Delhi District Court
U.P. Co-Operative Federation Limited vs Union Of India on 12 April, 2012
IN THE COURT OF AJAY GOEL: SCJ CUM RC(CENTRAL): DELHI.
S-1569/06/89
In the Matter of:
U.P. Co-operative Federation Limited
Having its registered office at Lucknow
and office at 10-11, Local Shopping Centre,
(DDA) (Udai Park), Maszid Moth Extn.,
New Delhi. ........Plaintiff.
VERSUS
1.Union of India,
(Service to be effected through)
The Secretary, Ministry of Defence,
Department of Defence-Army Purchase
Organisation, Govt. of India,
Krishi Bhawan, New Delhi.
2.Chief Director or Purchase,
Army Purchase Organisation,
Department of Defence,
Ministry of Defence,
Krishi Bhawan, New Delhi. ........Defendants.
Date of Institution: 15.04.1989
Date of Assignment to this court: 07.01.2009
Date of Arguments: 12.04.2012
Date of Order: 12.04.2012
JUDGMENT
1. This is a suit for permanent injunction and declaration filed by S-1569/06/89 Page No. 1/10 plaintiff against the defendants. It was stated that plaintiff is a State Federation of Co-operative Society under the state of U.P. and is engaged in the business of procurement and supply of various kinds of pulses including Gram Whole. As stated on January 29, 1988, the Chief Director of Purchase defendant No. 2 issued invitation to tender in respect of the supply of 7550 M/T of Gram Whole for defence services wherein it was stipulated that tenders should be submitted by February 9, 1988 giving complete information without any pages thereof being detached and acceptance by the Chief Director of Purchase will be communicated by telegram, express letter of formal acceptance of tender. It was also stipulated that in case where acceptance is communication by telegram or express letter formal acceptance for tender will be forwarded to the tenderer as soon as possible. As stated the schedule to the tender indicated the period between April to August, 1988 as the delivery period for the total quantity and supplies to be on the basis of F.O.R. station of dispatch. As stated by a telegram received on March 29th 1988 from DEFAPO stating that plaintiff's tender for the supply of gram whole opened on 19th February, 1988 accepted for 2550 M.T. for delivery of 1275 tonnes during July and August, 1988 respectively at a rate of Rs. 521.70 per M/T and indicating that the price was inclusive of packing and other incidentals and it was indicated in the said telegram that FOR stations of dispatch UP/MP/ Lucknow/Bombay/ Rajasthan/ Punjab/Haryana and Delhi. It was stated that petitioner S-1569/06/89 Page No. 2/10 was required to furnish security deposit by April 8, 1988 and since the defendants had not stipulated delivery before July 1988 the defendant was informed that security should be permitted to be furnished by June, 1988. As stated the plaintiff after receipt of the letter of acceptance pointed out to the defendants that there was a confusion with regard to the terms and conditions contained in the acceptance of tender. As stated thereafter the plaintiff received from the defendant a communication dated 20th June 1988 pointing out clause 4 of the terms and conditions and with regard to the confusing and conflicting provision to which attention has been specifically invited in letter dated 16th June, 1988 it was stated however the word "FOR stations of dispatch" have inadvertently crept in the A/T. It was further stated that after a receipt of the said communication the plaintiff by a letter of 15th July, 1988 pointed out to the defendants that their so called advance acceptance of tender cannot be described or considered as contract and the new and additional conditions that were sought to be introduced indicated that there was no contract concluded between the parties and the parties were not ad-idem. It was further stated that letter of 17th October, 1988 was wrongful, illegal, unfair and untenable. It was also stated that since there never came into existence any concluded contract between the parties there was no occasion for the defendants to effect any risk purchase or threaten to do so and their letter of 17th October, 1988 was wholly incompetent and S-1569/06/89 Page No. 3/10 unauthorised. Hence the present suit was filed by plaintiff.
2. During proceedings, defendants were directed to file written statement within four weeks but same was not filed, hence defence of defendant was struck off vide order dated 19.7.2005.
