JUDGMENT
Prabuddha Sankar Banerjee, J.
1. This is a suit by the plaintiff namely Patel Nagar Minerals Industries Pvt. Ltd. against the defendant Hindusthan Paper Corporation Ltd. for realisation of outstanding dues to the tune of Rs. 12,41,074/- together with interim interest and interest upon judgment.
2. The fact leading to filing of the suit may be summed up thus:
That the plaintiff is engaged in the business of manufacturing and selling diverse types of mineral and chemicals including china clay. The defendant is engaged in the business, inter alia, of manufacturing and selling of diverse type of papers.
3. On the basis of an agreement dated 6th June 2003 entered into between the plaintiff and the defendant, the plaintiff agreed to sell 1665 MT of china clay to the defendant. The terms & conditions of the said agreement will appear from a letter dated 13th June 2003, copy of which was annexed with the plaint.
4. On the basis of supply of 1665 MT of china clay to the defendant by the plaintiff, the plaintiff raised invoice being invoice No. 2197 dated 14.1.2005. The plaintiff annexed the delivery challans, railway receipt and wagon number along with the invoice.
5. The defendant duly received the invoice but did not raise any objection thereto. It is the case of the plaintiff that goods were duly utilised by the defendant. It is the further case of the plaintiff that the defendant made payment of Rs. 24,38,576/- on 8th July 2005 and as such there was a balance of Rs. 12,41,074/- as per the invoice/bill raised by the plaintiff.
6. Accordingly, the plaintiff sent demand notices and in spite of receiving the same, the defendant did not pay the said outstanding amount. On 14.11.2005 the defendant wrote a letter to the plaintiff stating that the sum of Rs. 24,38,576/- was paid by the defendant to the plaintiff towards full and final settlement of the aforesaid invoice. In the said letter the defendant raised question regarding quality of the goods sent.
7. By a letter dated 13.2.2006, the plaintiff through its Advocate demanded the outstanding dues of Rs. 12,41,074/- from the defendant together with interest @15% per annum. The defendant by their letter dated 3rd March 2006 denied that any such amount is outstanding. It is the case of the plaintiff that the goods which were duly delivered to the defendant were consumed by the defendant without raising any dispute regarding its quality and as such the plaintiff is entitled to get the outstanding balance of Rs. 12,41,074/- together with interest. As such the plaintiff filed the suit with prayer as mentioned in the prayer portion of the plaint.
8. The defendant contested the suit by filing written statement wherein the allegations made in the plaint against the defendants are denied. The defendant took the specific plea that the plaintiff was a regular supplier of china clay powder, which is required by the defendant for production of paper under various contracts entered into by and between the parties from time to time. It is the case of the defendant that one of the conditions in the agreement was that brightness of the china clay should not be less than 81%. In case it was found that brightness level was less than 85%, penalty would be imposed as per rate provided in the agreement. On examination of the quality of the goods it was detected that it was below the agreed percentage and as such the payment was made after adjusting the deduction towards penalty.
9. It is the specific case of the defendant that out of 1665 MT of china clay supplied by the plaintiff on the basis of contract dated 6th June 2003 it was detected on examination that brightness level in 1498.5 MT was below the acceptable limit of 81%. The defendant took the specific plea that test report in this regard was duly received by the plaintiff from the defendant and the defendant thereafter accepted the materials by imposing penalty. It is the further case of the defendant that the sum of Rs. 24,38,576/- was paid to the defendant towards full and final settlement of the plaintiffs invoice No. 2198 dated 14th January 2005. The defendant took the specific plea that no amount whatsoever is payable by the defendant to the plaintiff. The defendant denied the allegation that the goods covered by invoice No. 2197 dated 14.1.2005 was received by the defendant without raising any objection.
10. It is the specific case of the defendant that they have given reply to the plaintiffs letter dated 26.9.2005, 21.10.2005 and 8.11.2005 by their letter dated 14.11.2005.
11. It is the specific case of the defendant that they deducted the sum of Rs. 12,41,074/- legally as per terms and conditions of the agreement. The defendant prayed for dismissal of the case.
12. Upon pleading of the parties, the following issues were framed by the Court.
i) Whether the plaintiff is entitled to a Decree for Rs. 12,41,074/- and interest thereon as claimed in the plaint in terms of agreement between the parties?
ii) Whether the defendant is entitled to impose any penalty in terms of the agreement as alleged in the written statement?
iii) To what relief or reliefs, if any, is the plaintiff entitled?
13. In order to prove the case, one witness was examined on behalf of the plaintiff. The defendant also produced one witness. Documents were also marked on behalf of the parties.
14. It is to be mentioned here that there is no dispute that there was an agreement in between the parties on 6th June 2003 and the terms and conditions were mentioned in the letter dated 13th June 2003.
