Andhra Pradesh High Court - Amravati
The Aryapuram Cooperative Urban Bank ... vs Shaik Sameeullah on 19 April, 2024
APHC010419042010
IN THE HIGH COURT OF ANDHRA
PRADESH
[3365]
AT AMARAVATI
(Special Original Jurisdiction)
FRIDAY, THE NINETEENTH DAY OF APRIL
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE JUSTICE DR V R K KRUPA SAGAR
FIRST APPEAL NO: 534/2010
Between:
The Aryapuram Cooperative Urban Bank Ltd ...APPELLANT(S)
and Others
AND
Shaik Sameeullah ...RESPONDENT
Counsel for the Appellant(S):
1. M V SURESH
Counsel for the Respondent:
1. MANGENA SREE RAMA RAO
2. 2906/K VENKATESH
The Court made the following:
2
Dr. VRKS, J
A.S.No.534 of 2010
THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR
APPEAL SUIT No.534 of 2010
JUDGMENT:
Defendants in the suit preferred this Appeal under Section 96 of Code of Civil Procedure (C.P.C.) impugning the judgment dated 19.04.2010 of learned V Additional District Judge (Fast Track Court), East Godavari, Rajahmundry in O.S.No.65 of 2003. The respondent herein is the sole plaintiff in the suit.
2. For the purpose of computerization of its accounts, the first appellant - the Aryapuram Cooperative Urban Bank Limited, Rajahmundry invited tenders and Sri Shaik Sameeullah, who runs Star Computer Services, bid in the tender process and was selected by the bank for undertaking the works. A work order was given by the bank on 07.04.1995 evidenced by Ex.A.20. Between the parties a written contract was executed on 20.04.1995 evidenced by Ex.A.1. It contains the complete details of the work that was to be executed by Sri Shaik Sameeullah. The period of contract was for one year commencing from 01.04.1995 and completes by 31.03.1996. The remuneration to be paid by the bank and agreed by Sri Shaik Sameeullah was that the bank had to pay Rs.5,000/- per month for financial accounting and should pay Rs.1.17 paise per account per year for ledger balancing. The work was executed during these stipulated periods. Since there was continued need of the further 3 Dr. VRKS, J A.S.No.534 of 2010 works from time to time the contract period was extended and the works were done and payments were made. The contract that commenced under Ex.A.1 for the year 1995-1996 stood terminated by virtue of letter dated 01.04.2002 issued by the bank to Sri Shaik Sameeullah evidenced by Ex.A.28 disclosing that the contract was completed on and from 31.03.2002. However, it is for the works and payments for the years 2000-2001 and 2001- 2002 the controversy erupted between parties. It is with reference to the payments concerning the two years Sri Shaik Sameeullah filed O.S.No.65 of 2003 seeking for recovery of Rs.13,39,012/-. He claimed 24% interest per annum and prayed for costs and such other reliefs.
3. Defendants filed their written statement and additional written statement raising certain contentions and they disowned the liability. They stated that they were due to pay only Rs.21,840/-. They sought dismissal of the suit.
4. Learned trial Court settled the following issues for its determination:
1. Whether the suit is bad for mis-joinder and misdescription of the parties to the suit?
2. Whether D.2 is personally liable to pay any part of suit amount to the plaintiffs?
3. Whether the plaintiff is entitled for suit claim?
4. Whether the plaintiff is entitled for the interest? and if so, the interest claimed is excessive?
5. Whether the plaintiff is entitled for suit costs?4
Dr. VRKS, J A.S.No.534 of 2010
6. Whether the plaintiff is not entitled to obtain court fee exemption certificate from Legal Services Authority?
7. To what relief?
5. Plaintiff alone testified as PW.1 and got marked Exs.A.1 to A.34. An employee of the bank testified as DW.1 and no documents were exhibited on behalf of the defendants/appellants.
6. Learned trial Court duly assessed the evidence on record and considered the contentions raised on both sides and held that the suit was validly constituted and there was no misjoinder of parties and there was also no misdescription of the parties and defendant No.2/the Secretary of the bank is not personally liable to pay the suit claimed amount. It held that plaintiff is successful in establishing the claim made by him and granted a money decree for Rs.10,58,159/-. It held that since the bank failed to pay the overdue amounts that forced the plaintiff to sue it, therefore, it held that the plaintiff was entitled for claiming of interest and it granted 12% interest per annum from the date of suit till the date of decree and 6% interest per annum thereafter till realization. It awarded the proportionate costs to the plaintiff.
