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S.B.Civil First Appeal No.121/1982
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. CIVIL FIRST APPEAL NO. 121/1982
Appellant :
Rajasthan Rajya Sahakari UP-bhokta
Sangh Ltd, 100 Subhash Marg
C- Scheme, Jaipur
VERSUS
Respondents :
(1) M/s Banshi lal Chattar lal Mundra
Udaipur.
(2) Udaipur Sahkari Up-bhokta Thok Bhandar Ltd
Date of Judgment : 31st March, 2009
PRESENT
HON'BLE MR. C.M. TOTLA, J.
Mr. B.K. Bhatnagar for the appellant.
Mr. D.R. Bhandari for the respondent.
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BY THE COURT :-
Against the appellant, decreed for Rs. 68900/- plus interest
at the rate of 6% is respondent’s suit for damages on account of breach of
contract of sale of grain.
Respondent plaintiff instituted a suit in July, 1974 averring
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that (i) defendants are co-operative societies and No.2 agent of
respondent no. 2 (ii) in October, 1973 D1 had a good quantity of maize-
3200 bags of which sold by D1 through D2 to plaintiff as per letter dated
24.10.73 (iii) rate was Rs. 101/- per quintal including tax and goods to be
delivered at Udaipur within 15 days (iv) advance at the rate of Rs. 10/- per
bag liable to be confiscated in case of breach (v) plaintiff deposited
advance at the rate of Rs. 10 per bag i.e. Rs. 32000/- on 27.10.73 and
was ready to take goods (vi) goods not delivered and defendant vide letter
dated 02.11.73 enclosing cheque of Rs. 32000/- as re-payment of
advance informed that D1 has communicated not to deliver (vii) on
5.11.73 by telegram again demanded goods (viii) cheque of Rs. 32,000/-
was handed over to an employee at plaintiff’s shop on these days (ix)
plaintiff by several means informed that payment of refund cheque is not
taken and repeatedly requesting made every effort for same but goods
not delivered. Averred that subsequent to this agreement on 24.10.73,
price of goods (of maize) continued to increase and was Rs. 115/- on 1st
2nd and 3rd November, Rs. 128/- on November 4th and 7th, Rs. 130/- on 6th,
Rs. 127/- on 8 & 9and on November 11 to November 15th, Rs. 135/-
which
rose to Rs. 142/- by mid December and by the date of institution of suit
Rs. 165/-. Pleading that the goods were to be delivered and taken within
15 days i.e. by 8th of November, so though on this date rate was much
above but damages claimed at the rate of Rs. 122/- per quintal adjusting
tax etc comes to Rs. 63968/-. Also claimed that re-payment of advance
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taken only on November, 12 and interest not less than Rs. 32/-. Stated
that notices under Section 143 of Co-operative Societies Act dated
04.12.73 delivered on 14.12.73 but no reply or payment, so the suit is
instituted.
Appellant defendant no.1 in their written statement averred
that (i) D1 had 3200 bags of maize and apprehension was of fall in price
in October, so as per directions of the State Government, possibility of
selling same in open market explored (ii) agreement with P was only for
distribution of grain which was to be under supervision of D1 and it was
not a sale to plaintiff (iii) P knew that grain is not for commercial purpose
and plaintiff was knowing that agreement can be over ruled by
Government or District Supply Officer. Appellant claimed that (i) District
Supply Officer, Udaipur as per their letter dated 31.10.73 superseded this
deal so cheque of earnest money returned (ii) the deal i.e to say the
contract was always subject to approval of Commissioner (Civil Supply)
and District Supply Officer and as the same not approved by them, the
contract was never concluded (iii) contract stood rescinded on 1.11.73 so
basis for damages, if any, can only be 01.11.73. Defendant no.2 the
appellant further averred that (a) plaintiff was no more than a agent of
appellant for distribution of this grain (b) as per provisions of Section 75
of the Co-operative Societies Act, the Court has no jurisdiction (c) the
contract if any is and was against public policy (d) the maize could not
have been supplied in violation of direction of Supply Officer – claimed
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that if plaintiff had any apprehension of damages, same should have been
taken care on 01.11.73.
