Punjab-Haryana High Court
Food Corporation Of India And Anr. vs Hardial Singh And Ors. on 18 July, 1996
Equivalent citations: (2004)114PLR207
Author: R.L. Anand
Bench: R.L. Anand
JUDGMENT R.L. Anand, J.
1. Food Corporation of India (hereinafter called 'the Corporation') has filed the present R.S.A. which has been directed against the judgment and decree dated 13.8.1992 passed by the Court of Additional District Judge, Ludhiana, who affirmed the judgment and decree dated 6.2.1990 passed by the Court of Sub Judge 1st Class, Ludhiana.
2. Brief facts of the case are that Sarvshri Hardial Singh, Gurmail Singh sons of Santa Singh, Lal Singh son of Mota Singh and Gurmail Singh son of Lal Singh filed a suit for the recovery of Rs. 1,33,422/-, claiming rental of the premises which were let out to the above Corporation along with interest at the rate of 24% with effect from 27.10.1985 till 13.10.1986 amounting to Rs. 18,400/-, and the case set up by the plaintiffs was that they were the owners of the property comprising of open pucca plinths measuring 23968 sq. ft. and open kacha plinths measuring 160305 sq. ft. situated at Tejpur Road, Raikot, District Ludhiana, as fully described in para No. 1 of the plaint. The defendants approached the plaintiffs for taking on rent the above mentioned open pucca plinths to which the plaintiffs agreed and quoted rates of 14 p. per sq. foot per month for pucca plinths and 10 p. per sq. foot per month for open kacha plinths. These rates were admitted by the defendants and they took on rent the said kacha and Pucca plinths w.e.f. 27.10.1985 and took tenanted possession till 25.4.1996. The defendants had not paid the agreed rent to the plaintiffs on the agreed rates despite legal notice having been served on them. Hence the suit was filed by the plaintiffs for the recovery of Rs. 1,33,422/-, the break-up of which is given as under :-
i) Rent for pucca plinths Rs. 19,908.40
ii) Rent for Kacha plinths Rs. 95,113.60
iii) Interest at the rate of 24% pa. w.e.f. 27.10.1985 till 13.10.1986 i.e. upto the date of the Filing of the suit. Rs. 18,400.00 Total: Rs. 1,33,422.00
3. The suit was contested by the Corporation and it was admitted that the defendants agreed to take the premises on rent from the plaintiifs at the rates Fixed by the defendants. According to the defendants the rate fixed was 4 paise per sq. foot per month for kacha plinth and 6 paise per sq. foot per month for pucca plinth, and not 14 paise and 10 paise for pucca and kachha plinths, respectively, as quoted by the plaintiffs. The plaintiffs were assured that they shall be paid rent as per instructions of the Corporation. The defendants were ready and willing to pay the same at the rate of 4 paise and 6 paise, respectively, for kacha and pucca plinths. By denying other material allegations of the plaint, the defendants prayed for the dismissal of the suit.
3. The plaintiffs filed replication to the written statement field by the defendants, in which they reiterated the allegations made in the plaint by denying those taken in the written statement.
4. From the above pleadings of the parties, the trial Court framed the following lssues:-
1. Whether the defendant took plinths at the rate of 14 p. per sq. foot per month and 10 p. per sq. foot per month pucca and kacha plinths, as alleged? OPP.
2. Whether the plaintiffs are entitled to recover any interest? If so, at what rate and to what extent? OPP.
3. Whether the plaintiffs are entitled to recovery the suit amount? OPP.
4. Relief.
5. The parties led oral and documentary evidence in support of their case and on the conclusion of the trial, it was held by the trial Court that the plaintiffs were entitled to the rent of the plinths at the rate of 10 paise per sq. foot per month for pucca plinth and 4 paise per sq. foot per month for kacha plinth and in this manner the plaintiffs were entitled to only Rs. 52,854 as the amount of rent. The Court also awarded Rs. 2995/- by way of interest. In this way the trial Court decreed the suit of the plaintiffs for the recovery of Rs. 55,849/- with proportionate costs and future interest at the rate of 12% per annum from the date of the filing of the suit fill payment.
