Kerala High Court
P.K.Abraham vs M/S.Malabar Cements Limited on 2 August, 2012
Bench: K.Hema, A.M.Shaffique
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MRS.JUSTICE K.HEMA
&
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
THURSDAY, THE 2ND DAY OF AUGUST 2012/11TH SRAVANA 1934
AS.No. 363 of 1997 ( )
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OS.130/1993 of PRINCIPAL SUB COURT, PALAKKAD
APPELLANT/PLAINTIFF:
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P.K.ABRAHAM, S/O. KURIAN,
AGED 47 YEARS, RESIDING AT
PURAKKAT HOUSE, ALANGAD - 683611.
BY ADV. SRI.R.ANILKUMAR
RESPONDENT/DEFENDANT :
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1. M/S.MALABAR CEMENTS LIMITED
WALAYAR, P.O. PALAKKAD TALUK
AND DISTRICT, REPRESENTED BY
ITS SECRETARY.
2. THE MATERIALS MANAGER,
MALABAR CEMENTS LIMITED,
P.O.WALAYAR, PALAKKAD TALUK,
PALAKKAD DISTRICT.
R1 BY ADVS. SRI.B.S.KRISHNAN(SR.)
SRI.K.ANAND (A.201)
BY ADV. SMT.LATHA KRISHNAN
THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 13/04/2012,
THE COURT ON 02-08-2012 DELIVERED THE FOLLOWING:
BP
K.HEMA &
A.M.SHAFFIQUE, JJ.
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A.S. No. 363 of 1997 - E
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Dated this the 2nd August, 2012
J U D G M E N T
SHAFFIQUE, J.
The plaintiff is the appellant. The parties are referred to as plaintiff and defendants.
2. The suit is filed for recovery of an amount of Rs.2,01,800/-of which Rs.2,01,600/- represents damages for breach of contract.
3. The first defendant is a company and 2nd defendant is its Materials Manager. Plaintiff entered into an agreement with the first defendant by which the plaintiff offered to give on hire a pay loader for the work of handling raw materials at the plant site of the first defendant company at Walayar.
4. The work commenced on 07.10.92 and as per the terms of the contract, the plaintiff was to be paid hire charges @ Rs.800/- per working hour. It is the contention of the plaintiff that the equipment worked from 07.10.1992 until 16.10.1992 A.S. No. 363 of 1997 - E 2 and during that time it worked for more than the minimum of 12 hours prescribed in the contract except for one day i.e. 11.10.92. On 16.10.92 the 2nd defendant issued a stop memo and requested the plaintiff to withdraw the pay loader from the plant immediately. It is contended by the plaintiff that there was no specific reason for the 2nd defendant to have directed stoppage of the work as the contract was for a period of minimum one month from 07.10.92. Since the contract was prematurely cancelled he is entitled for hire charges for 12 hours per day for the remaining period of the contract in accordance with the terms of contract for which he claims Rs.2,01,600/-.
5. The defendants filed written statement denying the allegations. According to them, it was found by the Materials Manager that the pay loader was not working properly due to the engine getting heated frequently upto a termperature of 950C. It was also not able to fill the hopper due to the unsatisfactory working of the machine and hence a memo was issued to the plaintiff on 16.10.92 to withdraw the loader. The defendants therefore denied the liability to pay any amount as A.S. No. 363 of 1997 - E 3 damages. The defendants also relied upon Clause 1.2 of the terms and conditions of the work order which clearly stipulated that if the loader is not working properly or not giving the required output, the company has got the liberty to terminate the contract without notice. It was also contended that even if it is assumed that the termination of the contract forthwith was invalid, the plaintiff cannot insist upon performing the contract for the entire period as it was open for the plaintiff to terminate the contract by giving three days notice.
6. The trial court framed the issue as to whether the plaintiff is entitled for any decree for the suit amount. The plaintiff was examined as P.W.1 and the Materials Manager of the defendant was examined as D.W.1. Plaintiff relied upon Exts. A1 to A5 documents and the defendants relied upon Exts.B1 to B3. The court below found that the stoppage of work by notice dated 16.10.92 was not in terms of the contract and there is no material to show that the loader was not working properly. Therefore, the contract could have been terminated only by giving three days advance notice in terms of Clause 12 of Ext.A3. In that view of the matter, the court below decreed A.S. No. 363 of 1997 - E 4 the suit by directing the defendant to pay the plaintiff hire charges for three days which is computed at Rs.28,800/- and the defendant was also directed to pay interest @ 6% per annum from the date of suit till realisation.
