H. M. T. Limited v. P J Mathew — 1990 DIGILAW 12 (KER)

JUDGMENT K.P. Balanarayana Marar, J. 1. Defendant in O. S.137/1981 before the Sub Judge, Ernakulam is the appellant. The suit was for determination of reasonable/fair prices for certain articles manufactured by plaintiff and supplied to the defendant as per an agreement of the year 1976. The claim is for the period from 1-9-1977 to 15-2-1980. Deducting the amount already paid, plaintiff claimed Rs 2,55, 253.86 with interest and costs. The lower court decreed the suit as prayed for reducing interest to 6% from the date of the suit Defendant appeals. 2. The need for setting up small scale ancillary industries was emphasised by the Government of India. Comprehensive guidelines were issued in 1971 to all public sector enterprises spelling out the steps to be taken to accelerate the growth of ancillary industries. To accelerate matters in public sector enterprises, the programme was entrusted to the Bureau of Public Enterprises. Additional guidelines were issued by the Bureau in 1978. The Hindustan Machine Tools Ltd. (for short HMT) Bangalore set up industrial estates and in Kerala the Kalamassery Unit of HMT established its own ancillary units numbering 12 initially invitations were called for by HMT for allotment of ancillary industrial units (for short AIU) and plaintiff applied for one such unit. He obtained allotment and entered into an agreement with HMT on 29-4-1976. The document is styled as a licence agreement wherein the licensee had under taken to give first priority for the manufacture of products required by the HMT and not to do outside job before completing and fulfilling order/orders placed by HMT. The licensor agreed to place orders at its discretion for such production as required by HMT on the licensee and buy the same subject to inspection and rejection of products not conforming to HMT's standards and specifications at prices to be mutually agreed upon. 3. The AIU sanctioned to the plaintiff was originally conducted as a jobbing shop which was subsequently converted, into a product shop. In the case of a jobbing shop the raw materials are to be supplied by the public sector enterprises and is entitled to the jobbing charges for the work done. In the case of a product shop necessary raw materials are to be provided by the AIU itself and they will be entitled to get the prices of the products manufactured. In the case of a product shop necessary raw materials are to be provided by the AIU itself and they will be entitled to get the prices of the products manufactured. In case raw materials are supplied by the public sector enterprises (PSE for short), the AIU is liable to pay the price thereof. The materials are to be manufactured as per the drawings and specifications supplied by the PSE. 4. Plaintiff invested a total sum of Rs. 3,20,000/- of which a considerable amount was obtained as loan from Kerala Financial Corporation. He had also invested an additional sum of Rs. 40,000/- after conversion of the AIU into a product shop. Plaintiff had to purchase raw materials at his own costs and he had to provide additional working capital to the extent of Rs 30,000/-. Many of the products manufactured by the plaintiff are proprietary items viz. products manufactured in accordance with the drawings and specifications supplied by the purchaser. In pursuance to the agreement defendant placed various orders which were executed by plaintiff. The grievance of plaintiff is that defendant had not negotiated and settled the price of the products as envisaged in the agreement Several correspondence ensued but defendant had not agreed on the price and that necessitated the issue of a registered notice and the filing of the suit. 5. The suit was resisted by the defendant who contended that there was mutually agreed price for the items manufactured and supplied by plaintiff and that the amounts had been paid by defendant. The transaction, according to defendant, falls under S.9(1) of the Sale of Goods Act and as such the question of determining reasonable price does not arise according to them. 6. The suit as it was originally filed was for determination of the price of three categories of hand wheels and one category of longitudinal stops. Taking into account appropriate cost factors and providing reasonable margin for the investment and for payment of the amount less the amount already paid, the trial court decreed the suit. But on appeal the District Court set aside the judgment and remanded the suit for fresh disposal. Plaintiff was directed to get the plaint amended claiming the actual amount due to him. He was also directed to pay court fee on the said sum. But on appeal the District Court set aside the judgment and remanded the suit for fresh disposal. Plaintiff was directed to get the plaint amended claiming the actual amount due to him. He was also directed to pay court fee on the said sum. It was thereafter that the plaint was amended claiming reasonable price for the components manufactured and supplied by plaintiff. An estimate of the reasonable price showing the details was also furnished. The order of remand was challenged before this court in C. M. A. 55/1984 wherein the order of remand was sustained with the finding that none of the observations contained in the judgment of the District Judge touching on the merits of the case shall not have any bearing whatever on the mind of the court. Additional evidence was adduced before the trial court and the plaintiff was found entitled to get reasonable price for the articles supplied by them and a decree was granted in favour of plaintiff Defendant assails the correctness of that judgment and decree. 