Research › Search › Judgment

Gauhati High Court · body

2015 DIGILAW 624 (GAU)

Shukla Trading Company v. Oil India Ltd.

2015-05-25

N.CHAUDHURY

body2015
JUDGMENT Appellant herein instituted Money Suit No. 22 of 2001 before the learned trial court which was eventually taken up by learned Additional District Judge at Dibrugarh and the same was partly decreed on 13.6.2008. Not happy with the decree granted by the trial court, the plaintiff has preferred this appeal praying for enhancement of the decretal amount on various counts. 2. The plaintiff is a partnership firm and it entered into two contracts with the defendants company on 29.5.1989. By one contract, the plaintiff was engaged to supply five passengers’ vehicles with capacity of at least 54 seats including the driver and conductor and by the other contract, plaintiff was engaged to supply four numbers of vehicles for four years. The plaintiff made security deposit of Rs. 37,500/- and Rs.3000/- respectively for both the contracts and started performing the contracts. Subsequently, by letter dated 12.12.1985 the term of the contract was enhanced to five years. It was agreed to between the parties that the contract could be terminated by either side by giving notice on 180 days. According to the plaintiff the work was going on regularly till 20.4.1989 and since 21.4.1989 defendant stopped allotting works to the plaintiff No. 2 and to withdraw its buses. Not only that the defendants failed to pay bills for the month February, 1989 to April, 1989 amounting to Rs.4,38,251/- there was delay in making payment of the bills from time to time for which plaintiff also claimed interest of Rs.1,05,317/-. Plaintiff further alleged that defendants terminated the contract w.e.f. 21.4.1989 in breach of the condition and so they are liable to compensate the plaintiff for the same. Plaintiff prayed that a decree be passed for declaration that defendants have unlawfully terminated contract of the plaintiff and also for recovery of Rs.3,48,25,514.70 in all including the unpaid bills as well as compensation. 3. Defendants company submitted written statement contesting the suit not only on the ground of maintainability but also on merit. It was stated that plaintiff placed all the nine buses on 20.8.1985 before the date mentioned in the contract and accordingly by subsequent letter dated 21.11.1985, the contract period came into effect from 20.8.1985 for a period of four years. 3. Defendants company submitted written statement contesting the suit not only on the ground of maintainability but also on merit. It was stated that plaintiff placed all the nine buses on 20.8.1985 before the date mentioned in the contract and accordingly by subsequent letter dated 21.11.1985, the contract period came into effect from 20.8.1985 for a period of four years. On 23.8.1985, defendant requested for enhancement of the rate because of increase in the price of the chassis and defendants assured the plaintiff by letter dated 12.12.1985 to increase the same on condition that documentary evidence for enhanced price is placed by plaintiff with the defendants. By the same letter, defendants also intended to increase the contract period from four to five years at the sole discretion of defendant No.1. But the plaintiff neither furnished documentary evidence of making payment of enhanced price nor did it amend the contract from four years to five years. But even thereafter, plaintiff failed to give any service w.e.f. 21.4.1985 and did not continue the contract till 19.8.1989. Because of such failure on the part of the plaintiff to resume service inspite of repeated demands, irreparable damage was caused to the defendants for which defendant No. 1 became entitled to deduct amount from the bills at the stipulated rate of Rs.300 /- per bus as per Clause-7 of part –I of the contract. Thus, defendant No. 1 was made entitled to deduct Rs.4,81,272/- from the dues payable to the plaintiff for service rendered for the period. Details of which are furnished in Annexure-A to the written statement. With these pleadings , defendants prayed dismissal of the suit with cost. 4. Upon perusal of the pleadings of the parties, learned trial court framed as many as four issues which are quoted below: (i) Has there any cause of action for the suit? (ii) Has the plaintiff right to sue? (iii) Whether the contract works No. CCO/TPT 3800 and CCO/TPT/3801 were unlawfully terminated by the defendants? (iv) to what reliefs are the parties entitled ? 