INDORE INSTITUTE OF LAW

NATIONAL LAW FEST

LEX BONANZA 2014

MOOT COURT COMPETITION

(27th 28th SEPTEMBER 2014)

BEFORE THE HONBLE CITY CIVIL COURT OF MUMBAI

SUPREME CONSTRUCTION CONSORTIUM (APPELLANTS)

Vs
INVESTMENT ADVISORS INDIA LIMITED (RESPONDENTS)

MEMORIAL FOR APPELLANT-SUPREME CONSTRUCTION CONSORTIUM

TABLE OF CONTENTS

INDEX OF AUTHORITIES------------------------------------------------------------------ 2
............................................................................................................................................
STATEMENT OF JURISDICTION--------------------------------------------------------- 7
............................................................................................................................................
SUMMARY OF FACTS---------------------------------------------------------------------- 8
............................................................................................................................................
SUMMARY OF ARGUMENTS------------------------------------------------------------- 9
............................................................................................................................................
ARGUMENTS ADVANCED----------------------------------------------------------------- 10
............................................................................................................................................
PRAYER----------------------------------------------------------------------------------------- 13
............................................................................................................................................

INDEX OF AUTHORITIES
BOOKS
1. THE CONSTITUTION OF INDIA
2. LAW OF TORTS, R.K. BANGIA
3. CONTRACT AND SPECIFIC RELIEF ACT, AVTAR SINGH
---------------------------------------------------------------------------------------------------------------INDIAN CASES
Reciprocal Promises
---------------------------------------------------------------------------------------------------------------1. PULIYADI NAVANNA ELLARAYAN vs KUTTUVA CHINA KUNA MUNI
NAGENDRA
(14 March, 1917)
....................................................................................................................................................
2. OU vs CIBA INDUSTRIAL WORKERS' CO-OP
(11 May, 2012)
....................................................................................................................................................
3. OS vs ADV. SRI.P.GOPALAKRISHNAN
(28 July, 2009)
---------------------------------------------------------------------------------------------------------------Severability
4. SHIN SATELLITE PUBLIC Co. LTD. vs M/s JAIN STUDIO LTD.
(30 January, 2006)
---------------------------------------------------------------------------------------------------------------SEC 55
5. PURE PHARMA LIMITED VS UNION OF INDIA
( 2 July, 2008)
....................................................................................................................................................
6. TENCO PRIVATE LTD vs THE KSEB
(23 December, 2009)
....................................................................................................................................................
2

7. AYANG RINPOCHE vs SMT SURAKSHA GUPTA AND OTHER

( 2 July, 2008)
....................................................................................................................................................

8. BHAGWAN DAS METALS LTD. vs M/s RAGHVENDRA AGENCIES

(14 June. 2011)
....................................................................................................................................................
9. M/s CITADEL PHARMACUTICALS vs M/s RAMANIYAM REAL ESTATES
(8 August, 2011)
---------------------------------------------------------------------------------------------------------------SEC 37
10. GAURAV ARORA vs OM PRAKASH & ANR.
(17 August, 2010)
....................................................................................................................................................
11. HOTEL VRINDA PRAKASH REPRESENTED vs KARNATAKA STATE
FINANCIAL
(21 August 2007)
---------------------------------------------------------------------------------------------------------------SEC 73
12. IQBAL PROPERTIES PVT. LTD. vs ATAR SINGH
(24 November, 2010)
....................................................................................................................................................
13. E. BHAGWAN DAS VS DILIP KUMAR AND OTHERS
(12 March, 1998)
....................................................................................................................................................
14. BHAGWANDAS METALS LTD vs M/S.RAGHAVENDRA AGENCIES
(14 June, 2011)

