RSA No.1679 of 2004(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RSA No.1679 of 2004(O&M)
Date of decision: 10.9.2008
Food Corporation of India ......Appellant
Versus
M/s Balaji Goods Carriers ......Respondent
CORAM:- HON'BLE MR. JUSTICE RAKESH KUMAR GARG
* * *
Present: Mr. H.S. Dhandi, Advocate for the appellant.
Mr. Ashok Sharma Nabhewala, Advocate for the respondent.
Rakesh Kumar Garg, J .
1. The defendant-appellant invited offers for transportation of
stocks of foodgrains from Vallah District Amritsar to Srinagar. The
plaintiff-respondent who is carrying on the business as transport Contractor
submitted his offer at the rate of Rs.24.84 paise per quintal. The said offer
of the respondent was accepted by the appellant-Corporation and the
plaintiff-respondent was required to deposit a security amount and
complete the other formalities before 21.2.1986. In consequence of the
acceptance of the offer of the defendant-appellant, the plaintiff-respondent
had deposited Rs.50,000/- as security with the appellant-Corporation on
18.1.1986.
2. It is the case of the plaintiff-respondent that in spite of the fact
that it was ready and willing to transport the stocks of foodgrains, for the
reasons best known to the appellant-Corporation no work of transport on
stocks was assigned to it and instead the work was assigned to one M/s
Kay Carriers at the risk and cost of the appellant in the month of May,
RSA No.1679 of 2004(O&M) 2
1996 without any notice to the plaintiff-respondent and without terminating
the contract.
3. The plaintiff-respondent filed a suit for recovery of
Rs.4,81,500/- i.e Rs.50,000/- as refund of the security, Rs.4,00,000/- as
damages of breach of the contract and Rs.31,500/- as interest up to the
date of filing of the suit against the appellant-Corporation.
4. The suit was contested by the appellant-Corporation, admitting
the fact that the offer of the plaintiff-firm was less and it was asked to
complete the formalities and deposit the security amount before 21.2.1986.
Deposit of Rs.50,000/- on 18.1.1986 by the respondent was also admitted.
It was also admitted that the respondent was awarded contract for one
year, which was extendable for further three months. However, the
respondent did not complete other formalities of the contract by due date
i.e. 21.2.1986 and as such, after waiting for the respondent to fulfill the said
requirement till 17.3.1986 the appellant-Corporation allotted the work to
M/s Kay Carriers, Amritsar, at the risk and cost of the plaintiff-respondent
as per terms and conditions of the tender agreement. It was thus, the
stand of the Corporation that the plaintiff was not entitled to the refund of
the security amount, interest thereon or the damages.
5. After appreciating the evidence on file, the trial Court decreed
the suit of the plaintiff-respondent for the recovery of an amount of
Rs.50,000/- only with proportionate costs which was the security amount to
be deposited by the plaintiff with the appellant-Corporation. Rest of the
claim of the respondent was dismissed.
6. Feeling aggrieved, the Food Corporation of India filed an
appeal which was dismissed by the District Judge, Amritsar vide impugned
judgment and decree dated 10.1.2004.
7. Still not satisfied, the Food Corporation of India has filed the
RSA No.1679 of 2004(O&M) 3
present appeal challenging the judgments and decrees of the Courts
below.
8. Mr. H.S. Dhandi, learned counsel for the appellant-Corporation
has vehemently argued that as per the terms and conditions of the
contract, it was not necessary for the appellant-Corporation to repudiate
the contract or to forfeit earnest money. Since after the grant of tender, the
Contractor had failed to comply with the terms and conditions, the earnest
money was liable to be forfeited.
9. On the other hand, learned counsel for the respondent, has
supported the findings of the Courts below by arguing that there is no order
of the appellant- Corporation repudiating the contract nor any other order
was passed forfeiting the security amount. It is the argument of the learned
counsel for the respondent that without terminating contract with the
plaintiff-firm, the appellant-defendant could not forfeit the amount of
security.
10. I have heard learned counsel for the parties and perused the
record.
11. I find no force in the contentions raised by the learned counsel
for the appellant. From the documents and evidence on record this fact is
also clear that contract between the plaintiff firm and defendant corporation
is never terminated till today. There is no order on the file vide which the
contract was terminated or any order was passed regarding the security
amount of Rs.50,000/-. As per clause X(b) Senior Regional Manager had
right to terminate the contract in the event of breach by the contractor of
any of the terms and conditions of the contract and to get the work done for
the unexpired period of the contract at the risk and cost of the contractor
and/or forfeit the security or any part thereof for the sum or sums due for
any damages, losses, charges, expenses or costs that may be suffered or
RSA No.1679 of 2004(O&M) 4
incurred by the corporation due to the contractor’s negligence. Clause XI(f)
deals regarding the termination and forfeit of security deposited or any part
thereof towards the satisfaction of any sum due to be claimed for any
damages/losses, charges, expenses etc. But there is no evidence on the
file to show that any proceedings are followed by the defendant
corporation for the recovery of any loss suffered by Food Corporation of
India nor the Food Corporation of India has preferred any counter claim in
the present case. In my opinion the defendant corporation cannot retain
the security amount of Rs.50,000/- without passing formal order of
termination of contract with the plaintiff firm or passing any specific order
regarding the security amount as per terms and conditions of the contract.`
12. For the reasons recorded above, I find no merit in the appeal.
No substantial question of law arises in the present appeal.
13. Dismissed.
September 10, 2008 (RAKESH KUMAR GARG) ps JUDGE