Karnataka High Court
Itc Zeneca Limited Now Called As Advanta ... vs Sri Balaji Agro Traders on 13 October, 2009
Bench: N.Kumar, C.R.Kumaraswamy
IN THE HKGH COURT OF KARNATAKA AT BANGALORE
Dated this the 1331 day of October, ,,
PRESENT
THE I-ION'BLE MR. ' _
AND I . _ .
THE HOINPBLE MR. JUSTICE C R KUMQASWAMY
REGULAR FIRST APPEAL N9. 917 afzorrfz
BETWEEN:
ITC ZENECAV :r.IMIT%E1)_ '
NOW Ca11e:1'aS V' 'f ' '
ADVANTA INDIA LIMITED'
A cOMPA:\IYOIINCQRPO»RATED UNDER
THE .COMPANIES ACT, I955
AND HAVING REGISTERED OFFICE AT
" _ NO.._31:,;-SSAROJINI' DEVI ROAD
. SECUNDERABAD -- 500 003
'ANT: HAVINOCIIITS BRANCH
3: CORPORATE OFFICE AT
--- 405, 4th: FLOOR
A WING, CARLTON TOWERS
._NO;1, AIRPORT ROAD
BANGALORE - 500 008
I -IIEREIN REPRESENTED BY ITS
AUTHORXSED SENGATORY 8:
THE COMPANY SECRETARY
K. SURESH ...Appe112_;u<3e'LV
[By Sri B K SAMPATH KUMAR, ADVo'c£{TE}'_',1-L:-.: S.
1 SR1 BALAJI AGRO TRA1:)ERS.__
A proprietary concern V '
HAVING ITS OFFICE AT
NO.267/1, RAMAVELAS 'Eo;A..D
MYSORE -- 570 024 'V _
BY ITS PROPRIETQR -»
SHRI H TP SATHY_A;?€AE'iAYANA._GUPTA
2 ESPAKAGRO
NO.285a2b§Dv..CRC)SS. _ -
.'
OFF 'R.a.MAv"I'mSA.eR0AD_ '
V0'24"ee--.__ -
RF3PRESENTED'BY'{TI'$~
BRANCH MANAGER ' ...ReSpondentS
' " {By S¥<:..zV_§V;S'. MANJUNATH, ADVOCATE FOR R1;
. . 'RE~SPONDENT»2 SERVED)
filed under Section 96 r/W/o 41 R 1 of CPC
ag?ainSt~ fhe judgment and decree dated 28~5--2002 passed in
0S"'No.4o2i;1.-994 on the file of the 191*}. cm: Judge [Sr.Dr1.,},
Mysore," devcfeeing the Suit for recovery of money.
.Th;iS RFA coming on for hearing this day, N. KUBMR J
I, geiixrered the fo1l_oW:i1'1g:
J U D G M E N T
This appeal is preferred defenctants: "
challenging the judgment and decree has decreed the suit of the piaintiff 'feta with interest at the rate of front of suit till realisation, d _ if if
2. For the purgaosedddfddb the parties are referred to a they.Vai_~'e re_ferre--d': tO«.in't1heV_Q_;jiginaI suit. ._ « Balaji Agro Traders is a dealer in various kinds cf "agric:{i1.turaI products inclusive of seeds, fertijiizders etc.' defendant is a deaier dealing with the "the defendants 1 and 2. Defendants I and 2 are A as ITC Ltd. In fact, after the decree passed by the'<«.Tria'i the name of defendants 1 and 2 is changed to Adgvant.-a-- "India Limited pursuant to a transfer and change in ft holding during 1998. After the said change, they are d .._precluded from using the name of ITC Ltd. and thereafter, they E/.
are called Advanta India Limited. The said change was registered before the Registrar of Companies Therefore, it is Advanta India Limited which appeal' -. V. .
