Madras High Court
M/S.Divya Advertisers vs Tamilnadu State Transport ... on 29 April, 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated : 29.04.2021
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
SA(MD)No.485 of 2014
and
MP(MD)No.1 of 2014
1.M/s.Divya Advertisers,
through its Partner,
Veerabagu
2.G.Veerabagu
3.B.Maragathamani ... appellants/appellants/defendants
Vs.
Tamilnadu State Transport Corporation
Limited,
(Madurai Division),
Through its Managing Director,
Bye pass road,
Madurai – 625 010. ... Respondent / Respondent / Plaintiff
Prayer: Second Appeal is filed under Section 100 of Civil Procedure
Code, against the judgment and decree dated 22.12.2011 passed in the
appeal in A.S No.9 of 2010 on the file of the Additional District Judge
(Fast Track Court No.III), Madurai, partially reversing the judgment and
decree dated 30.09.2009 passed in the suit in O.S No.791 of 2003 on
the file of the II Additional Subordinate Judge, Madurai.
1/10
https://www.mhc.tn.gov.in/judis/
For Appellants : Mr.J.Barathan
For Respondent : Mr.P.Prabhakaran
JUDGEMENT
The defendants in O.S No.791 of 2003 on the file of the II
Additional Sub Court, Madurai are the appellants in this second
appeal. The plaintiff in the suit is the Tamil Nadu State Transport
Corporation Limited, Madurai Division. The case of the plaintiff is that
it issued a tender notification inviting applications for being issued with
the license to display advertisement board panels in the buses plied by
the corporation. The defendant firm was the successful tenderer and
they were issued with work order dated 09.07.2001 (Ex.A3). The
defendant firm was to remit license fee of Rs.34,64,802/- in one lump
sum and also execute an agreement within fifteen days. As per the
tender notification, the defendant firm can display the advertisement
board panels on 921 buses and the rate per bus was Rs.3762/-. This
was for a period of eleven months. The plaintiff alleged that the
defendants did not pay the license fee immediately in one lump sum.
However, vide Ex.A8 dated 14.09.2001, the license period commenced
on 15.09.2001 and ended on 14.08.2002. The license fee was paid in
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installments only for a sum of Rs.31,09,000/-. When the corporation
insisted on payment of the balance amount, the defendants took the
stand that since the corporation was operating only 827 buses instead
of 921 buses, there has been partial frustration of the contract. In the
meanwhile, citing default on the part of the defendants, the corporation
had also removed the advertisement board panels that were already
installed on the buses. The defendants filed WP No.22740 of 2002 and
obtained interim relief from the High Court. The corporation forfeited
the EMD deposited by the defendants and followed up the same by
filing O.S No.791 of 2003 before the trial Court. The defendants filed
their written statement contesting the claim of the plaintiff. The
preliminary defence of the defendants was that the plaintiff has not
acted in terms of the contract and instead of plying 921 buses, they
had plied only 827 buses. Therefore, the amount paid by the
defendants to the tune of Rs.31,09,000/- was a complete fulfilment of
their contractual obligation and they were not liable to make any more
payment. Few other contentions were also raised. The trial court
framed the necessary issues. The plaintiff corporation examined an
official as PW.1 and Exs.A1 to A19 were marked. On the side of the
defendants, DW.1 to DW.3 were examined and Exs.B1 to B12 were
marked.
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2.The trial Judge by judgment and decree dated 30.09.2009
partly decreed the suit and directed the defendants to pay sum of Rs.
1,31,631/- with interest at the rate of 6% p.a from the date of plaint till
the date of realization. Aggrieved by the same, the defendants filed A.S
No.9 of 2010 before the Additional District Judge/FTC No.III, Madurai.
The first appellate court by judgment and decree dated 22.12.2011
dismissed the appeal but gave relief in respect of the forfeiture of EMD.
Challenging the same, this Second Appeal came to be filed. The
second appeal was admitted on the following substantial question of
law :
“Whether the lower courts have committed an
illegality in not applying the principle of frustration of
contract contemplated under Section 56 of the Contract
Act, when the very object of advertising in a bus is
defeated by the bus not plying on the road ?”.
3.Heard the learned counsel on either side.
4.The learned counsel for the appellants reiterated all the
contentions set out in the memorandum of grounds. He pointed out
that the agreement was that the advertisement board panels affixed by
the defendants on as many as 921 buses of the corporation which
would be plying on the roads. But, it turned out that only around 827
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buses were actually found plying on the road. The defendants had
established their defence by obtaining the particulars of payment of
road tax. If all the 921 buses plying on the road, obviously, it would
have paid for all of them. It was not so. This single circumstance was
sufficient to demonstrate that the plaintiff had been less than fair in
dealing with the defendants. The learned counsel for the appellants
submitted that the plaintiff is a State Transport Corporation and
therefore, even in matters of contract, the corporation being a State
instrumentality must observe the principle of fairness. He submitted
that even though the courts below have granted some relief, he wanted
the Second Appeal to be allowed in toto and the suit itself to be
dismissed.
