IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 527 of 1994()
1. P P KUKILLAYA
... Petitioner
Vs
1. KERALA STATE ELECTRICITY BOARD
... Respondent
For Petitioner :SRI P K JOSE, SRI JOHNSON ABRAHAM
For Respondent :SRI P SANTHALINGAM
The Hon'ble MR. Justice PIUS C.KURIAKOSE
Dated :19/08/2008
O R D E R
PIUS C. KURIAKOSE,J.
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A.S.No.527 of 1994
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Dated: 19th August, 2008
JUDGMENT
The defendant in a suit filed by the respondent-K.S.E.B. is the
appellant and the appellant is aggrieved by the positive decree
passed by the learned Subordinate Judge in favour of the respondent.
2. Briefly stated the case of the respondent-plaintiff was that in
response to tenders invited by the plaintiff for supply of 50,000
meters of 20 mm PVC conduits, the appellant-defendant submitted
the lowest tender and the same was accordingly accepted and
purchase order was issued to the defendant. On the terms of the
purchase order, the defendant should have supplied 20,000 meters at
Aluva within 45 days of receipt of the order, 20,000 meters at
Kundara store within 75 days of the receipt of the order and the
remaining 10,000 meters at Kallai within 90 days of the receipt of the
order. The purchase order was accepted by the defendant who
executed necessary agreement in stamp paper in favour of the Chief
Engineer of the K.S.E.B. The agreed rate was Rs.135.41 per 100
meters inclusive of taxes. Contrary to the agreed terms the defendant
altogether supplied only 20,000 meters on three occasions. The third
occasion was 23.3.1977 when he supplied 10,250 meters. Thereafter
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the defendant defaulted supply causing huge loss to the plaintiff.
Successive demands in writing for supplying balance conduits where
of no avail and finally the defendant was informed that the contract
will be cancelled and alternative arrangements for purchase of
conduits will be made at the defendant’s risk and cost. The purchase
order was accordingly cancelled. Before the cancellation of the
purchase order issued to the defendant the plaintiff had invited
tenders for supply of 70,000 meters of 20 mm PVC conduits for other
purposes of the plaintiff and the lowest rate as per tenders received
in that case was at the rate of Rs.172/- per 100 meters received from
M/s.Trencos Ltd. 30,000 meters of conduits supplied by M/s.Trencos
Ltd. to the K.S.E.B. on 4.11.1977 was adjusted against balance 30
meters which were ought to have been supplied by the defendant
pursuant to the purchase order given to him. The difference price
comes to Rs.13,041/- and the suit was laid for recovering the above
amount with interest and cost.
3. The appellant-defendant filed written statement and
subsequently an additional written statement. The agreement for
supply of conduits was admitted. But it was contended that the
plaintiff never sustained any loss by reason of default in supply of
materials by the defendant. It was denied that the contractual
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obligations were violated by the defendant. It was contended that it is
the plaintiff who failed to fulfill the obligations in the contract by not
paying price for the goods supplied by the defendant. It was
contended that the suit claim is unsustainable since the plaintiff has
waived its rights under the contract by plaintiff’s conduct. It was also
contended that time was not essential regarding the contract of the
plaintiff and that since the defendant was ready and willing to supply
the agreed quantities of conduits, he is not liable to pay the
difference in price as claimed in the plaint. As regards the plaintiff’s
claim for adjusting the conduits supplied by M/s.Trencos Ltd. against
the conduits which were having supplied by the defendant, it is
contended that it is for the plaintiff to prove that claim.
4. The learned Subordinate Judge would formulate the following
issues for trial:
1. Whether the defendant performed his contractual obligation
relating to the agreement and purchase order No.T.A.36/Ele.4/76-77
P.P. (69) dated 1.12.76?
2. Whether the defendant accepted the purchase order and whether
the conditions in the purchase order are binding on the defendant?
3. Has the defendant supplied the agreed quantity? What is the
quantity supplied?
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4. Is the defendant a defaulter in satisfying the agreed conditions?
5. Is there any loss due to the non supply of the balance quantity by
the defendant caused to the Board? If so, what is the actual loss? Is
the plaintiff entitled to realise the loss as damages from the
defendant?
6. Has the defendant caused breach of contract? Is the defendant
liable for the breach?
7. Is the plaintiff entitled for interest?
8. Reliefs and costs.
Addl.9. Has the plaintiff relieved of its contractual obligations, and
was the plaintiff free to make alternate arrangements without
informing the defendant that the contract was cancelled?
10. Was time of the essence of the contract?
11. Was the defendant ready and willing to supply the required
quantity of PVC pipes?
In the first instance the suit was dismissed on the ground that actual
damages, if any, sustained by the plaintiff could not be ascertained
from the evidence which was available on record. Against that decree
the plaintiff preferred A.S.No.433 of 1982 and this court allowing
that appeal remanded the matter back to the court below for a de
novo consideration after affording sufficient opportunities. The
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evidence prior to the remand consisted of Ext.A1 and the oral
testimony of P.W.1 alone. After remand the plaintiff produced Exts.A2
to A10. After remand also the defendant did not adduce any counter
evidence. The learned Subordinate Judge on appreciating the
evidence answered issue No.2 in favour of the plaintiff and held that
the defendant had accepted the purchase order and that the
conditions of the purchase order are binding on the defendant. To
arrive at such a finding it was noticed by the court below that the
averments in the plaint to that effect had not been specifically denied.
Oral evidence of P.W.1 and documents Exts.A2 and A3 were also
relied on by the learned Subordinate Judge in the above context.
