Andhra HC (Pre-Telangana)
Ramesh Agencies, Guntur Rep. By Sole ... vs Andhra Pradesh Co-Operative Oil Seeds ... on 5 April, 2006
Equivalent citations: 2006(4)ALT355, 2007(2)CTLJ127(AP)
JUDGMENT P.S. Narayana, J.
1. The unsuccessful plaintiff in O.S. No. 153 of 1987 on the file of Principal Subordinate Judge, Guntur, had preferred this appeal and inasmuch as the appellant died, her legal representatives were brought on record in CMP No. 3337 of 2001, dated 31 -3-2001, and at present they are prosecuting the present litigation. The respondent in the appeal, the defendant in the suit, is Andhra Pradesh Cooperative Oil Seeds Growers Federation Limited, a Co-operative concern. The parties hereinafter would be referred to as the plaintiff and the defendant for the purpose of convenience.
2. The plaintiff filed the aforesaid suit for recovery of Rs. 82,080/- towards damages with subsequent interest and also for costs of the suit. The defendant resisted the said suit. The learned Judge recorded the evidence of P.Ws.1 and 2, D.W.1 and also marked Exs.A-1 to A-18 and Exs.B-1 to B-5 and ultimately came to the conclusion that the plaintiff is not entitled to the relief prayed for and dismissed the suit. Aggrieved by the same, the present appeal is preferred.
CONTENTIONS OF SRID. HANUMANTHA RAO
3. Sri D. Hanumantha Rao, learned Counsel representing the present appellants while making elaborate submissions had pointed out to the whole correspondence available on record in general and also to Exs.A-1, A-2, A-4 and Exs. B-1 to B-4 in particular and would maintain that even in the light of this correspondence or the material placed before this Court, the Doctrine of Frustration is not applicable and hence the learned Judge had adopted a wrong approach in appreciating the evidence available on record. The counsel would maintain that in the light of the dates as can be seen from Exs.A-1, A-2 and B-1 to B-4, it is clear that there is no supervening impossibility so as to apply the Doctrine of Frustration and on the other hand the applicability of the said Doctrine to be negatived inasmuch as the Doctrine of Forseability is applicable to the case on hand. The learned Counsel had taken this Court through the contents of Ex.A-4 in detail and also placed strong reliance on the decision of the Apex Court in Travancore Devaswom Board v. Thanath International (2004) 3 SCC 44. While further elaborating his submissions the learned Counsel also had pointed out to the language employed in Section 56 of the Indian Contract Act and would explain that in the light of the language, it cannot be said that the said Doctrine is applicable to the facts on hand. The learned Counsel also had explained the conditions relating to the supply within the State and supply outside the State and in the absence of any evidence in relation thereto, the learned Counsel explained that the burden of proof lies on the defendant and would maintain that the defendant was unable to discharge the said burden, whereas clear proof is available as far as the damages suffered by the plaintiff are concerned. The evidence of P.W. 1 and also P.W.2 is available in relation to the difference of price or the increase in price and the damage actually suffered by the plaintiff, and in that regard the counsel placed strong reliance on Ex.A-18 and also would comment that there was no cross-examination to P.Ws.1 and 2 in relation to Ex.A-18 and this aspect may have to be taken into consideration. The learned Counsel also had further explained about Exs.A-7, A-12 and A-15 and the other documentary evidence in detail and would maintain that in the light of the documentary evidence available inasmuch as there is clear proof of damage suffered by the plaintiff because of the difference of rate, the learned Judge should have decreed the suit instead of dismissing the suit. While making elaborate submissions the learned Counsel had pointed out to several of the findings which had been recorded by the learned Judge and would comment that the said findings cannot withstand the legal scrutiny.
CONTENTIONS OF SRI BALRAM REDDY
4. Per contra, Sri Balram Reddy, learned Counsel representing the respondent, defendant would contend that the obligation of the Federation to supply is clearly reflected in Ex,B-2. The learned Counsel also would maintain that along with the plaint only eleven documents were filed. Even if Ex. A-18 is to be taken into consideration, the difference of amount, if calculated, would be only around Rs. 5,000/-, and even this cannot be said to have been proved in accordance with law for the reason that P.W.2, the interested witness in P.W.1, alone had been examined. The learned Counsel also would maintain that the plaintiff had not chosen to enter into the witness box and on the contrary, the husband of the plaintiff was examined as P.W.1 and another witness as P.W.2. Ex.A-18 is just a copy and merely because P.W.2 was examined, it cannot be taken that Ex. A-18 is proved in accordance with law. The learned Counsel also pointed out in relation to Ex.A-5 and specified that though without prejudice is shown on Ex.A-5, the same was not signed either by the plaintiff or atleast by the husband of the plaintiff. The learned Counsel also pointed out to the relevant portion of the cross-examination of P.W.1 . Further while elaborating his submissions, the learned Counsel would maintain that there is no acceptable material placed before the Court to prove that in fact the plaintiff had suffered the damage so as to grant a decree. However, the counsel would maintain that in the light of the date 21-6-1985 in Ex.B-2, the Doctrine of Frustration is clearly applicable for the reason that it was not within the knowledge of the Federation what quantum to be supplied at a future date, but the fact is that the obligation to supply was in existence even from 21 -6-1985 as reflected in Ex.B-2. In the light of the non-specification of the quantum at the relevant point of time, the question of applicability of Doctrine of Forseeability would not arise inasmuch as only when instructions are issued the defendant is bound to follow the obligations specified under Ex.B-2 or otherwise. In this view of the matter, in substance, the findings recorded by the learned Judge are in accordance with law and hence the said findings need not be disturbed. The counsel also would maintain that in relation to the sale in favour of third parties no acceptable material is placed before the Court and none of such third parties had been examined except the interested testimony of P.W.2 and P.W.2 alone.
5. Heard the counsel and perused the oral and documentary evidence available on record and the findings recorded by the learned Judge.
6. Before proceeding with further discussion, it may be appropriate to have a look at the respective pleadings of the parties.
