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2006 DIGILAW 94 (HP)

PREET PAL MONGA v. H. P. M. C.

2006-04-10

K.C.SOOD

body2006
JUDGMENT K.C. Sood, J. - This second appeal arises out of the judgment of reversal of learned District Judge, Shimla dated September 1, 1999. 2. It appears pursuant to the decision taken by the Government of Himachal Pradesh, the Horticulture produce Marketing and processing Corporation, a Government of Himachal Pradesh undertaking, was charged with the responsibility to procure apples on behalf of the State Government under the Support Price Scheme particularly culled apples (bad apples) to save the farmers from financial crisis. One of the centre/sub -centre to collect the fruit was located in village Asthani in Tehsil Rohru of District Shimla. Under the Scheme, the culled fruit was to be received by the defendant Corporation and incharge of the concerned centre was required to issue receipt indicating the net weight of the fruit and the amount to be paid to the fruit grower in prescribed form. 3. The plaintiffs-appellants laid a suit before the sub Judge 1st Class, Rohru for recovery of a sum of rupees 1, 00,111/- claiming that in the year 1989 Mohammad Sadiq delivered to the defendant Corporation culled fruit worth rupees 1, 07,352/- out of which the plaintiffs were paid rupees 18,144/- and Rs.20,000/- and the balance amount of rupees 69208/-has not been paid. The suit was resisted. The defendant set up a defence and that the plaintiffs were not the owner of Pal Orchards and in any event, the receipt was issued in the name of Smt. Pushpa Bhatnagar. The trial Court found that the plaintiffs were the owners of Pal Orchard from where the fruit came and thus, the suit amount was payable to the plaintiffs. He accordingly decreed the suit for rupees 1, 00,111/-with costs and interest of the suit till realization of the amount. 4. Aggrieved, the defendant Corporation filed an appeal before the learned District Judge. Learned District Judge, Shimla by his impugned judgment, allowed the appeal and the suit of the plaintiffs was dismissed on the ground that the plaintiffs could not prove that they were the owner of Pal Orchards or that the fruit which was supplied to the defendant Corporation came from Pal Orchards. 5. Dissatisfied, the plaintiffs are in this second appeal. 6. This appeal was admitted on 8-11-1999 on the following substantial questions of law: 1. 5. Dissatisfied, the plaintiffs are in this second appeal. 6. This appeal was admitted on 8-11-1999 on the following substantial questions of law: 1. Whether the defendant could deny payment of the balance price of culled apples and interest thereon to the appellants when the receipt of apples is not disputed and the defendant had enjoyed the benefit of such apples and whether the appellants were entitled to such payment under Section 70 of the Indian Contract Act, 1872? 2. Whether the findings of the learned District Judge, Shimla, are not sustainable in law for non-consideration of material oral and documentary evidence and particularly document Exhibit PW/8/D, PW8/E, PW8/X, PW9/B and statements of PW8 Shri Mohammad Sadiq. PW10 Shri Prit Pal Monga and PW9 Shri Ram Singh and the findings of fact and appreciation of evidence by the trial Court could be reversed by the Id. District Judge, Shimla, without consideration of material evidence on the case file. 7. Heard Mr. Ajay Kumar, Advocate, learned Counsel for the appellants and Mr. Balbir Chauhan, Advocate, learned Counsel for the respondent. 8. The substantial questions of law arising in this appeal are settled as under:- 1. Whether findings of the court below that plaintiff Prit Pal Monga and Avnish Monga were not owners of Pal Orchards and the culled fruit supplied to the defendant Corporation did not come from Pal Orchards dehors the evidence on record. 2. Whether the plaintiffs are entitled to claim interest at 18% per annum. 9. Learned First Appellate Court being of fact did not appreciate the entire evidence on record. He based his conclusion the fact that receipts Exhibit PW9/B, PW9/C, PW8/D show that the "Pal Orchard" is owned by Pushpa Bhatnagar. However, the evidence on record, as discussed by the learned trial Court clearly proves that the name of the owner of the orchard was given by Ram Singh as Pushpa Bhatnagar for the reason that she used to receive the sale proceeds in respect of all the orchards belonging to the appellants as expenditure is jointly incurred in maintaining the orchards and the sale proceeds are remitted to the respective owners after deputing the share of the expenditure. This part of the testimony has not been disputed in the cross-examination or otherwise. It is admitted position before me that the appellants are close relatives of smt. Pushpa Bhatnagar who is real sister of Prit Pal. This part of the testimony has not been disputed in the cross-examination or otherwise. It is admitted position before me that the appellants are close relatives of smt. Pushpa Bhatnagar who is real sister of Prit Pal. Appearing as PW6 Prit Pal, one of the plaintiffs, is categorical that Pal Orchards belong to him which he had raised in the year 1968-69. He also says that in addition to this, his close relatives had three orchards and all these orchards are being maintained for the last ten years by Manger Mohammad Sadiq. The expenditure in maintaining this orchard is incurred by Smt. Pushpa Bhatnagar and she received the income the orchards which used to be disbursed to the respective owners after deducting the expenditure. He admits that payment in