15. That was a letter written to the plaintiff by Senior Manager (Commercial) of the defendant company. It is also not disputed that on the basis of the said agreement, the plaintiff delivered 1665 MT of china clay to the defendant on 14.1.2005 and raised an invoice bearing No. 2197 dated 14th January 2005 for a sum of Rs. 36,79,650/-. It is to be mentioned further that there is also no dispute that out of that amount the defendant made payment to the tune of Rs. 24,38,576/- to the plaintiff on 8th July 2005.
16. It is clear from the plaint and on the basis of evidence on record that the plaintiff had to file the suit for realisation of the alleged balance amount of Rs. 12,41,074/-.
17. It is worth mentioning that the defendant did not challenge the amount mentioned in the invoice whose number has been mentioned but took the specific plea that the plaintiff is not entitled to get the amount as mentioned in the invoice as the brightness of china clay was below the approved percentage i.e. 81% and for which they deducted the sum of Rs. 12,41,074/- as penalty. The defendant took the specific plea that as per terms and conditions of the agreement, the defendant is entitled to deduct any amount as penalty and on the basis of the same the defendant deducted the said amount and paid Rs. 24,38,576/- towards full and final settlement.
18. Mr. S. Chowdhury, learned Counsel for the plaintiff challenged the pleas of the defendant mainly on the ground that as the defendant consumed/utilised the entire goods without raising any objection, they are duty bound to pay the amount as mentioned in the invoice in question. It was his further contention that the defendant cannot impose any penalty, as they did not inform the plaintiff regarding quality of the goods supplied. It was his further contention that the goods were never inspected in presence of the parties mainly the plaintiff and the report of the alleged test was never served upon the plaintiff. Mr. Chowdhury relied upon the terms and conditions of the agreement and on the basis of the same he submitted that it was the duty of the defendant to send the copy of the report to the defendant- but the documents which were produced and marked in this case will go to show that the report was never sent to the plaintiff. Mr. Chwodhury drew attention of the Court to the deposition of the defence witness who made contradictory statement regarding service of report upon the plaintiff. He specially drew the attention of the Court to the evidence given by the defence witness wherein he stated that the report was received by one Mr. Roy from the Kachar Mill though subsequently he changed his version and stated that report was received by the plaintiff from the Calcutta office of the plaintiff. It was the contention of Mr. Chowdhury that there is no document wherefrom it can be seen that the report of the examination of the china clay in question was ever sent to the office of the plaintiff.
19. In view of the same, Mr. Chowdhury submitted that the defendant consumed the goods in question without raising any question regarding its quality and as such the plaintiff is entitled to get the entire amount as raised in the invoice in question.
20. The said pleas were strongly opposed by Mr. Gupta, learned Counsel for the defendant who took the specific plea that one Mr. Narayan Roy who executed the agreement on behalf of the plaintiff visited Kachar Paper Mill on several occasions and he was served with the report of the examination of the goods in question. Mr. Gupta submitted further that the defendant did favour to the plaintiff by paying Rs. 24,38,576/- as defendant was entitled to deduct more amount as penalty as per agreement. This plea was taken by Mr. Gupta on the ground that brightness of the china clay was below 81% and as such the defendant had the option to reject the goods totaling to 1498.5 MT. In other words, Mr. Gupta contended that if the said quantity of the goods was not consumed by the defendant, the plaintiff would have to pay enormous charges towards freight for bringing those material from Kachar to its factory at Patel Nagar.
21. Mr. Gupta, learned Counsel for the defendant argued further that if the goods were removed from Kachar to Birbhum, the plaintiff would have to pay Rs. 15.5 lacs as freight charges. However, by deducting a sum of Rs. 12,41,074/the defendant, in fact, saved the interest of the plaintiff.
22. I have already stated that the agreement, which was entered into in between the parties on the date as mentioned earlier and the terms and conditions of the said agreement which were mentioned in the subsequent letter are not disputed. At the same time, it is also not in dispute that 1665 MT of china clay was delivered to the defendant by the plaintiff on 14.1.2005. It is the specific case of the defendant that out of that quantity 1498.5 MT was found to be below 81% of brightness.
23. The defendant took the specific plea that for whitening the said brightness, they had to incur additional cost for purchasing whitening powder and Hydrogen Peroxide, cost of which was deducted from the amount as mentioned in the invoice.
24. Mr. Gupta in course of his strenuous argument took the specific plea that as the quality of goods delivered was not as per agreed quality, joint inspection was held and subsequently test was held.
