Bangalore District Court
M/S Raja Trading Company vs Beml Limited on 14 March, 2025
1 O.S.6714/2019
KABC010284802019
IN THE COURT OF I ADDL. CITY CIVIL &
SESSIONS JUDGE AT BENGALURU (CCH.No.2)
Present: - Sri.B.P. Devamane, LL.M.
I Addl. City Civil & Session Judge,
Bengaluru.
Dated this the 14th day of March 2025.
O.S.No.6714 / 2019
Plaintiff: M/s. Raja Trading Company,
Mundy Merchants & Commission
Agents,
Partnership Firm having its operations
at No.13, 2nd Main Road, APMC Yard,
Yeshwanthpur, Bengaluru-560 022.
Rep. by its Partner,
Sri.V.R.Srinivas Murthy.
(By Sri.Prasad Subbanna, Adv.)
- VS -
Defendants: 1. BEML Limited,
Corporate Office at S.R.Nagar,
Bengaluru-560 027.
Rep. by its Asst. General Manager
(Corporate Materials)
2. The General Manager (Materials),
BEML Limited,
Hydraulic and Powerline Division,
BEML Nagar, Kolar Gold Fields-563 115.
2 O.S.6714/2019
3. The Assistant General Manager
(Materials),
BEML Limited,
Hydraulic and Powerline Division,
BEML Nagar, Kolar Gold Fields-563 115.
(By Sri.B.S.Gnanaprakash, Adv.)
***
Date of Institution of the suit 12.09.2019.
Nature of the Suit (suit for pronote,
Suit for declaration & possession, Money suit.
Suit for injunction, etc.):
Date of the commencement of 03.09.2021.
recording of the Evidence:
Date on which the Judgment was 14.03.2025.
pronounced:
Year/s Month/s Day/s
Total duration:
05 06 02
(B.P.Devamane)
I Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
The plaintiff has filed this suit for recovery of money.
2. Case of the plaintiff in brief is that, the plaintiff is a registered partnership firm, a purveyor in grocery and provision items from past three decades. The plaintiff has been recognized as one carrying on business with high standards of quality, 3 O.S.6714/2019 prompt supply and is also known for its credibility and integrity. The plaintiff has supplied, interalia to renowned organizations like BEL, HAL, Escorts, KS & DL, Binny Mills, Minerva Mills, Janata Bazar, apart from defendants. The plaintiff's firm is registered under GST. The plaintiff is associated with the defendant No.1 from past 15 years. The plaintiff takes part in the bids called by the defendant No.1 regularly. Considering the quality of materials supplied, prompt service and their good reputation, the Defendant No.1 has been accepting the plaintiff's bids in the tenders called by them.
2a) After acceptance of the bid by the defendant No.1 Corporate office, for supply of Rice, Sugar, Toor Dal, Black Gram Dal and Oil, the Plaintiff was successful in getting order for Rice and Sugar. Based on the Order passed by the defendant No.1, Corporate Office, the defendant Nos.2 and 3 have raised Purchase Orders for supply of Rice and Sugar. In pursuance of the defendant's bid invitation number 6300016111/117/118/119, the Assistant Manager, Corporate Materials, BEML Limited requested the Plaintiff to supply the following provisions at the rate specified as per the details mentioned below.
Sl. Item Approximate Quantity for 6 months Unit price per
No. KG
1. Sona Masuri Raw Rice, Bengaluru Complex 72,000 Kgs Rs.49.50/-
fine quality, seasoned, free from KGF, EM Division 90,000 Kgs
broken rice, paddy, husk, stones & KGF, H & P Division 40,000 Kgs
other impurities (cleaned sona masuri Total 2,02,000 Kgs
raw rice)
2. Sugar Crystal Medium Size, free from Bengaluru Complex 12,000 Kgs
impurities / power KGF, EM Division 18,000 Kgs Rs.40.05/-
KGF, H & P Division 6,500 Kgs
Total 36,500 Kgs
4 O.S.6714/2019
2b) Based on the invitation, Purchase Orders were
raised by the defendant Nos. 2 and 3. The details of the same are as follows:
A) On 16.03.2018, Purchase Order bearing no.
