Kishan Das vs Municipal Corporation Of Delhi ...
1992 Latest Caselaw 297 Del

JUDGMENT

Gokul Chand Mittal, C.J.

(1) Shri Kishan Dass supplied coal to the Municipal Corporation of Delhi for use by Delhi Electric Supply Undertaking ofRs. 16,00,000.00, out of which Rs. 10,00,000.00 were paid and the supplier filed a suit for recovery of the balance amount and interest thereon.

(2) At the outset it may be noted that in order to have a legal contract with the Municipal Corporation of Delhi there has to be a formal contract, as required by Section 203 of the Delhi Municipal Corporation Act, 1957 read witht he rules and since in this case without execution of any formal contract, on the basis of request made by the Municipal Corporation of Delhi, supplies of coal were made, the case has to be decided keeping in view the provisions of Section 70 of the Indian Contract Act, 1872 to compensate the supplier for the supply of coal to the Municipal Corporation of Delhi. There is no dispute in this behalf between the parties.

(3) After trial, the learned Single Judge fixed the price of 12597.5 metric tonnes of coal regarding which no analysis was conducted by the Municipal Corporation of Delhi on the basis of the price contained in the written agreement (not formal agreement) between the parties, Ext. P9 at pages 100 and 101of the paper book.

(4) For the coal of the most inferior quality, called mineral not vend able as coal (for short "MNVC"), because the ash contents were beyond 35 percent, the learned Single Judge allowed compensation at the rate of Re. l.00 per metric tonne.

18364.7metric tonnes of coal was analysed and on analysis it was found of two categories :(i) ash up to 28 per cent,(ii) ash from 29 per cent to 35 per cent.

For these qualities of coal, price was allowed after making deductions as per the agreement annexure P9. In the result, the learned Single Judge passed a decree for Rs.. 2,53,453,03, the price of the coalandRs.96,701.00onaccount of interest at the rate of 12 per cent with proportionate costs by judgment and decree dated 1/02/1978. R.F.A. (OS) Ii of 1978 is by the plaintiff and R.F.A. (OS) 16 of 1978 is by the defendants. Since cross appeals arise out of the one suit and same judgment and decree, they are being disposed of by common order.

(5) In the appeal of the plaintiff, the controversy relates to payment of proper price, for 18,364.7 metric tonnes of coal. which was duly analysed and for "MNVC" quality of coal and interest as well.

(6) Adverting to the appeal of the defendants, the ground raised is that on the non-analyzed coal, the learned Single Judge has wrongly allowed the agreed rate. There is also a reference of the application of the defendants under Section 151 of the Code of Civil Procedure for permission to place further test reports relating to 8000 metric tonnes of coal.

(7) Adverting to the plaintiff's appeal, we are of the view that "MNVC"quality of coal, in which ash contents were more than 35 per cent, there is no scope for interference. The plaintiff has not led any reliable evidence as to what is the market rate of "MNVC" coal. Moreover, according to the material on record and as found by the learned Single Judge, such quality of coal has hardly any value and, therefore, we maintain the judgment and decree of the learned Single Judge, with regard to the "MNVC" coal.

(8) Coming to the analysed coal, weighing 18364.7 metric tonnes,according to the analysis conducted by the defendants, it is of two qualities one with ash contents up to 28 per cent and the other with ash contents from29 per cent to 35 per cent. According to the statement of Mr. NarendraAhiuwalia, D2W3 read with agreement of the defendant with Bharat Cooking Coal Limited, copy of which has been on the record of Rfa (OS) 11 of 1978along with C.M. 1372 of 1991, for permission to produce it by way of additional evidence, we are of the opinion that coal with ash contents up to 28 percent is considered coal of grade III-A and with ash contents from 29 per cent to 35 per cent, the coal is graded as Ill-B.

(9) Before we proceed to determine the value of grade III-A and Ill-B.it is necessary to decide the application for additional evidence.

