New Rama Seed Corporation vs Darshan Lal Jain
2008 Latest Caselaw 1764 Del

*                 IN THE HIGH COURT OF DELHI

                      Judgment reserved on : September 26, 2008
%                     Judgment delivered on : September 29, 2008


+                      RFA 374/2001


NEW RAMA SEED CORPORATION                    ..... Appellant

                  Through:   Mr.Manish Batra, Advocate

            VERSUS

DARSHAN LAL JAIN                             ..... Respondent

                  Through:   Mr. Rajiv Aneja, Advocate


CORAM:

Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R. Midha

1. Whether reporters of local papers may be allowed
   to see the judgment?                    Yes.

2. To be referred to the Reporter or not?    Yes.

3. Whether judgment should be reported in Digest? Yes.


: PRADEEP NANDRAJOG, J.

1. The appellant who was the defendant has suffered

a decree in sum of Rs.1,89,000/- together with interest @ 18%

per annum from the date of the suit till realization as also

cost.

2. Briefly stated, case of the respondent was that he

was in the business of manufacturing tin boxes and appellant

has placed 2 orders for manufacture and supply of tin boxes.

The first order was for 6000 tin boxes @ Rs.6.25 per box. The

second order was for 600 boxes @ Rs.8/- per box. On the

boxes relatable to the first order, the words "Gurdaspur Ki

Shaan" had to be printed and on the boxes relatable to the

second order "New Rama Seed Corporation" had to be

printed. It was stated that in addition to the aforesaid prices it

was agreed that the appellant shall pay Rs.21,000/- as cost of

scanning, planning and proofing and art work in connection

with the 2 orders.

3. Pleading that the appellant lifted only 3,200 boxes

pertaining to the first order and 385 boxes pertaining to the

second order and that the respondent had executed the entire

works; further pleading that even in respect of the boxes

which were taken delivery of, Rs.13,580/- was the outstanding

payment, suit was filed claiming Rs.1,89,100/- detailed as

under:

      i)          Outstanding payment           Rs.13,580.00

      ii)         Cost of Boxes.
                  (Gurdaspur-ki-shaan)
                  6000 - 3200 = 2800 x 6.25     = 17,500.00

                  (New Rama Seeds Corpn.)
                  6000 - 385 = 5615 x 8.00      = 44,920.00

      iii)        Cost of Scanning/Planning
                  Proofing & art-work           Rs.21,000.00

      iv)         Damages for restoration
                  of goods lying in the


                   godown from 9.6.97 to
                  8.3.1999.                     Rs.63,000.00

      v)          Interest on Rs.97,000/-
                  from 1.7.97 to 28.2.99
                  @18% p.a.                     Rs.29,100.00

                                      Total:    Rs.1,89,100.00

4. The stand taken in the written statement was that

the suit was barred by limitation. It was admitted that the 2

orders as stated in the plaint were placed but in respect of the

second order it was disputed that the agreed price was Rs.8/-

per box. It was stated that the price agreed was Rs.6.25 per

box. It was denied that any amount was agreed to be paid

towards printing and scanning charges. It was admitted that

3,200 boxes pertaining to the first order were received and

385 boxes pertaining to the second order were received. It

was pleaded that the remaining boxes were not lifted because

the same were not up to the specification.

5. Since the learned Trial Judge has found a variance

between pleading and proof pertaining to the defence raised

in the written statement and evidence led it would be relevant

to note the pleadings in the written statement pertaining to

the plea that the boxes were not taken delivery of on account

of not being up to the specification. The pleading is as under:-

"The first lot of boxes both with the inscription "Gurdaspur Ki Shan", numbering 3200 and "New

Rama Seed Corporation", numbering 385 was lifted by the defendant since the same being as per specification of the defendant's order while the remaining boxes of both the inscription that of "Gurdaspur Ki Shan" and "New Rama Seed Corporation" were of Sub-standard stuff, using low quality material like thin sheet of tin, sub- standard colour/paint etc. and as such the defendant refused to accept the same. The boxes were not as per specification. The defendant time and again requested the plaintiff to provide the material as per specification while the plaintiff failed to do so. The plaintiff instead of extending the co-operation started threatening the defendant."

6. Since learned counsel for the parties, in appeal,

have restricted their submissions pertaining to the suit being

decreed on merits we need not note any fact relatable to the

plea of limitation.

7. The defendant examined Narender Kumar Vij as

DW-1. Narender Kumar Vij stated in his testimony that he did

not receive the remaining boxes because the same were not

as per the specifications. In relation to the goods not being up

to specifications, he stated:-

"I had not lifted certain number of boxes which were not of the standard because of moisture. The printing was not good."

8. Learned Trial Judge has held that the

defendant/appellant has attempted to prove a deficiency in

the goods not as per the pleadings and hence has rejected the

defence.

9. In respect of the dispute whether there was an

agreement that the appellant shall pay Rs.21,000/- towards

printing charges the learned Trial Judge has noted that in the

statement of account maintained by the respondent in the

name of the appellant, Ex.PW-3/33, an entry was made on

22.3.1996 debiting Rs.17,296/- when bill No.3154 was raised.

10. Learned Judge has noted that the said bill was

raised on account of supply of 385 boxes @ Rs.8/- per box i.e.

Rs.3,080/-. Local sales tax @ 7% was charged being

Rs.215.60/-. Rs.14,000/- was charged towards designing

scanning, printing and proofing. Rounding of the figure, total

amount came to Rs.17,296/-.

11. Two conclusions have been drawn from the said

bill. First, on the admission by the appellant that it had

received delivery of 385 boxes under the 2nd order and this

being the only bill, it has been opined that it concludes the

issue of the price pertaining to the second lot. Since the bill

was raised @ Rs.8/- per box and there was no evidence that

the appellant refuted the bill, the learned Trial Judge has held

that the respondent has successfully established that the

price payable per box for the 2nd lot was Rs.8/-.