Defendant no.2, the R2 averred in pleadings that (i) D2 had
no right and did not sale (ii) no contract of D2 with P (iii) P did not fulfil
terms of contract by 27.10.73 (iv) direction of Government and orders of
Supply Officer prohibiting disposal and (v) State Government necessary
party.
Following issues were framed :-
“(1) Is the plaintiff entitled to get
Rs.64000/- as damages ?
(2) Was it a binding agreement
for sale between the plaintiff and the
defendant No.2 ? If so, defendant No.2
is also liable for its breach ?
(3) Does the order of D.S.O.
Excuse the non-performance by the
defendant ? And what is its effect ?
(4) Was the transaction a mere
bailment for distribution as per
Government instructions ? And as such
defendants are not liable for breach ?
(5) Was the agreement against
public policy and hence void ?
(6) If it is held that such contract
was not of the Government then such
transaction entered into comes in the
business of co-operative society and as
such this court has no jurisdiction to
hear the suit ?
(7) As the date of breach is
1.11.73 only the plaintiff can in no
circumstances get damages at the rate
of maize prevalent on subsequent
dates ?
(8) Is plaintiff entitled to get
Rs.49000 as interest on a sum of
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Rs.32000/- withheld by the Defendants.
(9) Relief.”
On behalf of plaintiff examined are five witnesses and on
behalf of defendants three.
In course of pendency of this appeal, part B,C & D of the
record of trial court weeded out and for re-construction, photo copies of
the available documents are submitted which finds mention in orders
dated 03.07.2008 and 10.02.2009. Neither side had any objection for
considering these as originally produced.
Learned Judge deciding issue No.1 in favour of plaintiff –
No. 3,4,5,6 & 7 against defendant no.1, no. 2 against plaintiff and no.8
in favour of plaintiff awarded decree for Rs. 68,900 with interest from
11.07.74in favour of plaintiff R1.
Learned counsel for the appellant argued that (1) the Court
at Udaipur had no jurisdiction and issue for it not framed, though raised
was plea. (2) Findings on all the issues and very particularly on issues No.
3 and 5 are totally erroneous. (3) The goods were grain – an essential
commodity governed by orders of the authorities under the Essential
Commodities Act and order of District Supply Officer (DSO) for prohibiting
and restraining any such sale or disposal of grain. (4) The deal to the
knowledge of plaintiff was subject to approval by Government – the
Government by order dated 24.10.73 prohibited such deals – appellant
was not free to deal with maize – such dealing was against public policy –
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and DSO order prohibiting it. (5) Suit prescribed by Section 75 of the Co-
operative Societies Act. For appellant also contended that the State
Government is a necessary party and appellant prevented by lawful orders
of the authorities from fulfilling contract. Lastly argued that amount of
earnest money was refunded by cheque on 1.11.73 and appellant
disclosed inability to deliver the goods so if any breach of contract
occurred, it occurred only on 1.11.73, so the date of termination of
contract is 1.11.73 and loss incurred, if any, is to be computed as per this
date.
Learned counsel for respondent No.1 submitted that (1) no
basis of disputing jurisdiction. (2) Provisions of Co-operative Societies Act
do not bar such suit. (3) Sale specifically made after obtaining permission
of the State Government. (4) DSO had no right to prohibit sale and
delivery of goods. (5) Contract not rescinded at least not finally rescinded
on 1.11.73 and was in force upto 8.11.73. Submitted that findings of the
learned trial Judge are sound one based on sound discussion of the
material and inference as per facts and law applicable.
Thoughtfully considered rival arguments, perused record and
also the judgment impugned.
The main thrust of the appellant’s argument is based on
orders of the State Government and of the DSO. Deposition on record is of
the then DSO Shri Rameshwar Dayal D. W. 2, the then General Manager
(GM) DW 1 and Assistant Accounts Officer D3 (AAO) of appellant. In
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cross-examination, DW 2 states that the Supply Officer may be having
authority to issue such an order. Broadly speaking, these witnesses have
deposed as per the documents which are on record.
Ex.2 is the agreement entered into between the parties
which is of 24.10.73 as per which 3200 bags of maize agreed to be sold
at the rate of 101 per quintal – sales tax extra – advance at Rs.10/- per
bag payable by 29.10.73 and goods to be delivered within 15 days-to be
removed in this period, otherwise advance to be forfeited. Witness D3
that is appellant DW 3 has admitted in evidence documents Exs. 18, 20,
Exs. A-1, A-2 to A-6 and other documents also do not seem to have been
disputed.
