The Supreme Court of India in this case held that the contract is not frustrated merely because its performance has become difficult because of some inevitable or that a contract is not frustrated merely because the conditions in which it is made are changed.
The Apex Court added that Force majeure clauses are to be narrowly interpreted. That if there is an unambiguous and clear provision relating to the Force Majeure condition in the contract, then the contract would be dealt by Section 32 of the Indian Contract Act and in cases where the Force Majeure event occurs outside the contract, it would be dealt by Section 56 of Indian Contract Act.
In this case, there were alternative modes of performance available, though the circumstances in which it was made were changed that is increase in price of fuel. There was no force majeure situation and therefore Section 56 of Contract Act does not have any application.
