Karnataka Silk Industries Corporation Limited v. Micro International
2019-06-21
H.P.SANDESH
body2019
DigiLaw.ai
JUDGMENT : H.P. Sandesh, J. This appeal is filed challenging the judgment dated 10.03.2010 passed in O.S.No.5712 of 1999 on the file of XXX Additional City Civil Judge, Bengaluru City. 2. The plaintiff has filed the suit for judgment and decree against the defendants claiming a sum of Rs.7,91,544/- with future interest and costs. The case of the plaintiff is that the plaintiff is a wholesale dealer and exporter of silk sarees and fabrics and is doing silk business since 5 decades. The defendants were one of the customers of plaintiff and used to place orders for the supply of sarees from the year 1995. It is contended in the plaint that on 19-06-1996, the second defendant visited the premises of the plaintiff, selected sarees and requested the plaintiff to send the quotation for the sarees. Accordingly, the plaintiff has sent the quotation on 19.06.1996. The defendants on accepting the terms and conditions and the rates quoted in the quotation placed the order for supply of sarees on 24.06.1996. The plaintiff has delivered the consignment after thorough inspection Nos.407 and 409 dated 25.06.1996 and 27.06.1996 respectively. The defendants have acknowledged the said consignment, inspected the goods and out of 558 sarees supplied, 29 sarees were returned after being satisfied with the rest of the consignment. The plaintiff issued invoice for only 529 sarees after deducting the amount towards 29 rejected sarees. As per the terms and conditions of the quotation, the defendants were liable to pay the invoice amount within a period of 30 days from the date of supply, but the defendants have failed to do so inspite of plaintiff's repeated letters and personal approaches. The invoice amount which is due from the defendants is Rs.5,13,340/-. When the defendant failed to pay the amount, the interest was also calculated while filing the suit. 3. The plaintiff in the suit has contended that the defendants after retaining 529 sarees being satisfied with the quality requested to raise invoice, but have sent a fax message on 12.07.1996 stating that the sarees supplied were not up to the specified quality and that once again the committee would be conducting re-inspection of the goods. When the plaintiff demanded the said payment, started harassing the plaintiff and defendants have committed default in payment of amount. Hence, the plaintiff was constrained to issue legal notice.
When the plaintiff demanded the said payment, started harassing the plaintiff and defendants have committed default in payment of amount. Hence, the plaintiff was constrained to issue legal notice. When the defendant gave evasive reply, the plaintiff was forced to approach the Court by filing the suit claiming interest at the rate of 18% p.a. and in all claimed a sum of Rs.7,91,544/-. 4. The defendants appeared through counsel, filed the written statement and contended that the defendants while receiving the sarees before inspecting the entire lot noticed 29 sarees having glaring defects and returned them to the plaintiff. Immediately the rest of the sarees i.e., 529 were received and accepted subject to detailed inspection by the technical committee. The technical committee of the defendant company inspected the sarees and noticed that substranded sarees were supplied and the same are defective. Hence the fax message was sent on 12.07.1996. Inspite of reminder, the plaintiff did not take back the sarees and instead requested the defendants to make the payment. The defendants also contended that in view of the terms and conditions, 30 days time was given to make the payment and when the defendants have not accepted the goods in question, the question of payment of interest and cost of the defective goods does not arise. Hence the defendants are not liable to pay the amount. It is further contended that the very supply of sarees were defective and damaged and were not in accordance with the specifications and with great difficulty, they have sold 83 sarees and the defendant is ready to pay for 83 sarees. It is further contented that there is no cause of action to file the suit. 5. Based on the pleadings of plaintiff and defendants, the Court below has framed the following issues: 1. Does plaintiff prove that the defendants are due a sum of Rs.5,13,340/- towards the price of goods sold? 2. Do defendants prove that the goods supplied by the plaintiff were not as per the specification given and were damaged and defective? 3. Is plaintiff entitled to interest as claimed? 4. Is plaintiff entitled to the suit claim? 5. What relief? 6. The plaintiff in order to prove the case examined Special Power of Attorney Holder of the plaintiff as P.W.1 and got marked Exs.P1 to P11. The defendant examined one witness as DW.1 and got marked Exhs.D1 to D8.
