High Court
Case Details
FA 57/1992 BEFORE THE HON’BLE MR. JUSTICE B.P. KATAKEY This appeal by the defendant is directed against the judgment and decree dated 05.06.1992 passed by the learned Asstt. District Judge at Tinsukia in Mon ey Suit No.122/1986, decreeing the suit of the plaintiff/respondent for Rs.9,00, 950/- with interest @18% per annum from the date of filing the suit till the dat e of realization, which was subsequently corrected and modified vide order dated 17.06.1992, decreeing the suit to the tune of Rs.9,48,950/-. 2. The respondent as plaintiff instituted Money Suit No.16/1982 in the Cour t of the learned Asstt. District Judge, Dibrugarh, which was later on transferre d to the file of the learned Asstt. District Judge, Tinsukia, on creation of Tin sukia district, where it was registered and renumbered as Money Suit No.122/1986 , against the present appellant as defendant for a money decree to the tune of R s.9,48,950/-, contending inter alia that a contract dated 28.04.1976 (Ext.-4) wa s executed between the plaintiff and the defendant appointing the plaintiff as h andling and storage contractor at Makum for handling and storing of all iron and steel materials despatched by the defendant from its own plants at Rourkella, V illai and Durgapur and also from its principal Bokaro Steel Limited, and Indian Iron Steel Company Ltd., initially for a period of 1(one) year, which contract, however, was subsequently extended thrice, i.e. from 27.04.1977 to 28.04.1978; 2 9.04.1978 to 31.08.1978 and lastly from 01.01.1979 to 30.06.1979, pursuant to wh ich the plaintiff performed its part of the contract and though submitted variou s bills claiming the amounts as narrated in paragraphs 7 to 15(b) of the plaint, which having not been paid despite the demand made, the plaintiff has to instit ute the suit for realization together with interest @18% per annum from the date when such amount is due and payable till the date of institution of the suit. 3.
Legal Reasoning
The defendant on receipt of the summons entered appearance and filed the written statement contesting the case contending inter alia that the suit is no t maintainable; that the same is barred by limitation; that the pleadings made i n the plaint is vague, some of it are fictitious, apart from contending that the amount claimed by the plaintiff being not covered by the terms of contract ente red into between the parties, the plaintiff is not entitled to the decree as pra yed for. It has also been contended that the accounts were not running, continuo us and current and it is not known whether what bills were submitted. The claim of the plaintiff for carriage of materials from Tinsukia to Makum has also been denied on the ground that the contract between the parties does not permit the p laintiff to transport any material from Tinsukia to Makum. Relating to the claim for stock verification cost, it has been pleaded by the defendant that in the a bsence of any contract between the parties the plaintiff is not entitled to such amount. It has further been contended that under the terms of the contract, the plaintiff would be entitled to short delivery only if any short delivery certif icate is issued by the Railway Administration and not otherwise. According to th e defendant since further amount is recoverable from the plaintiff for their non -performance of the contract, the security deposit of Rs.2,00,000/- is also not refundable. The claim of the plaintiff that they should be paid their commission at least at the rate of despatch of 1500 MT per month has also been disputed by the defendant by contending that there was no agreement between the parties in that respect and the earlier agreement executed on 28.04.1976 was extended up to 30.06.1979 on the same terms and conditions which stipulates, amongst others, t hat the company does not give any guarantee or assurance of handling and storage of any minimum quantity. The defendant has, therefore, prayed for dismissal of the suit with compensatory cost of Rs.3,000/-. 4. On the basis of the pleadings of the parties, the Trial Court framed the following issues for determination:- (i) (ii) Whether the Court has jurisdiction to try the suit? Whether the plaintiff has right to sue the defendant in the suit? Whether the plaintiff is entitled to a decree for Rs.9,48,950.00 with in (iii) terest, future interest, cost etc. from the defendant? (iv) (v) (vi) ties? (vii) Whether the suit is barred by limitation? Whether there is any cause of action for the suit? Whether there was an unconditional arbitration agreement between the par Whether any other relief/reliefs to which the plaintiff is entitled? 5. The plaintiff in order to prove its case examined 1(one) witness and pro ved a number of documents, which are marked as exhibits. The defendant has also examined 2(two) witnesses and proved 6(six) documents. 6. The Trial Court upon appreciation of the evidence on record initially de creed the suit of the plaintiff to the tune of Rs.9,00,950/- vide judgment and d ecree dated 05.06.1992, which was subsequently corrected and modified to Rs.9,48 ,950/- vide order dated 17.06.1992. Being aggrieved the defendant preferred this appeal. 7. The appeal preferred by the defendant was initially partly allowed by th is Court vide judgment and decree dated 24.11.1997, modifying the judgment and d ecree passed by the Trial Court and thereby decreeing the suit of the plaintiff only to the extent of Rs.2,00,000/-. The said judgment and decree, however, was set aside, on the basis of the application filed by the plaintiff/respondent und er Order 41 Rule 21 CPC and accordingly the appeal was directed to be reheard vi de order dated 03.06.2002 passed in Misc. Case Nos.134/1999 and 135/1999. 8.
