Manoj Kumar v. Union Bank of India

Judgment

1. Appellant is the plaintiff who is before this Court in appeal against the judgment of reversal passed by Additional District Judge, Fast Track Court No. II, Bokaro in Money Appeal No. 11 of 2003 / 3 of 2004.

Plaintiff filed the suit for a money decree of Rs 24,300 with interest at the rate of 18% from the date of agreement and for entitlement of contract till March, 2003.

3. The case of the plaintiff is that he was awarded the contract for providing power backup to the defendant Bank by generator by agreement dated 30.3.2000 at the rate of Rs. 2200 for period from 09.12.1999 to

31.03.2000. He received from the bank agreed amount without any default for this period. He however suffered a loss of Rs 3200/- for these four months, and has claimed damage of Rs 2200 for this period. It is further case that defendant agreed to enhance the rent wef. from April 2000 from Rs. 2200/- to 3000 for the period of 3 years i.e. till March, 2003. The plaintiff undertook to maintain uninterrupted electric supply during the office hours and rendered the services properly as per the term of the agreement. It was also agreed that in the event of enhancement of oil prices by the Central Government, the agreement would be altered at the will of the Bank. Considering the three years period of contract, the plaintiff did not raise any grievance for the loss he had to bear for the period of December 1999 to March 2000. The plaintiff had also purchased a new generator in December 1999 in view of the three years period of contract. The plaintiff 2 sent a notice to the Bank for rate revision considering the diesel price hike by 20% from Rs.14.46 to Rs.17.97 and also for the extra charges supply of electricity during late hours. No reply was sent with respect to it and by a unilateral order the generator service was stopped from 1.2.2001. Due to the breach of contract on the part of the Bank, the generator which he had purchased for Rs 24000/- had been rendered useless. As per clause six of the agreement, the extra charges for supplying electricity beyond 7.00 PM refused to be paid. As per the trade practice of every Bank extra charges of Rs.100 was paid for supply of electricity beyond 5.30 pm, but on assurance of payment for extra-charges the electric supply was provided beyond the agreed hour. From December 1999 to October 2000 for11 months electric supply was made at total cost of Rs.7700. The plaintiff had thus to suffer a total loss of Rs.24,300.

4. The specific defence of the defendant Bank apart from the legal plea, is that as per clause 4 of the agreement, even in the event of increase of oil price by the Central Govt. rate could be increased only at the will of the defendant bank. As soon as the plaintiff informed the bank that the rate of fuels had been increased as per the central budget, the plaintiff had been asked to stop generator service further and as such plaintiff stopped supply of the generator line to the defendant bank vide Letter dated 13.01.2001. The agreed amount of rent had been duly paid to the plaintiff satisfactorily and there was no any complaint of loss of payment during the generator service. The claim to loss of Rs.3200 at the rate of Rs.800 per month for a period of 4 months has been denied as the payment was made as per the agreement. It is further case that the plaintiff has never been advised to purchase a new generator. The plaintiff was in the business of generator energy supply and had also his own business of photo-stat copier for which he had replaced the old with new generator as per the requirements. The averment of the plaintiff regarding the supply of generator energy beyond 5 P.M. has been denied.

5. The suit was decreed for Rs.19,700 with interest at the rate of 6%, which included Rs.12,000 half the price of the new generator and Rs.7700 for the extra charges for electric supply beyond office hours. The learned trial court held that the defendant had committed breach of the terms of agreement by non-payment of the extra charges for 3 electric supply beyond the office hour up to 7 PM. On the demand of extra charges and also for revision of the rate in view of the fuel price hike the contract was cancelled by the defendant. With regard to the claim of extra energy charges supplied for 11 months from 5 PM to 7 PM that is Rs.7700 at the rate of Rs.700 per month it was noted that PW 1, PW 2 and PW 3 had deposed regarding the electric supply even beyond the office hour. From exhibit 4/c and 4/g it was evident that from November, 2000 the bank work was affected due to the electric supply being not provided up to 7 PM. As per clause 6 of the agreement, electric supply up to 7 hour came under the category of late hour for which the contractor was liable to receive extra payment. The claim of loss of Rs.800 per month for the period of December 1999 to March 2000 was not supported by any evidence and has not been accepted. The claim of enhancement of monthly rent for the supply of electrical energy in view of the price hike was also not allowed in terms of the agreement as per the clause it would have been increased only at the will of the bank. The trial court has also noted that the new generator was purchased after the plaintiff entered into the three years agreement for supply of electricity to the bank.

