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2021 DIGILAW 666 (KAR)

Granite Corporation v. S. V. Industries

2021-06-11

E.S.INDIRESH, S.SUJATHA

body2021
JUDGMENT : S. SUJATHA, J. 1. This appeal is directed against the judgment and decree dated 10.11.2011 passed in O.S. No. 6522/2005 on the file of the XIV Addl. City Civil Judge, Bangalore [Trial Court]. 2. For the sake of convenience, the parties are referred to as per their status before the Trial Court. 3. The plaintiff instituted the suit for recovery of Rs. 17,70,000/- along with costs and future interest against the defendant. 4. The plaint averments are that the plaintiff is doing business of manufacture and sale of different types of cranes. The defendant had placed order for supply of EOT crane and Gantry as per the Quotation No. SVI/QTN/592/2004 dated 04.03.2004. Part payment of Rs. 3,00,000/- was made on 14.05.2004 through demand draft by the defendant. Defendant through its representative Mr. Sateesh Katti sought for changes in the orders placed by the defendant. In view of the changes opted, the plaintiff informed through their letter dated 24.8.2004 that the changes if carried out will incur an additional cost of 25% for which the defendant agreed and on confirmation, the defendant issued another part payment of Rs. 2,00,000/- vide demand draft No. 210282 dated 25.9.2004 drawn on Punjab National Bank, Bangalore. The defendant placed further orders for delivery of single EOT crane and handling attachments for continuous loading and made another part payment of Rs. 3,00,000/- as advance payment. In the offer letter the terms of payment was mentioned as 35% advance with the order, 55% against delivery and 10% after erection and commissioning. At the request of the defendant, the plaintiff agreed to receive part payment. The total amount payable by the defendant on different purchases is Rs. 38,70,000 (Rupees thirty eight lakhs seventy thousand only). Out of the said amount, the defendant has remitted a sum of Rs. 21,00,000/- (Rupees Twenty one lakhs only). After giving deductions to the payment made, the defendant is still due in a sum of Rs. 17,70,000/- (Rupees seventeen lakhs seventy thousand only). However, the defendant has failed to make the balance payment and issued a notice on 5.7.2005 raising untenable objections. Hence, deducting the amount of Rs. 21,00,000/- paid by the defendant, the plaintiff sought for the relief of judgment and decree against the defendant for payment of Rs. 17,70,000/- (Rupees seventeen lakhs seventy thousand only). However, the defendant has failed to make the balance payment and issued a notice on 5.7.2005 raising untenable objections. Hence, deducting the amount of Rs. 21,00,000/- paid by the defendant, the plaintiff sought for the relief of judgment and decree against the defendant for payment of Rs. 17,70,000/- with interest @ 18% p.a. from the date of filing of the suit till the date of realisation along with costs. 5. On service of suit summons, the defendant appeared through its learned counsel and filed written statement repudiating the claim. The defence set up was that the plaintiff has supplied 2 EOT cranes and a portion of Gantry crane. The payment of Rs. 3,00,000/- was made on 14.5.2004 for the purchase of 2 EOT cranes and not relating to the quotation dated 4.3.2004 which indeed was cancelled. The plaintiff has supplied only 2 EOT cranes and Gantry without the Hoise (Crab) which costs about 10,00,000/-. As such, the plaintiff did not erect the Gantry crane. The EOT cranes supplied were of substandard quality. The weight of EOT crane was also not balanced as such it fell down many times at the time of carrying the granite block. Alleging manufacturing defects in the Gantry crane and the side supporters not having sufficient weight, the defendant contended that it was compelled to engage the services of local crane operators and had to hire the cranes. On bringing this fact to the notice of the plaintiff, a meeting was convened between the parties herein. The plaintiff admitted the poor quality of EOT cranes supplied by him and further agreed to refer the matter to third party for investigation and report. Hence, the defendant has engaged the services of M/s. Cranes and Hoists situated in Koteshwar, Udupi District, Karnataka, which made the valuation of the cranes supplied by the plaintiff. The entire amount for the cranes supplied has been paid by the defendant. However, the plaintiff is demanding the amount for the crane hoist which was not supplied. The defendant-a dealer in granite - a natural stone, finds