5. In course of trial both the plaintiff and the defendants examined one witness on each side and adduced their own documents. (ii) Has the plaintiff right to sue? (iii) Whether the contract works No. CCO/TPT 3800 and CCO/TPT/3801 were unlawfully terminated by the defendants? (iv) to what reliefs are the parties entitled ? 5. In course of trial both the plaintiff and the defendants examined one witness on each side and adduced their own documents. Upon consideration of these materials on record, the learned trial court by its judgment and decree dated 13.6.2008 held that there was cause of action for the suit and that the plaintiff has right to sue and that defendants did never terminate the contract of the plaintiff. However, while deciding Issue No. 4, the trial court found that the defendant did not make payment of Rs.4,38,251/- to the plaintiff for the period from February, 1989 to 21.4.1989 together with security advance of Rs.3000/-. Accordingly, decreed the suit for the aforesaid amount with interest @ 6% per annum till realization of the decretal amount. However, trial court did not find favour with the claim of the plaintiff for compensation on premature termination of the contract inasmuch as the trial court held that defendants did not terminate the contract at all. The plaintiff has challenged this judgment before this court. 6. The point for determination in the appeal would be as follows: (i) Whether learned trial court committed error in not decreeing the suit for compensation as claimed by plaintiff? (ii) Whether the trial court committed error in not granting interest exceeding 6% in view of the fact that transaction is commercial one? 7. I have heard Mr. GN Sahewalla, learned senior counsel assisted by Mr. P Deka for the appellant. Also heard Mr. MZ Ahmed, learned senior counsel assisted by Mr. AM Dutta for the respondents. I have perused the pleadings of the parties and the evidence led by them including the documents exhibited by them before the trial court. 8. In the plaint, plaintiff furnished material fact as to execution of the contract between the parties. Plaintiff stated that after 20.4.1989, the defendants terminated the contract and did not give any work to the plaintiff. Rather plaintiff was asked to withdraw the buses from the site. Under such circumstances, notice was sent through pleaders asking for payment of money to the tune of Rs.3,31,11,000/-. This amount includes compensation as well. In para-15 of the plaint, plaintiff has given breakup of the claim. Rather plaintiff was asked to withdraw the buses from the site. Under such circumstances, notice was sent through pleaders asking for payment of money to the tune of Rs.3,31,11,000/-. This amount includes compensation as well. In para-15 of the plaint, plaintiff has given breakup of the claim. It has claimed that estimated loss of closure of business was Rs.24,50,000/-, compensation for the Goodwill is Rs.3,00,00,000/- and estimated compensation for illegal shutdown etc. resulted in the loss of Rs.1,20,000/- and this is how total entitlement of Rs.3,25, 70,000/- was arrived at. Along with these amounts, plaintiff also claimed unpaid bills for the period from from February, 1989 to 21.4.1989. After giving the details in para-17 of the of the plaint, the amount has been arrived at Rs.,31,11,000/-. 8. Defendant has denied the whole case of the plaintiff by saying that there was no termination of the contract whatsoever and it is the plaintiff who had abandoned the contract w.e.f. 21.4.1989. Because of such unilateral withdrawal by the plaintiff, the defendant liquidated the damage. Be that as it may, after having pleaded that plaintiff sustained loss to the tune of Rs.28,24,000/-for closure and loss of business, plaintiff did not lead evidence to establish this amount. Even compensation for goodwill as estimated at Rs.3 crores has also not been substantiated by leading proper evidence. The plaintiff has only examined PW-1 as one of the witness who produced some copies of telegram . A letter of one V.S.Dwivedi has been exhibited to establish that the defendants did not permit the plaintiff to pursue the contract and forced them to withdraw. The learned trial court considered the letter Exhibit-26 which was allegedly written by V.S.Dwivedi , a man who used to attend office of the defendant for the purpose of obtaining duty slip . But learned trial court noticed that this letter has not been proved by examining the said V.S.Dwivedi . PW-1 who is the partner of the firm claimed that letter was written by V.S.Dwivedi and so according to the learned trial court it was nothing but hearsay evidence and so he did not accept the same. Mr. GN Sahewala, learned senior counsel