12. The second inference drawn was on account of the

fact that the amount of Rs.14,000/- was claimed on account of

printing, scanning and processing charges and if it was not so

payable, the appellant would have protested against the same

being raised in the bill. Having not so done, learned Judge has

opined that it shows that printing and scanning charges were

payable extra.

13. At the hearing held on 26.9.2008 the learned

counsel for the appellant very fairly conceded that the

principle of variance between pleadings and proof requires the

Court to reject all evidence which seeks to prove a fact

contrary to the pleadings of the parties or in a manner which

is at variance with the pleadings of the parties. Thus, learned

counsel very fairly conceded that the ground for rejecting the

goods has not been established by the appellant as required

by law.

14. There being no dispute that the first lot of 6,000

boxes had to be paid for @ Rs.6.25 per box the issue of price

related to the second order also was conceded as flowing out

of bill No.3154 dated 22.3.1996.

15. For record we may note that the said bill has not

been exhibited or proved at the trial but is at page No.219 of

the Trial Court record. As noted above, reference to the said

bill is in the ledger account Ex.PW-3/33 where an entry has

been made on 22.3.1996 debiting the account of the appellant

in sum of Rs.17,296/- relating the entry to a bill No.3154.

16. Learned counsel for the appellant urged only 3

submissions. Firstly that the learned Trial Judge erred in

awarding Rs.63,000/- as damages for storage of the goods in

the godown of the respondent from 9.6.1997 to 8.3.1999 as

also awarding interest @ 18% per annum on the outstanding

amount which include damages for storage of the goods.

Lastly, there was no evidence that Rs.21,000/- was agreed to

be paid for printing and scanning charges.

17. Learned counsel for the respondent stated that his

client had to store the boxes till they were destroyed from

9.6.1997 to 8.3.1999. When questioned whether the

respondent had taken the godown on hire, learned counsel

answered in the negative and stated that the godown

belonged to the respondent.

18. Under the proviso to Section 73 of the Contract Act

it is the duty of every party to a contract to mitigate the loss if

there is a breach of contract.

19. The appellant had refused to lift the boxes in the

year 1997 itself and thus we see no reason why the

respondent continued to hold on to the boxes which were not

being accepted by the appellant. Further, since the

respondent was not paying any rent for the godown in

question and there being no evidence that the respondent

could not store other goods in the godown due to lack of

space, we hold that no case is made out to award damages

towards storage charges.

20. With respect to the cost of scanning, planning and

proofing of the art work, it would be relevant to note that the

respondent has raised only one bill No.3154 dated 22.3.1996.

The bill raises a demand of Rs.14,000/- for said work. It does

not record that part amount was being claimed. No other bill

was admittedly raised for the alleged balance amount. The

boxes were manufactured much before the suit was filed. If

the bill in question probablizes that it was agreed between the

parties that extra money would be paid for planning, scanning

and proofing of the art work, in the absence of any further

demand, the bill also probablizes that the agreed amount for

said work was only Rs.14,000/-.

21. Learned counsel for the appellant conceded that an

outstanding payment of Rs.13,580/- was payable for the

goods which were received.

22. Thus, the amount which would be payable for the

manufacture and supply of boxes would be Rs.13,580/- +

Rs.17,500/- + Rs.44,920/- = Rs.76,000/-. Rs.14,000/- would

be payable for scanning, planning and proofing. Total amount

payable comes to Rs.90,000/-.

23. The bills raised show a demand of interest @ 18%

per annum, being a printed clause.

25. But to succeed, the respondent has to prove that

the said rate of interest was an agreed rate of interest or was

the rate of interest payable as per market practice and usage.

26. No evidence on market practice or usage has been

led.

27. It is true that a printed condition of a bill can

evidence a contract between the parties but the said principle

has to be applied with care. If, as noted in the instant case, a

contract is pleaded as an executory contract and bills are

raised when supply is effected, the bills cannot be read as a

contractual document for the reason the contract had

preceded the supply and the bill being raised. In such a

situation, the bill has to be treated as evidencing a demand

for payment and no more.

28. The respondent had served a notice on 9.6.1997

claiming interest @ 18% per annum. The said notice can be

treated as a notice of demand under the Interest Act 1978.

Thus, the respondent would be entitled to interest at the rate

offered by Scheduled Banks on fixed deposits which we note

was 12% per annum as on 9.6.1997.

29. The respondent would thus be entitled to interest

@ 12% per annum w.e.f. 9.6.1997, in view of the notice dated

9.6.1997 Ex.PW-3/31.

30. The appeal is partially allowed. Impugned

judgment and decree is modified to the extent that the suit

filed by the respondent is decreed in sum of Rs.90,000/- with

interest @ 12% per annum w.e.f. 9.6.1997 till the date of

payment and proportionate cost.

31. We note that pursuant to interim orders passed by

this Court the appellant has deposited a sum of Rs.1,20,000/-

and a further sum of Rs.1,52,034.80. The said amount had

been released in favour of the respondent.

32. Thus, the respondent has received in all a sum of

Rs.2,72,034.80.

33. The respondent has apparently received an

amount in excess than what would be payable to the

respondent as per decree modified today.

34. We thus grant a right of restitution to the appellant

who would be permitted to seek restitution by filing an

appropriate application as per law after calculating the

amount payable to the respondent as per our decision

rendered today.

35. There shall be no order as to costs in the appeal.

PRADEEP NANDRAJOG, J.

J.R. MIDHA, J.

September 29, 2008 rk