Legal Reasoning
I have heard Mr. B.C. Das, learned Sr. counsel for the appellant and Mr. D. Choudhury, learned counsel appearing for the respondent. 9. Referring to the pleadings of the parties as well as the evidence adduce d, apart from the judgment and decree passed by the Trial Court, it has been sub mitted by Mr. Das, learned Sr. counsel for the appellant that though the respond ent as plaintiff claimed the money decree against 7(seven) heads, they could not substantiate their claim by adducing any evidence. Against claim No.1, it has b een submitted that though the plaintiff has claimed an amount of Rs.15,823.70 on account of handling and storage charge for the period from 06.05.1979 to 31.07. 1979, the plaintiff could not produce any evidence relating to the amount spent for handling and storage of the materials belonging to the defendant in the plai ntiff’s godown, after the period of the contract is over i.e. from 01.07.1979 to 31.07.1979. Referring to the contract dated 28.041976 (Ext.-4), it has also bee n submitted by the learned Sr. counsel that the plaintiff is not entitled to any extra handling and storage charge in respect of the materials belonging to the defendant for the period of contract i.e. up to 30.06.1979, as it has been speci fically stipulated in such contract that towards the handling and storage charge the plaintiff would be entitled to Rs.30/- per MT in lump sum and nothing more. In regards to the claim No.2 i.e. for Rs.6,281.80 for transportation of the mat erials belonging to the defendant from Tinsukia to Makum, it has also been submi tted that since the contract between the parties is for transportation and stora ge of goods from Makum station to the plaintiff’s godown, the plaintiff is not e ntitled to any transportation charge for carrying any materials from Tinsukia Ra ilway yard to the plaintiff’s godown at Makum, there being no contract between t he parties in that regard. The learned Sr. counsel, in respect of the purported cost incurred by the plaintiff in relation to the stock verification done by the defendant i.e. for Rs.49,211.05, has submitted that the defendant under the con tract, more particularly in view of the Clause 2.2 of the Contract (Ext.-4), is authorized to enter into the premises of the plaintiff for the purpose of verifi cation of stock and for the cost incurred for such verification no amount can be claimed by the plaintiff under the contract and hence the claim No.3 of the pla intiff is also not tenable. 10. As against claim No.4 for Rs.17,272.08, it has been submitted that since under the contract the plaintiff is entitled to shortage as certified by Railwa y Administration and not beyond that, it cannot claim the said amount on account of the shortage of pig iron and such claim being contrary to the contract betwe en the parties, ought not to have been allowed by the Trial Court. Mr. Das, in r egard to the claim No.5 for Rs.35,168.47 for shortage of steel materials, has al so submitted that in the absence of any short delivery certificate by the Railwa y, the plaintiff is not entitled to the said amount for shortage of any steel ma terials. Relating to the claim No.7 i.e. claim of the commission on the basis of minimum transportation of 1500 MT of steel materials per month, the learned Sr. counsel has submitted that in view of the clear stipulation in the contract bet ween the parties (Ext.-4) that the defendant would not ensure delivery or transp ortation of any minimum quantity of the steel materials, which condition the pla intiff having been accepted at the time of extension of the contract up to 30.06 .1979, the plaintiff cannot claim, by virtue of certain communications issued by the plaintiff to the defendant, that the plaintiff is entitled to the enhanced amount of commission, on the basis of the minimum 1500 MT of steel materials per month, when there was neither any contract between the parties in that regard n or any assurance given by the defendant for supply of minimum 1500 MT of steel m aterials per month. Mr. Das, learned Sr. counsel with regard to the claim for re fund of the security deposit of Rs.2,00,000/-, referring to the deposition of DW -1, however, has submitted that the plaintiff is entitled to Rs.61,442.19, thoug h the defendant in the written statement has taken the stand that the said amoun t cannot be refunded as further amount is to be recovered from the plaintiff, in respect of the same contract. The learned Sr. counsel, therefore, submits that the suit of the plaintiff at the most could be decreed for Rs.61,442.19. 