Shri Ahsok Parshad Gupta vs M/S. K.M. Sugar Mills Ltd.
2011 Latest Caselaw 269 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI
 +                      RFA 41/2000 & RFA 59/2004
 %                                                  18th January, 2011

1.    RFA 41/2000

      SHRI AHSOK PARSHAD GUPTA              ...... Appellant
                             Through: Mr. Satya Prakash
                             Gupta, Advocate.
           VERSUS

      M/S. K.M. SUGAR MILLS LTD.                    ...... Respondent
                                    Through: Ms. Lalita Kohli,
                                    Mr. Abhishek Swarup, Advocates

2.    RFA 59/2004

      M/S. K.M. SUGAR MILLS LTD.               ...... Appellant
                                    Through: Ms. Lalita Kohli,
                                    Mr. Abhishek Swarup, Advocates.
            VERSUS

      SHRI AHSOK PARSHAD GUPTA         ...... Respondent
                             Through: Mr. Satya Prakash
                             Gupta, Advocate.

 CORAM:
 HON'BLE MR. JUSTICE VALMIKI J. MEHTA

 1.   Whether the Reporters of local papers may be
      allowed to see the judgment?
 2.   To be referred to the Reporter or not?
 3.   Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J. (ORAL)

1. These are two cross appeals filed by the parties, who were the

plaintiff and defendant in the trial court respectively, to the impugned

judgment and decree dated 7.8.1999 whereby the suit for recovery of

the appellant Sh. Ashok Parshad Gupta (Appellant in RFA 41/2000) was

decreed in part and dismissed for a part of the amount.

2. The appellant in RFA 59/2004 was the defendant in the suit and

by which cross appeal it is prayed that the trial court ought to have

granted to this appellant/defendant discount of 25% even on the

second bill of supply of the chemicals by applying the same principle

as applied in the first bill.

3. Reference which is made in this judgment to the appellant and

respondent are those as in RFA 41/2000.

4. The facts of the case are that the appellant was the seller and

the respondent was the buyer. Supply was made of certain chemicals

by two bills dated 12.11.1992 and 29.1.1993. The first bill was for a

sum of Rs. 2,61,128/- and the second bill was for a sum of Rs.

1,33,796.50. The total value of the goods therefore was Rs.

3,94,924.50. Since the respondent failed to make payments of the

bills, the suit for recovery was filed. The defence of the respondent in

the trial court was that the goods were defective and, therefore, the

appellant was not entitled to payment of 35% of the value of both the

bills.

5. After the pleadings were completed, trial court framed the

following Issues for determination:

"1. Whether the goods supplied by the plaintiff to the defendant were of sub standard quality? OPP

2. Whether this court has no territorial jurisdiction to try and decide this suit? OPP

3. Whether the defendant is entitled to deduct Rs.

1,40,834.64 on account of supply of the sub standard quality of goods? OPP

4. Whether the plaintiff is entitled to interest, if so, at what rate and to what amount? OPP

5. Whether the plaintiff is entitled to the suit amount?

OPP

6. Relief."

6. The main discussion is with respect to Issue No. 1 and while

dealing with this Issue, the trial court has arrived at a finding that

goods covered under the first bill were not of the requisite

quality/purity. In this regard, the trial court relied upon the letter

dated 20.1.1993 written by the appellant to the respondent and in

which the representative of the appellant had agreed that defective

goods will be replaced. The trial court has relied upon the report of

M/s. Shri Ram Institute in which there were findings that the goods

were defective.

Two arguments were raised by the appellant/plaintiff in the trial

court, firstly that there was no specific agreement regarding the level

of purity and secondly the samples were not taken in the presence of

the representative of the appellant. These two arguments have been

dealt with by the trial court firstly by holding that the appellant, when

he appeared as witness (PW-1), himself admitted in his cross-

examination that the level of purity in the chemicals supplied by him

was 98 or 99% as per ISI specifications. The trial court found,

however, as per the report of the M/s. Shri Ram Institute that the purity

content was far-far lesser and in fact even lesser than 50%. So far as

the factum of not lifting of the samples in the presence of the

representative of the appellant is concerned, the trial court has

referred to the fact that when this grievance was made by the

appellant, respondent asked the appellant to depute his representative

to take the second sample and get it tested from its own laboratory,

however the appellant mysteriously remained quiet.

7. The trial court has also found that so far as the second bill is

concerned, the same is dated 29.1.1993 and, therefore, the

agreement, as stated in the letter dated 20.1.1993 of the appellant,

cannot apply to the subsequent delivery dated 29.1.1993.

