M/s Pooja Flour Mills Private Limited v. Food Corporation Of India

Corporation of India Vs. Pooja Flour Mills Pvt. Ltd., the present first appeal under Section 96 of the CPC has been filed.

Vide the impugned judgment and decree the learned Court below has partly allowed the suit for recovery filed by the plaintiffs and ordered for an amount of Rs.191713.32 recoverable from the appellant defendants and trial Court further granted 18% of interest on the said amount payable with effect from 25.11.2000 onwards. 2

Brief facts relevant for adjudication of the present first appeal is that under the Open Sale Scheme introduced by the plaintiff the appellant defendant being interested was given an offer letter for lifting of 2270 Quintals of wheat from the godown of the plaintiff at Mandir Hasaud. Pursuant to this the defendants deposited a bank draft for an amount of Rs.16,08,595/- and he had been given periodical chits in the form of exit pass.

It is said that in the course of lifting of wheat the defendants lifted more than the permitted quantity of wheat inasmuch as he was permitted to lift only 2270 quintals of wheat at the rate of Rs. 690 per quintal. However, the plaintiff lifted 2873.96 quintals i.e. he had lifted an excess of 603.96 quintals of wheat over and above the permitted quantity of 2270 quintals. It is the demand for the price of this excess quantity of wheat when the defendant refused to pay that, dispute arose and the suit was filed.

When the appellant failed to fulfill the demand for the payment of excess quantity of wheat lifted the respondent plaintiff Food Corporation of India filed a civil suit registered as Civil Suit No. 4B/2005 seeking for an order of recovery against the appellant defendants. The appellant entered appearance before the Court below submitted that the detailed W.S. denied the claim raised by the plaintiff and also as regards the appellant defendant having received excess quantity of wheat in the course of lifting of wheat from the go-downs of the plaintiff Corporation under the transit pass that was issued against the different release orders by the plaintiff FCI. The plaintiff in support of their claim had examined three witnesses PW-1, Dinesh Kumar Gautam, Regional 3 Manager, PW-2, R.L. Kashyap, Go-down incharge, PW-3, P.S. Tripathi, AG-II working under the FCI. The plaintiff in support of his contentions have also found P-32, of which exhibit P-1, P-2 are the release orders in respect of the lifting of 2270 quintals of wheat and exhibit P-5 to P-27 were the different transit pass that was issued for transportation of wheat out of the godowns to the destination of the defendants.

The Appellant defendant in support of their contentions have examined only the proprietor of the defendant firm namely, Nand Kishore Agrawal. Based upon the evidence which had come on record during the course of trial, the Court did not accept the transit pass exhibit P-9, P-10 & P-11. The aforementioned three documents were accepted by the Court on account of the fact that three documents did not contain signature or seal of any authorized person from the plaintiff Corporation. Rest of the documents were accepted by the trial Court and finally the trial Court allowed the suit of the plaintiffs corporation to the extent of holding the plaintiffs liable to pay an amount of Rs.1,91,713.32 Paise, vide judgment and decree dated 9.5.2006 along with interest at the rate of 18% per annum. It is this impugned judgment and decree which is under challenge in the present first appeal.

The primary ground raised by the appellant while assailing the impugned judgment is that the plaintiffs had not been able to establish their case sufficiently to have the judgment and decree in their favour. It was the contention of the appellant that PW-1 examined on behalf of corporation was not a relevant witness at all as he was not posted at the concerned place during the said period of transaction between the plaintiffs and defendants. As such the evidence of PW-1 was liable to 4 be discarded and the impugned judgment to that extent was liable to be set aside/quashed. Further contention of the learned senior counsel appearing on behalf of the appellant defendant was that Court below failed to appreciate the fact that as it has discarded exhibit P-9, P-10 and P-11, so also exhibit P-5 was liable to be discarded as P-5 also did not have any sign, signature or seal. It was further contention of the appellants that learned Court below has also not given any opportunity of hearing while awarding interest on the amount payable by the defendants/plaintiffs. According to the appellant though there is an order of payment of interest at the rate of 18% per annum, no justifiable reasons, nor is their any discussions available in the impugned judgment justifying awarding of 18% of interest. It was contended by the learned counsel for the appellant that rate of interest awarded also is much higher than prevailing rate of interest in the nationalized banks and to that extent also the impugned judgment warrants interference on the rate of interest.

Opposing the appeal the learned counsel appearing for the FCI, Mr. B.P. Gupta contended that plain reading of impugned judgment would clearly reflect that all the contentions that appellant had raised on merits already stands thread bear thrashed out by way of evidence and discussed by the Court in the impugned judgment. It was further contended that reading of impugned judgment would also reveal that most of the findings given by the trial Court was in fact on admitted facts which has been either admitted by the defendants or have not been rebutted as regards the contentions of the plaintiffs are concerned. That finding of facts based upon all evidence passed by the trial Court does 5 not warrant interference. The appeal deserves to be rejected.

It was further contention of the learned counsel appearing for the appellant that as regards the grant of interest there was a categorical claim in the relevant clause for awarding interest at the rate of 18% by the plaintiffs. The appellant defendants in their W.S. have neither disputed the claim of 18% interest, nor have they denied the said claim on any ground. In the absence of dispute or denial by the defendants before the trial Court in the W.S. claim of the plaintiffs to the aforesaid extent has to be accepted to have been admitted by the defendants. In addition, it was the contention of the learned counsel for the appellant that provision of Section 34 of the CPC automatically get attracted in the facts of the present case and finding of trial Court therefore cannot be found fault with. So far as the evidence of PW-1, the Regional Manager is concerned, it was the contention of the learned counsel for the plaintiff corporation that the entire deposition of PW-1 would reveal that it was entirely based upon the documentary proof produced before the Court and for proving the documents available with the plaintiff establishment particularly, those which are matter of record, it may not be required to be proved by the author of those documents. Further that only because PW-1 was not posted at the relevant station during the relevant time of transaction would not make evidence of PW-1 inadmissible.

