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2008 DIGILAW 245 (CAL)

Vijai Shree Limited v. UNION OF INDIA

2008-02-28

MAHARAJ SINHA

body2008
Judgment :- (1.) AFTER the institution of the suit the Advocate-on-record of the plaintiff took out a Masters Summons dated 21 November, 2006 claiming the following relief :-a) A summary Judgment be passed as against the defendant No. 5 for Rs. 9,83,700/-with interest from 4 September, 2003 until realization on the amount @ 18% per annum ; b) Cost of the application be paid by the defendant No. 5; c) Leave to proceed with remaining claim in the suit as against other defendants. (2.) NEEDLESS to mention that the case of the plaintiff in support of the summary judgement has been made out in the supporting affidavit of one Sujit mitra, the constituted attorney of the plaintiff. (3.) THE case of: the plaintiff proceeds on the basis that the plaintiff company (shortly called the plaintiff) has its Jute Mill in the district of Howrah, west Bengal and the business of the plaintiff is to manufacture and sell various jute products. At present, the Jute Mill is run on the basis of a scheme approved by the Board of Industrial and Financial Reconstruction. (4.) IN the usual course of its business the plaintiff received orders from the Jute Commissioner for manufacturing and supplying B. Twill bags (shortly called jute bags) as per such Government orders. The normal procedure for manufacturing and supplying of such bags as mentioned in the affidavit of the plaintiff is that "various Government organizations all over India place their respective orders on the Director of Supply and Disposals, the 5th respondent herein, who in turn request the Office of the Jute Commissioner to place orders on various Jute Manufacturers. As per the production control orders, the Jute manufacturers supply B. Twill bags to the designated Government organizations". (5.) ON or about 2 June, 2003 the Deputy Jute Commissioner, the 3rd defendant herein, asked the plaintiff to make 780 bales of B. Twill bags. Thereafter on 3 June 2003, the 5th defendant asked the plaintiff to sell the said 780 bales of B. Twill bags to the Punjab State Co-operative Supply and marketing Federation Ltd. "through the Governor of Punjab". (6.) THE Managing Director, Food Grains, Punjab State Co-operative supply and Marketing Federation Ltd. appears to be the 6th defendant herein. (7.) THE terms and conditions of supply of the said bags, the price and specifications thereof are all mentioned in the said order dated 3 June, 2003. (6.) THE Managing Director, Food Grains, Punjab State Co-operative supply and Marketing Federation Ltd. appears to be the 6th defendant herein. (7.) THE terms and conditions of supply of the said bags, the price and specifications thereof are all mentioned in the said order dated 3 June, 2003. (8.) AFTER placement of the said order the plaintiff manufactured the number of bags in question and transported them by Railway to a place called Sangrur. Simultaneously with the transportation of the said bags the plaintiff also informed the 6th defendant that the plaintiff "had dispatched 390 bales to Sangrur" under the relevant Railway receipts. This piece of information of the plaintiff to the 6th respondent is recorded in the letter of the plaintiff dated 23 June, 2003 addressed to the 6th defendant. The said bags "were received and collected by the said Punjab State Cooperative Supply and Marketing federation Ltd. at Sangrur". (9.) AFTER the said bags were received, the plaintiff also sent the Railway receipts, Mill specifications, Quality Assurance Certificate "to the consignee, namely the said Punjab State Co-operative Supply and Marketing Federation ltd." The bills for the said consignment, however, were duly sent by the plaintiff to the Controller of Accounts, Ministry of Commerce, the 8th defendant herein, as per the "procedure". (10.) AFTER the said bills were sent "the plaintiff sometime in the 1st week of August, 2003 received a letter dated 18/28. 7. 2003 written by the Acting director, Quality Assurance, to the Chief Manager (Foodgrains), Punjab State co-operative Supply and Marketing Federation Ltd. and a copy of the letter dated 9 July, 2003 written by the Chief Manager (Foodgrains), Punjab State co-operative Supply and Marketing Federation Ltd. to the Director of Supplies and Disposals. It was alleged in the said letter that 390 bales which were received by the consignee were badly affected by the rain and the Railway authorities did not accept any remarks on the delivery of the goods. Those bales were lifted by the consignee to avoid further damages and kept separately. The consignee requested the Director of Supplies and Disposals to stop payment of 390 bales and further requested to direct the plaintiff to depute their representative for a joint inspection". (Paragraph 11 of the plaintiffs affidavit). (11.) THE plaintiff came to know from the above letters that the bales in question "got wet during transit". The consignee requested the Director of Supplies and Disposals to stop payment of 390 bales and further requested to direct the plaintiff to depute their representative for a joint inspection". (Paragraph 11 of the plaintiffs affidavit). (11.) THE