HINDUSTAN ZINC LTD. vs M/S. FRIENDS COAL CARBONISATION

The Supreme Court held that the appellant's obligation to pay price variation under Clause 5(i) of the purchase order was contingent upon the coal price ruling as of 8.11.1991, and any increase thereafter must be substantiated with documentary evidence. The Court found that the respondent's switch to a higher grade of coal (Washery Grade I) did not entitle them to a higher price escalation unless explicitly stated in the contract. The appeal was dismissed, affirming the Rajasthan High Court's decision that upheld the original contract terms.