4. The case of the plaintiff purchase of linted cotton seeds.'ggunderuthnegg Zeneca Ltd. DCH -- 32 for pure.ha'se_ of__1 said seeds. The contract bet\veen'--xf:fth.e'f--. defendants was concluded on 0?;-O4.94,Wiien" th'e.g.pi_aintiff' forwarded a DD vide No.147'7ti'8/4.é;s0/€24' 07.0494 drawn on Vysya Bank Ltd. for¥a"s.un1--of in the name of defendant No.1. This amount of was paid as advance at the rate of Rs.fl:50/a_--..fl:per KAgf"for--------the quantity of 1000 Kgs cotton seeds pf purchased by the plaintiff. As per the terms of the eontract; .plaintiff was entitled to rebate payment at R:-5.5/- per The defendants did not perform their part of the A eontract. In turn, plaintiff sustained loss, damage, loss of profits. During the previous khariff season 1993, the plaintiff i/ has secured 1000 Kgs of cotton seeds from M / s. Seeds and Agricultural Products, Bangalore, for fulfilling of the market. ~
5. When the defendant seeds even after 15.04.94, thellfilahintiff visits to the office of the dere;f1a.an:;;"0if§_~,'..[ and the am defendant failed to render reply' for not fulfilling thQ§.con;ji_--tiort__ of deliver the cotton seeds in Vlffilaintiff was constrained to address'lhthefldefendants 1 and 2. That corresf)'ond.encewhlais. unanswered. Because of the breach corfizinitteddefendants, the plaintiff was not able to the reduvire-nlents of the farmers who are his regular 0 In fact, the plaintiff had collected amounts ffronif customers to ensure prompt purchase by such customers. The farmers in turn, were unable to earn profits by 0' ~ useof such seeds. The plaintiff reliably learnt that defendants lgadlfdiverted the seeds booked by the plaintiff to various other kl/.
places which would have fetched considerable to the defendants. Hence, plaintiff got issued a legal 19.10.94 claiming the refund of amount and other amounts to which it defendants 1 and 2 did notre:p1y_to Tfie 3rd defendant repiied with a:stotfy._of.._hislowrhcreation. Thus, Rs.50,000/~ is not ~ per Kg Was not paid. Plaintiff has" of Rs.200/-- per Kg amountingttoyyy if; is also entitled to damagespvoffls'. the plaintiff preferred a claimhin a Of. -- by filing the suit.
_ 6. '"'~After_'serv_ice~"'of summons, the defendants entered a}ipearanc.e. Defendants 1 and 2 filed a Written statement ' =corit.esti:'I«1'g'.4'thevciaim. They contended the advance booking if lanyhfwasfrjeceeived by the defendant No.3 to Supply to the plaintiff«;_as agreed by defendant No.3 was a concern of the idfefendant No.3, therefore, there is no privity of contract 'reached between defendants 1 and 2 & plaintiff. Defendants 1 and 2 ascertained from the defendant No.3 as to whathwpas the nature of contract between the plaintiff and It was clarified that for purchase of delinted had placed orders, denied that Wcontract L 7.4.94, when the plaintiff paid a /4.
BID. The 3rd defendant "for cotton seeds under invoice dated ff3laintiff'Was'VVt0 purchase delinted cotton seeds seeds as claimed by him. Defendants and' willing to supply delinted ready to handover the same to reasons best known to himself, did not lift V defendant 3. Under these circ§;iinstances',i.sfdeferidant No.3 returned the stock to the and 2. Upon return of the stocks. these de~i?end'a1fits_ lof:svt""no time in returning the advance amount of RsL50,Q'O0/9"' to the defendant 3 with instructions to defendant No.3 to return the said amount to the plaintiff. They have it all the allegations of plaintiff regarding loss sustained, 8 inconvenience caused, which they had claimed and contended that they are not liable to pay any amount to the
7. 3rd defendant afso filed a sepjere-tejs-:--.f:
statement contesting the claim. It admits that April, 1994, the plaintiff met the pesrsonlnnel for supply of delinted cotton,.»piacedlorderssto. all the 3rd defendant agreed to received a sum of Rs.50,000/~» thelcornpany, after receipt of the draft, it to the company i.e., defendants lllfalxidllifwhichlfflamount was credited to the compan--y's. account._land'=..receipt was issued. Thereafter, deceased supplied the requisite material to the 3rd defehdant who called upon the plaintiff to receive the "In fact, a letter dated 18.07.94 was addressed byiee 13%? 'defendant to the plaintiff expressing their readiness and vviilliiigness to perform their part of the contract and it is if ifs' thepfaintiff who refused to receive the supply. They specifically denied any agreement to supply linted cotton. In fact, they ix/if contend because of the breach committed by in receiving the material, their reputation is ~'1o'st;i sustained damages and they haveeatij-ustec771'httiiéji/géjiioie of Rs.50,000/-- towards loss occasicnedtov of the plaintiff and therefore; sought' of the suit. it h b
8. On the Trial Court framed 9 issues which' as . it t
1. during the month of **** =1 dealers represented V ' t!'te_tr'J'Oit1tty approached the plaintiff and 4' gave_ forsale of various seeds of the ~vdefenc'é!a1iteo*frL, to the plaintiff? themdefendants agree to supply 1000 Kgs of '.4'"!tr1ted cotton seeds to the plaintiff on 17~4~199-4 at .. W per KG and received a sum of Rs.50,000/-- advance from the plaintiff'?
