A. K. SIKRI ( 1 ). The plaintiff in the instant case is State Trading Corporation of India Ltd which is a company registered under the Indian Companies Act 1956. It is having one of its Branch offices in Delhi situated at En Kay House,3-4, Shopping Centre, Dharam Marg, Chanakya pun, New Delhi One of the business activities of the plaintiff is sale of second hand imported cars and other vehicles The plaintiff has alleged in the plaint that the said Delhi Branch issued a Tender Notice No. DLH-44/sept 25/81 dated 11. 9. 1981 for the sale of imported cars and other vehicles mentioned including a Mercedes Benz 300-D Sedan Car mentioned at s. No. 3 in the said Tender Notice In response to the said Tender Notice, besides others, M/s. Madhu Enterprises (P) Ltd , defendant No. 1, M/s L. S. Bagla H. U. F. , defendant No. 2 and shri Shyam Goel, defendant No. 3 also offered their tenders for several cars mentioned in the said Tender Notice and remitted Bank draft/pay-orders of the amount of earnest money for the required category of vehicles All the defendants also filed tender offers for the said mercedes Benz 300-D Sedan Car mentioned at S. No. 3 of the said Tender Notice dated 11. 9. 1981 along with the Demand Draft/pay-orders of the amount of Rs 40,000/- each by way of earnest money. The tenders were opened in the presence of the tenderers who chose to be present including defendants 1 to 3 and following offers for the said Mercedes benz car mentioned at S. No. 3 were found to be the highest in the order mentioned below - 1 Madhu Enterprises (P) Ltd (Defendant No. 1) Rs. 13,57,000. 00 2 L. S. Bagla H. U. F. (Defendant No. 2) Rs. 11,83,979. 00 3 Sh. Shyam Goel (Defendant No. 3) Rs. 11,15,300. 00 4 Sh. Nalin Bhatia Rs. 9,81,501. 00 ( 2 ). It is further alleged in the plaint that on coming to know that tender submitted by the defendants 1 to 3 were the highest and that they had given very high bid than the next tenderer Shri Nalin Bhatia, their intention became bad and the defendant No. 3 in collusion with the defendant No. 2 raised an objection in respect of tender submitted by the defendant no. 1 alleging that the said tender was not accompanied by a valid Bank Draft The defendant no. 3 even sent a written representation dated 26. 9. 1981 requesting for rejecting the tender of the defendant No. 1 and demanded that fresh tenders be called for the sale of said car the plaintiff after considering the representation and objection rejected the aforesaid representation of the defendant No. 3 and accepted the highest tender offer of defendant no. 1 requiring the defendant No. 1 to pay the balance of the tender price with octroi duty by 26. 10. 1981 and take delivery of the car Thereafter on 24. 10. 1981 the defendant No. 2 withdrew his earnest money However, the defendant No. 3 in collusion with the defendant no. 1 filed suit for permanent injunction against the plaintiff on 25. 10. 1981 seeking restraint against the plaintiff from selling the car in question to the defendant No. 1 Initially ex-parte injunction was granted on 26. 10. 1981 The Defendant No. 1 on the same day came to the office of the plaintiff and handed over a letter dated 26. 10. 1981 and a Bank Draft in the sun of Rs. 13,14,118. 00 for the delivery of car in question However, the car could not be delivered because of the aforesaid restraint order On receiving this letter, the defendant No. 1 requested the plaintiff to return the Bank Draft Thereafter vide letter dated 23. 4. 1982 the defendant No. 1 sent a legal notice to the plaintiff refusing to purchase the car, terminating the contract and claiming the refund of earnest money. ( 3 ). The suit filed by the defendant No. 3 was ultimately dismissed on 3. 7. 1982 After the dismissal of the suit, the plaintiff sent telegram dated 24. 7. 1982 calling upon the defendant no. 1 to pay the balance price of the said car and take delivery of the car on or before 30. 7. 1982. The defendant No. 1, however, refused to take the car on the ground that as the plaintiff could not deliver the car earlier the contract had been terminated The defendant no. 1 also filed suit for recovery of Rs. 40,000. 7. 1982. The defendant No. 1, however, refused to take the car on the ground that as the plaintiff could not deliver the car earlier the contract had been terminated The defendant no. 1 also filed suit for recovery of Rs. 40,000. 00 being Suit No. 984/82 which was pending in the court of Additional District Judge, Delhi at the time of filing the suit As the defendant No. 1 refused to take the car the plaintiff auctioned the car again for Rs 9,03,079/- ( 4 ). On summons having been served upon the defendants, the defendants 1 and 2 appeared and filed their separate written statements denying various allegations made in the plaint. The preliminary objection to the effect that suit is time barred is also taken On the pleadings, following issues were framed on 6. 