Issue No.3 was also answered in favour of the plaintiff finding that
the allegations regarding short supply by the defendant had not been
denied even, by the defendant. Issue Nos.1 and 4 and additional
issue No.10 were considered together by the learned Subordinate
Judge. The learned Judge noticed that supplies were received by the
plaintiff even after the expiry of the time specified in Ext.A2 purchase
order and held that time was not essence of the contract between the
parties. Referring to Section 55 of the Contract Act it was held that
nevertheless the plaintiff-promisee is entitled to compensation from
the defendant-promisor for the loss occasioned and further held that
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evidence was nil for substantiating the plea that the plaintiff has
waived its right to claim damages. Additional issue Nos.9 and 11 were
also considered together by the learned Subordinate Judge. It was
noticed that the averments in the plaint that despite several demands
by the plaintiff for supply of balance quantity of conduits, supplies
were not made by the defendant had not been denied. It was further
noticed that for vindicating the contention that the defendant became
constrained to stop the supply due to the failure of the plaintiff to
make payments for the supply already made, absolutely no evidence
had been adduced by the defendant. Clauses 9 and 13 of Ext.A1
agreement were relied on by the learned Subordinate Judge to hold
that the plaintiff was justified in making alternative arrangements for
purchase of the quantity not supplied by the defendant. Issues were
answered accordingly. Issue Nos.5 and 6 were also considered by the
learned Subordinate Judge. Following the findings already entered on
the earlier issues and noticing that there was absolutely no counter
evidence on the side of the defendant to the evidence adduced by the
plaintiff regarding the damages actually sustained, the learned
Subordinate Judge answered these issues also in favour of the
plaintiff. Issue No.7 dealing with the plaintiff’s claim for interest on
the compensation amount was also answered holding that the claim
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at the rate of 6% is perfectly justified.
5. I have heard the submissions of Smt.Tessy Jose, counsel for
the appellant and those of Mr.C.K.Karunakaran, learned Standing
Counsel for the K.S.E.B.
6. Smt.Tessy Jose would argue that the very purpose of the
order of remand passed by this court in A.S.No.433/1982 was to
enable the respondent-plaintiff to adduce evidence to show that the
defendant had been informed that the purchase order will be
cancelled if supplies are not made within the stipulated time. Though
after remand Exts.A2 to A10 were produced, the letter dated
26.9.1977 by which the plaintiff claims to have informed the
defendant that the purchase order is liable to be cancelled was not
produced. She argued that even the letter dated 5.12.1977 through
which the purchase order was cancelled was not produced. Since the
evidence produced after remand does not serve the purpose of the
remand order, the learned Subordinate Judge was not justified in
reversing the earlier judgment and in decreeing the suit. She also
argued that preponderance of probabilities was in favour of the
defence case and therefore the plaintiff should have been non-suited.
7. Mr.C.K.Karunakaran, Standing Counsel for the K.S.E.B.
would resist the submissions of Smt.Tessy Jose. He would support the
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judgment of the court below on the reasons stated therein.
8. I have considered the rival submissions and I have
reappreciated the entire evidence adduced by the parties before the
court below. I am not impressed by the submission of the learned
counsel for the appellant that the non-production of the letter dated
26.9.1977 informing the defendant that the intention of the plaintiff
to cancel the purchase order and the letter of cancellation dated
5.12.1977 amounts to fatal lacunae in the evidence of the plaintiff.
Paragraphs 9, 11 and 12 of the plaint are the relevant paragraphs
and the same is quoted below:
“9. The defendant was requested again by letters dated
16.5.77, 1.7.77, 26.9.77 & 3.11.1977 to complete the supply as
agreed to. The plaintiff-Board was urgently in need of the conductor.
11. Finally the Chief Engineer on behalf of the Plaintiff-Board on
3.11.1977 sent the final notice to the defendant informing the
defendant that if the defendant fails to furnish the revised schedule
for effecting the supplies within 7 days, the purchase order will be
cancelled at the defendant’s risk and cost. In the letter dated
26.9.1977 also it was made clear to the defendant that the order is
liable to be cancelled at their risk and cost if they fail to complete the
balance supply of 30,000 Mts. within 15 days. The defendant-firm did
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not even reply to the final notice dated 3.11.1977.
12. So the Purchase Order was cancelled by letter dated
5.12.1977. The defendant-firm neither furnished a clear indication of
the schedule of delivery of the balance quantity of Metres, nor even
replied to the repeated reminders requesting to effect the supply of
the balance. So the Board was constrained to cancel the order at the
defendant’s risk and cost. The conduct of the defendant-Firm is a
clear violation of the contractual obligations thereby causing huge
loss to the plaintiff for which the defendant alone is responsible and
liable.”
These averments are answered by the defendant in paragraphs 6, 8
and 9 and the same is quoted below:
“6. The statement in para 9 of the plaint that the plaintiff Board
was urgently in need of the conductor is not admitted.
8. In reply to the allegations made in para 11 of the plaint, it is
submitted that the plaintiff Board has waived its right under the
contract by its conduct and for that reason, the claim made in the
plaint is not sustainable.
9. The statement in para 12 of the plaint to the effect that the
plaintiff Board has incurred huge loss due to the non supply of the
material is denied being not true.”
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It is thus seen that the plaintiff’s averment regarding issuance of a
notice informing the defendant of the intention to cancel the purchase
order and actual cancellation of the purchase order have not been
denied by the defendant. It is one of the fundamental rules of
pleadings that what is not specifically denied can be deemed to be
admitted and admitted facts are not expected to be proved.
9. The result of the above discussion is that the challenge
against the judgment and decree fails and the appeal will stand
dismissed. However, having regard to the special circumstances
which attend on this case, there will be a direction that if the principal
amount due under the decree is paid by the appellant to the
respondent on or before 30.11.2008, the respondent will receive such
payment in full and final settlement of all its claims. No costs.
srd PIUS C.KURIAKOSE, JUDGE