KH01/HPC/4530001999/0, for supply of Sugar Crystal Medium even size, free from impurities/Powder-6,500 kg and Rice raw Sona Masoori Brand- 40,000 kg in all totaling to Rs.22,40,325/- (Rupees Twenty Two Lakh Forty Thousand Three Hundred and Twenty Five Only) inclusive of taxes was raised by the Defendant.
The commodity Rice Raw Sona Masoori Brand was delivered at BEML Limited, H& P Canteen Division, Kolar Gold Fields by the plaintiff on 29.07.2018- 10,000 Kgs along with the Bill dated 29.07.2018, bearing Bill No.1735. The Tax invoice and the materials are duly acknowledged by the staff of the Defendant Nos. 2 and 3 on 29.07.2018. Against this Purchase Order, outstanding due as on 31.10.2018 against the supply of Rice, as per the Bill is Rs.2,60,000/- (Rupees Two lakh Sixty Thousand Only).
B) On 28.09.2018, Purchaser order bearing no.
KH01/HPC/4530002042/0, for supply of Rice Raw-Sona Masoori Fine quality, seasoned, free from Broken Rice, Paddy, Husk, stones and other impurities-5,000 kg and Sugar Crystal Medium Even size, free from Impurities/powder - 1,000 kg in all totaling to Rs.2,89,552.50 (Rupees Two Lakh Eighty Nine Thousand Five Hundred Fifty Two and Fifty Paise Only) inclusive of taxes was raised by the Defendant. The commodities as per the Purchase Order was delivered at BEML Limited, H& P Canteen Division, Kolar Gold Fields by the Plaintiff on 02.10.2018, along with the Bills dated 02.10.2018, bearing Bill No. 1818 towards the supply of Rice and bill dated 02.10.2018, bearing Bill No. 1819 towards the supply of Sugar. The Tax invoice and the materials are duly acknowledged by the staff of the defendant on 02.10.2018.
5 O.S.6714/2019C) On 24.10.2018, Purchase Order bearing no.
KH01/HPC/4530002048/0, for supply of Rice Raw-Sona Masoori Fine quality, seasoned, free from Broken Rice, Paddy, Husk, stones and other impurities-5,000 kg and Sugar Crystal Medium Even size, free from Impurities/powder-1,000 kg in all totaling to Rs.2,89,552.50 (Rupees Two Lakh Eighty Nine Thousand Five Hundred Fifty Two and Fifty Paise Only) inclusive of taxes was raised by the Defendant. The commodities as per the Purchase Order was delivered at BEML Limited, H& P Canteen Division, Kolar Gold Fields by the plaintiff on 29.10.2018, along with the Bills dated 29.10.2018, bearing Bill No. 1829 towards the supply of Rice and bill dated 29.10.2018, bearing Bill No. 1830 towards the supply of Sugar. The Tax invoice and materials were duly acknowledged by the staff of the defendant on 29.10.2018.
2c) As per the above mentioned Purchase Orders, the cumulative outstanding due from the defendants to the plaintiff for the supply made was in a sum of Rs.8,53,775/-. Except making a small payment of Rs.14,671/-, the rest of the amount was not paid. After receiving the provisions and consuming the same, defendants had not paid the complete amount due on the bills raised by the plaintiff. The balance amount payable on the above mentioned purchase orders was in a sum of Rs.8,39,104/- In this context, the plaintiff had made several correspondences over the phone, email and registered letter. On 06.11.2018 vide email, the Plaintiff had demanded payment of Rs.8,53,775/- immediately, to augment their financial commitments. In the email correspondence dated 15.11.2018, the plaintiff had rereferred to their previous emails and requested for making the overdue payment immediately and to that email, a list of dues from the defendant's end as on 31.10.2018 was attached. Further, as no payments were made, the plaintiff had also sent a 6 O.S.6714/2019 registered letter to the defendant No.2 on 20.11.2018 demanding outstanding amounts towards supply of rice, sugar and other provisions and as no response was received for the same, another registered letter was sent on 03.12.2018 wherein, it was mentioned that if they do not honor their commitments, despite having consumed the commodities supplied by the Plaintiff that they may have to resort to legal recourse.