plaintiff came to know from the above letters that the bales in question "got wet during transit". The complaint made in the said letters according to the plaintiff was not a complain regarding the quality of the bales as the jute bales only "got wet during transit on the train as the period of supplies were during the monsoon". The consignee was advised by the Acting director (Quality Assurance), Director of Supply and Disposals to file a claim on the carrier. (See paragraph 12 of the Affidavit). (12.) IN consequence of the above, the Controller of Accounts, the 8th respondent herein, was asked by the 7th defendant, the Assistant Director of supplies and disposals to "withhold the value of 390 bales on the bills raised by the plaintiff". The plaintiff in its turn denied any responsibility of the alleged damage to the goods, namely jute bales due to rain during transit and said that in the absence of any certificate from the Railway Authority the alleged claim was "untenable". It was also pointed out by the plaintiff that the Acting Director, quality Assurance also suggested that the claim should have been made on the carrier. (13.) THE plaintiff later came to know that a sum of Rs. 35,85,447/- was directed to be withheld from a pending bill of the plaintiff "pending finalization of the case of the recovery due from the plaintiff. " (Paragraphs 13, 14 and 15 of the affidavit). (14.) THE further case of the plaintiff is that though the plaintiff had received full payment against the supply of 390 bales the defendant concerned has withheld payment from the subsequent bill of the plaintiff which the defendants cannot do and this wrongful withholding amounts to arbitrary, discriminatory and unwarranted unreasonable acts on the part of the defendants. (15.) ALTHOUGH the plaintiff, in fact, received the full payments of 780 bales of B. Twill bags pursuant to the said order dated 3 June, 2003 of the deputy Jute Commissioner, the defendants have withheld payment for a sum of Rs. (15.) ALTHOUGH the plaintiff, in fact, received the full payments of 780 bales of B. Twill bags pursuant to the said order dated 3 June, 2003 of the deputy Jute Commissioner, the defendants have withheld payment for a sum of Rs. 35,85,447/- from the subsequent separate contract, the particulars of which are mentioned in paragraph 19 of the affidavit dated 1.8.2003 under which the plaintiff was required to supply 910 bales of bags and that there was no complain against such supply at all. The plaintiff has repeated that the decision to withhold the payments from the subsequent bill or bills of the plaintiff raised in respect of a subsequent supply or contract is illegal, unreasonable, mala fide and has been done in utter violation of the principles of natural justice. (16.) ACCORDING to the plaintiff there was no complain against the supply of jute bales pursuant to the said second order on the basis of which the said 780 bales of bags were supplied. Furthermore, the goods that were supplied, namely the B. Twill bags were inspected by the concerned defendant and were certified to be of proper quality. (17.) FURTHERMORE, as aforesaid, the 5th defendant had also advised the Punjab State Cooperative Supply and Marketing Federation to lodge a claim against the Railway Authority since the goods got wet by rain during transit and that there was no complain regarding the quality of the goods, namely the said bales of B. Twill bags ever. (18.) THE Railway Authority has also not issued any certificate or rather the defendants concerned have not obtained any such certificate from such authority that the goods when received by the Railway Authority were damaged by rain. In other words, when the plaintiff delivered the goods to the Railway authority for transportation the goods were already damaged. Plaintiff as such has denied its liability or any responsibility for the alleged damaged to the goods, namely the jute bales, due to rain. (19.) THE plaintiff has further said that the case of the defendants is that about 65 per cent of the goods out of total 390 jute bales were allegedly damaged due to rain so the 35 per cent of such goods, i. e. , jute bales were not received by the concerned defendant or defendants in damaged condition in the first place or rather were not damaged at all. (20.) IN support of the cause of action for summary Judgment the plaintiff has said that the 5th defendant herein made an application in this Court "in connection with a writ appeal and in the said application at paragraph X the said defendant admitted on affidavit that out of 395 jute bags 107 bales of jute bags were found fit for consumption and balance 288 jute bags were found to be damaged and not fit for consumption and for utilization". Needless to mention a copy of the said application without annexure affirmed on 15 October, 2004 is annexed to the affidavit of the plaintiff marked annexure -(L). (21.) FOR the sake of proper adjudication of the case of the plaintiff in port of the summary Judgment it is, I find, necessary to examine the stand taken by the defendant or rather the 5th defendant herein in the said application filed in its appeal for stay of an order of the Honble Single Judge of this Court that was passed in favour of the