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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.606/2005
Date of decision: 02nd December, 2008
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M/S PVR LTD ..... Appellant
Through : Mr. Harish Malhotra, Sr. Adv.
with Mr. Vipul Gupta, Adv.
versus
KEDAR NATH GUPTA ..... Respondent
Through : Mr. Y.P. Sharma, Adv.
CORAM :-
THE HON'BLE MR.JUSTICE PRADEEP NANDRAJOG
THE HON'BLE MR. JUSTICE J.R. MIDHA
1. Whether Reporters of Local papers may
be allowed to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be
reported in the Digest?
Pradeep Nandrajog, J. (Oral)
1. Heard learned counsel for the parties.
2. The issue is short and hence we shall pen down a brief
judgment more so for the reasons we are concurring with the
view taken by the Learned Trial Judge except on question of
interest.
3. Mr. Kedar Nath Gupta, the plaintiff filed a suit for
recovery of Rs.3,07,200/- together with pendent lite and
future interest @ 24% per annum.
4. Undisputed position was that Mr. Kedar Nath Gupta had
supplied refined coconut oil to the appellant and in respect
RFANo.606/2005 Page 1 of 6
thereof had raised 14 bills between 29.07.2000 to 21.10.2000.
Receipt of the goods under the bills and raising of the bill was
not a matter in issue. The total value of the bills, i.e., price of
the goods supplied as reflected in the bills was Rs.1,84,350/-.
5. Alleging that the appellant had failed to make payment
under the bills and had appropriated the goods which were
supplied under the goods, recovery of Rs.1,84,350/- +
Rs.1,20,650/- being pre-suit interest calculated @ 24% per
annum and Rs.2,200/- as the notice charges were the amount
claimed, totaling Rs.3,07,200/-.
6. Defence of the appellant was that as per the agreement,
the refine coconut oil to be supplied was of the brand
“Kamani” and that the goods supplied were not of the said
brand. That batch number/lot number, maximum retail price,
manufacturing details was not mentioned on the container in
which the refined coconut oil was packed. It was stated that
the billing price was exclusive being Rs.930/- per tin whereas
market price was between Rs.575/- to Rs.640/- per tin during
the relevant time.
7. Bills being admitted. Receipt thereof be admitted.
Goods listed in the bills being received being admitted, only
issue which required adjudication was whether the bills were
correctly raised.
8. Noting that there was no written order wherefrom price
of the goods could be gathered, Learned Trial Judge has
RFANo.606/2005 Page 2 of 6
pronounced the judgment on the conduct of the parties.
9. Learned Trial Judge has noted that the goods were
supplied on various dates between 29.07.2000 till 21.10.2000
and bills raised and that for the first time an issue pertaining
to the price was raised when the appellant wrote a letter on
15.02.2001 and that too after the respondent had pestered
the appellant for release of payment. Learned Trial Judge has
held that the contemporaneous conducted evidenced
appropriation of the goods without demur requiring an
inference to be drawn that the appellant had no grievance qua
the price at which the bills were raised since the issue of the
price was raised after nearly 6 months of the receipt of the
first lot of goods.
10. The result is that the suit has been decreed.
11. Conceding that there is no written contract evidencing
the price which was agreed between the parties, only
submission urged by learned counsel for the appellant is that
the newspaper cutting being extracts from the Economic
Times listing price of refined coconut oil was good evidence to
determine the price thereof.
12. Suffice would it be to state that for the same product,
depending upon the quality and purity; and pertaining to oil,
whether the same is double refined or single refined, price
variation do occur.
13. We take guidance from Section 42 of the Sale of Goods
RFANo.606/2005 Page 3 of 6
Act, 1930 which stipulates that a buyer is deemed to have
accept the goods if within a reasonable time he does not
intimate the rejection of the goods.
14. Pertaining to refined coconut oil, a reasonable time for
rejecting the good on price being not acceptable or quality
being not acceptable or packaging being not acceptable
certainly is not 6 months. What is reasonable time to reject
goods is a question of fact to be inferred from the surrounding
circumstances and the nature of the goods.
15. For example, banana which is highly perishable, would
require rejection within 2 – 3 days and for apples which have a
long shelf life, reasonable rejection time may be little more.
16. In the instant case, it has to be noted that the coconut
oil, which was supplied to the appellant, was used by the
appellant for manufacturing pop-corn at two of its PVR outlets.
The goods were consumed in house, meaning thereby, that if
there was any deficiency in the quality of the goods or there
was an issue on the price the same required intimation within
a reasonable period; which to our estimation should not
ordinarily exceeds 7 to 10 days.
17. A bill pertaining to a price needs to be questioned
forthwith and on the issue of price a reasonable time to
question the same should ordinarily not exceeds a week. It is
not in dispute that till 15.02.2001 appellant never raised any
issue on the price of the goods.
RFANo.606/2005 Page 4 of 6
18. On the issue of interest, learned counsel for the
appellant argues that there is no evidence that under any
contract the rate of interest was agreed @ 24% per annum.
Learned counsel for the respondent states that interest was
demanded as per the market price.
19. We have gone through the plaint. There are no
averments in the plaint as to on what basis interest has been
demanded @ 24% per annum.
20. Interest is governed by the Interest Act, 1978 which
stipulates three conditions on which interest can be awarded.
The first is the contractual agreed rate; second, on proof of
market custom or practice; lastly on proof of notice
demanding interest being served, @ offered by scheduled
bank on fixed deposits.
21. We find no evidence of market rate of interest being led
by the respondent. Admittedly, there is no contractual agreed
rate. Thus, the respondent has to fall back on the third
alternative, namely, interest offered by scheduled bank after
notice of demand claiming interest was served. The notices of
demand claiming interest is dated 11.03.2003. The
respondent would thus be entitled to interest with effect from
said date. Noting that banks offered interest on fixed deposit
at rates between 6.5% to 10% after 11.03.2003, we hold that
a reasonable interest to be granted would be @ 9% per
annum.
RFANo.606/2005 Page 5 of 6
22. The appeal stands disposed of by modifying the
impugned judgment and decree dated 13th May, 2005. Suit
filed by the respondent is decreed in sum of Rs.1,84,350/-
with interest @ 9% per annum w.e.f. 11.03.2003 till
realization.
23. The respondent would be entitled to proportionate cost
in the suit. There is no order as to costs in the appeal.
24. We note that the respondent has withdrawn the sum of
Rs.3 lakhs deposited by the appellant. We further note that
as per the judgment and decree passed by us today the
appellant would be entitled to refund. We note that the
respondent undertook to refund the amount, if liable to be
refunded, with interest @ 9% per annum. We thus hold that
the appellant would be entitled to restitution for the
differential amount with interest @ 9% per annum.
PRADEEP NANDRAJOG, J
J.R. MIDHA, J
DECEMBER 02, 2008
mk
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