Delhi District Court
M/S Dip Chand Kailash Chand vs The Food Corporation Of India on 16 April, 2018
IN THE COURT OF SH. SAURABH PARTAP SINGH LALER
ADDITIONAL DISTRICT JUDGE-01 (CENTRAL)
TIS HAZARI COURTS, DELHI
C.S. No. 616072/16
M/s Dip Chand Kailash Chand,
1716-18, Naya Bazar,
Delhi-110006.
Through its registered partner
Sh. Kailash Chand Gupta.
......Plaintiff
Versus
The Food Corporation of India,
Registered Office at :-
No. 16, Barakhamba Road,
New Delhi.
Zonal Office (North) at :-
4th Floor, Ansal Bhawan,
Kasturba Gandhi Marg,
New Delhi-110011.
......Defendant
SUIT FOR RECOVERY OF RS. 4,09,250/- ONLY
Date of institution of suit : 09.09.1994
Date of pronouncement of judgment : 16.04.2018
JUDGMENT
1. The present suit for recovery of Rs. 4,09,250/- filed by the plaintiff firm against the defendant corporation, was decreed on 15.11.2002. However, in appeal against the said decree, bearing RFA No.316/2003, the said judgment was set-aside and the CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 1 of 36 matter was remanded back for passing of a fresh judgment. Portion of the said order dated 7.5.2012 is reproduced as under:-
"2. The reason why the matter has been remanded because whereas the respondent/plaintiff claims amounts with respect to the supplies made by it, the appellant/defendant claims that there were delays in making of the supplies and hence the appellant/defendant was entitled to liquidated damages but the impugned judgment does not set out facts, discussion and correlation of facts/discussion qua the delays actually caused and its bearing when we take the contractual clause of liquidated damages. It is also an issue whether the claim of liquidated damages is hit by Section 74 of the Contract Act, 1872, and on which there is no discussion in the impugned judgment. A reading of the impugned judgment shows that there are no details therein with respect to what are the total periods of delays i.e. how much is the delay with respect to the different supplies which were effected by the respondent/plaintiff. It is necessary to arrive at the total number of delays with respect to each supply inasmuch as the supply was spread over a long period, inasmuch as the entitlement to claim of liquidated damages will be with specific reference to the number of days of delay, taking the entitlement to liquidated damages as the upper limit specified under the relevant contractual clause. Of course, once again I may add that the respondent/plaintiff can also show the disentitlement to the claim of the liquidated damages on account of the bar of Section 74 of the Contract Act, 1872 to such liquidated damages if such case has been pleaded and proved in the trial Court.
3. I may also state that the liquidated damages which the appellant/defendant claims to have imposed, is both for delayed supply as also non delivery of certain items. All these issues including the aspects aforesaid will be gone into by the Trial Court and a speaking judgment will be passed with respect to the issues as urged by the different parties.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 2 of 36 Appeal is allowed by setting aside of the impugned judgment and remanding back the matter to the Trial Court for passing of a fresh judgment."
2. The facts of the case can be picked from earlier judgment dated 15.11.2002, as under:-
"1. This is a suit for recovery of Rs. 4,09,250/- filed by the plaintiff firm against the defendant corporation. The case of the plaintiff in nutshell is that it is carrying on business of jute goods, canvass bags etc. under the name and style of M/s Dip Chand Kailash Chand and Shri Kailash Chand Gupta is one of its registered partners and has signed and verified and instituted the present suit.
2. The defendant is wholly owned Government company carrying on business inter-alia of purchasing and selling of various goods and its registered office is at 16, Barkakhamba Road, New Delhi and having its Zonal Office (North) on 4th Floor, Ansal Bhawan, Kasturba Gandhi Marg, New Delhi and its Regional Office at various places in India including in the towns of Punjab Chandigarh etc.
3. In pursuant to tender advertisement dated 07.10.1992 floated by the defendant inviting sealed tenders for the purchase of new B-T will gunny bags the plaintiff furnished its tender dated 12.10.1992 which resulted into a contract whereby defendant agreed to purchase from the plaintiff 4575 bales of gunny bags at the negotiated rate of Rs. 13.15 p. per bag F.O.R. destination in Punjab inclusive of all taxes, levies, on the terms and conditions indicated in the tender. The defendant by way of order placed in the late evening of 13.10.1992 after 7.00 pm requiring the plaintiff to supply gunny bags in the following three phases commencing from 14.10.1992 and ending on 20.10.1992:-
a) In the first phase, the supply of 1800 bales was to be completed by 14/15.10.1992;
b) In the second phase, the supply of 2300 bales was to be completed by 16/18.10.1992; and CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 3 of 36
c) In the third phase, the supply of 475 bales was to be completed by 19/20.10.1992.
4. The above new terms and conditions regarding supply of bales being not part of the terms and conditions of the agreement between the parties were not binding on the plaintiff nor were acceptable to the plaintiff. In the tender notice, it was stipulated that the supply will commence within two days of the acceptance of the tender up to 31.10.1992, but while accepting the tender, the period of delivery was unilaterally reduced by the defendant to 20.10.1992 as against 31.10.1992. The restriction imposed for phased delivery was also contrary to the tender terms. The plaintiff had therefore, clearly recorded on the acceptance that the order is accepted but the deliveries will be subject to availability of trucks. The plaintiff vide letter dated 14.10.1992 addressed to the Deputy General Manager of the defendant at New Delhi, indicating that the entire tender stock was lying ready in the godowns of the plaintiff at Siraspur and Nangloi in Delhi which can be physically checked up and the procurement of the trucks for huge supplies to the defendant's centre in Punjab will of course take 3-4 days time. The plaintiff stated further in the said letter that the dispatches of the contracted goods will, however commence from 14.10.1992 and the supplies will be made provided the plaintiff gets sufficient number of trucks within the short duration of time. The plaintiff had requested the defendant that as agreed clause relating to liquidated damages will not apply if deliveries are delayed for the reasons indicated therein. The defendant had waived the clause relating to liquidated damages and also by his act and conduct the defendant extended the delivery schedule accordingly.
5. The plaintiff forwarded two pay orders for the total sum of Rs. 5,52,400/- to the defendants to recover the balance amount of the security amount of Rs. 9,02,400/-, which the plaintiff was required to deposit with the defendant. The plaintiff also requested the defendant that the amount of Rs. 2,50,000/- deposited earlier alongwith the offer at the time of furnishing tender shall be adjusted towards the security CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 4 of 36 deposit and asked further that the defendant to acknowledge the receipt of 5% E.M.D. i.e. Rs. 9,02,400/- by way of security deposit as per the terms and conditions of the tender. Accordingly, the defendant had accepted the stipulation and acknowledged the receipt of Rs. 9,02,400/- by way of security deposit in favour of the plaintiff.
