Madras High Court
M/S.Golden Fries Limited vs M/S.T.Stanes And Company Ltd on 18 July, 2023
A.S.No.231 of 2013
THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 18.07.2023
CORAM:
THE HONOURABLE MR. JUSTICE R.SUBRAMANIAN
AND
THE HONOURABLE MRS. JUSTICE R.KALAIMATHI
A.S.No.231 of 2013
and M.P.No.1 of 2013
M/s.Golden Fries Limited
having its office at
Senniveerampalayam Hamlet of
Chikkarampalayam Village,
Karamadai, Mettupalayam Thaluk,
Coimbatore District
rep. by its Director R.C.Suresh. ...Appellant
Vs.
M/s.T.Stanes and Company Ltd.,
A Public Limited Company,
having its office at 8/23-24,
Race Course Road,
Coimbatore-18
rep. By its Vice President (Finance)
& Secretary S.C.Sekar. ...Respondent
Prayer: First Appeal filed under Order XLI r/w. Section 96 of C.P.C.,
against the judgment and decree dated 10.08.2010 of the learned III
Additional District Judge (Fast Track Court No.I), Coimbatore in
O.S.No.502 of 2006, decreeing the suit for a sum of Rs.32,93,802/-
with interest at 6% p.a. From 06.11.2006 being the date of the suit till
realization with costs of Rs.3,44,876/-.
For Appellant : Mr.H.Karthik Seshadri
For Respondent : Mr.S.V.Pravin Rathinam
Assisted by Mr.Hari Krishna
1/13
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A.S.No.231 of 2013
JUDGMENT
(Judgment of the Court was made by R.SUBRAMANIAN, J.)
The defendant in O.S.No.502 of 2006, a suit for recovery of
money against goods supplied is on appeal, challenging the said
decree. The said suit was laid by the respondent claiming a money
decree for a sum of Rs.32,93,802/- with interest thereon at 12% from
16.08.2004 to 22.09.2006. The value of the suit was
Rs.41,24,938.03/-.
2. The gist of the case of the plaintiff is as follows:
The plaintiff is a dealer of fertilizers and pesticides and the
defendant is a manufacturer of French Fries. These two entities got in
to an understanding for encouraging the farmers to cultivate a
particular variety of potatoes of their choice to enable them to make
French Fries and export them to various purchasers abroad. In order
to make it convenient for the farmers, the plaintiff and the defendant
had entered into a arrangement where the plaintiff will supply
fertilizers and pesticides and the defendant would supply the seeds.
The defendant would procure the potatoes from the farmers, after
deducting the value of the fertilizers and pesticides supplied by the
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A.S.No.231 of 2013
plaintiff and the seeds supplied by itself the defendant would pay the
remaining cost to the farmers. Since the defendant did not pay the
entire value of the fertilizers and pesticides supplied by the plaintiff to
the agriculturists as identified by the defendant, the plaintiff has come
up with the suit, claiming that the defendant is liable to make payment
of the value of the goods supplied.
3. The defence is as follows:
While admitting the arrangement as pleaded by the plaintiff,
the defendant would contend that since there was a crop loss, the
parties met on 07.11.2005 and the dispute was resolved. The manner
of resolution of the dispute was recorded in the form of Minutes of the
meeting on 07.11.2005 and as per the said Minutes, the defendant is
liable to pay only a sum of Rs.10 Lakhs and nothing more. The
defendant also contended that the farmers are also necessary parties.
The trial Court based on the pleadings of the parties framed the
following issues:
1.Whether the amount of
Rs.41,24,938.03/- claimed by the plaintiff?
2.Whether the suit is bad for non joinder of
necessary parties?
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A.S.No.231 of 2013
3.To what other relief?
4. At trial, while P.W.1 to P.W.3 were examined on the side of
the plaintiff, D.W.1 was examined on the side of the defendant; Ex.A1
to A14 were marked on the side of the plaintiff and Ex.B1 was marked
on the side of the defendant. The trial Court rejected the contentions
of the defendant that the bone of contention was resolved by the
parties in the meeting held on 07-11-2005 and the said Minutes
recorded in the meeting would operate as a 'final agreement and
binding settlement'. It accepted the contentions of the plaintiff that
the resolution recorded in the meeting dated 07.11.2005 was only an
interim arrangement and the same cannot be treated as a 'final
determination of the amount due by the defendant to the plaintiff'. The
trial Court also relied upon Ex.A3 / debit notes that were pressed into
service by the plaintiff. On such findings, the trial Court decreed the
suit. Hence this appeal.
5. We heard Mr. H.Karthik Seshadri, learned counsel for the
appellant and Mr. S.V.Pravin Rathinam, learned counsel appearing for
the respondent.
