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2004 DIGILAW 881 (JHR)

Bharat Coking Coal Ltd. v. Shashi Bala

2004-08-25

HARI SHANKAR PRASAD

body2004
JUDGMENT Hari Shankar Prasad, J.-This appeal, at the instance of the appellant, is directed against the judgment dated 8.8.1989 and decree dated 21.8.1989 passed in Money Suit No. 22/84, whereby and whereunder the suit of the plaintiff has been decreed on contest with cost. 2. The case of the plaintiff-respondent in brief is that the respondent is the sole proprietor of Mazda Cable Company, a company manufacturing and supplying various types of cables such as telephone cable of armoured, unarmoured, railway and control cables etc. The production of the plaintiff is also approved by the Director General of Mines Safety and many other Government and Semi Government organizations including Government Company. In pursuance of tender invited by the defendant by Tender Notice No. PURI 702179/Telephone-RC/81-82, plaintiff submitted quotations for the said under ground armoured telephone cables vide letter dated 11.6.1981 from her regional office at Hyderabad and defendant-appellant accepted the offer of the respondent, vide his letter No. PUR/702179/TeleJJhone/81-1586-dated 81 13.8.1981 and order was placed on the plaintiff under the defendant's reference No. PUR/702179/Telephone/81/397 date 2/9.4.1982 for Rs. 18,34,360/- plus excise duty and sales tax etc. The respondent dispatched the goods after the goods were duly inspected by Shri P.P. Singh, Executive Engineer and authorised competent senior officer of the defendant. The goods were also inspected by the defendant. It is further submitted that the respondent in consideration of the price of cable supplied to the appellant on 20.7.1982 and 9.9.1982 drew hoondies upon defendant at Delhi and negotiated the same through State Bank of India, Dhanbad. The appellant accepted the hoondies which were on valid consideration and agreed to pay and honour the same on 12.1.1983 being the amount mentioned in the hoondies in the Bank. There were two hoondies, one for Rs. 19,37,679.31 paise dated 12.9.1982 and another is for Rs. 1,94,635.38 paise dated 29th July, 1982/25.12.1982. The defendants retired the documents after accepting the hoondies on 26.11.1982 towards the payment of the goods supplied as aforesaid. In terms of the contract, the hoondies were vaid for 45 days from the signed draft i.e. the payment was to be made 25 days after it was presented. It is further submitted that the defendant has failed to honour the hoondies on maturity and make payment thereof when presented by the Bank. In terms of the contract, the hoondies were vaid for 45 days from the signed draft i.e. the payment was to be made 25 days after it was presented. It is further submitted that the defendant has failed to honour the hoondies on maturity and make payment thereof when presented by the Bank. Respondent went on reminding appellant for early payment and the State Bank of India was also requested to get payment from the defendant but respondent received a memo dated 7.2.1983 from the State Bank of India, Dhanbad about information that payment was not coming. Thereafter on 17.2.1983 the respondent again requested the State Bank of India, Dhanbad to represent the above hoondies to the defendant. The State Bank of India, Dhanbad again wrote to the defendant for making payment to the respondent on the hoondies vide letter dated 7.3.1983. The respondent's representative went in person to the State Bank of India and made enquiries but he was informed that payment is not forthcoming from the defendant. Accordingly the respondent served a legal notice dated 30.3.1983 to the defendant through B.B. Sharma, Advocate, Delhi for dishonouring the said hoondies and demanded payment for the goods supplied against hoondies. The appellant received the notice dated 30.3.1983 on 5.4.1983 but compliance was not made. The Manager, State Bank of India returned the hoondies back to the plaintiff vide letter dated 21.6.1983. Thereafter the respondent addressed a letter to the Chairman of the defendant but to no avail. The respondent thereafter claimed interest @ 18% per annum from 12.1.1983 and the interest is due on the entire amount. 