receipt of one receipt was made to him and he did not receive payment in respect of other receipts which Pushpa Bhatnagar is shown to be the owner of the orchard. It is significant to note that it is not the case of the defendant Corporation that this orchard belongs to some one else than Prit Pal Monga. Simply because the receipts are issued in the name of Pushpa Bhatnagar as owner who does not claim the ownership of this orchard would not prove that the orchard did not belong to the plaintiffs. The receipts itself clearly show that fruit came from Pal Orchards and Pal Orchard is proved to be, in view of the evidence of the plaintiffs, owned by the plaintiffs. Learned trial Court under Issue No.1 has held that in addition to the revenue entries, Manager Mohammad Sadiq has categorically stated that the area of Pal Orchards is twenty bighas and said orchard is owned by the plaintiffs. As already noticed this statement has not been disputed in the cross-examination. The learned District Judge misdirected himself in holding that the plaintiffs have not proved that they were owners of Pal Orchard. Admittedly, the fruit which was sold to the defendant Corporation belong to Pal Orchards. 10. In any event, once the plaintiffs claim the fruit and no body else claims that fruit, it will not be open to the defendant to dispute that this fruit, it will not be open to the defendant to dispute that this fruit did not belong to the plaintiff. 11. 10. In any event, once the plaintiffs claim the fruit and no body else claims that fruit, it will not be open to the defendant to dispute that this fruit, it will not be open to the defendant to dispute that this fruit did not belong to the plaintiff. 11. The inescapable conclusion is that the fruit which was sold to the defendant Corporation under the Support Price Scheme belong to the plaintiffs and the plaintiffs were entitled to receive the price thereof. The question is accordingly answered. Question No. 2 12. Mr. Ajay Kumar learned Counsel for the plaintiff as strenuously urges that this was a commercial transaction and therefore, plaintiff would be entitled to interest at commercial rate i.e., 18% per annum. Mr. Ajay Kumar contends that the defendant Corporation charges interest at the rate of 18% per annum from its customers and therefore, in support price also they are liable to pay this commercial rate of interest. The defendant purchased the culled apple under the Support Price Scheme which was designed and formulated to help the farmers from financial crises as the apple crop had gone bad. In fact evidence of Ram Singh Labour Contractor shows that the good apple was purchased by him and it was only bad apple which was supplied to the defendant Corporation. In these circumstances, by no stretch it can be said that if was a commercial transaction justifying commercial rate of interest. 13. Section 34 of the Code of Civil Procedure provides for the grant of interest in decrees for payment of money. Section 34 reads: "34. Interest. In these circumstances, by no stretch it can be said that if was a commercial transaction justifying commercial rate of interest. 13. Section 34 of the Code of Civil Procedure provides for the grant of interest in decrees for payment of money. Section 34 reads: "34. Interest. - (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum, as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit: Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions. Explanation-I. - In this sub-section, "nationalized bank" mean as a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 on f 1970). Explanation-I I. - For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability." 14. It may be noticed that before the amendment of 1976, the maximum interest which the Court could award was 6% per annum. However, in appropriate cases, the Court had the discretion to award interest at a lesser rate but in no case exceeding 6%. Now the courts are empowered to increase post decretal interest in relation to a liability arising out of a commercial transaction on the principal sum adjudged. Explanation-ll to Section 34 clearly says that a transaction would be commercial only if in it connected with trade or business of the party incurring liability. The culled apple was not purchased by the defendant Corporation as a commercial transaction. Explanation-ll to Section 34 clearly says that a transaction would be commercial only if in it connected with trade or business of the party incurring liability. The culled apple was not purchased by the defendant Corporation as a commercial transaction. It was only purchased to help the farmers from financial crisis as the culled apple was not marketable. There is nothing on the record to suggest even remotely that the defendant Corporation earned any profit out of the fruit purchased under the Support Price Scheme. The plaintiffs would be entitled to interest at the rate of 12% per annum from the date of the filing of the suit till the date of the decree and at the rate of 6% per annum from the date of suit till the realization of the amount in its entirety. The question is answered accordingly. 15. In result, the appeal is partly allowed. A decree in the amount of rupees 69,208/- is passed in favour of the plaintiffs and against the defendant Corporation with interest, pendente lite at the rate of 12% per annum, i.e., date of filing of the suit till date of decree and at the rate of Rs.6% per annum from the date of decree of the trial Court till the entire decretal amount is paid. 16. The defendant shall also pay costs throughout.