JUDGMENT
Prabha Sridevan, J.
1. The defendant is the appellant. The plaint averments are as follows: —
The defendant was appointed as the Procurement-cum-Hulling Agent for the plaintiff Corporation for 1984 ‘Kuruvai’ Season. The appointment order is dated 27-7-1984. The defendant deposited a sum of Rs. 10,000/- as security deposit on 25-7-1984. An agreement was entered into between the parties on 26-7-1984. To ensure safe custody of the paddy entrusted with the defendant, an Officer of the plaintiff Corporation was appointed as the Double Lock Officer for the defendant’s godown, in which the paddy was stored. As per the terms of the agreement, the defendant will receive the paddy and store the same in his godown, and it was kept under double lock system from 14-11-1984 to 16-3-1985. A total quantity of 6157 bags of paddy weighing 410.463 M.Ts. was stored under the double lock system. Out of the said 6157 bags of paddy, 415 bags were of Super Fine Quality, 2070 bags were of Fine Quality and the balance 3672 bags were Coarse variety. The parties had agreed that the defendant would hull the paddy and deliver the resultant rice at the rate of out-turn for conversion fixed by the plaintiff Corporation for the different varieties of paddy. The defendant agreed to pay the market value for the short delivery of rice calculated with reference to the out-turn agreed upon. The defendant also agreed to deliver the rice within seven days of receipt of the paddy from the Corporation. Out of the paddy stored in the defendant’s godown under the double lock system, the defendant was entrusted by the Double Lock Officer, the following quantities of paddy:
Bags Weight Super Fine Variety 415 27.050 M.Ts. Fine Variety 2045 134.815 M.Ts. Coarse Variety 3517 237.098 M.Ts Total 5977 398.963 M.Ts.
The aforesaid quantity of paddy was entrusted with the defendant in the period between 26-12-1984 and 21-5-1985. The defendant was bound to deliver the paddy as boiled rice. The norms fixed by the plaintiff Corporation, which were accepted by the defendant, entitled the plaintiff to receive 66% out-turn for Coarse Variety paddy and 68% for the other varieties. According to the calculation of the plaintiff Corporation, as regards the Super Fine Variety, as against the quantity of 27.050 M.Ts, of paddy, applying 68% out-turn, the defendant ought, to have delivered 18.394 M.Ts. but the quantity actually delivered was 7.977 M.Ts. and the shortage was 10.363 M.Ts. As regards the Fine Variety, as against the quantity of 134.815 M.Ts. of paddy, applying 68% outturn, the defendant ought to have delivered 91.674 M.Ts. but the quantity actually delivered was 83.155 M.Ts. and the shortage was 8.419 M.Ts. As regards the Coarse Variety, as against, the quantity of 237.098 M.Ts. of paddy, applying 66% out-turn, the defendant, ought, to have delivered 156.484 M.Ts. but the quantity actually delivered was 133.680 M.Ts. and the shortage was 22.804 M.Ts. Thus, the total shortage was 41.490 M.Ts., for which the defendant was liable to pay the market value. For the short delivery of Super Fine Variety, the defendant was liable to pay at the rate of 457.90 paise per quintal; for the Fine Variety, he was liable to pay at the rate of 446.10 paise per quintal; and for the Coarse Variety, he was liable to pay at the rate of 434.20 paise per quintal. Calculated thus, the defendant was liable to pay a sum of Rs. 47,470.48 towards the value of short delivery of Super Fine Variety, Rs. 37,557.14 towards the value of short delivery of Fine Variety and Rs. 99,014.96 towards the value of short delivery of Coarse Variety of paddy. In all, the defendant was liable to pay a sum of Rs. 1,84,042.58 for the short delivery. Further, a total quantity of 410.463 M.Ts. of paddy-was stored in the godown of the defendant under the single Lock System and the defendant was responsible for safe custody of the said quantity of paddy. After delivery of 398.963 M.Ts. of paddy to the defendant for conversion as rice, there was a stock of 11.500 M.Ts. of paddy in the defendant’s godown and since the defendant failed to deliver the resultant rice to the plaintiff Corporation properly, the plaintiff Corporation, exercising its right under the agreement, seized