11. 1995 1. Whether the plaint is signed and presented by a duly authorised person on behalf of the plaintiff? 2. Whether the plaintiff proves that defendant No. 1 had offered a valid tender for purchase of vehicle - a Mercedes Benz 300-D Sedan Car? 3. Whether the plantiff proses that the suit No. 488/81 was filed by defendant No. 1 by colluding with defendant No. 3? 4. Whether the notice issued by defendant No. 1 on 23 4 1982 is illegal and invalid? 5. Whether the plaintiff proves that the defendant No. 1 has committed a breach of contract? 6. Whether the plaintiff proves that plaintiff has suffered a loss of Rs 4,53 921/-? 7. Whether the plaintiff is entitled to claim and get Rs 2 56. 960/- by way of interest for the period running between 1. 8. 82 to 15. 7. 85? 8. Whether there is any cause of action for the plaintiff to sue defendants 1 to 3? 9. Whether plaintiff s suit is within limitation? 10. What is due from the plaintiff and from which of the defendants? 11. What order and decree? ( 5 ). Thereafter the defendants stopped appearing and by order dated 8. 7. 1996 the defendants were proceeded ex-parte. The plaintiff has filed affidavit of Mr George Verghese, deputy Finance Manager of the plaintiff Corporation in support of its case. ( 6 ). 11. What order and decree? ( 5 ). Thereafter the defendants stopped appearing and by order dated 8. 7. 1996 the defendants were proceeded ex-parte. The plaintiff has filed affidavit of Mr George Verghese, deputy Finance Manager of the plaintiff Corporation in support of its case. ( 6 ). The central issue in this case is issue No. 3 inasmuch as if the plaintiff is able to prove this issue and collusion between the defendants is established leading to filing of Suit no. 488/81 by the defendant No. 1 in the District Court it would not be difficult to find answers to other issues. We have to keep in mind that the defendants have remained ex-parte and, therefore, there is No. evidence of the defendants in support of their case. The version of the plaintiff supported by an affidavit of Mr. George Verghese its Deputy Finance Manager remains unrebutted. He has proved on record through various documents the entire tendering process i. e. the submission of bids by various persons including the defendants herein; opening of tenders, objection of defendant No. 3 to the tender submitted by defendant no. 1; turning down the said objection, acceptance of tender of defendant No. 1, rejection of that objection; filing of suit by defendant No. 3 challenging the bid of defendant No. 1, order of trial Court in that suit dismissing the injunction application ultimately; communications to the defendant No. 1 to take the delivery of the car and on refusal of the defendant No. 1 to make balance payment and take the delivery of the order; selling the said car by fresh auction. In his testimony Mr. Verghese has stated as under: 2. "that in those days defendant No. 1 and No. 2 were almost the biggest buyers of cars from S. T C. and used to buy more than any other single party in a given tender mr. S. Srinivasan was the authorised attorney of defendants 1 and 2 The said mr. Srinivasan and Mr. L. K. Bagia, the Karta of defendant No. 2 H. U. F. were frequent visitors to the office of the Imported Cars Division. They were also assisted by others including Mr. Shyam Goyal, the defendant No. 3 herein who also used to visit STC office sometimes alone and sometimes in company of Mr. Srinivasan and Mr. L. K. Bagia, the Karta of defendant No. 2 H. U. F. were frequent visitors to the office of the Imported Cars Division. They were also assisted by others including Mr. Shyam Goyal, the defendant No. 3 herein who also used to visit STC office sometimes alone and sometimes in company of Mr. Srinivasan and Mr Bagla sometimes the defendant No. 3 also filed tenders in his own name All the aforesaid three persons used to write and sign at STC office and also tenders and other correspondence were received at my office I am conversant with their handwriting and signature and can identify the same" ( 7 ). In order to prove the conspired dealing by the defendants, the plaintiff has also produced on record bids submitted by these defendants in respect of various other tender issued by the plaintiff for sale of various other cars. Paras 7 to 9 of the testing of mr. Verghese mention these aspects in the following manner: 7. "that Ex. PW-1/27 to Ex. PW-1/53 are tenders filed by defendant No. 1 for various cars in pursuance of tender No. DLH/44/sept-25/81, all of them bear my initials and initials of Shri N. P Dubey, Shri B. P. Gupta and S. Kumar They also bears the signatures of Shri L K. Bagia, Director of defendant No. 1 under the date 13. 