3. Is plaintiff entitled to interest as claimed? 4. Is plaintiff entitled to the suit claim? 5. What relief? 6. The plaintiff in order to prove the case examined Special Power of Attorney Holder of the plaintiff as P.W.1 and got marked Exs.P1 to P11. The defendant examined one witness as DW.1 and got marked Exhs.D1 to D8. The Court below after recording the evidence and hearing the arguments of both the parties answered issue Nos.1 and 3 in the affirmative and issue No.2 as negative by coming to the conclusion that the plaintiff is entitled for the decreetal amount and the evidence of the defendants cannot be accepted. 7. Being aggrieved by the judgment and decree, the defendants have preferred the present appeal. The main contention taken by the defendants is that the learned trial Judge has committed an error in decreeing the suit without appreciating the oral and documentary evidence adduced by the defendant. It is contended that no dispute with regard to placing of the order and supply of sarees and the learned trial Judge failed to take note of the fact that there was no delay in conducting the inspection and communicating the results of inspection to the plaintiff. The trial Court has decreed the suit without appreciating the documentary evidence placed on record. Hence, the same is not sustainable in law. The Court below has committed an error in taking the super technical view that the technical expert who inspected the sarees and found them defective would have been the best person to speak about the same. Non-examination of the parties to the inspection committee is fatal. When the plaintiff has not taken any such steps when they were communicated by letter dated 24.07.1996 it was not open for the trial Court to decree the suit on such technical ground. Moreover, the plaint was also not on the ground that though 446 sarees were good, the appellant has not paid the invoice amount. Hence the very impugned judgment and decree is contrary to the Contract Act is liable to be set aside. 8. Learned counsel for the appellant in his argument vehemently contended that the learned trial Judge has committed error in not appreciating both the oral and documentary evidence. The very conclusion of the trial Court that the inspection report is not produced is not correct.
8. Learned counsel for the appellant in his argument vehemently contended that the learned trial Judge has committed error in not appreciating both the oral and documentary evidence. The very conclusion of the trial Court that the inspection report is not produced is not correct. The case of the defendant is specific that the payment is subject to inspection and immediately after the inspection, the same was communicated to the plaintiff and in spite of the same, the plaintiff insisted for release of the amount. When the goods are defective, there cannot be any payment and the learned trial Judge ought to have considered the evidence of P.W.1 and D.W.1 in right perspective. He further contends that the Court below did not consider the defence of the defendants that the goods which were supplied were sub-standard and defective. In support of his contention, he relied upon the decision in the case of M/s.Sha Thilokchand Poosaji vs. Crystal and Co. by its authorized agent and Manager C. Satyam, (1955) AIR Madras 481 and referred to para 14 of the said judgment that once a buyer elects to reject the goods, he divests himself of his title to them and the property is thereupon vested in the seller. In a case where this divesting of the property from a buyer and the vesting of it in the seller takes place as a result of the conjoint action of the buyer and the seller, the buyer cannot subsequently, by any unilateral act of his own, divest the seller of his title to the property and purport to accept the goods as in performance and delivery of the original contract, to contend that in terms of the contract, 30 days is provided to pay the amount. Before expiry of the said period, the dispute has arisen. Though the same was brought to the notice of the plaintiff, instead of taking back the defective sarees, the present suit is filed only to make wrongful gain. Hence, the learned trial Judge has committed an error in decreeing the suit. 9. Learned counsel appearing for the respondent/plaintiff in his arguments vehemently contended that Ex.D8 reply given by the defendants is specific that except 29 sarees, rest of the sarees are accepted.
