The Appeal vs Unknown
2023 Latest Caselaw 3751 AP

            THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

                         APPEAL SUIT NO.310 OF 2011

JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure,

1908 (for short 'C.P.C.'), filed by the appellant/3rd defendant challenging

the decree and Judgment dated 18.09.2008 in O.S. No.32 of 2005 passed

by the learned IV Additional District Judge, Kurnool (for short, 'the trial

court').

2. Respondents 1 to 5 are the plaintiffs, filed the suit in O.S. No.32 of

2005 seeking recovery of Rs.15,73,696/- being the principal and interest

due to the plaintiffs for the supply of wooden dining tables and wooden

dining benches to the 3rd defendant office with future interest at 12% p.a.

Respondents 6 and 7 are defendants 1 and 2 in the said suit.

3. The parties will hereinafter be referred to as arrayed before the trial

Court.

4. The facts leading to the present Appeal, in a nutshell, are as under:

(a) Late T.Nagabhushanam was a contractor of erecting electrical fit-

tings, including the supply of electrical material at Srisailam. In re-

sponse to the advertisement in 'Vaartha Daily' by the 3rd defendant

called for quotations regarding the supply and erection of pole

lighting equipment to the Ashram Schools under their control, Late

Nagabhushanam submitted quotations specifying the rates of the

required material. The work involves the erection of 250 watts

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S.V.Lamps fittings and 250-watt S.B.Bulbs and 250 watts chowk

and condenser and ignitor, and 40 mm dia., G.I.Pipe (5 feet length)

clamps and nut bolts and internal electrical leads and labour

charges. The 3rd defendant accepted the Late Nagabhushanam's

quotation @ Rs.14,680/- per one pole and placed an indent for

erecting pole lightings at 20 Ashram Schools situated in Kurnool

and Mahaboob Nagar Districts through proceedings

Rc.No.A/2559/2001, dated 23.07.2002. The indent was placed in

two packages, in respect of 17 schools and another in respect of 3

schools. It is also stipulated that the supplied stock must meet the

specified requirements. The payment would be made two months

after the material was delivered, subject to budget availability, and

the work should be completed by 30.09.2002.

(b) The 3rd defendant, on satisfactory completion of work, issued pro-

ceedings in Rc.No.A/2339/01, dt.25.09.2002 sanctioning payment

of Rs.58,720/- per each bill for 20 schools, amounting to

Rs.11,74,400/-. However, the 3rd defendant failed to make pay-

ments. Late Nagabhushanam demanded that defendants 2 and 3

several times pay bill amounts, but the defendants failed to make

payments during his lifetime. Subsequently, Nagabhushanam died

on 18.12.2004, leaving behind the plaintiffs as his legal heirs, and

his estate devolved upon the plaintiffs. After the death of Nagabhu-

shanam, the plaintiffs made several representations to the defen-

dants requesting to make payments and finally issued statutory

notice U/sec.80 of C.P.C. on 29.10.2004 demanding payment. In

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response, the 3rd defendant requested to furnish additional infor-

mation in his letter dt.29.03.2005 to examine the issue. The plain-

tiffs furnished the information as required by the 3rd defendant.

However, the defendants neither replied to the notice nor complied

with the payment demand.

5. The 3rd defendant filed a written statement, adopted by defendants 1

and 2, contending that the 3rd defendant called for quotations and placed

supply orders and material was also supplied by Nagabhushanam. The

supplier has to give 250-watt S.V.Lamp fitting and 250-watt S.V. Bulb and

25-watt chokes and condenser and igniter, and 40 mm dia G.I.Pipe (5f)

length clamps and nut bolts and internal electrical leads and labour

charges. But the supplier has supplied the bulbs for the poles 4 Nos. for

each Ashram School. The supply order has been placed for 80 Nos. as de-

tailed below:

1. Mahaboobnagar District for 17 schools and 4 for each School 4 Nos. = 68

2. Prakasam District for 3 Schools and 4 for each School = 12

The defendant has to pay Rs.11,74,400/- is not correct. The rate of

each set is worked out based on the material quality supplied by the sup-

plier and, as assessed in the A.P.S.E.B., is worked out at Rs.5,000/- per

each set as against the rate of Rs.14,800/- and hence the amount due to

the plaintiff is Rs.4,00,000/-, but not Rs.11,74,400/-. It shows that the

plaintiff and the then Project officer, I.T.D.A. colluded in purchasing the

poor quality material for higher rates. Hence, the supplier is not entitled to

the amount mentioned in the suit, and the supply orders did not include

any stipulation for payment of interest.

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6. Based on the above pleadings, the trial Court framed the following

issues:

(1) Whether the plaintiff has supplied the material to the third defen-

dant as per the specifications and standards mentioned in the supply order placed by the third defendant? (2) Whether the plaintiff is entitled to recover the suit amount? (3) To what relief?

7. During the trial, on behalf of the plaintiffs, P.W.1 was examined and

got marked Exs.A1 to A.65. On behalf of the defendants, D.Ws.1 and 2

were examined and got marked Exs.B1 to B.14.

8. After completion of the trial and hearing the arguments of both

sides, the trial Court partly decreed the suit with proportionate costs for

Rs.11,74,400/- against the 3rd defendant with interest thereon at 6% per

annum from the date of suit till the date of realization.

9. The learned counsel for the appellant/3rd defendant contends that

the trial Court ought to have directed both the parties to substantiate the

respective rates of erection of 250 watts S.V.Lamps fittings and 250 Watt

S.B.Bulbs and 250 watts chowk and condenser and ignitor and 40 mm dia

G.I.Pipe (5 feet length) clamps and nut bolts and internal electrical leads

and labour charges for Rs.14,800/- and Rs.5,000/- by A.P.S.E.B. as on

the date of work. The trial Court committed a grave error in applying the

'Principle of Estoppel' based on an officer's admission regarding the condi-

tion of the goods.

10. Per contra, the learned counsel appearing for the respondents

would contend that the trial Court correctly appreciated the facts of the

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case and came to a correct conclusion. The reasons given by the trial

Court do not require any interference.

11. Having regard to the pleadings in the suit, the findings recorded by

the Trial Court and in light of the rival contentions and submissions made

on either side before this Court, the following points would arise for deter-

mination:

I. Whether late T.Nagabhushanam supplied the material without deviation from the specifications and stan- dards mentioned in the supply order and the plaintiffs are entitled to the payments?

II. Whether the Judgment passed by the trial Court needs any interference?

POINTS NO.I & II:

12. The following facts are either admitted or undisputed:

a. Late T.Nagabushanam was the contractor and engaged in business

in erecting electrical fittings, including supply of electrical material

at Srisailam. The 3rd defendant called for quotations for the supply

and erection of lighting equipment in the Ashram Schools under its

control. Late T.Nagabushanam submitted quotations, and the work

involves the erection of 250 watts S.V.Lamps fitting and 250 watts

S.B.Bulbs and 250 watts chowk and consensor and ignitor, and 40

mm dia. G.I.Pipe (5 feet long) clamps, nut bolts, internal electrical

leads and labour charges. The 3rd defendant accepted the quota-

tion of late Nagabhusanam at the rate of Rs.14,680/- per one pole

as it is the lowest rate and issued proceedings under Ex.A.1. Based

on the proceedings in Ex.A.1, issued by Project Officer, it is evident

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that the plaintiff's submitted quotation was reviewed. A decision

was made to place an indent for the erection of pole lighting at 20

Ashram schools in Kurnool and Mahaboob Nagar Districts. Later

Nagabhusanam submitted a bill in respect of each School together

with the certificate issued by the Head Master of the concerned

School that the poles were erected with the required specifications.

The 3rd defendant issued proceedings sanctioning payment of

Rs.58,720/- per bill for twenty schools.

b. Exs.A.3 to A.21 proceeding orders show that the 3rd defendant

sanctioned payment of Rs.11,74,400/- regarding the work done at

twenty schools as required by the 3rd defendant. The said Nagab-

hushanam died during the pendency of the suit, and his L.R.s were

brought on record as plaintiffs 2 to 5. It is also evident from the

record that the 1st plaintiff was requested to erect pole lighting in

Ashram Schools at four numbers @ Rs.14,680/-, the stock was re-

ceived by the Headmaster of the respective schools in good condi-

tion, and the same was entered in the stock register. The sanction

proceedings show the payment of Rs.14,680/- for the said purpose

under each proceeding Exs.A.2 to A.19. Exs.A.26 to A.44 are Xerox

copies of the receipts on various dates issued by the 1 st plaintiff to

the Headmasters of the respective Ashram schools. Thus, it is evi-

dent that the 1st plaintiff claimed an amount of Rs.15,73,696/- for

the supply and erection of electrical material, including sales tax.

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13. The defendants' contention is that the electrical material was

spoiled one week after erection, as it is of inferior quality. As such, they re-

ceived instructions from the higher authority not to arrange any payments

to the suppliers, and they referred the matter to the A.P. State Electricity

Board. They received the Ex.B.14 assessment made by the A.P.S.E.B. as-

sessing the value of each set of lighting equipment at Rs.5,000/- and the-

reby, the defendants issued notice to the plaintiffs demanding the excess

amount paid by them.

14. As already observed, Exs.A.2 to A.19 contained the stocks supplied

by the Nagabhushanam in good condition, and the material was received

from June 2002 to September 2002. As per Ex.B.7 letter from the Com-

missioner, Tribal Welfare, the defendants were directed to return the goods

to the supplier. But they have not issued any letter to the plaintiffs.

