Andhra Pradesh High Court - Amravati
The Agricultural Market Committee, vs Anajana Agro Agencies, Bhimavaram, on 14 August, 2024
1
APHC010625242009
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
WEDNESDAY, THE FOURTEENTH DAY OF AUGUST
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO
APPEAL SUIT NO: 209/2009
Between:
The Agricultural Market Committee, ...APPELLANT
AND
Anajana Agro Agencies Bhimavaram and Others ...RESPONDENT(S)
Counsel for the Appellant:
1. B PRAKASAM (Sr SC FOR A M C )
Counsel for the Respondent(S):
1. P DURGA PRASAD
The Court made the following JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, 1908
(for short, 'C.P.C.'), is filed by the Appellant/Plaintiff challenging the decree
and Judgment, dated 26.11.2008 in O.S.No.195 of 2005 passed by the
learned Senior Civil Judge, Bhimavaram, (for short, 'trial court').
2. The appellant is the Plaintiff, who filed the suit in O.S.No.195 of 2005
seeking recovery of Rs.3,75,856/
Rs.3,75,856/-,, the balance amount towards refund of
pesticides and fertilizers, with interest @ 12% p
per annum.
3. Referring to the parties as arrayed in the suit is expedient to mitigate
potential confusion and better comprehend the case.
4. The factual matrix, necessary and germane for adjudicating the
contentious issues between the parties inter se, may be delineated as follows:
The 1st Defendant is Anjana Agro Agencies, Bhimavaram,
Defendants 2 and 3 are its partners. The Plaintiff market
committee commenced the sale of fertilizers and pesticides to
local farmers under the Rytu Mitra Scheme following the policies
of the Government of Andhra Pradesh. To facilitate this initiative,
the Plaintiff Market Committee procured fertilizers and pesticides
from various wholesalers and retailers, including the 1st
Defendant. From August 1999 onwards, Plaintiff purchased
pesticide stocks from the 1st Defendant's business concern. The
purchases took place between 1998 and 2000. As the pesticide
stocks neared expiration, Plaintiff returned the stock to the 1st
Defendant. The details of the stock returned by the Plaintiff to
the Defendant are as follows:
Stock worth
S.No. Date Bill Numbers
(Rs.)
1. 02.05.2000 Return Bill No.117/005823 81,450-00
2 02.05.2000 Return Bill No.117/005824 1,45,650-00
3. 02.05.2000 Return Bill No.117/005825 1,43,520-00
4. 12.05.2000 Return Bill No.117/005830 17,700-00
As mentioned earlier, the stock was approaching its
expiration by the time of its return. The 2nd Defendant
acknowledged receipt of the returned stock and endorsed the
returned bills, promising that new stock would be sent to Plaintiff
upon receipt. The 1st Defendant subsequently dispatched stock
worth Rs.1,111,100/- to the Plaintiff under various invoices dated
25.03.2001 and 26.03.2001. The first Defendant is obligated to
either return stock valued at Rs.2,77,220/- to the Plaintiff or remit
the same amount to the Plaintiff. The Plaintiff's employees made
several demands for the payment of Rs.2,77,220/- or for the
equivalent stock of pesticides. Despite these repeated requests,
the defendants neither provided the stock nor made any
payment. The plaintiff's committee issued notices on
14.09.2001, 29.10.2001, 04.02.2002, 07.03.2002, 06.06.2002,
27.06.2002, and 12.12.2002 to the first defendant. Although the
defendants received these notices, they did not make any
payments. On 18.07.2002, the second Defendant endorsed the
notice dated 27.06.2002, stating that they would send the
pesticides after deducting 30% of the value. However, no
pesticides were dispatched to the Plaintiff. As partners in the first
defendant firm, defendants 2 and 3 and the first Defendant are
liable to deliver pesticides worth ₹2,77,220/- or pay the
equivalent amount in cash to the Plaintiff. Furthermore,
according to trade usage and customs, the defendants are liable
to pay interest at 12% per annum on the outstanding amount.
