Union Of India vs The Tata Iron & Steel Co. Ltd.
2011 Latest Caselaw 4352 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         FAO No.256/1995



%                                                   6th September, 2011

UNION OF INDIA                                          ...... Appellant
                                Through:    None.

                          VERSUS

THE TATA IRON & STEEL CO. LTD.                          ...... Respondent

Through: None.

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. No one was present for the appellant yesterday when the matter

was called out. Even today, no one is present for the appellant although it

is 3.10 PM. The appeal was earlier dismissed in default on 20.5.2008 and

subsequently restored. I have therefore perused the record and am

proceeding to dispose of the appeal.

2. The challenge by means of this first appeal under Section 23 of the

Railways Claims Tribunal Act, 1987, is to the impugned order dated

26.7.1995, and by which order the Railway Claims Tribunal decreed the

claim of the respondent/applicant for Rs.41.973.50 along with pendente

lite and future interest at 10% per annum simple. The claim was filed by

the respondent/applicant on account of the appellant consuming the

consignment of High Silicon Sheets which were booked for carriage by the

respondent/applicant.

3. A reference to the impugned order shows that the appellant/ Union

of India did not dispute that it had consumed the High Silicon Sheets and

therefore it was liable to pay the value thereof, however, the appellant

was ready to pay only a sum of Rs. 3,35,092/-. The appellant had

deducted an amount of 10% towards the profit margin of the

respondent/applicant of the goods, the excise duty, the freight charges

etc. The respondent/applicant had claimed a total amount of

Rs.4,25,359.92 instead of Rs.3,35,092/- which was offered by the

appellant.

4. The main issue which was argued before the court below was as to

whether the respondent/applicant had received and encashed a cheque

dated 19.9.1991 for a sum of Rs.3,35,092/- and therefore nothing was due

after encashment of cheque. In this regard, the Railway Claims Tribunal,

after referring to various judgments of different High Courts, has come to

a conclusion that whether or not the respondent/applicant encashing the

cheque of lesser amount is conclusive in law that of having taken it in

accord and satisfaction of the claim depends upon the facts and

circumstances of each case and on the basis of evidence available on

record. It was held by the Railway Claims Tribunal that there was no

accord and satisfaction in the facts of the present case. The relevant

observations in this regard of the Railway Claims Tribunal read as under:-

"The next question we have to examine is whether the applicant in the present case, in fact, agreed to accept the amount of Rs.3,35,092/- in full discharge of their entire claim. In order to decide the question, it is necessary to refer to the correspondence between the parties. It is common case of both the parties that the applicant booked the consignment for carriage, that the consignment was consumed by the respondent for departmental use and that it was not delivered to the applicant. When the applicant was informed by the respondent under Ex.A2 that the contents of the wagon were consumed for the departmental use, the applicant made a claim under Ex.A3 for a sum of Rs.4,25,359.92 towards the cost of the material alongwith interest of Rs.89,325.60. By the letter under Ex.A4, the CCO, Northern Railway required the applicants to produce the original RR and trade invoice for the settlement of the claim. Alongwith the letter under Ex.A6, the applicants produced the original RR and trade invoice. Ex.A7 is the letter dated 26.8.91 from the Chief Commercial Supdt. (Claims) to the applicant and by that letter the applicant was informed that the FA&CAO has been requested to pay the applicant a sum of Rs.3,35,092/- by cheque in full and final settlement of their claim. It must be pointed out here that by the letter Ex.A7, the applicant was merely informed that a sum of Rs.3,35,092/- will be sent to the applicant in full and final settlement of the claim. There is no specific mention in Ex.A-7 that the applicant may either accept the cheque for Rs.3,35,092 in full satisfaction of his claim or return the cheque to the respondent. In other words, in order to make the offer under Ex.A7 conditional the respondent ought to have not only stated that the applicant must receive the amount in full and final settlement of their entire claim, but also stated as pointed out in English decision (1847)/QB P 130 "take this in full discharge or take nothing". The condition directing the applicant to accept a cheque and condition directing the applicant to accept a cheque and condition directing the applicant to accept a cheque and take the money in full discharge or reject the cheque and not to encash the cheque is not specifically mentioned in Ex.A7. In the absence of such a condition in Ex.A-7 it is not at all possible to accept the contention of Shri Bhatnagar that the applicant ought to have returned the cheque to the respondent if they were not willing to accept the cheque in full satisfaction of their entire claim against the respondent. By the letter