3. The defendant-appellant filed a written statement and according to the case of the appellant, a tender notice was issued for submissions of quotations by the plaintiff by a telegram to the Chief Material Manager and a copy of which was sent to the plaintiff by ordinary post on 11.8.1981. The appellant has stated the terms quoted by the plaintiff-respondent in her quotations. The specification of the telephone cable had been mentioned in the purchase order dated 3/7.4.1982 and a liquidated clearance 1/2% per week or part thereof subject to the maximum of 5% of the price of all the articles, which the supplier failed to supply within the delivery, which has been provided. The specification of the telephone cable had been mentioned in the purchase order dated 3/7.4.1982 and a liquidated clearance 1/2% per week or part thereof subject to the maximum of 5% of the price of all the articles, which the supplier failed to supply within the delivery, which has been provided. Further, the plaintiff had agreed to supply six items of armoured cable as described as per specification stated in the purchase order in accordance with the terms stated in the purchase order and as per the contract for the purpose of installation of underground mines telephone lines of BCCL. Further case of the plaintiff is that the inspection made by Shri B.P. Singh, Executive Engineer of the defendant company, was neither proper nor sufficient, as he was not authorised to inspect the goods at the firms place i.e. at the plaintiff's place. Shri B.P. Singh submitted his report on visual inspection of tile materials and there is no document to support the imaginary test certificate, which has been made on the basis of the inspection note. Some test certificates had been given by the plaintiff to Shri B.P. Singh, which were wholly unauthenticated and will not even disclose as to the person, who tested the same or as to the place of testing nor that report bore signature of B.P. Singh. Further, as per terms, goods were to be inspected by Materials Manager at the consignee's place and B.P. Singh had no written authority to inspect materials at consigner's place. On the other hand, defendant submitted that after receipt of the materials, defendant got the same tested by a competent expert including the defendant and renowned expert and according to their opinion, materials supplied by the plaintiff were totally spurious and of sub-standard quality. Defendant had never accepted the materials and defendant had informed the plaintiff that goods were not supplied by the plaintiff within the time specified in the purchase order and this defendant was under no obligation to accept the materials. The defendant had further made out doubt regarding quality and storage have been verified and authenticated by thorough scrutiny and materials supplied, have been found to be spurious and sub-standard and not in accordance with the specifications laid down in the purchase order. Further, hoondies were signed by the defendant but they were not for valuable consideration. The defendant had further made out doubt regarding quality and storage have been verified and authenticated by thorough scrutiny and materials supplied, have been found to be spurious and sub-standard and not in accordance with the specifications laid down in the purchase order. Further, hoondies were signed by the defendant but they were not for valuable consideration. The plaintiff did not send the required documents as per terms and condition alongwith the railway receipts or signed note, which were not sent through bank or otherwise and, therefore, defendant is under no obligation to make payment. The materials were not dispatched by the railway but were dispatched to the plaintiff by the railway and road. It is further submitted that the plaintiff attempted to defraud the defendant by supplying spurious and sub-standard materials and the defendant was under no obligation either to accept the supply or to make any payment against the same. The plaintiff has not supplied the materials within the stipulated period. It is further submitted that the plaintiff has no right to demand payment of the goods supplied against the hoondi. The plaintiff is not entitled to get a decree on the basis of alleged two hoondies as the hoondies were signed by the defendant in good faith. It is further submitted that the committee were constituted by the defendant to examine the materials supplied by the plaintiff. The committee is of the opinion that the materials, which were supplied to the defendant, were not up to the mark and not fit for consumption. The defendant pray that the plaintiff has no valid cause of action or right to sue or the suit is fit to be dismissed with cost. 4. On the pleadings of the parties, following issues were framed by the learned Court below for determination in the suit. (I) Has the plaintiff any cause of action or right to sue? (II) Is the suit as framed maintainable in its present form? (III) Is the suit barred under the principle of estoppel, waiver and acquiescence? (IV) Whether the plaintiffs have duly complied the terms of contract in the matter of supply of articles of the deft? (V) Are the hoondies without consideration? (VI) To what relief or reliefs the plff., is entitled to? 5. Except issue No.3, issues Nos. 1, 2, 4, 5 and 6 were decided in favour of the plaintiffs. 6. (IV) Whether the plaintiffs have duly complied the terms of contract in the matter of supply of articles of the deft? (V) Are the hoondies without consideration? (VI) To what relief or reliefs the plff., is entitled to? 5. Except issue No.3, issues Nos. 1, 2, 4, 5 and 6 were decided in favour of the plaintiffs. 