7. Aggrieved by the said judgment, the bank and its authorities have preferred this appeal.
8. Sri M.V.Suresh, the learned counsel for appellants and Sri A.L.V.K.L. Prasad, the learned counsel arguing on behalf of Sri Mangena Sree Rama Rao, the learned counsel for respondent submitted arguments.
5Dr. VRKS, J A.S.No.534 of 2010
9. Learned counsel for appellants submits that the bank is liable to pay only Rs.21,840/- and the conclusions of the trial Court are incorrect. Thus, in tune with the pleaded case in the written statement this submission is raised in the grounds of appeal. On considering this submission, this Court finds there is no merit in this contention. DW.1, who deposed on behalf of the bank, during his cross-examination failed to sustain as to how it arrived at Rs.21,840/- alone. This DW.1 further admitted that even for the year 2000-2001, as per the bank records, the bank had to pay Rs.1,48,942/- and a TDS of Rs.28,512/- was to be deducted from it. In his cross-examination he further admitted that for the year 2001-2002 the bank was yet to pay Rs.1,58,400/- towards financial accounting and towards ledger balancing, interest etc., it had to pay Rs.3,50,742/-. Thus, DW.1 speaking through bank's own records having made such admissions it does not lie in the competence of the appellants to contend anything contrary. Therefore, this contention of the appellants is negatived.
10. The principal contention argued by Sri M.V.Suresh, the learned counsel for appellants is that for the disputed years there was no concluded contract between parties. That Ex.A.1 alone is the concluded contract. The rates at which the bank proposed to the respondent herein to carry out the work under Ex.A.9 are to be either accepted in toto or to be refused and the respondent by virtue of Ex.A.10 reply made a counter offer proposing certain rates and since the bank never accepted them, there was no 6 Dr. VRKS, J A.S.No.534 of 2010 concluded contract and therefore, the claim of the respondent before the trial Court and its acceptance by the trial Court that there was a concluded contract is incorrect and is liable to be set aside.
11. As against this, the learned counsel for respondent submits that the respondent having proposed his rates under Ex.A.10 there was a total silence on part of the bank for all the disputed period and thereafter and it allowed the respondent to continue to go ahead with the contractual work and having taken the benefit of the work executed by the respondent, it does not lie within the competence of the bank to turn around and say that there was no concluded contract. Learned counsel submits that there was no revocation of offer and there was no response to the counter offer and by conduct there was an implied acceptance of the counter offer and the trial Court rightly interpreted Section 7 of the Indian Contract Act, 1872 and reached to appropriate conclusions and there is no warrant for interference in this appeal.
12. From the rival contentions, the points that fall for consideration are:
1. Whether between parties there was a concluded contract or not?
2. Whether the amounts granted by the trial Court are incorrect requiring interference?7
Dr. VRKS, J A.S.No.534 of 2010 Point Nos.1 and 2:
13. The contract of work that commenced in 1995 and that continued till 31.03.2002 is not in dispute. The works that were done, the payments that were due and the payments that were made till 31.03.2000 are not in dispute. In this case we are concerned with the period 2000-2001 and 2001-2002 only. Ex.A.9 is letter dated 03.06.2000. This was addressed by the appellant-bank to the respondent/plaintiff. It refers to its resolution No.114, dated 23.05.2000. It informed the respondent about the continuation of the contract between them in the following terms:
"The bank also resolved vide reference (5) to continue the existing agreement for the year 2000-2001 on same terms and conditions as per the reference cited (1) & (2) and the existing system is to be continued till the total bank automation process is completed."
