(a) "The parties to a contract must either perform or offer to perform their respective promises unless the performance is…

(a)

The statement reproduces the first paragraph of Section 37 of the Indian Contract Act, 1872: the parties must either perform, or offer to perform, their respective promises unless performance is dispensed with or excused under the Act or any other law. The second paragraph adds that promises bind the promisor's representatives after death, unless a contrary intention appears or the contract is personal.

1. Actual performance

• Who must perform: the promisor personally, if the parties intended personal performance (for example, painting a portrait); otherwise the promisor or a competent person they employ (Section 40). If the promisee accepts performance from a third person, they cannot afterwards enforce the promise against the promisor (Section 41).
• Joint promises: Sections 42–45.
• Time, place and manner: Sections 46–50. Time is of the essence only if the parties intended it (Section 55).
• Reciprocal promises: the order of performance is governed by Sections 51–54. If one party prevents the other from performing, the contract becomes voidable at the option of the party prevented (Section 53).

2. Offer to perform (tender) Under Section 38, where the promisor has made an offer of performance to the promisee and it is refused, the promisor is not responsible for non-performance and does not lose their rights under the contract. A valid tender must:

• be unconditional;
• be made at the proper time and place, and in such circumstances that the promisee has a reasonable opportunity to see that the promisor can and will do the whole of what they are bound to do;
• where goods are to be delivered, give the promisee a reasonable opportunity to see that the thing offered is the thing contracted for.

3. Performance dispensed with or excused

• By agreement: novation, rescission or alteration (Section 62); remission, extension of time, or accepting any satisfaction the promisee thinks fit (Section 63).
• By the promisee's conduct: refusal to perform, or disabling oneself from performing, lets the promisee put an end to the contract (Section 39); neglect to afford reasonable facilities excuses the promisor to that extent (Section 67).
• By law: supervening impossibility or illegality (Section 56), as interpreted in Satyabrata Ghose v. Mugneeram Bangur (1954) and Energy Watchdog v. CERC (2017). A contingent contract becomes void if its contingency becomes impossible (Section 32).
• Under other laws: for example, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, and statutory prohibitions.

Where a contract is discharged, a party who has received an advantage must restore it (Section 65).

Conclusion: the duty to perform is the rule. Excuses are exceptions that must be brought within a statutory provision; mere hardship or a rise in cost does not excuse performance.

(b)

Section 3(1) of the Competition Act, 2002 prohibits any agreement relating to production, supply, distribution, storage, acquisition or control of goods or services that causes, or is likely to cause, an appreciable adverse effect on competition (AAEC) in India. Section 3(2) declares such agreements void.

Horizontal agreements (Section 3(3))

• These are agreements between enterprises engaged in identical or similar trade: price fixing, limiting output, market or customer allocation, and bid rigging, including cartels.
• They are presumed to cause AAEC, so the burden shifts to the parties to rebut it.
• Efficiency-enhancing joint ventures are carved out by the proviso.
• The Competition (Amendment) Act, 2023 also brings in "hub-and-spoke" facilitators who are not engaged in identical trade.
• Excel Crop Care v. CCI (2017) upheld the finding of bid rigging in the supply of aluminium phosphide to the Food Corporation of India, while limiting the penalty to "relevant turnover". Rajasthan Cylinders & Containers v. Union of India (2018) cautioned that parallel pricing in an oligopolistic market is not enough to prove a cartel without "plus factors".

Vertical agreements (Section 3(4))

• These are agreements between enterprises at different stages or levels of the production chain: tie-in, exclusive supply, exclusive distribution, refusal to deal and resale price maintenance. Since the 2023 amendment, the provision also covers "any other agreement" of this kind.
• There is no presumption. The CCI applies a rule of reason, weighing the factors in Section 19(3): entry barriers, foreclosure and harm to consumers against efficiencies, consumer benefits and improvements in distribution.
• Examples: Shamsher Kataria v. Honda Siel Cars (CCI, 2014), which found restrictions on the supply of spare parts; and Hyundai Motor India (CCI, 2019), on resale price maintenance.

Why horizontal agreements are treated as more harmful

• They remove rivalry between competitors directly and rarely generate efficiencies.
• Vertical restraints link complementary firms and can prevent free-riding, protect brand investment and improve distribution.

Why both are nonetheless included

• Vertical agreements can still foreclose markets, raise rivals' costs or facilitate collusion, as with resale price maintenance and hub-and-spoke cartels.

Comparative note: the approach matches US antitrust law, where horizontal price fixing is illegal per se, while resale price maintenance is judged under the rule of reason after Leegin (2007). It also matches EU law, where Article 101(1) TFEU prohibits restrictive agreements and Article 101(3) and the vertical block exemption allow efficiency defences.

Conclusion: Section 3 covers both kinds of agreement, but calibrates scrutiny to the likely harm: a presumption against horizontal agreements and an effects-based analysis for vertical ones. Section 3(5) protects the reasonable exercise of IPR.

(c)

Sustainable development means development that meets the needs of the present without compromising the ability of future generations to meet their own (Brundtland Report, 1987). Vellore Citizens' Welfare Forum v. Union of India (1996) held that the precautionary principle and the polluter pays principle are essential features of sustainable development and part of the law of the land. The Court traced them to Articles 21, 47, 48A and 51A(g). Section 20 of the National Green Tribunal Act, 2010 now requires the Tribunal to apply sustainable development, the precautionary principle and polluter pays.

Precautionary principle (Rio Declaration, Principle 15)

• Environmental measures must anticipate, prevent and attack the causes of environmental degradation.
• Lack of scientific certainty must not be used to postpone measures against threats of serious or irreversible damage.
• The onus of proof lies on the developer or industrialist to show that the activity is environmentally benign: Vellore, and A.P. Pollution Control Board v. M.V. Nayudu (1999), which suggested scientific input through expert bodies.
• Limits: Narmada Bachao Andolan v. Union of India (2000) held that the principle applies where the impact is uncertain, not where it is known and can be mitigated.
• Later applications include the forest cases in T.N. Godavarman, and M.K. Ranjitsinh v. Union of India (2024), which balanced the protection of the Great Indian Bustard with renewable energy and recognised a right against the adverse effects of climate change.

Polluter pays principle (Rio Declaration, Principle 16)

• The polluter bears the cost of pollution: both compensation to victims and the cost of restoring the environment.
• Indian Council for Enviro-Legal Action v. Union of India (1996, the Bichhri case) made the chemical industries liable for remediation. It built on the absolute liability rule of M.C. Mehta v. Union of India (1987, Oleum gas leak).
• Deepak Nitrite v. State of Gujarat (2004) required compensation to be linked to the actual damage assessed.
• Research Foundation for Science v. Union of India (2005) and Sterlite Industries v. Union of India (2013) applied it to hazardous waste and industrial pollution.

Contribution to sustainable development

• Precaution prevents irreversible harm before it happens and shifts the burden of proof onto the proponent of the risk.
• Polluter pays internalises environmental costs, deters pollution, and funds restoration and compensation.
• Together they convert the inter-generational equity idea behind sustainable development into enforceable rules, applied through Article 21 litigation, the NGT, and conditions attached to environmental clearances.