2d) In spite of receipt of communication from plaintiff seeking payment of the amount overdue, the defendants neither replied to the communication nor made payments. In terms of purchase orders, within 30 days from the date of receipt of goods, 100% payment was required to be made. The defendants did not make payments. Hence, the plaintiff issued legal notice on 24.12.2018. The defendants have not complied with the legal notice. The plaintiff approached the District Legal Services Authority, Bengaluru and filed a pre-litigation mediation on 21.02.2019, which was registered as PM No.12/2019. Inspite of the receipt of notice, the defendants did not participate in the pre-litigation mediation. Hence, the same was closed as 'Non- Starter'. The Non-Starter report was issued on 15.06.2019. Thereafter, the plaintiff approached the defendants once again for clearing the outstanding amount. Thereafter, the defendants released the payments as under:
a. On 29.06.2019 a sum of Rs. 5,67,601/- (Rupees Five Lakh Sixty Seven Thousand Six Hundred One Only) b. On 29.06.2019 a sum of Rs. 6,000/- (Rupees Six Thousand Only) 7 O.S.6714/2019 c. On 02.07.2019, a sum of Rs. 9,900/-(Rupees Nine Thousand Nine Hundred Only) After making payment of Rs.5,83,501/-, the defendants still withheld a sum of Rs.2,54,000/- as against the bill No.1735 dated 29.07.2018. Plaintiff issued legal notice issued to the defendants on 15.08.2019 calling upon them to release the payment of Rs.2,54,000/- within 7 days from receipt of the Legal Notice. The defendants neither replied nor made payment.
Hence, the plaintiff has filed this suit for recovery of said amount of Rs.2,54,000/- along with interest at 24% p.a. from the date of suit till realisation.
3. The defendants appeared through their counsel and filed written statement denying the case of the plaintiff. It is contended that, defendant No.1 is a Government of India Undertaking under the administrative control of Department of Defence Production, Ministry of Defence and a multi-technology heavy engineering industry, interalia, engaged in the design, manufacture and marketing of varieties of equipment and components required for core sectors of India viz. Mining & Construction, Rail & Metro, Defence & Aerospace, Dredging, etc. It has four manufacturing Units one each at Bengaluru, Mysuru, Kolar Gold Fields and Palakkad, besides marketing and depot offices across the country and abroad. The defendant No.1 has around 7,000 direct and about 3,000 indirect employees working with it. The defendant Nos.2 and 3 are its functionaries. The defendant No.1 has canteens at all its Manufacturing Divisions and procurements to the said canteens are done through open 8 O.S.6714/2019 tender process (e-public tender through Supplier Relationship Management [SRM] on-line portal) by publishing the Bid Invitation in its website and Central Public Procurement [CPP] Portal of Government of India also. The defendant No.1 also maintains registered vendors' list and the existing vendors get intimation of the tender through the SRM platform. Defendant No.1 follows a transparent e-public tender through SRM portal and the bidders are qualified if they are complying with the qualification criterion stipulated in the tender.
3a) On 08.11.2017, the defendant No.1 published bid Nos.6300016111 (for cleaned Sona Masoori Raw Rice), 6300016117 (for cleaned Toor Dhal), 6300016118 (for Cleaned Black Gram Dhal), 6300016119 (for Sugar Crystal Medium even size free from impurities/powder) and Bid No.6300016120 (for Refined Sunflower Oil) for supply of the groceries mentioned in the bracket for the use of canteens attached to its Equipment Manufacturing (EM) Division and Hydraulics & Powerline (H&P) Division of KGF Complex and also to Bangalore Complex. The plaintiff being the approved vendor of defendant No.1 had submitted its bid against Bid Invitation Nos.6300016111 and 6300016119 for supply of Sona Masoori Raw Rice, fine quality, seasoned, free from broken rice, paddy, husk, stones and other impurities (cleaned Sona Masoori Raw Rice) and Sugar crystal medium even size, free from impurities/powder respectively for a period of 6 months from 21.02.2018 to 20.08.2018. After the technical evaluation, sample testing & evaluation as well as the commercial evaluation of the bid, price negotiations were held, 9 O.S.6714/2019 the plaintiff emerged as the successful bidder (L1). Defendant No.1 finalised the contract at the negotiated rates in favour of the plaintiff.