it difficult to lift the stones manually which requires to be done mechanically. The defendant has suffered loss of reputation etc. The plaintiff is liable to pay the damages which has been assessed at Rs. However, the plaintiff is demanding the amount for the crane hoist which was not supplied. The defendant-a dealer in granite - a natural stone, finds it difficult to lift the stones manually which requires to be done mechanically. The defendant has suffered loss of reputation etc. The plaintiff is liable to pay the damages which has been assessed at Rs. 50,00,000/- The claim of 25% excess amount covered in the plaint was totally denied, equally the stages of payments was also denied. Denying the claim made by the plaintiff, it was contended that there was no contract for Rs. 38,70,000/- and as such the suit is based on false claim. The entire sum of Rs. 21,00,000/- made by the defendant is more than the value of the goods supplied by the plaintiff. It was further contended that the plaintiff was liable to pay Rs. 15,00,000/- towards the damages caused to the defendant. On these set of facts, the defendant prayed for dismissal of the suit with costs. 6. On the basis of the pleadings, following issues were formulated by the trial Judge: “1. Whether plaintiff proves that as per the orders of the defendant they have supplied cranes and other materials and the defendant is liable to pay Rs. 17,70,000/- the remaining balance amount as contended in Para 12 of the plaint? 2. Whether defendant proves that the cranes supplied by the plaintiff was defective, as contended in Para 3 and 4 of the written statement? 3. Whether defendant proves that as the cranes was defective they have hired the other cranes to comply the orders of 3rd party and thereby they have suffered loss to the extent of 15 lakhs as contended in Para 20 of the written statement? 4. Whether the court has no jurisdiction to try the suit? 5. Whether plaintiff is entitled for the interest at the rate of 18% per annum? 6. Whether plaintiff is entitled for the reliefs sought? 7. What order or decree?” 7. In order to prove the case, the plaintiff company has examined PW-1 and relied upon documents Ex.P1 to P33. The defendant-company has examined DW-1 and marked Exs.D1 to D18. On appreciation of evidence, Trial Court answered issue No. 1 in the affirmative and issue Nos. 5 and 6 partly in the affirmative, finally decreed the suit in part holding that the plaintiff is entitled for a sum of Rs. The defendant-company has examined DW-1 and marked Exs.D1 to D18. On appreciation of evidence, Trial Court answered issue No. 1 in the affirmative and issue Nos. 5 and 6 partly in the affirmative, finally decreed the suit in part holding that the plaintiff is entitled for a sum of Rs. 17,70,000/- from the defendant along with interest @ 9% p.a. from the date of the suit till its realization. 8. Being aggrieved by the said judgment and decree, the defendant has preferred this appeal. 9. Learned counsel for the defendant would submit that there is no basis for the claim of Rs. 38,70,000/- made by the plaintiff. The trial Judge proceeded on a wrong footing that the entire transaction was based upon the existence of a quotation dated 4.3.2004 which was neither agreed upon nor acted upon. In the absence of producing the quotation and unsuccessful in proving any concluded agreement, based on the imaginary representation from fictitious Mr. Satish Katti, the value of the claim made i.e. Rs. 38,70,000/- has been accepted to be genuine. The Trial Court has misconstrued the evidence at Exs.P7, P8 and P10. The Trial Court without appreciating the material evidence on record arrived at the conclusion that the total amount payable for the material supplied is Rs. 38,70,000/-. It was further argued by the learned counsel that the materials supplied by the plaintiff were defective as such he was forced to replace the motors and brakes of the EOT crane at his own expenses, procure a sizeable amount of dead weight at its own cost in order to ensure that the cranes remain sturdy and also had to hire cranes and other essential components that were not supplied, from third party vendors and has incurred expenses for hiring cranes and other essential components to which the plaintiff is liable to pay damages. The plaintiff having participated in the meeting convened on 14.6.2005 and agreed for hiring a third party inspecting agency for assessing the cost of supply as per the minutes drawn has surprisingly filed the suit on completion of the assessment by M/s Cranes and Hoists where the valuation of the entire supply of cranes made by the plaintiff was assessed at Rs. 25,50,000/-. The trial Judge grossly erred in ignoring this clinching material at Ex.P28 and Ex.D1 referred to by both the parties. 