the paddy and rice stocks available in the defendant’s mill on 18-6-1985. The plaintiff Corporation seized 48 bags of Coarse Variety of paddy weighing 4.592 M.Ts. The Corporation also seized and recovered 7.540 M.Ts. of Coarse and Fine varieties of paddy, though a total quantity of 11.500 M.Ts. was actually stored in the defendant’s godown. Thus, there is a total shortage of 3,960 M.Ts. of Coarse and Fine varieties of paddy due from the defendant, for which the defendant was liable to pay Rs. 11,011.60 towards the value of short delivery. The defendant was also bound to return the gunny bags which were entrusted by the plaintiff Corporation. The defendant was entrusted with 597/’ bags of paddy, which the defendant is bound to return. Out of the said quantity, the defendant had returned only 3772 gunny bags. On 18-6-1985, when the plaintiff Corporation broke open the godown of the defendant, 150 numbers of gunny bags were seized, Therefore, a total of 4222 gunny bags were recovered from the defendant, leaving a balance of 1755 bags. The defendant was liable to pay the value of the gunny bags at the rate of Rs. 5/- per bag, which amounts to Rs. 8,275/-. Thus calculated, the total sum of Rs. 2,03,829, 18 is due from the defendant, for which he was liable to pay interest at the rate of 15% per annum by way of damages. After the paddy, rice and gunny bugs were seized, the defendant sent a notice confining false allegations, which was suitably replied by the plaintiff Corporation. Since the defendant failed to pay the amount in spite of demands, the suit has been filed.
2. The defendant filed a written statement denying all the allegations. According to him, the person who has signed the plaint has not been duly authorized by the Corporation to do so; the copy of the agreement dated 26-7-1984 was not given to him; the quantity of 6157 bags were not stored under the Double Lock System; in any event, the plaintiff Corporation’s Officers were removing the stock from the defendant’s godown periodically; the out-turn of the hulled rice would depend upon the moisture content of the paddy sent by the plaintiff Corporation; the defendant was not liable to give rice at the out-turn claimed by the plaintiff Corporation; the details regarding the number of bags and the weight of paddy were all false; there was no shortage in the delivery of paddy or rice: the Officers of the plaintiff Corporation illegally trespassed into the defendant’s mill and removed even the personal stock of paddy of the defendant; the Officers of the plaintiff Corporation created false records; there were no witnesses at the time of the seizure; the defendant, was not liable to pay anything to the plaintiff Corporation and in fact, the plaintiff Corporation has to pay Rs. 2,96,800/- to the defendant.
3. The learned Principal Subordinate Judge framed the following issues for trial:
(i) Whether the plaintiff has proved their entitlement to the claims made under various heads ?
(ii) Whether the Officers of the plaintiff removed the stock from the defendant’s mill as claimed in the written statement ?
(iii) Should interest be paid at the rate claimed in the plaint ?
(iv) For what relief is the plaintiff entitled to?
Four witnesses were examined on behalf of the plaintiff Corporation and the documents, Exhibits A.I to A. 16 were marked. Two witnesses were examined on the side of the defendant and Exhibits B. 1 to B.8 were marked. The learned Principal Subordinate Judge decreed the suit as prayed for. The defendant has, therefore, filed the appeal.
4. The appellant argued as party in person and also submitted written arguments. Mr. R. Ponnusamy, learned counsel made his submissions on behalf of the respondent Corporation. To assist the Court in advancing the appellants case, we appointed Mr. Valliappan, Legal Aid Counsel.
5. The following points are framed for determination in this appeal:
(i) Whether the plaintiff has proved their entitlement to the claims made under various heads ?
(ii) Whether the defendant is entitled to adjust any of the claims as pleaded in the written statement ?
(iii) Is the plaintiff Corporation entitled to interest at the rate of 15% p.a. ?
(iv) To what relief is the defendant entitled ?