AVERMENTS MADE IN THE PLAINT
7. M/s. Ramesh Agencies, Guntur, by Sole Proprietor Smt. P. Anasuya Devi, the plaintiff, pleaded in the plaint as hereunder:
Plaintiff is a sole proprietrix, carrying on business as M/s. Ramesh Agencies at Guntur in oils and oil seeds. Defendant is registered under A.P. Co-operative Societies Act, with its office at Hyderabad also carrying on business in oils and oil seeds in the State of Andhra Pradesh through the broker Sri Balaji Ghanasyam, Hyderabad. Defendant sold groundnut expeller oil for immediate delivery 80 barrels at Rs. 186/- per 10 KG. F.O.R. Tadepalli of a net weight of 7.2 metric tones each of 2 deliveries of 40 barrels each. Payment of Rs. 1,33,920/- for each of the 40 barrels is required to be made before 31st July, 1986. Plaintiff accordingly paid defendant the aforesaid amount of Rs. 1,33,920/- each by different drafts within time. Upon receipt of the amounts, defendant issued delivery orders dated 29-7-1986 and 31 -7-1986 respectively in triplicate addressed to its Officer-in-charge at Vinod Solvent Extracts, Tadepalli. Such triplicate copies of orders were delivered to plaintiff for obtaining immediate delivery of the oil of 40 barrels each. Plaintiff received the first batch of delivery order in triplicate dated 29-7-1986. Upon which it immediately sent 40 empty barrels to defendant at Tadepalli for immediate delivery of oil. Plaintiff fulfilled all its obligations and has been ready and willing to take delivery of oil of both consignments as per schedule. Plaintiff has been also ready to send next consignment of 40 empty barrels also. Although delivery of oil has to be made at once by defendant, it failed to do so. Plaintiff represented to defendant the need for immediate delivery and of the readiness and willingness of plaintiff to obtain such delivery by arranging empty barrels etc. Defendant through its office at Hyderabad also confirmed to its officers at the mills at Tadepalli its instructions for immediate delivery as per confirmation letter dated 6-8-1986. In spite of several approaches made by plaintiff and in spite of plaintiff's readiness and willingness to receive the oil, defendant failed to deliver the oil and committed breach of the terms of the contract. Defendants were postponing such delivery by false premise and were making plaintiff to go about their mills at Tadepalli till about 3rd week of August, 1986. Plaintiff even made a written demand on defendant dated 19-8-1986 intimating that delivery of oil is unduly and unlawfully delayed, that the oil was in turn sold by plaintiff, that the increased market rate is at Rs. 243 per 10 Kgs. at Guntur and that defendant has to pay damages at the rate of 57 rupees per 10 Kgs. to Plaintiff in the event of nondelivery of oil immediately.
Defendant, however, failed to deliver the oil and instead expressed its unwillingness to fulfill its obligations. It has chosen to refund the amounts earlier paid by plaintiff by way of demand drafts. Such refund was accepted by plaintiff on 23-8-86; without prejudice to its rights for recovery of damages from defendant. The representation made by defendant that it was not able to deliver the oil because of its obligations to supply groundnut oil to Government etc. are not true and not tenable in law. Defendant is always aware of its obligations to the Government at all times. The contracts it made with plaintiff are not made subject to any such obligations. Defendant's obligations to deliver oil to plaintiff is independent of any such obligations and is undertaken by defendant with full knowledge of commitments if any to other parties. Having made the contracts with plaintiff and having accepted the sale proceeds by way of demand draft and having agreed and represented to make immediate delivery of a total of 80 barrels of oil FOR Tadepalli, defendant committed wilful default in fulfilling his obligations. It committed clear breach of the terms of the contract and its undertakings thereunder. In view of the prevailing and increased market rate of similar variety of oil in the market in the third week of August at the time of breach of contract and in view of loss suffered by plaintiff, defendant is bound to compensate plaintiff by payment of damages at the rate of Rs. 57 per 10 Kgs. coming to Rs. 41,040/- for each of the consignments of 40 barrels each and of a total amount of Rs. 82,080/-.
Plaintiff, therefore got issued through her Advocate a registered notice under Section 126 of A.P. Co-operative Societies Act to both the defendants and also to the Registrar of Co-operative Societies, A.P. State, setting forth its claim and furnishing all necessary particulars and demanded payment of the total amount of Rs. 82,080/-. Such notice sent by plaintiff's advocate dated 19-9-1986 was received by defendanton 22-9-1986 and by Registrar of Cooperative Societies on 29-9-1986. The Registrar of Co-operative Societies, A.P. State, duly acknowledged such receipt of notices and sent a copy of his letter addressed to defendant dated 7-10-1986 requiring defendant to report the action taken in the matter. Defendant has not chosen to send any reply nor make payment of the amount as demanded by plaintiff. Plaintiff is thus entitled to recover the same amount of Rs. 82,080/- with interest at 18%. Hence the suit.
AVERMENTS MAD IN THE WRITTEN STATEMENT
8. The written statement was filed by A.P. Co-operative Oil Seeds Growers Federation Limited, Hyderabad and subsequent thereto the said written statement was amended taking the plea of want of jurisdiction to entertain the suit. The averments made in the written statement are as hereunder:
1 (a) It is submitted that the defendant Federation is an Apex body at the State level and registered under the A.P. Cooperative Societies Act, 1964. It is concerned with the activities of all the oil seed growing and oil producing Cooperative Societies in the State. Its essential function is the production and distribution of essential commodity of edible oil to the public, and at the same time safeguarding the interests of oil seed growing farmers of getting remunerative price for their crops without being exploited by the middleman.
(b) It is further submitted that defendant in carrying out its statutory obligation of supplying 1/3rd of its oil stocks to the Civil Supplies Corporation to serve the needs of the latter under Public Distribution System , could not effect supply of oil, which is subject to the availability of stocks for which the plaintiff's firm filed the aforementioned suit in this Hon'ble Court claiming damages. In this connection it is submitted that this Hon'ble Court has no jurisdiction to entertain the suit for the following reasons:
(c) It is well settled and established law that to decide the question of jurisdiction of the Court to entertain a suit based on a contract regarding the purchase of goods the following points arise.
(1) The place where the offer is accepted i.e., the place of contract.
(2) The place where payment is made.
(3) The place where the delivery of goods was effected.
All the above facts constitute the cause of action. In the instant case the offer of the purchase of oil was accepted by the petitioner/defendant through a canvassing Agent/Broker of Hyderabad through telephone from Hyderabad, payment for the abovementioned purchase was also made at Hyderabad and the delivery order for issue of stocks at one of its units at Tadepalli which was subsequently closed during Nov., 1986 was issued from Hyderabad and thus the supply of stocks as aforementioned was not effected from Tadepalli. Thus either the whole or any part of the cause of action did not arise within the local limits of this Hon'ble Court and hence this Hon'ble Court is not the proper forum where the suit under reply is to be filed as it has no jurisdiction to entertain the suit, and if the petitioner firm has any grievance it has to agitate for the same elsewhere and, therefore, the present suit is liable to be dismissed with exemplary costs.
(d) It is further submitted that the plaintiff firm launch upon a speculative litigation with misleading and twisting tactics with the sole aim of ambitious and unlawful personal gain and filed the present suit and it deserved no encouragement and should be put down with a public interest is involved, the claims of the defendant Federation would override those of the plaintiff firm in any event and more so in this case in view of the facts mentioned above.