6. The learned counsel for the appellant, while assailing the judgment, submitted that inspection report, which was submitted by Sri B.P. Singh, Executive Engineer, BCCL is not -genuine as B.P. Singh was not authorized to inspect the materials but he inspected tile goods and submitted a report. B.P. Singh was not at all authorized to make inspection. According to terms and conditions, Materials Manager was to inspect the goods but B.P.Singh, who was not at all authorized, inspected the goods and granted certificate of inspection of goods. 7. On the other hand, learned counsel for the respondent submitted that Ext. B/6 is a letter dated 19.4.1982, which was written by the plaintiff to the defendant and in the said letter the plaintiff had requested that delivery period be counted from the date of receipt of necessary amendment. The learned counsel further pointed out that by another letter dated 10.5.1982, which is Ext. B/5, the respondent had informed the appellant that 50% of the materials was ready and therefore, requested the appellant to send its representative to carry out inspection of the materials so that the same can be dispatched and in another letter dated 2.6.1982, which is Ext. B/3, the respondent requested the appellant to issue necessary amendment and had made it clear that delivery period will be counted from the date of receipt of amendment and in the aforesaid letter the respondent had requested the appellant to depute its representative for carrying out necessary inspection. Ext. B/4 is another letter dated 12.6.1982, by which respondent had requested the appellant for amendment and ultimately amendment was made by Ext. 2 dated 23.6.1982. B.P. Singh, in his evidence has stated that he left Dhanbad for Delhi on 24.6.1982. He has also stated that originally the tour was approved for a period of seven days but he took 10 days time, as at the time of departure he was entrusted by the Material Manager (Inspection) to inspect the telephone cables of M/s Mazda Cable also, which was not included in the original programme. He has also stated that originally the tour was approved for a period of seven days but he took 10 days time, as at the time of departure he was entrusted by the Material Manager (Inspection) to inspect the telephone cables of M/s Mazda Cable also, which was not included in the original programme. B.P. Singh submitted its report on 7.7.1982 and the appellant knew that B.P. Singh has inspected the goods at the respondent's i.e. Exts. B/6, B/5 and B/3, it is clear that respondent was asking for inspection. My attention was also drawn to another inspection report, which is Ext. M, from which it appears that B.P. Singh was authorized by the Materials Manager to carry out the inspection and, therefore, in the facts and circumstances, the appellant cannot come out with a plea that inspection done by B.P. Singh was improper and unauthorised. 8. Learned counsel for the appellant assailed the judgment on the ground that the inspection of the goods was to be made at consignee's place meaning thereby at the appellant's place but from the document, it would appear that the inspection was to be made at the consigner's place. Ext. C is the purchase order, which stood amended by Ext. 2. Ext. 2 is a letter dated 23.6.1982, which was sent by the appellant to the respondent and in the said letter, in para 1, it has been specifically mentioned that the materials will be inspected by the Materials Manager (Inspection) at the premises of the respondent before dispatch and the appellant had agreed that the inspection will be made at the premises of the respondent and not at the place of the appellant and, therefore, this point also does not go in favour of the appellant. 9. The learned counsel for the appellant raised another point that the terms and conditions of the agreement were violated by the respondent inasmuch as goods were to be dispatched by rail but the goods in fact were partly sent by trucks and majority of the goods were sent by rail together with a plea that goods were sent not as per terms and conditions. Another plea was taken that goods were dispatched beyond the period of delivery but goods sent by rail and trucks were accepted by the appellant and in that circumstance, it was upon the appellant to refuse the delivery of the goods by the trucks and at the same time respondent had requested the appellant for extension of time for delivery, vide Ext. B/8 and after having taken delivery of goods and accepting the hoondies, the appellant cannot say that the goods were not accepted by appellant. Exts. 6 and 6/A are documents, which will show that the goods were accepted and kept in the godown and no document has been produced on behalf of the appellant or brought on record to show that at any point of time the appellant had written to the respondent that goods were not accepted. 