TEAM CODE: 27

3TH MARWADI UNIVERSITY LATE SHREE ABHAY BHARDWAJ MOOT COURT

COMPETITION, 2023

BEFORE THE HON’BLE HIGH COURT OF BAMBINO

UNDER SECTION 6 OF CIVIL PROCEDURE CODE, 1972

IN THE MATTER OF –

ABC PRIVATE LIMITED

(PETITIONER)

V.

PQN PRIVATE LIMITED

(RESPONDENT)

Memorandum on Behalf of the Petitioner

MEMORANDUM for RESPONDENT [TABLE OF CONTENTS]

TABLE OF CONTENTS

Before The Hon’ble High Court OF Bambino ................................................................... 1

TABLE OF CONTENTS ................................................................................................................ I

LIST OF ABBREVIATIONS........................................................................................................ III

INDEX OF AUTHORITIES .................................................................................................IV

STATEMENT OF JURISDICTION .............................................................................................. VII

STATEMENT OF FACTS ........................................................................................................ VIII

STATEMENT OF ISSUES ............................................................................................................. X

WHETHER THE HIGH COURT OF BAMBINO HAS JURISDICTION?.......................................... X

WHETHER PQN HAS DEFAULTED IN ITS PERFORMANCE OF CONTRACT? .......................... X

WHETHER ABC IS ENTITLED TO RECEIVE ANY COMPENSATION FOR THE SAME ? ............. X

SUMMARY OF ARGUMENTS .....................................................................................................XI

I. THE HIGH COURT OF BAMBINO DOES NOT HAVE JURISDICTION ........ XI

II. PQN HAS NOT DEFAULTED IN ITS PERFORMANCE OF CONTRACT ...... XI

III. ABC IS NOT ENTITLED TO RECEIVE COMPENSATION .............................. XI

ARGUMENTS .............................................................................................................................. 1

I. THE HIGH COURT OF BAMBINO DOES NOT HAVE JURISDICTION ........... 1

The Hc Of Bambino Does Not Have Territorial Jurisdiction. ........................................... 1

The valuation of the suit is arbitrary. ................................................................................. 1

II. PQN HAS NOT DEFAULTED ITS PERFORMANCE OF THE CONTRACT. ............................... 2

time is not of the essence anymore ..................................................................................... 2

PQN should get compensation on the ground of justice, equity and good conscience ...... 6

III. ABC IS NOT ENTITLED TO RECEIVE COMPENSATION .................................. 7

ABC is willing to accept the performance of the contract even after the deadline. ........... 7

1. time is not of the essence anymore .......................................................................... 7

PQN is not liable to compensate under section 73. ............................................................ 7

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MEMORANDUM for RESPONDENT [TABLE OF CONTENTS]

1. damages are remote and indirect to fall under the ambit of section 73 .................. 8

2. ABC did not take mitigating measures .................................................................. 10

PQN is not responsible for the loss of reputation. ........................................................... 10

1. the public announcement regarding the vaccine was not communicated to PQN
before entering into the contract................................................................................... 11

2. generally no damage is provided for loss of reputation ........................................ 11

compensation would serve no purpose. ............................................................................ 12

1. the contract is not merely about earning profits ................................................... 12

2. “salus populi suprema lex esto” is applicable ...................................................... 12

The court should not only look into the technicalities ...................................................... 13

1. the judges should act “ex debito justiciae” .......................................................... 13

damages are supposed to be compensatory ..................................................................... 14

1. penalization is not possible through damages ....................................................... 14

restitutionary remedies will not be appropriate to provide. ............................................. 14

1. restitutioanry remedies have a tendency to discourage economic activity ........... 14

PRAYER .................................................................................................................................XIV

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MEMORANDUM for RESPONDENT [STATEMENT OF JURISDICTION]

LIST OF ABBREVIATIONS

Abbreviation Term

§ Section

¶ Paragraph

& And

ABC ABC Private Limited

Act Official Languages Act

cr crore

Indica Republic of Indica

i.e. that is

EPI Essential Pharmaceuticals Ingredients

Govt. Government

HC High Court

Ltd. Limited

Pvt. Private

PQN PQN Private Limited

Serrana Republic of Serrana

SC Supreme Court

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MEMORANDUM for RESPONDENT [STATEMENT OF JURISDICTION]

INDEX OF AUTHORITIES

Cases
A.T. Brij Paul Singh v State of Gujarat (1984) 4 SCG 55 ....................................................... 12
Arson Enterprises Ltd v Union of India, (1999) 9 SCC 449. .................................................... 4
Citadel Fine Pharmaceuticals vs M/S Ramaniyam Real Estates Pvt. Ltd. and Ors, (2011) 9
SCC 147: AIR 2011 SC 335, ( (Avtar Singh, Contract and Specific Relief, 12th Edition,
EBC publication, page:384 .................................................................................................... 5
Derbishire v. Warran (1963) 1 WLR 1067 (CA) ..................................................................... 11
Ghaziabad Development Authority Vs. Union Of India & Anr. AIR 2000 SC 2003 ............. 12
Hadley v Baxendale, (1854) 9 Exch 341. (hereinafter Hadley v Baxendale). ........................... 9
Hind Construction Contractors v State of Maharashtra, (1979) 2 SCC 70 ................................ 5
Husensab vs Basayya and others, MANU/KA/3468/2020……………………………………2
Man Kaur V Hartar Singh Sangha, (2010) 10 SCC 512, ........................................................... 6
Maya Devi v Tulsa Devi, AIR 1935 Oudh 296 ......................................................................... 2
Modi Entertainment Network v WSG Cricket Pte Ltd, (2002) 3 Bom CR 634 ...................... 15
Muralidhar Chatterjee v International Film Co Ltd, (1943) 56 LW 283 ................................. 10
Nainesh Girishkumar Panchal v. Chirag Girishkumar Panchal ( 2021) Latest Caselaw 3908
Guj ........................................................................................................................................ 13
Nandita Bose v Ratanlal Nahta, AIR 1987 SC 1947 ................................................................. 2
Pannalal Jankidas v Mohanlal, AIR 1951 SC 144. .................................................................. 10
Pannalal Jugatmal v State of Madhya Pradesh, AIR 1963 MP 242......................................... 10
Raichurmatham Prabhakar and Others vs. Rawatmal Dugar AIR 2004 SC 3625 ................... 7
Ramakant Singh v Union of India, (2004) 1 BLJR 173 (Pat) .................................................... 8
Ramakant Singh v Union of India, (2004) 1 BLJR 173 (Pat): 2004 (1) CTLJ 635 Pat], (Avtar
Singh, Contract and Specific Relief, 12th Edition, EBC publication, page: 388). ................. 3
Ramanand vs Girish Soni, (RC. Rev. 447/2017) ........................................................................ 6
Ruxley Electronics and Construction Ltd v Forsyth, 1996 AC 344: (1995) 3 WLR 118........ 14
S.Brahmanand v K.R.Muthugopal, (2005) 12 SCC 764............................................................ 4
Surrey County Council v Bredero Homes Ltd, (1993) 1 WLR 1361 (CA) ............................. 15
Sushil Kumar Sen v State of Bihar 1975 AIR 1185. ............................................................... 14
Swarnam Ramchandram v. Aravacode Chakungal Jayapalan, 2004 8 SCC 689 ...................... 6
The Koufos v C. Czarnikow Ltd, (1969) 1 AC 350................................................................. 10

