JUDGMENT
Kuldip Chand Sood, J.
1. Plaintiff, Himachal Pradesh State Forest Corporation Limited, hereinafter referred to as “the Corporation” is a company, registered under the Companies Act, 1956 at Shimla Mr. G.C. Gupta is the Managing Director of the Corporation and is duly authorised to maintain the present suit. The plaintiff-Corporation has sued the defendant M/s. J.J. Ropeways, hereinafter referred to as “the Company” for recovery of Rs. 15,26,431.
2. The case of the plaintiff-Corporation is:
Defendant-Company, being the successful tenderer, was awarded work of Telescopic and Wet slide floating work of timber in Deori Khad vide an agreement dated 20.2.1991 (Ex. PW-1/A). The work included launching, collecting and stacking of the timber floated at road side depot of the Corporation. The defendant-Company was handed over 28195 scants of different sides of timber with total volume of 2599.444 cubic metres for the purpose of floating the timber through Deori Khad. A launching list was also given to the Company.
3. The defendant-Company after collecting the timber delivered 28232 scants having a volume of 2439.340 cubic metres against the volume of 2599.444 cubic metres. According to the plaintiff-Corporation, the number of scants are liable to be increased as some of the scant may break during transit. The volume of timber which was handed over and delivered to the plaintiff-Corporation, fell short by 144.094 cubic metres after deducting permissible loss of 1%, in accordance with the schedule, part of the contract agreement. The plaintiff-Corporation claims Rs. 7,28,600, as value of net shortfall of the timber.
4. It is the case of the plaintiff-Corporation that under Clause 7 of the contract agreement the Company is liable to make good the loss, caused to the Corporation. The Corporation made demand on the defendant-Company to make good the loss and pay the price of shortfall in the timber but without any response. The Corporation issued notices to the Company on various dates but the Company failed to settle the accounts,
5. The plaintiff-Corporation prays for a decree of Rs. 7,28,608 as principal amount (value of the shortfall in timber), Rs. 7.97,823 as interest from 31.5.1991 till the date of the filing of the suit, in all Rs. 15,26,431. The plaintiff-Corporation also claimed future interest @ 18% per annum from the date of the suit till the realisation of the decretal amount.
6. The defendant-Company resists the suit. The allegations are controverted.
7. Various preliminary objections are raised. The Company pleads that the suit is barred by the period of limitation and the plaint has not been verified by the competent person. The suit is liable to be dismissed on these grounds atone.
8. On merits, it is the case of the defendant-Company that the timber of floating was received in terms of the scants and not in terms of the volume of the scants. It is specifically denied by the defendant-Company that the launching list contained volume of the timber. According to the defendant company, the launching list was not prepared in the presence of the defendant nor it was so required to be prepared as the rate settled with the defendant-Company was for per piece and not volume of the timber. It is denied that volume of the timber handed over to the defendant-Company was 599.444 cubic metres. According to the Company, the Ghal was launched in March 1991 and the timber was delivered to the Corporation in the month of May 1991 at Deori Khad side depot. The floating work, undertaken by the defendant-Company, as per the contract agreement was confined only to the Telescopic and Wet Slide work over adistance of about 8 kms. in a small stream. The defendant-Company was given receipt acknowledging delivery of 28195 scants by the officials of the Corporation. The plaintiff, it is alleged, still owes Rs. 3.91,910 to the defendant-Company, as balance of floating of the timber, as per contract agreement. The defendant company also claimed refund of the security amount of Rs. 25,000. The defendant-Company maintains that the entire timber, which was entrusted to the defendant-Company for floating, was delivered to the officials of the Corporation at Deori Road side in May/June, 1991 without any shortfall.
