BEFORE THE

HON’BLE MOOT COURT of APPEAL

THE CASE CONCERNING BREACH OF CONTRACT

AND THE IMPOSSIBLITY TO PERFORM CONTRACT

BETWEEN

The Department of Food Supply……………… APPELANT

V.

Mr. Shyam………………………RESPONDENT

(CIVIL APPEAL No. ___ / 2017)

Counsel for Respondent Abhishek Mishra.
Aditya Mishra.
UNDER THE ARTICLE 136 OF THE CONSTITUTION OF INDIA
Memorandum for Respondent | 1
Contents
Index of Authorities ......................................................................3

STATUES: .................................................................................3

CASES: ......................................................................................4

Statement of Jurisdiction ...........................................................4

Statement of Facts ......................................................................5

Issues. .........................................................................................6

Summary of Arguments. ............................................................7

2. Whether the Contract is impossible to perform? ...................7

Arguments in Advance ..............................................................8

Contention 1. Whether the Contract is enforceable by law or

not? ................................................................................................8

A. Contract void under Section 23. ..............................................8

Contention2. Whether the Contract is impossible to perform .....9

Prayer .......................................................................................11

Memorandum for Respondent | 2

 Index of Authorities

STATUTES:

 Indian Contract Act, 1872

 Arbitration and Conciliation Act, 1996

BOOKS

 Avatar Singh, eleventh edition

 Civil Procedure Code 1908

 Manupatra

 Mulla and Mulla

Memorandum for Respondent | 3

 CASES:

 Easun Engineering Co. Ltd. v. The Fertilisers and

Chemicals, (1990), AIR 1991 Mad 158
 Nutun Kumar v. IInd Additional District Judge, Banda, (
1993), AIR 1994 All 298
 UOI v. International Trading Co. , (2003), AIR 2003 SC
3983
 Haridwar Singh v. Bagun Sumbrui (1972), AIR 1242, 1972
SCR (3) 629
 Satyabrata Ghose vs Mugneeram Bangur & Co., (1954)
AIR 44, 1954 SCR 310

STATEMENT OF JURISDICTION

The respondent humbly submits this memorandum in response to the petition filed
before this Hon’ble Moot Court of Appeal. The petitioner invokes its jurisdiction
under Article 136 of the Constitution of India which read here as under:

Special leave to appeal by the Supreme Court: -

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its
discretion, grant special leave to appeal from any judgment, decree, determination,
sentence or order in any cause or matter passed or made by any court or tribunal in the
territory of India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order
passed or made by any court or tribunal constituted by or under any law relating to the
Armed Forces.

Memorandum for Respondent | 4

 Statement of Facts
I

The Department of Food Supply (Ministry of Defence) invited tenders for supply of
fresh fruits for its troops in August, 2015. The period for the supply was 01.10.2015 to
30.03.2017 and the respondent Shyam along with the others submitted the Tender.
Shyam’s tender was accepted and he started supplying the fruits on the prescribed date
and stopped supplying on 06.06.2016.

II

On 13.06.2016, the Department issued a notice to Shyam to show-cause why action

should not be initiated against him for non-supply of fresh- fruits. Shyam submitted
reply on 20.06.2016 stating that the prices of all fruits had increased and it was
impossible on his part to perform the contract. The appeal made by Shyam was not
considered by the Department and it rescinded the contract and also forfeited the
security deposit by a letter dated on 29.06.2016.

III

The contract provided for an arbitration clause and the dispute between the parties was
referred to the Arbitrator. Shyam made a claim of Rs. 12,23,732/- before the arbitrator
and the Department claimed an amount of Rs. 5,89,130.72 for the purchase of fruits
during the period 02.10.2016 to 30.03.2017.

IV

The arbitrator framed four issues and answered the four issues in his award dated
06.11.2016 and awarded a sum of Rs. 38,173/- towards prices of fresh fruits supplied
by Shyam to the Department with interest at the rate of 18% per annum till payment
and also directed the Department to hand over the Fixed Deposit Certificates retained
as security deposit to Shyam.

Memorandum for Respondent | 5

 V

The Department of Food Supply filed an original petition under Section 34 of the
Arbitration and conciliation Act, 1996 for setting aside the Award dated 09.11.2016 in
the Civil Court, Shimla. The Senior Civil Judge by his order dated on 05.03.2017
dismissed the application of the appellant stating that there was no patent illegality in
the Award.

VI

The petitioner approached the High Court under Section 37 of the act against the order
of the Senior Civil Judge but by impugned judgment the division bench of the High
Court also rejected the appeal.

VII

The petitioner has now approached the Hon’ble Moot court of appeal under Special
Leave Petition of Article 136 of The Indian Constitution.

ISSUES.

1) Whether the Contract is enforceable by law or not?

2) Whether the Contract is impossible to perform?

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 SUMMARY OF ARGUMENTS.

1. Whether the contract were enforceable by law.

The first issue related to the case is whether the contract was enforceable by law. In
the previous judgement under the Arbitration and Conciliation Act, 1996, arbitrator
decided that the letter of Ministry of Defence that the price quoted under the 20% of
the reasonable rate would be treated as fictions and such application would be set
aside so, under the above letter would be in contravention of Sec 23 of the Indian
Contract Act, 1872. According to article 19(6) of the Constitution of India such letter
can be substantiated.

2. Whether the Contract is impossible to perform?

The issue put forward is related to the impossibility of contract to be performed.
Under the section 56 of the Indian Contract Act, 1872 when a contract becomes
impossible to perform then the contract become void. In the case of Easun
Engineering Co. Ltd. v The Fertilisers and Chemicals,1 apex court held that
unforeseeable increment in the hike of prices of the goods renders the performance of
the contract impossible to perform and cannot be performed and hence the contract is
void for impossibility.