11. Per contra, Mr. Choudhury, learned counsel appearing for the plaintiff/r espondent, supporting the judgment and decree passed by the Trial Court, has sub mitted that the plaintiff could, by adducing cogent and reliable evidence, prove that the amount as claimed on 7(seven) heads were due and payable by the defend ant to the plaintiff and as such the Trial Court has rightly passed the decree. It has been submitted that though the plaintiff has submitted the bills claiming the amount for handling and storage charge of Rs.15,823.70, the said amount has not been paid. According to the learned counsel the defendant never disputed th at the said amount is due and payable to the plaintiff. Referring to Exts.-18(1) to 18(3) bills, it has also been submitted that the bills for the amount due an d payable was raised, which were received by the defendant. With regard to the c laim for Rs.6,281.80, the learned counsel referring to Ext.-17 series and Exts.- 18(6) to 18(9) as well as Ext.-18(14) has submitted that the defendant has admit ted that though the steel materials ought to have been transported to Makum stat ion by the Railway, the same were transported to Tinsukia stantion and the plain tiff was allowed to transport the said materials from Tinsukia to the plaintiff’ s godown at Makum and as such the defendant cannot subsequently turn around and refused to pay the said amount of Rs.6,281.80 being transportation charge, on th e ground that there was no contract for transportation of steel materials by the plaintiff from Tinsukia Railway yard to the plaintiff’s store at Makum. 12. It has also been submitted by Mr. Choudhury that the claim for Rs.49,211 .05 (claim No.3) for the cost incurred by the plaintiff for verification of the stock by the defendant is also justified as the plaintiff could prove, by adduci ng evidence that the said amount has been spent by the plaintiff during the stoc k verification made by the defendant pursuant to the contract between the partie s, which authorizes the defendant to verify the stock of the steel materials sto red in the plaintiff’s godown. Mr. Choudhury, referring to the claim Nos.4 and 5 for Rs.17,272.08 and Rs.35,168.47, which amounts were deducted by the defendant from the bills raised by the plaintiff, on account of shortage of pig iron and steel materials, respectively, has submitted that since the contract between the parties (Ext.-4) allows shortage of 2% in case of pig iron and 0.25% in case of steel materials, the plaintiff is entitled to the said amount, the shortage of the pig iron and the steel materials being within the 2% and 0.25% of the materi als. It has also been submitted that it is not the case of the defendant that th e plaintiff has already been allowed the benefit of such shortage for more than 2% or 0.25% and in view of the positive evidence on record that deduction of the aforesaid amount being for the quantity of the pig iron and the steel materials within the permissible limit, the Trial Court has rightly passed the decree in respect of the claim Nos.4 and 5. 13. Referring to the claim for refund of the security deposit of Rs.2,00,000 /-, the learned counsel submits that though the defendant has set up the plea in the written statement that the said amount cannot be refunded to the plaintiff as the further amount is recoverable from it, the DW-1 in his evidence has at le ast admitted that the plaintiff is entitled to Rs.61,422.19 against the security deposit made. Mr. Choudhury, further submits that there being no dispute that R s.2,00,000/- was deposited, which amount is refundable by the defendant to the p laintiff at the expiry of the contract i.e. on 01.07.1979 and the defendant havi ng set up the plea that the said amount cannot be refunded as further amount is required to be recovered from the plaintiff as against the same contract, the bu rden lies on the defendant to prove as to why the deduction has been made from t he security deposit and that the amount deducted was due and payable by the plai ntiff to the defendant, which having not been able to prove by the defendant, th e Trial Court has also rightly passed the decree decreeing the suit of the plain tiff in respect of the security money with interest as claimed. Mr. Choudhury, referring to Ext.-12(6) further submits that the plaintif 14. f is also entitled to recover a sum of Rs.2,38,653.90 (claim No.7) being the fur ther amount towards the handling commission @Rs.30/- per MT, based on the assura nce given by the defendant for despatch of minimum 1500 MT of steel materials pe r month. 