25. Mr. Gupta took the specific plea that joint inspection was held in presence of one Mr. N. C. Roy who, however, was not present when the entire inspection was done. Mr. Gupta also took the specific plea that report of the test was duly received by Mr. N. C. Roy during his visit to Kachar Mill. This plea was taken by Mr. Gupta on the basis of entries made in the register maintained by CRPF at the gate of the defendant mill. On the basis of entries concerning the signature and initial by N. C. Roy which was duly exhibited, Mr. Gupta contended that the said entries will prove that N. C. Roy duly visited the mill at the time of joint inspection and thereafter received the copy of the report.
26. The said pleas were strongly opposed by Mr. Chowdhury who contended that the entries in the register which has been produced by the defendant is to be considered by the Court with grain of salt. He drew attention of the Court to the entries made in the register specially exhibit-6 series. On the basis of the same Mr. Chowdhury drew the attention of the Court to deposition of the defendant witness (cross examination) and on the basis of the same he contended that the entry being Sl. No. 20 is the last entry on the said page. Mr. Chowdhury contends further that the witness admitted that generally separate entries are started for each separate date. In the instant case he drew attention to entry No. 20 which is dated 2.2.2005 but on the next page the number has been penned through and number 01 has been mentioned against date 2.2.2005.
27. On the basis of the same Mr. Chowdhury submits that it is apparent that entries dated 2.2.2005 which starts after Sl. No. 20 was intially marked as Sl. No. 21, 22, 23 which were subsequently changed to 01, 02, 03. Mr. Chowdhury further drew attention of the Court to exhibit 7 i.e. Sl. No. 6 dated 5.2.2005 and on the basis of the same he contended that against the column issuing authority name of N. Bhattacharya has been penned through and subsequently the name of Dr. Best, Dy. GM (TS) was mentioned.
28. Mr. Chowdhury on the basis of the said entries contended that the said entries will not reflect that copy of the test report was ever handed over to Mr. N.C. Roy as alleged by the defendant. Mr. Chowdhury further contended that initial plea of the defendant that report was collected by Mr. N.C. Roy at Kachar was subsequently changed and a new plea was taken that the said report was collected from Kolkata office of the defendant.
29. Mr. Chowdhury further contended that in support of earlier plea and also the subsequent plea as taken by the defendant, no cogent evidence could be produced to substantiate the said pleas.
30. In this regard Mr. Chowdhury relied upon the document which was Annexure A to the affidavit-in-reply. The said document will go to show that previously the report was sent to the office of the plaintiff with a forwarding letter. On the basis of the same, Mr. Chowdhury contended that the same was done as per clause of the agreement, which clearly provides that the test report is to be forwarded to the office of the plaintiff.
31. On the basis of evidence and materials on record Mr. Chowdhury contended that in the instant case, the defendant not only failed to comply with the terms and conditions of the contract but took a plea which is apparently false that the report was collected by Mr. N.C. Roy. Mr. Chowdhury also challenged the said plea on the ground that though the defendant initially took the plea that the test report was collected from Kachar by N. C. Roy, subsequently modified the said plea by taking a fresh plea that the report was collected by the plaintiff from the Kolkata office of the defendant.
32. It is clear from the terms and conditions of the agreement that 90% of the payment is to be made within 45 days from the date of delivery of the goods. It is also clear from the terms and conditions that the report is to be submitted within 45 days from the date of delivery of the goods if the quality is challenged.
33. On the basis of the same Mr. Chowdhury contended that in the instant case the said terms and conditions of the agreement were never complied with by the defendant and as such, there should be automatic presumption that the defendant accepted the goods and subsequently consumed the same without raising any objection. As such the plaintiff is entitled to get the full amount as raised in the invoice.
34. It is to be mentioned that at the time of haring Mr. Gupta took the specific plea that the signature of N.C. Roy which are appearing in the register is a blow to the plaintiffs case that the report was never received by the plaintiff. Mr. Gupta further contended that as the said N.C. Roy (Narayan Chandra Roy) was not examined as witness for the plaintiff, the presumption should be that the said N. C. Roy received the report and as such he was afraid of appearing before the Court.
35. The said plea cannot be accepted. On the basis of the evidence and materials on record this Court is of clear opinion that the defendant miserably failed to make out the case that copy of the report was ever served upon the plaintiff.
36. Mr. Chowdhury in course of his argument drew attention of the Court to exhibit-2 i.e. the goods receipt voucher and on the basis of the same he contended that the defendants case that penalty was imposed is to be disbelieved. On perusal of exhibit-2 i.e. goods receipt cum inspection voucher, it is clear that 1495.5 MT was rejected due to low brightness which was below 81% and notification of above rejection was under process.
37. On the basis of the same, Mr. Chowdhury contended that even in that voucher which is dated 11th March 2005 it has not been mentioned that the defendant would consume the goods after imposing penalty. The said document also does not disclose that copy of the test report was ever sent and received by the plaintiff. Mr. Chowdhury further drew attention of the Court that even in the written statement the case of rejection has not been mentioned.
