State Trading Corporation Of ... vs Jagdish Gupta
2012 Latest Caselaw 5297 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of Decision: 5th September, 2012

+                             RFA(OS) 80/2012

       STATE TRADING CORPORATION OF INDIA ..... Appellant
                    Represented by: Ms.Sumati Anand, Adv.

                     versus

       JAGDISH GUPTA                        ..... Respondent

Represented by: Mr.Jayant Nath, Sr.Adv.

instructed by Mr.Udit Gupta, Adv.

CORAM:

HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MR. JUSTICE MANMOHAN SINGH

PRADEEP NANDRAJOG, J (Oral) Caveat No.914/2012 Since counsel as above appears for the caveator/respondent the caveat is discharged.

RFA(OS) 80/2012

1. Record of the suit has been summoned. Since a short issue arises for consideration, the appeal is being disposed of on the date of preliminary hearing.

2. Respondent owns storage tanks where oil can be stored at Shakur Basti. Two tanks, numbered 4 and 5 were taken on a license by the appellant as per agreement dated July 01, 1983, Ex.PW-1/1 for a period of three years and as per clause-24 of the agreement, before the licence period

expired, at the option of the appellant the licence could be renewed for a further duration of two years, and admittedly no such option was exercised during the validity of the licence; such option being exercised by a letter Ex.D-1 bearing the date 29/31.7.1986.

3. With reference to the decision reported as AIR 1969 SC 405 Caltex India Ltd. v. Bhagwan Devi Marodia, though pertaining to a lease, the principle of law culled out by the learned Single Judge is that if an option has to be exercised for continuation of a contractual obligation and the indenture requires the same to be exercised within a given period, unless exercised within the said period, the option cannot be exercised and where the right to exercise the option is not restricted by any time period, the option has to be exercised within a reasonable period.

4. Insofar as this aspect of the matter is concerned, learned counsel for the appellant concedes that the view taken by the learned Single Judge is correct.

5. With reference to the facts, since appellant did not exercise the option for the licence to be renewed within the stipulated time, it agreed to consider negotiating with the respondent, the terms on which the licence could be extended and the respondent demanded `40/- per metric ton per month inclusive of handling charges but when asked to put it in writing, vide Ex.PW-1/9 being its letter dated March 03, 1988 reduced the licence fee to `32/- per metric ton per month. The negotiations broke down.

6. The appellant continued to use the two tanks; tank No.1 till March 31, 1989 and tank No.5 till June 30, 1989. The respondent kept on submitting the monthly bills as per licence fee chargeable under Ex.PW-1/1

till 31.08.1987, notwithstanding the licence period having expired on June 30, 1986, and thus the respondent restricted its claim to receive, by way of damages, licence fee chargeable as per prevailing market rates for the period commencing September 01, 1987 till the two tanks were used by the appellant and for this, laid a claim @Rs32/- per metric ton per month, inclusive of handling charges, which we note as per Ex.PW-1/1 were `17.75 per metric ton per month (`7.75 towards storage charges and `10/- towards handling charges).

7. The learned Single Judge has noted that the respondent led no evidence of what were the prevailing rates in the market for the period in question i.e. September 01, 1987 till the two tanks were used; tank No.4 till March 31, 1989 and tank No.5 till June 30, 1989.

8. But has noted that the appellant had filed documents, though not proved, wherefrom it was apparent that for storage tanks at Modi Nagar, as of March 01, 1988 it was paying licence fee in sum of `21.50 per metric ton per month, for storage tanks at Dhulkot, Haryana as of March 03, 1988 it was paying licence fee in sum of `22/- per metric ton per month and for storage tanks at Karnal, as of November 07, 1989, it was paying licence fee in sum of `22/- per metric ton per month. The learned Single Judge has accordingly opined that being the documents filed by the appellant, they were evidence which could be used against the appellant.

9. Opining that the rates in the satellite towns around Delhi would be lower than the rates at Delhi, the learned Single Judge has opined that for the period in question it could safely be said that monthly licence fee would be `25/- per metric ton per month on an average basis.

10. Now, exactness can never be reached where the licence fee or a rental of a receptacle (a storage tank being a receptacle) in an area has to be determined on a comparative basis, but where the receptacle rests on land, it would be relevant that the price of commercial lands in the satellite towns around Delhi is less and this is bound to be reflected in the licence fee of the receptacle.

11. A vital fact, in favour of the respondent, has been overlooked by the learned Single Judge. The witness of the appellant did not dispute that during the period in question, the appellant had taken on licence storage tanks from other parties in Delhi, but feigned ignorance with respect to the licence fee which appellant had agreed to pay. As a Public Sector Body, one would have expected appellant to be fair. In any case, the rule that if a party deliberately withholds relevant and material evidence, an inference adverse to the party concerned needs to be drawn is squarely applicable. It is apparent that the licence fee would have been more than the licence fee which the appellant was paying to the parties in Modi Nagar, Dhulkot and Karnal and that is why the appellant filed documentary evidence pertaining to the said three towns and withheld the document pertaining to Delhi. Now, for the duration of the licence i.e. commencing from July 01, 1983, for a period of three years the agreed licence fee was `17.75 per metric ton per month. On March 01, 1988 and March 03, 1988 the licence fee in Modi Nagar and Dhulkot was `21.50 and `22/- respectively. The period we are concerned is September 01, 1987 ending on June 30, 1989, and thus `25/- per metric ton per month towards licence fee, which includes storage and handling charges, determined by the learned Single Judge cannot be faulted.

12. Agreeing with the reasoning of the learned Single Judge, the appeal is dismissed in limine but without there being any order as to costs. CM No.15497/2012 Since appeal has been dismissed in limine, instant application which seeks stay of the operation of the impugned judgment and decree is dismissed as infructuous.

(PRADEEP NANDRAJOG) JUDGE

(MANMOHAN SINGH) JUDGE SEPTEMBER 05, 2012 dk