15. I have considered the submissions advanced by the learned counsel for th e parties and also perused the pleadings apart from the evidence adduced by the parties, both oral and documentary, and also the judgment and decree passed by t he Trial Court. The plaintiff’s claim is under 7(seven) heads, which are as follows:- Rs.15,823.70 being the handling and storage charge for the period from 1 16. (i) 6.05.1979 to 31.07.1979; (ii) Rs.6,281.80 being the transportation cost for transportation of the stee l materials from Tinsukia stockyard (Hijuburi) to Makum stockyard during the per iod from 30.06.1979 to 01.08.1979; Rs.49,211.05 being the cost incurred by the plaintiff to facilitate stoc (iii) k verification in the plaintiff’s godown by the defendant pursuant to the contra ct; (iv) Rs.17,272.08 being the amount deducted by the defendant from the plainti ff’s bill, on account of shortage of pig iron, though, according to the plaintif f, 2% shortage of pig iron is allowed under the contract; (v) Rs.35,168.47 being the amount deducted from the bill of the plaintiff fo r shortage of steel materials, though, according to the plaintiff shortage of 10 .276 MT of steel materials, being 0.25% of the materials handled and stored, is permissible under the contract; (vi) (vii) Rs.2,00,000/- towards the security deposit made by the plaintiff; and Rs.2,38,653.90 being the additional handling commission @Rs.30/- per MT, on the ground that an assurance was made by the defendant to the plaintiff for despatch minimum 1500 MT of steel materials per month. The plaintiff has also claimed interest @18% per annum on the af oresaid amounts and filed the suit for realization of Rs.9,48,950/- with pendent ilite and future interest. 17. The plaintiff having instituted the suit the burden initial lies on the plaintiff to prove that he is entitled to the amount claimed. In the instant cas e, though the plaintiff claimed an amount of Rs.15,823.70 on account of the hand ling and storage charge for the period from 15.05.1979 to 31.07.1979, it appears from the contract dated 28.04.1976 (Ext.-4), entered into between the parties, that the plaintiff is not entitled to any amount towards the handling and storag e charge, during the period of the contract, other than Rs.30/- per MT in lump s um. The plaintiff, therefore, cannot claim any amount towards the handling and s torage charge from 16.05.1979 to 30.06.1979, when the contract was extended on t he condition that the plaintiff would be entitled to only Rs.30/- per MT in lump sum towards the handling and storage charge and would not be entitled to any fu rther amount on that account. The plaintiff, however, may be entitled to the han dling and storage charge after the period of contract is over i.e. from 01.07.19 79 to 31.07.1979, provided the plaintiff could prove handling and storage of any steel materials belonging to the defendant in the plaintiff’s godown. The plain tiff in the instant case except submission of the bills could not produce any ma terial to demonstrate storage of any material belonging to the defendant in the plaintiff’s godown on or after 01.07.1979 and incurring of any expenses towards the handling and storage charge. Neither any voucher in support of such claim no r the books of accounts has been produced and proved. That being the position, t he plaintiff is not entitled to the decree against the claim No.1. 18. The plaintiff has also claimed an amount of Rs.6,281.80 towards the tran sportation cost for transporting the steel materials from Tinsukia stockyard (Hi juburi) to Makum stockyard of the plaintiff. The plaintiff in order to prove his case has proved the communication dated 17.02.1979 (Ext.-17) issued by the Tins ukia Branch Manager of the defendant company to the Divisional Superintendent of N.F. Railway, whereby and whereunder the N.F. Railway authority was requested t o transport the consignments to Makum Jn., which has wrongly been despatched to Tinsukia Railway yard, instead of Makum Jn. The plaintiff also could prove the b ills dated 30.06.1979 being Exts.-18(6) to 18(9) as well as Ext.