D.P.MADON, J. - (1.) THESE cross appeals by special leave arise out of execution proceedings adopted by Forasol, a French Company, having its principal office in Paris, France against the Oil and Natural Gas Commission, a statutory body incorporated under the Oil and Natural Gas Commission Act, 1959 (Act XLIII of 1959), hereinafter for the sake of brevity referred to as 'ONGC'.
(2.) ON 30/07/1962 the Government of India invited global tenders for structural drilling for exploration of oil in the Jaisalmer area of the State of Rajasthan. The tender of Forasol was accepted by the Government of India and in pursuance thereof a contract date 17/02/1964, headed "Structural Drilling Contract", was entered into between ONGC and Forasol. Under the said contract, ONGC engaged Forasol to carry out structural drilling in relation to the exploration for oil in the Jaisalmer area of the State of Rajasthan on the terms and conditions contained in the said contract. The said contract was for a period of one year commencing from the date of the start of the drilling work. The said contract also gave an option to ONGC to extend the period by one more year. Article IX-3 of the said contract dealt with the currency of payment. It. provided as follows: "IX-3.1. The operational fee, standby fee and equipment charges payable to FORASOL have been specified in French Francs in Articles IX-1.1.1 to IX-1.1.10 above. The amount payable to FORASOL on account of aforesaid fees and charges shall be computed in French Francs. ONGC shall pay 80% of the aforesaid amount in French Francs and the remaining. 20% in Indian Rupees using a fixed conversion rate of FF. 1.033 Re=. 1.000." Under Article IX-3.2 the cost as well as the insurance, packing, forwarding and clearing charges in respect of the materials provided by Forasol and the freight, insurance, packing, forwarding and clearing charges for transporation from a sea port or air port in France to India and back to a sea port in France or outside France if Forasol so chose, in respect of the rig, equipment, machinery tools and other materials provided by Forasol were to be reimbursed to Forasol by ONGC in Indian rupees, if the expenditure was initially incurred by Forasol in Indian rupees, otherwise in French Francs. Under a Credit Agreement arrived at between the Government of India and the Government of France, the Government of France had, agreed to provide credit facilities to a limited extent to the Government of India for the import of plant, machinery, equipment and materials and for execution of certain projects including oil exploration. Under the said Credit Agreement, credit was to be given by the French suppliers to the Indian buyers in the form of acceptance of payments on deferred basis upon the conditions laid down in the letters dated 5/02/1962, exchanged between the Governments of India and France. Consequently, in respect of the said contract, Forasol had agreed under Article X-1.1 thereof to accept payment of its fees, costs and charges payable in French Francs on deferred basis under the overall conditions of the said letters exchanged, between the two Governments and Forasol and ONGC had agreed opon the estimates of the payments to be made to Forasol in French Francs under the said contract, the invoicing rules and the mode of payment. Articles X-2, X-3 and X-4 of the said contract set out such estimates, invoicing rules and the mode of payment. Under Article X-3.3, Forasol was to indicate in each of its invoices the amount payable to it in French Francs and the amount payable to it in Indian rupees under the said contract. So far as the mode of deferred payment of French Francs was concerned, Article X-4.1-1 provided for remittance by ONGC in French Francs immediately following the signing of the said contract of a sum of FF 73,437.49, being the 10/800th part (i.e. 1.25 percent) of the total estimated amount of Forasol's operational and standby fees and equipment charges, cost of the materials to be provided by Forasol and transporation charges in respect of Forasol's rig, equipment, machinery and tools. Under Article X-4.1.2, subsequent to the above remittance ONGC was to remit to Forasol in French Francs 15/800th part (i.e. 1.875 per cent) of the total estimated amount in respect of the said items mentioned above, that is, FF 110,156.23 on each 5th day of August and February, the first of such payments to be made on 5/08/1962 and the last on 5/02/1965. Article X-4.2 provided for payment by ONGC to Forasol of the balance of the amount due to Forasol Under Article X-4.2.1, on receipt of each of Forasol's invoices. in respect of operational fees, standby fees and equipment charges accepted by ONGC. Forasol was to present to ONGC a set of 14 promissory notes payable to CNEP (Paris) of equal value totalling to 87.5% of the French Franc portion of the amount for which each of the said invoices had been accepted by ONGC and maturing on the 5th day of August and of February, the first such date being 5/08/1965 and the last being 5/02/1972. Within fifteen days of the date of receipt of the said promissory notes, ONGC was to return the said promissory notes to Forasol (Paris) duly signed and stamped. Article X-4.2.2 provided for payment of the said promissory notes. The said Article was as follows : "X-4.2.2. ONGC binds itself, irrevocably, to pay in French Francs the promissory notes given by it to Forasol. Forasol shall present the promissory notes to CNEP (Paris) for collecting payment on the dates of maturity. ONGC shall place with CNEP (Paris), at least one day before each date of maturity, adequate funds to cover the total value of the promissory notes maturing on that date".