7. On the issue regarding estoppel raised by defendant the trial court found that the finding of the appellate, court was binding on the parties. Defendant was found not entitled to dispute that finding on account of his inaction is not filing an appeal against the judgment of the appellate court. This finding of the trial court has been rendered without adverting to the observations made by this court in C. M. A. 55/1984. This court having directed the trial court to proceed with the trial afresh untrammelled by the observations contained in the appellate judgment, the issue regarding estoppel should have been considered by the trial court. Appellant had questioned the correctness of this finding in the appeal memorandum. The plea of the bar of estoppel is therefore at large and finding has to be rendered by this court on that aspect. Faced with the situation counsel for plaintiff wanted us to frame an additional issue and get the finding of the trial court on the same. But an issue had already been framed by the lower court and a finding had been entered though erroneous. The request of the counsel for framing an p additional issue and getting a. finding from the lower court was therefore refused. Both sides were heard on all the aspects involved in the case. 8. But an issue had already been framed by the lower court and a finding had been entered though erroneous. The request of the counsel for framing an p additional issue and getting a. finding from the lower court was therefore refused. Both sides were heard on all the aspects involved in the case. 8. Two points arise for consideration and they are: (1) whether plaintiff is estopped from claiming any amount over and above the amount paid already, and (2) whether plaintiff can claim reasonable price and, if so, what is the reasonable price to be paid. On the first point it is argued by the counsel for appellant - defendant that the price was already fixed in the purchase orders issued by the defendant and the same had been accepted by the plaintiff by acknowledging those purchase orders and issuing invoices for the amounts covered by them. According to the counsel the question of fixation of reasonable price does not arise. In order to enable plaintiff to claim, reasonable price the burden is heavy on them to establish absence of a price fixed by a contract as in a manner agreed between the parties. The price as defined in the Sale of Goods Act (Act 3 of 1930) means the money consideration for sale of goods. S.9 of the Act provides the manner in which the price has to be ascertained. Sub-s.(1) of S 9 contemplates three modes of fixing the price. They are: (i) the price may be fixed by the contract itself, (ii) the contract may provide for the manner in which the price has to be fixed and (iii) the price may be determined by the course of dealing between the parties. Sub-s.(2) which provides for payment of a reasonable price is attracted only when price is not determined in accordance with sub-s.(1). The question as to what is the reasonable price is a question of fact depending on the circumstances of each particular case. 9. When the price is fixed in the contract itself court has only to A enforce the same and need not embark on an investigation as to the adequacy of the price. There may be contracts providing for the manner in which price has to be fixed. 9. When the price is fixed in the contract itself court has only to A enforce the same and need not embark on an investigation as to the adequacy of the price. There may be contracts providing for the manner in which price has to be fixed. If the parties agree that the price shall be agreed upon on a future date, there is no enforceable contract until the price is fixed since an option has been reserved with them to determine the price of the goods. In such a case the question of determining reasonable price does not arise. While construing a contract which provided for "prices to be agreed upon from time to time" the House of Lords in May and Butcher v. the King (1934) 2 KB 17n. 21 held that there was no contract at all, but a mere agreement to agree it was also held that S.8(2) of the English Act which corresponds to S.9(2) of the Indian Sales of Goods Act could only be brought into play when the contract was totally silent about the price. Bat an intention to pay reasonable price can be inferred from the contract and the other circumstances. If the goods were manufactured and supplied under an arrangement whereby an inference regarding payment of reasonable price can be drawn, plaintiff can enforce such an arrangement and claim reasonable price. The position of law which emerges from the interpretation of S.9 of the Sale of Goods Act is that an agreement to leave the price open to further negotiations will normally exclude any inference that the price should be a reasonable price. Even then reasonable price can be claimed if an intention to pay reasonable price can be inferred from the agreement. 