3b) Thereafter, the Bengaluru Complex of defendant No.1 issued Purchase Order No.BR01/RMS/4530001983/0 dated 22.02.2018 for supply of the Cleaned Sona Masoori Raw Rice and Sugar Crystal medium even size free from impurities / Powder. The Hydraulics and Powerline (H & P) Division of KGF Complex issued purchase Order No.KH01/HPC/4530001999/0 dated 16.03.2018 and the Equipment Manufacturing (EM) Division, KGF Complex of defendant No.1 issued Purchase order No.KE01/EMC/4530001990/0 dated 09.03.2018 for supply of the Cleaned Sona Masoori Raw Rice and Sugar Crystal medium even size free from impurities/Powder. Plaintiff had duly accepted all the terms and conditions and agreed to supply the items strictly in accordance with the terms of purchase orders.
3c) Based on information received from reliable source, the Vigilance Department of Defendant No.1 had started confidential investigations into the quality of rice supplied by the plaintiff and conducted surprise checks at the canteen stores and found that the plaintiff was supplying 'King Ashoka Sorted Rice' to EM and H&P Division, KGF and that the plaintiff had supplied steam rice of 15,000 kgs. to EM Division as against PO No.4530001990 dated 09.03.2018. As against PO No.4530001999 dated 16.03.2018, the plaintiff had supplied steam rice of 13,000 kgs. to H&P Division. Plaintiff was supplying SVR GOLD and Meera Brands of Rice to Bengaluru 10 O.S.6714/2019 Complex and, as against PO No. 4530001983 dated 22.02.2018, plaintiff had supplied steam rice (SVR GOLD) of 10,000 kgs. to Bengaluru Complex. Thus, the plaintiff had supplied 38,000 Kgs. of steam rice instead of Raw Rice to EM and H&P Divisions and Bengaluru Complex. The defendants understand that the King Ashoka and SVR Gold Brands are normally meant for steam rice and not for raw rice.
3d) In order to arrive at a reasonable conclusion on the quality of the rice supplied by the plaintiff that was used by the defendants, Sri.G.P. Capt. Chakrapani Mandela, DGM (Vigilance) of EM and H&P Divisions, KGF of the Vigilance Department collected samples of rice supplied by the plaintiff and sent to M/s Shankar Hi-Tech Industries, without mentioning the brand & supplier names, in order to get confidential/unbiased report, vide letter dated 21.05.2018 for analysing the quality of rice. M/s Shankar Hi-Tech Industries submitted its report stating that, the sample of rice was analysed and found that the same was steam rice.
3e) The Vigilance Department vide their letter Ref.VO(E)/10/2018/300 dated 21.05.2018, submitted sample of rice supplied by the plaintiff to M/s Sri Tungabhadra Rice Industries, without mentioning the brand & supplier names, in order to get confidential/unbiased report, for analysing the quality of rice and to inform the rate of the sample and their report was received by the Vigilance Department on 05.06.2018 stating that, the sample analysed by them was not Sona Masoori Rice and was steam rice. They have confirmed that, the price of steam 11 O.S.6714/2019 rice is Rs. 2800/- to Rs.3000/- per quintal. The plaintiff has given a letter dated 09.06.2018 informing dispatch of 100 quintals of Sona Masuri Rice (SVR Gold Brand of batch No. 03) through lorry number KA07 A0317 against PO No.4530001990 dated 09.03.2018. In the said letter, the plaintiff had certified that the rice, which was dispatched by the plaintiff, was 'Sona Masuri Rice'. The plaintiff for the reasons best known to them did not mention that the rice was 'Sona Masuri Raw Rice'.
3f) Thereafter, the Vigilance Department had written to the plaintiff, vide letter dated 09.06.2018 requesting to confirm that this is specifically "Raw Rice" of 'Sona Masuri'. Clearance of the consignment is kept in abeyance for want of Quality Certificate from you'. The plaintiff vide letter dated 13.06.2018 self certified that the Rice they sent was 'Sona Masuri Raw Rice' by stating that, we like to reconfirm the Rice that was sent on 09.06.2018 vide our delivery challan No. 538 dt. 09.06.18 is Sona Masuri Raw Rice (SVR GOLD Brand) of Batch No.3'.