Point (1):
The plaintiff made his claim under the following heads:
Value of the suit for the
purpose of Court-fees and
jurisdiction : Rs. 2,01,501.38
Value of 10.367 MTs of
super Fine Rice at the rate
of Rs. 457.90 paise per
quintal : Rs. 47,470.48
Value of 5.419 MTs of Fine
variety rice at the rate of
Rs. 446.10 paise per quintal : Rs. 37,557.14
Value of 22.804 MTs of coarse
variety rice at the rate of
Rs. 434.20 paise per quintal : Rs. 99,014.96
Value of 2.015 MTs of Fine
variety paddy at Rs. 282/-
per quintal : Rs. 5,682.30
Value of 1.945 MTs of coarse
variety paddy at the rate of
Rs. 274/- per quintal : Rs. 5,329.30
Value of 1755 Gunny Bags at
the rate of Rs. 5/- per bag. : Rs. 8,775.00
Total : Rs. 2,03,829.18
Amount adjusted from
Security deposit : 10,000.00
Balance : 1,93,829.18
Interest on 1,93,829.18 paise
from 28-5-85 at 15% per
annum : 7,672.20
Total : Rs. 2,01,501.38
According to the plaintiff 6157 bags of paddy weighing 410.463 MTs were stored under double lock system in the godown of the defendant’s mill premises. P.W. 1 has spoken about the entrustment. In his chief examination, he has given evidence which has not been dislodged in the cross-examination. Ex. A4 bears out the fact that 6157 bags of paddy was entrusted for the period from 14-11-1984 to 16-3-1985. In the written statement, the defendant in paragraph No. 5 had pleaded that he is not aware of the paddy bags sent by the plaintiff and that unless various accounts are perused he will be able to file a detailed written statement. Ex. A4 clearly shows the entrustment of paddy as pleaded in the plaint. In his evidence P.W. 1 has referred to the conversion of paddy to rice and delivery of rice bags for periods prior to 14-11-1984 and therefore, his evidence is really not useful to support his pleadings that 6157 bags of paddy were not entrusted to him. In any event, since Ex. A4 has been countersigned by the defendant, so the entrustment stands proved. Out of the 6157 bags of paddy weighing 410.463 MTs 415 bags of paddy weighing 27.050 MTs were Super Fine quality, 2070 bags of paddy weighing 136.830 MTs were fine quality and the balance 3672 bags weighing 246.583 were of coarse variety paddy. The defendant had agreed under the agreement to hull the paddy and deliver the resultant rice at the rate of out-rate for conversion. P.W. 1 has stated that the rate of conversion was 68% for the first two varieties and 66% for the inferior variety. Ex. A2 agreement also shows that the out turn should be at the rate fixed by the plaintiff for the various varieties of paddy from time to time. This is seen from Clause 6 of Ex. A2 agreement. Ex. A8 speaks of the rate of out turn.
6. The defendant who appeared as party-in-person also confirmed that for 1000 bags of paddy 680 bags of rice should be delivered. His contention is that the out turn would depend upon the moisture content and since the plaintiff was always sending with 90% and 20% moisture content, the defendant is not liable to give the rice at the agreed out turn. But even in his chief examination he has not spoken about the moisture content and the agreement does not speak of it and therefore, we cannot accept the defendant’s case that the out turn will vary according to the moisture content of the paddy delivered.
7. P.W. 2 had stated that the defendant had taken delivery of the paddy only after being satisfied by the moisture content and no objection was raised.
8. According to the plaintiff, the defendant agreed to deliver the resultant rice within seven days of receipt of the paddy from the plaintiff. In Ex. A2, Clause 5 shows specifically that the agent should deliver the rice obtained by hulling and processing the paddy so entrusted in gunnies packed and stitched within 7 days of receipt of each consignment of paddy. P.W. 1 has stated in his chief examination that as per the agreement, the delivery should be made within a week and this has not been challenged in the cross-examination.
9. According to the pleadings, out of the paddy stored in the defendant’s godown 5977 bags were entrusted to the defendant for conversion into rice. Out of this, there were 415 bags of super fine variety, 2045 bags of fine variety and 3517 bags of coarse variety. This was entrusted to the defendants during the period 26-12-1984 to 21-5-1985. This is borne out by Ex. A5. P.W. 1 has given evidence regarding this and it remains uncontroverted.
10. The evidence of D.W. 1 does not help the case of the defendant pleaded by him in his written statement in paragraph No. 7 where there is a bald denial that the number of bags are falsely stated and the weight of paddy are also falsely stated. Therefore, the number of bags given by the plaintiff for conversion into rice also stands proved.