(3.) UNDER Article X-4.3 ONGC undertook to pay to Forasol in French Francs simple interest at the rate of 5 per cent per annum and also a credit insurance charge at the rate of 1.08 per cent per annum. The other sub-articles of Article X-4.3 provided for calculation of interest and insurance charges and for submission by Forasol every six months of invoices in respect thereof. Article X-4.3.2, inter alia, provided that- "ONGC shall accept each invoice for the interest and insurance charge and shall remit the invoiced amount to Forasol in French Francs as early as possible but not later than two months after receipt of the invoice." Provision was also made by the said Article X-4.3.2 for drawing of promissory notes payable at CNEP (Paris) maturing on each 5th day of August and of February, the first of such dates being 5/08/1965 and the last being 5/08/1971. UNDER Article X-4.3.3 ONGC bound itself, "Irrevocably, to pay in French Francs the promissory notes for interest and insurance charge given by it to Forasol." Article XI provided for payments to be made to Forasol in Indian rupees. UNDER Article XI.1.1 the rupee payment part of the operational and standby fees, equipment charges and transporation charges payable to Forasol under the said contract was estimated to be FF 1,495,216 and ONGC was to pay to Forasol as an advance 10 per cent of the said amount, namely, FF 149,522, Indian rupees using a conversion rate of FF 1.033 equal to Rupee 1.000. The balance amount in respect of the aforesaid item was to be paid by ONGC to Forasol in Indian rupees using a conversion rate of FF 1.033 equal to Rupee 1.000 in the manner set out in the other sub-articles of Article XI. On account of the hostilities between Pakistan and India which broke out in September 1965 the work under the said contract could not be completed and the operations to be carried out thereunder had to be suspended. The period of the said contract was thereupon extended by a supplementary agreement being Addendum No. 1 dated 6/12/1965, by a period of six months with effect from the date on which the drilling operations in the Jaisalmer area were resumed at the expiry of the period of suspension. By another supplementary agreement being Addendum No. 2 dated 30/07/1966, the period of the said, contract was further extended by a period of five months from the moment at which all the equipment of Forasol then under repair at Jodhpur arrived, after completion of the repairs at the new drill-site, where ONGC might like to have drilling operations to be started under the said Addendum No. 2. Article 2.7 of the said Addendum No. 2 provided as follows : "2.7. In case Forasol has to refund to ONGC an amount which cannot be adjusted or has not been adjusted against Forasol's invoices for the last two months of the five months period of this Addendum, Forasol shall refund the amount in cash in the same curruency in which ONGC had paid it earlier." By another supplementary agreement being Addendum No. 3 dated 23/02/1967, the period of the contract was further extended till the completion of the drilling of Manhere Tibba Well No. 1 and in case ONGC should decide to test the said well till the completion of such test or till 18/04/1967, whichever was earlier. Article 2.5 of the said Addendum No. 3 provided as follows : "2.5. In case Forasol has to refund to ONGC an amount which cannot be adjusted or has not been adjusted against Forasol's invoices for the period of extension stipulated in Article 1.2 above, Forasol shall refund the amount in cash in the same currency in which ONGC had paid it earlier." It may be mentioned that each of the said supplementary agreements provided that all the terms and conditions of the original contract which were not repugnant to the terms and conditions agreed to for such supplementary agreements were to continue to apply until the termination of the said contract ;