Supreme Court - Daily Orders
M/S. Padia Timber Company (P) Ltd. vs Board Of Trustees Of V.Port Trust on 29 September, 2016
Bench: Madan B. Lokur, Uday Umesh Lalit
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 3454-3455 of 2007
M/S. PADIA TIMBER COMPANY (P) LTD. Appellant(s)
VERSUS
BOARD OF TRUSTEES OF V.PORT TRUST Respondent(s)
O R D E R
The appellant is aggrieved by the judgment and order dated 10.10.2006 passed by the Division Bench of the Andhra Pradesh High Court.
The parties had entered into a contract for the supply of wooden pallets by the appellant to the respondent. The rate per unit of the pallet was Rs.1,479/- and the entire value of the contract was Rs. 4,43,945/- exclusive of taxes. One of the requirements of the contract was that the appellant had to deposit additional security amount of Rs.69,950/- against the purchase order. The appellant failed to make the additional security deposit as a result of which the purchase order was cancelled.
One of the terms and conditions of the purchase order is clause 16 which reads as follows:
“In case of failure to supply the stores in terms of this purchase order by the due date or such mutually agreed extended date, the purchaser Signature Not Verified reserves the right to cancel the outstanding Digitally signed by MEENAKSHI KOHLI Date: 2016.10.16 quantities against the order and repurchase the 19:36:48 IST Reason: stores at the risk and expense of the defaulting contractor.” 1 It appears that after cancellation of the purchase order, the respondent intended to purchase the wooden pallets. Therefore, the respondent floated a tender and received three bids, the lowest being M/s Kumar Wooden Works, Visakhapatnam who offered to supply wooden pallets at Rs.2500/- per pallet.
In view of this bid having been received by the respondent from M/s Kumar Wooden Works, Visakhapatnam, a suit was filed by the respondent claiming the difference in the risk purchase value in the contract entered into with the appellant and M/s Kumar Wooden Works, Visakhapatnam. The differential amount claimed was Rs.4,43,945/-.
The appellant also preferred a suit seeking recovery of the amount of security deposit already deposited in respect of the offer/tender given by the appellant.
The trial court allowed the suit filed by the respondent and dismissed the suit filed by the appellant.
This gave rise to two appeals both filed by the appellant. Both the appeals were dismissed by the High Court vide judgment and order dated 10.10.2006 (impugned).
We have heard learned counsel for the parties and have gone through the records. On a perusal of the record, it is quite clear that after the purchase order of the appellant was cancelled, the respondent had invited a tender for the wooden pallets and the lowest bid received was from M/s Kumar Wooden Works at the rate of Rs.2500/- per pallet. However, the respondent had not issued any purchase order to M/s Kumar 2 Wooden Works. As such there was no re-purchase by the respondent. This is also clear from the oral evidence given by the Deputy Material Manager of the respondent. Clause 16 of the Special Terms and Conditions of the Purchase Order clearly mentions that the appellant would be liable only if there is a repurchase of the stores. There is nothing on record to indicate that the respondent had actually repurchased the stores.
The only evidence on record is that an offer was invited but there is nothing to suggest that that offer was accepted and a purchase order was issued in favour of M/s Kumar Wooden Works. Consequently, the respondent did not suffer any actual loss and therefore was not entitled to invoke the provisions of clause 16 of the Special Terms and Conditions of the contract entered into with the appellant to claim any differential amount against re-purchase.
Under the circumstances, we are of the view that the trial court as well as the first appellate court were in error in decreeing the suit filed by the respondent. In view of the above, the suit filed by the respondent for recovery of an amount of Rs.4,43,945/- is dismissed. As far as the suit filed by the appellant for recovery of the amount of security deposit is concerned, we find no error in the view that has been taken by the trial court as well as the High Court. Clearly, there were no supply of goods by the appellant and the respondent was entitled to adjust the amount by appropriating it against other contracts. 3 Any amount deposited in the trial court should be refunded to the parties.
In view of the conclusion that we have arrived at, the submissions made by learned counsel for the respondent with regard to the applicability of Sections 73 and 74 of the Contract Act does not survive.
The appeals are disposed of as above.
…....................J. [Madan B. Lokur] …....................J. [Uday Umesh Lalit] NEW DELHI;
SEPTEMBER 29, 2016.
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ITEM NO.110 COURT NO.7 SECTION XIIA
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 3454-3455/2007
M/S. PADIA TIMBER COMPANY (P) LTD. Appellant(s)
VERSUS
BOARD OF TRUSTEES OF V.PORT TRUST Respondent(s)
(With office report)
Date : 29/09/2016 These appeals were called on for hearing today. CORAM : HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE UDAY UMESH LALIT For Appellant(s) Mr. Subramonium Prasad, SR. Adv.
Mr. Devashish Bharuka,Adv.
Ms. Anu Tyagi, Adv.
Mr. Utkarsh Srivastava, Adv.
Ms. Ila Haldia, Adv.
For Respondent(s) Mr. Kailash Vasdev, Sr. Adv.
Mr. Shreyans Singhvi, Adv.
Mr. Umrao Singh Rawat, Adv.
Mrs V. D. Khanna,Adv.
UPON hearing the counsel the Court made the following O R D E R The appeals are disposed of in terms of the signed order.
(Meenakshi Kohli) (Jaswinder Kaur)
Court Master Court Master
[Signed order is placed on the file]
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