11. As per the agreement the defendant: had to deliver rice at the out turn fixed by the plaintiff and the defendant ought to have delivered 18.394 MTs. of super fine variety rice of which 7.977 MTs. were delivered. Similarly as against 91.674 MTs. of fine variety which ought to have been delivered 83.155 Mts. alone were delivered and as against 156.484 MTs of coarse variety only 133.680 MTs. were delivered.
12. Therefore, there was a shortage of 10.367 MTs. of super fine variety, 8.419 MTs. of fine variety and 22.804 MTs. of coarse variety aggregating to 41.590 MTs. This has also been specifically stated by P.W. 1 in his chief-examination which stands uncontroverted in cross-examination. This is seen from Ex. A5.
13. Though the defendant has in paragraph No. 8 of the written statement, denied the allegations on the ground of moisture content he is unable to support his denial by satisfactory evidence. The case of short delivery of rice is established.
14. According to P.W. 1, the defendant is liable to pay a sum of Rs. 457.90 paise per quintal for super fine variety and at Rs. 446.10 paise per quintal for fine variety and at Rs. 434.20 paise for coarse variety. P.W. 1’s evidence clearly speaks of the rate at which the defendant has to pay for the short delivery of each category of rice and therefore, the plaintiff has pleaded and proved that the defendant is liable to pay a sum of Rs. 18442.58p towards short delivery.
15. According to the plaintiff, out of the total bags of paddy entrusted to the defendant, excluding the paddy given for conversion, there was a balance of 11.500 MTs. of paddy in the godown of the defendant, which was kept under single lock system. Since the defendant failed to deliver the resultant rice to the plaintiff, the plaintiff seized the paddy and rice stocks available in the mill premises on 18-6-1.985. According to the plaintiff, 48 bags weighing 4.592 MTs of coarse variety rice were seized from the godown and this has been given credit to. The seizure of 48 bags of paddy from the defendant’s godown is spoken to by P.W. 3. The documents in support of this are Exs.- A13 and A14. At the time of the seizure, the defendant was not present as per his own pleadings and according to him, more bags of paddy were seized than given credit to. He produced Ex.-B4, according to which, not 48 bags, but 348 bags were seized. Ex,-B4 is the carbon copy of the seizure mahazar, which was affixed on the door of the mill. The original of Ex.-B4 is Ex.-A14, and it shows that what was seized was only 48 bags.
16. Some questions were put to the plaintiffs witnesses to the effect that since the witnesses’s signatures are not seen in Ex. B4, Ex. A14 itself is a fabricated document. It is true that Exs. A13 and A14 contain several sheets. Ex.-A13 is the statement of the Village Administrative Officer and the other sheets are Ex. A14. The last sheet of Ex.-A14, which is the original of Ex.-B4, shows the signature of witnesses as well as the signature of the Village Administrative Officer, which the carbon copy does not show, but it is evident that Ex.-A14 is the original of Ex.-B4 and the carbon copy, which was affixed on the door of the mill, which was obviously not attested by the village Administrative Officer and the witnesses, since the original was attested by them. We have seen for ourselves the two documents and there is no doubt that Ex. B4 must be the carbon copy of Ex. A14 and therefore, the addition of 2 in front of 31 as regards the fine variety and addition of 1 in front of 17 with regard to coarse variety has clearly been made. The Trial Court held that the defendant had made this interpolation. We confirm this finding. So it is clear that 48 bags alone were seized. According to the pleadings, this has been given credit to and this is seen from Ex.-A5. The plaintiff also pleaded that they had seized 7.540 MTs. of line and coarse variety paddy from the godown, which equals to 180 bags and that since, actually 11.500 MTs of coarse and fine variety of paddy was stored in the godown of the defendant, there is a shortage of 3.370 MTs. of coarse and fine variety paddy. The plaintiff had fixed the liability with regard to this 3.960 MTs. of paddy at Rs. 11,011.60p. But, regarding this shortage of 3.960 MTs. of paddy, there is no evidence since, P.W. 1 does not speak of it. Ex. A4 at page ] 1 shows that as on 10-5-1985, the agent, had 180 bags of paddy with a net weight of 11.500 MTs. They had seized on 18-6-1985, as per the entry in the letter 180 bags, but with a net weight of 7.540 MTs. This is how the plaintiff has arrived at a shortage of 3.960 MTs. In the page, the words “3.960 is considered to have been taken by the hulling agent till 1.0-5-1985 as 100 bags out of 180 bags were in the damaged condition”, were written and have been scored off. For this, there are no pleadings and in fact, P.W. 2 has stated in his evidence that the stock in the godown cannot be depleted without his knowledge and in a single lock godowns the godown key will be with him and he has also stated that on 15-6-85, there were 180 bags.
