Metal Distributors Limited vs Union Of India
2001 Latest Caselaw 339 Del

ORDER

A.K.Sikri, J.

1. Plaintiff/appellant filed the suit for recovery of Rs.1,92,292.14 paisa in this Court, being Suit No. 417 of 1968. The case of the plaintiff was that the Directorate General of Supplies and Disposal (DGS&D for short) issued a tender on 9th November, 1964 for supply of 1045 metric tonnes(M.T.) of copper. The plaintiff had offered to supply 1000 M.T. of this material which offer was accepted by DGS&D on 24th November, 1964. It is an admitted case that the supply was required for army and DGS&D wanted an early supply. The plaintiff had quoted higher price for 500 M.T. shipment during January 1965 and remaining 500 M.T. during February, 1965. Its lowest offer was at the rate of Rs. 5,557.84 paise per M.T. when the shipment was to made at a later date in June/July, 1965. DGS&D, while accepting the offer, agreed to pay higher rates demanded by the plaintiff during January-February, 1965 shipment as it was in need of early supply. However, in the Contract between the parties, following special condition was attached:

" Special condition:It should be noted that on the assurance of the seller delivery at the rate as given under Clause 20 F.O.R. Bombay offered by you this contract has been placed on you in preference to your lowest offer of Rs.5557.84 per M/T F.O.R. Bombay. In case of failure to complete the supplies against this contract in terms thereof with in the date of delivery specified herein, you would be liable to pay to the Govt. the difference between the contract rate and that of the lowest acceptable tender on the basis of final price F.O.R. destination including all elements of freight, sales tax, local taxes duties and other incidental. This is in addition and without prejudice to the right of the Government to recover all other losses and damages resulting from delayed supplies including the right of cancellation and repurchase at your risk and expenses."

(emphasis supplied)

2. Admittedly the shipment was delayed. The goods were actually shipped in the following manner:

 S.No.    Vessel           Sailing Date         Quantify M/T
____     ______           ____________         ____________   

1A.     Steel Navigator     15.3.1965             12.387
1B.     "       "               "                 49.9972
1C.     Jaldata             12.4.1965            209.9918
 1.     Laxmi Jayanti       31.1.1965            203.289

S.No.   Vessel            Sailing Date         Quantify M/T
____    ______            ____________         ____________ 

2.     Green Valley         28.2.1965            101.6034
3.     Jaladhir                "                 205.2354
4.     Kampala               5.2.1965             50.800
5.     Aloca Voyager        30.3.1965             75.1859
6.     Aloca Marketer       25.3.1965             67.0711
7.     Vishva Jyoti         30.6.1965              4.458

 

3. The defendant/respondent made the payment against the aforesaid supplies. However, the payment was made at the lesser rate in view of the special condition in the Contract because as per the defendant, shipment was not made during January-February, 1965 and therefore, the plaintiff was not entitled to the higher price meant for shipment during January-February, 1965. Due to late shipment the goods were received by the defendant much belatedly. In this way payment made was lesser by Rs.1,46,481/- than the price agreed for shipment during January-February, 1965. Further, after taking the delivery the defendant informed the plaintiff that the consignment was short to the extent of 190 ingots and because of this necessary endorsement for recovery of Rs.45,811.14 paisa had been made on the inspection note sent along with the intimation dated 27th December, 1965 regarding short supply. Thus the grievance of the plaintiff was that the two deductions effected by the DGS&D namely Rs.1,46,481/- under the price preference clause and Rs.45,811.14 paisa for alleged short supply added up to Rs.1,92,292.14 paisa. After serving a notice under Section 80 of the Code of Civil Procedure suit for recovery of this amount was instituted.

4. The defendant filed written submission contesting the claim of the plaintiff. After the pleadings, the Court framed the following issues:

1. Whether the suit has been instituted by a duly authorised person?

2. Whether the plaint discloses a cause of action?

3. Whether a legal and valid notice under section 80 C.P.C. had been served on the defendant?

4. Whether there was a long shoremen's strike in U.S.A. and did it affect the delivery of the goods as alleged in para 4 of the plaint? if so, with what effect?

5. If issue No.4 is proved in favor of the plaintiff, then is the defendant entitled to recover a sum of Rs.1,46,4481/- from the plaintiff under the price preference clause?