6. Aggrieved by the judgment and decree, the defendants filed the first appeal before the Court of Additional District Judge, Ludhiana, who affirmed the judgment and decree of the trial Court and it will be useful for me to incorporate the following observations of the learned first appellate Court at the first instance before dealing with the arguments raised by the learned counsel for the parties in the present appeal:-
"... The plaintiffs have not been able to show any agreement having been executed by the defendants to pay the rent at the rates demanded by them. In fact, no agreement allegedly executed between the parties has been brought on the record and the case of the parties rests on their pleadings and admissions only. The trial Court rightly allowed rent to the plaintiffs at the rate of 10 ps. and 4 ps. per sq. foot per month respectively, for pucca and kacha plinths taken on rent."
7. I have heard Shri Gopi Chand, Advocate, on behalf of the appellants, and Shri Sumeet Mahajan, Advocate, on behalf of the respondents, and with their assistance have gone through the record of this case.
8. Learned counsel for the appellants was highly critical of the impugned judgments and assailing the findings of the Courts below, he argued that both the Courts did not appreciate the pleadings and submissions of the suit and wrongly came to the conclusion that the plaintiffs were entitled to the rent at the rate of 10 paise per square foot per month for the pucca and 4 paise per square foot per month for the kacha plinth. According to the learned counsel, the agreed rates were 4 paise per sq. ft. per month for the kacha and 6 ps. per sq. ft. per month for the pucca plinths, respectively. Also it was submitted that the Courts below could not award interest more than 6% from the date of the passing of the decree till payment.
9. On the contrary, it was submitted by the learned counsel for the respondents that the judgments and decrees of the Courts below are according to law and the proved facts on the file.
10. The first point which requires determination of this Court is about the rate of rent. The case put up by the plaintiffs in para No. 2 of the plaint was that they quoted rates of 14 p. per sq. ft. per month for open pucca plinths and 10 P. per sq. ft. per month for the open kacha plinths, which rates were admitted by the defendants and as such they took on rent the said open kacha and pucca plinths w.e.f. 27.10.1985 and the defendants remained in possession thereof up to 25.4.1986. Plaintiff No. 4 Gurmail Singh (P.W1) was examined in the trial Court at the first instance on 9th March, 1989 and stated on oath that there was a written agreement between the parties regarding the rate of rent. The said written agreement he had not brought in Court but had been attached with the file. Said Gurmail Singh again appeared in the witness box on 5.5.1989 and deposed that there was an agreement in writing regarding rate of rent of Kacha Plinth and Pucca Plinths and that agreement had been in the case file. The said agreement was on a plain paper but he could not trace written agreement entered by him with the F.C.I. on the file. In other words plaintiff No. 4 has relied upon a written document forming the basis of the agreement. In Sukhwant Rai v. Mis Kalu Ram Khiali Ram, Mandi Gobindgarh, (1991-2)100 P.R.L. 226 wherein it has been held that Section 91 of the Evidence Act is an absolute, bar to the production of any oral evidence to prove the terms of a contract which has been reduced to writing. If the written contract is inadmissible in evidence, a suit to enforce it must fail. Therefore, the plaintiffs cannot be allowed to say that the rented premises were given on rent at the rate of 14 paise per sq. ft. per month for pucca plinth and 10 paise per sq. ft. for kacha plinth, as rightly held by the Courts below.