8. Before this Court, the learned counsel for the appellant argued

that the trial court has wrongly held that the materials were defective.

The same arguments which were raised in the trial court and dealt with

by the trial court were again re-argued before this Court. On behalf of

the respondent in the cross-appeal it was argued in addition to

supporting the decree to the extent passed that since discount was

given for the first bill for 25% of the amount on account of defective

goods, discount of 25% ought to have been given even for the second

bill since the goods were defective even under the second bill.

9. I am unable to agree with the arguments of the appellants in

both the appeals and both the appeals are liable to be dismissed. The

trial court has rightly examined all the issues and after detailed

discussions arrived at a conclusion that the goods/chemicals which

were supplied by the appellant to the respondent were not of the

requisite quality qua the first bill. Para 9 of the impugned judgment

(internal pages 7 to 11 of the impugned judgment: there are

repetitions of para numbers) is relevant and the same exhaustively

deals with the position and the same is accordingly reproduced below:

"9. As against this evidence of the plaintiff, the defendant examined V.K.Verma, Dy.Director, in Siriram Institute for Industrial Research. He deposed that the sample of caustic soda, washing soda and Amonima Bifloride was sent to this Institute by the Central Agency, Darya Ganj. He examined those for finding the purities in the samples. After examining the samples he gave three separate reports. He proved his reports as Ex-DW1/1 to Ex.DW1/3. He further deposed that price of these chemicals depends upon the level of purity. The only part of cross-examination which is relevant is that the witness admitted it to be correct that the report given by this Institute is more reliable and authentic then the report given by any other private laboratory. There is no dispute that as per the reports of this Institute Ex-DW1/1 to Ex.DW1/3 samples were found to be of sub standard quality. Report Ex.DW1/1 shows that level of purity in the sample of caustic soda was 37.1%. It is admitted by

the plaintiff himself during cross-examination of this witness that the report given by Siriram Institute is more authentic and reliable than any other private laboratory. The arguments of the learned counsel are two fold. Firstly, there was no specific agreement regarding the level of purity in the goods supplied and secondly, the samples were not taken in the presence of representative of the plaintiff and hence this report was not with regard to the goods supplied by the plaintiff and not binding on the plaintiff. There is no force in the contention raised by the ld. counsel because PW-1 himself admitted in his cross-examination that the level of purity in the chemicals supplied by him was 98 or 99% as per ISI specifications. So even if there was no specific agreement but when certain specifications are prescribed by ISI, presumption is that the goods supplied would be of that standard only. The second contention was that the sample was not taken in the presence of their representative. It is admitted by the plaintiff that they were informed well in time by the defendant that the goods supplied by them were of sub standard quality. Goods were supplied on 12.11.92 and on 6.1.93 itself the plaintiff received letter from the defendant that the goods supplied were of substandard quality. It is admitted that their representative visited the premises of the defendant for inspection of the goods. It is admitted in the plaint itself that the representative of the plaintiff TP Tripathi went to Faizabad and agreed for getting the goods tested either from DCM Laboratory or from any other Laboratory and to abide by the test report of the Laboratory. It is also admitted in para 11 of the plaint that the said representative of the plaintiff also agreed to replace the balance of the goods sent by the plaintiff in case any defect was found after the goods were tested by the Laboratory. It is admitted in the plaint itself that the letter dated 20.1.93 was given by the said representative of the plaintiff to the Executive Director of the defendant in which all the aforesaid facts were mentioned. Letter mark A is the same letter. This letter was denied by the plaintiff during admission denial of documents. Admittedly, no evidence has been led by the defendant to prove

this document or to prove their defence that the goods supplied were of sub standard quality and TP Tripathi had handed over the letter mark A to the defendant. But still, I am forced to rely upon this letter because the contents of this letter have been admitted by the plaintiff in para 11 of the plaint itself. This is the same letter dated 20.1.93 addressed by TP Tripathi to the Executive Director of the defendant. In this letter, Tripathi agreed to abide by the report of the DCM Laboratory. Now it does not lie in the mouth of the plaintiff to say that the sample was not taken in their presence and they are not bound by the report of DCM Laboratory, though in the letter mark A it is not specifically written that the sample has been taken in the presence of Tripathi and same has been sealed but the contents of the letter give an impression that this letter was written by Tripathi after taking of the samples in his presence because when he was very much present there and had specifically gone there for inspection of the goods supplied by them and was also binding himself with the report of the DCM Laboratory, there was no occasion for the defendant not to take the samples in his presence and Tripathi also would not have agreed to accept the report of the Laboratory unless sample was taken in his presence and he was satisfied that the sample was being taken out of the goods supplied by them only. In para 20 of the plaint, the plaintiff submitted that the letter dated 26.8.94 was sent by them to the defendant wherein, it was informed to the defendant that no sample was taken in the presence of their representative. In reply dated 8.9.94 to this letter of the plaintiff, the defendant again wrote them that two samples were taken from the chemical supplied by them in presence of their representative, out of which one sample was sent for analysis to DCM Laboratory through Central Agency, Darya Ganj and one was still lying with them. All the samples were sealed in presence of Tripathi under his signatures and once again the plaintiff was advised that they could send their representative who could collect the second sample which was lying with them and get it analysed from any other Laboratory if they were having no faith in

