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FOOD CORPORATION OF INDIA & ORS. vs. ABHIJIT PAUL

SCR Citation: [2022] 8 S.C.R. 728
Year/Volume: 2022/ Volume 8
Date of Judgment: 18 November 2022
Petitioner: FOOD CORPORATION OF INDIA & ORS.
Disposal Nature: Appeals Disposed Off
Neutral Citation: 2022 INSC 1216
Judgment Delivered by: Hon'ble Mr. Justice Pamidighantam Sri Narasimha
Respondent: ABHIJIT PAUL
Case Type: CIVIL APPEAL /8572-8573/2022
Order/Judgment: Judgment
1. Headnote

Contract – Demurrage – Food Corporation of India (Corporation) entered into a contract with Respondent (Contractor) for transporting food grains – Subsequently, corporation called upon contractor to reimburse the amount of demurrages imposed on it by the railways – As contractor incurred heavy losses on account of demurrages due to the contractor’s inability to provide trucks – This unilateral action of corporation was challenged – Whether the contractual clause enabling the Corporation to recover “charges” includes the recovery of demurrages – Held: The scope of the expression “charges” must be understood as intended by the parties to the contract – The expression charges has to be examined in the context of its related words in the contract, which are costs, damages, registeration fees, and expenses – The preamble of the contract, i.e., the Work Order, reads that the contractor is engaged for “transportation of foodgrains fromdepots, mandis, rail heads of Churaibari to various destinations” –It is evident from the contractual provisions and also the admissions of the Corporation that the task of loading or unloading of food grains from the railway wagons was not a part of the contract – Thus, based on interpretation of the expression “charges” in the contractual context, it did not include liability on account of demurrages – Hence, the Corporation cannot impose and collect demurrages from the contractors – Even by referring to other similar contracts entered by the corporation in 2010 and 2018, it is ascertained that responsibility of loading and unloading of foodgrains wagons is absent in the present contract – Thus the expression “charges” cannot be interpreted to include demurrages.

2. Case referred
3. Act
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4. Keyword
  • Contract – Demurrage