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Executive Director, Steel Authority of India v. Tycoon Traders

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 4026 of 2014)Decided 26 Mar 2014
Civil Appeal No. 4026 of 2014
Justice Gyan Sudha Misra · Justice Pinaki Chandra Ghose

Background

A buyer paid money under an auction contract to remove iron ore fines from mines near Bhadra Wildlife Sanctuary. Permission to transport the material through the sanctuary was refused after it became a tiger reserve, and the supplier resisted a High Court order requiring refund of the entire payment.

Decision Breakdown

The Court dismissed the supplier's appeal and upheld the refund order. The required transport would conflict with the wildlife-protection restriction governing the tiger reserve, making the contract unenforceable in the circumstances. The supplier's argument that the buyer had breached contractual conditions did not overcome that legal prohibition. The Court therefore left intact the direction restoring the buyer's money rather than allowing forfeiture under this contract.

Lesson Learnt

A commercial contract cannot require performance forbidden by environmental law; where that prohibition defeats the transaction, retaining the buyer's payment may be unjustified.

Official source (sci.gov.in)View Judgment (PDF)

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