R.

Surianarayanan
17040142025

BEFORE THE HON’BLE SUPREME COURT OF

REPUBLIC OF HIND

MOOT COURT PROBLEM – 3

BEFORE THE HON’BLE SUPREME COURT OF HIND

UNDER ORIGINAL JURISDICTION
WRIT PETITION NO: ____ OF 2021

IN THE MATTER OF:

Rail Track Manufacturing co………………….…………PETITIONER
Coastal Railway Trust of hind…………………………...RESPONDENT

COUNSEL APPEARING ON BEHALF OF THE RESPONDENT,

COASTAL RAILWAY TRUST OF HIND

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 TABLE OF CONTENT PAGE NO:

1. LIST OF ABBREVIATIONS 4

2. INDEX OF AUTHORITIES 5

I. TABLE OF CASES 5

II. CONSTITUTIONS 5

III. STATUTES 5
IV. DATABASES 5

3. STATEMENT OF JURISDICTION 6

4. STATEMENT OF FACTS 7-8

5. STATEMENT OF ISSUES 9

6. SUMMARY OF ARGUMENTS 10

7. ARGUMENTS ADVANCED 11-13

8. PRAYER 14

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 LIST OF ABBREVIATIONS
CRTH Coastal Railway Trust of hind

RTMC Rail Track Manufacturing co

ICA Indian Contract Act

UOI Union of India

Art Article

Vs Versus

Hon’ble Honorable

SC Supreme Court

Govt Government

INDEX OF AUTHORITIES
I TABLE OF CASES
CASE CITATIONS
Food Corporation vs. JP Kesharwani 1994 Supp (1) SCC 531
Pannalal Janakidas vs. Mohanlal AIR 1951 SC 144
Union Of India vs Tribhuwan Das Lalji Patel AIR 1971 Delhi 120
Tsakiroglou & Co. Ltd. v. Noblee Thorl [1961] 2 All ER 179
GmbH

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 II CONSTITUTIONS
 Constitution of India, 1950

III STATUTES
1. Section 2(B) of the Indian Contract Act, 1872.
2. Section 3 of the Indian contract Act, 1872. (Communication of Acceptance and
Revocation)
3. Section 32 of the Indian Contract Act, 1872. (Force Majeure)
4. Section 39 of the Indian contract Act, 1872. (Anticipatory Breach)
5. Section 73 of the Indian Contract Act, 1872. (Compensation for Damages arising
from Breach of Contract).
6. Section 74 of the Indian Contract Act, 1872. (Compensation for Breach of Contract of
mentioned in the contract itself)

IV DATA BASES
1. www.manupatra.com
2. www.lexisnexis.com
3. www.SCConline.com

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 STATEMENT OF JURISDICTION

Article 133 of The Constitution of India, 1949 reads as:

Appellate jurisdiction of Supreme Court in appeals from High Courts in regard to civil
matters
(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order
in a civil proceeding of a High Court in the territory of India if the High Court certifies
under Article 134A
(a) that the case involves a substantial question of law of general importance; and
(b) that in the opinion of the High Court the said question needs to be decided by the
Supreme Court
(2) Notwithstanding anything in Article 132, any party appealing to the Supreme Court
under clause (1) may urge as one of the grounds in such appeal that a substantial
question of law as to the interpretation of this Constitution has been wrongly decided
(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by law
otherwise provides, lie to the Supreme Court from the judgment, decree or final order
of one Judge of a High Court.

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 STATEMENT OF FACTS

1. On the 24th August, 2019, the Coastal Railway Trust of Hind or CRTH
[ “Respondent”], in the Republic of Hind, invited a tender for the supply of rails. The
Respondent set out certain conditions that had to be followed. Clause 7 of the tender
stated that the Respondent will not be liable for transit insurance. Clause 8 of the
tender stated that if the supplies are found to be defective, the Respondent reserves the
right to reject them and recover the freight charges from the supplier. Clause 9 of the
Tender required a security deposit of Rs. 10,00,000/- to be deposited with the offer.
The bid was scheduled to open on 15th December, 2019, but the date was revised and
the last date to accept the bid was extended to 31st January, 2020, and the date to
open the bid was extended to 15th February, 2020.