(Vernacular text omitted…. Ed.)
P.W. 3’s evidence is that apart from this 180 bags they had also seized 48 bags of damaged rice. Therefore, the plaintiffs have not proved how they are entitled to what they claim to be shortage to 3.960 MTs. of paddy when the godown was under lock and key and the lock was with the officers of the plaintiff and it is their own admission that it is not possible for the paddy stock to get depleted without the knowledge of the officers. Therefore, the plaintiffs claim of a sum of Rs. 11,011.60p. being the value of the shortage of 3.960 MTs must be rejected.
17. As regards the gunny bags, according to the plaintiff the defendant was entrusted with 5977 bags of paddy and is bound to return the gunny bags where the defendant had returned 3772 gunny bags. On 18-6-1985, 450 number of gunny bags were seized from the defendant’s premises and therefore there is a balance of 1755 bags due from the defendant. The defendant is liable to pay for the gunny bags at the rate of Rs. 5/- per bag. A seizure of 450 gunny bags is spoken by P.W. 3. P.W. 1 has spoken about the shortage of 1755 bags and the value of the bags at the rate of Rs. 5/- per bag. This has not been challenged in cross-examination. Ex. A6 is the document relating to gunny bags and from this it can be calculated that 1755 bags are due from the defendant. Since the rate at which the price of gunny bags should be fixed has not been denied by any acceptable evidence on the part of the defendant. This claim is also accepted.
18. Therefore, as against the various heads of claims made by the plaintiff except for a sum of Rs. 11,011.60p. being the value of the shortage of 3.960 MTs. the finding of the trial Judge is confirmed and the plaintiff is entitled to the same. The claim made for the value of 3.960 MTs of paddy is rejected.
19. Point (ii):
On the side of the defendant Exs.-A1 to A3 were marked and when we asked the defendant, party-in-person as to how they are relevant for the entrustment, he was not able to say and in fact, he admitted that they will not prove the entrustment or the delivery of converted rice and therefore, no reliance is placed on Exs. A1 to A3. The defendant has in paragraph No. 10 given a list of items which are alleged to have been removed illegally by the plaintiff when they trespass into the mill. His own pleadings is that he was away from the Village at that time. In his evidence there is nothing to prove that the claim of removal of the various items mentioned. The defendants themselves have stated that they took away 180 bags of paddy. So this alone is accepted and that is the paddy that was remaining with him after delivery of 398.96 MTs of paddy for conversion as rice. Therefore, as regards the claim made against illegal removal of the other items there is no proof. The claim of the defendant that a sum of Rs. 35,000/-should be paid for hulling charges is not been proved.
20. The defendant has set out a claim for about a sum of Rs. 2,97,800/- under various heads as follows:
1. 180 bags of paddy at the
rate of Rs. 150/-
180 x 150 = Rs. 27,000.00
2. 30 bags of paddy at the
rate of Rs. 160/-
30 x 160 = Rs. 4,800.00
3. 480 bags of rice at the
rate of Rs. 450/-
480 x 450 = Rs. 2,16,000.00
4. 1000 gunny bags
each Rs. 5/-
1000 x 5 = Rs. 5,000.00
5. Security Deposit = Rs. 10,000.00
6. Hulling Charges = Rs. 35,000.00
Rs. 2,97,800.00
As regards 160 bags of paddy, the plaintiffs officers admit that 180 bags of paddy were removed which represents the balance of the paddy remaining after 5977 bags of paddy were given for conversion. As for the other items, there is no proof for the seizure of 30 bags of paddy, 400 bags of rice and 1000 gunny bags by the plaintiff. As regards the security deposit, the plaintiff themselves have given credit for that and for hulling charges there is no evidence. So the claims which the defendant prays must be set off against the suit claim have not been proved.