6. Is the defendant not entitled to withhold a sum of Rs.45,811.14 from the plaintiff on account of shortage of 1990 pieces of copper ingots as alleged in para 8 of the written statement?

7. To what amount, if any, is the plaintiff entitled?

8. Relief.

5. First three issues were decided in favor of the plaintiff. On issues No. 4 and 5, the learned Single Judge returned the findings that although there was shoremen's strike in USA, in view of the price preferential clause the payment at the rate of Rs.5,557.84 paisa was rightly made. Moreover the dock workers' strike in USA involved only East Coasts and Gulf Ports but not West Coasts from where the material could also be procured. While reaching this conclusion, the learned Single Judge also took into consideration that the plaintiff could secure the material from other refineries in Germany, France and Zambia etc. and in fact ultimate shipment was by procuring material from other refineries. Therefore the plaintiff could not bank upon dock strike affecting East Coast and Gulf Ports of USA and since the shipment was not made during January-February. 1965, as per price preferential clause payment was rightly made at the lesser rate as per special condition in the Contract.

6. In so far as short supply is concerned, the learned Single Judge held that there was shortage of 190 ingots at the time of delivery at destination as against the booked quantity of 800, and therefore, the deduction on this account was also rightly made. In coming to this conclusion, the learned Single Judge relied upon the evidence led before it and thus concluded that deduction of Rs.45,811.14 paisa was also rightly made. With these findings, the suit of the plaintiff was dismissed vide the impugned judgment and decree and this appeal is preferred against that judgment and decree dated 13th October, 1975.

7. Learned counsel appearing for plaintiff/appellant submitted that once it was proved that there was strike of dock workers in USA which resulted in delay in delivery, the plaintiff could not be allowed to suffer, and therefore, he was entitled to the price as per the Contract which was fixed for making shipment during January-February, 1965 and not the lowest price. It was submitted that delay was due to factors beyond its control and Section 56 of the Contract Act stood attracted because of supervening impossibilities and the plaintiff was absolved of his contractual obligation to supply the goods under the Contract. Therefore, price preferential clause was not applicable and he was entitled to the agreed price. This argument, is wholly misconceived. Section 56 of the Contract Act cannot be pressed into service at all. It is not a case where plaintiff did not supply the goods and was seeking to be absolved from obligation under the Contract on the ground that it had become impossible to perform. As mentioned above, the goods were in fact supplied although shipment was not made in January-February, 1965 but belatedly during the period March, 1965 to June, 1965. Thus the price preferential clause clearly got attracted. The defendant had offered the plaintiff higher price only because the plaintiff assured shipment during January-February, 1965 as defendant needed copper urgently. The plaintiff could not take advantage by charging higher price even when it has shipped the material belatedly. In fact the very purpose of putting special condition containing preferential price clause was to ensure that plaintiff would not get higher price if the shipment is delayed and in that eventuality plaintiff would be entitled to its lowest offer of Rs.5,557.84 paisa per M.T. When such a clause was there which clearly got attracted on delayed shipment, plaintiff cannot crib or complain for getting the price as per this clause. The learned counsel for the plaintiff had no answer to the findings of the learned Single Judge to the effect that copper could be purchased from West Coasts in America, Germany, France or even Zambia. The following observations in the judgment of the learned Single Judge in this respect are worth a reproduction:

"But it is to be seen that the D.G.S.D. was interested in getting the supply or copper very early and for that reason he offered a price higher by about 20 per cent than the lowest proposed by the plaintiffs for the February shipment and a still better price for the January shipment. It was open to the plaintiffs to buy the requisite quantity of the material from any quarter in the world and they were under no obligation to go for the purpose to America alone. It has been conceded by Raj Kumar Bagri that copper could be purchased in Germany and France and 50 tons thereof was actually acquired from Zambia. He did not know which other countries of the world could supply copper ingots, and that signified that all the possible sources of supply were not tapped by the plaintiffs. There is no evidence worth the name to establish that copper was not available in ready stock anywhere apart from East Coast of America and the reason offered for the delay in delivery i.e. dock strike effecting East Coast and Gulf Ports of U.S.A. cannot for want of tangible support he accepted. Raj Kumar Bagri admitted, then, that there was a refinery which supplied copper for exports on the West Coast too and the plaintiffs did not endeavor to prove by any evidence other than the interested statement of the said witness that the entire necessary quantity of coper could not be purchased from the said refinery in time. There was admittedly no strike in the American refineries and there could to no impediment in the way of buying the requisite copper from the said refineries and handing it over to some shipping company for transport to India. The plaintiffs did ship 203.209 metric tons of copper on 31st January, 1965 and 50.800 metric tons on 5th February, 1965 and on both these dates the dock strike was on. Had the plaintiffs been possessed of any more copper ingots they must have booked the same for shipment and the fact that it was not done indicates that they did not have any copper as could be dispatched to India, it is inconceivable that the plaintiffs bought a thousand metric tons or so of copper from American Refineries without any sort of bills or vouchers and from the non production of such documents it may be safely presumed that no copper beyond what was shipped in January and February had been purchased by them from any refinery. It is pertinent that Raj Kumar Bagri, PW2 who claimed to have contacted the refineries in Germany and France for supply of copper could not produce copy of a single communication addressed to any such refinery."