plaintiff herein who happened to be the writ petitioner before the Honble Single Judge. (22.) AFTER narrating the case which, I find, is practically similar to the facts stated in this Judgment or rather the facts stated by the plaintiff in support of its application for summary Judgment, it was stated on behalf of the 5th defendant herein that a joint inspection was indeed held on 18 October, 2003 and in the said joint inspection it was found that "65% of the jute bales were in a damaged condition. The said inspection report was duly signed by the representative of the respondent No. 1/writ petitioner", (meaning thereby the plaintiff herein). . . . . . . . . . . . . . that out of the 780 jute bales which were supplied by the respondent No. 1/writ petitioner 395 jute bales were found to be in damaged condition due to rain. Accordingly, the said 395 jute bales were segregated and rejected. From the inspection report it can be found that out of 395 jute bales, 107 jute bales were found fit for consumption and balance 288 jute bales were found to be damaged and not fit for consumption/utilization". [paragraphs IX and X at page 7 of the stay application which is marked as annexure -(h) to the plaintiffs affidavit]. From the inspection report it can be found that out of 395 jute bales, 107 jute bales were found fit for consumption and balance 288 jute bales were found to be damaged and not fit for consumption/utilization". [paragraphs IX and X at page 7 of the stay application which is marked as annexure -(h) to the plaintiffs affidavit]. (23.) IT appears, although the 107 jute bales were found fit for consumption the plaintiff was not paid the price of the said 107 jute bales and the entire amount was withheld by the Deputy Controller of Accounts, Ministry of Commerce, Calcutta. (24.) AS aforesaid, it is on the above basis the plaintiff relying on the said joint inspection report, which is also relied on by the defendants as well, the plaintiff has claimed a summary judgment for Rs. 9,83,700/-being the value of the said 107 bales of jute bags which according to the said inspection report was found fit for "consumption/utilization" in this proceeding. (25.) THE person, namely Ram Prasad Mondal who affirmed the said stay application used on behalf of the 5th defendant herein in its said appeal against the said order of the Honble Single Judge where he, as aforesaid, clearly stated that a joint inspection was made and that 107 jute bags were found fit for consumption/utilization, has also affirmed an affidavit-in-opposition to the present application for summary judgment of the plaintiff where the said Ram Prasad Mondal, the Assistant Director of the 5th defendant herein, has practically narrated the same story as was made out by him in the said stay application used in support of the said appeal of the 5th defendant herein. (26.) TWO paragraphs from the affidavit-in-opposition to the present application of the plaintiff for summary judgment need, however, be mentioned herein, namely paragraphs 37 and 38 at pages 22 and 23 thereof. The said affidavit-in-opposition was affirmed by ram Prasad Mondal on 13 February, 2007. (27.) A combined reading of the above two paragraphs, in my opinion, practically make it clear that the defendant or the concerned defendants have accepted the case of the plaintiff made out by the plaintiff in this proceeding. In that, on the basis of the said joint inspection of 395 bales of jute bags 288 bales were found to be unfit for consumption and 107 bales of jute bags were found to be in "sound condition". In that, on the basis of the said joint inspection of 395 bales of jute bags 288 bales were found to be unfit for consumption and 107 bales of jute bags were found to be in "sound condition". However, it appears that the concerned defendants have taken the stand that although the 107 bales of jute bags were found fit for consumption and use or rather were found to be in "sound condition", as mentioned in paragraph 37 of the affidavit-in-opposition of Ram Prasad, the concerned defendant or the defendants did not make payment for the said 107 bales of jute bags or B. Twill bags because the plaintiff has not replaced the 288 bales and because of such alleged fault or default on the part of the plaintiff the defendants have suffered loss and damages for failure to supply or replace the said bales. (28.) IN reply to the case made out by the plaintiff in its present proceeding for summary judgment or rather in its affidavit used in support of the Musters summons, namely paragraphs 24, 25, 26 thereof, the said joint inspection report dated 18 October, 2003 read with a letter dated 15 November, 2003 have been admitted to be matters of record including the said application affirmed on behalf of the 5th defendant herein used in the said appeal by Ram Prasad which I have mentioned above. I, however, must make one thing clear that joint inspection report is dated 15 November, 2003 as mentioned in paragraph 45 of the affidavit-in-opposition of Ram Prasad, namely Annexure -(E) and not dated 18 October, 2003. (29.) BEFORE I conclude, it should be briefly mentioned, however, that the plaintiff initiated the above mentioned writ proceeding against the concerned defendants herein