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MEMORANDUM for RESPONDENT [STATEMENT OF JURISDICTION]

TKC v Allianz,[2020] EWHC 2710 (Comm). ............................................................................ 7

Trailakyanath Maity v Provabati Santra, AIR 1974 Cal 261 ..................................................... 6
Union of India v. Harendra Gawaria, (2022) 1 RLW 643, 04-02-2022 .................................. 14
Union of India v. Panipat Woollen Mills Co Ltd....................................................................... 9
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, (1949) 2 KB 528 (CA) .............. 11
Welspun Speciality Solutions Ltd. v ONGC, (2022) 2 S.C.C 382 (India) ................................ 7
Welspun Specialty Solutions Ltd. vs. ONGC (Oil and Natural Gas Corporation), LL 2021
SC 646 .................................................................................................................................... 6

Statutes
The Code of Civil Procedure,1908, § 6, Acts of Parliament,1908 (India). ............................... 1
The Code of Civil Procedure,1908, § 20, Acts of Parliament,1908 (India). ............................. 1
The Code of Civil Procedure,1908, Order VII,Rule 10, Acts of Parliament,1908 (India) ........ 2
The Commercial Courts Act,2015, § 3, Acts of Parliament,2015 (India) ................................. 1
The Indian Contract Act, 1872, §39....................................................................................... 8, 9
The Indian Contract Act, 1872, §73......................................................................................... 10
The Indian Contract Act, 1872, §73........................................................................................... 8

Other Authorities
“Ex debito justitiae.” Merriam-Webster.com Dictionary, Merriam-Webster,
https://www.merriam-webster.com/dictionary/ex%20debito%20justitiae. (20 Mar.
2023). ................................................................................................................................... 14
7 MATHIAS SIEMS, DISGORGEMENT OF PROFITS FOR BREACH OF CONTRACT: A COMPARATIVE
ANALYSIS, 33 (2003)............................................................................................................. 15
Andrew Burrows, Remedies for Torts, Breach of Contract and Equitable Wrongs 83-146 (4th
ed. 2019) ............................................................................................................................... 10
Eisenberg, Melvin A., 'The Principle of Hadley v. Baxendale', Foundational Principles of
Contract Law 239-254 (online edn, 2018) ............................................................................. 9
Merriam-Webster. (n.d.). Salus populi suprema lex esto. In Merriam-Webster.com
dictionary. (March 18, 2023), from https://www.merriam-
webster.com/dictionary/salus%20populi%20suprema%20lex%20esto (hereinafter
Salus populi suprema lex esto) .......................................................................................... 13
Michael Trebilock & Jing Leng, The Role of Formal Contract Law and Enforcement in
Economic Development, 92 Va. L. Rev. 1517-1580 (2006) ................................................ 15

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MEMORANDUM for RESPONDENT [STATEMENT OF JURISDICTION]

Nina Anana, Restitutionary Damages for Beach of Contract: A Bad Precendent?, KSLR
COMMERCIAL & FINANCIAL LAW BLOG (Feb. 09, 2013)
https://blogs.kcl.ac.uk/kslrcommerciallawblog/2013/02/09/restitutionary-damages-for-
breach-of-contract-a-false-precedent/. ................................................................................. 15
Source: P. Ramanatha Aiyar’s, Advanced Law Lexicon, 5th Edition, 2017, at page no.1797 . 6

Books
(Avtar Singh, Contract and Specific Relief, 12th Edition, EBC publication,
page:388)…………………………………………………………………………………….16

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MEMORANDUM for RESPONDENT [STATEMENT OF JURISDICTION]

STATEMENT OF JURISDICTION

The Petitioner has approached the Hon’ble High Court of Bambino, under section 6, Civil
Procedure Code, 1908.

The present memorial on behalf of the petitioner sets forth the facts, contentions and
arguments in the present case.

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MEMORANDUM for RESPONDENT [STATEMENT OF FACTS]

STATEMENT OF FACTS

BACKGROUND:

The maker of pharmaceuticals (including vaccines), ABC Private Limited, has a global
presence and has received numerous honours, including "The Best Practice Award" from a
Global Best Practice Association of Medicine manufacturer. On September 22, 2020, it first
entered into a contract of supply with PQN Private Limited for the raw materials necessary to
produce a vaccine for Covid-19 within three months. The Republic of India oversees both
businesses. The Republic of Serrana, which provided 80 percent of the world's EPI, was one
of the nations from which PQN used to receive the majority of their supply. The remaining 25
crore were to be paid by ABC after the deal was completed. Serrana was placed under total
lockdown because of the deterioration of the situation due to Covid-19, and the factories and
all other industries broke down. One of the few sources of the raw materials needed to make
the COVID-19 vaccines was PQN. Time would be of the essence, as the parties expressly stated
in the contract, and later ABC made public announcements that it would be among the first few
businesses to introduce a COVID-19 vaccination.