10. Counsel for plaintiff places considerable reliance on the phrase "at prices to be mutually agreed upon" contained in Ext. B1 agreement. According to counsel the prices are to be agreed upon by mutual consultations. Such a consultation has not been made according to the plaintiff though the plant level committee of HMT was authorised to advice and assist the management on the prising system. B1 agreement. According to counsel the prices are to be agreed upon by mutual consultations. Such a consultation has not been made according to the plaintiff though the plant level committee of HMT was authorised to advice and assist the management on the prising system. It is seen from the minutes of the Plant Level Committee held on 24-5-1978 that a team consisting of HMT Planning Engineers and other officers was constituted and the entrepreneurs were to represent their individual cases before that team who was to give its recommendations after examining all relevant aspects. The pricing committee had met on 27-7-1978. Ext. A5 is the minutes of the meeting. The committee had discussed the claim of plaintiff for price increase. The price of one category of driver bolt was increased from Rs. 5.65 to Rs. 8.80. The change in price was necessitated due to change in operation lay out from turret turning to center turning. This price was accepted by the plaintiff. The offer of an increase to p brackets was not acceptable to plaintiff. The committee decided to review the case on plaintiff in respect of the price claimed for longitudinal stops. Mention was made about the request of plaintiff to revise and fix the price on the basis of their cost plus profit. But the party was not prepared to furnish the details for arriving at the rate suggested by them. The committee therefore decided to refer the issue to higher authorities, the reason being that the requirement was a very major one. No agreement was thereafter arrived at on the price of the accessories to be manufactured and supplied by plaintiff. 11. It is argued by counsel for appellant that the price offered in the purchase orders was acceptable to the plaintiff and the acknowledgment of the purchase orders and issue of invoices amount to acceptance of the price offered. Considerable reliance was placed on Exts B2 to B15 which are the purchase orders and Exts. B16 to Ext. B32 invoices. The earliest purchase orders is Ext. B2 dated 25-4-1977. That does not contain the price par unit. Exts. B3 to B 15 contain the price offered. The purchase orders are seen accepted by plaintiff and endorsement made to that effect. The endorsement runs thus "I/We hereby accept the order and conditions as specified overleaf". B16 to Ext. B32 invoices. The earliest purchase orders is Ext. B2 dated 25-4-1977. That does not contain the price par unit. Exts. B3 to B 15 contain the price offered. The purchase orders are seen accepted by plaintiff and endorsement made to that effect. The endorsement runs thus "I/We hereby accept the order and conditions as specified overleaf". Invoices for these amounts were sent by plaintiff and the amount collected from defendant. The plaintiff had accepted a few orders and signed the standard form is mentioned in Ext. A2 letter sent on 11-10-1976. Plaintiff has also undertaken to continue to accept orders for the time being. That was being done so that the work of defendant may go ahead without delay. In spite of the acceptance of the orders defendant was informed that the acceptance should not be construed as acceptance of the rates mentioned in the orders. Defendant was also informed that final billing would be done on rates to be mutually agreed upon. In spite of the conditional acceptance of the purchase orders, plaintiff accepted orders issued periodically and in Ext. B40 letter sent on 16-5-1977 plaintiff expressed willingness to work on the rates quoted by plaintiff. No doubt mention was made that it was agreed on a trial basis. Plaintiff had also undertaken the manufacture the items mentioned by defendant. In that latter also plaintiff wanted verification and finalisation of the cost data and price. The acceptance of the purchase orders and the issue of the invoices would conclusively establish the intention of plaintiff to execute the orders at the rates quoted by defendant. At the instance of plaintiff, defendant had revised the price of some of the items, which revision also was agreeable to plaintiff. In the circumstances it cannot be said that there was no concluded contract between the parties regarding the price to be paid, nor can it be said that reasonable price had to be determined at a latter date. 12. Considerable stress is laid by plaintiff on the letter Ext. A22 sent by defendant on 5-1-1980 whereby plaintiff was asked whether they were prepared to supply the products on the rates offered by defendant. That letter mentions that there is no obligation on the part of defendant to purchase any of the products in the absence of any mutually agreed price. A22 sent by defendant on 5-1-1980 whereby plaintiff was asked whether they were prepared to supply the products on the rates offered by defendant. That letter mentions that there is no obligation on the part of defendant to purchase any of the products in the absence of any mutually agreed price. The mention of this fact, according to counsel for the respondent, enables respondent to claim reasonable price. But the same latter mentions about the practice followed by the parties Such a letter was necessitated on account of the conduct of plaintiff in not accepting the price and rates offered by defendant after supplying of the products in pursuance to the contract entered into between them. The mention of the absence of any mutually agreed price is Ext. A22 will not therefore enable respondent to contend that the price had to be ascertained at a later date and that too by mutual consultations. Appellant had made their intention clear in Ext. A22 that they were not agreeable to accept the products unless plaintiff was agreeable to the price determined by the Pricing Committee. That was the procedure followed till then and that was manifested from the acceptance of the purchase orders by plaintiff. Here is therefore a case where the parties had arranged for fixation of the price of the products at a later date and such price was actually fixed by defendant and. accepted by plaintiff. That fixation was in accordance with S.9(1) of the Sale of Goods Act. No question can thereafter arise about fixation of reasonable price under S.9.