14. Reference No.5 mentioned therein is about resolution No.114, dated 23.05.2000. Reference No.1 cited therein is Ex.A.1-agreement dated 20.04.1995. Reference No.2 cited therein is Administrative Order No.408, dated 07.05.1996/Ex.A.4. In Ex.A.1 dated 20.04.1995 agreed remuneration was Rs.5,000/- per month for financial accounting Rs.1.17 paise per account per year for ledger balancing. Under Ex.A.4 dated 07.05.1996 the bank enhanced the remuneration for the year 1996-1997. As per it Rs.8,000/- per month for financial accounting and Rs.1.35 per account per year for ledger balancing was fixed. This Ex.A.4 8 Dr. VRKS, J A.S.No.534 of 2010 further mentions further enhanced rates for the year 1997-1998. As per it Rs.10,200/- per month for financial accounting and Rs.1.70 per account per year towards ledger balancing was fixed. Thus, the bank under Ex.A.9 for the year 2000-2001 offered to the respondent to avail his works for the bank and made it known to the respondent that the remuneration for the year 2000-2001 would be as mentioned in Ex.A.4 dated 07.05.1996. This offer was considered by the respondent and he replied to it under Ex.A.10 dated 12.06.2000. In this he expressed his willingness to continue his work to the bank, but stated that he is prepared to do this work not on the remunerations that are mentioned in Ex.A.4 and he mentioned the rates at which he would do his work. As per Ex.A.10, he proposed his remuneration at Rs.25,000/- per month for financial accounting works and Rs.3/- per account per year towards ledger balancing works. Thus, on the question of remuneration the respondent did not agree for the proposal made by the bank and he made a counter offer of his rates. These aspects are not in dispute. According to learned counsel for appellant-bank, after this Ex.A.10 counter offer, there was no written acceptance on part of appellant-bank and therefore, it should be construed by this Court that the bank did not accept this counter offer. Learned counsel further submits that the fact that the bank did not accept this counter offer is to the knowledge of the respondent himself as otherwise he would have stopped continuing his work with the bank. Learned counsel argues that the very fact that the respondent continued his work is indicative that he had agreed to Ex.A.9 proposal and therefore, he is bound 9 Dr. VRKS, J A.S.No.534 of 2010 to receive only such remuneration as was stipulated in Ex.A.9 read along with Ex.A.4 and nothing more.
15. In this regard, one has to notice a few further facts. It is undisputed by pleadings and was also admitted by DW.1 that for Ex.A.10 issued by respondent, the bank did not give any reply. By 31.03.2001 Ex.A.9 mentioned stipulated period 2000-2001 came to an end. Thereafter it was the respondent, who addressed a letter dated 08.10.2001 as per Ex.A.11 to the bank. In this he had submitted his part bills for the works he had carried out for the financial year 2000-2001 and referred to his Ex.A.10- letter dated 12.06.2000 wherein he proposed for certain rates prescribed by him and claimed for those amounts from the bank. He had also specifically mentioned about the need for computer contract work for the current year namely 2001-2002. Be it noted, Ex.A.11 was addressed after expiry of the financial year 2000- 2001. Therefore, he was referring to the next year as 2001-2002. From the pleadings and the evidence of DW.1, it is crystal clear that for this Ex.A.11 also, there was absolutely no response from the bank. It is also to be noticed from the evidence of PW.1 as well as DW.1 that this Ex.A.11 was sent along with requisite statements of account. These accounts would indicate that for the year 2000-2001 respondent staked his claim at the rates proposed by him, namely, Rs.25,000/- per month for financial accounting works and Rs.3/- per account per year for ledger balancing work. He claimed a total amount of Rs.5,93,934/- as due. There was no response for it from the appellant-bank. Next 10 Dr. VRKS, J A.S.No.534 of 2010 came letter dated 29.11.2001 as per Ex.A.12 sent by the respondent to the appellant-bank. In this he refers to the earlier communications and once again demanded for his overdue bills for the year 2000-2001 wherein he made a specific mention that the bank had paid him certain advance amounts and after making due credit of them he was asking the bank to pay the overdue bill amount. He stated that final bill for 2000-2001 is Rs.9,18,957/- and, after taking into account the advance received, the net amount was arrived at Rs.5,58,757/-. He attached the statement of accounts to this Ex.A.12. It is undisputed that there was no response for it from the appellant-bank. Then one has to notice a letter dated 17.03.2003 as per Ex.A.13. This was sent by respondent to the appellant-bank. In this he had mentioned about the fact that he had earlier submitted his bills for the year 2001-2002. He mentioned that the gross amount was Rs.7,86,402/- and he also mentioned the advance paid by the bank and received by him and requested the bank to pay the net amount overdue. He also referred to non-payment of his bills for the year 2000-2001. He annexed to it statement of accounts. It is undisputed that the bank did not respond to this also. Thereafter the respondent had sent a further detailed letter dated 17.03.2003 as per Ex.A.14 wherein all the above referred details are mentioned. There was no response to it from the bank. Then he sent Ex.A.15 letter dated 23.04.2003 to the bank demanding payment of his overdue amounts. In this he claimed 24% interest over the overdue amounts. There was no response to it. The infuriated respondent got issued a notice through his learned 11 Dr. VRKS, J A.S.No.534 of 2010 counsel on 19.06.2003 as per Ex.A.23 reiterating his agony and forewarned the bank about legal proceedings. It is then on 02.07.2003 under Ex.A.24 the bank through its learned counsel issued the reply notice. The essence of this reply notice and the essence of its written statement and additional written statement are same. Thus, from Ex.A.10 dated 12.06.2000 received by the bank, it is for the first time it responded more than three years later on 02.07.2003 under Ex.A.24. It is in the light of the above facts, the contentions that are argued are to be decided.
