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TMI Blog2018 (8) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... EC/Gold Del/20:80/2014-15/Lot-8 dated 12th May, 2014 floated by the respondent with respect to "Net Trading Margin on Sale of Gold by PEC to be imported in 8th Lot of 337 kg. under 20:80 scheme of RBI". 3. The Reserve Bank of India (RBI) vide its Circular dated 14th August, 2013 had clarified its instructions with respect to import of gold by nominated banks/agencies/entities whereunder the Nominated Banks/Nominated Agencies and other Entities were to make available gold for domestic use only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the Gold Deposit Scheme (GDS) against full upfront payment on certain conditions. Under 20:80 Scheme of RBI, 20% of the quantity of imported gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon making requisite payments to the respondent/customs/supplier. 7. Thereafter, the petitioner filed the claim for recovery of the alleged excess Net Trading Margin paid by it to the respondent claiming that due to the change in policy of the Government, the Net Trading Margin had fallen to 0.40% as was evident from the subsequent tender floated by the respondent on 10th June, 2014 and therefore, the respondent was only entitled to the Net Trading Margin of 0.41 % and it should return the excess Net Trading Margin received by it. The claim has been rejected by the majority of the Members of the Arbitral Tribunal by its Impugned Award. 8. The only question therefore, for consideration is as to whether with the change in the policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any nature and blockades 'preventing the seller/buyer from wholly or partially carrying out his contractual obligations.' 10. In the present case, it is not the contention of the petitioner that due to the change in policy of the Government as issued by the RBI Circular dated 21st May, 2014, it was 'wholly or partially' prevented from carrying out its contractual obligations. The only plea raised by the petitioner is one of economic loss and un-viability of the contract due to loss in profit margins as a result of change in the policy. 11. Section 56 of the Contract Act is reproduced hereinbelow: "56. Agreement to do impossible act.-An agreement to do an act impossible in itself is void. Contract to do act afterwards becomin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged merely because it may become onerous to one of the parties. The relevant paragraphs are reproduced below:- "21. Section 56 of the Indian Contract Act provides that: "A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful." Performance of the contract had not become impossible or unlawful; the contract was in fact, performed by the Agents, and they have received remuneration expressly stipulated to be paid therein. The Indian Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the contract, merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous. That is the law both in India and in England, and there is, in our opinion, no general rule to which recourse may be had, as contended by Mr. Chatterjee, relying upon which a party may ignore the express covenants on account of an uncontemplated turn of events since the date of the contract. Mr. Chatterjee strenuously contended that in England, a rule has in recent years been evolved which did not attach to contracts the same sanctity which the earlier decisions had attached, and in support of his contention, he relied upon the observations made in British Movietonews Ltd. v. London and District Cinemas Ltd. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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