SEC 74
15. STATE OF KARNATAKA vs SHREE RAMESHWARA RICE MILLS
(AIR 1987 SC 1395)
---------------------------------------------------------------------------------------------------------------SEC 126
16. ASHOK MAHANSING BAJAJ H.U.F. vs ELEGANT PHARMACEUTICALS LTD.
( 14 February,2000)
....................................................................................................................................................
17. M/S. GLOBAL INFOSYSTEM LTD. vs M/S. LUNAR FINANCE LTD
(28 May, 2012)
....................................................................................................................................................
18. SHRI RAJAN GUPTA vs BANK OF INDIA
(22 August, 2007)
---------------------------------------------------------------------------------------------------------------SEC 54
19. NATHULAL VS PHOOLCHAND
(16 October, 1969)
....................................................................................................................................................
20. 1970 AIR 546, 1970 SCR (2) 854
---------------------------------------------------------------------------------------------------------------Other Cases
21. UNION OF INDIA vs TANSEM SINGH
[ 2008 (118) Fac LR 1079 (SC) (A) ]
....................................................................................................................................................
22. ASHOK KUMAR vs STATE OF BIHAR
[ AIR 2008 SC 2723 : 2008 AIR SCW 4533 : 2008 (8) SCC 445 ]
....................................................................................................................................................
23. ORIENTAL BANK OF COMMERCE vs SUNDAR LAL JAIN
[AIR 2008 SC 1339 (A): 2008 (2) SCC 280: 2008 (1) Scale 298]
4

24. VISHWANATH SARAGOI vs RAVI BHATIA

[2008 AIR SCW 3779:2008 (4) ACJ 632 : 2008 (2) Scale 675]
....................................................................................................................................................
25. GAMMON INDIA LTD. vs M.S REDDY & CO.
[2004 (13) SCC 359]
....................................................................................................................................................
26. GANPAT METALS vs MSTC LTD
[2005 (12) SCC 169]
.....................................................................................................................................................
27. K. C SKARIA vs GOVERNMENT OF STATE
[AIR 2006 SC 811 (E) : 2006 AIR SCW 265 : 2006 (2) AIR Kar R 93 : 2006 (2) SCC
285 : 2006 (1) Scale 204]
......................................................................................................................................................
28. FOOD CORPORATION OF INDIA vs M/S LAXMI CATTLE FEED INDUSTRIES
[AIR 2006 SC 1452 : 2006 AIR SCW 1043 : 2006 (2) SCC 699)
---------------------------------------------------------------------------------------------------------------DEFAMATION
29. D.P CHOUDHRY vs MANJULATA[AIR 1997 Raj, 170]
...............................................................................................................................................
30. S.N.M. ABDI vs PRAFULLA KUMAR MOHANTA[AIR 2002 Gauhati, 75]
................................................................................................................................................
31.R. vs ADAMS[1888, 22, Q.B.D. 66 Sec 505, IPC]
................................................................................................................................................

FORIEGN CASES
32. SIM vs STRECHES
(1936 52 TLR 669,671)
..........................................................................................................................................
33. CAPITAL AND COUNTIES BANK vs HENTY AND SONS
(1882 7 AC 741)
..........................................................................................................................................

Breach of Duty
34. BOLTON vs STONE
(1951 AC 850)
---------------------------------------------------------------------------------------------------------------SEC 73
35. HORNE vs MIDLAND RAILWAY
(1873 LR 8 CP 131)
.....................................................................................................................................
36. COLUMBIA SAWMILL Co. vs NETTLESHIP
(L.R.3 C.P. 499,509)

STATEMENT OF JURISDICTION

The Appellant humbly submits this memorandum for the appeal filed before this Honourable
Court.

SUMMARY OF FACTS
1.

Investment Advisors India Ltd. (IAIL), an Indian Company, is a growing private equity firm
based in Mumbai which had an annual turnover of Rs. 200 Crore for the fiscal year 2005-2006.

2.

Supreme Construction Consortium (SCC), an Indian company which is a well known real
estate contractor, acquires a reputed name in the same for the execution of several prestigious
building contracts for top corporate houses over the years.

3.

In a Board Meeting called on June 2005 IAIL decided that it will setup its own corporate
house in Mumbai and a month later procured a piece of land from NMRDA at BKC for the
aforesaid purpose for which invited RFP in August 2005 (including building designs, quotation,
etc.).

4.