(2) of that Act. Plaintiff having accepted the price quoted by defendant was estopped from claiming any higher amount. Nor can he invoke the aid of S.9(2) of the Act and claim fixation of any reasonable price. The finding of the lower court that plaintiff was not barred by estoppel is therefore erroneous and has to be set aside with the consequence that the suit has to be found to be not maintainable. 13. The lower court has proceeded to fix reasonable price of the f three categories of hand wheels and longitudinal stops presumably for the reason that S.9(2) of the Sale of Goods Act is applicable. We have found that price was fixed by mutual agreement as revealed by the conduct of parties and that fixation satisfied the requirements of S.9(1) of the Sale of Goods Act. We have found that price was fixed by mutual agreement as revealed by the conduct of parties and that fixation satisfied the requirements of S.9(1) of the Sale of Goods Act. S.9(2) of the Act can operate only in the absence of a price fixed under S.9(1). Yet in deference to counsel for the respondents who dealt with the question of fixation of reasonable price under S.9(2) of the Act at great length, we feel it desirable to deal with that aspect also for the sake of completeness. 14. The contention of the appellant that none of the other entrepreneurs occupying sheds like respondent had any dispute regarding the price of similar products, but respondent alone refused to accept the price fixed by appellant did not find favour with the lower court. The suggestion of the appellant that the products were supplied by other concerns at the rates offered and given to the respondent was also not accepted by the trial court. The reason which prompted the lower court to reject these contentions is that the categories of hand wheels and longitudinal stops are proprietary items for which there cannot be a market price and as such reasonable price cannot be fixed on the basis of a market value. Considerable number of hand wheels and longitudinal stops were supplied by respondent during the period 1-9-1977 to 15-2-1980 where as the supply by the two companies mentioned by appellant was only negligible out of which a major portion had to be rejected. As per Ext. B44 purchase order A placed on Process Systems, Chalakudy price of hand wheels was shown as Rs. 90/- per piece for one category and Rs. 42/- for another category. That order was placed only on 2-4-1981. It would appear that out of 100 pieces of MO 1 hand wheels ordered by appellant, 9 pieces were supplied out which 2 alone were accepted and the remaining rejected. Similarly of the 50 numbers of MO 3 hand wheels ordered only 8. were supplied, cut of which one was rejected and the remaining accepted. Material Materials were supplied by appellant. It is pointed out that no invoice was placed Process Systems and the said company is alleged to have gone into g liquidation. For these reasons the lower court was not prepared to accept the price quoted by the Process Systems, Chalakudy. were supplied, cut of which one was rejected and the remaining accepted. Material Materials were supplied by appellant. It is pointed out that no invoice was placed Process Systems and the said company is alleged to have gone into g liquidation. For these reasons the lower court was not prepared to accept the price quoted by the Process Systems, Chalakudy. The purchase orders issued to Shujai Engineering Products, Coimbatore were also not relied on for the reason that they were having other contracts with the appellant and were under an obligation to supply those products. The approach made by the lower court does not appear to be correct. The fact that Shujai Engineering Products were having other contracts with appellant is no reason not to rely on the price quoted by them for the hand wheels ordered by the appellant. The Process Systems, Chalakudy might not have supplied sufficient number of hand wheels and even a portion of the products supplied by them had to be rejected. For that reason it may be proper not to rely on the price quoted by them in order to ascertain the market price. But the lower court was not right in not placing reliance on the price quoted by Shujai Engineering Products, Coimbatore. The fact that they were prepared to supply products at the rate of Rs. 100/- per piece of MO 1 category of hand, wheel and that major part of the supplies made by them had been accepted by the appellant would suggest that the price offered by them was reasonable. The observation of the lower court that the price shown in the purchase orders placed by appellant before other manufacturers cannot be accepted as reasonable price is therefore incorrect. 