3. The defendant also preferred review application of order dated 19.7.2005 whereby defence of the defendant was struck off to file written statement but same was dismissed vide order dated 12.12.2009 and WS thus cannot be read though in written statement preliminary objections were raised stating that plaintiff has not paid the requisite court fee as per the correct and proper valuation of the suit and has valued the suit arbitrarily and improperly for the purpose of court fee. It was also stated that suit has not been signed, verified and instituted by duly authorised and competent person on behalf of the plaintiff and hence the present suit is not maintainable and liable to be dismissed on this ground alone. On merits, it was stated that schedule attach to the tender inadvertently and mistakenly contained the supplies be on the basis of F.O.R. station of dispatch and whereas the prices were to be borne by the contractor up to the delivery point at Lucknow therefore, the word FOR were erroneously mentioned in tender schedule and the actual intention was to write only the word "Station of dispatch" in the tender schedule. It was stated that plaintiff submitted the tender after clearly understood the definition of price. It was also stated that plaintiff later on wanted to run away from the contractual S-1569/06/89 Page No. 4/10 obligations and to avoid the supply of the goods, the plaintiff with malafide intention wrote a letter dated 14.6.1988 for clarification regarding the payment procedure, inspection and delivery of stores and price and it was stated that said letter was a mischievous attempt by the plaintiff to avoid the liability in the garb of clarification wheres if there was any doubt about the terms and conditions of the contract, the plaintiff would have sought the clarification before submitting the tender as well as before security deposit. It was further submitted that plaintiff itself was not interested in fulfilling its contractual obligations and therefore, the plaintiff deliberately and with malafide intention started writing the letters showing that in the garb of the alleged letters, the contractual obligations and liabilities can be avoided. It was also stated that when the plaintiff failed to supply the goods within the delivery period and thereby breached the terms and conditions of the contract, the defendants rightly cancelled the contract vide letter dated 17.10.1988 at the risk and cost of the plaintiff. Rest of the contents of plaint were denied.
4. On the pleadings of parties, the following issues were framed:-
1) Whether the suit has been properly valued for the purposes of court fees and jurisdiction?
5. In evidence, the plaintiff examined Sh. S. K. Gupta, Retired Sr. Regional Manager, in support of his case.
6. During proceedings, vide order dated 3.1.2007 my Ld. Predecessor S-1569/06/89 Page No. 5/10 has opined that suit was properly valued for the purposes of court fees and jurisdiction but still left the question to be decided at the time of final arguments.
7. During proceedings, issues were left to be framed on merits of the case. Hence same are framed today which are as under:-
1. Whether the plaintiff is entitled to the decree of declaration?OPP
2. Whether the plaintiff is entitled to the decree of permanent injunction?OPP
8. Hence now issues which are to be decided by this court are hereby re-framed and are given below:
1. Whether the plaintiff is entitled to the decree of declaration?OPP
2. Whether the plaintiff is entitled to the decree of permanent injunction?OPP
3. Whether the suit has been properly valued for the purposes of court fees and jurisdiction?
4. Relief.
9. The plaintiff has not to lead further evidence on the issues framed on merits and has based his claim on the evidence led earlier.
10.I have gone through the record and have heard the counsels for both parties. My issue-wise finding is given below:-
11.Issue No. 1. Whether the plaintiff is entitled to the decree of declaration?OPP and Issue No. 2. Whether the plaintiff is entitled to the decree of permanent injunction?OPP:- Both these issues are taken up together as they are inter-connected.
