Kandibandla Rama Rao vs Food Corporation Of India
2023 Latest Caselaw 120 Tel

     THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

           APPEAL SUIT Nos.1570 & 1575 of 2003

COMMON JUDGMENT:


      These appeals are filed against the Common Judgment

and Decree of the trial Court in O.S.No.59 of 2000 and

O.S.No.62 of 2000 dated 30.04.2003.



2.    One Kandibanda Rama Rao filed suit in O.S.No.59 of

2000 against the Regional Manager and the District Manager of

Food Corporation of India (hereinafter referred as 'F.C.I') for

recovery of Rs.4,24,938/-. Whereas, the F.C.I filed suit in

O.S.No.62 of 2000 against the said K. Rama Rao for recovery of

money arising out of the contract stating that there was a

transit loss of Rs.7,22,644/-. After adjusting the amounts kept

with F.C.I as security, the said Rama Rao has to pay balance of

Rs.4,85,144/-. The trial Court considering the entire evidence

on record and the arguments of both sides dismissed O.S.No.59

of 2000 and decreed the suit in O.S.No.62 of 2000 for

Rs.4,85,144/- and also held that F.C.I is entitled to recover the

same with costs as there is no interest stipulated in the

agreement Ex.B1, no interest is being awarded on the decreetal
                                 2


amount. Aggrieved by the said Judgment present appeals are

preferred.



3.    The appellant mainly contended that the trial Court erred

in dismissing the suit filed for recovery of Rs.4,24,938/-

claiming refund of security deposit along with interest accrued

on it and it was also wrongly held that there was a transit loss.

In fact, transit loss was minimal and less than 0.25%. He stated

that the trial Court failed to consider the certification of bills

from time to time without any claim of transit loss recoverable

from the appellant. The trial Court ought to have seen that the

very issuance of "no demand" and "no due" certificates and

payment of all the bills of freight charges and the defendants are

claiming the transit loss. The claim of the defendants in defence

is hit by Section 10 of the Carriers Act of 1865. The trial Court

erred in giving a finding that the appellant/plaintiff is not

entitled for suit claim though there was no counter claim by the

respondents/defendants to set off against admitted amounts

entitled by appellant/plaintiff. He further stated that the

admission of D.W.2 was not properly appreciated regarding

allowable transit loss. Therefore, requested the Court to set

aside the Common Judgment and Decree of the trial Court in

O.S.No.59 of 2000 and O.S.No.62 of 2000 dated 30.04.2003. He

also raised the same grounds in A.S.No.1575 of 2003 along with

the ground that trial Court erred in relying on Ex.B4 to B9 for

the purpose of passing a decree and the District Manager is not

competent to represent the Corporation.

4. The plaintiff K.Rama Rao in O.S.No.59 of 2000 was

running a transport business by maintaining 5 to 10 lorries

from the past 25 years. He was given a contract work for

transportation of sugar, food grains, fertilizers etc., from Central

Warehousing Corporation godown, Suryapet to Food

Corporation of India godowns, Khammam as per Tender No. S &

C 15/12/95 CONT-I, dated 28.04.1995 with effect from

16.10.1995 for a period of two years i.e, till 15.10.1997 and an

agreement was also executed in favour of defendant No.1. A

cash security of Rs.2,50,000/- is to be paid to F.C.I. The

plaintiff deposited Rs.1,25,000/- towards half of the security

deposit and the balance half is to be adjusted from the bills

payable to the plaintiff from time to time at the rate of 5% of bill

per month. This amount of Rs.1,25,000/- was adjusted within

two months of the contract. This security deposit of

Rs.2,50,000/- is to be refunded after the completion of contract.

As per Circular No.F/1/1/80 dated 13.04.1970, F.C.I

considered 0.25% loss in transit as negligible and it is not

recoverable. The plaintiff stated that till the completion of

contract, there was no loss found by the F.C.I and no demand

was made by them, as such he is entitled for refund of security

deposit amount. The fixed deposit amount of Rs.1,25,000/-

which was deposited in F.D.R became Rs.2,04,679/- by

12.04.2000. The plaintiff got issued a notice on 06.09.2000

demanding refund of the amount. The defendant Nos.1 & 2

issued a reply notice on 27.09.2000 demanding Rs.7,22,644/-

alleging that there was transit loss for the period from

December, 1995 to February, 1997. The reply given by F.C.I

shows a quantity of M.T.5.833 was found to be transit loss

amounting to Rs.1,02,661/-. The plaintiff got issued a reply

notice on 09.10.2000, denying the transit loss and also filed suit

for recovery of Rs.4,24,938/-.

5. The defendants stated that Circular is not binding on

them and contract prevails over it. The trial Court extracted the

relevant conditions of the contract for the sake of proper

appreciation of the facts. The trial Court considering the entire

evidence on record found that there was a transit loss of 56

Metric Tonnes which is valued at Rs.7,22,644/-. It was also the

admitted fact that from the time of lifting the stocks contractor

is responsible for all the losses, he had not obtained copy of the

"No Demand Certificate" from the defendants and also not filed

copy of Truck Slips before the Court. Even in the clearance

certificate these stock deficits are mentioned and demand notice

was issued only for the losses found in the transit. The

defendants issued notice under Exs.B2 and B3 on 12.01.1999

and reply notice was given to it and Exs.B1 to B9 are admitted

by the plaintiff and no protest letter was given by him for transit

loss recorded in truck slips. He also admitted the abstract of

Truck Chits maintained by defendants at receiving point from

13.12.1995 to 19.12.1995 and he received notice under Ex.B10

and got issued reply. The D.W.2 deposed before the Court on

behalf of the D.W.1 and stated that Ex.B12 is acknowledgement

for plaintiff and Ex.B13 is the abstract of transit loss. The last

Bill paid to said Rama Rao on 21.07.1997 which terminates

contract. After the completion of contract period, "No Demand

Certificate" and "Six Point Certificate" are issued. Such

certificates will not be issued if there is any transit loss found as

per normal practice.

6. The trial Court considering the oral and documentary

evidence held that there was transit loss and accordingly

security deposit was adjusted and the balance was claimed by

the F.C.I, as such the question of refund of security deposit

does not arise. The trial Court considering the evidence on

record at length, discussed each and every point in detail and

rightly dismissed the suit in O.S.No.59 of 2000 and decreed

O.S.No.62 of 2000 for Rs.4,85,144/- and subsequently F.C.I is

entitled to recover the same with costs and interest was not

granted as there was no interest stipulated in Ex.B1 but

appellant filed appeal only to prolong the litigation and points

raised by him before this Court are already considered by the

trial Court in detail. He mainly contended that mandatory notice

was not issued under Section 10 of the Carriers Act of 1865, but

the said fact was not raised before the trial Court at the earliest

point of time. The issue of limitation was also discussed at

length, and the trial Court held that suit is within the limitation.

Therefore, both the appeals filed against the suits in O.S.No.59

& 62 of 2000 have no merits and are dismissed with costs.

In the result, appeals are dismissed with costs confirming

the Common Judgment and Decree of the trial Court in

O.S.No.59 of 2000 and O.S.No.62 of 2000 dated 30.04.2003.

Miscellaneous petitions pending, if any, shall stand

closed.

_________________________

JUSTICE P.SREE SUDHA

DATED: 06.01.2023

tri

THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

APPEAL SUIT Nos.1570 & 1575 of 2003

DATED: 06.01.2023

TRI