(2) The orders referred to by the plaintiff are not incorrect as also the deposit made by her with the defendant for the supply of 14.4 Mts. of groundnut oil at Tadepalli supply point. This defendant submits that in this regard the supplies of groundnut oil by the defendant is always under statute controlled by the Civil Supplies Corporation and every order for supply of groundnut oil fully is within the control of the Civil Supplies Corporation. As such the supply order to the plaintiff is also conditioned and falls within the control of Civil Supplies Corporation and the above facts are fully known to the plaintiff and therefore the plaintiff is also bound by the orders of Civil Supplies Corporation in the matter of supply of Groundnut oil according to their instructions and preference. Further in this case the defendant who had undertaken to supply groundnut oil to other States had a legal obligation to comply those orders to the extent of 1/3rd of the orders as conditioned by the Civil Supplies Corporation. These facts too are known to the plaintiff and everybody in this state as well as in other states. In this view of the matter the allegations in the plaint that the plaintiff's order is not conditioned by the restrictions of the Civil Supplies Corporation is wholly incorrect and untenable. The Civil Supplies Corporation is the sole authority to control and regulate the supply of groundnut oil and other essential commodities is a matter of common knowledge too well known to everybody including the plaintiff from the inception of formation of the said Corporation with its duties and rights. The plaintiff and others in the District are also aware of the facts, the Collector of the District as a functionary of the Civil Supplies Corporation issues instructions from time to time as to preferential rights of parties to whom supplies have to be made both in this State and outside.
(3) The plaintiff admittedly received the two drafts for a total sum of Rs. 2,67,840/- and the plaintiff admittedly encashed the drafts through her bankers. The plaintiff has not chosen to refuse the said drafts issued by the defendant in full satisfaction of her claim and the amount deposited by her with the defendants. The plaintiff did not at all notify the drafts were received by her without prejudice. The plaintiff is even otherwise estopped under law to sue for alleged damages or loss sustained by her on the basis of alleged difference of rates of Rs. 57/- per 10 Kgs. of Groundnut oil in the market as on the date of failure of supply by the defendant. The suit appears to be wholly a speculative enterprise to make unlawful gain and cause hardship and loss to the defendant who returned back the deposit amount which evidences the bona fides of defendant.
(4) The plaintiff is at all material times aware of the bona fides and good intentions of the defendant to comply with the orders in question but circumstances beyond their control have intervened by the direction of Civil Supplies Corporation to supply oil to other States for which written undertakings were given by the defendant to supply 1/3rd of the quantity for which orders were placed by those other States and this is all subject to the Government orders from time to time. So it is beyond the control of the defendant to supply oil to the plaintiff as the Tadepalli stock point has no outstanding stock to comply with the order. Thus the doctrine of Frustration under Indian Contract Act is also a cause for non-fulfilment of the plaintiff's contract and this is within the knowledge of plaintiff and as such the suit is not in any event maintainable against the defendant and is misconceived, (5) The alleged differential rate of Rs. 57/- for 10 Kgs. of groundnut oil is also equally incorrect and the alleged rate claimed by the plaintiff is bolstered up to somehow to sustain the plaintiff's unwholly claim. The other persons who placed orders with the defendant also realized this aspect of the case that the defendants could not comply with the orders for the reasons beyond its control as the supplies were conditioned by the Civil Supplies Corporation and they received their respective deposit amounts.
AVERMENTS MADE IN THE REJOINDER
9. A Rejoinder was filed by the plaintiff, wherein the following averments were made:
The averments now made by the defendant in paras 1, A, B, C, D, by way of amendment five years after the filing of the original written statement are either repetitive or adumberation of untenable positions of law or untrue and distorted versions and facts particularly relating to formation and enforcement of contract etc. The new plea now sought to be raised by defendant alleging lack of territorial jurisdiction is not tenable. Defendant is estopped from raising any such plea having initially submitted to the jurisdiction of this Hon'ble Court by taking time for written statement and by contesting the suit on merits. Further this Hon'ble Court has territorial jurisdiction on more than one ground. Part of the cause of action arises at the place where delivery of oil was agreed to be made under the contract viz., Tadepalli, which is within the jurisdiction of Sub-Court, Guntur. Either long later closure of the outlet or failure to deliver at the said place cannot alter the jurisdiction already created. Further even the refund of earlier paid amounts to plaintiff made by defendant are accepted without prejudice at Guntur also creating jurisdiction. Further even on the formation of contracts through broker and by telephone, it is concluded and at Guntur creating jurisdiction and part of the cause of action within the jurisdiction of Sub-Court, Guntur. All averments now made by defendant contra to the above trying to project jurisdiction at Hyderabad to the conclusion of the Courts at Guntur are false, untenable and motivated.
ISSUES SETTLED INITIALLY
10. Initially the under-noted issues were settled:
1. Whether plaintiff is entitled to suit amount?
2. To what relief?
ADDITIONAL ISSUE
11. In the light of the amended written statement wherein the question of territorial jurisdiction to entertain the suit had been raised, the following additional issue was framed:
1. Whether this Court has no territorial jurisdiction to try this suit?
ORAL EVIDENCE AVAILABLE ON RECORD.
For Plaintiff For Defendant
P.W.1.P. Chandrasekhar Rao D.W.1 P. Sudhakara Rao
P.W.2. K. Seshagiri Rao.
DOCUMENTARY EVIDENCE AVAILABLE ON RECORD
For Plaintiff
Ex.A-1/29-7-86. Delivery order issued by defendant to the plaintiff.
Ex.A-2/31-7-86. Delivery order issued by defendant to the plaintiff.
Ex.A-3/6-8-86. Photostat copy of the letter issued by defendants to the plaintiff.
Ex.A-4/19-8-86. O/c. of the letter addressed by the plaintiff agencies to the defendant.
Ex.A-5/23-8-86. Letter regarding refund of advance payment addressed by defendant to the plaintiff.
Ex.A-6/23-8-86. Letter regarding refund of advance payment addressed by defendant to the plaintiff.
Ex.A-7/19-9-86. O/c. of notice issued by the plaintiff/s Advocate to the defendant and Registrar of Co-operative Societies, A.P. Government, Hyderabad.
Ex.A-8/22-9-86. Postal acknowledgement of Ex.A-7 by D-1 Ex.A-9/23-9-86. Postal acknowledgement of Registrar of Co-operative Societies, A.P. Government.
Ex.A-10/7-10-86. Copy of letter addressed by Registrar, Co-operative Societies, A.P. Hyderabad, to the plaintiff and defendant in reply Ex.A-7.
Ex.A-11/24-7-86. Letter addressed by Balaji Ghanashyam Brothers to the plaintiff confirming the transaction.