In September 2005 after reviewing several proposals, IAIL selected the proposal submitted
by SCC taking all the factors in view and a contract was signed between the two on September
15,2005 which provided:a. SCC shall complete the construction of the project by December 2006;
b. The total cost of the product was Rs. 60 Crore;
c. IAIL will make payment in four equal tranches of Rs 15 Crore each, in October-2005,
February-2006, June-2006 and the final tranche would be paid with the completion of the
project.
d. SCC was required to furnish a bank guarantee in favor of IAIL to cover breach on their part;
which was 50% of the value of the contract i.e. Rs. 30 Crore.

5.

The construction began in October 2005 and continued as per the plan without any delay till
June 2006 as on 10 June a severe damage took place in the top two floors of building due to fire.

6.

The committee set up by the IAIL noted that the fire arose from the position of machinery
kept by SCC, but was unable to conclude that whether SCC was at fault. The committee also
noted that the cost of incomplete construction would now increase by aprx. 20%.

7.

The construction was finally completed in March 2007, three months behind the schedule.
The final tranche of payment was withheld by IAIL owing to this delay. SCC sent a letter on 15
March 2007 to IAIL claiming the last tranche of payment i.e. Rs 15 Crore along with Rs. 5 Crore
for the delay in construction citing clause 11 & 12 of the contract which read as under:

8.

(11) SCC will not be liable for any loss or damage arising out of the work carried out under
this contract;
(12) SCC is entitled to levy extra charges where(a) extra work is required to prepare the project before handing over of the finished project, and
(b) increase in costs arising from delay in completion of project, where the delay occurs from
causes outside the control of SCC.

9.

After tedious proceedings in the court, respecting the order of the court, the IAIL paid the last
trench while the SCC transferred the constructed building to the IAIL. The rest issues over

compensation and defamation are pending before the City Civil Court of Mumbai.
8
SUMMARY OF ARGUMENTS

1. Whether there had been malafied intentions on the part of respondent leading to
defamation in form of libel of the appellant company?
This issue raised from the appellants side questions the statement published by the CEO of
IAIL in the leading business magazine, with all intentions of defamation and derogation of
the appellant. It questions the warranty of the statement published, which as is evident fails to
be justified and hence claims compensations for the loss of reputation caused due to such
negligent publication of opinion.

2. Whether the IAILs demand of compensation for the delay maintainable, keeping
in view the interpretation of Section 55 of Indian Contract Act 1872?
This issue de-grounds the claim of compensation for the delay caused due to an accident
beyond the control of SCC. It is based on the explanation and interpretation of Section 55 of
Indian Contract Act 1872. It renders the request of compensation made my IAIL void due to
the acceptance of work promised after the time decided upon.

9
ARGUMENTS ADVANCED

1. Whether there had been malafide intentions on the part of respondent leading to
defamation in form of libel of the appellant company?
The appellant company had faced a bruise on its reputation due to the mindless and vague
assertion of a statement by the CEO of IAIL, which holds not even the remotest
resemblance with truth.
As the knowledgeable bench must already be aware that the act done by the falls under
the purview of Libel which is publication of defamatory statement is a permanent form,
whether it be writing, printing, picture, effigy1 or statue.2
The Counsel would like to put before the Honble Bench that publication of a news item
which is untrue and is published negligently with utter irresponsibility3, is held to be a
form of libel defamation. It was also stated that all defamatory words are actionable per
se.4
Defamatory statement is the one which tends to injure the reputation of the plaintiff.5 The
statement given by the CEO of the company IAIL, stating that contracts performed with
SCC are not performed as professionals is simply an instrument whereby the former has
tried to lower the reputation of company is the estimation of right thinking members of
the society.6
Any such statement in the eminent business magazine, as that of made by the CEO of the
IAIL Company, cannot be taken as a statement of truth or fair comment due to the very
fact that this statement is unwarranted. And fair comment ought to be a comment and
not the personal opinion7, that too an opinion on a platform which would make most of
the people concerned, think unworthy of that of SCCs professionalism and work culture.
To prove the assertion that the statement given by the CEO of IAIL is nothing but a
cooked up story to cover up the fault and breach of contract and trust, the Counsel would
request the Honble Court to scan paragraph number 6, which goes as, IAIL noted that
the fire arose from the position of machinery kept by SCC, but was unable to conclude
that whether SCC was at fault. When the Board of directors of IAIL themselves
cannot warrant the fault of SCC, on what grounds can the CEO of the same company
publically shun the contracts and works done in collaboration with SCC?
Moreover, the statement directly refers to the appellant8and hence leaves no doubt in the
minds of the reader and thus forces them to make a negative opinion of SCC, which
undoubtedly derogatory and defamatory for the same.