38. There is also discrepancy about the date of inspection of the goods. Whereas exhibit-2 goes to show that the inspection was held on 11th March 2005, plea was raised that the inspection report was made on 9th February 2005.
39. It is therefore, clear that the defendant was not sure about the actual date of test of the goods. Consequently the question of sending the report of the test is to be taken with grain of salt.
40. There is no dispute that as per terms and conditions of the agreement, 90% of the billed amount is to be paid within 45 days and the option was with the defendant to impose penalty if it is found that quality of the goods delivered was not as per the specification.
41. It is also clear from the terms and conditions of the agreement of the contract that report is to be given to the plaintiff within 45 days from the date of delivery of the goods if there is any inspection and test.
42. Admittedly the amount of Rs. 24,38,576/- was paid after the stipulated period of 45 days. The Court also held that the defendant miserably failed to make out the case that copy of the report was sent to the plaintiff like previous years.
43. Mr. Gupta, learned Counsel for the defendant however, raised objection on the ground that the plaintiff did not raise any objection regarding late paymentneither claimed the amount immediately after the stipulated period was over.
44. It was further contended on behalf of the defendant that the letter by which the plaintiff claimed the alleged balance amount was sent long after the amount of Rs. 24,38,576/- was accepted by the plaintiff.
45. The said plea under no circumstances can be accepted. The defendant was duty bound to pay 90% of the amount within 45 days and in the event of non payment of the same, the liability was with the defendant to pay the said amount. They cannot take the plea that the plaintiff is estopped from getting the balance amount as they were late in claiming the said amount. It is clear from the documents on record, which were duly marked that the plaintiff sent many letters demanding balance amount of Rs. 12,41,074/-. Though the same were duly received by the defendant, they sent a belated reply wherein they took the plea that they are not supposed to pay the said amount as they have imposed penalty.
46. Mr. Chowdhury learned Counsel for the plaintiff contended that it was the duty of the defendant to cross examine the plaintiffs witness to substantitate the pleas taken in the written statement. As the said witness was not cross examined on material points, the defendant cannot claim that the plaintiffs case is to be disbelieved. In other words, it was the contention of Mr. Chowdhury that though the defendant got the opportunity to cross examine the plaintiffs witness with respect to the plea as taken in the written statement, that option was not utilised by the defendant and as such the defendants plea should be ignored.
47. In support of his contention Mr. Chowdhury relied upon the case in between A.E.G Carapiet v. A.Y. Derderian . Mr. Chowdhury relied upon paragraph 10 of the said judgment, which runs as follows:
The law is clear on the subject. Wherever the opponent has declined to avail himself of the opportunity to put his essential and material case in cross-examination, it must follow that he believed that the testimony given could not be disputed at all. It is wrong to think that this is merely a technical rule of evidence. It is a rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice, because it gives notice to the other side of the actual case that is going to be made when the turn of the party on whose behalf the cross examination is being made comes to give and lead evidence by producing witnesses. It has been stated on high authority of the House of Lords that this much a counsel is bound to do when cross-examination that he must put to each of his opponents witnesses in turn, so much of his own case as concerns that particular witness or in which that witness had any share. If he asks no question with regard to this, then he must be taken to accept the plaintiffs account in its entirety. Such failure leads to miscarriage of justice, first by springing surprise upon the party when he has finished the evidence of his witnesses and when he has no further chance to meet the new case made which was never put and secondly, because such subsequent testimony has no chance of being tested and corroborated.
48. I have gone through the said judgment. In this case I have already stated that the defendant changed his initial plea that one Mr. Roy received the report from Kachar Mill to subsequent plea that it was received by the plaintiff from the defendants Calcutta office. The said plea was not put to the witness for the plaintiff in cross-examination.
49. On the basis of evidence and materials on record, it is crystal clear that the plaintiff has been able to make out its case against the defendant and as such they are entitled to get the decree as prayed for.
50. All these issues are answered in favour of the plaintiff.
51. Accordingly, the suit is decreed in terms of prayer (a) & (b).
52. The amount which has been deposited as per order of Hon’ble Mr. Justice Ashim Banerjee and is utilised in a fixed deposit account of a nationalised Bank, be given to the plaintiff. The amount along with the interest accrued thereto be given to the Advocate on Record of the plaintiff within 60 days from this order. The department is directed to draw up the decree as expeditiously as possible and preferably within one month from this date.
53. After passing of the order, learned Counsel for the defendant prays for staying operation of the order for two months. Heard learned Counsel for the plaintiff also.
54. As the amount in question is secured, let operation of the order be stayed for 30 days.
55. Urgent xerox certified copy of this order be given within 10 days from the date of this order to the parties on proper application.