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A.S.No.231 of 2013
6. Mr.Karthik Seshadri, learned counsel for the appellant
would invite us to the Minutes of the meeting dated 07.11.2005, which
is marked as Ex.A6 and the evidence in cross examination of P.W.1,
who contended that the Minutes of the meeting dated 07.11.2005
amounts to a complete resolution of the monetary dispute between the
two parties. He would also draw our attention to Clause Nos.2 to 8 of
the minutes dated 07.11.2005, which read as follows:
“2. Due to various factors and
vagaries of monsoon the yield was not up
to the expected level.
3. Total potato harvested is
about 716 Tons, out of which those
quantity which was as per size specified
was used by the GFL for manufacturing of
Frozen French Fries for export.
4. Input cost involved by T.
Stanes is Rs.35.50 Lakhs as per GFL – as
per T. Stanes Rs.37.41 Lakhs. This is to
be reconciled.
5. Total value of Goods i.e.,
Potato harvested Rs.32.23 Lakhs.
6. Rs.11.59 Lakhs cost involved
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A.S.No.231 of 2013
by GFL towards harvesting / transport and
miscellaneous expenses for the produce.
7. Surplus amount with GFL is
Rs.20.64 Lakhs as per statement given by
GFL.
8. GFL expressed that the
surplus amount available with i.e.,
Rs.20.64 has to be shared equally
between GFL and Stanes towards
expenses incurred. Accordingly, a sum of
Rs.10 Lakhs has been agreed in principle
to be paid by GFL to T. Stanes on mutually
agreeable date.”
The learned counsel would also draw our attention to the cross
examination of P.W.1, where he has admitted the effect of Ex.A6. The
relevant portion of the cross examination relied on by the learned
counsel reads as follows:-
“/////// _epthrd; uhftd;;. _jud;. mde;jehuhazd; ,e;j jhth bjhl';Fk; rkaj;jpy; thjp
epWtdj;jpy; mjpfhupahf ,Ue;jhu;fs;/ th/rh/M/6I nkw;fz;l 3 egu;fs; jhd; thjp
epWtdj;jpd; rhu;ghf ifbaGj;J nghl;oUf;fpwhu;fs;/ th/rh/M/6y; ghuh 7y; Tl;lj;jpd;
jPu;khdk;/ TLjy; bjhif gpujp thjpaplkpUe;J 20/64 yl;r';fs; ,Ug;gjhf gjpt[
bra;ag;gl;Ls;sJ vd;why; rup/ mjpy; mt;thW g';F bra;ag;gl ntz;Lk; vd;W
brhy;yg;gl;Ls;sJ vd;why; rup/
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A.S.No.231 of 2013
gj;jp 8y; gpujpthjp thjpf;F U:/10 yl;rk; jUtjhf xg;g[f; bfhs;sg;gl;Ls;sJ
vd;why; rup/ Mdhy; mjid gj;jp 9cld; nru;j;J gof;f ntz;Lk;/ gj;jp 9y; thjpf;Fk;.
gpujpthjpf;Fk; ,ilna ey;y Kiwapy; ,UtUk; ,e;j tpahghuj;ij elj;Jtjw;fhf te;J
Mnyhrpj;J nkYk; xU Kiw kPl;o'; ,Uf;f ntz;Lk; vd;W jhd; Fwpg;gplg;gl;Ls;sJ/
gj;jp 9 fzf;F tHf;Ffs; Fwpj;J vJt[k; Fwpg;gpltpy;iy vd;why; rup/ th/rh/M/6
fzf;F tHf;Ffs; Fwpj;J Kot[ bra;ag;gl;Ls;sJ vd;why; jtW/////”
7. Relying heavily upon this evidence in cross examination
and the contents of Ex.A6, Mr.Karthik Seshadri would contend that
Ex.A6 amounts to a final agreement between the parties which was
entered into due to vagaries of the monsoon and crop failure.
According to him, Clause Nos. 9 and 10 of the said Minutes namely,
Ex.A6 only relates to future plan of action regarding the aspect of
taking the cultivation project forwarded to the best advantage of both
the parties. Contending contra, Mr.Pravin Rathinam, learned counsel
for the respondent would submit that the learned counsel for the
appellant has proceeded on the assumption that it is a joint venture
between the appellant and the respondent. According to him, there
was no such joint venture and the obligation on the part of the
respondent was to supply fertilizers and pesticides to the persons
nominated by the appellant and the obligation on appellant is to
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A.S.No.231 of 2013
recover the costs of such fertilizers and pesticides supplied by the
respondent from the farmers while purchasing the potatoes from
them. He would also contend that Ex.A6 is only an interim
arrangement and it is not a final resolution of the dispute between the
parties. To buttress his submission on the character of Ex.A6, the
learned counsel relied upon on Clause Nos.9 and 10 of Ex.A6, which
reads as follows:
“9. It is proposed to have
another meeting with the personnel's
concerned shortly to achieve and go
ahead with the project with win-win
situation for both the organizations /
farmers / own plantations of GFL.