3g) In the meanwhile, Sri.H.P.Chakrabarti, AGM (Vigilance), Bengaluru Complex vide letter dated 11.06.2018, sent the sample of Rice supplied by the plaintiff to Bengaluru Complex (SVR GOLD Brand) for analysis to M/s Karnataka Co- operative Oil Seeds Growers' Federation Ltd. (KCOGFL), without mentioning the brand & supplier names, in order to get confidential / unbiased report, and they had submitted report dated 13.06.2018, stating that the sample of rice submitted was of 'Rice Sona (Steam)'. On 13.06.2018, the plaintiff issued one more letter referring to the letter dated 09.06.2018 of Vigilance 12 O.S.6714/2019 Department requesting for convenient date and time of DGM(Vigilance) of defendant No.1 to discuss about the issue and problems they were facing. The confirmation of the Plaintiff that the SVR GOLD Brand Rice supplied by the Plaintiff was Raw Rice is absolute false as SVR Gold Brand is only Steam Rice and not Raw Rice.
3h) One more sample collected from the rice supplied by the plaintiff to Bengaluru Complex was sent for analysis to M/s Karnataka Co-operative Oilseeds Growers' Federation Ltd. (KCOGFL), vide letter dated 22.06.2018 and KCOGFL submitted their report dated 27.06.2018 confirming that the sample of Rice submitted was of 'Rice Sona (Steam)'. Sri. G P Capt Chakrapani Mandela, DGM (Vigilance), BEML, KGF had vide letter dated 27.06.2018 sent two (2) samples of rice supplied by the Plaintiff (King Ashoka Brand) and also another sample of rice obtained from KCOGFL for analysis to M/s Food Corporation of India (FCI), a Government of India Enterprise, without mentioning the brand & supplier names, in order to get confidential/unbiased report. FCI submitted their report finding that the samples of rice of the plaintiff were 'Rice (Steam)' and the sample of KCOGFL as 'Raw Rice'.
3i) FCI submitted its reports with findings vide its letter Nos. QC/DO Lab/2018-19 dated 06.07.2018 holding that the samples of Plaintiff (1) and (3), i.e. samples from the rice supplied by the plaintiff were not fit for regular consumption and advised the defendant to utilize/use Raw Rice (Masoori 13 O.S.6714/2019 varieties). In order to maintain confidentiality, impartiality and to have an independent and impartial unbiased test report, the Vigilance Department did not mention the brand name and supplier name while forwarding rice samples to third party test agencies, who tested the quality of the samples. The samples were not collected in presence of the plaintiff to maintain confidentiality to avoid undue influence on the testing agency by the plaintiff. From the said reports, it is evident that, the rice supplied by the Plaintiff was Steam Rice, which is of inferior quality and not fit for regular consumption and has less market price compared to Sona Masoori Raw Rice which is of higher cost. Thus, the Plaintiff had supplied steam rice instead of Raw Rice as against the contract terms and fraudulently charged price of raw rice.
3j) The plaintiff had resorted to fraudulent practices by supplying inferior quality rice and had cheated the defendant No.1 by supplying 38,000 kgs of Steam Rice and charging the rate of Sona Masoori Raw Rice (Rs. 49.50/kg), thereby causing an estimated loss of Rs.7.60 lakhs. In view of the loss caused to the defendant No.1 due to the fraudulent activities of the Plaintiff, the Defendant No.1 had recovered the said loss from the amount payable to the plaintiff. The defendant No.1 had also, after following its policy for banning business dealings with a Firm/Company, banned the future business dealings with the plaintiff for a period of 5 years, which is challenged by the petitioner in WP No.49430/2019 before the Hon'ble High Court of Karnataka. Hence, the suit filed by the plaintiff for recovery of 14 O.S.6714/2019 Rs.2,54,000/- against rice supplied by the plaintiff to Bengaluru Complex of the defendant No.1, is not maintainable. Parawise contents of the plaint are denied and prayed to dismiss the suit.
4. Based on the pleadings, Court has framed following issues :-
ISSUES
1. Whether the plaintiff prove that they had supplied goods worth of Rs.8,53,775/- and the defendants have paid only a sum of Rs.5,83,501/- and they have withheld a sum of Rs.2,54,000/- as against the bill No.1735 dated 29.07.2018 ?
2. Whether the defendants prove that the plaintiff Company had indulged in fraudulent activities and supplied steam rice instead of Sona Masoori raw rice and collected the price of Sona Masoori raw rice and caused loss to them and as such they are liable to pay the amount claimed in the suit ?