15. Regarding longitudinal stops there is Ext. B43 purchase order placed on Royal Industries, Bangalore. The lower court has referred to the admission of DW 4 that the products ordered as per Ext. B43 were not received by them. As such the court was right in not placing any reliance on Ext. B43 in order to fix the reasonable price for longitudinal stops. 16. That other entrepreneurs occupying sheds like respondent had not raised any dispute regarding the price of similar products is not challenged by respondent. It would appear therefore that respondent alone had refused to accept the price fixed as per the purchase orders. B43 in order to fix the reasonable price for longitudinal stops. 16. That other entrepreneurs occupying sheds like respondent had not raised any dispute regarding the price of similar products is not challenged by respondent. It would appear therefore that respondent alone had refused to accept the price fixed as per the purchase orders. This aspect of the matter escaped the notice of the lower court. The plaintiff while examined as PW 1 said that the prices offered by other units was not acceptable to him since there were no comparable items in those units Respondent was aware from the reply notice Ext. A18 that other entrepreneurs had not raised any dispute regarding the price of similar products. The complaint of appellant was that respondent alone refused to accept the price fixed by appellant. They had therefore informed respondent that anything more than what has already been offered or paid as price cannot be claimed by them. Though respondent was aware of this plea raised by appellant, no steps are seen taken by respondent to prove that the price offered by other entrepreneurs was more than the price offered to respondent or that other entrepreneurs had raised objections regarding the price The only inference possible is that the other entrepreneurs to whom orders for supply of similar products were given were satisfied with the price offered and that is an indication regarding the reasonable pries offered by appellant. 17. It is urged by the counsel for respondent that the guidelines in Ext. Al had not been followed in fixing the price of the products That provides for drawing up purchase contracts between the public sector and the individual ancillary units keeping in view a guarantee of atleast 50% off take of the annual production of ancillary units to be given by the public sector for a reasonable period of cover the development phase and beyond as mutually agreed upon. Moreover prices are to be fixed after taking into account the various factors of appropriate cost and after allowing a reasonable margin of 10% to 20% before tax on capital is employed. The lower court is of the view that these guidelines are also to be taken into consideration while fixing reasonable price. Mention is also seen made about the admission of DW 2 that the price has to be fixed on the cost plus profit basis. The lower court is of the view that these guidelines are also to be taken into consideration while fixing reasonable price. Mention is also seen made about the admission of DW 2 that the price has to be fixed on the cost plus profit basis. But the consistent stand taken by the appellant throughout was that it is not possible for them to accept this in particular for the simple reason that they hold no control over the cost and the principle if accepted will only help to increase the certain the absence of any incentive to control cost on the side of respondent. This stand of appellant was not acceptable to the lower court and reasonable price for the products supplied by the respondent was fixed by relying mainly on Ext. A30 work sheet prepared by respondent. That was claimed to be one prepared in accordance with Ext. A1 guidelines. The Assistant General Manager of appellant has also prepared worksheets which are Exts. B65 and B66. They show the Machine hour rate prepared by HMT for the ancillary units of its industrial units, the production involving three categories of work viz. turning, milling and drilling. Ext. A30 work sheet also contain details of machine hour rate, investment, wages, overhead charges, interest and entrepreneurs remuneration. In particular the cost of production and entrepreneur's margin for the four categories of products supplied by them are also attached. It is on the basis of Ext. A30 that the lower court has proceeded to ascertain the reasonable price of the products supplied. On a consideration of the documents and evidence we find it difficult to accept the reasons given by the Subordinate Judge. 18. It is admitted by PW 1 that the cost plus profit method is not based on the actual cost of production incurred in any particular unit, but based on estimation of the cost of production in normal conditions. The number of available working days and working hours per day are computed on that basis. The total number of working days available was estimated at 273 per year in Ext. A30 whereas it is 300 in Ext. B66. Respondent had deducted Sundays, 13 public holidays and the number of days for which a worker is entitled to avail casual leave and privilege leave. That a worker is entitled to avail casual leave and privilege leave cannot be disputed. A30 whereas it is 300 in Ext. B66. Respondent had deducted Sundays, 13 public holidays and the number of days for which a worker is entitled to avail casual leave and privilege leave. That a worker is entitled to avail casual leave and privilege leave