6. The plaintiff commenced the supply of first phase of the contracted goods and dispatched 19 trucks load of B-T will gunny bags containing 806 bales to the defendants deposit in Punjab i.e. 454 bales to Bhatinda, 314 bales to Sangrur and 38 bales to Bareta and so on as per the delivery schedule subject to the availability of trucks for carrying the contracted goods as aforesaid. The plaintiff submitted that those delivery trucks reached the destination in time but the depots of the defendant refused to unload the trucks on account of non receipt of instructions from the defendants for the purchase of gunny bags from the plaintiff, thereby the truck owners were reluctant and ultimately refused to supply sufficient number of trucks for speedy and timely supply of the contracted goods under the fear and apprehension that the loan trucks will not be cleared and unloaded at various centres/depots of the defendant situated in Punjab and as such the truck owners will suffer heavily due to wrongful detention of the trucks at the destination. Inspite of the said hindrances and difficulties faced by the plaintiff in procuring the truck from the market, for the purpose of transporting the contracted goods, the plaintiff continued with his efforts to fulfill the contractual obligations within the reasonable dispatch. The plaintiff submitted that Sangrur Depot of the defendant had not unloaded the trucks dispatched on 14 th up to 16.10.1992, 14 trucks out of 16 trucks remained standing for unloading. Inspite of the above delay in unloading of trucks, the plaintiff dispatched further 29 trucks on 15 th containing 1970 bales and on 16.10.1992 the plaintiff dispatched 20 more trucks as recorded in letter dated 16.10.1992, addressed to the defendant.
7. The plaintiff submitted that the defendant failed to issue instructions to its various depots for quick clearance and CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 5 of 36 unloading of trucks, thereby, the defendant is in breach of contract and as such liable for payment of damages and detention charges to the plaintiff as suffered for the defendant's wrongful denial of unloading of trucks and/or for the wrongful detention of the trucks for a longer period at its depots in Punjab as aforesaid. The defendant refused to accept and take the delivery of trucks even on production of octroi duty receipt and even on receipt of instructions from District Manager, Bhatinda of the defendant as recorded in plaintiff's letter dated 22.10.1992, addressed to the defendant.
8. The plaintiff further submitted that eight trucks loaded with contracted goods were dispatched in the time for delivery to the centre of defendant at Jaitu. The trucks waited for an abnormally longer period for more than three days. Finally, the truck owners left the centre without unloading the bales. The plaintiff in its letter dated 31.10.1992 has further recorded that nine trucks containing 333 bales reached in time at the different centres of the defendant but the same were not unloaded by the respective centres. The plaintiff had to pay the detention and other charges to the said drivers reluctantly. The plaintiff further submitted that the defendant had kept 298 bales in their custody for a longer period, but returned the same to the plaintiff at a very belated stage and wrongly levied penalty on the plaintiff on account of non supply of goods. The plaintiff relied upon the letters dated 20.10.1992, 31.10.1992, 24.11.1992 and 26.11.1992 in this regard.
9. As per the arrangement finalised between the parties, 100% payment was to be released to the plaintiff within three days of the receipt of the goods by demand draft payable to the plaintiff at Delhi, failing which the interest was liable to be charged at the bank rate. The defendant delayed the payment to the plaintiff and invariably withheld 10% or 20% payments from the bills submitted for the goods supplied. The defendant wrongly levied liquidated damages on the ground of alleged delay of the supplies of the contracted goods, by the plaintiff. The plaintiff submitted that the defendant failed to release wrongly deducted amounts inspite of said letter CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 6 of 36 dated 20.11.1992 addressed to the defendant. The defendant has no right at all to withhold 10% or 20% out of the bills and/or impose liquidated damages of 2% on flimsy grounds.
10. Out of the bills submitted by the plaintiff to the defendant for payment of Rs. 84,93,383/- towards the supplies made of the contracted goods. The plaintiff was paid only a sum of Rs. 83,23,515.34 p. leaving a balance of Rs. 1,68,897.66 p., which was not paid by the defendant despite demand vide letter dated 06.01.1993. So, the plaintiff is entitled to claim interest at the rate of 18% on the amount withheld by the defendant from 01.11.1992 till its repayment. Similarly, out of the security amount of Rs. 9,02,400/-, which was deposited at Delhi on acceptance of the tender, the defendant released/refunded only part amount of Rs. 8,95.693.50 p. to the plaintiff much later of the completion of the deliveries vide cheque no. 065251 dated 15.06.1993 payable at New Delhi. So, the plaintiff is entitled to recover from the defendant outstanding security amount of Rs. 6,706.50 p. In addition to the above, the plaintiff is entitled to recover from the defendant a sum of Rs. 86,585/- by way of extra expenditure incurred or reimbursement of wrongful detention charges etc. and also an amount of Rs. 90,622.25 p. towards loss/damage suffered by the plaintiff on account of distress sale of 298 bales which were returned wrongly to the plaintiff after keeping them in their custody for an abnormally longer period. The plaintiff has claimed the following amounts from the defendant, particulars of which are summarized below :-
S. No. Particulars on account of Amount in Rs.
1. Outstanding amount against the 1,69,867.66 bills wrongly deducted
2. Outstanding amount of security 6,706.50 deposit wrongly withheld by the defendant.
3. Interest on Rs. 1,69,867.66 @ 55,468.59 18% from 01.11.1992 to 31.07.1994.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 7 of 36
4. Detention charges paid to truck 34,600.00 drivers on non-unloading of trucks by defendant.
5. Towards freight paid for goods 30,193.00 returned from Punjab to Delhi which were not unloaded by the defendant.
6. (a) Amount of freight paid for 19,930.00 return of 298 bales.
(b) Including loading charges. 1862.00
(c) Loss suffered on account of 90,622.25
distress sale of the said 298 bales
Grand Total:- 4,09,250.00
11. The plaintiff has prayed for decree in the sum of Rs. 4,09,250/- in favour fo the plaintiff and against the defendant with costs of the suit and interest at the rate of 18% p.a. from the date of the institution of the suit till realization of the decretal amount.