' Did the defendants receive the said advance of Rs.50,000/- assuring delivery of the said cotton seeds on or before .1 5~-$1994 to the plaintyj"? it Shivanna Power of Attorney holder of defendants 1 and 2 was 11/ H}
4. Was the plaintiff entitled for rebate of per K9 under the above said transactionfuhh' « T
5. Did the plaintff su~ffe_red,_lossiof lakhs on account of the Sir.p.pl'y*-ofVihe vv:eetton"*-- seeds by the defendantsloefore 15e.4:j994?'=«. '
6. Did the plaintiffplajcelhorder defendants for the supplg"'¢,;f delinted-Iepottonpseeds?
7. Did the thirdv_defendc:nt stock of delinted cotton':-.seeiis to and 2 for the reasons . in of written statement?
" retarn the amount of Rs.5O.OOO ' D to pleaded in para 5 of the written A ' stat"e-ment? ' .. 'V91 degree or order?
{1}}, _ support of his case. the plaintiff examined hhi1Dnee1'f' I?\?t}'i.. and produced 8 documents which are marked ash'.§;.'*'.xs;--.i:3.1 P8. On behalf of the defendants defendant No.1 examined as DW--1, produced 2 documents which. aremarked as Exs.D1 and D2.
10. The trial Court on appreciation oral and documentary evidence on record held' the fplai-ntiff is has proved that during the montlifof iV'.l_arc:h :lQ€)4}l:'11./_the defendant's dealers represented th.e_ir".:vl'oft'icvers jointly approached the plaintiff and gave'»a__proposal«for safe of various seeds of the defendant cornpany thejpilainfiff. Further it held that the defendants agreed. "Kgs of linted cotton at Rs.50/- per Kg and received. a surn of as advance from the plaintiff. It also held that a_'sun1 o'filRs.50,000/~ was received assuring ' _ .ofuthe saidcotton seeds on or before 15.04.1994 to the plaintiffaflt that plaintiff is entitled to rebate of Rs.5/-- per 'recorded a finding that plaintiff has suffered loss to the tune_ of Rs.1/$8,000/~ on account of non--supp1y of the f eaten seeds by the defendants before 15.04.1994. It categorically held that the evidence on record had established that the plaintiff placed orders with the defendant.s-for the supply of linted cotton seeds and not delinted 3 as contended by the defendants. It defendants have not returned the.'arI1ount'l-.lof to the plaintiff as pleaded in pVaralg.of.'A--Athe Therefore, it proceeded to "suit as prayed for. Aggrieved by' decree of the trial Court, the defendants-- la this appeal.
11. the learned Counsel appearinglvfbriithe aslsailing the impugned judgment and decree. eontent_is_tl'th_at...neither the oral evidence nor the documentary levidence this case do establish that the I3lz1'.i.jI.:1°ti1°;f...pia,ced orde--r--s"with the defendants for supply of linted cotton therefore the finding recorded by the trial plaintiff has established his case of placing orders lforlthe supply of iinted cotton seeds is illegal and A requires to be set aside. He further contended that what was 'agreed to be supplied is delinted cotton seeds. On receipt of Rs.50.000/--, the invoice was raised. the said material was supplied to the third defendant for being delivered:"p:'to'-the plaintiff. It is the plaintiff who committed breach:"of 4_ not receiving the delinted cotton seeds».---- . Thereforelthle §¢nt1:ac't':. was terminated and defendants--1 and -- to the third defendant for being:vppa,id to."ih_e "H-.we";further' contended that the clairn of balg'as._Arebfate and the loss of Rs.l,48,000/-- any basis and unsnpported ,anyi"inat-eiial Therefore, he contendedp serious error in decreeing ._the so:~:~-.pfwth'ev.p'ia.1ri--ti§£. ._12. L"-Petr the learned Counsel Sri. P.S. appearing for the plaintiff submitted that though pl t"he1"e_is..;io_'clolc'urnentary evidence to show placing of orders for supply o.i"v'xlint:ed cotton seeds. the evidence of P.W--1 clearly establishes the said fact. In fact, P.W--1 in examination in chief A hals~.,asserted that he had placed such orders and the fact 135.50/-- per Kg was collected as advance towards the supply xi//.
