSTITUTION OF

AMARLONI.

It is ultra vires to the Constitution of Amarloni because it tends to delegate excessive

legislative power to the Government.

III. ASHWIMAJA CAN CLAIM DAMAGES FOR NON-PERFORMANCE OF

CONTRACT AS PER THE SECOND AGREEMENT.

Ashwimaja can claim damages as per the second agreement because non-performance of

contract was not due to Force Majeure and the second agreement was in force between the

parties.

x
 ARGUMENTS ADVANCED

I. THE NOTIFICATION ISSUED BY THE GOVERNMENT IS VIOLATIVE OF ARTICLE 14,

19(1)(g), 21 AND 300(A) OF THE CONSTITUTION OF AMARLONI.

A. It is violative of Article 14

Every action even a change of policy in any realm of state activity has to be informed fair and

non-arbitrary.1 Any illegal, irrational or arbitrary action or decision, whether in the nature of

legislative, administrative or quasi-judicial exercise of power is liable to be quashed being

violative of Article 14 of the Constitution.2 Any arbitrary State action infringes Article 14.3

The Notification passed by the Government violative of Article 14 because it is arbitrary in the

sense that it is discriminatory and against fair and equal treatment4. It discriminates between

account holders and non-account holders. This notification lays down ‘holding of a bank

account’ as an intelligible differentia to reach to the object of ‘curbing black money ’ but it is not

rational to be unfair towards those non-account holders who are not on wrong side of the law.

Government’s contention that it gave reminders to people to get a bank account to avoid

discrimination is not appropriate because the scheme by Government was a welfare scheme and

not a binding order. Moreover, the scheme was limited to one account per household and hence

1
E. P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555
2
Neelima Misra v Harinder Kaur Paintal And Others (AIR 1990 SC 1402)
3
A.P Aggarwal v. Govt. Of NCT of Delhi, AIR 205, 2000 ,SC (India)
4
M.P JAIN, INDIAN CONSTITUTIONAL LAW, PAGE 910,(7 TH EDITION 2014)
1
if at all, the government considers it as a notice to get bank accounts, it still stays unfair to the

remaining members of the household.

B. It is violative of Article 19(1)(g)

Article 19(1)(g) of the Constitution of Amarloni guarantees the right to freedom to carry on trade

and commerce subject to reasonable restrictions. This notification violates this right with the

inconvenience caused to people to trade freely due to demonetising large currency notes which

are generally used in trade. It also created a panic situation where people hesitated to involve into

trade and commerce activities due to shortage of cash. Trade and Commerce also involves

tangible regulation of bank accounts which was also restricted by this clause. The counsel further

submits that these restrictions are not reasonable because it is arbitrary or excessive in nature so

as to go beyond the interest of general public.5

C. It is violative of Article 21

Article 21 of the Constitution of Amarloni provides for protection to life and liberty. Olga Tellis

case6 led to implication of right to livelihood out of right to life. It states how important is the

right to livelihood in respect to right to life and no person shall be deprived of this right except

by the procedure established by the law. Gopalan case7 introduced American concept of ‘due

procedure’ to Amarlonian law in the expression ‘procedure established by law’ but this

notification by the government attacked the right to livelihood in a direct manner and that too

without any ‘procedure established by law’.

5
M.P JAIN, INDIAN CONSTITUTIONAL LAW, PAGE 1071,(7 TH EDITION 2014)
6
Olga Tellis and ors Vs. Bombay Municipal Corporation and ors, SCC 545 1985 SC(India)
7
AK Gopalan v. State of Madras, AIR 1950 SC 27
2
 D. It is violative of Article 300A

It is compulsory acquisition of public debt 8 and hence violative of constitutional right to property

as under Article 300A of the Constitution of Amarloni.

Some restrictions are allowed to be place on Article 300A for public policy but Article 300A

allows acquisition of public debt only by law and not by executive order as done in this case.

Such an acquisition necessarily required government to issue an ordinance or legislation by the

Parliament.9 It is clearly stated in Bishambar Dayal Chandra Mohan v. State of U.P. & Ors.10

that an executive order is not a law for the purpose of imposing restrictions under Article 300A.

Even if there were a legislation or an ordinance, it would still have been violative of Article

300A because it violated the duty imposed on public authority to act fairly by taking into

consideration all relevant factors relating to the ‘legitimate expectations’ 11 of public. And it is

legitimate enough to expect that all possible repercussions of a decision which affects masses in

such a direct manner shall be taken into account, which government failed to do.

II. SECTION 26(2) OF RBA ACT, 1934 IS ULTRA VIRES TO THE CONSTITUTION OF

AMARLONI.