2. 1986. 8 That Ex. PW-1/54 to Ex PW-1/60 are tenders filed by defendant No. 2 which bears my initials and initials of Shri N. P. Dubey and Shri S. Kumar All these tenders have been signed by Shri S. Srinivasan attorney of defendant No. 2 which I identify. Ex. PW-1/61 to Ex PW-1/63 are the tenders of defendant No. 3 which bears his signatures which I identify. They also hear my initials, initials of Shri N. P. Dubey, shri B. P Gupta, FM and of Mr. S. Kumar The endorsement on Ex PW-1/61 at point X is in the hand of Mr. Bhupinder Singh, General Manager, Delhi Branch Ex PW-1/64 to Ex PW-1/66 are the letters of defendant No. 1 received by our office in connection with the payment of price of various cars purchased by defendant No. 1 in the tender no. S. Kumar The endorsement on Ex PW-1/61 at point X is in the hand of Mr. Bhupinder Singh, General Manager, Delhi Branch Ex PW-1/64 to Ex PW-1/66 are the letters of defendant No. 1 received by our office in connection with the payment of price of various cars purchased by defendant No. 1 in the tender no. DLH/44/sept-25/1981 forwarding the bank draft/pay order mentioned therein ex PW- 1 /67 is the letter from defendant No. 2 under the signatures of Shri S. Srinivasan forwarding Bank draft/pay order in payment of the price of car at serial number 4, 31, 44 and 56 of the said tender. It also bears the initials of Shri N. P. Dubey and Shri h. C. Gupta and the signature of Shri L. K. Bagla Karta of defendant No. 2 9 That Ex. PW-1/68 to Ex. PW-1/74 are the tenders filed by defendant No. 2 in response to tender notice No. DLH/42/july-29/1981 opened on 29/07/1981 for various cars serial numbers whereof are stated therein Each of them is signed by shri S. Srinivasan attorney of defendant No. 2 and is witnessed by defendant No. 3 I identify the signatures of Shri S. Srinivasan and Shri Shyam Goyal defendant No. 3 each one of the tenders bears my initials and initials of Shri N. P. Dubey as members of the tenders opening Committee having opened the tenders on 29/07/1981" ( 8 ). As per the aforesaid dealings as well as circumstantial evidence in the present case may lead to the conclusion that three defendants were known to each other and they wanted to purchase the car in question May be for this reason the bid given by these defendants is much more than the next bid of another person The bid of defendant No. 1 was for an amount of Rs. 13,57,000. 00, defendant No. 2 for an amount of Rs. 11,83,979. 00 and defendant no. 3 for an amount of Rs. 11,15,300. 00 The next bid was of another person Mr. Nalin Bhatia. It was for an amount of Rs. 9,81,501. 13,57,000. 00, defendant No. 2 for an amount of Rs. 11,83,979. 00 and defendant no. 3 for an amount of Rs. 11,15,300. 00 The next bid was of another person Mr. Nalin Bhatia. It was for an amount of Rs. 9,81,501. 00 Thus it appears that when the tenders were opened they found that they were paying much more price than the bid of the highest bidder outside their cartel They thus wanted to frustrate the tender First salvo was filed by M/s Madhu enterprises which is sole proprietorship concern of Mr L. K. Bagia The suit was filed by M/s Madhu Enterprises alleging that the bid should not be accepted as it had also submitted its bid which was the highest bid which was not at all considered. This Suit No. 397/83 was dismissed by the Court of Smt. Bimla Makan, Sub-Judge, lind Class, Delhi on 27. 9. 83 (Ex PW1/25) Then defendant No. 3 challenges the bid of defendant No. 1 and sent a notice. Significantly, only said in the notice that the car be reauctioned If the bid submitted by defendant No. 1 was not proper and defendant No. 3 was challenging the same earnestly the only demand would have been to accept his bid who was the next highest bidder However, strangely he requested fro reauctioning When his request was turned down he filed the suit and managed to get ex-parte injunction which was ultimately vacated on this very ground, namely, he had No. locus standi to challenge the bid submitted by defendant No. 1 when he was not asking for the purchase of car by himself in the alternative In all this game plan they played smart because immediately after the injunction order dated 26. 10. 10. 