10
The last test which confirms defamation on the part of the respondent is the fact that the
statement is published.9 when even a fictional article can constitute defamation if it
invariably points toward the plaintiff10, then this was the case where a direct allegation
with no truth at its base was pointed on the face of the appellant company.
It is the very essence of defamation and hence the Counsel from the SCC i.e. the
appellant would request the Honble bench to take a scrutinized note of the same.

1. Monsoon vs Tussands LTD. (1894) (1) Q.B 671

2.R.K BANGIA Law of Torts
3. D.P Chaudhary vs Manjulata (AIR 1997 Raj. 170)
4. R.K BANGIA Law of Torts
5. R.K BANGIA Law of Torts
6. Sim vs Strech (1936) (52) TIR 669,671
7. R.K BANGIA Law of Torts
8. R.K BANGIA Law of Torts
9. R.K BANGIA Law of Torts
10. Hulton Co. vs Jones (1910 AC 20)

11

2. Whether the IAILs demand of compensation for the delay maintainable, keeping
in view the interpretation of Section 55 of Indian Contract Act 1872?
The Honble court, as knows the reason of delay in completion of contract being fire, and
the fault behind the same unresolved and undeclared, the construction company accepts
that the essence of time was lost due to forces beyond the powers of the company. But
even then, when the IAIL has agreed to accept the constructed building, on what basis can
it then claim compensation.
As the Hon'ble bench may already be aware that the interpretation of Section 55 states,
If, in case of a contract voidable on account of the promisors failure to perform his
promise at the time agreed, the promisee accepts performance of such promise at any
time, other than that agreed, the promise cannot claim compensation for any loss
occasioned by the non-performance of the promise at the time agreed.11
Also, no such compensation can be announced without a prior notice in the contract, as
there was no stipulation as to the effect of failure of keeping the date 12. Time for
completion of contract was specified but effect of delay was not emphasised 13, hence IAIL
cannot claim compensation for a term which it neither, impliedly nor expressively
mentioned in the terms of contract.
The Honble bench shall be pleased to notice the fact that the delay occurred due to
breakdown of fire. No reasonable man would defy, that such a delay could not be worked
upon lest the time is extended. Even then, IAIL did not look forward to provide the
construction company with the notice of extension of time, closing all doors of common
sense and practicality. In order to strengthen this point, the Counsel would like to cite a
similar case of Ramakant Singh vs Union of India14, where a road construction could
not be completed on time due to bad weather. The Court held that in such cases, where no
force from both the sides can govern the delay, extension shall be given.
By the aforesaid argument, the Counsel would simply like to dismantle the claim of
compensation demanded by the respondent, owing to its inconsistency with the provisions
of the INDIAN CONTRACT ACT, 1872.

11.AVTAR SINGH Contract and Specific Relief (Section 55 of Indian Contract Act, interpretation and
explanation.
12. rakha singh vs babu singh (AIR 2002 P&H 270)

13. Sri brahadambhal agency vs ramasamay (AIR 2002 mad 352)

14. 2004 (1) BLJR 173 pat

12

PRAYER

In the light of arguments advanced, authorities cited and evidences produced, the counsel on
behalf of the Appellants would humbly submit before the Honble Court, to grant1. Compensation for the statement made which lead to defamation.
2. Compensation for the extra work done by the Appellant.
3. Repayment of bank guarantee which was revoked by IAIL.

13