Unfortunately, due to restrictions everywhere and a complete closure in Serrana, PQN was
unable to supply raw materials as required by the contract. In the meanwhile, Covid-19 was
introduced by other businesses, including FGN, by February 2021, but it was met with criticism
because of claims that the vaccine was rushed into use without adequate testing and was having
a number of negative effects on patients. ABC sent emails to PQN requesting immediate
supply. As a result of the public response FGN was receiving, ABC made the decision to get
in touch with JNM, a business that specialises in plasma therapy for the production of vaccines,
in the meantime. This was promoted as a COVID-19 vaccine alternative that was more reliable
and secure. But, ABC was aware that it would take time for this therapy to take hold because
it is still in its early stages.

ABC continued to favour using the conventional vaccine production process. PQN indicated
that it had switched massive shipments of the raw material to another manufacturing business
and that it was prepared to create the supply in pieces as quickly as possible, but they could not

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MEMORANDUM for RESPONDENT [STATEMENT OF FACTS]

promise the schedule given the scenario. At the High Court of Bambino in the Republic of
India, ABC sued PQN for particular performance and damages in the alternative (having
original jurisdiction to entertain suits over an amount of Indica Rupees 1 Crore). ABC
requested damages in the amount of Indica Rupees 100 crores, of which Indica Rupees 75
crores were for losses incurred by ABC due to the delay induced by PQN and the remaining
25 crores were for money already paid under the Contract of Supply. Time would be of the
essence, as the parties explicitly stated in the contract, and ABC made public announcements
that it would be among the first few companies to roll out a Covid-19 vaccination on the basis
of PQN's representations regarding its competence and the contract's deadline.

Nevertheless, PQN did not provide any raw materials as required by the contract, preventing
ABC from releasing the Covid-19 vaccine by February 2021. Several businesses, including
FGN, launched Covid-19 in the interim. Since PQN was unable to deliver the raw materials to
ABC on time, ABC sent PQN emails requesting immediate supply. In the interim, ABC made
the decision to get in touch with JNM, who manufactured vaccines using plasma treatment.

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MEMORANDUM for RESPONDENT [STATEMENT OF ISSUES]

STATEMENT OF ISSUES

ISSUE I

WHETHER THE HIGH COURT OF BAMBINO HAS JURISDICTION?

ISSUE II

WHETHER PQN HAS DEFAULTED IN ITS PERFORMANCE OF CONTRACT?

ISSUE III

WHETHER ABC IS ENTITLED TO RECEIVE ANY COMPENSATION FOR THE SAME?

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MEMORANDUM for RESPONDENT [SUMMARY OF ARGUMENTS]

SUMMARY OF ARGUMENTS

I. THE HIGH COURT OF BAMBINO DOES NOT HAVE JURISDICTION

It is humbly submitted before this hon’ble court that the High Court of Bambino does not
have jurisdiction to entertain this case as, first The High Court of Bambino does not have
territorial jurisdiction[A]; The valuation of the suit is arbitrary[B].

II. PQN HAS NOT DEFAULTED IN ITS PERFORMANCE OF CONTRACT

. PQN has not breached the contract. Though in the current scenario the contract has a clause
that time is the essence, there is a need to consider the circumstances of global lockdown and
inability to carry on normal trade. The entire supply chain of PQN all of its supply schedules
have been hampered, so time cannot be treated as the essence of the contract.

In the current scenario specific performance is demanded by ABC and therefore the intensions
of the parties are not to make time the essence of the contract. Specific performance is indirectly
extension of time and when there is scope for extension of time then time is not the essence of
the contract. Therefore, considering the inability to supply during the lockdown and time not
being the essence of the contract, ABC should be given reasonable period to complete the
contract. PQN is willing to supply EPI in parts to ABC.

III. ABC IS NOT ENTITLED TO RECEIVE COMPENSATION

The Respondents humbly submit that ABC is not entitled to receive compensation because
ABC is willing to accept the performance even after the deadline [A]; PQN is not liable to pay
under section 731 [B]; the court should not only look into the technicalities [C]; compensation
would serve no purpose as the contract is not merely about earning profits [D]; PQN is not
responsible for the loss of reputation [E]; Damages are supposed to be compensatory and not
penal [F]; Restitutionary remedies will have a tendency to discourage economic activities [G].

1
The Indian Contract Act, 1872, §73, Acts of Parliament,1908 (India).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

ARGUMENTS

I. THE HIGH COURT OF BAMBINO DOES NOT HAVE JURISDICTION

It is humbly submitted before the Hon’ble High Court of Bambino that the High Court of
Bambino does not jurisdiction as first, the HC of Bambino does not have territorial
jurisdiction(A); and lastly, the valuation of the suit is arbitrary(B).

THE HC OF BAMBINO DOES NOT HAVE TERRITORIAL JURISDICTION.

The petitioners humbly submit that the High Court of Bambino has original jurisdiction
jurisdiction to entertain this case. Section 6 of the Code of Civil Procedure ,1908 2 defines
pecuniary jurisdiction as:
“The Commercial Court shall have jurisdiction to try all suits and applications relating to a
commercial dispute of a Specified Value arising out of the entire territory of the State over
which it has been vested territorial jurisdiction.”
Further, Section 3 of the Commercial Courts Act,20153 states that “Provided further that with
respect to a territory over which the High Courts have ordinary original civil jurisdiction, the
State Government may, by notification, specify such pecuniary value which shall not be less
than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District
Courts, as it may consider necessary”. Therefore, the pecuniary jurisdiction of the High Court
is dependent upon the its territorial jurisdiction, as defined under Section 204 of the Code of
Civil Procedure,1872. According to this section, territorial jurisdiction is either where the
defendant actually and voluntarily resides, or carries on business, or personally works for gain
or, where the cause of action arises. According to the facts of the present case, it is uncertain
whether Bambino qualifies for the same.

THE VALUATION OF THE SUIT IS ARBITRARY.