Ex.A-12/23-8-86. Letter addressed by Balaji Ghanashyam Brothers to the to claim difference amount regarding price of groundnut oil.
Ex.A-12/23-2-91. Photo copy of debit note entered by National Dairy Development Board, Hyderabad, addressed to plaintiff Agencies.
Ex.A-13/23-8-86. Copy of Bill issued in the name of Veeranjaneya Traders regarding sale of 10 Kgs. of Groundnut oil.
Ex.A-14/18-8-86. Carbon copy of bill issued in the name of Veeranjaneya Traders regarding sale of 10 Kgs. of Groundnut oil.
Ex.A-15/30-8-86. Carbon copy of bill issued in the name of Srinivasa Traders of Mangalagiri regarding sale of 10 Kgs. of Groundnut oil.
Ex.A-16/14-3-90. Debit note entry issued by defendant for non-fulfillment of the contract for supply of groundnut oil from Manohar Oil Industries, Hyderabad.
Ex.A-17/14-4-90. Debit note entry issued by defendant for non-fulfillment of the contract for supply of groundnut oil from Sarada Traders, Adoni.
Ex.A-18/29-8-86. Copy of bill issued to the plaintiff regarding purchase of Groundnut oil from Kodandarama Trading Company at Rs. 250/- per 10 Kgs.
For defendants Ex.B-1/20-6-86. Letter received from District Collector, Guntur, for Delivery of oil addressed to the defendant.
Ex.B-2/21 -6-85. Photo copy of Memo N0.52220/C5/IV/84, dt.21 -6-85 for Govt. of A.P. Food and Agriculture (CS) Department addressed to defendant.
Ex.B-3/19-7-86. Copy of letter addressed to defendant by Tadepalli Office Ex.B-4/26-7-86. Copy of letter addressed to defendant by Tadepalli Office stating that they supplied oil to Civil Supplies Department, Guntur.
Ex. B-5/19-8-86. Letter addressed to defendant by plaintiff regarding supply of refined repossessed oil at concessional rate in lieu of groundnut oil.
FINDINGS RECORDED BY THE LEARNED JUDGE.
12. On appreciation of the evidence available on record, the learned Judge on the aspect of jurisdiction came to the conclusion that the Court has territorial jurisdiction to entertain the suit especially in the light of the decision of this Court in D.V.V. Subbayya Firm v. Biswanath AIR 1962 A.P. 338. However, the learned Judge, on appreciation of the oral and documentary evidence available on record, came to the conclusion that in the light of the applicability of Doctrine of Frustration, the question of claiming damages for the difference of amount would not arise and hence in the light of the facts and circumstances it cannot be said that the defendant had committed any breach of contract so as to fasten any liability as against the defendant and hence the plaintiff is not entitled to the suit amount and accordingly dismissed the suit.
POINTS WHICH ARISE FOR CONSIDERATION IN THIS APPEAL
13. The following points arise for consideration in this appeal:
1. Whether the findings recorded by the learned Judge, negativing the relief of recovery of amount by way of damages in the facts and circumstances to be confirmed or to be disturbed?
2. If so, to what relief the parties would be entitled to?
Point No. 1:
14. As far as the aspect of want of territorial jurisdiction is concerned, inasmuch as a positive finding had been recorded that the Principal Subordinate Judge, Guntur, has territorial jurisdiction to entertain the suit, this Court is not inclined to disturb the same and hence the said finding is hereby confirmed.
15. The principal question which had been agitated by both the counsel is in relation to the claim of damages prayed for by the plaintiff on the ground of difference of amount which the plaintiff is said to have suffered by virtue of the breach of contract or the non-supply of the oil in question by the Federation. The sole proprietor Smt. P. Anasuya Devi was not examined. The husband of Anasuya Devi, P. Chandrasekhar Rao, was examined as P.W. 1. Some comment was made as regards the ground that there is no authorization given to P.W. 1 by the wife and non-examination of the plaintiff-Anasuya Devi may have to be viewed with some seriousness. Section 120 of the Indian Evidence Act, 1872, deals with Parties to civil suit, and their wives or husbands, husband or wife of person under criminal trial. The said provision specifies thus-
In all civil proceedings the parties to the suit, and the husband or wife of any party to the suit, shall be competent witnesses. In criminal proceedings against any person, the husband or wife of such person, respectively, shall be a competent witness.
In the light of the same the objection raised by the learned Counsel representing the defendant-Federation cannot be accepted.
16. P.W.1 deposed that Anasuya Devi is his wife and he has been looking after the affairs of the plaintiff firm. Anasuya Devi is the sole proprietor of the plaintiff firm and the plaintiff firm is carrying on business in all kinds of edible oils. The defendant is also dealing in edible oils at Hyderabad. The defendant sold groundnut oil on 24-7-1986 to them and he had given the quantum and other particulars and details. This witness also deposed that they issued two delivery orders on 29-7-1986 and 31-7-1986. The defendant directed the officer-in-charge (APCOGF) of the defendant c/o Vinod Solvent Extract, Tadepalli, for delivery of oil to the plaintiff. They are Exs.A-1 and A-2. They sent empty barrels to Tadepalli and the defendant did not fill up those empty barrels and deliver to them. They waited till 4-8-1986 by going daily to Tadepalli factory. Then he went to the office of the defendant at Hyderabad. They gave a letter to him saying that the oil would be delivered to him if the letter was shown at Tadepalli. It is Ex.A-3. The defendant did not deliver the oil to them even thereafter. He again went to Hyderabad and made representation. He gave a letter and obtained an endorsement on his copy regarding the delivery of the letter, which is marked as Ex.A-4. Two or three days later the defendant gave a demand draft for Rs. 2,00,000/- and odd which they paid to the defendant. The defendant gave two letters to him dated 23-8-1986, which are Exs.A-5 and A-6. Then he got issued a lawyer's notice to the defendant and to the Registrar of Co-operative Societies, Hyderabad. The office copy of the notice is Ex.A-7. They received the notices and the acknowledgements are Exs.A-8 and A-9. The Registrar of Co-operative Societies sent letter to defendant marking a copy of that letter to them, which is Ex.A-10. They claimed the difference in rate of oil agreed to be supplied to them which was the rate on the date on which it was agreed to be supplied and the rate on which the claim is made by them. Before further proceeding with the evidence of P.W. 1., it may be appropriate to have a look at the contents of Exs. A-4 and A-7. Ex.A-4 reads as hereunder;
From M/s. Ramesh Agencies, Date 19-8-1986. Bandala Bazar, Guntur, To The Managing Director, A.P. Co-op., Oil Seeds Growers Federation Limited, Basheer Bagh, Hyderabad. Dear Sir.