16. Learned counsel for appellants argued that mere silence on part of the bank cannot be called as acceptance. In this regard, the learned counsel cited Manepalli Udaya Bhaskara Rao v. Kanuboyina Dharmaraju1. The facts that were for consideration before the learned Division Bench were in the context of a summary suit filed under Order XXXVII C.P.C. For the notice issued by the plaintiff prior to the institution of suit, the defendant did not give any reply. The defendant in the suit moved an application seeking leave to defend. The question that fell for determination was whether non-issuance of a reply notice by the defendant would amount to admission of the contents of the notices issued by the plaintiff and therefore, the defendant was debarred from seeking leave to defend in the summary suit. The learned Division Bench answered the question and laid down the law stating that it cannot be said that mere non-issuance of a reply notice would constitute an admission on the part of the 1 2004 (4) ALT 600 (A.P.) (D.B.) 12 Dr. VRKS, J A.S.No.534 of 2010 defendant. That an admission has to be spelled out only from the positive acts on the part of the party, but cannot be culled out or cannot be based on any presumptions. The exchange of notices would only constitute a demand and refusal in writing, but the absence thereof would not either way constitute an admission in terms of Section 17 of the Indian Evidence Act, 1872. During the process of giving reasons for laying down such propositions, while considering Section 17 and Section 114 of the Indian Evidence Act, the learned Division Bench stated that silence or non-issuance of reply notice cannot be termed to be admission and the law in this country will not oblige the man who receives an absurd and vexatious notice to give a reply to it.
17. In the considered opinion of this Court, the above cited ruling does not help the case of the appellants. The facts and the legal principles and the contentions on the facts that were available before the learned Division Bench are totally different from the facts and circumstances available at hand in this case. The ruling refers to pre-suit notice and failure to give a reply before institution of suit and the consequence of such non-reply in a summary suit. Whereas in the case at hand, it is with reference to offer, acceptance, counter offer and acceptance that have fallen for consideration. Therefore, the cited ruling cannot help the appellants.
13Dr. VRKS, J A.S.No.534 of 2010
18. Learned counsel for appellants cited Union of India v. M/s. Uttam Singh Dugal and Co. (Pvt.) Ltd.2. That was a case where variation in terms of contract and the connected facts and law were to be adjudicated. On facts it was found that execution of a formal agreement between the parties was found to be an essential term and a condition precedent to the contract. Since in that case that condition precedent was not complied with, it was found that there was no concluded contract. It was in the process of deciding the said contention, the Court noticed and ruled that when there is a variance between the offer and acceptance, the acceptance cannot be said to be absolute and unqualified and the same will not result in the formation of a legal contract.
19. With reference to the principle mentioned in the above cited ruling, if the facts at hand are seen, they emerged in the following manner:
Under Ex.A.9 the appellant-bank proposed the remunerations as covered by Ex.A.4. As could be seen from Ex.A.10, the respondent did not agree for that remuneration. In addition to refusal to accept that remuneration, the respondent herein made a counter offer putting forth the terms of remuneration he demands. Thus, this counter offer was available for the appellant-bank. What has to be seen and not to be missed is that respondent's Ex.A.10 can be considered as a composite counter offer. In other words, he agreed to execute work and demands specific remuneration mentioned in it. This 2 AIR 1972 Delhi 110 14 Dr. VRKS, J A.S.No.534 of 2010 composite counter offer has to be accepted in toto or is to be negatived in toto or the bank was at liberty to put forth its own further terms and conditions. The law is that when party makes a composite offer, each part thereof being dependent on the other, the other party cannot by accepting a part of the offer, compel the other to confine its dispute only to that part not accepted, unless the party offering the composite offer agrees to that course vide The General Assurance Society Ltd. v. The Life Insurance Corporation of India3. Here in the case at hand, appellant-bank having received Ex.A.10 dated 12.06.2000 from the respondent had the option to stop the respondent from executing the works on the ground that it did not accept the counter offer of remuneration stipulated by the respondent. It did not do it. It accepted the respondent to continue to execute his works not only in the year 2000-2001 but also in the next year namely 2001- 2002. The contract is made the moment the work is accepted and consumed by the bank. As no reply was given by it denying and disputing the conditions attached to the work being continued, the acceptance of conditions must be implied from the conduct of the bank. In fact the words employed in Section 3 of the Indian Contract Act are relevant to be noticed:
"3. Communication, acceptance and revocation of proposals:--
The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any 3 AIR 1964 SC 892 15 Dr. VRKS, J A.S.No.534 of 2010 act or omission of the party proposing, accepting or revoking, by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it."