3. Whether the plaintiff is entitled for recovery of Rs.2,54,000/- with interest at the rate of 24% p.a. as sought ?
4. What order or decree ?
AMENDED AND RECTIFIED ISSUE NO.2 DATED 30.05.2022
1. Whether the defendant proves that the plaintiff Company had indulged in fraudulent activities and supplied steam rice instead of Sona Masoori raw rice and collected the price of Sona Masoori raw rice and caused loss to the defendants and therefore, the defendants are justified in recovering the amount of Rs.2,54,000/- from the pending bills of the plaintiff ?
15 O.S.6714/20195. In order to prove the case, the partner of the plaintiff company by name Sri.V.R. Rama Murthy examined as PW.1 and got marked documents at Ex.P.1 to Ex.P.12. The AGM (Corporate Materials) in the defendant company by name Sri.Srivatsa G.Y. examined as DW.1 and got marked the documents at Ex.D.1 to Ex.D.23.
6. Heard arguments. Perused the materials on record.
7. My findings on the above issues are as under:-
Issue No.1 : In the Affirmative,
Issue No.2 : In the Negative,
Issue No.3 : Partly in the Affirmative,
Issue No.4 : As per final order;
for the following :-
REASONS
8. ISSUE Nos.1 & 2: Both issues are interconnected
with each other; hence they are taken together for discussion in order to avoid repetition.
9. In this case, on perusal of pleadings and materials available before the Court, there is no dispute regarding profile of the parties. Plaintiff company is a supplier of rice and other commodities to the defendants. There is no dispute regarding supply of rice and other commodities by the plaintiff to the defendants as per the purchase orders. It is the case of the plaintiff that, he has supplied Sona Masoori Raw Rice to the defendants as per purchase order but, the defendants did not 16 O.S.6714/2019 make payment; hence, he issued notice to the defendants. Thereafter, he approached the District Legal Services Authority, Bengaluru, on 21.02.2019 and filed pre-litigation mediation bearing PM No.12/2019 for recovery of the amount, but the defendants did not participate in the mediation, hence, the DLSA closed the same as Non-Starter and issued Non-Starter report on 15.06.2019. Thereafter, the plaintiff once again approached the defendants for clearing the outstanding amount. After that, the defendants made payment of Rs.5,83,501/- and withheld Rs.2,54,000/- as against the Bill No.1735 dated 29.07.2018. On 15.08.2019, plaintiff issued legal notice to defendants for release of amount of Rs.2,54,000/-, for which, defendants have not replied nor made payment. Hence, the plaintiff has filed this suit.
10. Defendants have not denied regarding supply of quantity of Rice as contended by the plaintiff, but it is the case of the defendants that, as per the purchaser orders, the plaintiff was required to supply Sona Masoor Raw Rice but, the plaintiff has supplied Steam Rice. Further, the defendants have contended that, the rate of Steam Rice is Rs.2800/- to Rs.3000/- per quintal. Rate of Sona Masoor Raw Rice is Rs.49.50 per kg. This plaintiff has committed fraud against the defendants and caused estimated loss of Rs.7.60 lakhs. Thereafter, the defendants put the plaintiff into black list, against which, the plaintiff approached the Hon'ble High Court in W.P.No.49430/2019. Hence, the defendant has recovered an amount of Rs.2,54,000/- from the pending bills towards loss caused by the plaintiff and hence, the suit is not maintainable.
17 O.S.6714/201911. Learned counsel for the plaintiff argued that, admittedly, plaintiff has supplied Rice to the defendants. There is no dispute regarding quantity of Rice. The defendants have consumed the rice supplied by the plaintiff and thereafter, they are claiming that, Rice supplied by the plaintiff is Steam Rice and not of Raw Rice. He has further argued that, if the rice supplied by the plaintiff is of inferior quality, the defendants ought to have returned back the rice or they could have stopped the use of the same. If the rice supplied by the plaintiff was of inferior quality, how and why the defendants have consumed the same. Learned counsel for the plaintiff has further argued that, as per delivery challan Ex.P.9, it can be seen that, the defendants have received Sona Masoori Raw Rice on 29.07.2018, hence, the defendants cannot dispute the payment and prayed to decree the suit.
12. Learned counsel for the defendants argued that, the Vigilance Department of the defendants' organization has sent the sample rice to various agencies for sample testing without mentioning the brand and supplier name in order to get confidential/unbiased report. All the agencies, to which the rice was sent, have reported that, it is Steam Rice of inferior quality. The plaintiff has committed fraud with the defendants, hence, the defendant has recovered the loss of Rs.7.60 lakhs under these 3 bills, hence, plaintiff is not entitled for suit claim amount and prayed to dismiss the suit.
