Case Note & Summary
The dispute arose from a contractual relationship between the Union of India and J.K. Gas Plant Manufacturing Company regarding the supply of steel for gas plants. The Union of India supplied steel, but only part was used for its intended purpose. The remaining steel was to be delivered to the U.P. Registered Stock Holders Association, but due to transport issues, it was redirected to G. Brothers. Despite the delivery, the price remained unpaid, prompting the plaintiff to file a suit for recovery. The trial court ruled in favor of the plaintiff, stating that the Kanpur Controller had assumed liability for the payment. The Union of India contended that the suit was barred under Section 17(2) of the Defence of India Act, which the High Court rejected, affirming that the suit was for recovery of price, not damages. The High Court also found that the correspondence between the parties constituted a valid agreement, despite non-compliance with Section 175(3) of the Government of India Act. The Supreme Court dismissed the appeal, confirming that the suit was not barred and that the Union of India had benefited from the transaction, thus was liable under Section 70 of the Indian Contract Act.
Headnote
A) Contract Law - Recovery of Price - Suit for recovery of price of goods supplied - Indian Contract Act, 1872, Section 70 - The court held that the suit was not for damages or compensation as contemplated by Section 17(2) of the Defence of India Act, and thus not barred. The plaintiff company was entitled to recover the price of goods supplied to G. Brothers, as the Union of India had enjoyed the benefit of the delivery (Paras 898-901).
Issue of Consideration
Whether the suit for recovery of the price of goods supplied was barred under Section 17(2) of the Defence of India Act and whether the Union of India was liable to pay for the goods delivered to G. Brothers.
Final Decision
The Supreme Court dismissed the appeal, affirming the High Court's decision that the suit was not barred and that the Union of India was liable to pay the price of the goods supplied to G. Brothers.
Law Points
- Contractual liability
- Government liability
- Conditions for Section 70 applicability
- Defence of India Act interpretation