for the appellant has drawn my attention to Exhibit-18 to 22 which are office copies of the telegram sent to defendants pointing out that defendants did not permit the plaintiff to continue working in terms of the contract. Mr. GN Sahewala, learned senior counsel for the appellant has drawn my attention to Exhibit-18 to 22 which are office copies of the telegram sent to defendants pointing out that defendants did not permit the plaintiff to continue working in terms of the contract. According to Mr. Sahewala, trial court has committed error in not considering this piece of evidence while discarding the claim of the plaintiff. I have myself perused the Exhibits-18 to 22. Exhibit-18 appears to be typed copy of a telegram dated 22.4.1989. Exhibit-19 was letter dated 21.4.1989. Similarly, Exhbit-20, 21 are also office copies of the telegram. Along with these receipts from the Indian Post and Telegraphs are placed on records as part of the Exhibits. Plaintiff sought to establish by these documents that these telegrams were sent to the defendants in relevant time registering its protest against alleged action of the defendants. But it appears that plaintiff did not call for the original copies from the custody of the defendants before placing the office copies in record. Merely exhibiting receipts by Indian Post and Telegraphs cannot give credence to the typed copy of the telegram produced from the custody of the plaintiff. Plaintiff could have called for typed copy from the custody of the department of post or ought to have called the original telegrams delivered to the defendants on the relevant dates. In the absence of any action as required under Section 66 of Indian Evidence Act 1872 these office copies cannot become admissible in evidence. This being the position, learned trial court has not committed any error in ignoring these documents while arriving at the finding that the defendants did never terminate the contract and plaintiff failed to establish that it was debarred from the work by defendants w.e.f. 21.4.1989. The submissions of Mr. GN Sahewala in regard to Exhibit-18 to 21 therefore cannot be upheld. 9. Mr.Sahewala thereafter submits that admittedly learned trial court found that plaintiff is entitled to a decree of Rs.4,38,251/- along with Rs.3000/- as security advance. But having so found, the trial court limited the claim of the plaintiff for interest at 6% although transaction between the parties is commercial in nature. According to the learned counsel, Section-34 of the CPC empowers the court to grant higher interest exceeding 6% per annum in case the transaction is commercial one. But having so found, the trial court limited the claim of the plaintiff for interest at 6% although transaction between the parties is commercial in nature. According to the learned counsel, Section-34 of the CPC empowers the court to grant higher interest exceeding 6% per annum in case the transaction is commercial one. In that event, the court can grant interest at the contractual rate and if no contractual rate is mentioned , lending rate of nationalized banks should have been considered by the learned trial court for the purpose of awarding interest. Having heard the learned counsel for the parties, this court feels that submission of Mr. GN Sahewalla has substance. 10. The plaintiff and the defendant entered into contractual relationship with each other for transport duties. Two contracts have been exhibited by plaintiff and the defendants admitted in their pleadings that plaintiff had entered into contract with the defendants for rendering the service. Defendant is a commercial organization and the transaction between the parties, therefore, is also commercial in nature. Under such circumstances, the learned trial court had discretion to grant higher interest exceeding 6% in terms of the Provisio to Section 34 of the Code of Civil Procedure. True that parties have not led any evidence as to what was the lending rate of the nationalized bank at the relevant time. But in terms of the submissions made by the learned senior counsel, there is no dispute that lending rate at relevant time was more than 12% per annum. That being the position, the interest granted by the trial court on the decretal amount needs to be enhanced at least to 12 % per annum. Accordingly, appeal stands partly allowed. The defendant shall pay interest @ 12 % per annum on decretal amount of Rs.4,38,251/- w.e.f. the date of institution of the suit till realization. 11. Appeal stands allowed and decree stands modified. 12. Send down the records after framing of the decree.