5. Defendants 1 and 2 filed a written statement denying the material
allegations made in the plaint. Defendant 3 adopted the written statement of
Defendants 1 and 2. The defendants contended that, according to the
guidelines of the Marketing Department concerning the sale of seeds,
pesticides, and fertilizers, such purchases should be made from the Andhra
Pradesh Seeds Development Corporation. Should the corporation not have
the required stock, Plaintiff is permitted to procure from reputed companies
only with prior approval from a committee led by the District Collector. Since
Plaintiff did not obtain this prior approval for purchasing stock from the first
Defendant, the purchase is deemed unauthorized, rendering the alleged
transactions illegal and the suit untenable under the law. The defendants
further contended that if the Plaintiff encountered issues with stock supply
from a dealer, it was incumbent upon the Plaintiff to report these problems to
the District Collector initially. As the Plaintiff failed to do so, they lack the
standing to file the suit. Additionally, the Agricultural Market Committee should
have stipulated conditions for returning or replacing unsold stocks before
expiration. Since there was no contractual stipulation between Plaintiff and the
first Defendant regarding the return or replacement of unsold stocks, and the
invoice clearly states that "Goods once sold will not be taken back," Plaintiff is
barred from seeking a refund from the first Defendant. The defendants also
claimed that the endorsement made by the 2nd Defendant was a rank-forged
one. Defendant 3 is argued to be neither a proper nor necessary party to the
suit, as they are not associated with the first Defendant and are not a partner.
Furthermore, the endorsement by the second Defendant is alleged to
contravene sections 23 and 24 of the Indian Contract Act concerning public
property, thus making it unenforceable. The defendants asserted that the suit
was barred by limitation and requested its dismissal with costs.
6. Based on the above pleadings, the trial Court framed the following
issues:
1. Whether Plaintiff returned the stock worth Rs.3,88,320/- to Defendant
under endorsement on the return bills?
2. Whether the Plaintiff committee is not entitled for suit claim on the
Plaintiff Committee purchase the stock from the Defendant without
prior approval of District Collector?
3. Whether the Plaintiff is estopped from recovering the suit claim as per
the stipulation in the notice that "Goods once sold will not be taken
back"?
4. Whether the Plaintiff is entitled for suit claim of Rs.3,75,856/- with
costs and future interest at 12% p.a., as prayed for?
5. To what relief?
7. During the trial, on behalf of the Plaintiff, PWs.1 and 2 were examined
and marked Exs.A.1 to A.20. On behalf of the Defendants, D.W.s 1 and 2
were examined, and Exs.B.1 was marked.
8. After the trial was completed and both sides' arguments heard, the trial
Court dismissed the suit without costs.
9. Sri B. Prakasam, learned Senior Standing Counsel for AP AMCs,
representing the Appellant/Plaintiff, contends that the Plaintiff, possessing
inherent attributes of local authority, would not have initiated the suit without
a valid cause of action against the Defendants. The trial Court failed to
appropriately weigh the testimony of PWs.1 and 2, who, being employees of
the Plaintiff, had no personal interest in the matter. The trial Judge
improperly regarded the non-examination of the then Secretary, who
obtained an endorsement from the 2nd Defendant, as detrimental to proving
the return of unsold stock. The daily involvement of the 3rd Defendant in the
1st Defendant's business rendered the 2nd Defendant's presence or consent
in the affidavit (Ex.A.20) irrelevant. Additionally, the absence of a specific
denial from the 3rd Defendant regarding Ex.A.20 did not undermine the
document's significance. The trial Judge should have examined the Notary
before whom the 3rd Defendant swore the affidavit and compared the 3rd
Defendant's signatures on Exs.A.5 to A.12 as per Section 73 of the Indian
Evidence Act, 1872. Ultimately, it was contended that the Judge's conclusion
that the suit was barred by limitation was erroneous, given the documentary
evidence, testimonies, and established legal principles.
10. Per contra, Sri P. Durga Prasad, learned counsel representing the
Respondents/Defendants, argued that the trial Court appreciated the case
facts and reached a correct conclusion. The reasons given by the trial Court
do not require any interference.
11. Concerning the pleadings in the suit and the findings recorded by the
Trial Court, the following points would arise for determination:
1) Is the trial Court justified in holding that the Plaintiff is not
entitled to recover for the suit claim?
2) Does the Judgment passed by the trial Court need any
interference?
POINTS NOs.1 AND 2:
12. The learned counsel for the Plaintiff ardently argues that
notwithstanding the presentation of evidence demonstrating the return of stock
to the Defendants, as evidenced by endorsements on the relevant bills, the
trial Court has declined to accept the Plaintiff's case. The trial Court's ruling
asserts that the mere demonstration of a transaction between the Plaintiff and
the Defendants does not suffice to establish the fact of stock return. To
thoroughly evaluate this assertion, I have meticulously examined the materials
submitted by both parties pertinent to this issue.