The plaint discloses the value of the suit, which determines jurisdiction. Although the
plaintiff's valuation usually determines the forum, he cannot arbitrarily value a suit in order to

2
The Code of Civil Procedure,1908, § 6, Acts of Parliament,1908 (India).
3
The Commercial Courts Act,2015, § 3, Acts of Parliament,2015 (India).
4
The Code of Civil Procedure,1908, § 20, Acts of Parliament,1908 (India).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

file it in the Court of his choice.5However, the suit cannot be said to be properly valued if the
plaintiff purposefully overvalues or undervalues the claim through fraud or misrepresentation
in order to select his own form. 6 In the event of an incorrect valuation, the Court may require
the plaintiff to demonstrate that the valuation is correct. In the case of Husensab vs Basayya
and others7, it was held that a party cannot be allowed to file a particular suit before a Court
that would not have jurisdiction to try the matter if the valuation was not artificially inflating
or undervaluing the suit. He cannot do so because the Court's hierarchy dictates that a particular
Suit with a particular valuation must be filed and tried by a particular Court, giving rise to a
vested right to the defendant that the Suit of particular nature and particular valuation must be
tried by that particular Court only and not by any other Court.
If there in the jurisdiction, a Plaint may be returned to a court of competent jurisdiction at any
stage of the case, according to Order VII Rule 10 of the Code of Civil Procedure,1872.8
Therefore, it is humbly submitted before this court that the valuation of the suit has been
arbitrarily done to attract the jurisdiction of this court.
Therefore, it is the HC of Bambino does not have territorial jurisdiction.

II. PQN HAS NOT DEFAULTED ITS PERFORMANCE OF THE CONTRACT.

It is humbly submitted before the Hon’ble High Court of Bambino that PQN has not defaulted
its performance of the contract as first, time is not of the essence anymore(A); and lastly, PQN
should get compensation on the ground of justice, equity and good conscience(B).

TIME IS NOT OF THE ESSENCE ANYMORE

PQN has not defaulted in its performance of contract and the following case laws justify the
argument:
Ramakant Singh v Union of India9: The Airport Authority of India announced a tender, and the
petitioner's bid was accepted. 15 months’ time was given to complete the project but was
reduced to 6 months before the bidding. Construction could only be done during the dead of
night, from 10 p.m. to 6 a.m.

5
Nandita Bose v Ratanlal Nahta, AIR 1987 SC 1947.
6
Maya Devi v Tulsa Devi, AIR 1935 Oudh 296.
7
Husensab vs Basayya and others, MANU/KA/3468/2020.
8
The Code of Civil Procedure,1908, Order VII,Rule 10, Acts of Parliament,1908 (India).
9
Ramakant Singh v Union of India, (2004) 1 BLJR 173 (Pat): 2004 (1) CTLJ 635 Pat], (Avtar Singh, Contract
and Specific Relief, 12th Edition, EBC publication, page: 388).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

In December 2002 and entire January, the State of Bihar experienced a severe cold wave that
paralysed daily life and made it hard to complete the construction work at night. Other
challenges also existed. The situation was ‘out of control’.
In the current case PQN Pvt. Ltd. contracted with ABC Pvt. Ltd. for EPI. Due to Covid-19 the
all the countries went under lockdown including Republic of Serrana and they were not able
to get supplies from other countries. Since the situation was out of control PQN was not able
to complete the contract.
Notwithstanding all these challenges, the petitioner has finished the foundation and site clean-
up and is now in a position to finish the entire project in one month since materials are being
dropped at the site and 160 workers are available to start the construction process.
Regardless of the pandemic PQN was willing to supply in parts to ABC.
The respondents have released a new tender notice and intended to extend the deadline for
completion of the project by five months from the date of tender acceptance.
The petitioner asked for a one-month extension of time because due to the inability to follow
the prescribed timeline. The respondents contend that because the task at hand involves flying
planes, it is extremely delicate and fraught with risk. As a result, they contend that time is the
essence of the contract, and the petitioner has done little to demonstrate that he has acted in
this regard.
ABC contended that the delay in procuring the raw materials will delay the manufacturing
Covid-19 vaccines and their competitors (like FGN) may launch the vaccine before them and
they would suffer huge losses. As a result, they contended that time is the essence of the
contract.
The Patna High Court ruled that while there can be no denying that the project is of a quite
sensitive nature and indeed the party must adhere to the timeline, it is difficult for the court to
completely disregard the various factors that prevent the work from being completed due to
security concerns, unusually bad weather, etc.
However, in the interest of the public, taking into account the unique facts and circumstances of
the current case, keeping in mind the petitioner's commitment to finish the work in a timely
manner, as well as the fact that the fresh tenderer's completion time would be five times longer
in addition to the extra cost, the court did not find any reasoning in denying an extension of
time.
It is an important factor in this case to consider that due to the pandemic PQN was not able to
complete the contract by the fixed time. As well, PQN in Indica is the biggest supplier. If ABC
enters into another contract with another company (for example JNM, for plasma therapy to

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MEMORANDUM for RESPONDENT [ARGUMENTS]

manufacture vaccines), rescinding this, it will take a longer time to get supply or manufacture
the vaccine.
Though time may be the essence of the contract, the following case laws explains that it will
not be in the following circumstances:
In the case S. Brahmanand v K.R. Muthugopal10: On October 3, 1989, Plaintiffs and
Defendants entered into a contract for the sale of the suit property, which included two shops
and a go-down. On September 15, 1995, the plaintiffs filed a lawsuit for the specific
performance of the contract dated October 3, 1989 after serving notice to Defendants.
The supreme court ruled that despite the fact that the original agreement from October 3, 1989,
had a fixed date for performance, the defendant had requested a postponement in the letter that
followed. Their act of forbearance in not insisting for immediate performance forthwith.
Although the agreement originally had a defined date an extension was granted by the courts.
In the case Arson Enterprises Ltd v Union of India11: Although a contract said that time was of
the importance, it also allowed for a time extension. The supplier requested an extension. The
application for an extension was not approved as a result of the buyer's silence. The court was
unable to determine a subsequent date of performance because there was no proof of any
renewed date. Extension cannot be assumed in any way. In terms of categories, it must be
repaired or refixed. The contract in this instance was for the supply of imported sugar. The
buyer did not reject the contract or respond to the seller's request for an extension. The buyer
effectively lost the ability to insist on time being of the essence.
Initially ABC demanded the supply forthwith. But after the request of PQN without giving a
subsequent date, ABC remained silent on the extension. Since ABC did not reject the contract
or respond to the seller's request for an extension, ABC effectively lost the ability to insist on
time being of the essence. PQN should be granted an extension.
Specific performance is extension of time therefore, time is not the essence of the contract if
specific performance is demanded:
In the case Hind Construction Contractors v State of Maharashtra (Supreme Court)12: A
construction contract was entered between the respondent and the petitioner to complete the
construction in 12 months. The appellant was unable to fulfil the contract and the contract was