Hence, the learned trial Judge has committed an error in decreeing the suit. 9. Learned counsel appearing for the respondent/plaintiff in his arguments vehemently contended that Ex.D8 reply given by the defendants is specific that except 29 sarees, rest of the sarees are accepted. Further, he would contend that the sarees which the defendants have received were exhibited in the Panorama Exhibition for which they have purchased the sarees and also they have sold 83 sarees in the said exhibition and did not inform the defects. It is further contended that though said exhibition was conducted on 01.07.1996, defendants have not specifically stated as to the sub-standard quality of the sarees; what are the defects they have noticed; on which date the inspection was conducted and no material is placed before the trial Court in order to substantiate their defence. Therefore, the trial Court has rightly rejected the claim of the defendants by coming to the conclusion that except taking defence, the same has not been substantiated. The trial Court has rightly observed that the technical person, who inspected the sarees was not examined and the report of Technical Committee is not produced before the Court. Hence, the defence taken that sarees were sub-standard and the same is not in terms of the specifications is not substantiated. There is an acknowledgment for having received 29 sarees which were defective. After conducting exhibition, on 01.07.1996, the sarees were returned on 04.07.1996. The learned trial Judge has rightly rejected the defence of the defendants. Hence, there is no good ground to interfere with the judgment and decree. 10. Having heard the arguments of the learned counsel for the appellant and also learned counsel appearing for the respondent, the point that arise for my consideration is : "Whether the Court below has committed an error in decreeing the suit and not accepting the defence of the appellant herein." 11. There is no dispute with regard to placing of the purchase order and supply of the sarees. On perusal of the document Ex-P2 which is marked on behalf of the plaintiff, rates are quoted and orders have been placed for supply of 750 sarees. Ex-P3 discloses the cost of sarees as Rs.6,87,150/-. but, did not supply 750 sarees. In terms of Ex-P4, 510 sarees were supplied and there is an endorsement on Ex-P4 that the defendants have received 510 sarees subject to inspection.
Ex-P3 discloses the cost of sarees as Rs.6,87,150/-. but, did not supply 750 sarees. In terms of Ex-P4, 510 sarees were supplied and there is an endorsement on Ex-P4 that the defendants have received 510 sarees subject to inspection. Ex-P5 dated 27.06.1996 discloses the fact that 48 sarees were received subject to inspection. The other documents are invoice and letters of correspondence. Ex-P8 is dated 05.09.1996 demanding supply of sarees again. Exs-P10 and P11 are notice and reply exchanged between the plaintiff and defendants. 12. The only dispute between the parties is that, the sarees which were sent were not in terms of the specifications. The contention of the plaintiff is that except 29 sarees, remaining sarees were accepted and exhibited in the exhibition on 01.07.1996 and 29 sarees were returned. Subsequently, only in order to avoid payment, a false defence is taken that the sarees are not in terms of the specifications. On the other hand, the defendants in the suit have contended that 446 sarees were defective and with great difficulty 83 sarees were sold in the exhibition and on 12.07.1996, the same was communicated. In spite of the same, a false suit is filed. 13. The plaintiff, in order to prove the case, examined the Special Power of Attorney Holder as P.W.-1. The Special Power of Attorney is also marked as Ex.P1. The plaintiff in the affidavit reiterated the contents of the plaint and relied upon the documents which I have referred above. 14. In the cross-examination of the plaintiff, it is elicited that they have not supplied 750 sarees and it is admitted that they have supplied only 558 sarees as per Exs-P4 and P5. It is further admitted that out of 558 sarees supplied, 29 sarees were returned to them as defective. It is further elicited that, 558 sarees were received by the defendants subject to inspection as per Exs-P4 and P5. P.W.1 denied the suggestion that on 12.07.1996, defendants have informed that 446 sarees were defective. However, he admits that they have written a letter as per Ex-D1 dated 16.07.1996 in response to the fax message. He also admits the letter dated 23.07.1996 Ex-D2 and another letter dated 24.07.1996, in which it is mentioned that sarees were defective and requested to take back the same in terms of Ex-D3.