5.Per contra, the learned counsel for the corporation submitted
that the impugned judgment passed by the first appellate court does
not call for any interference and according to him, no substantial
question of law has arisen for consideration. He pressed for dismissal
of the second appeal.
6.I carefully considered the rival contentions and went through
the evidence on record. The basic facts are not in dispute. The
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appellant firm was the successful tenderer. The appellant was to pay a
sum of Rs.34,64,802/-, in one lump sum as per Ex.A3 dated
09.07.2001. The appellants admittedly did not pay the entire amount
in one lump sum. The license fee was only paid in installments. The
total amount paid by the appellants was Rs.31,09,000/- and the last
installment was paid on 16.07.2001. The license period had
commenced on 14.09.2001 and ended on 14.08.2002. There is
considerable force in the contention of learned counsel for the
corporation that the appellant firm did not pay the license fee as per
the tender terms and conditions. However, as rightly observed by the
learned appellate judge, there appears to have been a given and take
policy between the parties. Be that as it may, when once the dispute
arose, the appellant filed WP No.22740 of 2002 before the High Court
and vide order dated 26.06.2002, the corporation was called upon to
the dispose of the appellants' grievance as regards the number of buses
that were actually plying on the road which were carrying the
advertisement board panels of the appellants. Pursuant to the
direction, final order was passed by the corporation on 26.07.2002
(Ex.A13) rejecting the stand of the appellants/defendants. Of course,
the appellants sent one more communication dated 31.07.2002 to the
Managing Director of the Corporation expressing their disappointment.
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7.I must note that the communication dated 26.07.2002 issued by
the Managing Director of the plaintiff corporation was not challenged by
the appellants in the meanwhile. The said communication was issued
pursuant to the direction given by the High Court in a writ petition filed
by the appellants. When a formal letter emanated from the corporation
pursuant to the direction given by the High Court, the appellants did
not choose to challenge the same. As already pointed out, the license
period commenced on 14.09.2001 and ended on 14.08.2002, the
aforesaid communication was issued on 26.07.2002 itself, ie., during
the subsistence of the license period. The appellants who now claim
partial frustration of the contract in their communication dated
31.07.2002 were only insisting that the advertisement board panels
removed by the corporation must be reinstalled. Be that as it may, it
was the corporation which chosen to file the suit for recovery of the
balance of the tender amount. When the stand of the defendants is
that the corporation did not act in terms of the tender notification, the
burden would lie only on them and not on the plaintiff corporation. Be
that as it may, after a careful consideration of the evidence on record,
even though the suit claim of the plaintiff corporation was Rs.
3,55,802/-, the trial court had decreed only to the extent of Rs.
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1,31,631/-. The first appellate court had also granted relief to the
appellants/defendants by holding that forfeiture of the EMD amount
was not justified. As a result, the liability of the defendants had come
down to Rs.68,635/-. The issue regarding the number of buses which
were actually plying is rather factual in nature. Therefore, in exercise
of Section 100 of CPC, I am not in a position to interfere with the same.
The substantial question of law is answered against the appellant.
However, I must note that the trial court was not justified in decreeing
the suit with cost. The cost alone comes to Rs.34,421/-. This costs
was quantified by taking note of the suit claim which was Rs.
3,88,140/-. The first appellate court has held that the defendants are
liable to pay only a sum of Rs.68,635/-. There is some substance in
the contention of the appellants' counsel that the plaintiff corporation
has not been entirely fair it its dealings. Therefore, taking note of the
same, direction to pay cost to the plaintiff is deleted. The second
appeal is partly allowed by directing deletion of cost directed to be paid
by the trial court. No costs. Connected miscellaneous petition is closed.
29.04.2021
Index : Yes / No
Internet : Yes/ No
skm
https://www.mhc.tn.gov.in/judis/
Note : In view of the present lock down owing to COVID-19 pandemic,
a web copy of the order may be utilized for official purposes, but,
ensuring that the copy of the order that is presented is the correct copy,
shall be the responsibility of the advocate/litigant concerned.
To
1.The Additional District Judge
(Fast Track Court No.III), Madurai.
2.II Additional Subordinate Judge, Madurai.
Copy to :
The Record Keeper, V.R.Section,
Madurai Bench of the Madras High Court, Madurai.
https://www.mhc.tn.gov.in/judis/
G.R.SWAMINATHAN, J.
skm
SA(MD)No.485 of 2014
and
MP(MD)No.1 of 2014
29.04.2021
https://www.mhc.tn.gov.in/judis/