21. Point (iii):
As regards the claim for payment of interest, the learned Principal Subordinate Judge came to the conclusion that one of the conditions in Ex. A,2, the agreement entered into between the parties, is that after hulling, the resultant rice should be delivered to the plaintiff Corporation within seven clays from the date of delivery and the last delivery was made on 21-5 1985. As such, delivery should have been made on or before 28-5-1985 and since (he defendant has not complied with the said condition, the plaintiff Corporation was entitled to interest. The plaint averments have already been looked into. Paragraph 12 of the plaint deals with the question of interest. There is nothing in the pleading to show that there-was an agreement to pay interest at the rate of 15% p.a. The trial Judge has held the question of interest in favour of the plaintiff Corporation on the basis of Ex. A.2. Though paragraph 5 of this agreement indicates that the agent should deliver the rice in gunny bags, packed and stitched, within seven days of receipt of each consignment of paddy. It is left to the discretion of the Principal or one of their Officers to alter this period. However, there is nothing in this agreement indicating that the plaintiff Corporation is entitled to interest at the rate of 15% p.a. for the delay.
22. If we look at the evidence, P.W. 1 is an Assistant of the plaintiff Corporation. In his chief-examination, he has stated that The defendant is bound to pay the suit claim together with interest at the rate of 18%. There is nothing in his evidence to show that the interest should be calculated for every day’s delay after the lapse of seven days or that the agreement spelt out the rate of interest. In his cross-examination, he has admitted that he has no personal knowledge of the transaction and was speaking only from the records. P.W. 2 is the Retired Tahsildar, who was the Double Lock Agent at the time of the transaction. In his chief-examination, P.W. 2 has staled that the damage for short supply should be recovered on the basis of Ex.-A9. Ex.-A9 is a departmental order in which under one clause, the plaintiff Corporation has been directed to recover the value of short supply from the agent at twice the market rate and that the appointment of Hulling Agents should be made, inter alia, on those terms. This communication was signed on 18-7-1984 and received by the plaintiff Corporation on 20-7-1984. On the other hand, there is nothing to indicate in Ex. A.2 that this was made known to the defendant. In fact, the damages are not claimed at this rate, but at the rate of 15% p.a. Apart from this, P.W. 2 has not spoken of interest. P.W. 3 is the Assistant Superintendent of the plaintiff Corporation. He has also not spoken of any agreement to pay interest at the rate of 1 5% p.a. P.W. 4 is the witness who speaks about the authorization given for filing of the plaint and therefore, his evidence also does not help the case of the plaintiff Corporation. No question has been asked of the appellant D.W. 1 regarding the rate of interest. Even in the reply notice that was sent by the Corporation under Ex. A7, there is no reference to the interest. In the absence of any contract for payment of interest at 15% per annum there can be no decree for interest at that rate. Ex. A2 agreement clearly speaks of the defendants liability to deliver the hulled rice within one week from the date of entrustment. The contract came to an end on March 1985. The plaintiff has claimed interest from May 1985 by way of damages and the Trial Court has granted the same.
23. In Clariant International Ltd. v. Securities Exchange Board of India , the Supreme Court held as follows (para 30):
Interest can be awarded in terms of an agreement or statutory provisions. It can also be awarded by reason of usage or trade having the force of law or on equitable considerations. Interest cannot be awarded by way of damages except in cases where money due is wrongfully withheld and there are equitable grounds therefor, for which a written demand is mandatory.
24. In Executive Eng. Dhenkanal Minor irrigation Division v. N.C. Budharaj the Supreme Court held that (para 43):
… A careful analysis of the principles underlying those decisions would show that the claim of interest for the period prior to the commencement of proceedings was not countenanced in view of the settled and indisputable position of law that damages till quantified are not and cannot be said to be an ascertained or definite sum and until it is ascertained and crystallised into a definite sum and decreed, no question of payment of interest for the period prior to such quantification would either arise or be permissible in law, even if made before regular Civil Courts, in ordinary suits filed.
In these circumstances, we hold that the plaintiff will be entitled to the interest at 6% per annum from the date of suit.
25. In the result, the appeal is partially allowed, there shall be a decree for a sum of Rs. 1,82,769.18p together with interest at 6% per annum from the date of the suit till the date of decree, and at the same rate from the date of decree till the date of realisation.
26. We record our appreciation for the assistance given by Mr. Valliappan, whom we appointed as legal services counsel and he may be paid his counsel fees by the High Court Legal Services Authority, No costs.