10
S.Brahmanand v K.R.Muthugopal, (2005) 12 SCC 764.
11
Arson Enterprises Ltd v Union of India, (1999) 9 SCC 449..
12
Hind Construction Contractors v State of Maharashtra, (1979) 2 SCC 70: AIR 1979 SC 720, (Avtar Singh,
Contract and Specific Relief, 12th Edition, EBC publication, page:389).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

rescinded. The appellant argued that time was not the essence of the contract and explained
that several factors contributed to the delay such as, lack of proper infrastructure, heavy rains
and lack of means to reach the site.
The supreme court disapproved the rescission, stating that there was a clause for extension of
contract on reasonable grounds and time is not the essence of the contract. Further stated that
reasonable period should have been allowed to the contractor telling him that the extended time
would be of the essence of the contract and that would neither be extended, nor excusable on
payment of fine.
In the case of Citadel Fine Pharmaceuticals v Ramaniyam Real Estate13: The court upheld the
principle that when the time is the essence of the contract, specific performance cannot be
entitled.
In the current scenario specific performance is demanded by ABC and therefore the intensions
of the parties is not to make time the essence of the contract. Specific performance is indirectly
extension of time and when there is scope for extension of time then time is not the essence of
the contract. Therefore considering the inability to supply during the lockdown and time not
being the essence of the contract, ABC should be given reasonable period to complete the
contract.
This principle can bee also seen in the case Man Kaur V Hartar Singh Sangha14: The supreme
court held extension of time makes time not the essence of the contract.
In the case Welspun Speciality Solution Ltd. v ONGC (Oil and Natural Gas Corporation)15:
The supreme court held that regardless of the fact that a clause present in the contract stating
that ‘time is the essence of the contract’ will not make it the essence. The circumstances,
scenario and the whole contract should read and indicate that time is the essence of the contract.
Though in the current scenario the contract has a clause that time is the essence, there is a
need to consider circumstances of global lockdown and inability to carry on normal trade. The
entire supply chain of PQN has been disturbed, all of its supply schedules have been hampered,
so time cannot be treated as the essence of the contract.

13
Citadel Fine Pharmaceuticals vs M/S Ramaniyam Real Estates Pvt. Ltd. and Ors, (2011) 9 SCC 147: AIR
2011 SC 335, ( (Avtar Singh, Contract and Specific Relief, 12 th Edition, EBC publication, page:384)
14
Man Kaur V Hartar Singh Sangha, (2010) 10 SCC 512, (Avtar Singh, Contract and Specific Relief, 12 th
Edition, EBC publication, page:388).
15
Welspun Specialty Solutions Ltd. vs. ONGC (Oil and Natural Gas Corporation), LL 2021 SC 646.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

This principle were also observed by the court in the cases Trailakyanath Maity v Provabati
Santra16 and Swarnam Ramchandram v. Aravacode Chakungal Jayapalan17.Therefore, it is
submitted that time is not of the essence anymore.

PQN SHOULD GET COMPENSATION ON THE GROUND OF JUSTICE, EQUITY AND GOOD
CONSCIENCE

In Ramanand vs Girish Soni18, the Delhi High Court granted extension in payment of rent,
even when there was no force majeure clause in the contract and the doctrine of frustration
did not apply to lease agreements.The principle of ‘equitable jurisdiction’ as observed in the
case of Ramanand is an interesting one and may be invoked by High Courts to adjudicate on
contractual disputes in the absence of a contract or contractual stipulation during the ongoing
pandemic. The concept is explained as follows:

“In modern practice the High Court exercises both a legal and an equitable
jurisdiction, and may grant all remedies, legal or equitable, to which the parties may appear
properly entitled.”19
Also in TKC v Allianz20, it was held that : “the situation of COVID and the COVID
Regulations has (at least in modern times and as a matter of degree) been unprecedented and
in particular with regard to its effect upon the Entertainment (and Hospitality) Sector but
also the Non-Essential Retail Sector who have been deprived of the turnover which is the life-
blood of their businesses (and especially where there is no on-line equivalent). It is
impossible not to feel sympathy for them.”
Also , in the case of Raichurmatham Prabhakar and Others vs. Rawatmal Dugar,21 [] it was
suggested that the cases for suspension of rent can be encouraged when it is a question of justice,
equity and good conscience.

Therefore, it is humbly submitted that PQN must be granted some relaxation in terms of extension of
time on principles of justice, equity and good conscience.

16
Trailakyanath Maity v Provabati Santra, AIR 1974 Cal 261.
17
Swarnam Ramchandram v. Aravacode Chakungal Jayapalan, 2004 8 SCC 689.
18
Ramanand vs Girish Soni, (RC. Rev. 447/2017).
19
Source: P. Ramanatha Aiyar’s, Advanced Law Lexicon, 5th Edition, 2017, at page no.1797.
20
TKC v Allianz,[2020] EWHC 2710 (Comm).
21
Raichurmatham Prabhakar and Others vs. Rawatmal Dugar AIR 2004 SC 3625.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

Therefore, it is submitted that PQN should get relief on the ground of justice, equity and good
conscience.

III. ABC IS NOT ENTITLED TO RECEIVE COMPENSATION

ABC IS WILLING TO ACCEPT THE PERFORMANCE OF THE CONTRACT EVEN AFTER THE DEADLINE.

It is humbly submitted that ABC is willing to accept the performance of the contract even after
the deadline as, time is not of the essence anymore (1).