cannot be disputed. But before deducting those days respondent should have produced the registers to show that the workers had actually availed of casual leave and the privilege leave. Thirty percent of the total hours are alleged to be lost due to power failures, machine break downs, lack of raw materials etc. To show that there had been such losses, no evidence was adduced before the lower court. There is also no material on record to show how many employees were engaged by respondent and the total wages paid to them. PW 1 categorically admitted that he has records to show the number of employees engaged by him. He would say that there are no records to show that there was any strike in the relevant period. At the next breath he added that there was no strike by the employees during that period. He has further admitted that there is no record to show that there was power failure during the relevant period. According to him he would not have paid bonus for some years, but would add that he might have paid. He had not paid any contribution towards Provident Fund during that period and is not in a position to say whether any contribution had been to the E. S. T. Still he would say that he had paid E. S. I. contributions for some period. He has no records to show the time or the work lost due to power failure. According to him there are records to show the number of days lost due to strike and bandhs. For reasons best known to him none of these records was exhibited before the lower court. As stated by him the worksheet was based on estimation of cost of production in normal conditions. If that be so, the lower court was not right in placing reliance on Ext. A30 worksheet in order to ascertain the total number of working hours or the machine hour rate calculated on that basis. As stated by him the worksheet was based on estimation of cost of production in normal conditions. If that be so, the lower court was not right in placing reliance on Ext. A30 worksheet in order to ascertain the total number of working hours or the machine hour rate calculated on that basis. In this connection it is pertinent to note that the actual working hours per day is taken as 14 for two shifts together whereas such worker is liable to work for a period of 8 hours. One hour is seen to have been deducted for the time spent on the change of shifts and time taken for tea break. On the other hand, appellant had calculated the available hours on the basis of 8 hours per shift which appears to be reasonable. There is, therefore, no reason why the hours estimated by appellant and shown in Ext. B66 should not be accepted. Similar is the case with the salary of the employees: Wages are seen calculated by respondent at the rate of Rs. 300/-, Rs. 500/- and Rs. 750/- for three categories of employees. The Dearness Allowance payable to them and all other benefits are seen mentioned in Ext. A30 and added on to the salary in order to ascertain the total wages. No document is seen produced to prove the payment of wages at these rates. On the other hand appellant had calculated wages at the rate of Rs. 500/- per month which cannot be said to be unreasonable. In the absence of any document on the side of respondent, it was not right on the part of the lower court to place reliance on Ext. A30 and find that respondent had paid wages as shown therein and the finding that plaintiff is entitled to calculate the machine hour rate on the basis of the wages shown therein cannot be sustained. 19. According to respondent 30% of the available hours will be lost due to power failures, machine failure, lack of orders, time lost for strike and lock out. As observed earlier, details regarding hours lost are not available on account of the failure of the plaintiff to produce the necessary registers. In the work sheet submitted by appellant, number of available hours has been taken as 80% giving a margin of 20% for machine break down, loss of power failure etc. As observed earlier, details regarding hours lost are not available on account of the failure of the plaintiff to produce the necessary registers. In the work sheet submitted by appellant, number of available hours has been taken as 80% giving a margin of 20% for machine break down, loss of power failure etc. In the absence of satisfactory evidence on the side of respondent, the deduction of 20% appears to be reasonable and the number of hours available as shown in Ext. B66 has to be accepted. 20. What remains to be considered is whether the machine hour rate estimated by plaintiff has to be preferred to that estimated by defendant. On a perusal of Ext. B66 it is seen that depreciation has been calculated at 8% which is the percentage of depreciation adopted by plaintiff. Other expenses and overhead charges are taken as 68%. The rejection allowance is taken as 5%. 