We have obtained two delivery orders No. MK/GNO/4/86/119-110, dated 29-7-1986 and MK/GNO/4/86/119-123 dated 31-7-1986 for each 7.2 Mts. of Groundnut oil FOR Tadepalli at the rate of 1867- per 10 Kgs. We have gone for taking delivery of the same at Tadepalli since we are in possession of delivery orders dt.30-7-86. Your officer incharge have not given delivery of the same. We have contacted your Deputy Marketing Manager. He assured us immediate delivery and instructed your Tadepalli Officer incharge to give the delivery of the same immediately on dated 6-8-1986 by way of letter. In spite of your instruction to deliver the stocks from you i.e., Tadepalli Plant, they have not handed over the stock. We have already sold these stocks. We are now facing to pay the difference of the marketing price. The present market rate is Rs. 245/- per 10 Kgs. at Guntur and you have to pay the difference amount at which you agreed to supply and the present market rate Rs. 57/- per 10 Kgs. due to your fault for non-delivery of the above oil. We are put to heavy loss for non-supply of the oil. If you deliver us even now we are ready to take delivery of the same oil without any further delay and immediately.
We humbly request you to consider and look into the matter and decide either give the delivery or pay us the difference of the price as mentioned above.
Thanking you, Yours faithfully, For RAMESH AGENCIES Ex.A-7, the lawyer's notice, reads as hereunder:
Particulars of the claim: In terms of the 2 contracts made through broker Sri Balaji Ghanasyam, Hyderabad, my client M/s. Ramesh Agencies has become entitled for delivery of groundnut oil, ex-factory Vinod Solvents, Tadepalli from A.P. Co-operative Oil Seeds Growers Federation Limited of quantities of 7.2 Matric tones each at the rate of 186 per 10 Kgs. The aforesaid Federation issued 2 delivery orders No. MG/GNO/4/ 86/119-110, dated 29-7-1986 and MK/ GNO/4/86/119-123, dated 31-7-1986. The amount of Rs. 1,33,920/- in respect of each of the delivery orders was duly paid in time by my client through the aforesaid Federation. Delivery orders dated 29-7-1986 and 31-7-1986 were also issued by the aforesaid Federation in favour of my client. While acknowledging the receipt of amount by D.Ds. in full, delivery was however nor made as scheduled, although as per contract it has to be made promptly at once. On my client's representation the aforesaid Federation confirmed to the mills at Tadepalli, its instructions for immediate delivery as per confirmation letter dated 6-8-1986. In spite of approaches made by my client and in spite of my client's readiness and willingness to receive the oil, the aforesaid Federation failed to deliver the oil and committed breach of the terms of contract. Accordingly it has become liable to pay my client compensation representing the difference in the rate of oil between the contract rate and the rate prevailing at the time of breach in 3rd week of August, 1986. This has been duly intimated to the Federation by my client under its letter dated 19-8-1986 and the claim for payment of compensation by way of damages at the then market rate of Rs. 243/- per 10 Kgs. was made, it represents the difference in price of Rs. 57/- per 10 Kgs. coming to Rs. 41,040/- in all in each of the contract. Thus the Federation has become liable to pay damages of a total amount of Rs. 82,090/-. The refund of sale amount made by the Federation was however accepted by my client without prejudice to its rights.
The alleged obligations of the Federation to deliver any oil to the Government by way of levy are matters of its own concerned known to it at all times and in any event the Federation has no justifiable reason for violating its obligations under the contracts made between the Federation and my client.
You are now demanded on behalf of my client M/s. Ramesh Agencies, Guntur, to pay the amounts of Rs. 41,040/- each by way of damages for breach of each of the two contracts in all Rs. 82,080/- to my client under proper receipt, If you failed to do so, my client will be obliged to take necessary steps through Court of law for recovery of the amounts with costs. Please note.
This witness also further deposed that the broker wrote a letter to them confirming the transaction dated 24-7-1986, which is marked as Ex.A-11 and they informed the broker that the defendant did not deliver the oil to them. The broker wrote a letter asking them to claim the difference, which is marked as Ex.A-12, on 23-8-1986. This witness also further deposed that in oil trade, there is a practice of raising debit note in respect of difference in price. Debit note raised by National Dairy Development Board, which was sent to them is marked as Ex.A-12. He deposed that he is a member of the Guntur Oil Dealers Association and he received market review report for the week from 18-8-1986 to 23-8-1986 from A.P. Oil Dealers Association, Hyderabad. Ex.A-13 is the weekly report which he had received. At the time of placing orders, the defendant did not impose any conditions or restrictions. He claimed for 80 barrels which is equal to 14.4 metric tones at Rs. 57/- per 10 Kgs. At the time of contract the rate was Rs. 186/- per 10 Kgs. He claimed the difference in price which was on the date on which it was agreed to be delivered and the rate on which they gave a letter to the defendant. A total sum of Rs. 82,800/- is claimed and the interest claimed at 18% p.a. as per the trade practice. Again the chief examination was continued and P.W.1 deposed that the plaintiff maintained bill books for sale of groundnut oil and they sold 10 Kgs. of ground nut oil on 18-8-1986 to Veeranjaneya Traders under bill No. 36, the carbon copy of the bill is Ex.A-14. On 30-8-1986 they old 10 Kgs. of groundnut oil to Srinivasa Traders of Mangalagiri under bill No. 6 for Rs. 265/- and the carbon copy of the bill is Ex.A-15, Exs.A-16 and A-17 are the debit notes raised by the defendant for non-fulfilment of the contract for supply of groundnut oil from Manohar Oil Industries and Sarada Traders. They purchased groundnut oil for Rs. 250/- per 10 Kgs. from Kodandarama Trading Company on 29-8-1986 and the copy of the bill is Ex.A-18. This witness was cross-examined at length. In the cross-examination this witness deposed that he has been managing the business of the plaintiff firm and he has no authorization from his wife for managing the business and he had not filed the authorization letter into Court. He stated that he purchased oil from the defendant through a broker at Hyderabad and he had sent his confirmation to the broker at Hyderabad for purchase of oil. They sent a demand draft obtained at Guntur to the broker at Hyderabad for purchase of the oil. The delivery order was received from Hyderabad. No quantity of oil was supplied from Tadepalli to them. The amount paid by the plaintiff to the Federation was refunded by way of demand draft payable at Guntur and she received it without prejudice. This writness also deposed that he merely signed Ex.A-5. At this juncture it may be appropriate to have a look at Ex.A-5, which reads as hereunder:
Please find enclosed herewith two demand drafts bearing Nos. 253244 dated 23-8-1986 for Rs. 2 lakhs (Rupees two lakhs) payable on Apex Bank, Guntur and another one 463063 dated 23-8-1986 for Rs. 67.840/- (Rupees sixty seven thousand eight hundred and forty only) payable on SBI, Guntur, towards refund of advance payment against groundnut oil.