the DCM test. After receipt of this letter, the plaintiff did not depute any representative to collect the samples which were still lying with the defendant and to get it analysed from any other Laboratory. Under these facts and circumstances and considering the reports Ex.DW1/1 to Ex.DW1/3 and the letter of the defendant dated 6.1.93. I am of the opinion that the defendant has successfully proved that the goods supplied to it vide bill dated 12.11.92 for a sum of Rs.3,61,158.50 were of sub-standard quality."

I do not find any error whatsoever in the discussion and

conclusions in above quoted para 9. The trial court has rightly held the

goods to be defective.

10. As regards the percentage of discount this aspect has been dealt

with in para 10 (running page 27) of the impugned judgment and the

same reads as under:

"10. The onus was on the defendant to prove that the goods supplied vide bill dated 22.11.92 as well as vide bill dated 29.1.93 for sum of Rs.1,33,796.50 were defective. The defendant has successfully proved that the goods supplied to them vide bill dated 12.11.92 were of sub-standard quality because immediately letter dated 6.1.93 was written to the plaintiff informing him that the goods supplied by them were of sub-standard quality. The samples were taken in the presence of representative of the plaintiff and reports Ex.DW1/1 to Ex.DW1/3 have been proved but no evidence has been led by the defendant to prove that the goods supplied vide bill dated 20.1.93 for Rs.1,33,796/- were of sub-standard quality because after receipt of these goods, there is no communication on the record by the defendant that the plaintiff was intimated regarding the sub- standard quality of the goods or that any chemical examination report was obtained to prove that the goods were sub-standard. Hence, I hold that the

goods supplied by the plaintiff to the defendant vide bill dated 22.11.92 for sum of Rs.2,61,128.50 were of sub-standard quality. Issue is decided accordingly."

Once again, there is no illegality or perversity in the aforesaid findings

because once the goods are found to be defective, the respondent

was surely entitled to reduction in the amount of bill. The trial court on

a balanced judgment has found it fit to grant 25% although the

respondent has prayed for deduction of 35%. I do not find that my

estimate can in any manner better replace the considered estimate of

reduction granted by the trial court of 25%. I may however note that

the respondent in its correspondence had claimed a discount varying

between 25% to 32% and which it had made into a flat claim of

discount of 35% in its written statement.

11. So far as the argument of the respondent in the present appeal

and the appellant in RFA 59/2004 is concerned that discount of 25%

should also be granted in the second bill. I find that this argument is

not acceptable because the delivery of goods under the second bill

was pursuant to the invoice dated 29.1.1993. The agreement of

replacement of the goods as shown in the letter dated 20.1.1993 is

therefore prior to the actual supply of goods under the second bill

dated 29.1.1993. On 20.1.1993 surely it cannot be presumed that the

goods which would have been supplied by a subsequent bill on

29.1.1993 would also be defective so the agreement dated 20.1.1993

should automatically apply to the second bill also. The trial court has

therefore rightly rejected the claim of discount of 25% on the second

bill and which aspect has been dealt with by the trial count in para 10

of its judgment with which I agree.

12. In view of the above, I do not find any illegality or perversity for

this Court to interfere in exercise of its appellate jurisdiction. Merely

because two views are possible, this Court is not entitled to interfere

with the judgment of the trial court. There is neither any illegality nor

any perversity nor any injustice caused to either of the parties by the

impugned judgment and decree.

13. The appeals are therefore dismissed, leaving the parties to bear

their own costs. The interim orders are vacated. The amount so

pursuant to the decree had been deposited by the appellant in RFA

59/2004. The amount deposited by the appellant in RFA 59/2004 along

with accrued interest, if any, be released to the respondent in the said

RFA 59/2004 and the appellant in RFA 41/2000. Trial court record be

sent back.

JANUARY 18, 2011                                 VALMIKI J. MEHTA, J.
godara