who were the respondents in the writ proceeding on the ground that the defendants/respondents unreasonably, arbitrarily or perhaps without any authority of law withheld payments in respect of bills though there was no dispute with regard to such bills in the first place only on the alleged plea that the goods supplied pursuant to the earlier order or orders were defective. (30.) CHALLENGING the judgment of the Honble Single Judge pronounced in favour of the plaintiff/writ petitioner on its writ petition the concerned defendants herein preferred an appeal and the said application for stay was filed and moved by the respondents concerned wherein, as aforesaid, the case of the plaintiff as made out in support of the summary judgment in this proceeding was practically admitted and the said application was affirmed by ram Prasad who has also affirmed the affidavit-in-opposition to the plaintiffs affidavit used in support of the Masters Summons for summary judgment in this proceeding. (31.) HOWEVER, various points were argued on behalf of the concerned defendants by their learned Counsel at the hearing of this summary proceeding but I have not been able to find any valid or rather acceptable defence to the claim of the plaintiff for summary judgment. Instead of meeting the case of the plaintiff as made out in the summary proceeding the learned Counsel appearing on behalf of the defendants sought to raise all sorts of technical or rather hyper-technical objections which have no bearing upon the merits of the case of the plaintiff for summary judgment at all. The very fact that the defendants have adopted the technical or rather hyper-technical approach in meeting the merits of the case of the plaintiff for summary judgment prompts me to hold that the defendants have taken that approach as the defendants have otherwise no answer to the merits of the plaintiffs case for summary judgment at all. (32.) ON the contrary, upon consideration of the facts and the said inspection report relied upon by both the plaintiff and the defendants I have no hesitation to hold that the concerned defendants being the Government or government Department should immediately pay the price of the 107 bales of jute bags which were found to be fit for consumption and use and which were or rather have been described as in "sound condition" by the deponent, Ram prasad himself in his affidavit-in-opposition. (See paragraph 37 of page 22 of the Affidavit-in-Opposition). (33.) THUS, the defendants, in my opinion, should pay the price of goods, namely the 107 bales of jute bags which were received by them "in sound condition". (See paragraph 37 of page 22 of the Affidavit-in-Opposition). (33.) THUS, the defendants, in my opinion, should pay the price of goods, namely the 107 bales of jute bags which were received by them "in sound condition". The concerned defendants, in my opinion, taking the fullest advantage their mighty position most wrongfully and illegally have withheld payment for 107 jute bags which on their own showing were not only fit for consumption and use but were received in "sound condition" as admitted by the defendants or on their behalf by Ram Prasad both in the said application as well as in the present affidavit-in-opposition. (34.) THE defendants, in my opinion, therefore cannot be permitted to withhold the payments for 107 bales of jute bags on the alleged plea that the plaintiff has not replaced 288 jute bags as admittedly the defendants have not made any payment for the said 288 jute bags till date nor the plaintiff has claimed any payment therefor in this summary proceeding. (35.) THUS, having fully accepted the case as made out by the learned counsel Mr. Utpal Bose in support of the plaintiffs claim for summary judgment and at the same time rejecting the alleged defence if there be any as sought to be made out by the learned Counsel for the defendants concerned, there will be an order in terms of Prayer- (a) of the Masters Summons. (36.) IT is, however, made clear that instead of interest @ 18% as claimed in Prayer-(a) of the Master Summons the rate of interest will be 10% instead of 18%. It is made further clear that the rate of interest as allowed herein is wholly without prejudice to the rights of the plaintiff to claim interest @ 18% or such other rate or rates at the time of the trial of the suit for adjudication of the rest of the claim or claims of the plaintiff in the suit. It is made further clear that the rate of interest as allowed herein is wholly without prejudice to the rights of the plaintiff to claim interest @ 18% or such other rate or rates at the time of the trial of the suit for adjudication of the rest of the claim or claims of the plaintiff in the suit. (37.) SINCE, in my opinion, the concerned defendants or the 5th defendant ought to have made the payments for 107 bales of jute bags after the said joint inspection without any delay and since instead of making payment for the said 107 bales of jute bags the 5th defendant most wrongfully and illegally has so far withheld payment for the said bags, the 5th defendant herein should, pay the costs of this proceeding for summary judgment of the plaintiff, which I assess at Rs. 40,000/-, positively within a period of three weeks.