10. 25,50,000/-. The trial Judge grossly erred in ignoring this clinching material at Ex.P28 and Ex.D1 referred to by both the parties. 10. Learned counsel for the plaintiff justifying the impugned judgment and decree submitted that as per Ex.P10 duly accepted by the defendant, he is liable to pay Rs. 38,70,000/- for supply of Gantry and EOT cranes. However, he has paid only Rs. 21,00,000/- and on the demand made for the balance amount by the plaintiff, defendant came with a new theory of manufacturing defect of the goods supplied in order to avoid the payment. Minutes of the meeting would not indicate the value of the goods. It discloses that third party inspecting agency has to be hired for assessing the cost of supply. However, the same was not acted upon. Ex.D2 the valuation report would not be binding on the plaintiff which is made sans issuing any notice to the plaintiff. The trial Judge having rightly appreciated the material evidence on record has allowed the suit in part and the same deserves to be confirmed by this court. 11. The learned counsel submitted that the Trial Court after appreciating the material evidence in a right perspective, has decreed the suit in part for Rs. 17,70,000/- with interest @ 9% p.a. and the same deserves to be confirmed by this court. 12. Adverting to the arguments advanced by the learned counsel for the parties and perusing the material on record, the points that arise for our consideration are: 1. Whether the plaintiff has proved that the defendant is liable to pay Rs. 38,70,000/- towards the purchase of cranes and other materials? 2. Whether the defendant has proved that the goods supplied by the plaintiff was defective and as such it is entitled to damages? 3. Whether the impugned judgment and decree warrants any interference by this court? Re: Point No. 1: 13. It is evident that Exs.P22 to P25 are the invoice copies which would disclose the supply of goods to the defendant amounting to Rs. 28,20,000/- made by the plaintiff. Sale invoices would play a pivotal role for establishing the sale of goods and the same cannot be disputed by the defendant. Re: Point No. 1: 13. It is evident that Exs.P22 to P25 are the invoice copies which would disclose the supply of goods to the defendant amounting to Rs. 28,20,000/- made by the plaintiff. Sale invoices would play a pivotal role for establishing the sale of goods and the same cannot be disputed by the defendant. At this juncture, it would be apt to refer the deposition of PW-1, the relevant cross-examination portion is extracted hereunder: “It is true we have not produced ledger or extract of the ledger pertaining to the transaction of the defendant. It is false to say that we claimed amount without any base. Apart from Ex.P28 there is another minutes of meeting held at Bangalore. Apart from supplies shown in Ex.P22 to P25, we have not made any other supplies to the defendant. It is true we have not supplied trolley for granite cranes. The defendant not made payment therefore we have not supplied. We have filed this suit only for the supplies made to the defendant. It is true we have not produced statement of account in respect of transaction of the defendant Granite cranes are basically material handling equipment. They are used for transportation of granite from one place to other place within the premises.” (Emphasis supplied) 14. Thus, the ocular and documentary evidence would clearly establish that goods-cranes were supplied as per Exs.P22 to P25 worth Rs. 28,20,000/-. Apart from this, no other supplies were made to the defendant as admitted by PW-1. The entire case of the plaintiff was built upon the quotation dated 4.3.2004 and subsequently modified as per their letter 24.8.2004. Surprisingly no quotation dated 4.3.2004 is marked as an exhibit. On the other hand, the letter dated 13.9.2004 at Ex.P10 refers to visit of Mt. Katti to the office of the plaintiff and further discussions held with the defendant’s factory at Satara. Mr. Katti is a fictitious person as per the defendant. This Ex.P10 does not bear the signature of both the parties. Further, photocopy of the letter dated 13.9.2004 relied upon by the learned counsel for the plaintiff though bears the signature of the defendant, no signature of the plaintiff is found, the same is left blank. Mr. Katti is a fictitious person as per the defendant. This Ex.P10 does not bear the