12. The defendant contested the suit and filed written statement. The defendant denied that the plaintiff is a partnership firm duly registered under Indian Partnership Act or Shri Kailash Chand is one of its registered partners. The defendant admitted that the advertisement dated 07.10.1992 was floated vide which tender for purchase of new BT gunny bags was invited. The plaintiff submitted a tender which was accepted by the defendant corporation vide zonal office telegram No. Gunny bales/kharif/92-NZ dated 13.10.1992. The defendant pleaded that it is a fact that the party deposited earnest money alongwith the tender. The plaintiff was required to complete the total supplies in three phases undelivered within the stipulated schedule. However, there was no clause vide which liquidated charges can be waived of in case of late delivery of gunny bags after scheduled date of deliver. The defendant admitted that on 13.10.1992 after CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 8 of 36 7.00 pm it placed order requiring the plaintiff to supply gunny bags in the three phases commencing from 14.10.1992 and ending on 20.10.1992, as detailed in para-5 of the plaint. The defendant denied that any new terms and conditions were imposed at the time of placement of order. The defendant submitted that the sealed tenders were invited from interested parties for supply of new BT will gunny bales of prescribed specifications and the successful parties were required to commence supply within two days of acceptance of their offer and to complete the supply latest by 31.10.1992. However, the defendant subsequently issued a corrigendum which was duly published in newspaper to the effect that the delivery of gunnies would be as per terms and conditions of the purchase order and delivery will be completed not later than 25.10.1992. The defendant denied that the restriction imposed for phased delivery was contrary to the tender terms. According to the defendant, the plaintiff had accepted the offer and was further bound to commence and complete the supplies within the prescribed period as per terms of the contract. There could not have been any conditional acceptance as the arrangement of the supply of the trucks was not responsibility of the defendant. The defendant admitted that the plaintiff deposited the security amount as per terms of the tender and accordingly the orders were made for supply of the gunny bales. The defendant denied it failed to unload the trucks on account of non receipt of instructions from the defendant for purchase of gunny bags from the plaintiff or on account of that reason the truck owners were reluctant and ultimately refused supply of sufficient number of trucks for speedy and timely supply of the contracted goods under the apprehension that the loaded trucks will not be cleared at various centres/depots of the defendant and as such the truck owners will suffer heavily due to wrongful detention of the trucks at the destination, as alleged by the plaintiff. The defendant further denied that 14 trucks out of 16 trucks remained standing for unloading at Sangrur depots, as alleged by the plaintiff. The defendant submitted that as and when any trucks were received from CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 9 of 36 the plaintiff, they were promptly unloaded as the requsite instructions had already been given by the defendant to various depots/centres in this regard. The defendant denied that it failed to issue instructions to its various depots for quick clearance and unloading of trucks and as such committed breach of the contract, or was liable to pay damages and detention charges to the plaintiff for wrongful denial of unloading and detention of trucks for a longer period at depots in Punjab. The defendant further emphatically denied that it refused to accept and take the delivery of trucks even on production of octroi duty receipt and even on receipt of instructions from District Manager, Bhatinda. According to the defendant, the plaintiff failed to deliver the contracted goods within the time stipulated and hence was liable to pay liquidated damages @ 2% as agreed between the parties.
12. The defendant denied that eight trucks loaded with the contracted goods were made to wait at Jaitu for an abnormally longer period for more than three days. It also denied that the said trucks containing 333 bales reached different centre of the defendant in time, but the same were not unloaded by the respective centres as alleged. The defendant denied that the plaintiff had to pay any detention and other charges to different trucks drivers as alleged. It also denied that it had occupied 298 bales in their custody for a longer period and returned at a very belated stage and wrongly levied penalty on the plaintiff on account of non supply of goods. The defendant submitted that the plaintiff was awarded tenders for the supply of 4575 bales of BT will gunny bales to various centres of the defendant in Punjab region at Sangrur, Faridcot and Bhatinda districts as follows :-
Sl. PHASE-1 Phase-II Phase-III
No. 14/15.10.1992 16/18.10.1992 19/20.10.1992
1. Bhatinda - 800 Bareta - 300 R. Puraphool -
125
2. Dhuri - 200 Budlada -700 Budlada - 350
3. Sangrur - 800 R. Purapoo
-1500
CS-616072/16
Deep Chand Kailash Chand Vs. FCI Page 10 of 36
Kotakpura - 500
Jaitu - 300
Total :- 1800 2300 475
13. The plaintiff delivered 31 bales short (undelivered) at Dhuri and 54 bales, respectively. Therefore, District Manager, Sangrur while forwarding No Dues Certificate recommended deduction of Rs. 6,706/- from the Security Deposit of the plaintiff.
14. The plaintiff delivered 500 bales at Kotakpura and 114 bales at Jaitu against supply order of 500/300 bales, respectively. The liquidation charges @ 2% deducted D.O. Faridkot from the plaintiff's bill for non supply of 186 bales at Jaitu and no dues certificate was sent accordingly.
15. The plaintiff supplied 788 bales at Bhatinda against supply order for 800 bales, 258 bales at Bareta against 300 bales, 983 bales at Budlada against 1050 bales and 298 bales against 625 bales at Rampuraphool. Liquidation charges were deducted for delayed supply of 659 bales and for non supply of 448 bales by D.O. Bhatinda. Therefore, in all the plaintiff supplied only 3856 bales against 4575 bales against 4575 bales ordered for supply.
16. The defendant denied that the action of the defendant in whholding 10% or 20% payments out of the bills was arbitrary and illegal and contrary to the arrangements finalized for payment of the goods as alleged by the plaintiff.
17. The defendant submitted that as per clauses (d) of appendix -1 of the tender from, the gunny bales shall also be subjected to inspection by the FCI staff at the time of delivery. Since, 100% inspection of the bales supplies made was not possible immediately on the arrival/unloading of trucks and as such 90% payment was released immediately in one of the districts. The balance 10% amount was also released subsequently. The defendant denied that a sum of Rs. 1,69,867.66 p. was outstanding in the account of the plaintiff from the defendant as alleged. According to the defendant, a sum of Rs. 6,706.60 p. was recovered from security amount on account of liquidated damages for non supply of 85 gunny CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 11 of 36 bales at Sangrur, as the plaintiff failed to deliver gunny bales within delivery schedule as per para-f(ii) of Appendix-1 of the tender form. The defendant denied that it is liable to pay a sum of Rs. 86,585/- by way of alleged extra expenditure incurred or reimbursement of wrongful detention charges etc. and also an amount of Rs. 90,622.25 p. towards loss/damage allegedly suffered by the plaintiff on account of distress sale of 298 bales wrongly returned to the plaintiff by the defendant after keeping them in their custody for an abnormally longer period as alleged by the plaintiff. Accordingly to the defendant, in fact no loaded trucks were returned, neither any truck of the plaintiff was detained by the defendant. The defendant has alleged that there was no provision for payment of interest and has prayed for the dismissal of the suit.