9. On the pleadings of the parties, the following issues were settled:
1. Whether the plaint has been verified by the competent person, if not, its
effect? --OPP
2. Whether the suit, is within the period of limitation? --OPP
3. Whether 28195 Nos. of scants of different sizes of the volume of 2599,444 cubic
metres were handed over to the defendant on 20.3.1991,
as alleged? --OPP
4. Whether the defendant handed over the converted timber to the plaintiff of
volume of 2439.340 cubic meters, as alleged? --OPP
5. Whether the defendant is liable to pay Rs. 7,28,608 on account of the value of
loss of the timber in the hands of defendant? --OPP
6. Whether the plaintiff is entitled to the interest, if so,
at what rate? --OPP
7. Whether the plaintiff is entitled to the special damages, if so, of what
amount? --OPP
8. Relief.
10. I have heard the learned Counsels for the parties. I have also been taken through the evidence on record. Suit of the plaintiff is liable to be decided on Issue No. 2 alone, therefore, I do not propose to give findings on other issues, as provided under Order 20 Rule 5 of the Code of Civil Procedure.
Findings on Issue No. 2 are:
11. It is admitted position that under the contract agreement, in terms of Clause 13, the work was to be completed by 31.5.1991. The time was stipulated to be essence of the contract agreement. Clause 13 of the contract agreement reads:
“13. The period of the work shall be from date of signing this Agreement to 31.5.1991 (date) and the time is the essence of the agreement.”
12. It is also not in dispute that the timber entrusted to the defendant Company for
floating was handed over to the officials of the Corporation, which was completed in the month of May 1991. It is so provided from the abstract of the entries relating to the Ghal of the defendant-Company, maintained by the Corporation in Form No. 7 (Ex. DW-4/A). The entry of the abstract shows that 28195 scants were received by the Corporation from the
defendant-Company. On completion of the float, the timber handed over to the Corporation was further despatched to its various depots from June 1991 to March 1992. Kundan Sharma (DW 4), Office Manager of the Forest Corporation, Kullu, proved the abstract (Ex. DW-4/
A) of the Register Form No. 7. He stated that the abstract is correct to the original entries of the register which was produced for inspection. Thus it is evident that the work in terms of the contract agreement, was completed in May 1991. The cause pf action, in the circumstances, and evidence discussed above, to recover the damages for short fall in timber,
accrued to the Corporation in May, 1991. The present suit was filed on 4.9.1997, that is, after
six years.
13. Under Article 55 of the Schedule of the Limitation Act, period of limitation of three years starts to run, for compensation for breach of any contract, when the contract is broken or (whether there are successive breaches), when the breach take place for which the suit is instituted. The contract was broken when the timber was not delivered in its entirety to the Corporation in May 1991. The short fall too was detected by the Corporation i.e. in May 1991. Thus, the suit was laid by the plaintiff-Corporation after the expiry of the period of limitation of three years. In any event, the Corporation was well aware of the shortfall in the volume of the timber at least on 15.6.1994 when the Corporation served notice on the defendant company informing that there was shortfall of 161.788 cubic metres of timber which was handed over to the Corporation by the defendant-Company after float in terms of the contract agreement. Now computing the period of limitation from this date the suit would be barred on 14.6.1997 whereas the present suit was laid on 4.9.1997.
14. In H. P. State forest Corporation and Ors. v. Achhar Singh and Ors., 2001(1) Shim.L.C. 206, on the similar facts, it was held that the period of limitation will start running from the date of completion of work. In that case, under the contract agreement, the work was required to be completed by 31.5.1987 and the timber was delivered to the plaintiffs somewhere in May 1988. In these circumstances, it was held that the limitation of three years will start running from May, 1988 whereas the suit was filed on 15.7.1992, after the expiry of the limitation of three years. Again in H.P. State Forest Corporation Ltd. and Anr. v. Shri Paras Ram and Anr., 2001(1) SLJ 486, noticing that the float work was to be completed before March 1986, it was held that the cause of action accrued to the plaintiff Corporation on 31.3.1986 on which date the work was to be completed and the period of limitation will start running from that date. In the present case, as discussed earlier too, suit is barred by the period of limitation. The issuers according decided.
In result, the suit of the plaintiff fails and is dismissed.
15. Taking into consideration the larger public interest, it will be appropriate for the plaintiff-Corporation, which is a Government Company, to recover the loss caused to the Corporation from the erring official(s)/officer(s), who were found responsible, after due inquiry.