shows that it is for supply of linted cotton seeds ands"..therefore he contends that admittedly, the tinted cotton not supplied, consequently, he sustained toss, and even Rs.50,000--00 was not retntned bjgthe Int.' it those circumstances, the t1ia1_Coutt, justified»ii~1 oecreeing the suit of the plaintiff as h. V V V' 2 t V
13. From axndrivaiuoontentions, the points that arise for appeal are as under: V hhhh " thetiicttnttff has established ptetetng orders' supply of 1 Metric Tons of tinted _ _v cottoitseeds? V F x {2} "tvttether the plaintiff has established the fact it it e. entitled to a sum of Rs.1,-48,000/« towards toss Rs.I0,000/-- towards damages, Rs.5,000/~ ~~ rebate, Rs.6,200/~ towards interest from O"/".04.I994 to 14.12.1994 and notice charges? it//, Point No.1:
14. it is not in dispute that the plaintiff a orders in writing for the supply of~1000 seeds. it is not in dispute that the was concluded on Rs.50,000-00 was paidfihy wapy_..ofA'dena.and.hdraft_HinJ:the name of the first defendant third defendant.
The third defendant, on amount and the order, in draft to the first defendaritv forffsuppiy of 1000 Kg cotton S€€dS-:7__ pW'ais'vv-.rais'ed and the cotton seeds was supplied 2 through the third defendant, itspdeaier. It is _thereafter the plaintiff did not receive the said on the ground that he had placed orders for cotton seeds, whereas, what is sought to be su'p.p1ie__d «delinted cotton seeds. 00 15. On the refusai of the plaintiff to receive the delinted cotton seeds, the material on record discloses that we defendants--l and 2 were informed about the same, whopinturn terminated the contract, paid Rs.50,000/--
defendant and the third defendant material to defenc1ants--1 and L documentary evidence on record ewlayfiof is a letter addressed to the .regairdir1,sv'VVflo'atingof advance, scheme of ta':i.fif--9.4;""'1te.";5:i-efiiisied tefpayinent of the amount by way of favour of the plaintiff, payable at Rs.2% on advance payment The token amount to be should be paid and packet size is amount to be collected is Rspp..E§O'/"~A.per it If so paid, Rs.5/- per Kg is the incentive agrleedi 'oepaid. The next document Ex.D--4 dated 07.07.94, it:-Twhich'"_the»AV.plaintiff complained to the defendants bringing to their the agreed terms and the fact that they were not ..supplied" with the seeds for which they have placed orders. it '~A_Cerisequent1y, they have sustained loss to the extent of = ...§§{s.1,48,000/», which is loss of profit and Rs.5,000/-- towards rebate and therefore, they put forth the of Rs.2,03,000--O0. In fact, in the entire body not mentioned that in pursuance of the ; 2 the defendants supplied delinted s'eVedfs~._«,1_V'g; cotton seeds and therefore'fthe~.._plain'tiff wafsMnot"'olsiiged receive the said supply? 'On stated therein is, after accepting the dernand. the defendants nor the distributor bothered" and they never expected thisof they have suffered loss. third defendant wrote a letter :*,_as._ 18.07.94 to the plaintiff acknowlfedgéirigv Jl;{s.50.000/-- towards the supply of ITQf)CH--32 seeds and the fact the they have received ifZfthevfusaidlffseedsvfrom ciefendants--1 and 2 and supplied it to the plaiiitifififanpd thereafter, the plaintiff wanted the linted cotton and therefore they did not take the supply of deiintedseeds. They also pleaded their inabiiity to supply the _ if '-livfltfifi seeds as it was not available. 18
16. Therefore, from these undisputed .«jdoc1iinVents which are relied upon by the plaintiff, it defendants were ready to supply the..d.el_i4nted"cotton plaintiff did not receive the same.