18. In the replication, the plaintiff denied the averments made in the written statement and reaffirmed the statements made in the plaint."
3. After completion of pleadings, following issues were framed on 16.07.1998:-
I. Whether the plaintiff is a partnership firm and the suit has been signed, verified by competent person? OPP II. Whether the plaintiff supplied the goods to the defendant as per terms during the contract period? OPP III. Whether the plaintiff is entitled to the suit amount, if so, at what amount? OPP IV. Whether the plaintiff is entitled to interest, if so, at what rate and for period? OPP V. Relief.
4. In support of its case, the plaintiff has examined only one witness PW-1 Sh. Laxmi Narain Gupta, Manager of the plaintiff CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 12 of 36 firm and defendant corporation merely examined Sh. Niranjan Singh, Assistant Manager (Depot), FCI, Regional Office, Punjab and Chandigarh as DW-1.
5. As an application under Order XI Rule 12 & 14 read with Section 151 CPC was filed by the plaintiff, which was allowed vide order dated 08.05.2002 and defendant was directed to file original documents as mentioned in para no-5 of the application, hence, defendant produced CW-2 Sh. Ramesh Chander Bhatia, AG-II(M), FCI, Regional Office, Punjab, on 21.08.2002, who brought the file of the defendant from the Regional Office of the defendant at Chandigarh, containing some relevant documents and proved the copy of the same as Ex CW-1/1 to CW-1/15.
6. Arguments were addressed by both the parties and written arguments were filed by the parties.
FINDINGS ON THE ISSUES FRAMED ARE AS UNDER :-
7. ISSUE NO-1:- Whether the plaintiff is a partnership firm and the suit has been signed, verified by competent person?
OPP Plaintiff witness PW-1 in his testimony has proved the copy of Form-A issued by the Registrar of the Firms, which shows that the plaintiff firm is a registered firm and Sh. Kailash Chand Gupta and Sh. Vishwanath Gupta are its registered partners. Plaintiff also proved another copy of the certificate issued by the Registrar of Firms in Form-B as Ex PW-1/2, which shows the plaintiff firm is a registered partnership firm. The plaint has been CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 13 of 36 signed and verified by Sh. Kailash Chand Gupta, registered partner of the plaintiff firm.
There is no counter witness summoned by the defendant to prove that the plaintiff firm is not registered and there is also no cross examination of PW-1 in this regard. Hence, it is held that the plaintiff firm is a registered partnership firm and the suit has been signed and verified by a competent person. Accordingly, Issue No.1 is decided in favour of the plaintiff and against the defendant.
8. ISSUE NO. 2, 3 & 4 :-
Whether the plaintiff supplied the goods to the defendant as per terms during the contract period? OPP Whether the plaintiff is entitled to the suit amount, if so, to what amount? OPP Whether the plaintiff is entitled to interest, if so, at what rate and for which period? OPP 8.1. As the three issues are interconnected, hence they are taken up together.
8.2. The present suit has arisen out of contract between the parties and before discussing as to who committed breach of contract, it is essential to understand as to what were the terms of the contract.
8.3. Admittedly, the defendant issued an advertisement in newspaper dated 07.10.1992, inviting tender from interested parties for supply of 20000 bales, each containing 300 new B-
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 14 of 36 Twill gunny bags size 112 cms X 67.5 cms weight 1021 grams, at various centers in Punjab. The advertisement mentioned that the supplies were to be started within two days of acceptance of offer and be completed latest by 31.10.1992. It also required 2% as earnest money and specified that 5% of the value of the offer will have to be deposited, if offer is accepted, after adjusting earnest money. In view of the said advertisement Ex. PW 1/4, the plaintiff filed tender dated 12.10.1992. The relevant portion of plaint in this regard is as under:-
"That pursuant to a tender advertisement dated 07.10.1992 floated by the defendant inviting sealed tenders for the purchase of new B-Twill gunny bas, the plaintiff furnished its tender dated 12.10.1992................."
Relevant portion of testimony of PW-1 is as under:-
"After going through the press advertisement and offered the tender Ex. PW 1/4 and filled up the tender."
8.4. Now coming to the offer letter that was submitted by the plaintiff with defendant. The same is Ex. PW 1/5 in evidence of PW 1 and Ex. CW 1/1 in evidence of CW-1 Ramesh Chander Bhatia, AG-II (M), FCI, Regional Office, Punjab. 8.5. Tender / offer letter dated 12.10.1992 Ex/ PW 15 ( Ex. CW 1/1) is an offer by the plaintiff to the defendant to supply 4575 bales of bags at price of Rs.1315/- per hundred bags including sales tax at FOR Punjab. "FOR" means "Freight on CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 15 of 36 Road" and it means that the goods would be transmitted from supplier to purchaser without any transportation charges. The said offer letter is reproduced as under:-
8.6. The said offer was accepted by the defendant by telegram/ savingram dated 13.10.1992 Ex. PW 1/6 and the defendant CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 16 of 36 asked plaintiff to supply 4575 bales at negotiated price of Rs13.15 per bag as per the time schedule provided in Annexure A (Ex. PW 1/7 & Ex. CW 1/7). The schedule is reproduced in tabular form as under:-
"Sl No. Name of party Total qty. Phase-I Phase-II Phase-III allotted 14/15-10-92 16/18-10-92 19/20-10-92
1. M/s. Dip a) Bhatinda 800 Bareta 300 R. Puraphoo1 125 Chand Kailash 4575 b) Dhuri 200 Budlada 700 Budlada 350 Chand, Delhi c) Sangrur 800 R. Purapool 500 475 1800 Kotkapura 500 Jaitu 300 2300 8.7. The said acceptance was subject to conditions as mentioned in Appendix I to the Invitation of Offer dated 12.10.1992, which was accepted by plaintiff. The same is Ex. CW 1/11 and relevant terms with respect to the present case are reproduced as under:-
"d) The gunny bales shall also be subjected to the inspection by the F.C.I. staff at the time of delivery. Any stock not conforming to the laid down specifications shall not be accepted.
e) The supplier shall be paid the cost of gunny bales accepted at the centre by the concerned distt. Manager on the bales of the bills only submitted and verified by the authorized representative of the FCI at the delivery point.
f) The Corporation shall not be liable to pay any interest on security by money deposited and no interest is either payable or will be paid on the amount of security deposits.
(i) If the supplier duly performs and completes the contract in all respects and presents an absolute 'No Demand Certificate', the Corporation shall refund security to the supplier after deducting all costs and all other expenses that the Corporation have incurred and all dues and other money including the losses and damages which the Corporation is entitled to recover from the supplier.
(ii) Time is the essence of the contract. If the supplier fails to deliver the gunny bales to the Corporation within the stipulated schedule he shall be liable to pay liquidated damages @ 2% of the total value of the gunnies remained undelivered with in stipulated schedule."
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 17 of 36 8.8. The plaintiff claims that the defendant while accepting offer vide telegram / savingram dated 13.10.1992 Ex. PW 1/6 and 1/7, modified the condition with respect to delivery of goods as advertised in newspaper dated 07.10.1992 Ex. PW 1/4. As per Ex. PW 1/4 (newspaper advertisement) the goods were to be supplied latest by 31.10.1992, whereas as per the acceptance telegram / savingram dated 13.10.1992 Ex. PW 1/6, Ex. PW 1/7 (Ex. CW 1/9), the bags were to be delivered in three phases and the last phase ended on 20.10.1992. 8.9. The defendant has not denied that there was change in the time period provided for supply in newspaper advertisement Ex. PW 1/4 and the acceptance telegram / savingram Ex. PW 1/6 and Ex. PW 1/7, but it took the defence that the last date of delivery in the advertisement Ex. PW 1/4 (dated 07.10.1992) was modified by subsequent newspaper advertisement dated 12.10.1992 Ex. PW 1/D2. Relevant portion of cross examination of PW-1 in this regard is as under:-
"I have no knowledge about this tender in various newspaper which is Ex. PW 1/D2. I have no knowledge that the delivery was to be completed not later than 25 th October 1992. Vol. I had delivered the goods to the defendant within 25th October, 1992."
8.10. Thus, even if the invitation advertisement dated 7.10.1992 was modified by another advertisement dated 12.10.1992 and the last day for delivery was fixed as 25.10.1993, still the acceptance telegram / savingram Ex. PW 1/6 and 1/7 CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 18 of 36 provided a different time line for delivery of goods. 8.11. Thus, question before the court is, whether such acceptance by defendant of the offer of the plaintiff can be said to be valid acceptance of the offer?
a) In this regard the could would like to reproduce Section 7 of the Contract Act, as under:-
"7. Acceptance must be absolute .In order to convert a proposal into a promise, the acceptance must (1) be absolute and unqualified;
(2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance.
b) Section 7 (1) of the Contract Act specifically provides that an acceptance must be absolute and unqualified in order to convert a proposal into a promise.
c) If the purported acceptance is conditional or qualified, it does not create contractual relationship. It becomes counter proposal, which may become a contract on the terms offered by the offeree if the proposer accepts it.
d) Thus, the acceptance telegram/savingram Ex PW-1/6 and Ex PW-1/7, which provided different time line for delivery of the goods, as compared to the one advertised by defendant on 07.10.1992 and 12.10.1992, cannot be said to be unconditional acceptance, rather, it is a counter proposal by the defendant to the plaintiff.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 19 of 36 8.12. However, the said counter proposal was accepted by the plaintiff on 13.10.1992 itself at 7:15 pm with the following remarks on telegram/savingram Ex PW-1/6 :-
"Received order and confirmed goods are in ready stock departing on availability of trucks. Trying best."
8.13. Thus, though the defendant in telegram/savingram Ex PW-1/6 and Ex PW-1/7 changed the time-line for delivery of goods, still the said counter offer/counter proposal was accepted by plaintiff unconditionally on 13.10.1992 at 7.15 pm. 8.14. The remark as reproduced above, in the opinion of the court amounts to unconditional acceptance of the counter offer of defendant, as the plaintiff did not request to modify any term of the proposal i.e. either the time line provided in Ex PW-1/7 or the penalty clause provided in Ex CW-1/11. 8.15. The plaintiff in order to save itself from the penalty clause provided in Ex. CW-1/11, strongly relies upon letter dated 14.10.1992 (Ex PW-1/8). The contents of the said letter is reproduced as under :-
"We are thankful to receive your order for supply of 4575 Bales B. T Will 44x26½ -21bs to your various centres in Punjab. We accept your order and wish to submit that the entire stock is lying in our godowns at Siraspur and Nangloi in Delhi which can be physically checked, this fact we have already mentioned in our offer dated 12.10.92. As the trucks in Delhi arrives from Punjab in a particular quantity daily and goes back on the same station, so it is not practically possible to get such a huge trucks within 3-4 days, however we ourselves and our full staff are on the lines to get trucks CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 20 of 36 at any rate from any transport and we hope that we shall get about 10/15 trucks today itself. As your schedule starts from 14th October but the order have been given on 13th evening after 7 P.M. so despatches can start from today only.
In view of the above facts it is requested that we should not be penalised for late delivery and for your satisfaction we once again offer that stocks can be inspected at our godowns at any time.
As per your order our 5% E.M.D. amount is Rs.9,02,400/- we have already deposited with our offer one pay order No. 506672 dt. 12.10.92 Rs. 3,50,000/- and two pay order Nos. 506671 dt. 12.10.92 Rs. 50,000/0 and 506812 dt. 14.10.92 Rs. 5,02,400/-, total Rs. 5,52,400/- are enclosed with this letter, kindly acknowledge the receipt of our E.M.D. Rs. 9,02,400/-."
8.16. The question before the court is : Whether the said letter dated 14.10.1992 save the plaintiff from the penalty clause provided in Ex CW-1/11?
a) In the opinion of the court, the answer is in the negative.
An offer once accepted, becomes contract and the terms of the contract cannot be unilaterally modified by any party to the contract. Once the plaintiff on 13.10.1992 unconditionally accepted the counter offer Ex PW-1/6 and Ex PW-1/7, the said contract became binding between the parties and the terms of the said contract could not be modified by plaintiff by issuing letter dated 14.10.1992 Ex PW-1/8. It may be noted that the plaintiff in aforesaid letter dated 14.10.1992 acknowledged the penalty clause, but requested that in view of the facts stated in the CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 21 of 36 application, the plaintiff be not penalized for late delivery. 8.17. From the aforesaid discussion it is clear that the term of contract, relevant for disposal of the present case are as under:-
"100% payment within three days of receipt of material by demand draft payable at Delhi. In case of any delay interest shall be charged at bank rate."1 "d) The gunny bales shall also be subjected to the inspection by the F.C.I. staff at the time of delivery. Any stock not conforming to the laid down specifications shall not be accepted.
e) The supplier shall be paid the cost of gunny bales accepted at the centre by the concerned distt. Manager on the bales of the bills only submitted and verified by the authorized representative of the FCI at the delivery point.
f) The Corporation shall not be liable to pay any interest on security by money deposited and no interest is either payable or will be paid on the amount of security deposits.
(i) If the supplier duly performs and completes the contract in all respects and presents an absolute 'No Demand Certificate', the Corporation shall refund security to the supplier after deducting all costs and all other expenses that the Corporation have incurred and all dues and other money including the losses and damages which the Corporation is entitled to recover from the supplier.
(ii) Time is the essence of the contract. If the supplier fails to deliver the gunny bales to the Corporation within the stipulated schedule he shall be liable to pay liquidated damages @ 2% of the total value of the gunnies remained undelivered with in stipulated schedule." (emphasis supplied)
h) Without prejudice to the levy of liquidated damages above either supplier bales or neglects to observe or perform his obligation under the contract it shall be lawful for the Corporation to forfeit the security deposit either in whole or in part at the discretion of the Zonal Manager (N)"2 8.18. Now coming to the next question i.e. who committed breach of said terms and conditions and why?
a) Plaintiff witness/PW-1 Sh. Laxmi Narain Gupta in his 1 Taken from Ex.CW-1/1 (i.e. offer letter issued by plaintiff) 2 Taken from Appendix I i.e. Ex CW-1/11.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 22 of 36 cross-examination dated 25.01.2001 admitted that the goods could not be supplied within the time frame provided by defendant. Relevant portion of cross- examination is as under :-
"There was deviation in certain deliveries which was next in our competence because of lack of time. I had written letter to the FCI regarding in ability to meet the supply in the stipulated time because the time was too short. FCT Officers verbally agreed for relaxation of time, however, despite our best efforts they did not get anything in writing.........it is correct that those letters were written after acceptance of tender."
b) Thus, it is an admitted fact that the goods were not delivered as per the order placed by defendant and the plaintiff was unable to meet the supply in the stipulated time. Thus, there was breach of the agreed terms of contract by the plaintiff.
c) In para-13 of WS on page-9, the defendant stated:-
"Therefore in all the plaintiff supplied only 3856 Bales against 4975 Bales ordered for supply."
The said averment is not denied in corresponding para of the replication.
d) Rather, in his cross-examination dated 11.10.1991, PW-1 testified as under :-
"We have raised invoices Rs. 1,52,11,820/- out of which payment of Rs. 1,50,42,052.34p received, balance of Rs. 1,69,867.66p still due and recoverable from the defendant."
e) It is an admitted fact that the price at which the gunny CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 23 of 36 bags were to be supplied was Rs. 13.15 per bag :-
1 Bale = 300 bags.
3856 Bale = 11,56,800 bags
11,56,800 bags x Rs. 13.15/- per bag = Rs.
1,52,11,920/- (total)
f) The said amount of Rs. 1,52,11,920/- is the same (with difference of Rs. 100 only) as mentioned by PW-1 in aforesaid cross-examination.
g) Thus, if not directly, indirectly PW-1 admitted in his cross-
examination that only 3856 Bale of gunny bags were supplied as against order of 4575 bales of gunny bags.
h) As regards amount of Rs. 1,69,867.66p, as stated by PW-
1 in the cross-examination and by plaintiff in para-13 of plaint, the defendant in para-13 on page-10 of WS stated as under:-
"------ It is submitted that an amount of Rs. 1,68,897.66p was rightly recovered on account of liquidated damages charges as per clause f(ii) of Appendix-1 of tender form."
i) At this stage, it is necessary to reproduce clause f(ii) of Appendix-I of tender form i.e. Ex CW-1/11, which is as under :-
"f) The Corporation shall not be liable to pay any interest on security by money deposited and no interest is either payable or will be paid on the amount of security deposits.
(i) If the supplier duly performs and completes the contract in all respects and presents an absolute 'No Demand Certificate', the Corporation shall refund CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 24 of 36 security to the supplier after deducting all costs and all other expenses that the Corporation have incurred and all dues and other money including the losses and damages which the Corporation is entitled to recover from the supplier.
(ii) Time is the essence of the contract. If the supplier fails to deliver the gunny bales to the Corporation within the stipulated schedule he shall be liable to pay liquidated damages @ 2% of the total value of the gunnies remained undelivered with in stipulated schedule."
j) As per defendant the gunnies which remained undelivered were: 4575bales - 3856 bales = 719 bales DW-1 also testified in this regard as under :-
"Out of 4575 bales the plaintiff supplied 3856 and 719 bales were less delivered."
k) As per clause f(ii), as reproduced above, the liquidated damages for failure to supply goods as per contract was fixed at 2% of the total value of gunnies that remain undelivered.
l) Total value of gunnies that remained undelivered is as under:-
719 bales x 300 = 215700 bags 2,15,700 bags x Rs. 13.15 per bag = Rs. 28,36,455/-
2% of Rs. 28,36,455/- = Rs. 56,729.1/-
m) The liquidated damages as per clause f(ii) therefore comes out to Rs. 56,729.1/- and not Rs. 1,68,897.66p as mentioned in para-13 of WS.
8.19. The question before the court is: "Whether the defendant is CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 25 of 36 entitled to levy liquidated damages of Rs. 56,729.1/- without proving actual loss caused to the defendant, due to non supply of 719 bales by the plaintiff?"
a) The defendant neither pleaded nor proved the actual damages or loss caused to it due to non-supply of 719 bales of gunny bags by plaintiff. However, Section 74 of Contract Act provides remedy in such a situation. The said section is reproduced as under:-
"Section-74. When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for." (emphasis supplied)
b) Under Section 73 of Contract Act, 1872, the actual loss or damage which naturally arose in the course of things has to be proved, but under Section 74 of Contract Act, 1872, the proof of actual loss or damage is not the sine qua non of awarding reasonable compensation.
c) In Maula Bux Vs. Union of India, Hon'ble Supreme Court observed as follows:-
"It is true that in every case of breach of contract the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree and the Court is competent to award reasonable compensation in case of breach even if no CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 26 of 36 actual damage is proved to have been suffered in consequences of the breach of Contract. But the expression "whether or not actual damage of loss is proved to have been caused thereby" is intended to cover different classes of contracts which come before the courts. In case of breach of some contracts it may be impossible for the Court to assess compensation arising from breach while in other cases compensation can be calculated in accordance with established rules. Where the Court is unable to assess the compensation, the sum named by the parties if it be regarded as a genuine pre-estimate may be taken into consideration as the measure of reasonable compensation, but not if the sum named is in the nature of a penalty. Where loss in terms of money can be determined, the party claiming compensation must prove the loss suffered by him."3
d) In Fateh Chand Vs. Balkishan Das, Hon'ble Apex Court observed as under:
"Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that impose upon the court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss of damage." it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract of things, or which the parties knew when they made the contract, to be likely to result from the breach."4 3 AIR 1970 SC 1955 at 1959, Para 8 : (1969) 2 SCC 554 4 (1964) 1 SCR 515 at 527 : AIR 1963 SC 1405 CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 27 of 36
e) In ONGC Vs. Saw pipes,5 the Supreme Court observed-
"Section 74 emphasizes that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation whether or not actual loss is proved to have been caused by such breach. Therefore, the emphasis is on reasonable compensation. If the compensation named in the contract is by way of penalty, consideration would be different and the party is only entitled to reasonable compensation for the loss suffered. But if the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss or such party is not required to lead evidence to prove actual loss suffered by him. Burden is on the other party to lead evidence for proving that no loss is likely to occur by such breach."
In the same case, the court subsequently also observed6 "Section 74 is to be read along with Section 73 and, therefore, in every case of breach of contract the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree. The court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequences of the breach of a contract..... In some contracts, it would be impossible for the Court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or unreasonable, Court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation."
f) As per the aforesaid judgments interpreting Section 74 of The Contract Act, the Court is competent to award 5 ONGC V. Saw Pipes Ltd. (2003) 5 SCC 705, 742, AIR 2003 SC 2629 6 ONGC V. Saw Pipes Ltd., (2003) 5 SCC 705, 742 : AIR 2003 SC 2629 CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 28 of 36 reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequences of the breach of a contract. In the present case, the defendant Corporation has not proved the actual loss or damage suffered by it because of non-supply of 719 bales of gunny bag i.e. 215700 gunny bags, however, in the opinion of the court the liquidated damages, as mentioned in Clause- f (ii) of the contract Ex CW-1/11, @ 2% of the total value of the gunnies that remained undelivered within stipulated schedule, can be said to be reasonable compensation for the breach committed by the plaintiff, as in order to purchase the said gunny bags the defendant Corporation had to undergo the entire exercise of inviting tenders by making fresh advertisements in newspapers etc. and all that exercise7 must have incurred expenses, which have been quantified by the parties at the rate of 2% on the un-supplied gunny bags, which cannot be said to be by way of penalty or unreasonable. In the opinion of the court the said liquidated damages as mentioned in contract Ex CW-1/11 is genuine pre-estimate by the parties as the measure of reasonable compensation. The damage for one gunny bag of Rs. 13.15/- is merely 26 paise and the said liquidated damage, in the opinion of the court, in the light of the aforesaid judgments can be granted by the court being reasonable, 7 Because of breach of contract by the plaintiff.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 29 of 36 even without proof of actual loss of damage.
g) Accordingly, it is held that the defendant is entitled to recover damages, as per clause-f(ii) of the contract, which as stated earlier comes to Rs. 56,729.10p. 8.20. The defendant has also levied penalty of Rs. 6,706.60 from the security amount on the ground that plaintiff failed to deliver 85 gunny bales at Sangrur within the schedule, as per clause-f (ii) of the contract Ex CW-1/11. The relevant para in this regard is para-14 of the written statement, which is reproduced as under:-
"14. That the contents of para 14 of the plant are wrong and emphatically denied. It is submitted that the amount of Rs. 6,706.60p. Was recovered from security amount on account of liquidated damages charges for non supply of 85 gunny bales at Sangrur as the plaintiff failed to deliver Gunny Bales within delivery schedule as per para f(ii) of appendix-I of the tender form."
As stated earlier, the defendant has already levied damages @ 2% as per clause-f(ii) of the contract by deducting Rs. 1,69,867.66 p from the amount due to the plaintiff and under the same clause the defendant wants to recover liquidated damages from the security amount. It is to be noted that clause-f(ii) of the contract does not deal with the security amount, rather, it is clause- h of the contract, which deals with forfeiture of the whole or part of the security deposit at the discretion of the Zonal Manager. The said para of the contract reads as under:-
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 30 of 36 "h) Without prejudice to the levy of liquidated damages above either supplier bales or neglects to observe or perform his obligation under the contract it shall be lawful for the Corporation to forfeit the security deposit either in whole or in part at the discretion of the Zonal Manager (N)"
Admittedly, there is no order passed by Zonal Manager for the forfeiture of the amount of Rs. 6,706.60 from the security amount and the said damages under para-f(ii) of the contract cannot be levied again and again by the defendant as stated in paras-13 and 14 of the written statement. Moreover, in the entire written statement it is not stated by the defendant that some of the goods were supplied after 20.10.1992, which as per para-6 on page-4 of written statement was much before the date of delivery mentioned in the corrigenda 8 i.e. 25.10.1992. At this stage, the court would like to refer to testimony of DW-1 Sh. Niranjan Singh, who as regards the last date for supply of gunny bags testified as under:- "A corrigendum was issued on 12.10.1992, which was also published in the newspapers amending the phase delivery upto 25.10.1992...... At Sangrur District, the plaintiff was to supply 1000 bales, they supplied 815 bales and there was a less delivery of 85 bales. At Sangrur District plaintiff supplied 839 bales beyond scheduled dates...... Plaintiff submitted No Due Certificate and the payment were released after deducting the dues of Rs. 6706.50 towards LD charges for non-delivery of 85 bales at Sangrur District.......
Q. In the advertisement FCI had stated that supply 8 Dated 12.10.1992 CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 31 of 36 should be made latest by 31.10.92 but while accepting the tenders you reduced the period upto 20-10-92 and into 3 phase deliveries?
A. The tenders was accepted against the corrigendum published in the newspaper dated 12-10- 92. Q. It is correct that in the corrigendum the offer was valid upto 16th October 92 and deliveries was to be completed by 25th October and FCI had never informed the party about the corrigendum by before accepting the tender?
A. The party was not informed separately before accepting the tenders.
It is correct that in the corrigendum all the terms and conditions would remain the same as stipulated in the advertisement dated 7-10-92.
The date of delivery as given in corrigendum of 25.10.1992 were acted upon. It is correct that the corrigendum last supply was to be made by 25.10.1992 irrespective of the phase delivery as there is no mention of the phase delivery in the corrigendum Ex DW-1/D2." (emphasis supplied) From the aforesaid cross-examination and the corrigenda dated 12.10.1992, by which the last date of delivery was fixed as 25.10.1992, it is clear that the defendant corporation was not entitled to claim any damages, either liquidated or otherwise from the plaintiff, if the goods were supplied before 25.10.1992, even if parties have agreed to phase delivery of goods by 20.10.1992.
CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 32 of 36 Accordingly, the defendant Corporation could not have levied any liquidated damages amounting to Rs. 6,706.60p from the plaintiff for the alleged non-supply of 85 gunny bales at Sangrur in phased manner because it is not the case of defendant that the goods were supplied at Sangrur after 25.10.1992. It may be noted that the area managers of the defendant filed affidavits as regards the supplies in 2017 and in the said affidavits it is mentioned that the goods were supplied at Sangrur by 18.10.1992, from which it is clear that the goods were supplied before 25.10.1992 i.e. the date mentioned in corrigenda dated 12.10.1992. Accordingly the deduction of Rs. 6,706.60p as mentioned in para-14 of written statement was wrongly made by the defendant from the security amount.
8.21. The plaintiff also claimed detention charges alleged to be paid to the truck drivers on non-unloading of trucks by the defendant and also towards freight paid for goods returned from Punjab to Delhi, which were not unloaded by the defendant, however, the plaintiff has not been able to establish by providing the bills etc. from the transporter or any witness from the transporter backed by record of the transporter to show that the plaintiff had to pay charges on account of non-unloading of the trucks as claimed in para no- 17 at page no-16 of the plaint. Similarly, the amount of any distress sale of 298 bales as claimed by the plaintiff including CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 33 of 36 loading charges and freight for the same is not established by any convincing evidence. Thus, the plaintiff is not entitled to these claims as made in para no. 17(iv) to 17(v)(a) to (c) in the plaint, total amounting to Rs. 90,622.25 p.9 8.22. As regards interest, the plaintiff in offer letter Ex. CW-1/1 mentioned that the rate of interest shall be at bank rate in case there is delay in payment. The relevant clause of the offer letter is as under:-
"100% payment within three days of receipt of material by demand draft payable at Delhi. In case of any delay interest shall be charged at bank rate."10 The plaintiff has referred to the said clause in para 12 of the plaint as under:-
"12. That the plaintiff submits that pursuant to the arrangement finalised between the parties, 100% payment was to be released to the plaintiff within three days of the receipt of the goods by demand draft payable to the plaintiff at Delhi. In case of any delay in making payment to the plaintiff, interest shall be charged at bank rate. ...."
The plaintiff in paras 13 and 17 of the plaint claimed interest at the rate of 18% per annum on the amount wrongly withheld by the defendant w.e.f. 1.11.1992.
Though no specific evidence has been lead by the plaintiff to prove the bank lending rates at that time, but the court taking judicial notice of the fact that at the said time the rate of 9 Reproduced from para 36 of judgment dated 15.11.2002, as this court concurs with the said observation made in the earlier judgment. 10 Taken from Ex.CW-1/1 (i.e. offer letter issued by plaintiff) CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 34 of 36 interests were quite high as compared to today, awards interest at the rate of 12% per annum on the amount withheld by the defendant (i.e. Rs.1,19,845.06p)11 w.e.f. 1.11.1992 till realization.
8.23. The three issues are decided accordingly and the plaintiff is held entitled to recover Rs.1,19,845.06p from plaintiff along with interest @ 12% per annum w.e.f. 1.11.1992 till realization12.
9. RELIEF In view of my findings on the aforesaid issues, the suit of the plaintiff is partly decreed as under:-
S. No. Particulars of claim made Amount Claimed Amount awarded
1. Outstanding amount 1,69,867.66 Rs.1,13,138.56p against the bills wrongly (after deducting deducted liquidated penalty of Rs.56,729.10p for non supply of 719 bales)
2. Outstanding amount of 6,706.50 Rs.6,706.50p security deposit wrongly withheld by the defendant.
3. Interest on Rs. 1,69,867.66 55,468.59 Rs.25,167.46p @ 18% from 01.11.1992 to (interest on 31.07.1994. Rs.1,19,845.06p @ 12% from from 01.11.1992 to 31.07.1994)
4. Detention charges paid to 34,600.00 ZERO truck drivers on non-
unloading of trucks by defendant.
5. Towards freight paid for 30,193.00 ZERO 11 Rs.1,13,138.56p plus Rs.6,706.50p.
12 Subject to time period mentioned in para 17 (iii) of the plaint.
CS-616072/16
Deep Chand Kailash Chand Vs. FCI Page 35 of 36
goods returned from
Punjab to Delhi which were
not unloaded by the
defendant.
6. (a) Amount of freight paid 19,930.00 ZERO
for return of 298 bales.
(b) Including loading 1862.00 ZERO
charges.
(c) Loss suffered on 90,622.25 ZERO
account of distress sale of
the said 298 bales
Grand Total:- 4,09,250.00 Rs.1,45,012.52p
Plaintiff is held entitled to recover from the defendant a sum of Rs.1,45,012.52p with proportionate costs and interest @ 12% per annum from the date of filing of the suit till realization on principal amount of Rs.1,19,845.06p.
Decree sheet be prepared accordingly.
File be consigned to record room. Digitally signed by SAURABH PARTAP SINGH LALER Date: 2018.04.16 20:40:37 +05'30' Announced in open Court (Saurabh Partap Singh Laler) on 16th Day of April, 2017. Additional District Judge-01 (Central) Tis Hazari Courts, Delhi.
(AD) CS-616072/16 Deep Chand Kailash Chand Vs. FCI Page 36 of 36