1. TIME IS NOT OF THE ESSENCE ANYMORE

Initially, the parties agreed that time would be of the essence but by the conduct of the plaintiff
i.e., the facts that it did not sue immediately after the deadline got over and the respondent is
even now ready for specific performance imply that time is not of the essence anymore.22
Because merely including a provision saying that time is of the essence is not enough.23 Thus,
PQN need not return the 25 crore given in advance because it can perform the contract and
need not restore ABC to a position in which it was before entering into the contract. Also, the
only way ABC could have received compensation is by notifying PQN about the compensation
while extending the contract by conduct but it did not.24

Resorting to the authority of “Ramakant Singh v. Union of India25”, the only other alternative
is cancelling the contract and again searching for and contracting another supplier which would
take even more time considering the dearth of EPI in the source countries like the Republic of
Serrana. Thus, the extension of time should be granted.26

Therefore, it is submitted that time is not of the essence anymore.

PQN IS NOT LIABLE TO COMPENSATE UNDER SECTION 73.27

22
Moot Prosposition ¶9.
23
Welspun Speciality Solutions Ltd. v ONGC, (2022) 2 S.C.C 382 (India).
24
Moot Prosposition ¶9.
25
Ramakant Singh v Union of India, (2004) 1 BLJR 173 (Pat).
26
Moot Prosposition ¶4.
27
The Indian Contract Act, 1872, §73.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

It is humbly submitted that PQN did not breach the contract under section 7328 as first, the
damages are remote and indirect to fall under the ambit of section 7329 (1); and lastly, ABC did
not take mitigating measures (2).

1. DAMAGES ARE REMOTE AND INDIRECT TO FALL UNDER THE AMBIT OF SECTION 7330

Section 39 of the Indian Contract Act, 1872 defines the breach of contract as “when a party
has refused to perform, or disable himself from performing, his promise in its entirety, the
promisee may put an end to the contract unless he has signified, by words or conducted his
acquiescence in its continuance”.31 But, no breach was committed by PQN because the party
did not refuse to do the promise and have instead signified by words that it is willing to perform
its obligations.32

In “Rash Behary Shaha v Nirttya Gopal Nundy”, A agreed to buy 300 tonnes of sugar from B
under two contracts, with delivery taking place at various times. B claimed to repudiate both
contracts after A refused to accept delivery as required by the first contract. According to the
Calcutta High Court, B was not allowed to terminate the contract because A did not refuse to
fulfil his pledge in full33 as required by Section 39.34 The same point is emphasised in the
court's ruling in “Schiller v. Sooltan Chand”.35 A consignee whose shipment was delayed was
not entitled to compensation for losses brought on by the closure of his factory36. Similarly, in
this case as well PQN also did not refuse to fulfil his pledge.

The “Hadley v. Baxendale” ruling places a cap on the breaching party's obligation to prevent
the awarded damages from becoming insurmountably high. The justification for such a limit
on the contractual party's culpability is that unrestricted liability would discourage the average
person from getting into business agreements. Contracting will become a dangerous endeavour
with an unlimited liability because the parties won't be able to foreseen the value of its promise

28
Id.
29
Id.
30
The Indian Contract Act, 1872, §73.
31
The Indian Contract Act, 1872, §39.
32
Moot Prosposition ¶8.
33
Rash Behary Shaha v Nirttya Gopal Nundy, (1928-29) 33 CWN 477.
34
The Indian Contract Act, 1872, §39.
35
Schiller v Sooltan Chand, ILR (1878) 4 Cal 252.
36
Union of India v. Panipat Woollen Mills Co Ltd.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

monetarily.37 Similarly, in this case PQN should be imposed on an unlimited liability to pay an
enormous amount of 100 crore.38

“Where two parties have made a contract which one of them has broken, the damages which
the other party ought to receive in respect of such breach of contract should be such as may
fairly and reasonably be considered either arising naturally, i.e., according to the usual course
of things, from such breach of contract itself, or such as may reasonably be supposed to have
been in the contemplation of both parties, at the time they made the contract, as the probable
result of the breach of it.”39 So, even if PQN has breached the contract, the damages are not
fairly and reasonably be considered arising naturally because ABC contracted with the PQN
for the first time and ABC being an established company even before that must have access to
its previous suppliers for EPI and thus PQN might have assumed that it is not the only supplier
ABC has contracted with, considering the fact that they are not the only suppliers of raw
material in the market.40 Additionally, a reasonable person could not have anticipated a
complete lockdown in the country sourcing raw materials i.e., the Republic of Serrana, even
though Covid-19 was prevalent as the contract took place before the situation exacerbated.41
Even though it was pointed out that the loss happened owing to the delay in the supply of raw
materials there could have existed several reasons for the loss. For example, even if PQN had
supplied the raw materials, the vaccine manufactured by ABC could have faced backlash like
FGN did because of their hurried introduction of the vaccine without any proper trial and
probable side effects in patients42 and thus it also fails the “but for” test adopted in the case of
“Pannalal Jankidas v. Mohanlal and Another”jmn43.

In every instance, proving a causal link does not automatically hold the defendant accountable
because it is possible for a third party's action or the plaintiff's negligence to sever the causative
link. Thus, the plaintiff's damages claim in such circumstances shall be rejected.44 The causal

37
Eisenberg, Melvin A., 'The Principle of Hadley v. Baxendale', Foundational Principles of Contract Law 239-
254 (online edn, 2018).
38
Moot Prosposition ¶9.
39
Hadley v Baxendale, (1854) 9 Exch 341. (hereinafter Hadley v Baxendale).
40
Moot Prosposition ¶5.
41
Moot Prosposition ¶4.
42
Moot Prosposition ¶6.
43
Pannalal Jankidas v Mohanlal, AIR 1951 SC 144.
44
Andrew Burrows, Remedies for Torts, Breach of Contract and Equitable Wrongs 83-146 (4th ed. 2019).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

link in our case was broken by the third party action of the government of Serrana by imposing
lockdown.45

The case of “Koufos v. Czarnikow Ltd” has laid emphasis upon the "contemplation of the
parties".46 The fact that the clause of “force majeure” was not included in the contract proves
that none of the parties contemplated the situation of COVID-19 to deteriorate to the extent it
has right now.