13. In para-9 of the written statement, the defendants have contended that, Vigilance Department of defendant No.1 received information from reliable sources and started 18 O.S.6714/2019 confidential investigations and sent the samples of Rice to M/s.Shankar Hi Tech Industries, M/s. Tungabadhra Rice Industries, M/s Karnataka Co-operative Oil Seeds Growers' Federation Ltd. (KCOGFL) and Food Corporation of India and collected the reports. In the said reports, it is stated that, the sample rice sent was of inferior quality and it was not Sona Masoori Raw Rice, but it was Steam Rice. As per the defendants, the alleged collection of sample was not in the presence of plaintiff. The person who has collected the samples is not examined before the Court. The persons who issued the reports are also not examined before the Court. The rice is an edible commodity. The cook who used the rice in the Canteen is the best person to say whether the rice used by him in cooking was of good quality or inferior quality, whether it was raw rice or steam rice. The said cook is also not examined before the Court.
14. AGM (Vigilance) in defendant's Company examined as DW.1. This DW.1 is not the same person, who collected the samples and sent them to various agencies and collected the report as stated above. This DW.1 has deposed before the Court based on the documents available before the Court.
15. Admittedly, plaintiff has supplied thousands of KGs of rice to the defendants. It cannot be consumed or used in one or two days. If the defendants suspected about the quality of the rice, they ought to have stopped the use and consumption of the said rice and reported the same to plaintiff or return the said rice to the plaintiff or they ought to have collected sample in the presence of plaintiff and sent for testing to any authenticated agency.
19 O.S.6714/201916. In the cross-examination of PW.1, it is stated that, ನನ್ನ ಮತ್ತು ಪ್ರತಿವಾದಿ ಕಂಪನಿಯ ನಡುವೆ ರೈಸ್ನ ಗುಣಮಟ್ಟದ ನಡುವೆ ವಿವಾದವಿದೆ ಎಂದರೆ ಸಾಕ್ಷಿ ಪ್ರತಿವಾದಿ ಕಂಪನಿಯವರು ಸದರಿ ರೈಸ್ಅನ್ನು ಉಪಯೋಗಿಸಿ ಮುಗಿಸಿದ ನಂತರ ಹಣ ಕೊಡುವ ಮುಂಚೆ ವಿವಾದ ಮಾಡಿದ್ದಾ ರೆ ಎಂದು ಹೇಳುತ್ತಾ ರೆ.
17. Ex.D.1 to 4 are the delivery challans regarding supply of Sona Masoori Rice on various dates. In Ex.D.1 to 4 it is not mentioned that, it is Raw rice, but, it is only Sona Masoori Rice. If the Rice supplied under Ex.D.1 to 4 is not upto the mark or it is not the rice ordered by defendants, they ought to have refused to receive or they could have rejected the same. Ex.P.9 is the delivery challan dated 29.07.2018, wherein, at the time of receiving the goods, it is endorsed that, they have received Sona Masoori Raw Rice through lorry Number KA41 8510. Ex.P.8 is the Tax Invoice dated 29.07.2018, wherein also it is mentioned regarding Sona Masoori Raw Rice. On perusal of these documents, it shows that, the defendants have received Sona Masoori Raw Rice, as these documents are not disputed.
18. On perusal of the pleadings and Ex.P.2 i.e., report of DLSA in PIM No.12/2019, the defendants have not appeared before the District Legal Services Authority. Only after institution of Pre-litigation case before DLSA, the defendants have made payment withholding Rs.2,54,000/-. Admittedly, the plaintiff has approached the Hon'ble High Court in W.P.No.49430/2019 against block listing the plaintiff company. The Hon'ble High Court has allowed the WP and quashed the communication dated 26.06.2019 block listing the plaintiff company.
20 O.S.6714/201919. Under the above circumstances, there was dispute between the plaintiff and defendants. Only after the plaintiff approached the District Legal Services Authority, the defendants without participating in the mediation have made part payment and withheld a sum of Rs.2,54,000/- as against the bill No.1735 stating that, it is the difference amount in respect of Sona Masoori Raw Rice and Steam Rice.