(10) On a consideration of the matter, we are of the view that the contents of the agreement with Bharat Cooking Coal Limited stands admitted bydefendants' witness, Narendra Ahiuwalia. who appeared as D2W3 and also from other material on record and it was only necessary to place the formal agreement on record, which is in possession of the defendants. In fact, the plaintiff has obtained the certified copy from the office of the defendants and has placed it on record, with permission, by way of additional evidence. In the interest of justice and to enable to take a proper decision, we grant the application and take on record the agreement as additional evidence and marked it as C-l,

(11) Adverting to determine the price of grades III-A and Ill-B, we are of the opinion that the best material to be taken into consideration would be the statement of Narendra Ahiuwalia, D2W3 and the agreement entered into with Bharat Cooking Coal Limited. A reading of these shows that for coal with ash contents up to 29 per cent the defendants agreed to pay to Bharat CookingCoal Limited Rs. 29.06 per metric tonne, as the quality of the coal was considered as grade III-A. They also agreed that for coal with ash contents up to 30per cent, there would be deduction of five paise per per cent deficiency in ash contents, and for ash contents from 31 per cent to 35 per cent, there will be deduction of 10 paise per per cent deficiency of ash.

(12) The agreement with the plaintiff was to supply grade II coal from three collieries and the rate per metric tone range from Rs. 30.21 to Rs. 30.70 Grade II coal is undisputedly better than grade III coal. With Bharat CookingCoal Limited the agreement was for supply of coal with ash contents of 29 percent at the rate of Rs. 29.06 per metric tonnes with deductions of five paise per percent up to 30 percent and ten paise per per cent beyond that. According to the pleadings and the statement of Narendra Ahluwalia, D2W3 and the agreement with Bharat Cooking Coal Limited, we are of the opinion that this is the best criteria for awarding compensation to the plaintiff for coal of grades III and Ill-B and accordingly we hold that for grade III- A coal and for ash contents up to 29 per cent the plaintiff would be entitled to the price at Rs. 29.06 per metric tonne and for grade Ill-B, with ash contents up to 30 per cent, there will be deduction from the aforesaid price at the rate of 5 paise per per cent and we also order that for grade III-B coal with ash contents beyond 30 per cent and up to 35 per cent, there" will be deduction of ten paise per per cent from Rs.29.06 per metric tonne.

(13) Obviously, the learned Single Judge forgot to award interest on the decrial amount that is from the date of decree till realisation. The plaintiff is clearly entitled to interest on the decretal amount from the date of decree tillrealisation.

(14) Adverting to the appeal of the defendants, we find no ground to interfere with the well considered judgment and decree of the learned Single Judge with regard to the compensation allowed for the coal, which was not analysed by them and in allowing the agreed rate.

(15) The learned Counsel for the defendants urged that he would have not disputed the correctness of the decision of the learned Single Judge if there had been no analysis of the remaining coal, but analysis was conducted. We have the report of the local commissioner at page 92 of the paper book-it,which clearly goes to show that 12597.05 metric tonnes of coal was not analysed. Further, we have the application of the defendants under Section 151 of the Code of Civil Procedure for permission to place test reports relating to about8000 metric tonnes of coal on record. This application was filed before the learned Single Judge and was dismissed as belated. In- appeal, neither an application was filed for permission to place on record the said report nor report has been placed on record so far and if report had been placed on record, we might have looked into it for doing justice between the parties. The appeal is also pending for about 14 years. Hence, there was not only delay before the learned Single Judge for bringing on record the alleged report regarding balance coal,there has been further delay of 14 years before us in this behalf. Therefore, in the absence of any report, we cannot come to any conclusion for the non-analyzed coal, which admittedly was utilized by the defendants in producing electricity, that it was not of the quality as agreed upon.

(16) For the reasons recorded above, while Rfa (OS) 16 of 1978 isdismissed, Rfa (OS) 11 of 1978 is partly allowed and it is ordered that for18364.7 metric tonnes of coal, which was analysed, the plaintiff would be entitled to price for coal with ash contents up to 29 per cent at the rate of Rs. 29.06per metric tonne and for coal with ash contents up to 30 per cent at the rate less by five paise per per cent deficiency in ash contents and for coal with ash contents beyond 30 per cent and up to 35 per cent at the price less by ten paise per percent of the ash deficiency. The plaintiff would also be entitled to the interest at the rate of 12 per cent P.A. on the decretal amount awarded by thelearned Single Judge from the date of decree till realisation. On the price ofcoal, which would be enhanced under our decree, the plaintiff would also been titled to interest at the rate of 12 per cent from the date of-the decree of thelearned Single Judge till realisation. However, the parties are left to bear their own costs.