-18(14), whereby the plaintiff raised the bill towards the transportation cost incurred by the p laintiff for transportation of the steel materials from Tinsukia Railway shed to the Makum stockyard of the plaintiff. The DW-1 in his evidence has also admitte d that the steel materials were wrongly despatched to Tinsukia Railway shed by t he Railway instead of Makum Jn. and hence the plaintiff transported such steel m aterials from Tinsukia stockyard (Hijuburi) to its godown at Makum. In view of s uch positive statement as well as the admission by the DW-1, the plaintiff is en titled to the aforesaid amount of Rs.6,281.80 towards the cost of the transporta tion from Tinsukia (Hijuburi) to the godown of the plaintiff at Makum. Though th e plaintiff has also claimed an amount of Rs.49,211.05 towards the cost incurred for stock verification conducted by the defendant pursuant to the contract betw een the parties, the plaintiff could not adduce any evidence except making a sel f serving statement that such an amount has been incurred as cost to facilitate the stock verification by the defendant. Neither any voucher nor the books of ac counts maintained by the plaintiff during the course of its business has been pr oduced to demonstrate incurring such cost to facilitate the defendant in making the stock verification. The plaintiff, therefore, is not entitled to the said am ount of Rs.49,211.05, which has wrongly been decreed by the Trial Court. The plaintiff also claims Rs.17,272.08 and Rs.35,168.47 being the amount 19. s deducted by the defendant from the bills of the plaintiff on account of shorta ge of pig iron and steel materials, respectively. According to the plaintiff the said amount being the cost of permissible limit of shortage, as per the contrac t (Ext.-4), could not have been deducted by the defendant from the plaintiff’s b ill. 20. Clause 2.1 of the contract (Ext.-4) provides that to cover the hazards o f shortage, the company would allow a maximum of 0.25% net shortage, in case of steel materials, and 2% in case of pig iron. It also provides that all shortage in transit, not supported by the Railways Short Certificate, shall also be inclu ded in the above maximum shortage allowable to the contractor. The further stipu lation in the contract is that any shortage in excess of that percentage as stip ulated shall be on the contractor’s account, value of which shall be recovered b y the company from the contractor. 21. The plaintiff, after the defendant deducted the aforesaid sum of Rs.17,2 72.08, requested the defendant vide communication dated 08.11.1977 (Ext.-16) to refund the said amount contending that the shortage of 26.248 MT of pig iron bei ng 2% of the total pig iron handled (wagon completed) and sold up to March, 1977 , is allowable and as such the cost of the said quantity of the pig iron amounti ng to Rs.17,272.08 should be refunded. Since there was no response, the plaintif f again wrote to the defendant on 16.11.1977 [Ext.-16(2)] requesting the refund of the amount, which has been wrongly deducted from the plaintiff’s bill. The de fendant has taken the stand that such amount has been deducted from the bill of the plaintiff as the aforesaid quantity of the pig iron was found to be short in the plaintiff’s godown. It is not the case of the defendant that the shortage o f 26.558 MT is after deduction of the allowable shortage of 2%. The plaintiff co uld prove that Rs.17,272.08 has been deducted towards the cost of the said short age of 26.558 MT of pig iron, which is within the 2% of allowable shortage, in t erms of the contract. The plaintiff is, therefore, entitled to the refund of the said amount of Rs.17,272.08. 22. Similarly, the defendant has deducted an amount of Rs.35,168.47 from the bills of the plaintiff towards the cost of shortage of 10.876 MT steel material s (cutting waste). According to the plaintiff the same cannot be deducted as the plaintiff, pursuant to the direction issued by the defendant, allowed the perso n identified by the defendant to cut the materials at the time of delivery to th e customers, which resulted in the wastage for cutting of the steel materials st ored in the plaintiff’s godown. The plaintiff in order to prove his case has exh ibited the communication dated 09.03.1977 issued by the Branch Manager of Tinsuk ia Branch of the defendant authorizing one Shyam Sundar Agarwal to render the ga s cutting services to the customers at Makum stockyard against the delivery orde rs issued. Vide Ext.-8(5) communication dated 01.09.1976 the Branch Manager of T insukia Branch of the defendant asked the plaintiff not to recover any cutting w aste from the customers against the delivery orders and to maintain a register r elating to the cutting waste. The plaintiff accordingly could prove maintenance of the register and furnishing the same to the Branch Manager of Tinsukia Branch of the defendant, by proving the communication dated 18.08.1977 issued by the p laintiff to the Branch Manager of the Tinsukia Branch of the defendant. It is no t in dispute that the steel materials belonging to the defendant, which were sto red in the plaintiff’s godown, were allowed to be cut by the defendant to facili tate delivery to the customers against the delivery orders issued by the defenda nt. As a consequence of such cutting, there is bound to be wastage. The defendan t nowhere has disputed that the wastage for such cutting was to the tune of 10.2 76 MT, cost of which was Rs.35,168.47, which was deducted from the bills of the plaintiff. Though there is no stipulation in the contract (Ext.