available and there is nothin'g--.__to placed orders for linted cotton gin entire body of the plaint, the plaintiff"hasV:pn:2it that the defendants were prepared to seeds, which the plaintiff wanted linted cotton seeds. been exchanged. This is alliathe -- the plaintiff has produced to substantiate l7; I1'lV."[h~';'w"lv".fl"'f')"S'-F";'~ examination of D.W-1 at the fag end, it for linted cotton seeds the advance of Rs.50/-- and the plaintiff has paid advance of for 1000 Kgs. This witness volunteered that the V' ad:e;rgnce"was for delinted cotton seeds. From this, an argument it "wa's'canvassed that Rs.50,000/- is paid at the rate of Rs.50/-- per Kg, as advance, which is for linted cotton 'seeds' not for delinted cotton. In fact, Ex.P~1 a which is not in dispute, shows cotton or other type of cotton, the Rs.50/~. In that View of the inataer, per Kg collected is only. for lint.ed»v:cotton .and:VnoVtL§for delinted cotton, do not stand circumstances, the trial this evidence on record, that the plaintiff has estahlisheid for linted cotton and linted:'--.cott.o-n psu.,pp1.ied to the plaintiff and therefore the defendants'l1iave"cornVn1ittedpreach of terms of the agreement. V 1.8. In thev----a--i«;sence of any clinching oral evidence on V reco~r1c1'<._a'nd=pin. the absence of any documentary evidence produced'Vdsiiljistantiating the claim, mere assertion in the exanlination in chief by P.W--1 that he had placed orders for Asiipply of linted cotton seeds would not establish the case of the' plaintiff. As already stated, in the entire plaint, such a 20 contention is not taken. In that View of the matter, the finding recorded by the triai Court that the plaintiff his case of placing orders for linted cotton seedspalnd concluded contract for supply of "is unsupported by any legal evidence:=.and_- l' Point No.2: A l V. i l V V
19. Only in the event 'p_lainVtiffle'siabiishlnglbreach of Contract by the defendants compensating plaintiff' loss suffered by them ismattributable to the breach of contract, would qliestion of payment of rebate would ariseonly if-the tlja-nsaction has been completed. Similarly, the establish that they have sustained damages on acTcoL_1nt.:_lof"bi9each of contract committed by the defendants. While dealiiigfurith Point No.1 when it is held that plaintiff has not llestablished his case of placing orders for supply of linted A f_' cotton seeds, Consequently, the defendants have not committed breach of supply of said cotton seeds. Defendants R/, 2! acknowledged receipt of Rs.50,000/-- and contended':that-. the agreement was for supply of delinted cotton of Rs.50,000/-- the invoice was ra--is'ed--.and co.ttori_ seeds iraerej' if despatched by defendants--1 and '~deferi.dant'for being supplied to the the "repudiated the contract, did not ..recei}ze----VVV,t'ig_;1ehitpttondl' 'seeds: the third respondent promptly 'to defendants} and 2, who in turn ljiave paid' it-o defendant, to be paid tQ.~~1§:11'1§ circumstances, the evidence__on""recoi%.e1:'p either loss of profit or loss sustainecl.g the in the absence of any damage occasioned:_'_tc- it is the plaintiff who committed breach of the 'contract. The trial Court has not properly V' appr-eciated the material on record and erroneously came to the con_clusvio1<1f_ defendants have committed the breach, con4seq1._1e'1itlf5}*, the plaintiff sustained loss of business, entitled topprebate and also damages and in decreeing the suit of the it The said finding is contrary to the evidence on record h dnd cannot be sustained. Accordingly, it is set aside. XV
20. It is not in dispute that plaintiff - to the hands of the third defendant, though was in the name of defendants--1:---a"nd«2 the first defendant encashed the said was repudiated, they were under..a legal obiigatiofnfto' r'e'tu1'n the money to the plaintiff,' Because"pvthe._;.noney*vwasii received by them through the were justified in returning it to third defendant has not paid the liability is that of defendants'-"1,f:an%:':::_ defendant in the Written statezrzent __ damages of Rs.50,000/-- and adjustrne'nt_'of The third defendant has not stepgpedeainto theyvitness box to prove the so called damages or y' there no Counter claim. There is no set off. Under these third defendant was not justified in With~ hoI'ding_y'Rs.$0,000/- which is legally payable to the plaintiff. As the said" amount was paid to the defendants--1 and 2 and it was if '~~eir1eashed and if their dealer, the third respondent refused to V 23 repay it, the responsibility continues to that of and 2. it it
21. In the facts of the case,,mas_ the_-"had benefit of Rs.50,000/-- from the date not repaid even though the veontractllwas terrninate_d,V they liable to pay interest at the 'rate ,of as there is no agreement to pay the '--.ra';e of inter-este.." the plaintiff would be entitled to interest at th.e..ra-t.e E5%'.l'fron:ii.p,the date of payment till the date "Ho\:XIeyéi9,.VV"this amount is paid in eonneetionl' ll;7'fV;}ornrnve'reialh_ltransaction. The interest from the of payment would be at 18% as awarded the trial Hence, we pass the following order:
'allowed in part.
A it it _ l,4"C':l1e:..decree of the trial Court is modified as under:
l defendants} to 3 are jointly and severally J ll 4' liable to pay the sum of Rs.50,000/-- with interest at 6% from 07.04.1994 till the date of suit and at the k/ 24 rate of 18% on Rs.50,000/ ~ from the suit till the date of payment.
(d) It is made clear that pI.a1'r1t=;.ff '_l;i'b'eurty.VVto<.'_enforee ; 2 this decree against defézntfifltntswlttafid. .2 against the appeltctfit-sf tttt ~ E3335: