TMI Blog2011 (11) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be initiated for such non-supply of fresh fruits. The Respondent No. 2 submitted its reply dated 20.06.2000 saying that the prices of all variety of fruits had increased and that it was impossible on its part to perform the contract and that the appeals made by the Respondent No. 2 were not considered by the authorities. The Appellant then rescinded the contract with Respondent No. 2 by letter dated 29.06.2000 and informed the Respondent No. 2 that its security deposit has been forfeited and that the Appellant will recover the expenditures made by the Appellant for purchase of fruits during the contract period. 3. As the contract provided for an arbitration clause, the dispute between the parties was referred to the arbitrator. The Respondent No. 2 made a claim of ₹ 12,23,732/- before the arbitrator and the Appellant made a claim of ₹ 5,89,130.72 for purchase of fruits during the period 07.06.2000 to 30.09.2000 before the arbitrator. The arbitrator (Respondent No. 1) framed 4 Issues and answered the 4 Issues in his Award dated 06.06.2001 and awarded a sum of ₹ 38,173/- towards prices of fresh fruits supplied by Respondent No. 2 to the Appellant with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of fruits made by Respondent No. 2 to the Appellant and to the security deposit with interest at the rate of 18% per annum to the Respondent No. 2. 6. We have perused the Award of the arbitrator and we find that the arbitrator has framed the following 4 Issues: Issue No. 1 - Whether the parties to the contract were discharged? Issue No. 2 - Whether the disputed contract was discharged in the following ways: (a) By performance of the contract (b) By breach of the contract (c) By impossibility of performance Issue No. 3 - Construction of ASE Specification No. 68; Issue No. 4 - Whether the contract was legally enforceable? On Issue No. 1, the arbitrator has held that the Respondent No. 2 by not supplying fruits to the Appellant had discharged the Appellant from its obligations under the contract and the Appellant had the right to sue for breach of contract for damages for loss caused to it in accordance with the provisions of the Indian Contract Act. On Issue No. 2, the arbitrator has held that the contention of Respondent No. 2 that he was disabled to perform from his part of the contract due to impossibility of performance caused by short supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the contravention, be void. (3) in this article, unless the context otherwise requires (a) 'law' includes any Ordinance, order, bye-law, rule, Regulation, notification, custom or usage having in the territory of India the force of law; (b) 'laws in force' includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas. (4) Nothing in this article shall apply to any amendment of this Constitution made under article 368. A reading of Clause (2) of Article 13 of the Constitution quoted above would show that by the said clause the State is prohibited from making any law which takes away or abridges the fundamental rights conferred by Part-III of the Constitution. Clause (2) of Article 13 of the Constitution further provides that any law made in contravention of clause (2) shall to the extent of the contravention be void. In clause (3) (a) of Article 13 of the Constitution, the word 'law' has been defined for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing, as a matter of history, from extraneous evidence, such as legislative debates or preliminary memoranda, not forming part of the enactment. It is thus clear that the word 'law' in the expression 'defeat the provisions of any law' in Section 23 of the Indian Contract Act is limited to the expressed terms of an Act of the legislature. 10. In Shri Lachoo Mal v. Shri Radhey Shyam (1971) 1 SCC 619 this Court while deciding whether an agreement was void and not enforceable under Section 23 of the Indian Contact Act held: What makes an agreement, which is otherwise legal, void is that its performance is impossible except by disobedience of law. Clearly no question of illegality can arise unless the performance of the unlawful act was necessarily the effect of an agreement. We are, therefore, of the opinion that unless the effect of an agreement results in performance of an unlawful act, an agreement which is otherwise legal cannot be held to be void and if the effect of an agreement did not result in performance of an unlawful act, as a matter of public policy, the court should refuse to declare the contract void with a view to save the bargain enter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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