1981 served upon the plaintiff, defendant No. 1 through Shri S. Srinivasan, Attorney of defendant No. 1 approached the plaintiff with a bank draft of the balance consideration and requested for delivery of the car knowingly fully well that because of the injunction order the plaintiff would not be in a position to do so Thereafter taking advantage of the operation of the said injunction order, defendant No. 1 withdrew his offer to purchase the car There are certain other circumstances which lead to the inference that there was collusion between the defendants These are: (A) The moneys of defendant No. 1/2 were utilized by defendant No. 3 (b) Ex PW-1/63 which is tender of defendant No. 3 for car at S. No. 23 mentions draft no. 696749/49 has been mentioned Defendant No. 3 was unsuccessful bidder and draft which was really given by defendants 1 and 2 was utilized by defendant No. 1 in purchase of the car at S. No. 3 (c) Ex PW 1/2 is a tender of defendant No. 1 for the said car It mentions the draft no. 696712 which is scored out and in its place draft Nos. 031205 and 031206 of rs. 20,000/- each are added in its place. This draft No. 696712 has been used by defendant No. 3 for his tender for the said Mercedeze Benz Car. (d) PW 1/40 is the tender of defendant No. 1. Also this draft No. 051207/357 is scored of and in its place draft No. 695796 is written This draft 051207/357 is used by defendant No. 3 in Ex. PW 1/61 as earnest money for car at serial No. 56 (e) Beside Ex PW 1/61 which is tender of defendant No. 3 in which draft No. 696748/ 48 and 051207/357 of Rs 20,000/-each have been given byway of earnest money for car at S. No. 56 As defendant No. 3 was unsuccessful bidder and offer of defendant no. 2 was accepted for the said car, the said two drafts which were the property of defendants No. 1 and 2 were utilized by defendant No. 2 for the purchase of cars at serial No. 4, 31,44 and 56 (Ex PW. 1/67) ( 9 ). 2 was accepted for the said car, the said two drafts which were the property of defendants No. 1 and 2 were utilized by defendant No. 2 for the purchase of cars at serial No. 4, 31,44 and 56 (Ex PW. 1/67) ( 9 ). In view of the aforesaid documents produced on record supported by uncontroverted testimony of the plaintiff s witness and in the absence of any evidence produced by the defendants, it stands established that Suit No. 488/81 was filed by defendant No. 1 in collusion with defendant No. 3. ( 10 ). In view of this finding, it is not difficult to unfold the events and to reach the conclusion, namely, the defendant No. 1 did not want to purchase the car at such a high price mentioned by him in his bid and, therefore, in order to wriggle out from this obligation everything was managed. Thus by not purchasing the car in question, defendant No. 1 committed breach of the contract which forced the plaintiff to reauction the said car. The plaintiff has produced the documents showing that the car was reauctioned for a sum of Rs. 9,03,197. 00 and in this way it suffered a loss of Rs. 4,53,921. 00 than the offer made by defendant No. 1. The defendant No. 1 would thus be liable to make good this loss suffered by the plaintiff. The defendant No. 1 had given earnest money of Rs. 40,000. 00. It may be pointed out at this stage that defendant No. 1 had filed this suit for recovery of this amount alleging that the money could not be forfeited. This suit, being Suit No. 2992/88 was filed in the District Court which was transferred to this court and ultimately dismissed in default by order of this Court on 21. 3. 1990. After adjustment of this amount, the plaintiff shall be entitled to recover a sum of Rs. 4,13,921. 00 from the defendant No. 1. ( 11 ). After recording the aforesaid conclusion on the main issue, it would be appropriat record issuewise findings. I proceed to do so now: ISSUE No. 1 The plaint is signed by Mr. S. Dubey Marketing Manager of the plaintiff ex. PW1/84 is the delegation of power of the plaintiff company, which authorised marketing Managers to signature verify the plaint. After recording the aforesaid conclusion on the main issue, it would be appropriat record issuewise findings. I proceed to do so now: ISSUE No. 1 The plaint is signed by Mr. S. Dubey Marketing Manager of the plaintiff ex. PW1/84 is the delegation of power of the plaintiff company, which authorised marketing Managers to signature verify the plaint. Under the heading, signing and verification of legal documents, it is stated that the Chairman, any Executive director, any Group Executive, Chief Engineer, Chief Finance Manager and Marketing manager, any Finance Manager, Chief Legal Advisor, Legal Advisor, Deputy Legal advisor are authorised and empowered on behalf of State Trading Corporation to sign, verify, declare and affirm plaint, written statement, memorandum of appeal or other pleadings, vakalatnama, affidavit and miscellaneous applications. It is further mentioned that the officers mentioned in para-1 shall for the purpose of CPC be deemed to be the principle officers of the State Trading Corporation Hence the suit has been signed and verified by an authorised person. Therefore, issue No. 1 is decided in favour of the plaintiff and against the defendants