S-1569/06/89 Page No. 6/10PW-1 has clearly stated the terms and condition and modification carried out by defendant after entering into negotiation. The counsel for defendant has suggested the plaintiff in his cross-examination that terms and conditions were not introduced unilaterally by defendant but failed to prove the same. The necessity of introducing the unilaterally term has not been clarified and it was never agreed by plaintiff. The defence of the defendant was struck off and there is no defence on the disputed point. The invitation to tender was dated 29.1.88 vide Ex. PW-1/A and Ex. PW-1/B is the copy of tender. Ex. PW-1/C is the acceptance of tender by way of telegram on the terms and condition mentioned therein which was accepted vide telegram as well as vide post Ex. PW-1/D. Thereafter vide Ex. PW-1/E the request was made by plaintiff regarding the permission of furnishing the security by June 1988 and some clarifications were sought vide letter dated 14.6.88 Ex. PW-1/F which was clarified vide order dated 20.6.88 by defendants modifying the terms of delivery by adding stations of dispatch and terms were modified in clause (iv) of the terms and conditions by substituting some words in para 9 of telegram dated 28.3.88 EX. PW-1/C by deleting the word "For" in 9th line between words "stop and station" and separate station for each delivery was mentioned vide this corrigendum which clearly was a modification of the earlier contract and Ex. PW-1/G can be termed as counter offer and was introduced unilaterally which was altogether new, different and additional term seeking modification of earlier S-1569/06/89 Page No. 7/10 order. Vide Ex. PW-1/H letter dated 15.7.88 the plaintiff showed its inability to accept the same. Vide Ex. PW-1/I letter dated 17.10.88 the contract was cancelled by defendants and defendants have sought to make the plaintiff liable under the contract which never entered into between the parties. Whole controversy thus rested whether addition of terms could be read as part of contract or altogether de-novo contract. The whole evidence produced by plaintiff shows that this was counter offer destroying the original and slight variation cannot be accepted as immaterial variation of the contract and law is well settled in this regard. It therefore needs to be examined if the changed term mentioned in the letter dated 20th June 1988 is a material variation in the terms of the contract or not. In AIR 1949 Cal 472 it has been observed as under:- "The word F.O.R are well known words in commercial contracts. In my judgment they mean when used to qualify the place of delivery, that the seller's liability is to place the goods free on the rail as the place of delivery. Once that is done the risk belongs to the buyer". In AIR 1990 Supreme Court 1753, it has been held that when the delivery of goods is FOR at place of dispatch, the property in the goods together with risk passes from the consignor to the consignee as soon as the goods are loaded at place of dispatch consignor not liable for short delivery of goods by railways. Who would be liable for the loss of the goods from the point? The goods are loaded in railway wagon till the goods are S-1569/06/89 Page No. 8/10 actually delivered to the consignee is certainly a vital and a material term to be concluded between the parties as it effects the rights of the party under the contract. If the term of delivery under the contract is FOR, the property in the goods together with risk gets passed on from the consignor to the consignee as soon as the goods are loaded in the railway wagon at the place of dispatch while in the other goods which is not sought to be introduced by the appellants/defendants, the liability of the consignor would remain till the goods are actually delivered at the pointed stations. To the same effect is AIR 1990 Supreme Court 1753. In this situation, it cannot be said that the changed term from term of delivery FOR to stations of dispatch is not vital and material. On the one hand the changed term material effects, the rights of the other parties as discussed above. Therefore, unless the changed term is accepted by the respondent/plaintiff, no concluded contract can possibly result. The changed term virtually amounts to counter offer and the counter offer amounts to rejection of the original offer. Thus it is clear that plaintiff has proved its case and parties were not at ad-idem by entering into contract and unilateral introduction of the term is fatal to original contract and is counter offer. These issues are decided in favour of plaintiff and against the defendants.
12.Issue No. 3. Whether the suit has been properly valued for the purposes of court fees and jurisdiction?:- The onus was on the defendant to prove the same. Even otherwise, the court has to S-1569/06/89 Page No. 9/10 see whether contract was valid or not or whether both the parties were at ad-idem while entering into contract or effective contract came into existence or not. If contract is not found to be in existence then decree of declaration is to be passed necessitating the benefit of consequential relief also. So no ad-velorum court fees is required to be paid, hence issue is decided in favour of plaintiff and against the defendants.
13.Relief:- In view of the finding on all issues, the suit of the plaintiff stands decreed with costs. Decree of declaration is passed in favour of plaintiff and against the defendants and it is declared that no concluded contract ever came into existence between the parties and alleged contract is nonest, ineffectual, void and stood vitiated. Decree of permanent injunction is also passed in favour of plaintiff and against the defendants and defendants are restrained from issuing or accepting any rick purchase tender/quotation or effecting any risk purchase as alleged or threatened and making any claim or demand by way of alleged risk purchase loss or damage. No liability exists on the plaintiff. Decree sheet be prepared. File be consigned to record room.
Announced in open court on (AJAY GOEL)
12.04.2012. SCJ cum RC(Central)/Delhi.
S-1569/06/89 Page No. 10/10