dated 17.9.91 marked as Ex.A-8 the applicant did not accept the offer made under Ex.A-7 but sought for clarification from the respondent as to how they calculated the figure of Rs.3,35,092/-. The respondent did not sent any reply to the letter Ex.A-8 though it was received by the respondent on 19.9.91. Thereafter the respondent sent the cheque dated 19.9.91 for Rs.3,35,092/- to the applicant. According to the evidence of AW-1, the cheque was received by the applicants on 1.10.91 and it was sent to the Bank for encashing the same on the same dated on 9.10.91, under Ex.A/8A, the applicant informed the respondent that the cheque dated 19.9.91 was accepted under protest and that they have not received the cheque in full and final settlement. By the said letter, the applicant required the respondent to pay a balance of Rs.90,267/- alongwith interest within 15 days. Again on 14.10.1991, the applicant wrote another letter to the respondent under Ex.AW1/R1 stating that they were accepting the payment made under the cheque dated 19.9.1991 under protest as the deduction of Rs.41,973.50 has been made by the respondent arbitrarily. By the said letter, the applicant further stated that the deduction of Rs.41,973.50 was not acceptable and requested the respondent to pay the balance amount. Careful examination of Ex.A-8 shows that by the letter dated 17.9.91 the applicant have not accepted the offer made by the respondent under Ex.A7 to pay a sum of Rs.3,35.092/- in full and final settlement of their entire claim. On the other hand, the applicant asked the respondent to furnish details as to how the amount of Rs.3,35,092/- was arrived at and thus in effect under Ex.A-8 the applicant have registered their protest to the respondent for offering a sum of Rs.3,35,092/- in full satisfaction of their entire claim. Though this letter under Ex.A8 was received by the respondent on 19.9.91, the respondent did not chose to send any reply to Ex.A8 but sent the cheque dated 19.9.91 for a sum of Rs.3,35,092/- only. If the respondents had sent a reply to ex.A8, the applicant could have rejected the cheque dated 19.9.91. Again after encashing the cheque the applicant by the letter dated 9.10.91 Ex.A/8A informed the respondent that the cheque dated 19.9.91 had been accepted by them only under protest. Again the applicants have registered their protest by the letter dated 14.10.91 under Ex.AW1/R1. Thus the evidence on record referred above particularly Ex.A8, A/8a and

AW1/R1 clearly goes to shows that the applicants have received the cheque and encashed the cheque only under protest. Therefore, having regard to the correspondence between the parties and the surrounding circumstances and the evidence available on record, we have no hesitation in coming to the conclusion that the applicant have not really agreed to accept the cheque for Rs.3,35,092/- in full and discharge of their entire claim."

5. The aforesaid discussion of the Railway Claims Tribunal shows that

the Railway Claims Tribunal has rightly held that there was no accord and

satisfaction inasmuch in the covering letter Ex.A7 by which the cheque

was sent, it was not mentioned that the cheque was being sent in full

discharge of the liability. In any case, I am persuaded by the further

reasoning of the Railway Claims Tribunal which shows that after

encashment of cheque, the respondent/applicant by its letter dated

17.9.1991, Ex.A-8 did not accept the offer made under Ex.A-7 and sought

for clarification as to how the figure of Rs.3,35,092/- was calculated. The

appellant did not sent any reply to the letter Ex.A-8. It is only thereafter

that the appellant sent a cheque dated 19.9.1991 for Rs.3,35,092/- to the

respondent/applicant. Again on 14.10.1991, the respondent/applicant had

returned the letter Ex.AW-1/R-1 stating that the payment under the

cheque was being accepted under protest. The most important aspect is

that the cheque was sent for encashing on 9.10.91 and if the appellant

had responded to the letter dated 17.9.1991, Ex.A-8, the

respondent/applicant may not have sent the cheque for encashment.

6. This court sitting in an appeal need not interfere with the conclusion

of the court below if the court below takes one of the possible views. I

find that the view taken by the Railway Claims Tribunal is one of the

plausible views and therefore I do not propose to interfere in appeal,

especially because the appellant consumed the consignment in question

illegally.

7. In view of the above, I do not find any merit in the appeal which is

accordingly dismissed leaving the parties to bear their own costs.

SEPTEMBER 06, 2011                              VALMIKI J. MEHTA, J.
ib