HINDUSTAN ZINC LTD Vs. FRIENDS COAL CARBONISATION

JUDGEMENT

(1.) THIS appeal by special leave is against the judgment dated 17.8.2001 of the Rajasthan High Court in Civil Misc. Appeal No. (SB) 227/1997.

(2.) IN pursuance of a tender invitation dated 14/10/1991 issued by the appellant for supply of Metallurgical coke (for short 'coke'), the respondent submitted its offer dated 8/11/1991. The appellant accepted the said offer and placed a purchase order dated 16/18/12/1991 on the respondent for supply of 15,000 MT of coke, to be supplied to its Vizag Unit and Tundoo Unit. Clause (2) of the purchase order contained the specifications for the supply of coke and Clause (3) related to price. The price agreed, exclusive of taxes and duties, was Rs.2,231/- per MT of coke. The loading charges was Rs.32 per MT. The transportation charges were Rs.950 per MT for delivery at Vizag Unit and Rs.120 per MT for delivery at Tundoo Unit. Therefore, the FOR price was Rs.3,213 per MT for Vizag Unit and Rs.2,383 per MT for Tundoo Unit. Clause 5 provided for price variation. Sub-clause (i) thereof provided for variation in prices of coke and sub-clause (ii) provided for variation in transportation cost. As we are concerned with the variation in price of coke, Clause 5(i) is extracted below :-

(3.) THE appellant granted escalations in price of coke from time to time by increasing the basic price of coke (Rs.2,231 per MT) and made payments accordingly. THE appellant, however, granted escalations only on the basis of price variation of washery grade II coal (that is difference between base price of washery grade II coal as on 8.11.1991 and the prevalent price of washery grade II coal) and not with reference to washery grade I coal.