It is ultra vires to the Constitution of Amarloni because it tends to delegate excessive legislative

power to the Government. Article 14 guarantees against any law which (A) Confers unguided

and unrestricted power on an authority12 or, (B) Leaves scope for administrative discrimination.
8
Jayantilal Ratanchand Shah v. RBI & Ors, JT 1996 (7)
9
Madan Mohan Pathak v. UOI & Ors., 1978 SCR (3) 334
10
Bishambar Dayal Chandra Mohan v. State of U.P. & Ors, 1982 AIR 33
11
Navjyoti Co-operative Group Housing Society v. Union of India, AIR 155 1992 SC(India)
12
M.P Jain, Indian Constitutional Law, page 910,(7th edition 2014)
3
 A. Confers unguided and unrestricted power on an authority

This section is discriminatory in the sense that it confers absolute administrative discretion

because (1)It lays down no guidelines regarding the procedure how and in which

circumstances such power can be exercised by the executive. (2) Neither does it put any kind

of restrictions on such power of the government which may lead to the Government taking

arbitrary measures. Hence, this section in itself is void under Article 14.

B. Leaves scope for administrative discrimination.

If at all the section in itself is not considered to be suffering from any such vice, but it leaves

wide scope for administrative authority to implement it in a discriminatory manner.13

Hence, this section of RBA Act is ultra vires for being violative of Article 14 and for delegating

of excessive legislative powers.

III. ASHWIMAJA CAN CLAIM DAMAGES FOR NON-PERFORMANCE OF CONTRACT AS

PER THE SECOND AGREEMENT.

Ashwimaja can claim damages as per the second agreement because (A) Non-performance of

contract was not due to Force Majeure, and (B) The second agreement was in force between the

parties.

A. Non-performance of contract was not due to Force Majeure.

A fire does not constitute Force Majeure, since the possibility of a fire breaking out can be

reasonably foreseen, especially, in a factory where electrical fittings are manufactured.

13
Yick Wo v. Hopkins, 118 U.S. 356; Lumdsen Club v State of Punjab, AIR 1954 SC 634.
4
 B. The second agreement was in force between the parties.

Second agreement was in force between the parties because (1) Modification of first

agreement is possible (2) Such a modification was agreed by both the parties, where (3)

Acceptance of the respondent can be derived from its conduct.

1) Modification of first agreement is possible.

Contracts may be modified by subsequent oral agreements or conduct, even when they include

clauses purporting to prohibit such modifications. 14 Hence, an amendment can be brought into

the contract by conduct despite any kind of “no variation unless in written and signed by both

parties” clause present in the first agreement.

2) Such a modification was agreed by both the parties.

Because the parties to the contract agreed to alter it, the original contract need not be performed

as stated in Section 62 of Indian Contracts Act. Such an agreement between the parties can be

concluded with their conduct as will be proved by the counsel in its further arguments. The

invoices were raised by the respondent as per new terms and acted upon by the appellant. The

appellant now should not be permitted to take a different stand.15

Respondent’s argument of raising of invoices as per new terms being a mistake does not stand

considering that such invoices were being raised by Kyska from May 2016 to July 2016. Two
14
  Globe Motors Inc., et al. v TRW Lucas Varity Electric Steering Ltd., et al. [2016] EWCA Civ
396; World Online Telecom Ltd v I-Way Ltd, [2002] EWCA Civ 413; BACARDI U.S.A., INC.
and MHW, Ltd., Appellants, v. GALLO WINE DISTRIBUTORS, LLC d/b/a Premier Wines &
Spirits, Inc., Appellee., No. 3D02-1699.
15
Bharat Sanchar Nigam Limited and Another v. BPL Mobile Cellular Ltd. and Others, (2008)
13 SCC 597 at Para 47; Mercury Metal Corporation v. AP Backward Classes Co-operative
Financial Corporation Ltd. Hyderabad and Another, 2009 SCC OnLine AP 811 : (2010) 3 ALD
290 (DB) at Para 42.
5
months are sufficient enough time to realize and amend a mistake of this sort but there were no

signs of protest throughout this time.

3) Acceptance of the respondent can be derived from its conduct.

Issue of invoices by the respondent itself as per the new agreement shows implied acceptance by

performance of conditions on the part of Kyska as described under Section 8 of Indian Contracts

Act, 1872.16 So the damages claimed should also be provided according to the terms and

conditions of the new agreement.

A proposal is in every case accepted by performance of its conditions, i.e., by compliance with

its terms.17 In Brogden v. Metropolitan Railways Company 18, it was held that though there was

no execution of any formal contract but parties began acting as per the terms and conditions of

the new draft signifying acceptance by conduct and therefore the contract was binding.

16
Amrit Banaspati Co. Ltd. v. Union of India, AIR 1966 ALL 104.
17
Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256.
18
 2 App. Cas. 666.
6
 PRAYER OF RELIEF

In the light of facts raised, arguments advanced and authorities cited, it is most respectfully and

humbly prayed before the Honorable Supreme Court of Amarloni that it may be pleased to:

 Declare Section 26(2) of RBA Act ultra vires to Constitution of Amarloni.

 Declare the notification issued by the Government as unconstitutional.

 Declare that the appellant had the right to claim damages at 50% of the total value of the

consignment.

And pass any such order which the Hon’ble Court may deem fit in the eyes of equity, justice

and good conscience.

All of which is most humbly and respectfully, submitted.

9 September, 2017 049A