20%, is seen allowed by way of profit and interest. The overhead charges is estimated on the basis of the actual expenses of HMT. The lower court has referred to the evidence of DWs 2 and 5 regarding the over head charges. DW 2 stated that overheads will work to 100% of the aggregate of depreciation of machines used, power consumed etc. He had prepared the estimate on the basis of the advice given by the accounts department. The Cost Accountant, DW 5, admitted that power consumed, space occupied by the machine etc. are outside the purview of overhead charges. He had not conducted any work study. It was therefore argued that overhead charges were calculated without taking into account the actuals. The difference in the investment on the Universal milling Machine is adopted by defendant j and the amount actually paid by plaintiff has also been pointed out by the lower court. This prompted the court to reject the computation given in Ext. B66 when once Ext. B66 was rejected, the lower court thought that Ext. A30 can be accepted as a work sheet establishing the accurate hour rate and that was accepted as a reasonable one. Even if the details shown in Ext. B66 are liable to be rejected, it is not right on the part of the lower court to accept Ext. A30 unless the particulars mentioned therein are supported by registers and documents on the side of plaintiff. 21. Even if the details shown in Ext. B66 are liable to be rejected, it is not right on the part of the lower court to accept Ext. A30 unless the particulars mentioned therein are supported by registers and documents on the side of plaintiff. 21. Reasonable price is seen calculated by plaintiff on the basis of actual operational time taken for each and every operation in producing MOs 1 to 3 categories of hand wheels and MO 4 category of longitudinal stops Reliance is seen placed by the lower court on the testimony of PW 2 who, as a Planning Engineer, has to do operation sheets for various parts of the scooter made in the factory in. which he was employed. He claimed to be in the know of things about turning, milling and drilling. He tendered evidence in support of the plaintiff's claim after perusing the drawings and specifications given by appellant to the respondent in respect of hand wheels and longitudinal stops. Though he was not engaged in the manufacture of hand wheels and longitudinal stops, he had spoken about the time taken for each operation on the basis of the drawings and specifications. This he was able to do from his experience as a Planning Engineer. The lower court found him to be a competent person and placed reliance on his testimony. He had visited the plaintiffs factory only to familiarise himself with the various machines whereas he had no personal knowledge about the working of those machines. In other words, he has spoken about the operational time on the basis of the drawings and specifications. It would thus appear that PW 2 had no personal knowledge regarding the actual working of the machine and the operational time taken. Reliance should not have been placed on his testimony in the absence of any other supporting evidence. The lower court has found fault with the defendant for not producing the documents possessed by them which, would have been helpful to prove the actual operational time taken by defendant company. Plaintiff had no doubt expressed willingness to accept the operational time taken by defendant as correct and reasonable. A petition is also seen to have been filed for directing defendant to produce the job cards relating to the operations. Plaintiff had no doubt expressed willingness to accept the operational time taken by defendant as correct and reasonable. A petition is also seen to have been filed for directing defendant to produce the job cards relating to the operations. They were not produced on the excuse that they are preserved only for a period of six months The lower court has proceeded to discuss the evidence of DWs 2 and 4 regarding the preservation of these job cards. Whatever may be the inconsistency in their testimony, the non production of job cards will not militate against the defendant since the burden is on the plaintiff to prove his case by producing documents and adducing evidence. On the side of the plaintiff there is only the testimony of PW 2 about which reference has been made already. Moreover, there are no registers or documents on the side of plaintiff in support of the particulars mentioned in the work sheet. As such the lower court was not right in adopting the computation of the actual operational time shown in Ext. A30 as reasonable. The failure of the defendant to establish the actual time taken by them is no reason to find in favour of plaintiff. 22. Regarding the margin of profit also the lower court appears to have adopted Ext. A30 in toto. As per the guidelines 10 to 20 percent margin of profit has to be given. In Ext. B66 profit and interest has been taken as 20% and it is on that basis that the price has been fixed. The objection of plaintiff appears to be that the rate was adopted on calculating the total hours at 3840 instead of 2675 as shown in Ext. A30. It has already been found that the available hours shown in Ext. B66 is reasonable. There is, therefore, no reason why the computation of reasonable price in Ext. B66 should not be accepted. The lower court was therefore not right in relying on Ext. A30 and in adopting the price shown therein. The finding of the lower court on this aspect is liable to be set aside. That being so, the claim of plaintiff for enhanced rates on hand wheels and longitudinal stops has also to be rejected. In short, the claim made in the plaint has to be refused. A30 and in adopting the price shown therein. The finding of the lower court on this aspect is liable to be set aside. That being so, the claim of plaintiff for enhanced rates on hand wheels and longitudinal stops has also to be rejected. In short, the claim made in the plaint has to be refused. The judgment and decree of the lower court are therefore set aside and the suit is dismissed, but in the circumstances without costs.