2. Rail Track Manufacturing Company or RTMC [“Appellant”], a rail track

manufacturing and supplying company, submitted its tender bid, which included a
specific condition that rail inspections be performed only at Appellant’s warehouse,
and declined to consider Clauses 7 and 8 of the Tender. Regarding the clause 9th,
Appellant paid a security deposit of Rs. 10,00,000/- in accordance with the Tender's
other terms and conditions. Since the Tender's opening was postponed, Appellant
submitted a revised bid, reiterating its previous stance.

3. The bid was opened as scheduled on 15th February 2020 and Appellant’s bid was the
lowest. Following a discussion between the parties on certain terms and conditions, it
was agreed that if the inspection is to be done at the stores of the Respondent then
Appellant would charge 18% above the quoted rate. The Respondent accepted the
Appellant’s offer for the supply of rails in a letter dated 21st March, 2020 and issued a
purchase order, but with the condition of transit insurance and inspection of the rails
at the stores, and requested that the delivery date to be extended by 30 days from the
earlier mentioned date of 2nd May, 2020.

4. On 22nd March, 2020, Appellant issued a letter rejecting the Respondent's proposal
and declining its request to extend the delivery date, and also requesting the return of
the security deposit amount of Rs 10,00,000/-. The letter from Appellant rejecting the

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proposal did not reach the Respondent’s office, due to the fact that on 22nd March,
2020 Janta Curfew was declared by the Government of Hind. The Respondent
communicated to the Appellant that if the rails were not delivered in accordance with
the purchase order, the security deposit would be forfeited and a risk purchase would
be made at the expense of the Appellant. The Appellant contested that there was no
concluded contract between the parties. Hence a civil suit was filed in the Civil Court
of Harappa by the Respondent for the breach of contract and, by the Appellant to
recover the security deposit, interest, cost and other consequential reliefs. However,
the Appellant invoked the force majeure defence for not being able to supply the
goods. On 25th June, 2020 the Civil Court of Harappa decreed its judgement in favour
of the Respondent and rejected the defence of force majeure by the Appellant. An
appeal was filed by the Respondent in the High Court of Aryavrat. On 10th October,
2020 vide its judgement the High Court of Aryavrat upheld and confirmed the Trial
Court’s Order. Aggrieved by the Judgement of the High Court of Aryavrat, the
Appellant at the stage of Supreme Court of Hind filed an appeal challenging the
validity of judgement of the High Court of Aryavrat.

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 STATEMENT OF ISSUES.

Issue 1
Whether the RTMC has committed a breach of contract or not?

Issue 2
Whether the CRTH is entitled to recover the amount as claimed in the suit from the
RTMC ?

Issue 3
Whether the appellant was entitled to a refund of the security deposit with interest as
claimed or not?

Issue 4
Whether the defense of Force Majeure would stand or not?

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 SUMMARY OF ARGUMENTS

1. Whether the RTMC has committed a breach of contract or not?

It is humbly submitted in the hon’ble Supreme Court that, there was a breach of
contract on the part of RTMC. The Appellant failed to supply the rails, further it is
submitted that acceptance to the offer has been communicated to the Appellant and
thereby binding to the contractual obligations. The Appellant has admittedly not
supplied the goods to the respondent as per the terms of the purchase order resulting in
non-performance and breach of contract.
2. Whether the respondent is entitled to recover the amount as claimed in the suit
from the respondent or not?

It is humbly submitted that the appellant is bound to give the claimed amount in suit as
the condition has been previously communicated to appellant. The respondent is
entitled to recover the damages for breach of contract since the appellant is accountable
for the breach of contract and regardless of whether any real loss was caused or not, the
appellant is obligated to pay the damages.
3. Whether the appellant was entitled to a refund of the security deposit with
interest as claimed or NOT?

It is humbly submitted that appellant is not entitled to claim the security deposit with
interest as they haven’t performed their duty to the contract established and further the
amount they claimed as a refund of security is already been forfeited by CRTH as a part
of damages arising from the breach of duty to the contract. So the respondent is not
liable to refund the security deposit with interest as claimed by the appellant.
4. Whether the defense of Force Majeure would stand or not?

It is humbly submitted that the appelant cannot take the defense of force majeure as
there was no causal link between the force majeure and non-performance was
established. The pandemic may slow down the performance but cannot invalidate the
whole performance, and in this case, the appellant showed non-performance, which
suggests a breach of duty, and force majeure must not be an obstacle to the violation of
duty, thus the argument for force majeure should be rejected.

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 Arguments Advanced:

Issue 1-

WHETHER THE RTMC COMMITTED A BREACH OF CONTRACT?

1. It is humbly submitted to the Hon’ble SC that the appellant has committed a

breach of contract. The respondents have already conveyed their acceptance of
the offer made by the appellant on March 21, 2020, and also sent a letter stating
the same.
2. Section 4 of Indian contract act says that
The communication of a proposal is complete when it comes to the knowledge of
the person to whom it is made. The communication of a proposal is complete
when it comes to the knowledge of the person to whom it is made." The
communication of an acceptance is complete, as against the proposer, when it is
put in a course of transmission to him so as to be out of the power of the
acceptor; as against the acceptor, when it comes to the knowledge of the
proposer. The communication of a revocation is complete, as against the person
who makes it, when it is put into a course of transmission to the person to whom
it is made, so as to be out of the power of the person who makes it; as against the
person to whom it is made, when it comes to his knowledge.

3. The counsel wants to draw the attention of the court to the case of Pannalal
Jankidas v. Mohanla1l, where it has been remarked by the Supreme Court of India
that the party who is in breach must be compensated for any direct loss emerging out
of the breach of the contract.

1
AIR 1951 SC 144

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 4. In the Household Fire Insurance Co. V. Grant case2, the court ruled that when
an offer is properly accepted by means of a letter or any acceptable way of
communication, the acceptance is complete and a binding contract comes into
force as soon as the letter is posted, even though the letter is lost in the post and
never reaches the offeror.

5. Hence, the appellant has committed a breach of contract

Issue 2-

WHETHER THE CRTH IS ENTITLED TO RECOVER THE AMOUNT AS CLAIMED

IN THE SUIT FROM THE RTMC?

1. It is humbly admissible before the supreme Court of republic of Hind, that appellant has
committed a breach of contract by the non-performance of its duty towards the contract
entered and further the counsel wants admit before the court that, as per Section 73 of
The Indian Contract Act,1872 When a contract has been broken, the party who
suffers by such breach is entitled to receive, from the party who has broken the
contract, compensation for any loss or damage caused to him thereby, which
naturally arose in the usual course of things from such breach, or which the parties
knew, when they made the contract, to be likely to result from the breach of it.

2. If we focus on the facts of the present case, we can easily point out that CRTH has issued
a purchase order on dated 21 st March, 2020 and they have also communicated to the
RMTC that if the supply of the rails were not made as per the purchase order which was
communicated on 21st of March, 2020 then the security deposit would be forfeited as risk
purchase would be made at the cost of the RMTC.

2
(1879) 4 Ex 216

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3. This is clear from the decision of the Supreme Court in Karsandas H. Thacker Vs.
Saran Engineering Co. Ltd.3. The Supreme Court held that when a party commits
breach of contract, the other party is entitled to receive compensation for any loss by
the damage caused to him which naturally arose in the usual course of business from
such breach or which the parties knew when they made the contract to be likely to
result from the breach of it. Remote and indirect loss or damage sustained by reason
of the breach will not entitle the party complaining breach, to any compensation.

4. For this case also, the facts are quite same and it has been communicated to RMTC by
CRTH that the security deposit will be forfeited as risk purchase if they failed to
supply the rails. And here counsel again wants to cite the provision under section 74
of the Indian Contract Act, 1872 which says that when a contract comes to an end and
if any value mentioned for the breach of it in the contract itself or contain any other
stipulation and the same is communicated, then the party incurred the loss entitled to
receive the mentioned amount but not exceeding that irrespective of loss suffered or
not.

Issue 3-

WHETHER THE APPELLANT WAS ENTITLED TO A REFUND OF THE

SECURITY DEPOSIT WITH INTEREST AS CLAIMED?

1. It humbly submitted to the Hon'ble SC that the appellant is not entitled to a refund of the
security deposit with interest. In this scenario CRTH (respondent) has issued a purchase
order on dated 21st March, 2020 and they have also communicated to the RMTC
(appellant) that if the supply of the rails were not made as per the purchase order which
was communicated on 21st of March, 2020 then the security deposit would be forfeited as
risk purchase would be made at the cost of the RMTC.

3
AIR 1965 SC 1981

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 2. In the case of Shanti devi v.Bhojpur Rohtas Gramin Bank4, it was held that when a
promise has to be performed before a certain or on a specific day then it must be
performed before the lapse of that time.
3. After that also RMTC ignored the directives given to them by the CRTH and
breached the contract by not delivering the rails on the specific time slot so it can be
clearly stated that they are On Behalf of Respondent 15 not entitled to get back their
security amount as per the section 73 of the Indian Contract Act, 1872 that clearly states,
when a party to the contract suffers any damages or incurred any loss due to breach of the
contract by the other party, then the party suffered the loss entitled to recover the damage
from the other party.

Issue 4-

WHETHER THE DEFENCE OF FORCE MAJEURE WOULD STAND?

1. It is humbly submitted before the Supreme Court of republic of Hind, the appellant’s
claim of ongoing pandemic as the force majeure doesn’t stand because to establish force
majeure as a defense for non-performance of contract, the two essentials- causal link and
obligation to mitigate the effect of force majeure on the event is to be fulfilled. There
should be a proximate causal link between the force majeure event and the non-
performance, rather than the force majeure just being an obstruction and slowed down the
performance of its obligations. The counsel admits that the ongoing pandemic has slowed
down the performance, but it didn’t completely hinder the performance of contract.

2. In Industrial Finance Corporation of India Ltd. v. Cannanore Spinning and Weaving

Mills Ltd.5, the SC held that three conditions must be met to invoke the doctrine of
frustration under Sec. 56 of the Contract Act: first, there must be an existing contract;
second, some part of the contract must still be performed; and third, after the contract is
entered.
3. In the aforementioned recent decision of the Bombay High Court in Standard
Retail (supra), the absence of a direct causal link between Covid-19 pandemic and the

IV (2006) CPJ 83 NC
4

5
(2002) 5 SCC 54

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 non-performance was one of the other grounds on which the Court refused to grant an
injunction. An injunction restraining the encashment of letters of credit was
sought inter alia on the ground that the underlying contract for sale of steel had
become impossible to perform due to Covid-19 pandemic and the nation-wide
lockdown. However, the Court observed that distribution of steel was an essential
service and, since there were no restrictions on its movement, performance of the
contract was not affected.

4. But in our case the appellant contested the reason for not fulfilling the contract is the
government lockdown due to pandemic, with no considerable alternate efforts to fulfill
the contract. Thus, the counsel pleads to reject the claim of appellant.

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 PRAYER

WHEREFORE, in the light of the issue raised, arguments advanced and authorities cited, it
is most humbly prayed before this Hon’ble Supreme Court that it may gracefully be
pleased to:

1. Uphold the breach of Contract by RMTC in the case.

2. Declare that the CRTH is entitled to receive the amount they have mentioned by virtue
of breach of contract.

3. Dismiss the contention of the appellant of refund of security deposit with interest.

And/ Or
Pass any order that it deem fit in the best interest of justice, equity and good
Conscience.

And for the respondent in the duty bound shall humbly pray.

The Respondent

Sd/-

………………. Counsel

for the Respondent

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