issue No. 2 In fact the defendant No. 1 never challenged that it had not given a valid tender Its tender was challenged by defendant No. 3 for which suit was filed and the same was dismissed In view thereof this issue does not even survive Be that as it may insofar as the plaintiff is concerned it has proved on record that tender was submitted by defendant No. 1 along with earnest money The tender was accompanied by a demand draft payable at Madras It was not a pay-order and thus did not require to be made payable in Delhi or New Delhi In any case, as mentioned above, the defendant No. 1 had itself accepted the tender as a valid tender This issue is decided in favour of the plaintiff and against the defendants issue Nos 3 and 4 In view of detailed discussion above these issues are decided in favour of the plaintiff and against the defendants It is held that the suit No. 488/81 was filed by defendant No. 1 in collusion with defendant No. 3 Therefore notice of defendant No. 1 dated 23. 4. 4. 1982 withdrawing from the tender was not valid notice moreover insofar as bid of defendant No. 1 is concerned the same was admittedly accepted by the plaintiff and thus a valid enforceable contract came into existence If the plaintiff could not deliver the car earlier it was because of the injunction order issued by the Court The Defendant No. 1 was also a party in the Suit No. 483/81 and had not only in the knowledge of the injunction order, it was equally bound by the said injunction order This injunction order dated 26. 10. 1981 was vacated by the court only on 3. 7. 1982 Immediately thereafter the plaintiff offered to deliver the car to defendant No. 1 During the currency of the aforesaid injunction order, defendant no. 1 sought to withdraw the bid by letter dated 23. 4. 1982 which was, therefore, not a valid action of the defendant No. 1 These issues are accordingly decided in favour of the plaintiff and against the defendants issue No. 5, 6, 8 and 10 When a concluded contract stands proved between the plaintiff and defendant No. 1 and it also stands proved that defendant No. 1 wrongly refused to accept the delivery of the car and to pay balance amount after the vacation of the injunction order it is clear that defendant No. 1 committed breach of the contract As already recorded above, the plaintiff has been able to prove the loss of rs. 4,53,921/- Since there is a breach of the contract because of which the plaintiff suffered loss, it is held that the plaintiff has a cause of action to sue defendants 1 to 3 Issue Nos 5,6,8 and 10 are therefore decided in favour of the plaintiff and against the defendants Since breach is committed by defendant No. 1 and the beneficiary of the collusion is defendant No. 1, it is defendant No. 1 who would be liable to pay the amount in question. Issue No. 7 The plaintiff has suffered a loss of Rs. 4,13,921. 00 In normal course the car was offered for delivery on 30. 7. 1982 when the defendant No. 1 had refused to take delivery of the car and pay the balance consideration The car was reauctioned on 1. 10. 1982 The plaintiff has calculated interest on Rs. 4,13,921. 00 It would be entitled to interest thereon w. e. f. 1. 00 In normal course the car was offered for delivery on 30. 7. 1982 when the defendant No. 1 had refused to take delivery of the car and pay the balance consideration The car was reauctioned on 1. 10. 1982 The plaintiff has calculated interest on Rs. 4,13,921. 00 It would be entitled to interest thereon w. e. f. 1. 10. 1982 when it received lessor consideration on re-sale of the car and suffered loss of Rs. 4,13,921. 00 on that date However, the claim of interest at the rate of 21% appears to be excessive Interest at the rate of 11% is granted for the period 1. 10. 1982 to 15. 7. 1985. This issue is decided accordingly issue No. 9 As mentioned above, defendant No. 1 refused to take the delivery of the car on 30. 7. 1982 Thereafter the car was sold to some other person on 1. 10. 1982 on that date when the loss was ascertained the plaintiff would have cause of action to file the suit. The suit is filed on 15. 7. 1985. Thus even if the limitation is taken from 30. 7. 1982 when the defendant No. 1 committed breach by refusing to accept the car the suit is within the period of limitation. This issue is decided in favour of the plaintiff and against the defendants. Issue No. 11. The result of the aforesaid discussion is that suit is decreed in the sum of Rs. 4,13,921. 00 along with interest at the rate of 12% w. e. f. 1. 10. 1982 to 15. 7. 1985 against the defendant no. 1 only. The plaintiff shall also be entitled to pendente lite and future interest at the rate of 12% p. a. . The plaintiff shall also be entitled to costs. Decree sheet be drawn accordingly.