Judgement of the Day.-Case- Hungerford investment trust ltd v haridas mundhra and others

Case- Hungerford investment trust ltd v haridas mundhra and others

FACTS- Respondent was awarded a contract for installation of LTMS rods at various locations

by the appellant. According to the appellant, there were lot of complaints regarding the work of

respondent. Respondent informed that they will change all the rods which are not working well,

appellant accepted the offer. Respondent only installed 17,294 rods instead of 47,497 and

thereafter terminated the contract alleging breaches on the part of appellant. Disputes arose.

Arbitral tribunal passed an order – appellant has to pay damages to the respondent.

ISSUE INVOLVED- Whether the arbitral tribunal was justified in coming to the conclusion that

the MSEB had committed breach of contract by not supplying DTC list?

Whether the damages were properly awarded?

CONTENTIONS: respondent contended that appellant did not supply the list of locations where

the contract objects has to be installed and appellant did not renew the LC through which the

lease rentals were being paid for installed objects.

Appellant contended that list of locations were ready but it was the respondent who was facing

difficulties in installation and later violated the terms of the contract. Also. LC continued to

remain live eve after termination of the contract in order to make payment for future rentals.

Held- Categorical findings are arrived at by the Arbitral Tribunal to the effect that insofar as

Respondent 2 is concerned, it was always ready and willing to perform its contractual

obligations, but was prevented by the appellant from such performance. From these findings it

stands established that there is a fundamental breach on the part of the appellant in carrying out

its obligations, with no fault of Respondent 2 which had invested whopping amount of Rs 163

crores in the project. 

The court held that In our view from the material on record, it is abundantly clear that supply of

DTC lists was a fundamental term of the work order and MSEB had miserably failed in

complying with the said fundamental term and there was a breach on the part of MSEB in

supplying the DTC locations which eventually prevented DSL from installation of contract

objects.

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