11. Now I would like to deal, with the stand of the defendants who alleged that the premises were taken on rent at the rate of 6 paise per sq. ft. per month for pucca and 4 paise per sq. ft. per month for Kacha plinths respectively. Again I would revert to the pleadings of the parties containing their respective stands in the shape of admissions, on which the learned first appellate Court has relied. In Para 2 of the written statement it is the pleaded case of the defendants that the rates fixed by the defendants were 4 paise for kacha plinths and 6 paise per sq. ft. for pucca plinths and the defendants had taken the above plinths at the above rates. Exhibit Dl is the letter dated 3/11.12.1985 written by the Deputy Manager (STG) on behalf of the Senior Regional Manager, to the District Manager, Food Corporation of India of different stations, including Ludhiana, where it has been communicated that Zonal Office had approved the rates for hiring of different types of plinths. In this letter the rate for kacha plinth is 4 paise per sq. ft. per month and for pucca plinth 10 paise per sq. ft. per month and for semi pucca plinths (lined by single bricks) 6 paise per sq. ft. per month. Now the defendants want to say that the agreed rate was 6 paise and 4 paise for pucca and kacha plinths, instead of 10 paise and 4 paise as awarded by the Courts below. This submission of the defendants is not borne out from its pleadings. The case of the plaintiffs was specific in para Nos. 1 and 2 of the plaint that there were two types of plinths one was pucca and the one was kacha. It is not pleaded by the defendants that the type of plinths were partly pucca and partly pucca kacha and that the plaintiffs could be awarded rental at the rate of 6 paise per sq. ft. for semi-pucca plinth and 4 paise for kacha plinths per sq. ft. per month. Order 8 Rule 3, C.P.C., lays down that the denial must be specific and the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages. Order 8 Rule 4 lays down that there could not be evasive denial and according to Order 8 Rule 5, C.P.C., if every allegation of fact in the plaint is not denied specifically or by necessary implication by the defendant in his pleadings, such allegation of fact shall be taken to be admitted except as against the person under disability. According to the, letter (Ex.D1) for pucca plinths 10 ps. per sq. ft. per month could be awarded to the plaintiffs and 4 ps. per sq. ft. per month could be awarded for the kacha plinth. There is no averment for evidence to the effect that the leased plinths were partly kacha, so as to entitle the plaintiffs to charge rental at the rate of 6 paise per sq. ft. per month. In these circumstances I am of the considered view that the learned trial Court did not exceed its jurisdiction nor misinterpreted the evidence nor made out a new case for the plaintiffs-respondents and rightly held that the rate was 10 paise per sq. ft, per month for the pucca and 4 paise per sq. ft. per month for the kacha plinths and only these two types of plints were let out to the defendants-appellants.
12. Now I come to the second point for determination about the interest to which serious contest has also been given by the learned counsel for the appellants, who submitted that the Courts below were not justified in granting interest at the rate of 12 per cent from the date of the passing of the decree till payment, in view of Section 34, C.P.C. On the contrary, it was submitted by the teamed counsel for the respondents that the transaction entered into between the parties was commercial and was connected with the industry, trade or business of the F.C.I., which was incurring liability. For my convenience I would like to reproduce Section 34 of the C.P.C. in this judgment in order to determine the rights of the parties :-
"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 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 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 a contractual rate the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
Explanation 1. - 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 purpose 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 therefore shall not lie."
13. Food Corporation of India has been set up under the Food Corporation of India Act, 1964, to perform some of the essential functions, which the Government in a welfare society is obliged to perform and is a machinery to perform Governmental activities in the specific social sphere and responsibility. The present agreement was sheer letting out of the premises to the defendant Food Corporation of India. The nature of transaction is a question of fact, which has to be specifically raised and proved. As per Section 34, C.P.C, the Court has the power to award interest at such rate as it deems reasonable to be paid on the principal amount adjudged, from the date of the suit upto the date of the decree. The awarding of interest at the rate of 12% per annum from the date of the suit upto the date, of the decree cannot be held to be unreasonable. The only dispute is from the date of decree onwards and the guiding words of Section 34 C.P.C. are that further interest could not be awarded more than 6% per annum unless the transaction is held to be commercial. According to the explanation a transaction is commercial if it is connected with the industry, trade or business of the party incurring liability. But the present transaction can not be stretched so as to bring the case of the plaintiffs-respondents in the Ex planation-II of Section 34. Learned counsel for the plaintiffs-respondents submitted that a commercial transaction necessarily arises from commercial business which result into profit but Food Corporation of India is a corporate body whose primary function is to procure the foodgrains and to remit the same to the deficient State. In this view of the matter I am of the opinion that the plaintiffs-respondents were entitled to interest at the rate of 6% per annum from the date of the decree till payment and to that extent I modify the judgment and decree of the trial Court.
14. The net result is that this appeal is partly allowed. The judgment and decree of the trial Court is modified and the suit of the plaintiffs-respondents is decreed in part and a money decree for a sum of Rs. 52,854/- along with proportionate costs is passed in the favour of the plaintiffs - respondents along with interest at the rate of 12% per annum from the date of the filing of the suit fill the passing of the decree by the Sub. Judge 1st Class, Ludhiana, i.e. 6.2.1990, and at the rate of 6% per annum on the principal amount of Rs. 52,854/- from 7.2.1990 till the entire amount is paid to the decree holders-plaintiffs. The appellants shall also bear the costs of this appeal. The counsel's fee is assessed at Rs. 500/-. The amended decree shall be prepared according to law.