However, he admits that they have written a letter as per Ex-D1 dated 16.07.1996 in response to the fax message. He also admits the letter dated 23.07.1996 Ex-D2 and another letter dated 24.07.1996, in which it is mentioned that sarees were defective and requested to take back the same in terms of Ex-D3. It is suggested that defendants have written a letter stating that they have sold 83 sarees and the plaintiff has to collect the amount along with 446 defective sarees and the said suggestion was denied. It is admitted that even in the reply notice, the defendants have asked them to take back 446 defective sarees and collect the amount in respect of 83 sarees sold by them. 15. On the other hand, the defendants also examined one witness, who is working as Manager, Marketing and in his affidavit, he has reiterated the defence which has been taken in the written statement and got marked the documents Exs-D1 to D18. 16. In the cross-examination of D.W.1, it is elicited that he is not aware whether apart from the suit transaction, there has been any transaction between the plaintiff and defendants. It is elicited that after acceptance, within 30 days, the payment had to be made by the defendants as per the purchase order. It is further admitted that in Ex-P11, it is mentioned that the consignment was not checked in detail and on random check, 29 sarees were returned and the rest were accepted. It is further elicited that without examining the quality, the goods supplied are not exhibited for sale. It is further elicited that one Mr. Krishna Rao, Assistant Sale Officer and one more person, who has now retired has done the checking. He further admits, he knows one Mr. Ratti Halli, who was the Head of Department of Marketing, who is still in service and there was an enquiry against him and he does not know the result of the disciplinary enquiry. He further admits that enquiry reports are in the Personnel Department of the Corporation and there is no impediment to produce the board resolution passed relating to Mr. Ratti Halli in connection with the suit transaction. 17. Now let this Court appreciate the evidence available on record keeping in mind the contentions urged by both the parties.
He further admits that enquiry reports are in the Personnel Department of the Corporation and there is no impediment to produce the board resolution passed relating to Mr. Ratti Halli in connection with the suit transaction. 17. Now let this Court appreciate the evidence available on record keeping in mind the contentions urged by both the parties. As already pointed out, there is no dispute with regard to placing of the order and supply of the sarees. It is further clear that though order was placed to supply 750 sarees, only 558 sarees were supplied and out of that, 29 sarees were returned, as the same were defective. There is no dispute with regard to the fact of returning of 29 sarees. The contention of the defendants that with great difficulty, they have sold the sarees to the extent of 83 sarees in the exhibition which was conducted on 01.07.1996 and there is no dispute with regard to the date of exhibition of the sarees. It is also not in dispute that, order has been placed to exhibit the sarees on 01.07.1996. It is important to note that in the cross-examination of D.W.1, he categorically admits that without examining the quality of the sarees, they are not exhibited for sale. Hence, it is clear that they have examined the quality of the goods supplied before the exhibition. I have already pointed out that the exhibition was conducted on 01.07.1996 and I would like to refer the document Ex-D2 which was produced by the defendant himself while leading the evidence. On perusal of the overleaf of Ex-D2, there is a specific endorsement that 29 sarees were defective and the same were received on 04.07.1996 i.e., after conducting the exhibition. Hence, it is clear that 29 sarees were returned when they noticed that the said sarees were defective and one Mr. Chandru has acknowledged the receipt of 29 sarees on 04.07.1996. It is further important to note that the main contention of the defendant that the remaining sarees were defective and a fax message was addressed to the plaintiff on 02.07.1996 and though P.W.1 disputes the said letter, he admits in the cross-examination that they gave the reply to the said fax message. The said fax message is not placed before the Court. However, there is a reply.