6. The first Court of Appeal reversed the judgment of the trial court mainly on the ground that as per clause 6 of the agreement, the contractor was to provide power backup by generator during office hour and in the late hours at least up to 7 PM at any extra charges. Exhibit A series where the 10 bills submitted before the bank in respect to generator supply charges for the month of April, 2000 to January, 2001 at the rate of Rs.3000 which has been duly paid. No supplementary bill was raised for extra hours of electrical supply. The issue of extra charges were never raised although letters were sent from time to time that is on 05.10.2000, Ext 3, 13.11.2000 Ext. 3/A by the contractor to the Bank. The issue of extra charges was raised for the first time in the letter dated 15.1. 2001(Ext. B) which was in reply to the letter is sent by the bank regarding electrical supply not being provided after 6 PM. The learned appellate court noted that the trial court failed to consider Exhibit A series while awarding the damage for loss upto Rs.7700 as extra charges. 4 With regard to the claim for ₹ 12,00 decreed for purchase of the new generator it has been held that as per Ext-B para 8 it has been mentioned that the new generator had been purchased for ₹ 22000 and due to breach of contract he suffered a loss of ₹ 11,000. PW1 the father of the plaintiff has accepted in his examination in chief that he was running a business of photocopy machine since 1993 for which he had purchased generator of three KVA. P W-2 had accepted that there was a demand of only about 1K.V.A. Therefore there was no justification in purchasing the generator of five kVA for the use of bank.

7. This appeal has been admitted to be heard on the following substantial questions of law: (i) Whether the learned appellate court has gravely erred in law by opining that the plaintiff has not succeeded to prove that he has supplied the generator power to the bank on extra charge nor he has claimed it at relevant period nor it has been mentioned in Exhibit A series because the learned trial court has come to definite finding that before November, 2000, bank was willing to generator facility till 7 PM in the evening and therefore the learned trial court held that plaintiff is entitled to get ₹ 7700 as extra rent and the said finding of the learner trial court has not been properly disturbed by the lack net appellate court? (ii) Whether the learned appellate court has committed an error of law by reversing the finding of learned trial court regarding plaintiff entitlement to get extra charge from the appellant only on the basis of the Exhibit A Series which are the regular bills submitted by the plaintiff by opining that the extra charge has not been mentioned in Ext-A series?

8. It is argued on behalf of the appellant that there was an express Clause 6 for supply of electricity up to 7 PM at any extra charge. The contractor vide his letter dated 5.10.2000,13.11.2000 and 20.11.2000 (Ext 3, 3/A,3/B) informed that he will not be able to provide electric backup beyond 6 pm in view of the substantial loss. Letter of the Bank manager Ext-4 goes to show that till 17.11.2000 there was no complain of non-supply after 6 PM. It was contended in this letter that the contractor was supposed to provide the power backup up to 7 PM for which no extra payment would be made. This letter was contrary to the stipulation in clause 6 of the agreement. The contract for supply of electric energy was cancelled with effect from 1 February 2001 5 by letter dated 13.01.2001 Exhibit 4. It is argued that the learned appellate court has not considered Clause 6 of the agreement and passed the judgement only on the basis of Exhibit-A series which are the bills raised in terms of clause 2 and 3 of the agreement. Under section 51 of the Indian contract act, 1872 the promisor, is not bound to perform, unless promisee was ready and willing to perform his reciprocal promise. Reliance has been placed on (2013)5 SCC 470 wherein it has been held that the contract is to be interpreted giving actual meaning to the words contained in the contract and it is not permissible for the court to make a new contract, however reasonable, if the parties have not made it themselves.