Therefore, it is submitted that damages and remote and direct to fall under the ambit of section
7347.

2. ABC DID NOT TAKE MITIGATING MEASURES

In the case, “Muralidhar Chiranjilal v. Harishchandra Dwarkadas”, the second principle

expects the plaintiff to take all the mitigating measure and he is barred from claiming any
portion of the harm that results from his failure to take such efforts in order to lessen the loss
brought on by the breach.48 The same principle has been established in the case of “Pannalal
Jugatmal vs. State of Madhya Pradesh”.49 In this case, defendant did not take reasonable
actions to mitigate the loss by filing the suit immediately after the breach of deadline or
contracting with other suppliers like JNM since PQN is not the only supplier of the raw
materials and they contracted with the PQN for the first time which implies that they must have
access to their previous suppliers. Additionally, the plaintiff increased its loss by unreasonable
conduct by not taking reasonable mitigating steps to lessen the loss and thus the increase in
loss is not payable.50

Therefore, it is submitted ABC did not take mitigating measures.

PQN IS NOT RESPONSIBLE FOR THE LOSS OF REPUTATION.

45
Moot Prosposition ¶4.
46
The Koufos v C. Czarnikow Ltd, (1969) 1 AC 350.
47
The Indian Contract Act, 1872, §73.
48
Muralidhar Chatterjee v International Film Co Ltd, (1943) 56 LW 283.
49
Pannalal Jugatmal v State of Madhya Pradesh, AIR 1963 MP 242.
50
Derbishire v. Warran (1963) 1 WLR 1067 (CA).

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MEMORANDUM for RESPONDENT [ARGUMENTS]

It is humbly submitted that PQN is not responsible for the loss of reputation as first, the public
announcement regarding the vaccine was not communicated to PQN before entering into the
contract (1); and lastly, generally no damage is provided for loss of reputation (2).

1. THE PUBLIC ANNOUNCEMENT REGARDING THE VACCINE WAS NOT COMMUNICATED TO

PQN BEFORE ENTERING INTO THE CONTRACT

In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, Lord Asquith worked out a
number of propositions from a consideration of the leading authorities. The substance of the
propositions is as follows: Only such loss is recoverable as was at the time of the contract
reasonably foreseeable as liable to result from the breach. Foreseeability depends upon
knowledge. Accordingly what was at that time reasonably foreseeable depends upon the
knowledge then possessed by the parties or, at all events, by the party who later commits the
breach.51 In this case, the fact that ABC is going to announce publically about releasing of its
vaccine that too as one of the first companies to do so was not communicated to PQN. Thus, it
was neither in the knowledge of the PQN and nor could they reasonably foresee.52

The second rule of Hadley v. Baxendale says that to the knowledge which the defendant is
assumed to possess must be added his actual knowledge of the ‘special circumstances’ of the
case showing the possibility of more loss arising from the breach. Such a case attracts the
operation of the "second rule" so as to make the additional loss recoverable.53 In this case, the
actual knowledge of the ‘special circumstance’ of public announcement was not available with
the respondent.54

Therefore, it is submitted that the public announcement regarding the vaccine was not
communicated to PQN before entering into the contract.

2. GENERALLY NO DAMAGE IS PROVIDED FOR LOSS OF REPUTATION

No compensation is given to the plaintiff for pain and suffering, emotional distress, mental
anguish, irritation, loss of reputation, and social disgrace brought on by the contract's breach.

51
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, (1949) 2 KB 528 (CA).
52
Moot Prosposition ¶4.
53
Hadley v. Baxendale, supra note 65.
54
Moot Prosposition ¶4.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

55
The contract whose fulfilment is intended to bring calm and release from anguish is the only
exception.

Therefore, it is submitted that generally no damage is provided for loss of reputation.

COMPENSATION WOULD SERVE NO PURPOSE.

It is humbly submitted that compensation would serve no purpose as first, the contract is not
merely about earning profits (1); and lastly, “Salus Populi Suprema Lex Esto” is applicable (2).

1. THE CONTRACT IS NOT MERELY ABOUT EARNING PROFITS

Due to the fact that building and construction contracts are only entered into with the intention
of making a profit, the party who violated the agreement would be responsible for the
contractor's loss of anticipated profits. This was the judgement reached by the Supreme Court
in A.T. Brij Paul Singh v. State of Gujarat.56 But in this case, the contract was not entered just
for the sake of profit but also to benefit the public at large by providing with timely dose of
vaccine. This can implied from the facts like ABC received the “The Best Practice Award”
from a Global Best Practice Association of Medicine manufacturers, it wanted to be one of the
first vaccine suppliers and did not contracted with JNM because its therapy was in the nascent
stage and it would require some time before it can materialize properly. 57

Therefore, it is submitted that the contract is not merely about earning profits.

2. “SALUS POPULI SUPREMA LEX ESTO58” IS APPLICABLE

“Salus Populi Suprema Lex Esto59” means that the welfare (health) of the public should be the
supreme law. This is pertinent to the case at hand as the performance of the act will be for the
welfare of the public because it would benefit its health by the eventual introduction of the
vaccine whereas compensation would not help at all in a situation like COVID-19.60

55
Ghaziabad Development Authority Vs. Union Of India & Anr. AIR 2000 SC 2003.
56
A.T. Brij Paul Singh v State of Gujarat (1984) 4 SCG 55.
57
Moot Prosposition ¶1.
58
Merriam-Webster. (n.d.). Salus populi suprema lex esto. In Merriam-Webster.com dictionary. (March
18, 2023), from https://www.merriam-
webster.com/dictionary/salus%20populi%20suprema%20lex%20esto (hereinafter Salus populi suprema
lex esto).
59
Id.
60
Moot Prosposition ¶4.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

Therefore, it is submitted that the maxim of “Salus Populi Suprema Lex61” is applicable.

THE COURT SHOULD NOT ONLY LOOK INTO THE TECHNICALITIES

It is humbly submitted that the court should not only look into the technicalities as the judges
should act “ex debito justiciae62”(1).