Please acknowledge the receipt.
Thanking you, Without prejudice The stand taken by him that he had signed in Ex.A-5 cannot be a sustainable stand inasmuch as no such signature is available on Ex.A-5. This witness also deposed further in relation to Ex.A-5. P.W.1 further deposed that the plaintiff had not made an endorsement that the demand draft was accepted without prejudice and he does not remember if in the plaint it is averred that the plaintiff received the demand draft without prejudice. Anticipating supply of 80 barrels of groundnut oil, they sold 80 barrels of groundnut oil. The sale of oil in anticipation of supply to them will not be called as forwarding trade. They had not filed any record to show that they sold the groundnut oil to others in anticipation of the supply of oil to them by the Federation. This witness further deposed that it is not true to suggest that they filed this suit being aggrieved against Federation as though they requested for supply at concession rates. This witness also deposed that it is not true to suggest that oil merchants have to supply oil to Civil Supplies Corporations levy. P. W. 1 also deposed that he will examine the broker, if necessary. He also deposed that he gave instructions to his Advocate for drafting the plaint and he had no authorization in writing from his wife for giving instructions to the Advocate for drafting the plaint. He also denied certain other suggestions.
17. Apart from this witness, P.W.2 was examined and it appears that P.W.2 was examined in relation to Ex.A-18. Ex.A-18 is the copy of the bill dated 29-8-1986 which was issued to the plaintiff. This witness deposed that he is a partner in Kodandarama Trading Company and he knows the plaintiff and in 1986 he sold groundnut oil to the plaintiff and issued a bill, Ex.A-18. Copy of Ex.A-18 was issued to the plaintiff when she represented to them that she lost the original bill. In Ex.A-18 the rate of groundnut oil of 10 Kgs. was noted as Rs. 250/-. This witness also deposed that they will be purchasing and selling oil and they claim difference in the market rate and contract rate if the re is breach of contract. In the cross-examination this witness deposed that he had not received the summons to give evidence. The plaintiff informed him that he lost the original of Ex. A-18. This witness also deposed that she had not made a request for furnishing copy in writing. He is a member of Oil Dealers Association, Guntur and he does not know if the oil dealers have to supply oil to the Civil Supplies Department towards levy and then sell the supply to them. Damages can be claimed after expiry of the time given for supply of oil and it can be claimed only on breach of contract. This witness also denied the other suggestions. This is the evidence available on record on behalf of the plaintiff.
18. On behalf of the defendant, D.W.1, the then Manager of A.P. Co-operative Oil Seeds Federation, Hyderabad, was examined. He had deposed about the functions and other details in relation to the Federation. D.W.1 deposed that the functions of the Federation are procurement of oil seeds, processing and marketing of oil to general public. The Federation is under the statutory obligation to supply V^ of the oil produced to Civil Supplies Department for public distribution. After supplying the quantity to the Civil Supplies Department, the remaining quantity has to be sold in the market by the Federation. The canvassing agent contacted the plaintiff on phone from Hyderabad for proposed sale of oil and the plaintiff accepted to purchase over telephone. The plaintiff remitted money at Hyderabad. The Federation issued delivery order from Hyderabad to the plaintiff authorizing the stock point to deliver the oil. This witness also deposed that the Civil Supplies Corporation insisted on delivery of oil. They received communication from Tadepalli unit stating that they received communication from District Collector, Guntur, for delivery of oil. Ex.B-1 is the communication. It may be relevant to have a look at the contents of Ex. B-1 at this juncture.
We have received letter from Guntur Collectorate on 20-6-1986 regarding G.N. Oil levy to be given by us to Civil Supplies Division. I am herewith sending copies of those letters (Nos. (1) R.C. No. N1-27-73-85, dt.23-5-86 and (2) RC. No. S1-2273-85, dt. 13-6-86).
I request you please kindly go through those letters. (District Supply Office, Guntur, Ph. No. 21717).
Awaiting for your kind instructions.
This witness also deposed about Memo No. 52220/CS.IV/B4, dated 21 -6-1985, which was marked as Ex.B-2; the contents of Ex.B-2 also are relevant for the present purpose, which reads as hereunder:
In the Government Homes, 2nd and 3rd cited, the policy on the movement of groundnut and groundnut oil was laid down for the year 1983-84. In the reference 4th cited, instructions were issued to follow the policy adopted in 1983-84 during the year 1984-85 also until further orders. In the reference 5th cited, instructions were issued to permit only movement of oil and not to give any permits for the movement of seeds outside the State until further orders.
The Government have carefully examined the entire policy adopted during the year 1983-84. After taking into account various aspects, the Government hereby order that the following policy shall be followed for the year 1984-85 with immediate effect.
(i) Bona fide farmers shall be entitled to move and sell groundnut pods produced in their own fields without any restrictions, anywhere in the country. To ensure that farmers are not unnecessarily interfered with, any movement of Groundnut pod at one time upto 20 bags of 10 Kgs. each will be presumed to be movement by farmers. However, Collectors shall ensure that traders do not move pds in the name of farmers by enforcing rigorious chods on movement of groundnut pods by lorries.
(ii) The policy of oil millers and traders delivering oil to the State Civil Supplies Corporation Ltd., on the orders of the District Collectors for use in Public Distribution System whenever they wish to move oil or seed outside the State shall continue. As far as the Oil Industry is concerned it would continue to deliver oil in a proportion of 1 ton of oil for every 3 tons of oil to be moved outside the State and the Trade shall deliver 1 ton of Oil for every 5 tons of groundnut seed to be moved outside the State. Wherever it is not possible to take delivery of oil in view of the prevailing open market prices, the Oil Millers/Dealers may be permitted to move groundnut oil and seed outside the State after obtaining from them necessary undertakings. The Oil Millers and Traders shall execute these undertakings without fail as and when demanded by the Collectors. The Oil stocks will be taken delivery of from the Millers and Traders as and when the open market prices of groundnut oil goes beyond Rs. 17/- per Kg. The oil thus delivered will be sold through fair price shops at a price of Rs. 14.25 per Kg. The Collectors and the Chief Rationing Officer, Hyderabad shall fix the retail margin not exceeding 20 paise per Kg. of oil and release the oil through the fair price shops.