1
(1990) AIR 1991 Mad 158.
Memorandum for Respondent | 7
 ARGUMENTS IN ADVANCE

Contention 1. Whether the Contract is enforceable by law or not?

The contract here is in the contravention of law which is the letter issued by the
Ministry of Defence that the if the price of the goods to be supplied in the tender if it
is less than 20% of the reasonable prices then the prices of the goods should be treated
fictious and such tender must be rejected by a panel. This letter which was issued by
the Ministry of Defence has a force of law under the Art. 13( 3)(a) of the Constitution
of the India. Contrary to the Section 23 of the of the Indian Contract Act, 1872 the
contract is void as the consideration of the contract here is that if the consideration of
a contract is unlawful then it is void hence the contract here is void.

Art. 13. (1) all laws in force in the territory of India immediately before the
commencement of this Constitution, in so far as they are inconsistent with the
provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State
shall not make any law which takes away or abridges the rights conferred by this Part
and any law made in contravention of this clause shall, to the extent of the
contravention, be void.
(3) In this article, unless the context otherwise
requires,—
(a) “Law” includes any Ordinance, order, bye-law, rule, regulation, notification,
custom or usage having in the territory of India the force of law;
(b) “laws in force” includes laws passed or made by a Legislature or other competent
authority in the territory of India before the commencement of this Constitution and
not previously repealed, notwithstanding that any such law or any part thereof may not
be then in operation either at all or in particular areas.
1[(4) Nothing in this article shall apply to any amendment of this Constitution made
under article 368.]
A. Contract void under Section 23.
Under the section 23 of the Indian Contract Act, 1872:-

23. What consideration and objects are lawful, and what not.—The consideration or
object of an agreement is lawful, unless—The consideration or object of an agreement

Memorandum for Respondent | 8

is lawful, unless—" it is forbidden by law; 14 or is of such a nature that, if permitted,
it would defeat the provisions of any law; or is fraudulent; or involves or implies,
injury to the person or property of another; or the Court regards it as immoral, or
opposed to public policy. In each of these cases, the consideration or object of an
agreement is said to be unlawful. Every agreement of which the object or
consideration is unlawful is void.

The contract here is void under the Section 23 of the Indian Contract Act, 1872 as it is
forbidden under the law and also if permitted then it would defeat the provision of any
law. This argument can be substantiated by the Andhra High Court judgement in
Nutan Kumar And Others v Iind Additional District Judge2 the term 'law' in Section
23 of the Contract Act has, in my opinion, been used in a wider sense and must be
understood in the sense of the term explained in Art. 13(3) of the Constitution of
India.

Contention2. Whether the Contract is impossible to perform?

The contract here is not fulfilled by Respondent due to unenforceable hike in the price
of fruits due to which contract has been discharged under section 56 of the Indian
contract act which states that an agreement to do impossible act is itself void. A
contract to do an act which, after the contract is made, becomes impossible, or, by
reason of some event which the promisor could not prevent, unlawful becomes void
when contract become impossible or void. On finding the fact of the case of
Respondent similar to the case of Easun Engineering Co. Ltd. v The Fertilisers And
Chemicals3 , the facts of the case were presented as Easun Engineering co has it
commence delivery on 19/10/1973 and completed by 19/2/1974 and the erection and
commission completed by 19/06/1974. Easun has despatched six number of
transporter out of 18 on various date commencing from 14/06/1974 to 17/3/1975, the
value of the transformers despatched and delivered was 2/3 of the value of entire
transformer was amounted to rupees 17,00,000 and four transformer was tested in July
and September were not dispatched and delivered, Easun contended that they were
prevented from supplying due to Force majeure condition namely strike, power cut

2
(1993) AIR 1994 All 298.
3
(1990) AIR 1991 Mad 158.
Memorandum for Respondent | 9
and phenomenal rise in the price of transformer oil due to war condition etc. It was
also finds that the price increase in transformer oil was so enormous, the increase
having risen to 400% due to War conditions in the Middle East and the Ordinance by
Government of India imposing higher Excise duties. The Umpire agreed with the
contention of the EASUN that price in transformer oil was unexpected, unforeseen
and beyond their control, and, therefore, it must be deemed to be a force majeure
condition. Court dealing with the term Impossible under section 56 of contract act
referred the case of Satyabrata v Mugneeram4 defined term Impossible has not been
used in the sense of physical or literal impossibility. “The performance of an act may
be impracticable and unless from the point of view of the object and which the parties
had in view and if an untoward event or change of circumstances totally upsets the
very foundation upon which the parties rested their bargain, it can very well be said
that the promisor finds it impossible to do the act which he promised to do”. By
referring the authority of mentioned cases it can be contended that the hike in cost of
fruits made impossible for respondent to discharge his contract against ministry of
defence under government of India.

4
(1954) AIR 44, 1954 SCR 310

Memorandum for Respondent | 10

 PRAYER

In the light of mentioned issue raised, argument advanced and authorities cited the
counsel for the respondent has respectfully requested to the honourable Apex Moot
court of appeal to declare, adjudge and hold.

1. To quash the petition filed by appellant under Article 136 of Constitution of India.
2. To allow respondent the amount of 38,173 and the interest rate of 18% awarded to
him by the Arbitrator.
3. In addition amount of 12, 23,732 claimed by Respondent and to hand over the
fixed deposit certificate retained as security deposit to Shyam.

To pass any other order or decree deemed fit to the Apex court in the respect of
justice, equity and good conscience.

Sd/-

(Counsel for Respondent)

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