20. It shall be noticed that the appellant-bank which gave its offer under Ex.A.9 did not revoke it. The appellant-bank which received Ex.A.10 counter offer did not say that Ex.A.9 was withdrawn or did not say that it did not accept the work and the remuneration claimed. Such omission shall be deemed to be acceptance in terms of Section 3 of the Indian Contract Act. It may also be noticed that the general rule is that an offer is not accepted by mere silence on the part of the offeree. There may, however, be further facts, which taken together with the offeree's silence constitute an acceptance. One such case is where a part of the offer was disputed and the original offeree indicated that fact to the offeror showing that he understood the offer in a particular sense mentioned what he wanted. The indication amount to counter offer in which case it may be that mere silence of the original offeror will constitute his acceptance. The evidence on both sides and various admissions made by DW.1 clearly indicate that even after Ex.A.10 from the respondent wherein he stipulated his rates of remuneration, the bank was making advance payments which it did in 2000-2001 as well as in 2001-2002. It is not shown by evidence by these appellants that those advance payments were made making it very clear to the respondent that it made any calculations only in terms of its offer under Ex.A.9, but not in terms of Ex.A.10 proposed by 16 Dr. VRKS, J A.S.No.534 of 2010 respondent. Therefore, the ruling cited by the learned counsel for appellants does not help the case of the appellants.
21. Learned counsel for respondent cited Haji Mohammed Ishaq Md. Sk. Mohammed v. Mohamed Iqbal. That was a case where their Lordships have held that acceptance of goods received and making part payments amounted implied contract and therefore, the liability accrued upon should be discharged by the one who received the goods. Their Lordships held that whatever may be the jural relationship between the parties and when once it was clear that there was supply of goods and acceptance of them by the defendant on its own account the defendants made themselves liable to pay the whole of the price to the plaintiff therein. In the opinion of this Court this principle governs the situation at hand.
22. Learned counsel for appellants also cited Vedanta Limited v. Emirates Trading Agency LLC4. That was a case under Section 73 of the Indian Contract Act where on facts their Lordships found that there was no acceptance of a proposal and whatever available was a counter proposal which was never accepted and therefore, there was no concluded contract. In that case the quantity to be supplied and the duration for which the supply had to be made were all at dispute and in such context of facts the above ruling was given. In the case at hand, going by the evidence on both sides, full services of respondent are fully availed by the appellant-bank and it failed to pay what, by its 17 Dr. VRKS, J A.S.No.534 of 2010 conduct, it agreed to pay to the respondent. Therefore, the findings and the conclusions of the learned trial Court in granting the decree in favour of the respondent is unexceptionable. The learned trial judge appropriately considered the entire evidence and reached to correct conclusions.
23. Learned counsel for respondent argued for 24% interest per annum. This Court has considered this submission. The learned trial Court has recorded that referring to the very original agreement under Ex.A.1 and during the subsequent period there was no stipulation for interest for any delayed payments and therefore it refused to grant any interest over the overdue amount preceding the date of institution of suit. Learned trial Court also mentioned that in terms of Section 34 C.P.C., it thought it fit and just to grant 12% interest per annum for the suit period and 6% interest per annum from the date of decree till the date of realization. The respondent has not shown any principle of law that can be said to have been ignored by the learned trial Court in this regard. Therefore, this Court is not inclined to disturb the impugned judgment with reference to the clause concerning interest.
24. In summation it has to be stated that between the parties, there was a concluded contract and based on evidence, the learned trial Court granted the reliefs and they are in accordance with the material on record and they do not call for any 4 (2017) 13 SCC 243 18 Dr. VRKS, J A.S.No.534 of 2010 interference. Hence, both the points are answered against the appellants.
25. In the result, this Appeal is dismissed. Consequently, the impugned judgment dated 19.04.2010 in O.S.No.65 of 2003 of learned V Additional District Judge (Fast Track Court), East Godavari, Rajahmundry stands confirmed. There shall be no order as to costs.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 19.04.2024 Ivd 19 Dr. VRKS, J A.S.No.534 of 2010 THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR APPEAL SUIT No.534 of 2010 Date: 19.04.2024 Ivd