13. The Supervisor of the Agricultural Market Committee, Y.Nageswara
Rao, testified as PW.1. Additionally, Y. N. Rama Krishna, Section Grade
Secretary of the Agricultural Market Committee, who served the Plaintiff's
market committee from June 2001 to July 2005, was examined as PW.2. The
second Defendant, M.Nageswara Rao (DW.1), testified that business
transactions occurred between the Plaintiff's market committee and the
Defendants from 1998 to 2000, during which period he supplied fertilizers and
pesticides to the Plaintiff's market committee according to orders placed
between 1998 and 2000. However, he contested the authenticity of his
signatures on Exs.A.1 to A.12. Exhibits A.5 to A.12 comprise invoices from the
1st Defendant to the Plaintiff's market committee. In contrast, Exs.A.1 to A.4
pertain to return bills issued to the Plaintiff's committee.
14. It is undisputed that the Plaintiff market committee commenced the
distribution of fertilizers and pesticides to local farmers under the Rythu Mitra
Scheme following the policy set forth by the Government of Andhra Pradesh.
The Plaintiff market committee acquired pesticide stocks from the Defendants
between 1998 and 2000. In the Plaintiff's case, stocks covered under Exs.A.1
to A.4 were returned to the 1st Defendant due to their imminent expiration; the
2nd Defendant accepted the returned stock and provided endorsements on
the corresponding return bills. According to the Plaintiff's claims, the 1st
Defendant dispatched stock valued at Rs.1,11,100/- to the Plaintiff between
25.03.2001 and 26.03.2001. Nonetheless, the 1st Defendant was obligated to
return stock worth Rs. 2,77,220/- to the Plaintiff.
15. The pivotal issue to be resolved is whether the Defendants received the
stock from the Plaintiff market committee as alleged. The onus of proving this
fact lies with the Plaintiff market committee. In its assessment, the trial Court
relied heavily on the evidence provided by PWs.1 and 2 during cross-
examination, which ultimately undermined the Plaintiff's claim. PW.1 testified
that the Plaintiff Agricultural Marketing Committee did not employ him during
the transactions. PW.2, similarly, admitted in cross-examination that he had
no personal knowledge regarding the transactions between the Plaintiff and
the Defendants.
16. Furthermore, Khadar Valli, who served as the Secretary of the Plaintiff's
market committee, was not called to testify on behalf of the Plaintiff. Based on
the testimonies of PWs.1 and 2, the trial Court concluded that neither had
personal knowledge of the transactions between the Plaintiff and Defendants
from 1998 to 2000. In light of the Defendants' denial of the Plaintiff's claims, it
was incumbent upon the Plaintiff's market committee to substantiate its case
by presenting officials who directly knew the transactions. The record reflects
that the Plaintiff market committee did not provide any justification for the
failure to examine officials who were knowledgeable about the transactions in
question.
17. PWs.1 and 2's testimonies indicate that their evidence was based on
the available office records. The Plaintiff market committee's case relies on
the endorsements purportedly made by the 2nd Defendant on Exs.A.1 to A.4,
which are return bills. According to the Plaintiff, these endorsements were
intended to authorize the supply of new stock. However, the 2 nd Defendant,
who testified as DW.1, denied the Plaintiff's claims. During cross-examination,
nothing was elicited to support the Plaintiff's assertion regarding the
endorsements on Exs.A.1 to A.4. Consequently, the Plaintiff's reliance on
these endorsements to substantiate their claim remains unsupported by
corroborative evidence.
18. Plaintiff contends that the 3rd Defendant agreed to replace the stock on
the condition that a deduction of 30% of the value of the expired goods be
made for refund charges, with an additional 4% of the value for sales tax paid
on the returned stock. Plaintiff supports this assertion with Ex.A.20, a
notarized affidavit provided by the 3rd Defendant during a departmental
enquiry. The trial Court observed that the affidavit reveals that the 3 rd
Defendant, as a partner in the 1st Defendant's firm, directed P. Venkateswara
Rao, the Sales In-charge, to return the expired stock to the firm. According to
the affidavit, P. Venkateswara Rao complied with this instruction, returned the
stock, and issued the corresponding bills.