The said fax message is not placed before the Court. However, there is a reply. It is pertinent to note that when the exhibition was conducted on 01.07.1996 itself, it is elicited in the cross-examination that, the customers have not complained that the sarees were defective. If really, there were defects in the sarees, it would have been informed to the plaintiff immediately and the Ex-D2 endorsement discloses that on 04.07.1996, returned 29 sarees which were defective. Hence, the very contention of the defendant that the Technical Committee has conducted the inspection and noticed the defects in the remaining 446 sarees exhibited, cannot be accepted. If really, those sarees are sub-standard and not in terms of the specifications, those sarees ought not to have been exhibited in the exhibition conducted on 01.07.1996. It is further important to note, in the written statement, it is contended that the sarees are not in terms of the specifications and the Technical Committee has conducted the inspection and no document is placed before the Court as to what are the defects and in how many sarees defects are found. Except stating that the sarees are not in terms of the specifications, nothing is placed before the Court to substantiate their claim that the sarees were of substandard quality and not in terms of the specifications except, oral say. 18. As rightly observed by the learned trial Judge, the person, who conducted the inspection and member of the Technical Committee has not been examined before the trial Court and no piece of material is placed before the Court that the Technical Committee has noticed the said defects. If really the sarees are of sub-standard quality, the same would not have been accepted and exhibited in the exhibition. No reply has been sent immediately when they noticed the defects. Before exhibiting the sarees, they would have inspected the same and no details on which date the inspection was conducted and no Technical Committee report and only on 12.07.1996, the defendants raised the dispute with regard to the quality of the sarees and hence, I am of the opinion that the documents clearly reveal that the defect is in respect of only 29 sarees and instead of making the payment, subsequently, the dispute is raised by the defendants. If really, they found the defects immediately after supply of the sarees, they should have communicated the same.
If really, they found the defects immediately after supply of the sarees, they should have communicated the same. There is no dispute that sarees were supplied on 25.07.1996 and 27.06.1996 in terms of Exs-P4 and P5. 19. As already pointed out, defects were also noticed and no doubt in Ex-D8, it is specifically mentioned that they have received the consignment which was not checked in detail and however, in random checking, sarees were returned and rest were accepted. It is further important to note that 83 sarees were sold in the exhibition and hence, it is clear that all the sarees were exhibited in the exhibition and when such being the case, the contention that has been raised on 12.07.1996 after lapse of 12 days of exhibition that sarees were not as per the specification is nothing but an after thought defence. 20. I have already pointed out that in the cross-examination of D.W.1, he has categorically admitted that without examining the quality of the goods supplied, they are not exhibited for sale and this admission takes away the case of the defendants that they have not examined the quality of the goods at the time of conducting the exhibition and hence, I do not find any error committed by the trial Court in appreciating the evidence available on record. The burden lies on the defendants to prove that sarees which were supplied were of sub-standard quality and not as per the specifications. Mere taking the defence is not enough and in order to substantiate the same, no documentary proof is placed before the learned trial Judge, on which date the Technical Committee has conducted the inspection and no report of the Technical Committee is placed before the trial Court. Apart from that, the sarees were also exhibited in the exhibition on 01.07.1996 itself and also the technical person, who inspected the quality of the sarees which were supplied was also not examined. Further, in the cross-examination of D.W.1, it is elicited that, disciplinary enquiry is initiated against one of the Technical Committee member in respect of the suit claim and resolution also passed i.e., against one Mr. Ratti Halli. Though D.W.1 does not know about the resolution, he did not dispute the fact that enquiry was conducted and report was submitted and resolution was also passed and the same is suppressed by the defendant.
Ratti Halli. Though D.W.1 does not know about the resolution, he did not dispute the fact that enquiry was conducted and report was submitted and resolution was also passed and the same is suppressed by the defendant. Hence, taking into consideration of all these aspects, I do not find any reason to interfere with the findings of the trial Court to come to a conclusion that the learned trial Judge has committed an error in appreciating the evidence available on record. Hence, I do not find any merit in the case to reverse the findings of the trial Court. 21. In view of the discussions made above, I pass the following: ORDER (i) The appeal is dismissed without cost.