(iii) For the Oil thus delivered by the Millers and Traders, the State Civil Supplies Corporation will pay Rs. 13,250/- per M.T. for groundnut oil delivered by the Millers and Traders of Hyderabad city and Rs. 13.000/- per MT to the Millers and Traders of all other areas. These rates shall be all inclusive of taxes etc. The delivery shall be at the godown points of the Civil Supplies Corporation as nominated by the Collectors. The cost of oil, transport and handling charges from the Mill point to the Civil Supplies Corporation godown/storage point shall be paid by the Civil Supplies Corporation promptly as was done in last year. The Civil Supplies Corporation shall fix and pay the transport and handling charges and necessary orders will be issued by the Managing Director, State Civil Supplies Corporation at once.
(iv) Not visible.
(v) District Collectors, Chief Rationing Officer, and the Deputy Inspector General of Police are requested to ensure that for the wholesalers in the Mandis nominated in the G.O. 1st cited the stock limits specified for a wholesaler in Category 'A' cities are applied.
This witness also further deposed about the letter received from Tadepalli-Ex.B-3 and also the communication from Tadepalli Unit under Ex.B-4. D.W.1 also deposed that the plaintiff is aware of the supply of oil to the Civil Supplies Corporation by defendant Federation. The plaintiff is doing oil trade and is aware of the procedures for the supply of oil to Civil Supplies Corporation and in such circumstances the amount was returned to the plaintiff and the same was received without any protest. The amount was paid to him at Hyderabad (may be D.W.1 is referring to the husband of the plaintiff in fact). This witness also deposed that if the oil is not supplied, the other party has to raise the debit note for the difference in price in oil then providing within a period of 10 days and as the plaintiff did not raise any such debit note, she is not entitled to claim damages. He further deposed that forward trading in oil is not allowed as it is banned by Government of India. This witness also deposed in relation to the letter marked as Ex. B-5 and further reiterated that the plaintiff was aware that the defendant-Federation has to supply oil produced to Civil Supplies Corporation and he had also deposed certain other facts. This witness was cross-examined at length. In cross-examination this witness deposed that they had not supplied oil to the defendant as per delivery order because of the instructions from the Civil Supplies Department. They supplied 1/3rd oil sold outside the State at the time when the defendant Corporation sold oil outside the State, earlier it was not asked to supply 1/3rd of oil by Civil Supplies Department, but subsequently Civil Supplies Department asked the defendant to supply 1/3rd of oil earlier sold outside State due to high increase in prices of oil and for the purpose of supply of oil for public distribution. This witness also deposed that they sent back the amount to the broker informing him that due to the commitment to the Civil Supplies Department, they were not in a position to supply the oil to the plaintiff, but they had not written the letter directly to the plaintiff. The endorsement made on Exs.A-5 and A-6 that he was receiving back the amount without prejudice. There was no condition imposed by defendant Corporation that the delivery of oil would be taken with plaintiff subject to commitment of the defendant to the Civil Supplies Department. Ex.A-11 is the letter written by the broker to the plaintiff after confirming the purchase of oil by the defendant. This witness also deposed in detail about Exs.B-5 and A-11. This witness was further cross-examined in relation to the Federation, the duties of the Federation and other obligations. Specific stand was taken that the 1/3rd oil to be supplied to the Civil Supplies Department is a statutory obligation. The stand was reiterated in detail by this witness at length. In cross-examination this witness specifically deposed that for the sale of oil to the plaintiff, the rule that 1/3rd oil should be supplied to Civil Supplies Department does not apply. The oil has to be delivered to the plaintiff as per the delivery order, but he does not know if the plaintiff obtained demand drafts at Guntur which were payable at Hyderabad and the defendant Corporation did not deliver the oil to the plaintiff as per the delivery order and he does not know if Ex.B-5 was given to the Chairman of the defendant Federation. He further deposed that they did not agree to supply refined rape seed oil at concessional rate. He does not know if any reply was given to Ex.B-5 letter by defendant Corporation.
19. At this juncture it may be appropriate to have a look at the other documents, which had been referred to in Exs.B-3 to B-5 and the contents thereof, which read as hereunder:
Ex. B.3:
As per the circular received from the Civil Supplies Department, we are asked to give a levy of 36 Mts. per month for the period from 6/86 to 9/86.
Failing which they wanted to file prosecution against the Federation and to cancel the licence.
You are requested to take immediate action in this regard. The Xerox copy of Circular herewith enclosed for your kind information.
Regarding the giving of levy 10 MT G.N. Oil to Civil Supplies Department, Guntur, we could not supply the same to them as the barrels are not ready with the Civil Supplies Department for filling. I am meeting the concerned authorities daily as soon as they supply us with barrels we will fill the G.N. Oil and handover to them. It is likely that the handovering will be done by Monday i.e., 21-7-86.
I request you to kindly enlighten me with the further details I am to observe regarding giving of levy to Civil Supplies Department.
This is for your kind information.
Ex.B-4:
With reference cited above, we have (called on 24-7-86) dispatched (24-7-86) G.N. Oil through Tanker No. ADB. 6477 to the Department of Civil Supplies, delivery at Guntur District Co-op. Marketing Society (G.D.M.S.) on 25-7-86. Oil unloaded into 55 barrels (Loaded 9,990 Mts. at V.S.P.C. Tadepalli) Quantity 10,033 Mts. unloaded on 25-7-86.
This is for your kind information.
Ex.B-5:
Dated: 19-8-1986 We have given a representation to Managing Director of yours the copies is enclosed.
The Managing Director after hearing us expressed his inability to comply with the Federation delivery orders. He even refused to show us concession in price of Rape seed oil (Refined Oil) to help us to get over the heavy losses incurred on account of this transaction.
We request your good self to kindly intervene in the matter and save us from the heavy loss.
We are prepared to take rape seed refined oil if given immediately as an alternative at a concession rate to make good our losses as mentioned in the enclosed letters addressed to Managing Director.
As we intend to continuing business with you, we would request you to show us the concession and oblige.
It is needless to say that the contents are self-explanatory. In re-examination this witness deposed that in Exs. A-5 and A-6, P. Anasuya Devi did not endorse as without prejudice. Her husband took delivery of the demand drafts and endorsed without prejudice. In further cross-examination this witness deposed that after the husband of Anasuya Devi came to defendant Corporation through the broker, the demand drafts were delivered to him.