8. These findings would also militate against the plaintiff's argument on Section 56 of the Contract Act inasmuch as the Contract had not become impossible to perform due to the strike of shoremen at one or two ports of U.S.A.

9. Accordingly we are of the opinion that the learned Single Judge rightly decided issues No. 4 and 5 in favor of the defendant and against the plaintiff.

10. In so far as findings on issue No.6 are concerned, our conclusion remains the same as that of learned Single Judge. A detailed discussion in the impugned judgment, based on evidence on record, brings out the following pertinent aspects:

1. At the time of dispatching the goods, a form Ex.DW-3/2 is to be completed and forwarded to the officer who places the order. It is shown by Ex.DW-3/2 that the actual weight of the goods dispatched was 148.400 M.T. whereas they submitted a bill for payment of price of 154.000 M.T. of copper Ex.DW-4/1.

2. The Chief Commercial Superintendent of the Cental Railway informed the General Manager, Ordnance Factory, Ambarnath vide his letter dated 23rd April, 1969 Ex.DW-1/2 that M/s Metal Distributors Limited, Bombay had booked in all 8 wagons containing 6045 copper ingots weighing 148.400 M.T. and the goods delivered to the factory were found at the time of delivery to be weighing 148.862 M.T. inspite of the discrepancy in the number of ingots.

3. When wagon No.NR 72198 reached the factory siding at Ambarnath its seals on both sides were intact and so were the rivets and EP locks.

4. The railway authorities charges their freight with reference to the weight of the goods booked and they were not concerned with the number of ingots.

5. The plaintiff did not produce their dispatch register which could have provided invaluable evidence as to the quantity dispatched by them on relevant dates. Inspite of orders passed by the court for filing correct statement mentioning that quantities were dispatched by the plaintiff, witness namely PW-3 did not do so and defied the orders of the court. Thus adverse inference could be drawn against the plaintiff.

6. The order was for supply of a certain quantity of copper by weight and number of ingots comprised in the said quantity was absolutely immaterial. Still the detail as to the goods dispatched appended to the plaintiffs bill Ex.DW-4/1 gives the number of pieces placed in each of the 8 wagons and significally omits to specify the weight. From this the learned Single Judge concluded that the plaintiff chose to furnish the number of ingots instead of weight of the copper because plaintiff knew that it was booking payment for supply of 154.000 M.T. of copper whereas it had actually dispatched only 148.400 M.T.

11. The learned counsel for the appellant could not shake the credibility of the aforesaid findings based on material on record. His only argument was that the contract was F.O.R.Bombay and once the goods were dispatched, the ownership in the property stood transferred to defendant and if there was any short supply, The deduction could not be made from the plaintiff's dues and the defendant should have raised the claim with the Railways as owner of the goods supplied. However, the argument misses the point namely the plaintiff failed to prove that they supplied the entire quantity of copper for which their bill was submitted and could not explain that the defendant and withheld part of its payment because of alleged short supply. As noticed above although the goods dispatched were to the extent of 148.400 M.T. only, the payment was claimed for 154.000 M.T. The defendant had therefore rightly paid for 148.400 M.T. It was not a case of short delivery where the entire quantity was supplied and there was some pilferage after the goods were delivered to the carrier and before when they were received by the defendant.

12. This appeal is therefore without any merit and is accordingly dismissed with costs.