Ex.A-4 letter of 30.10.73 by appellant’s G.M. to the Food
Commissioner states that 3200 bags lying at Udaipur are old and copy of
contract already sent but the supply officer is not permitting delivery of
maize who may be immediately asked to permit. Noting Ex.A-5 shows that
accounts officer on 2.11.73 was telephonically directed to stop sale –
Udaipur, if not already sold who from Jaipur, telephonic directions,
directed Udaipur not to do because of the orders of the Food Department.
Order of supply officer Ex.A-6 dated 31/10/73 directs that disposal to be
made after order of that office. As per letter Ex.18, by appellant’s G.M. to
Commissioner Supplies states that consequential to Food Department
endorsement dated 10.10.73 allowing arrangement of free sale of maize
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as declining of price of maize, a package deal for entire maize lying at
Udaipur is made by contract dated 24.10.73, but subsequently, is this
order of DSO, Udaipur but no such directions at other places so clear
instructions may be to the DSO. The Food Commissioner vide letter dated
16.11.73 Ex.19 mentioning permission of such sale on 3.10.73 and
subsequent above development asked the Collector to look into and
reconsider the matter. The G.M. of appellant vide letter dated 27.11.73
Ex.20 to Food Commissioner mentioned about all this and earlier
correspondence asked to do needful by asking concerned so in order to
avoid possible losses.
The letter Ex.18 specific mention of disposal allowed in this
manner on 10.10.73 and this position is not controverted anywhere and
specifically accepted is in the oral evidence. Subsequently, even the Food
Commissioner asked the authorities to look and reconsider the matter
regarding order of DSO. It is not disputed that Rajasthan Food Grains
(Prevention of Holding) Act, 1973 promulgated under E.C. Act was in force
at that time, but the learned trial Court, extensively dealing with the
matter, found that the DSO had no authority to issue any such order.
Further as above, the Food Commissioner-cum-Secretary, Food and
Supplies Department in his letter too has mentioned about it. Thus,
minimum at least, it seems that concerned relevant higher authorities did
not endorse the order of supply officer – any how highly diminished is
significance of the order considering permission of Government dated
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10.10.73 as mentioned above. Learned trial Judge, exhaustively dealing
with the question, has arrived at conclusions that appellant on excuse of
this order, could not have declined delivery of goods. The learned Judge
also concluded that Ex.A-6 not under valid authority.
Second contention is regarding as to when the contract
rescinded – finally rescinded – as per agreement goods the maize was to
be delivered within 15 days of 24.10.73, that is by upto 8.11.73. Though
the amount of advance Rs.32,000/- paid back on 1.11.73, but this by itself
can hardly be said to be conclusive determination of agreement.
Subsequent communication as above clearly discloses inclination of
appellant to honour the agreement. Though the appellants could have
asked for picking up the goods any day after 29.10.73 when advance was
paid. Even after return of advance, the appellants could have very well
asked and insisted upto 8.11.73 defendant to pick the goods. In the
circumstances, the agreement continued to be valid and not rescinded
upto 8.11.73 and amount of damages, in absence of specific reason,
determinable as on 8.11.73. Proved by the evidence is that on 8.11.73,
rate of maize 127 quintal and allowed is as per rate of Rs.122 as sought
by the plaintiff. From the evidence, it appears that on November 3rd rate
was Rs.121 and after Sunday on 5.11.73 Rs.127 and then in ascending
order, as such, this rate Rs.122 some what appears as per on November
3rd to November 5th – agreement was for rate of Rs.101, so calculated
damages of Rs.63968 is correct one.
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The agreement entered into at Udaipur and goods too were
to be delivered there, so contention regarding jurisdiction finds no
strength.
Lastly argument of non-maintainability as per provisions of
Section 75 of the Act. A plain reading of Section 75 will clear that
provisions are not applicable for the matter like this suit pertains to, so
this argument too, without force.
For the above reasons, the appeal being devoid of merit
deserves to be rejected. The appeal is dismissed. Costs of appeal made
easy.
(C. M. TOTLA), J.
bjsh/scd