20. The important and crucial documents, which had been strongly relied upon by both the counsel and the contents thereof are Exs.A-1, A-2, A-4 and B-1 to B-5 already referred to supra. The contents in Ex.A-7, the notice issued also had been referred to supra. The contents thereof need not be repeated again. The question which had been argued in elaboration is that the approach adopted by the learned Judge on the ground that there is no breach of contract inasmuch as Doctrine of Frustration is applicable in the light of the statutory obligation on the part of the Federation to make supply to the Civil Supplies Corporation cannot be sustained and the same may have to be negatived on the ground of Doctrine of Forseeability. This appears to be the principal stand though incidentally other questions in relation to the other evidentiary details also had been argued in elaboration. Strong reliance was placed on the decision of the Apex Court in Travancore Devaswom Board(1 supra), the Apex Court at paras 11 to 14 observed thus-
The question then remains whether assurances supposedly given to the respondent would create any right in favour of the respondent. It is not disputed that there was an escalation of price of raw material as a result of the Gulf War. It cannot be disputed that the Ram Janmabhoomi agitation had taken place and that this had resulted in difficulty of transport. However, there was no frustration of contract. It is not the respondent's case that the contract got frustrated, The respondent has made the supply. Of course it became more onerous to fulfil the contract. The question is whether this can justify the courts granting relief.
The law on the subject is well settled. In the case of Alopi Parshad & Sons Ltd. v. Union of India this Court has held that the Contract Act, 1872, does not enable a party to a contract to ignore the express covenants thereof. It is held that the Contract Act does not permit a party to claim payment of consideration for performance of contract at rates different from the stipulated rates, on some vague plea of equity. It is held that in the performance of a contract, one often faces, in the course of carrying it out, a turn of events which are not anticipated e.g., an abnormal rise or fall in prices, sudden depreciation of currency, an unexpected obstacle to execution or the like. It is held that these do not affect the bargain that has been made. It is held that there is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract, merely because on account of an uncontemplated turn of events, the performance of the contract has become onerous. It is held that compensation quantum meruit is awarded when the price is not fixed by the contract. It is held that for work done or services rendered pursuant to the terms of contract, compensation quantum meruit cannot be awarded.
The above law fully governs this case. In this case the contract between the parties laid down the price. Clause 2 specifically provides that this price was to remain firm till May, 1991. As stated above, the circumstances enumerated by the respondents were not such as frustrated the contract. Merely because performance had become more onerous was not a ground for non-performance or for claiming enhancement of price.
The principles laid down in the above decision have since been reaffirmed in the decisions in the cases of Continental Construction Co. Ltd. v. State of M.P. and Rajasthan State Mines & Minerals Ltd. v. Eastern Engg. Enterprises .
21. Section 56 of the Indian Contract Act, 1872, deals with agreement to do an act impossible in itself is void, which reads as hereunder:
An agreement to do an act impossible in itself is void: A contract to do an act which after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.
In this context reliance also was placed on the decisions in Kunjilal v. Durga Prasad AIR 1920 Cal. 1021, V. Power Co. Ltd. v. Corporation N. Vancouver AIR 1917 Privy Council 103, Ram Kumar v. P.C. Roy & Co. , Easun Engineering Co. Ltd. v. Fertilisers and Chemicals Travancore Ltd. and Ramayya v. Firm G.M.S. Shaik Saib AIR 1958 A.P. 576. The 3-Judge Bench in Alopi Parshad v. Union of India held that a contract is not frustrated merely because the circumstances in which the contract was made, are altered. The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. On the aspect of the meaning of the expression 'impossible of performance', the Apex Court in G.G. Patel v. Gulam Abbas observed as hereunder:
The meaning of the aforesaid expression 'impossible of performance' as used in the above quoted section would be clear from the following observations made by Lord Loreburn in Tamplin Steampship Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd. (1916) 2 AC 397, 403) which is generally considered to contain a classic and terse exposition of the law relating to frustration:
The parties shall be excused if substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible.
The meaning of the word or expression "impossible" in Section 56 of the Act aforesaid had been dealt with in Satyabrata Ghose v. Mugneeram Bangur & Co. and Anr. 1954 SCR 310. The 3-Judge Bench in Boothalinga Agencies v. V.T.C. Poriaswami while dealing with Doctrine of Frustration of contract, expressed an opinion that to make Section 56 of the Act aforesaid to be attracted, there should be frustration of the contract, but the provisions of Section cannot be made applicable to the cases of self-induced frustration. In the light of the legal position referred to supra, now it may have to be considered whether the findings recorded by the learned Judge in this regard to be confirmed or to be disturbed.
22. Prima facie the submissions made by the counsel for the appellant appear to be more attractive inasmuch as if Doctrine of Forseeability is applicable, the applicability of Doctrine of Frustration has to be negatived, but it is pertinent to note that in the instructions of the Memo an obligation was imposed for supply as specified by the Civil Supplies Department even from the year 1985. It is no doubt true that the quantum to be supplied and the demand which would be made were not within the knowledge of the Federation at the relevant point of time and due to the said reason, when it was communicated through the broker, the offer to purchase made by the plaintiff appears to have been accepted. Submissions at length were made that in the light of the correspondence, especially Exs.B-2 and B-3, the knowledge is attributable and hence the Doctrine of Forseeability is applicable. It is pertinent to note that this is a matter where the offer is said to have been made for purchase by the plaintiff from the Federation. The administration in relation to the affairs of a Federation can be taken judicial notice of. It is needless to say that such Federations would be managed by human agencies. At the best it can be said that there was some lapse or negligence on the part of some staff of the Federation, which is well reflected from the correspondence and nothing more or nothing beyond. In the alternative even if it is to be accepted that the ingredients of Section 56 of the Act aforesaid are not applicable in strict senso to the facts of the case, the next question would be whether the burden cast upon the plaintiff to show that she had suffered the damage because of the difference of amount had been established.
23. Both the counsel made certain submissions at length that the plaintiff was unable to discharge the burden cast upon her; equally the defendant had not placed acceptable evidence. It is needless to say that the plaintiff is coming to the Court with a positive case praying for the relief of requisite damages by way of amount on the strength of contract. No doubt certain third party bills were produced before the Court, but none concerned with those bills or sales were examined. Though P.W. 2 alone was examined in relation to Ex.A-18, which is a copy of the bill, the original of it is not forthcoming. Even if Ex.A-18 is to be taken into consideration, the difference of amount, if calculated, as per Ex.A-18, would come to Rs. 5.000/- and odd and not beyond thereto. Even otherwise from the very evidence of P.W. 2, it is clear that P.W. 2 is an interested Witness in supporting the version of P.W. 1, both being the members of the self-same Association. In the light of the facts and circumstances, in substance, this Court is inclined to accept the findings which had been recorded by the learned Judge especially taking into consideration the obligation on the part of the Federation to make supplies and also further taking into consideration the absence of clear acceptable proof relating to the damage actually suffered by the plaintiff, and the said findings need not be disturbed in any way and accordingly the said findings are hereby confirmed, Point No. 2:
24. In the light of the findings recorded above, the appeal is bound to fail and accordingly the same shall stand dismissed. However, there appears to be some lapse on the part of the Federation, this Court directs the parties to bear their own costs.