20. As discussed above defendants failed to prove that the Rice supplied by plaintiff is of inferior quality or it was not fit for human consumption. The reports regarding the Rice produced by the defendants are not proved before the court. There are no any authenticated documents before the Court regarding price of Steam Rice, hence, it appears that, the defendants as per their own will and wish collected the amount and withheld the payment of Rs.2,54,000/- stating that, it is the difference amount.
21. As discussed above, the defendants have failed to examine the persons who collected the sample, the persons who issued reports stating that, the sample rice sent to them was steam rice. Defendants have also failed to examine the cook or any person who complained that the rice supplied by the plaintiff was of inferior quality. The defendants have failed to explain as to why they are making allegations against the plaintiff only after consuming the entire stock supplied by the plaintiff. Under these circumstances, the defendants have failed to prove that, the plaintiff company supplied steam rice instead of sona masoori raw rice and caused loss to the defendants. Accordingly, I answer Issue No.1 is in Affirmative and issue No.2 is in Negative.
21 O.S.6714/201922. ISSUE NO.3: Plaintiff claimed for recovery of amount of Rs.2,54,000/- with interest at 24% per annum. The plaintiff has failed to prove that, there was any agreement between the plaintiff and defendants regarding the rate of interest at 24% per annum. There is no any agreement or any document to show that, the defendants are liable to pay interest at 24% p.a.
23. Section 34 of CPC reads as under:
34. Interest.-- (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, [with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum], from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit:
[Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent. per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
Explanation I.--In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970).
Explanation II.--For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.] (2) Where such a decree is silent with respect to the payment of further interest [on such principal sum] from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.22 O.S.6714/2019
Looking to the facts and circumstances of the case, in the absence of any contract about rate of interest, I think it proper to award interest at 6% from the date of suit till its realisation. Accordingly, I answer issue No.3 is Partly in the Affirmative.
24. ISSUE NO.4: In view of the aforesaid discussions, I proceed to pass the following: -
ORDER The suit of the plaintiff is partly decreed with cost.
The defendants are directed to make payment of Rs.2,54,000/- with interest at 6% p.a. from the date of suit till its realisation to the plaintiff, within one month from the date of this Judgment.
Failing which, the plaintiff is at liberty to recover the same by following due process of law.
Draw decree accordingly.
(Dictated to the Stenographer-III, transcription computerised by her, corrected and then pronounced by me in the open court on this the 14th day of March 2025).
(B.P.Devamane) I Addl. City Civil & Sessions Judge, Bengaluru.23 O.S.6714/2019
ANNEXURE WITNESSES EXAMINED ON BEHALF OF PLAINTIFF:
PW.1 : Sri.V.R.Rama Murthy.
DOCUMENTS MARKED ON BEHALF OF PLAINTIFF:
Ex.P.1 : GPA.
Ex.P.2 : Non Starter certificate.
Ex.P.3 : Copy of the legal notice.
Ex.P.4 : Postal receipts.
Ex.P.5 : Postal acknowledgments.
Ex.P.6 & 7 : Purchase orders.
Ex.P.8 : Bill dated 01.10.2018.
Ex.P.9 : Delivery challan.
Ex.P.10 & : Certified copy of the price contract supply
11
Ex.P.12 : Certified copy of the order of the Hon'ble
High Court in W.P.No.49430/2019.
WITNESSES EXAMINED ON BEHALF OF DEFENDANTS:
DW.1 : Sri.Srivatasa G.Y. DOCUMENTS MARKED ON BEHALF OF DEFENDANTS: Ex.D.1 to 4 : Delivery challans. Ex.D.2 : Authorisation letter. Ex.D.6 to : Certified copies of Ex.D.8 to Ex.D.16 marked 14 in O.S.No.6712/2019. 24 O.S.6714/2019 Ex.D.15 to : Photo and whats app message. 17 Ex.D.18 : Certificate under Sec.65B of Evidence Act. Ex.D.19 : Certified copy of the letter dated 21.05.2018. Ex.D.20 : Certified copy of the letter dated 09.06.2018. Ex.D.21 : Certified copy of the letter dated 11.06.2018. Ex.D.22 : Certified copy of the letter dated 22.06.2018. Ex.D.23 : Certified copy of the letter dated 27.06.2018. (B.P.Devamane) I Addl. City Civil & Sessions Judge, Bengaluru.