M/S Kla Bharat Cottage Industries vs U.P.Cooperative Federation Ltd & ...
2010 Latest Caselaw 5592 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI

                  RFA No.218/2003


                    Judgment delivered on: 08.12.2010


M/s KLA Bharat Cottage Industries        ..... Appellant
                  Through: Mr. Arvind Kumar Sharma,
                           Adv.

                        Versus

U.P. Cooperative Federation Ltd. & Anr.  ..... Respondent

Through: Mr. J.N. Aggarwal with Mr. Mayank Joshi, Advs.

CORAM:

HON'BLE MR. JUSTICE KAILASH GAMBHIR,

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

2. To be referred to Reporter or not? Yes

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

KAILASH GAMBHIR, J. Oral:

1. By this appeal filed under Section 96 read with

Order 41 Rule 1 of the Civil Procedure Code, 1908 the

appellant seeks to challenge the judgment and decree dated

26.11.2002 passed by the learned Trial Court whereby the

appellant's suit for recovery was dismissed.

2. Brief facts of the case according to the appellant

and relevant for deciding the present appeal are that the

respondents failed to supply the goods i.e 43.2 metric tones

Rosin (N Grade) @ Rs. 6.72 paisa per kg. to the appellant

despite of an agreement between the two parties.

Consequently the appellants had to purchase the product from

the open market and hence suffered damages for which they

filed a suit for recovery of Rs. 2,59,200/- which vide judgment

and decree dated 26.11.2002 was dismissed. Feeling

aggrieved with the same, the appellants have preferred the

present appeal.

3. Mr. Arvind Kumar Sharma, learned counsel for the

appellant submits that the suit filed by the appellant was

dismissed by the learned Trial Court on technical grounds

without appreciating the pleadings of the parties and the

evidence adduced by the parties in support thereof. The

contention of the counsel for the appellant is that the

appellant was duly registered under the Indian Partnership Act,

1932 but due to some bona fide mistake the appellant could

not place on record certified copy of Form A and had the

appellant been given a further opportunity to place on record

the said certified copy of Form A, the appellant would have

certainly produced the same. Counsel also submits that the

appellant has separately filed an application under Order 41

Rule 27 read with Section 151 CPC so as to place on record

copy of Form A for consideration of this Court. Counsel for the

appellant also submits that the learned Trial Court has also

committed further error in observing that the appellant failed

to produce any evidence to prove that it had suffered loss on

account of breach of the contract by the respondents. The

contention of counsel for the appellant is that the appellant

had adduced PW1 Shri Jitender Nath, who duly proved on

record the price of Rosin at the end of year 1982 and also its

price in March and April, 1983. Counsel thus submits that the

said evidence of PW 1 was sufficient enough to prove that the

appellant had to purchase the said product of 'Rosin' from the

open market at a higher rate due to the failure of the

respondents to supply the same on the agreed rates.

Elaborating his arguments further, counsel contended that the

appellant was not to prove actual damage of loss as it was

sufficient for the appellant/plaintiff to prove on record that the

appellant was forced to purchase the goods in question at a

higher rate. In support of his arguments, counsel for the

appellant placed reliance on the following judgments:-

1. Maula Bux vs. Union of India AIR 1970 SC 1955.

2. M/s Skytone Electricals (India) vs. Union of India & Anr ILR (1982) I Delhi 788.

4. Counsel for the appellant also submits that the

learned Trial Court has failed to give any specific finding on

issues No. 2,3,5 and 6 and has decided the said issues based

on the view taken by the Court on issue No. 1 and 4. The

contention of counsel for the appellant is that such a course

adopted by the learned Trial Court is impermissible in the eyes

of law.

5. Refuting the said submissions of counsel for the

appellant, Mr. J.N. Aggarwal, counsel for the respondent

argued in support of the findings arrived at by the learned Trial

Court and contended that the appellant has failed to point out

any illegality or infirmity in the said findings.

6. I have heard learned counsel for the parties at

considerable length and gone through the records.

7. The appellant in the recovery suit has claimed

breach of contract on the part of the respondents in not

supplying 43.2 metric tones of Rosin (N Grade) despite the

appellant having deposited a sum of Rs. 7,000/- by two bank

drafts of Rs. 3,500/- each towards the earnest money. As per

the appellant the said supply of Rosin (N Grade) was to be

made by the defendants/respondents at the rate of Rs. 6.72

paisa per Kg and the said breach on the part of the

defendants/respondents forced the appellant to purchase the

said Rosin from the open market at a higher rate i.e. @ Rs.

12.60 per Kg. The appellant thus claimed an amount of Rs.