-4) between the p arties for permitting the shortage towards the cutting waste, since the defendan t has allowed the plaintiff to cut the materials to facilitate delivery to the c ustomers pursuant to deliver orders issued, the cost of the aforesaid shortage t owards the cutting waste amounting to Rs.35,168.47 cannot be deducted by the def endant from the plaintiff’s bill and as such the plaintiff is also entitled to t he decree for the said amount. This leads to the claim of the plaintiff for Rs.2,00,000/-, which the pl 23. aintiff has deposited towards the security money. Admittedly the contract betwee n the parties ended on 30.06.1979. Under the contract the defendant immediately thereafter is required to refund the security deposit, after making the necessar y deduction permissible under the contract. The defendant in the written stateme nt has taken the stand that the entire security amount has been forfeited, as th e amount more than the security is due by the plaintiff to the defendant for the said contract. The DW-1, however, in his evidence has admitted that after makin g deduction the plaintiff is entitled to refund of Rs.61,422.19 towards the secu rity money. The defendant though has taken the stand that certain amount is reco verable from the defendant, out of the security money, nothing could be placed o n record and no evidence could be led to demonstrate that any amount is deductab le from the security money deposited by the plaintiff, except making a self serv ing statement that certain amount has been deducted therefrom, though the burden lies on the defendant to prove that any amount is recoverable from the plaintif f. In the absence of any such evidence the plaintiff is entitled to refund of th e said amount of Rs.2,00,000/-. The last claim of the plaintiff is for Rs.2,38,653.90 towards the handli 24. ng commission @Rs.30/- per MT on minimum transportation of 1500 MT of steel mate rials per month, which according to the plaintiff the defendant has assured to d espatch. The plaintiff in order to prove his case in that regard has proved a nu mber of communication including the communication dated 28.11.1978 issued by the plaintiff to the defendant intimating that it would not be economical for the p laintiff to operate unless an average of 1500 MT of steel materials is received in the plaintiff’s stockyard. The plaintiff, however, could not produce any docu ment demonstrating that the offer of the plaintiff has been accepted by the defe ndant and it was agreed upon or assured by the defendant for despatch of minimum of 1500 MT of steel materials per month. On the contrary the plaintiff has agre ed for extension of the earlier contract up to 30.06.1979 on the same terms and conditions which stipulates, amongst others, that the defendant does not assure supply of minimum quantity of steel materials to the contract. In view of such w ritten contract between the parties the plaintiff would not be entitled to the h andling commission of Rs.2,38,653.90 as claimed against claim No.7. In view of the above, the plaintiff would be entitled to the sum of Rs.6 25. ,281.80, Rs.17,272.08, Rs.35,168.47 and Rs.2,00,000/-, totaling Rs.2,58,722.35, which amount would carry interest @9% per annum from the date when such amount i s due till the date of filing the suit and thereafter @6% per annum from the dat e of filing the suit till the date of decree and further interest at the same ra te from the date of the decree till the date of realization, in the absence of a ny positive evidence relating to the lending rate of interest charged by the Nat ional Bank in relation to commercial transaction. 26. It has been submitted by the learned Sr. counsel for the appellant that pursuant to the interim order passed by this Court, an amount of Rs.4,74,475/- h as been deposited vide cheque dated 04.09.1992 drawn on the SBI, Guwahati Branch , which amount has been withdrawn by the respondent/plaintiff. The learned Execu ting Court while executing the decree shall bear in mind the said aspect of the matter. 27. No costs. The appeal is accordingly partly allowed to the extent indicated above.