15. As seen from the evidence of DW.1 (E. Ravindra Kumar) and DW.2

(B. Naveen Kumar), they have no expert knowledge in testing the electrical

material. No material is placed to show that the quality of materials sup-

plied by the Nagabhushanam is inferior. The defendants have not ex-

amined any witnesses to show that they took an authorized electrician's

assistance to assess the quality of the supplied material.

16. DW.1, E. Ravindra Babu, the Project Officer representing the 3 rd

defendant, contended that Nagabhushanam managed the then Project Of-

ficer to approve the higher rate than the market rate. According to the pro-

ceedings of the Commissioner, Industries Department, Andhra Pradesh

(Ex.B.10), a Multi Disciplinary Committee was formed for joint inspection.

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It is undisputed that after two years of supply, the MDC was constituted. It

is not in dispute that the material supplied by the Nagabhushanam was

put into use. The Headmasters of the respective schools have not com-

plained about the quality of the provided materials. As rightly pointed out

by the trial Court, having accepted the material by accepting the quota-

tions made by the Nagabhushanam and placing orders and using the ma-

terial for two or three years, how can the 3rd defendant conclude that the

materials supplied to the Ashram Schools are inferior quality, how can

they say that quotation made by the Nagabhushanam was with a higher

rate than the market rate.

17. Though it is contended that the Project Officer, Superintendent

and Senior Assistant were suspended, no documentary evidence supports

the contention. But Dw.1 admitted that the then Project Officer, Nagamani,

is working as Joint Director, Department of Statistics and Economics, Hy-

derabad and the Senior Assistant is working as District Social Welfare Of-

ficer, Kurnool. The evidence on record supports the plaintiffs' contention

that the Project Director and the Senior Assistant got promotions, whereas

the other members are working in their respective departments. The ab-

sence of any documentation or evidence regarding the initiation of depart-

mental proceedings against the I.T.D.A. Project Director and other mem-

bers of the Purchasing Committee raises doubts about the credibility of the

defendant's claims. The lack of proper examination of key individuals and

the absence of supporting evidence of severe allegations cast doubts on the

fairness and validity of the defendant's contentions against the Nagabhu-

shanam and the Purchasing Committee members.

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18. It is clear from the record that the defendants have not placed the

quotations filed by the other suppliers. They have not examined the offi-

cials of A.P.S.E.B., who were experts in assessing the quality of materials

supplied. DWs.1 and 2 have not filed their inspection notes to explain how

they came to the conclusion that the rates quoted by Nagabhushanam are

higher without submission of the rates quoted by other contractors. Admit-

tedly, DWs.1 and 2, who are members of the MDC, have no knowledge of

testing the electrical fittings. DW.2 clearly admitted in cross-examination

that he is not a competent person to assess the value of the electrical fit-

tings and MDC has not assessed the value of the electrical fittings and pole

light equipment, and he does not know anything about the supply and the

value of the material. Without placing any acceptable evidence, the defen-

dants refused to pay the amount to the Nagabhushanam on the ground

that he supplied the substandard material, having utilized the same for

two and half years.

19. After careful analysis of the evidence on record by giving reasons,

the trial Court has observed that the plaintiffs have proved that only to

evade payment for the material supplied by Nagabhushanam under

Ex.A.1, the defendants put up the defence of inferior quality. No material is

placed to show that there was collusion between Nagabhushanam and the

Project Officer and Purchasing Committee members. According to the evi-

dence placed, there is no implied condition or warranty regarding the qual-

ity of the materials supplied by the supplier/Nagabhushanam. The defen-

dants are not entitled to make a dispute questioning the quality of mate-

rials supplied after using the same for a period of two and half years. There

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is a clear admission of the DWs.1 and 2 that they did not pay anything to-

wards the cost of the material to the supplier and for the supply of elec-

trical fittings, poles, lighting equipment and the plaintiffs are entitled to

claim for the value of cost as per the agreed quotations of Rs.11,74,000/-.

20. After careful consideration, I am of the view that the trial Court

correctly appreciated the evidence. There is no reason for this Court to ar-

rive at a different conclusion than the one arrived at by the trial Court. I

am of the opinion that the findings arrived at by the trial Court are correct,

and no justifiable reasons have been shown by the appellants/defendants

for arriving at different conclusions. I agree with the conclusion arrived at

by the trial Court.

21. Accordingly, the Points are answered in favour of the plaintiffs by

holding that the Trial Court is justified in holding that plaintiffs are en-

titled to claim the cost value per the agreed quotations of Rs.11,74,000/-.

Given the preceding discussion, the view taken by the trial court does not

call for any interference.

22. As a result, the Appeal is dismissed without costs by confirming

the Decree and Judgment in O.S. No.32 of 2005, dated 18.09.2008.

23. Miscellaneous petitions pending, if any, in this Appeal shall stand

closed.

_________________________________ JUSTICE T. MALLIKARJUNA RAO

Date: 31.07.2023 MS/SAK

AS No.310 OF 2011

THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

APPEAL SUIT NO.310 OF 2011

Date: 31.07.2023

MS/SAK