The Scindia Steam Navigation Co. Ltd. vs The Union Of India (Uoi) on 31 August, 1961
The learned Judge has also expressly approved of the decision in Krishna Ranjan Basu's case and disapproved the contrary view-expressed in Union of India, v. Loke Nath. In the case of Chaman Lal Loona this Court was dealing with a contract entered into on behalf of the Governor-General in Council for the supply of fodder to the Manager, Military Farms, Lahore Cantonment, which was in Pakistan on August 15, 1947. The trial Court had found that the contract was not enforceable against the Union of India, but this conclusion was reversed by the High Court on the ground that the fodder constituted military stores under the exclusive control of the joint Defence Council on the appointed day, and that it was liable to be transferred to anywhere in India. This Court held that even if it be assumed that the High Court was right in holding that the fodder was liable to be transferred to anywhere in India, the contract must nevertheless be held to be one exclusively for the purposes of Pakistan and the Union of India could not be made liable thereunder. This conclusion was based on the fact that the purpose of a contract is not to be confused with the ultimate disposal of the goods supplied thereunder, since such disposal can in no way determine or modify the contract. It would thus be seen that in considering the nature of the contract in the present appeal either of the two artificial tests approved by this Court must be applied.