7. The plaintiff has filed the appeal claiming that the court below having found that there was no justification on the part of the defendants to have terminated the contract, the plaintiff was entitled for the entire amount claimed for the balance period for which the plaintiff could not carry out the work. It is also contended by the learned counsel appearing for the plaintiff that the plaintiff was permitted to remove the pay loader only on 12.11.92 which is evident from Ext.A1 and as a result of which the plaintiff was not in a position to mitigate his damages and therefore he was justified in claiming the entire amount for the balance period for which the pay loader did not work. On the other hand, the learned counsel appearing for the respondents contended that there is enough evidence in the case to show that the pay loader was not working properly and it was not carrying the required load. According to the counsel, the court below did not properly appreciate the evidence and the A.S. No. 363 of 1997 - E 5 finding that there was no evidence to show that the pay loader was defective is absolutely baseless. The learned counsel also contended that since the pay loader was not working properly, the agreement was terminated by invoking clause 12 which states that if the loader is not working properly or not giving and required output, the company has the liberty to terminate the contract without notice. Otherwise, according to the counsel, the contract could be terminated by giving 3 days advance notice. Therefore, it was argued that when the pay loader is defective and does not give proper output, defendants can direct stoppage of the work and in that view of the matter, there is no reason to award any damages and the court below had awarded damages for three days which itself was more than sufficient.
8. The point for determination in this appeal is whether the plaintiff is entitled for damages as claimed in the suit. Ext.A3 is the work order and clauses 4 and 12 which are relevant is extracted hereunder:
" 4. The contract shall be valid for a minimum of one month from the date of commencement of hiring the loader (i.e. 7.10.92). If for any reasons A.S. No. 363 of 1997 - E 6 not attributable to you, the contract is terminated before the expiry of the contract, we shall pay you the rent @ 12 hours per day for the remaining period of the contract and no other compensation will be paid.
xx xx xx
12. The contract shall be terminated by giving three days advance notice. However, if the loader is not working properly or not giving the required output, we have the liberty to terminate the contract without notice."
9. Admittedly the period for which the pay loader was hired was for one month. Ext.B2 is the stop memo issued by the Materials Manager in which it is stated that the pay loader deployed in the plant is not able to meet their requirement. It is further stated that the pay loader is taking a lot of time to travel because the speed of the equipment is very slow and the engine is getting heated frequently upto 950C. It is further stated that because of the slow work of the loader, the company is unable to fill up the hopper and therefore the crusher has to run empty. According to the Materials Manager, the loader is A.S. No. 363 of 1997 - E 7 extremely in a bad condition and for that reason the plaintiff was asked to stop the work. Ext.A4 is the lawyer notice issued on 21.12.92 claiming the aforesaid suit amount. Ext.A5 is the reply issued by lawyer on behalf of the first defendant company. Ext.A1 is the letter issued by the company permitting the pay loader to be taken out from the factory. Ext.B1 is the letter issued by the plaintiff in reply to the stop memo Ext.A2. When a bill was issued by the plaintiff the defendant paid the amount for the period during which the pay loader was working and clearly indicating that the balance amount cannot be paid. Ext.B3 is copy of the said covering letter. Ext.B1 is a reply sent by the 2nd defendant in reply to Ext.B2 reiterating their stand in the matter. Plaintiff was examined as P.W1. To a pointed question as to whether there is any material to show the number of hours the pay loader had worked and what quantity of materials were carried, plaintiff was unable to give any answer as he was not in possession of any material. Therefore, the question to be considered is whether the defendant was satisfied with the work of the pay loader for which they have contracted for. The Materials Manager was examined as D.W.1. He categorically A.S. No. 363 of 1997 - E 8 stated that at the time when he issued Ext.A2 stop memo, the plaintiff was present. According to D.W.1, on 16.10.92 the work was stopped since the engine of the pay loader was getting heated and it was running dead slow. The Company was interested in transporting the maximum quantity of materials and he reported the matter to the Materials Department to issue Ext.A2 memo. During 1992, he was the Production Manager and he retired in 1995. He noticed the defects in the machine on 12th and 13th. He reported the matter to the company regarding the defects also. After noticing the defects for 2 or 3 days more, the machine worked. According to him, it worked very slowly. He also stated that there will be no records in the Company in regard to the defects noticed by him. Earlier the Contractor offered to rectify the defects, but he did not do so. According to him, the speed that is expected for a machine of this nature within a particular time is to load 100 to 150 tons and this machine was loading only 20 to 30 tons. The evidence of D.W.1 clearly indicates that this machine was defective. The Court below did not accept the evidence of D.W.1 only for the reason that no records were produced by the Company. It is A.S. No. 363 of 1997 - E 9 relevant to note that the pay loader was hired by the 1st defendant Company. It does not belong to them and therefore any record that could be maintained is only that of the plaintiff. The court below was not right in holding that in the absence of any records produced by the defendant, evidence of D.W.1 is to be discarded. We do not think that the court below had correctly appreciated the evidence of defendants. From the evidence of defendants it is clear that the defendant was justified in stopping the work of the pay loader forthwith in terms of the 2nd part of Clause 12. As such the defendant was entitled to issue Ext.A2 stop memo. That being the situation plaintiff is not entitled for any further amount and does not succeed in the appeal.
Hence the appeal is dismissed with cost.
K.HEMA, JUDGE A.M.SHAFFIQUE, JUDGE.
rka A.S. No. 363 of 1997 - E 10 K.HEMA & A.M.SHAFFIQUE, JJ.
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2nd August, 2012 J U D G M E N T