1. THE JUDGES SHOULD ACT “EX DEBITO JUSTICIAE63”

In a recent case related to COVID-19, the court sided with the argument of the appellant when
he submitted that the court is required to deliver the verdict on substantial justice rather than
on technicalities. Thus, the neither the contractual provisions nor contractual laws should be
interpreted strictly in the difficult times of COVID-19.64

In another recent case, Union of India v. Harendra Gawaria, Whenever there is a conflict
between substantial justice and hyper-technicality then substantial justice should be preferred
to avoid defeat for the ends of justice: Raj HC observes in a case where candidature was
rejected on a hyper-technical approach.65

Hon’ble Supreme Court of India has emphasized liberal interpretation of procedural rules time
and time again. Hon’ble Justice Kishna Iyer of the Supreme Court of India noted in the
judgement Sushil Kumar Sen v. State of Bihar; “The processual law so dominates in certain
systems as to overpower substantive justice. The humanist rule that procedure should be the
handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power
in judges to act “ex debito justiciae66” where the tragic sequel otherwise would be wholly
inequitable.67

61
Salus populi suprema lex esto supra note 88.
62
“Ex debito justitiae.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-
webster.com/dictionary/ex%20debito%20justitiae. (20 Mar. 2023).
63
Id.
64
Nainesh Girishkumar Panchal v. Chirag Girishkumar Panchal ( 2021) Latest Caselaw 3908 Guj.
65
Union of India v. Harendra Gawaria, (2022) 1 RLW 643, 04-02-2022.
66
“Ex debito justitiae.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-
webster.com/dictionary/ex%20debito%20justitiae. (20 Mar. 2023).
67
Sushil Kumar Sen v State of Bihar 1975 AIR 1185.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

Therefore, it is submitted that judges should act “ex debito judiciae68”.

DAMAGES ARE SUPPOSED TO BE COMPENSATORY

It is humbly submitted that damages are supposed to be compensatory and not penal as,
penalization is not possible through damages (1).

1. PENALIZATION IS NOT POSSIBLE THROUGH DAMAGES

Damages are meant to compensate and not penalize the plaintiff and the same principle was
affirmed in Ruxley Electronics and Construction Ltd v. Forsyth.69 Thus, the plaintiff cannot
sue the respondent to pay damages as a penalty. Further, delivery in parts is otherwise useful.

Therefore, it is submitted that penalization is not possible through damages.

RESTITUTIONARY REMEDIES WILL NOT BE APPROPRIATE TO PROVIDE.

It is humbly submitted that restitutionary remedies will not be appropriate to provide as,
restitutionary remedies have a tendency to discourage economic activity (1).

1. RESTITUTIOANRY REMEDIES HAVE A TENDENCY TO DISCOURAGE ECONOMIC

ACTIVITY

In his persuasive dissent, Lord Hobhouse emphasised that Attorney General v. Blake was thus
decided in ill faith. It was the government's and agency's last ditch effort to make up for a
mistake they had failed to address through the usual channel of criminal prosecution. If the
defendant had violated any of the claimant's property rights, the claim would have been more
appropriate under tort law rather than contract law. Restitution awarded for a violation of
contract, however, looks more punitive than compensatory without the necessary harm or loss
sustained. Even when no loss has been inflicted and no clear regulations have been breached,
it punishes those who, by the use of what appear to be dishonest practises, have made a profit
in the course of business. This violates the fundamental precept of contract freedom and goes
against the very nature of contractual agreements. In other words, one is typically allowed to

68
Id.
69
Ruxley Electronics and Construction Ltd v Forsyth, 1996 AC 344: (1995) 3 WLR 118.

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MEMORANDUM for RESPONDENT [ARGUMENTS]

refuse or reduce performance in quest of a "better deal," so long as she later becomes obligated
to make up for any losses suffered by the other party.70 By forsaking the broad compensatory
nature of damages and adding restitution as a remedy, the courts risk creating greater ambiguity
and thereby deterring commercial activity.71 Because it breaches the fundamental presumptions
of contracts without necessarily attaining the goal of equitable income transfer, this risky
enlargement of the remedy should be viewed as a poor precedent.72
The existence of formal contract laws and their enforcement is supposed to contribute to
economic growth.73

Although the court may order an account of profits for breach of contract where the claimant
could not demonstrate that it had incurred any financial loss, this would only be done in
extraordinary situations such national security, exceptional profits, and violations of fiduciary
duties.74 The contract involved in the dispute fulfills neither of the exception.

Therefore, it is submitted that restitutionary damages will not be appropriate to provide.

70
7 MATHIAS SIEMS, DISGORGEMENT OF PROFITS FOR BREACH OF CONTRACT: A COMPARATIVE ANALYSIS, 33
(2003).
71
Surrey County Council v Bredero Homes Ltd, (1993) 1 WLR 1361 (CA).
72
Nina Anana, Restitutionary Damages for Beach of Contract: A Bad Precendent?, KSLR COMMERCIAL &
FINANCIAL LAW BLOG (Feb. 09, 2013) https://blogs.kcl.ac.uk/kslrcommerciallawblog/2013/02/09/restitutionary-
damages-for-breach-of-contract-a-false-precedent/.
73
Michael Trebilock & Jing Leng, The Role of Formal Contract Law and Enforcement in Economic
Development, 92 Va. L. Rev. 1517-1580 (2006).
74
Modi Entertainment Network v WSG Cricket Pte Ltd, (2002) 3 Bom CR 634.

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MEMORANDUM for PETITIONER [PRAYER]

PRAYER

Wherefore, in the light of the issues raised, arguments advanced, reasons given and authorities
cited, it is most humbly prayed before this Hon’ble Court, that it may be pleased to:

A. Declare that, the HC of Bambino does not have jurisdiction.

B. Declare that, the PQN did not default its performance of the contract.
C. Declare that ABC is not entitled to get compensation.

And for this act of kindness the respondents as are duty bound shall ever pray.

DATE: 20/03/2023 (S/d)

PLACE: High Court of Bambino (Counsels for the Respondents)

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