signature of both the parties. Further, photocopy of the letter dated 13.9.2004 relied upon by the learned counsel for the plaintiff though bears the signature of the defendant, no signature of the plaintiff is found, the same is left blank. There are some interpolations made in the said letter and the same cannot be given any evidentiary value since the said photocopy of the letter is not proved in accordance with law. Moreover, there is no reference to that letter either in the pleadings or in the evidence of PW-1. Having regard to these aspects, the fundamental question of the basis of the claim of Rs. 38,70,000/- has not been proved by the plaintiff. Having regard to the invoices Ex.P22 to P25 and the testimony of PW-1, the supply of goods i.e. cranes and other materials to the tune of Rs. 28,20,000/- cannot be disputed by the defendant. 15. It is the strong case of the defendant that as per Ex.P28/Ex.D2-Minutes of Meeting held between the parties, it was decided to hire a third party inspecting agency to assess the cost of 50 tons crane and the cost of supply of goods made by the plaintiff. Accordingly, M/s Crane and Hoist Co. was appointed as the inspecting agency to value the supply of 50 tons crane by the plaintiff. As per Ex.D2, valuation of 50 tons Gantry crane without crab (lifting and cross travel machine) has been assessed by M/s Crane and Hoist Co. at Rs. 12,50,000/- existing 5 tone EOT crane at Rs. 6,00,000/- and existing 8 ton EOT crane at Gangsaw shed at Rs. 7,00,000/- totally amounting to Rs. 25,50,000/-. However, the same is disputed by the plaintiff. In order to prove the said Ex.D2, no author of the said report has been examined. Thus, the same remains unproved. No weightage could be given to Ex.D2 to determine the value of the goods supplied by the plaintiff. Ex.P28 though reflects the minutes of the meeting held on 14.6.2005 between the parties, no value of the goods has been arrived at. Hence, placing reliance on the said Ex.P28, the defendant cannot establish the defects in the goods supplied. Re: Point No. 2: 16. Ex.P28 though reflects the minutes of the meeting held on 14.6.2005 between the parties, no value of the goods has been arrived at. Hence, placing reliance on the said Ex.P28, the defendant cannot establish the defects in the goods supplied. Re: Point No. 2: 16. It is discernable that the defendant has raised objections regarding the quality of goods subsequent to the demand made by the plaintiff for the payment of the balance amount pursuant to supply of goods as per Exs.P22 to P25. In order to prove the substandard goods said to have been supplied by the plaintiff, the defendant has relied on Exs.D1 and D2. As discussed above, the same would not assist the defendant in any manner. Nothing positive is elicited from the mouth of the PW-1 to substantiate the supply of substandard goods by the plaintiff nor any concrete evidence is placed on record to substantiate the same. In the absence of material evidence, the defence of the defendant inasmuch as the defective goods said to have been supplied by the plaintiff falls to ground. Further, no evidence is placed on record in support of hiring the cranes and other materials and incurring the loss. In the appeal proceedings a futile attempt has been made by the defendant to place on record some documents as additional evidence. Document No. 1 is relating to Ranee Enterprises, document No. 2 relates to various invoices of Mansi Cranes Service relating to the period October 2004 to November 2005 and June 2006 to September 2006, the invoice of M/s. Cranes and Hoists relating to various periods. It is well settled legal principle that additional evidence cannot be taken on record in a routine manner. 17. It is well settled by now that under these exceptional circumstances additional evidence can be adduced before the appellate court as provided in Rule 27 of order XLI of CPC: (a) The Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted. (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed. (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed. (b) The Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause. In Union of India vs. Ibrahim Uddin and Another, (2012) 8 SCC 148 , the Hon’ble Apex Court has held as under: “49. An application under Order 41 Rule 27 CPC is to be considered at the time of hearing of appeal on merits so as to find out whether the documents and/or the evidence sought to be adduced have any relevance/bearing on the issues involved. The admissibility of additional evidence does not depend upon the relevancy to the issue on hand, or on the fact, whether the applicant had an opportunity for adducing such evidence at an earlier stage or not, but it depends upon whether or not the appellate court requires the evidence sought to be adduced to enable it to pronounce judgment or for any other substantial cause. The true test, therefore is, whether the appellate court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced.......” The documents now sought to be placed on record as additional evidence do not satisfy the true test propounded by the Hon’ble Apex Court i.e. whether the additional evidence is required to pronounce judgment or for any substantial cause. 