Steel Authority of India Ltd. vs ANURAG TUBES PVT. LTD.

THIS is a case where Steel Authority of India Ltd. (SAIL) has challenged the findings of the Fora below. In this case, the complaint of the respondent was allowed and the petitioner has been directed to refund the security amount deposited by the complainant which is alleged to have been illegally confiscated. The respondent deposited by way of security with the petitioner for the purchase of raw-materials for manufacturing purpose in this industry. There took place strike in their unit. As a consequent thereof, a situation of closure of industry was brought about. It may be noted that a notice of such strike having taken place was given to the petitioner, but that notice was not received by the petitioner within the stipulated period of ten days, as provided in the contract to make the force majeure clause come into operation. One thing which may be noticed here is about that time period. A reading of the contract will show that such provision of ten days was directory and not mandatory and that there was substantial compliance with the said clause when notice was received, though a little late, of the strike. In fact, on record, no evidence has been led about the ultimate use of the materials which were to be purchased by the respondent from the petitioner and it is not for that reason that the District Forum repelled the argument that it was a commercial transaction as the material sought to be purchased was for commercial purpose, to be used in their manufacturing process. In fact, that argument has not been seriously pressed before us. Counsel has very forcefully argued on the question of commercial purpose relying upon the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, reported as II (1995) CPJ 1 (SC)=(1995) 3 SCC 583. There, the question as to whether a particular transaction is purely commercial in nature and the purpose is commercial is a matter of fact which depends upon the evidence which is produced before the Court or the Fora under the Act. As no evidence was led in this respect the Fora below rejected this contention and we do not wish to go into this concurrent finding of fact of the two Fora below. The only question which remains to be decided is whether the force majeure clause could come to the rescue of the respondents. On the question of force majeure we have already answered hereinabove that the time prescribed in the contract is directory and not mandatory and a little delay in sending the intimation of the strike will not make that clause inapplicable. The situation which developed as a consequence of strike was such that the matters were beyond the control of the respondent. He, therefore, rightly claimed the benefit of force majeure clause in the contract. For convenience force majeure clause is reproduced hereunder : "8.1 : Nothing in this agreement shall be construed as a failure or breach either on the part of SAIL or the customer(s) if either of them or both are : (a) prevented from discharging its/their obligations under this agreement by reason of arrests, restraints by Government or people, blockades, revolution, insurrections, mobili-sations, strikes, go-slows, lock-outs, civil commotions, riots, accidents, acts of God, destruction of materials by fire, flood, tempest, earth-quake or other natural calamities or on account of any other cause or causes beyond the control of the parties to the agreement.

8.2 : On the occurrence of any of the force majeure conditions, the party concerned shall notify the other party in writing of such occurence within 10 days of occurrence stating therein (i) the day of such occurrence of force majeure disability, (ii) nature of such force majeure disability, and (iii) the anticipated duration (if such duration can be estimated).

8.3 : In the event SAIL exercises its option to cancel the agreement for reasons of any or all of the force majeure conditions mentioned hereinabove, SAIL shall not be liable to pay any compensation whatsoever to any of the customer(s)."

IN the light of this, we find that there is no infirmity in the impugned order or in the order of the District Forum which calls for our interference under Section 21(b) of the Consumer Protection Act, 1986. This revision petitions are dismissed. Revision Petitions dismissed.