10. It is therefore agreed that
both GFL and T. Stanes will jointly discuss
and plan regarding input supply for the
various farms at its most competitive
pricing.”
8. We have considered the rival submissions.
9. The only point that arise for consideration in the appeal is
as to whether Ex.A6 amounts to a final resolution or it was only an
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A.S.No.231 of 2013
interim arrangement, as contended by the respondent?
10. We have extracted the relevant clauses of Ex.A6. An
overall arrangement between the parties is admitted by the parties and
there is no dispute over the same. The appellant would acknowledge
the fact that the respondent supplied fertilizers and pesticides to the
farmers. It is also not in dispute that the appellant had supplied
potato seeds to the farmers and it has procured potatoes from the
farmers is also not disputed by them. The entire dispute arises
because of the fact that the appellant is unable to realise the entire
value of the seeds and fertilizers & pesticides, due to crop failure. The
issue was resolved at the meeting of the officers of both the appellant
and the respondent held on 07.11.2005 and the resolution was
recorded in the form of the Minutes. The same has been produced as
Ex.A6. Ex.A6 gives the details of the input costs incurred by both the
appellant and the respondent. It also gives the total costs of the
potatoes that is harvested. The surplus amount that is available with
the appellant is shown as Rs.20.64 Lakhs and the appellant's claim
that this 20.64 Lakhs has to be shared equally between the appellant
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A.S.No.231 of 2013
and the respondent is accepted in principle by the respondent and the
same was agreed to be paid by the appellant to the respondent on a
mutually agreeable date. This is the effect of Ex.A6 which is admitted
by P.W.1 in his cross examination, which has been extracted above.
No doubt, P.W.1 would claim that Clause 9 provides an open window
for the respondent to reagitate the same contention as projected by
the respondent. But a reading of Clause Nos.9 and 10 would show
that a subsequent meeting was not in reference to the accounts or the
amount to be paid by the appellant to the respondent or vice-versa.
Reading of Clause No.9 would show that the subsequent meeting is to
decide as to how to carry out the business in future between the
parties. In the light of the clear language of Ex.A6 and the evidence of
P.W.1, we find that the trial Court should have considered Ex.A6 as a
complete resolution. Though the learned counsel for the respondent
would attempt to demonstrate that Ex.A6 is only an interim
arrangement, he is unable to point out any evidence in the cross
examination of D.W.1 on the contents of Ex.A6 and its effect. In the
absence of cross examination of the aforesaid witness, we do not think
that we can accept the contentions of the learned counsel for the
respondent that Ex.A6 is only an interim resolution and not a final
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A.S.No.231 of 2013
settlement and a binding document. It is uncommon to enter upon the
Minutes to make them binding documents. One of the signatories of
Ex.A6, who has been examined as P.W.2, has admitted that he was a
party to Ex.A6 and other signatories are the officers of the respondent
at that relevant point of time. We therefore conclude that Ex.A6 is a
final and binding resolution of the dispute relating to payment of
monies between the parties. Once we come to the said conclusion, we
do not think that we can make the appellant liable to pay more than
the amount that he has agreed to be paid i.e., a sum of Rs.10 lakhs.
We therefore set aside the decree of the trial Court and we conclude
that the respondent is entitled for a decree for a sum of Rs.10 Lakhs
with interest at the rate of 12% per annum from the date of the suit
till the date of the decree and at 9% per annum thereafter till the date
of realisation. Thus, the appeal is partly allowed and the suit is decreed
for a sum of Rs.10 Lakhs as stated above. The respondent would be
entitled to proportionate costs in the suit. We make no order as to
costs in this appeal. We find that the appellant had paid a sum of
Rs.10 Lakhs even in the year 2013 pursuant to the interim order. It is
also seen from the memo filed by the learned counsel for the appellant
that a sum of Rs.24,87,842/- has been deposited to the credit of the
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A.S.No.231 of 2013
suit between 02.09.2013 and 13.01.2014. The trial Court will
calculate the amount due as on 13.01.2014 that is the last date of
payment of Rs.5,89,195.34/- as per the modified decree and pay out
the same to the respondent, any amount remaining thereafter will be
paid out to the appellant. Consequently, connected Miscellaneous
Petition is closed.
(R.S.M.,J.) (R.K.M.,J.)
18.07.2023
DP
Internet:Yes
Index:No
Speaking order
Neutral Citation : No
To
The III Additional District Judge,
Fast Track Court No.I,
Coimbatore.
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A.S.No.231 of 2013
R.SUBRAMANIAN, J.
and
R.KALAIMATHI, J.
DP
A.S.No.231 of 2013
and
M.P.No.1 of 2013
18.07.2023
https://www.mhc.tn.gov.in/judis