10. Another point that has been taken by the learned counsel for the appellant in course of argument is that the goods supplied were of sub-standard quality and in this connection the learned counsel drew my attention to Ext. O/1 and submitted that a test check was conducted at Kustore Regional Store on, 21.1.1983 and the telephone cable received at the store was selected. 11. Learned counsel for the respondent pointed out that from perusal of this Ext. O/1, it will appear that only defect pointed out was that of shortage. At the end of report it is written that materials were inspected at the consignee's place by Sri D.P. Saha, Senior Purchase Officer (Inspection) on 21.12.1982 with remarks that "expressing his inability to accept the consignment for want of ITI specification D 3003, however, on 13.1.1983 these consignments were cleared by him." It means that goods were accepted and nothing was found wrong in the inspection carried out on 21.12.1982. A committee was constituted to examine the goods but in the committee no telecommunication engineer was present. In support of this report DW 11 has been examined and he has stated in his deposition, in para 5, that telecommunication engineer is the specialist in cable testing and there was no telecommunication engineer in the report. In para 7 he has stated that the only defect was of shortage and there was no other defect. He admitted in para 13 that the defect in cable was not governed from visual test. In para 7 he has stated that the only defect was of shortage and there was no other defect. He admitted in para 13 that the defect in cable was not governed from visual test. It was further pointed out that the appellant has produced another report (Ext. 1) and this report is dated 22.3.1983. In this report five defects have been pointed out but none of the defects is relating to substandard quality of the goods. It is further stated that telecommunication engineer S.K. Prasad was consulted but he has not signed the report and appellant has examined three witnesses in support of this report. DW 3 is N. Ekambram and in para 3 he has admitted that S.K. Prasad did not sign the report. According to this witness, no testing equipment was brought at the time of testing and he is also unable to say whether defects were supported by S.K. Prasad. According to DW 7, S.K. Das, he was present during visual test, although he was not asked to remain present but he was present there by chance. According to him, there was no inspection according to specification and he could not say how many points were permissible in ITI D 3003. According to him, he never found any defect in Mazda Cable, vide para 10. DW 10 has also not stated anything about any defect. 12. The learned counsel for the appellant pointed out that goods were of substandard quality and the goods were inspected by different agencies but on perusal of impugned order, it appears that the learned Court below has discussed the evidence both of plaintiff/appellant witnesses and of defendant/respondent witnesses and has come to a finding that the inspection of cable by Hindustan Cable Company was done but this company has also not been able to inspect the cable in proper manner and with qualified staff and at the same time it has not found any defect. The learned Court below, after scrutinizing the evidence of the parties found that prosecution witnesses were more consistent than the witnesses of the defence side. The learned Court below has met with all the points raised in course of argument before the learned Court below and has dealt the same in the impugned judgment in detail and I have also discussed the points thoroughly in this connection. The learned Court below has met with all the points raised in course of argument before the learned Court below and has dealt the same in the impugned judgment in detail and I have also discussed the points thoroughly in this connection. The learned counsel for the appellant has also submitted that the respondent, as per terms and conditions, has to forward 8 documents to the appellant but only 3 documents were sent to him and that was a violation of the terms and conditions, but in this connection it is relevant to say that at every stage, when there was an opportunity for the appellant to accept the consignment, the appellant did not avail that opportunity and, therefore, after filing of this suit such plea cannot be taken by the appellant and in fact the appellant has accepted the goods and never intimated to the respondent about refusal of the same. 13. From the facts and circumstances, it can very well be said that the goods have duly been received by the appellant and documents were accepted after honouring the hoondies and, therefore, this plea cannot be taken by the appellant and appellant cannot escape from the liability by simple saying that the goods were of sub-standard quality, because no such intimation was ever given to the respondent. 14. From the facts, discussed above, I am of the view that the impugned judgment does not require any interference. In the result this appeal is dismissed, but no order as to costs.