9. To sum up, the plaintiff/appellant is the contractor and the defendant is the bank. The plaintiff undertook to provide power backup. The relevant provisions of the agreement are as follows: Clause 2 – Monthly rent of Rs. 2200 from 9.12.99 to 31.3.2000 Clause 3 – At the rate of Rs. 3000 per month from April, 2000 for three years to March, 2003. Clause 4 – “That to avoid all controversy, this agreement is reduced in writing between the parties concerned and this agreement shall remain enforceable upto the stipulated period i.e. the month of April, 2003 with the condition that as per year’s budget of the Central Government, in the cost of oil, the provision of agreement may be alterable at the will of Bank”. Clause 6 – The contractor shall operate the generator from opening of the branch office to close of the branch when the electric power goes off. The contractor has to render the service in late hours at least up to 7 PM at any extra charge.

10. From a plain and literal reading of Clause 6 it is evident that it has two parts. First is that the contractor was under an obligation to supply electrical energy during the office hour. Second was with regard to supply during late hours at extra charges. There is no ambiguity that supply of energy during late hours had to be on payment of extra charges. I do not find any infirmity in the trial court judgment wherein the bank has been held liable for payment of extra charges beyond the bank hours. The appellate court took a hyper- technical view that the bills were not raised with respect to it and series of bills do not refer to it. If there is a specific clause in the agreement for payment of extra charges and there is evidence to that effect the same cannot 6 be denied merely because the bills were not earlier raised. As discussed above, the trial court has noted that the bank manager in his letter dated

17.11.2000 (Ext-4) had for the first time raised issue of non-supply of electric energy after 6 PM. This showed that there was no deficiency in service earlier and electric supply was given beyond office hours. The Bank was clearly on wrong to have denied payment of energy charges beyond the office hours as per the term of the agreement after having consumed the same. In view of the above discussion the impugned Judgment and decree is set aside and the finding and decree of the trial Court for compensation of Rs.7700 is affirmed with modification of simple interest at the rate of 12% per annum from 1.12.2000.

11. Indubitably the contract was for three years which was rescinded by the Bank apparently on two grounds. Firstly, the plaintiff claimed payment of extra charges for the power back-up beyond office hour and secondly the demand of rent to be enhanced in view of the diesel price hike.

12. As far the extra-charges for energy supply beyond the office hour is concerned, as held above the bank was clearly at fault to have refused the payment of extra charges. With regard to refusal to enhance the rate on account of diesel price hike and cancel the contract , the unilateral act of the bank was equally indefensible. Clause 4 of the agreement which reserved the right of the bank to alter the rate at will, on the change of fuel prices spurred by the central budget was illegal. While this clause will squarely apply where the price is determined by market forces, I am afraid it will not apply where the price rise is by the Government in the exercise of its sovereign power. There the supplier will be entitled to increased price. It is well established that there is excise and tax component, where the rise is due to taxes or Government notification the private contract is exempted from such a limitation which such a clause imposes. Unilateral rescission of the contract much before the expiry of its term without any justifiable reason was a breach of contract on the part of the Bank. It was unfair and unreasonable on the part of a nationalized Bank to insert a term in the agreement to overcome statutory tax liability and on demand for increase in rent to have responded by cancelling the contract. 7

13. In view of the above and for the reasons stated by the trial court for awarding Rs.12,000 for the loss incurred by the contractor in purchasing the new generator set to serve as a standby to ensure uninterrupted supply of electricity as per the terms of agreement is affirmed. Both the substantial questions of law are accordingly answered in favour of the plaintiff appellant. The suit of the plaintiff is decreed for a sum of Rs.19,700 with interest at the rate of 12% per annum from 1.12.2000. Judgment and decree passed in appeal is set aside and that of the trial Court is restored. The appeal is partly allowed as at above and the suit of the plaintiff is decreed. (Gautam Kumar Choudhary, J.) Jharkhand High Court, Ranchi Dated the 22nd April, 2022 AFR / AKT