Yamuna Developers Pvt. Ltd. (YDPL) contracted with Amritsar Tiles Ltd. (JTL) for supplying various kinds of tiles to its Green Valley Project with actual cost of Rs. 50,00,000. JTL fulfilled its own part but YDPL had paid only Rs. 20,00,000. After one year, JTL agreed to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000. Later on, JTL filed a suit......Decide the case...

Question: Yamuna Developers Pvt. Ltd. (YDPL) contracted with Amritsar Tiles Ltd. (JTL) for supplying various kinds of tiles to its Green Valley Project with actual cost of Rs. 50,00,000. JTL fulfilled its own part but YDPL had paid only Rs. 20,00,000.

After one year, JTL agreed to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000. Later on, JTL filed a suit for the enforcement of contractual obligation. Decide the case on the basis of relevant legal provisions and case law.

Find the answer to the mains question of the Law of Contract only on Legal Bites. [Yamuna Developers Pvt. Ltd. (YDPL) contracted with Amritsar Tiles Ltd. (JTL) for supplying various kinds of tiles to its Green Valley Project with actual cost of Rs. 50,00,000. JTL fulfilled its own part but YDPL had paid only Rs. 20,00,000. After one year, JTL agreed to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000. Later on, JTL filed a suit for the enforcement of contractual obligation. Decide the case on the basis of relevant legal provisions and case law.]

Answer

The given scenario involves a contract between Yamuna Developers Pvt. Ltd. (YDPL) and Amritsar Tiles Ltd. (JTL) for the supply of tiles to YDPL's Green Valley Project, with an actual cost of Rs. 50,00,000. JTL fulfilled its part of the contract, but YDPL only paid Rs. 20,00,000. After one year, JTL agreed to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000. However, JTL later filed a suit for the enforcement of the contractual obligation.

To decide the case, we need to examine the legal provisions of the Indian Contract Act, 1872. Under Section 37 of the Act, when a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has waived his right to do so.

In the given scenario, YDPL has not fulfilled its contractual obligation of paying Rs. 30,00,000 to JTL. This constitutes a breach of contract. However, JTL agreed to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000 after one year. This agreement to accept a lesser amount than what was due can be seen as a discharge of the original contract.

Under Section 63 of the Indian Contract Act, 1872, a party to a contract may discharge or waive the performance of the contract, either wholly or in part, with the consent of the other party, and such consent must be free, voluntary, and with consideration.

In the given scenario, JTL's agreement to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000 can be seen as a discharge of the contractual obligation. However, it is important to note that this agreement was made after one year of the breach of contract by YDPL. It is not clear from the given scenario whether there was any consideration involved in this agreement.

In the case of Kailash Nath Associates v. DDA, [Arising out of SLP (Civil) No.32039 of 2012], the Supreme Court of India held that if a party accepts a lesser amount than what is due under a contract, the acceptance must be supported by consideration, or else it will not be binding. Therefore, it is important to examine whether there was any consideration involved in JTL's agreement to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000.

If there was no consideration involved, JTL's agreement to accept a lesser amount may not be binding. In such a case, JTL may be entitled to enforce the original contract for the full amount of Rs. 30,00,000.

In conclusion, the outcome of the case would depend on whether there was any consideration involved in JTL's agreement to accept Rs. 20,00,000 in satisfaction of its claim of Rs. 30,00,000. If there was no consideration, JTL may be entitled to enforce the original contract for the full amount of Rs. 30,00,000. If there was consideration involved, JTL's agreement to accept Rs. 20,00,000 may be binding, and it may not be entitled to enforce the original contract for the full amount.