Jharkhand High Court
M/S. Tata Steel Limited vs M/S Naveen Transport Company on 5 May, 2022
IN THE HIGH COURT OF JHARKHAND AT RANCHI
F.A. No.52 of 2012
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M/s. Tata Steel Limited .... .... .... Appellant
Versus
1. M/s Naveen Transport Company
2. Shri Girdhar Narayan Singh
3. Most. Bharti Kothari .... .... .... Respondents
CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
For the Appellant : Mr. Indrajit Sinha, Advocate
For the Respondents : Mr. Malay Kumar Laik, Sr. Advocate
CAV ON : 22.02.2022 PRONOUNCED ON 05 .05 . 2022
The appellant-defendant has preferred the First Appeal against
judgment and decree passed in Money Suit No.51 of 1998 whereby the suit
has been decreed for a sum of Rs.32,78,664/- pendente lite and future interest
at the rate of 18% per annum.
2. The plaintiffs' case is that it is a partnership firm in transportation
business, was engaged by defendant Company for transportation of Hard Coke
from F.C.I., Sindri to Jamshedpur by Work Order No. RMPO/11/93/730956
dated 12.11.1993 for transportation of 6000 metric ton of Hard Coke per
month at the rate of 232 per ton for the period of one year commencing from
01.10.1993 to 30.09.1994.
3. The terms and conditions of the contract inter alia provided as under:-
i. Terms of payment- 95% payment to be released by the General
Manager (Finance & Account), Jamshedpur against the bills
submitted on monthly basis and balance 5% to be released after
making adjustment of quantity and verification of Challans etc.
ii. Each truck loaded with Hard Coke, would be covered with double
tarpaulin and sealed at the transporter's cost and would be sampled
individually at loading and unloading point by a public analyst.
iii. Penalty charge at the rate of Rs.4000/- per metric ton to be imposed
in the event of any variation on account of quality and quantity of
Hard Coke.
4. It is the case of the plaintiffs that the said consignment was
transported within the contracted period but the defendant company deducted
a total amount of Rs.25,41,600.00 during the period from August, 1994 to
February, 1995. On representation, a sum of Rs.6,35,400.00 has been
refunded on 19.12.1995 keeping a balance of Rs.19,06,200.00.
5. The case of the appellant-defendant is that as per the purchase order
dated 12.11.1993, the penal charges were fixed at Rs.4000/- per metric ton.
The break-up of this penalty amount was Rs.3000/- as the cost of coke and
Rs.1000/- as penalty towards difference in quality of the coke received at the
delivery point and in accordance with the report of the analyst. Out of the total
deduction of Rs.25,41,600/- calculated at the rate of Rs.4000/- per metric ton,
Rs.19,06,200/- was price of the coke found deficit in quantity at the delivery
point at the rate of Rs.3000/- per metric ton. The penal charge of
Rs.6,35,400/- regarding the deficiency, which was earlier imposed, has now
been released.
6. On the basis of the pleadings of the parties, the following main issues
were framed:-
v. Whether there is any breach of contract?
vi. Whether the defendant is entitled to deduct the amount from the
bills for short supply to the extent of Rs.19,06,200/- and whether
it is refundable to defendant?
vii. Whether the plaintiffs are entitled to the decree sought for?
viii. Is it fact that every truck was sampled individually by public
analyst M/s. S.G.S. India Ltd.?
7. The learned Trial Court recorded a finding in favour of the plaintiffs
for a money decree of Rs.19,06,200/- with interest at the rate of 18% per
annum from 19.12.1995 till the institution of the suit.
8. The Trial Court held that in terms and condition of contract (Exhibits
1 & 2) in the event of any complaint regarding quantity or quality, it was to be
made known to the plaintiffs in respect of each truck and within 30 days of
the receipt of consignment, payment was to be made after adjustment of
penalty, if any. As per para 20 of the written statement, the deductions were
made after 30 days from receipt of consignment. Since the payment had to be
made by the defendant company within 30 days, therefore, the Clause
providing for imposition of penalty, was rendered redundant. The Trial Court
also noted that each truck was not sampled individually. With regard to
different letters (Exhibit 'B' series) regarding deficiency of quality and
quantity, it has been noted by the Trial Court that these were addressed to
S.G.S. India Ltd., not to the plaintiffs. The Trial Court concluded the
defendant had failed to prove that any information with respect to shortage of
materials and increase of moisture had been furnished to the plaintiffs within
30 days of receipt of consignment.
9. The judgment has been assailed on the ground that on the basis of the
Public Analyst Report (Exhibit 'B' series), the plaintiffs had committed breach
of contract and not the defendant. Exhibit B-16 to B-32, was also not
considered by the Trial Court when these letters were regularly sent by the
defendants to the plaintiffs. As per the terms of the contract, the deduction had
to be made from each bill within 30 days of receipt of consignment and if
such deductions were wrongly made, then cause of action for such deduction
would arise against each bill after 30 days from the date of bill. The plaintiffs
were therefore required to prove their claim within three years from the date
of such deduction. The last bill was submitted on 31.03.1994 and date of
cause of action should have been 30 days from the said date.
10. At the time of hearing of the Appeal, the learned counsel appearing
on behalf of appellant has confined his argument mainly on the interest
awarded by the learned Court below and submitted the interest is excessive.
Reliance has been placed on the following authorities:-
i. DDA & Others Versus Joginder S. Monga & Others; (2004) 2 SCC 297
ii. Clariant International Ltd. & Another Versus Securities & Exchange
Board of India; (2004) 8 SCC 524
iii. M/s Rampur Fertiliser Ltd. Versus M/s Vigyan Chemicals Industries;
Civil Appeal No.1101 of 2009
iv. Abhinav S/o Gopal Agarwal Versus Pradeep S/o Parasram Thakre;
2013 SCC Online Born 1532
The ratio can be summed up as under:
Firstly, while determining the cases of commercial transaction, fall in
rate of interest need to be taken note of.
Secondly, while compensating a person, the Court should see that he
is not unjustly enriched.
Thirdly, the rate of interest can be awarded in terms of an agreement
or statutory provision and it can also be awarded by reason of usage or trade
having the force of law or on equitable consideration.
Lastly, Section 34 of the C.P.C. limits the discretion of the Court in
granting future interest when the decree is for payment of money. This
provision of law does not permit the Court to grant any pre-suit interest.
Having considered the rival submissions advanced on behalf of both
the sides and considering the fact of the present case where the penalty
imposed for deficit in the quantity of supply has been set aside on technical
ground by the Court below, an award of simple interest at the rate of 12% per
annum pendent lite and 9% from the date of decree shall meet the ends of
justice.
The appeal is partly allowed as at above with modification in the
interest amount.
(Gautam Kumar Choudhary, J.)
Jharkhand High Court, Ranchi
Dated the 5th May, 2022
AFR / Anit