19. The trial Court observed that the 3rd Defendant did not support the
Plaintiff's case by adopting the written statements provided by Defendants 1
and 2. Additionally, the trial Court noted that the Plaintiff failed to take
necessary steps to examine the Notary before whom the 3rd Defendant swore
the contents of Ex.A.20. The Plaintiff contends that the 3rd Defendant, as a
partner of the 1st Defendant firm, made an endorsement regarding the
replacement of expired pesticides and agreed to send new stock with a 30%
deduction on the remaining balance. This endorsement is argued to be
binding on Defendants 1 and 2. PWs.1 and 2 testified that the 3 rd Defendant is
indeed a partner of the 1st Defendant's firm. Thus, the acknowledgement and
endorsement by the 3 rd Defendant on the notice dated 26.07.2002 should be
considered binding on the firm. Although the Notary who attested Ex.A.20 was
not examined, the 3rd Defendant's failure to dispute the Plaintiff's claims in
Court may mitigate the impact of this omission. Nevertheless, Plaintiff is still
required to establish that the 3rd Defendant had the authority as a partner to
make such endorsements on behalf of the 1st Defendant firm.
20. The Defendants assert that the 3rd Defendant is not a partner of the 1st
Defendant firm; thus, any actions or endorsements by the 3 rd Defendant are
not binding on the firm. To support this claim, the Defendants produced
Ex.B.1, a certificate of registration dated 22.11.1997, which indicates that the
1st Defendant firm is a proprietary concern, not a partnership firm. DW.2, P.V.
Prasad Rao, Deputy Commercial Tax Officer from Akiveedu, testified that, as
per Ex.B.1, the 1st Defendant firm is registered as a proprietary concern. The
Plaintiff market committee chose not to cross-examine DW.2, leading to a
conclusion based on the unchallenged testimony and Ex.B.1. Consequently,
the trial Court found that the 1st Defendant firm is a proprietary concern rather
than a partnership firm. Additionally, the trial Court noted that while Ex.A.20, a
notarized affidavit from the 3rd Defendant, indicates that he is a partner of the
1st Defendant firm, this affidavit cannot override the registration certificate
presented as Ex.B.1. Even if the statements in Ex.A.20 were accurate, the trial
Court concluded that the 3rd Defendant could not be deemed a partner with
authority to make binding endorsements on behalf of the 1 st Defendant firm.
As a result, the endorsement made by the 3rd Defendant could not be used to
affect the statute of limitations for the case.
21. According to the Plaintiff's case, the cause of action for the suit arises
from a notice sent to the 1st Defendant on 27.06.2002. This notice included an
endorsement by the 3rd Defendant, indicating that new stock would be sent in
exchange for the expired pesticides, with an additional undertaking to deduct
30% from the remaining balance. The trial Court noted that although the
Plaintiff relied on an office copy of the notice dated 26.07.2002 containing the
3rd Defendant's endorsement, no such office copy was filed with the Court.
Furthermore, the Plaintiff did not contest the absence of this document in the
proceedings. The suit was filed on 18.07.2005. The 2nd Defendant received
the stock, as indicated by endorsements on four return bills dated 02.05.2000
and 12.05.2000. The Plaintiff allegedly returned the stock to the 1 st Defendant
on 25.03.2001 and 26.03.2001. According to the Plaintiff's claims, the suit was
based on the alleged endorsement dated 18.07.2002 by the 3 rd Defendant.
Assuming the stock was returned on 25.03.2001 and 26.03.2001, the suit
should have been filed within three years. The Plaintiff's delay in filing the suit
on 18.07.2005 exceeds the limitation period.
22. Additionally, the trial Court found that the 3rd Defendant was not a
partner of the 1st Defendant firm. Thus, any endorsement by the 3rd
Defendant, even if true, was not binding on the Plaintiff Market Committee.
Given these observations, the trial Court correctly determined that the suit was
barred by limitation.
23. After careful consideration, the trial Court correctly appreciated the
evidence. There is no reason for this Court to arrive at a different conclusion
than the one arrived at by the trial Court. I believe the findings arrived at by
the trial Court are correct, and no justifiable reasons have been shown by the
appellant/defendant No.1 for arriving at different conclusions. I agree with the
conclusion reached by the trial Court.
24. Accordingly, the Points are answered in favour of the Defendants.
Given the preceding discussion, the view taken by the trial court does not call
for any interference, and this Appeal fails and is hereby dismissed. The
impugned Decree and Judgment passed by the trial court is upheld.
25. As a result, the Appeal is hereby dismissed without costs by
confirming the Decree and Judgment in O.S.No.195 of 2005, dated
26.11.2008, passed by the learned Senior Civil Judge, Bhimavaram.
Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.
_____________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 14.08.2024
SAK
THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO. 209 OF 2009
Date: 14.08.2024
S.A.K