2,59,200/- towards the differential price of the said item i.e.

the agreed rate and the rate on which the appellant had

purchased the said item from the open market. Defendants on

the other hand seriously refuted the claim of the appellant and

took a stand that there was no concluded contract between

the parties to effect supply of 43.2 MT Rosin (N Grade) @ Rs.

6.72 paisa per Kg and, therefore, there was no breach on their

part. The defendants/respondents, however, did not dispute

the first supply made by them to the appellant at the said rate.

The respondents had also seriously refuted the market rate of

said Rosin @ Rs. 12.60 pr Kg. at the time of alleged breach of

the contract. The respondents in the written statement also

disputed credentials of the person, who has signed the plaint

as one of the registered partners and also registration of the

appellant firm. Based on the pleadings of the parties, the

learned Trial Court framed the following issues:-

"1. Whether the plaintiff is a firm duly registered under the Partnership Act and Mr. B.L. Khurana who has signed the plaint is one of its registered partners?

2. Whether the plaintiff has no locus standi to file the suit?

3. Whether the contract entered into between the parties vide letter dated 26.7.1982 was not valid for reasons mentioned in the written-statement?

4. Whether the contracts entered into between the parties before 26.7.1982 and which were fulfilled, have any effect on the contract subsequently entered into between the parties on 26.7.1982?

5. What amount of damages, if any, is the plaintiff entitled to recover from the defts?

6. Relief."

8. The appellant had examined Shri Jitender Nath as

PW1 while the respondents/defendants had examined three

witnesses in support of their defence. Before carrying the

discussion further it would be relevant to reproduce the

statement given by the sole witness adduced by the appellant

in his examination-in-chief and the same is reproduced as

under:-

"I am dealing in purchase and sale of Rosin. At the end of 1982, its price was between Rs. 11/- to 1.50 per Kg. In March and April, 1983, its price was Rs. 12, 13 & 14 per Kg. I have conducted the sales at this price."

9. Based on this sole testimony of PW 1 the

submission of counsel for the appellant is that the said

evidence is sufficient enough to make the respondents liable

for payment of differential amount of Rosin i.e. Rs.2,59,200/-.

Although the finding of the learned Trial Court on issues No. 3

and 4 cannot be appreciated on account of the fact that no

specific finding in detail was given by the Trial Court on the

said issues. Failure of the appellant to prove its locus standi

would not have any bearing on issues No. 3 and 4, which were

to be decided by the learned Trial Court independent of the

findings given by the learned Trial Court on issues No. 1 and 2.

Be that as it may, the learned Trial Court while carrying on the

discussion on Issue No.3 and 4 did observe that nothing

material was deposed by PW1 in his examination-in-chief,

therefore, the appellant/plaintiff was found to have failed to

prove that any contract was executed between the parties by

letter dated 26.7.82. Even in the absence of any detailed

findings given by the learned Trial Court, can the appellant by

any stretch of logic say that it had proved the said issues No.

3,4 and 5 based on the sole and brief testimony of PW-1.

Indisputably, the appellant firm or any of the partners failed to

adduce any evidence to prove their case on the said issues.

Because of the serious disputes raised by the respondents it

also cannot be said that the respondents had admitted the

claim of the appellant.

10. The two judgments relied upon by counsel for the

appellant in the case of Maula Bux (supra) and M/s. Skytone

Electricals (India) (supra) would be of no help to the case of

the appellant as for claiming damages, the prerequisite is to

first establish breach of contract on the part of the

respondents. No damages can be awarded by the Court

without coming to the conclusion that there was a legal, valid

and binding contract between the parties and then there was a

breach on the part of the defendant which resulted in causing

loss to the plaintiff. In the present case, the respondents have

seriously disputed the existence of a contract itself and,

therefore, it was obligatory on the part of the appellant to have

first established the existence of a valid and legal contract

between the parties and then the breach of the contract. But,

since no evidence was led by the appellant to establish the

said prerequisites to claim damages, therefore, the said two

judgments cannot be of any assistance to the case of the

appellant. The deposition of PW-1 is only confined to the

disclosure of the rates of the item 'Rosin' in the open market

during the relevant period and merely proving the said rate of

item 'Rosin', the learned trial court could not have accepted

the amount of damages as claimed by the appellant in the

suit. This Court, therefore, does not find any infirmity or

illegality in the said finding arrived at by the learned trial court

on the failure of the appellant to lead any evidence to prove

the issues No.3 & 4. The appellant would have been in no

better position even if the Form A, now placed on record by

the appellant along with the application moved by the

appellant under Order 41 Rule 27, is accepted by this Court.

11. There is no merit in the present appeal, the same is

hereby dismissed.

December 08, 2010                        KAILASH GAMBHIR, J
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