18. The document of Ranee Enterprises has no relevancy for the present adjudication of dispute. In order to ascertain the genuineness of the tax invoices, the audited books of accounts and the returns filed by the respective builders accounting the said invoice amounts would be sine qua non. However, it is unrealistic to expect any dealer to keep the books of accounts for about 14-15 years. Providing an opportunity for the defendant to cross examine in this regard would be futile. In our opinion, mere production of these three documents at this length of time, would be of no assistance to the plaintiff to prove the damages incurred by it. Thus, we are not inclined to accept the additional evidence proposed to be placed on record. Providing an opportunity for the defendant to cross examine in this regard would be futile. In our opinion, mere production of these three documents at this length of time, would be of no assistance to the plaintiff to prove the damages incurred by it. Thus, we are not inclined to accept the additional evidence proposed to be placed on record. Re: Point No. 3: 19. The trial Judge having observed that the primary burden lies on the plaintiff to prove the supply of the cranes to the defendant worth Rs. 38,70,000/- proceeded to analyse the same on the basis of Exs.P7 to P10-the letters addressed by the plaintiff on a wrongful notion that all these are undisputed correspondences. It is significant to note that the defendant has categorically denied about these letters in the written statement as well as in the evidence adduced by DW-1. We are astound by the findings of the trial Judge recorded in Para-12 of the impugned judgment that as per the agreement between the parties, the defendant is also liable to pay the sales tax, supply, delivery and erection charges including all these amounts, the plaintiff has claimed total sum of Rs. 38,70,000/- from the defendants. As could be seen from the records, no agreement entered into between the parties is available. Neither the pleadings nor evidence is forthcoming in this regard. Having observed so, deducting the amount of Rs. 21,00,000/- paid by the defendant, it is held that the plaintiff’s claim of Rs. 17,70,000/- has been proved. We are unable to accede to the same. In our considered opinion, except the invoice amount of Rs. 28,20,000/- as per Exs.P22 to P25, the plaintiff has not proved Rs. 38,70,000/- as claimed in the plaint. In para.12 of the plaint, it is submitted that the total amount payable by the defendant is Rs. 38,70,000/- but no particulars of the said outstanding amount is shown. The vague statement made by the plaintiff sans supported by the corroborative evidence cannot be countenanced. 20. For the reasons aforesaid, in our considered view, the plaintiff is entitled for a sum of Rs. 7,20,000/- after deducting Rs. 21,00,000/- from the invoice amount of Rs. 28,20,000/-. Accordingly, we modify the order of the trial Judge. 21. Hence, the following: ORDER: (i) The appeal is allowed in part. 20. For the reasons aforesaid, in our considered view, the plaintiff is entitled for a sum of Rs. 7,20,000/- after deducting Rs. 21,00,000/- from the invoice amount of Rs. 28,20,000/-. Accordingly, we modify the order of the trial Judge. 21. Hence, the following: ORDER: (i) The appeal is allowed in part. (ii) The impugned judgment and decree dated 10.11.2011 passed in O.S. No. 6522/2005 on the file of the XIV Addl. City Civil Judge, Bangalore is modified. (iii) The suit of the plaintiff is decreed in part with costs for a sum of Rs. 7,20,000/- payable by the defendant to the plaintiff along with interest at the rate of 9% per annum from the date of the suit till its complete realisation. (iv) The defendant/appellant is granted four months time to pay the decretal amount. In case of failure to do so, the plaintiff/respondent is at liberty to recover the same in accordance with law. (v) Draw modified decree accordingly.