Likewise, it was also the contention of the counsel for the FCI that the defendants themselves have in their W.S. as also in their evidence have admitted the fact that defendants had been issued with two release orders for lifting of 2270 quintals of wheat from the go-downs of 6 FCI. It has also been admitted by the appellant that they have in fact lifted the wheat from the godowns of the FCI periodically. Issuance of transit pass for the transportation of wheat outside the FCI go-downs stands established and proved. Therefore, there is no reason why deposition of the plaintiffs is to be disbelieved or cannot be accepted. It was further contention of the learned counsel for the plaintiffs that on an application moved before the trial Court seeking a direction against defendants for production of documents in respect of production of release orders further in spite of order of the Court below in this regard directing the defendants to produce these documents, the defendants failed to produce the same and meanwhile the trial Court had also struck down their defense. Against striking down the defense, the defendants had come to the High Court vide Writ Petition No.3108/2005. The High Court while allowing the aforesaid writ petition on 17.08.2005 permitted the petitioner to approach the High Court again in support of non production of the documents before the trial Court. Even, in spite of the order of the High Court, the appellant defendant failed to produce these release orders which were in his possession before the Court so as to rebut and disprove the claim of the Food Corporation of India. No such document is also brought on record of this first appeal by the appellants in support of their defence.

Counsel for the appellant submitted that the finding of the trial Court being strictly and after due appreciation of the entire pleadings and evidence, the same does not warrant any interference and prayed for rejection of the first appeal.

Having heard the contentions put forth on either side and on 7 perusal of records, admitted factual matrix from the case is that the appellant defendant had participated in an open sale scheme introduced by the plaintiff respondent for purchase of wheat from the go-down of the Food Corporation of India i.e. the Plaintiff. The purchase and lifting of wheat was to be made from the go-down at Mandir Hasaud, District Raipur. The permitted quantity of wheat which the appellant defendant were required to lift was 2270 quintals. The rate of wheat fixed under the scheme was Rs.690 per quintals. In the course of lifting of wheat, it is alleged that appellant defendant lifted 2873.96 quintals i.e. an excess of 603.96 quintals of wheat over and above the permitted 2270 quintals of wheat. There is no dispute so far as the payment of permitted 2270 quintals of wheat is concerned. The dispute and claim is for the 603.96 quintals of wheat in excess lifted by the appellant defendant. That it is the price of this 603.96 quintals of wheat which has been claimed by the plaintiffs before the trial Court by initiating a suit for recovery. The trial Court in the course of adjudicating the dispute between the parties reached to the conclusion that the plaintiffs have been able to establish their case only so far as

229.72.800 quintals of wheat and the rate of this wheat amounting to Rs.1,58,512.32 and on which 2% sale tax with other statutory dues like sale tax, mandi tax etc. was decreed in favour of the plaintiffs against the appellant. In all the whole decreetal amount was of Rs.1,91,713.32/- with interest at the rate of 18%.

What is necessarily to be seen at this juncture is the fact that as regards the claim of interest is concerned, there was a specific prayer in the plaint for grant of interest at the rate of 18%. This was never 8 claimed by the appellant defendant to be excessive or bad in any manner. There was also no denial or dispute on this aspect by the defendants in their return. Since there was no dispute or denial and there being a specific prayer for grant of interest on the amount to be recovered, it has to be accepted that there was a deemed admission on the part of the appellant defendant so far as claim of the interest by the plaintiffs are concerned. The appellant defendant in their evidence have admitted 14 exit pass/chits which were issued pursuant to the release orders of the wheat. Moreover, there was nothing in rebuttal produced by the appellant defendant like the counter receipts that the defendants had retained to dispute or rebut the exit pass/release order produced by the plaintiffs from time to time permitting the appellant defendants to lift the wheat. No such material or document was produced by the appellant defendants even after allowing of the earlier writ petition by the appellants themselves by the High Court i.e. WP 3108 of 2005 which was allowed on 17.08.2005.

What is necessary to be appreciated at this juncture is that even though there were many exit pass which were exhibited by the plaintiffs before the trial Court, it was only those exit pass which were bearing signatures of the competent authority which were accepted by the trial Court. It is also revealed from the pleadings and judgment of the trial Court that in fact trial Court has decreed the suit to the extent of transit pass/exit pass which were identified and accepted by the defendant no.1 proprietor of the appellant firm. Thus, it becomes finding of fact based on evidence and that too the evidence of the defendant himself.

As regards, the evidence of PW-1, an officer of plaintiff 9 corporation since the entire evidence of the corporation was record based, the officer PW-1 has in the course of his evidence proved the records which again is neither disputed nor rebutted by the appellant defendant. There is no reason to disbelieve the contents of the said contention of the said PW-1.

Given the aforesaid facts and circumstances of the case this Court does not find any strong case made out by the appellant to interfere with the judgment of the trial Court at this juncture. As regards, the question of rate of interest is concerned also considering the period of transaction and then prevailing rate of interest on commercial transactions, it cannot be said that interest of 18% ordered by the trial Court also to be bad in law or excessive in any manner. The appeal thus being devoid of merit deserves to be and is accordingly rejected affirming the judgment and decree passed by the trial Court. Registry is directed to draw a decree accordingly. Rohit Sd/- P. Sam Koshy Judge