The Food Corporation Of India vs M/S Namita Paul
2021 Latest Caselaw 575 Tri

                      HIGH COURT OF TRIPURA
                            AGARTALA

                             RFA 16/2019

1.The Food Corporation Of India, having its registered Office
(Headquarter) At Khadya Sadar, 16-20 , Barakhamba Lane, New Delhi,
Represented by the General Manager Food Corporation of India,
Regional Office, NEFR, Shillong- 08.

2.The Divisional Manager,
Food Corporation Of India Divisional office, Agartala, Colonel
Chowmuhani, P.S. -West Agartala, West Tripura.

                                                        -----Appellant(s)


                                 Versus
M/S Namita Paul,
W/o- Sri Swapan Kr. Paul,Residence of B.K. Road, Banamalipur, P.O.
Agartala, P.S. East Agartala, Dist- West Tripura.

                                                      -----Respondent(s)

Along with RFA 17/2019

1.The Food Corporation Of India and Anr Having its registered office (Headquarter) At Khadya Sadar, 16-20, Barakhamba Lane, New Delhi, Represented by the General Manager Food Corporation of India Regional Office, NEFR Shillong - 08.

2.The Divisional Manager, Food Corporation Of India Divisional office, Agartala, Colonel Chowmuhani, P.S. - West Agartala, West Tripura.

-----Appellant(s) Versus M/S Namita Paul, W/o - Sri Swapan Kr. Paul, Residence of B.K. Road, Banamalipur, P.O - Agartala, P.S - East Agartala, Dist - West Tripura.

                                                      -----Respondent(s)





For the Appellant (s)           :        Mr. A. Bhowmik, Advocate
For the Respondents(s)          :        Mr. R. Datta, Advocate
Date of hearing                 :        26.03.2021
Date of judgment
& order                         :        24.05.2021
Whether fit for reporting       :        YES


                        HONBLE THE CHIEF JUSTICE
                     HON'BLE MR. JUSTICE S. TALAPATRA

                              JUDGMENT & ORDER

[S. Talapatra,J]

We have combined both the appeals as the disputes emerge from

the same contract being CONT.09/NEFR/TC/TVZ-CDR/09 dated

29.04.2009 which was formalised for transporting foodgrains etc. from

railway sidings/FSD Churaibari to FSD Chandrapur for a period of two

years from the date of acceptance of the tender.

02. Let us first deal with RFA 16 of 2019 [The Food Corporation

of India and Anr. vs. M/S Namita Paul] as the decision of this appeal

will determine the fate of the other appeal being RFA No.17 of 2019

[The Food Corporation of India and Anr. vs. M/S Namita Paul].

03. The appellants in RFA No.16 of 2019, Food Corporation of

India had accepted the rate quoted by the respondent and

communicated their acceptance by FAX dated 20.04.2009 and the letter

dated 29.04.2009. While accepting the tender it was communicated

that the contract shall be governed by its terms and conditions as

provided in the tender document. The respondent was advised to

commence work with effect from 30.04.2009. The rate quoted by the

respondent was 47.5% above the scheduled rate proposed by the

appellant-corporation. The said rate was worked out @Rs.1176.54 for

transportation of food grains per metric ton. The respondents

(hereinafter referred to as the transport contractor) deposited a sum of

Rs.4, 73, 500/- by demand draft as security, out of the total security

deposit quantified at Rs.47, 41,000/-. For couping the said amount,

another sum of Rs.18,97,000/- was deposited. it was agreed that the

earnest money would be converted as the security deposit. It was

further agreed that the balance of the security deposit to the extent of

Rs.23,70, 500/- was to be deducted from the bills of the transport-

contractor. In terms thereof, the work order dated 29.04.2009 for

transporting food grains from railway sidings/FSD Churaibari to FSD

Chandrapur with effect from 30.04.2009 was issued in favour of the

transport-contractor. The transport-contractor had resumed the work of

transportation with effect from 01.05.2009 and with intimation to the

corporation she had suspended the work on 24.12.2010, after 20

months from its inception. For such decision of the transport-contractor

suspending the transportation had serious impact. According to the

corporation, it affected the public distribution system. The corporation

had repeatedly requested the transport-contractor to restore the

transportation and adhere to the contractual obligation in order to

maintain the adequate stock of food grains in the corporation-godowns,

but the transport-contractor defied such request. By a series of letters

under No.F.9/NEFR/HTC/MISC/Corres/2008-09 dated 18.10.2010,

19.10.2010, 20.10.2010, 06.11.2010, 09.11.2010 and 12.11.2010 the

corporation had informed the contractor that for her failure to perform

the contractual obligation, she shall be liable for breach of the contract

and she had to bear the cost and risk for non-performance of the work

assigned under the contract/agreement. The corporation by invoking

the Clause-X(c) of the Contract invited the interested and eligible

transporters to do the unperformed work as abandoned by the

transport-contractor by floating the tender notice vide

No.Cont.9/AGT/Adhoc/R&C/CBZ/2009-10 dated 03.12.2010 and thus,

the appellant had appointed ad-hoc contractors for transportation of

food grains for a period of six months with effect from 24.12.2020, as is

evident from the letter No.Cont.9/DO-AGT/TC/CBZ/Adhoc/2010/2781

dated 24.12.2020. According to the corporation, the rate as claimed by

the ad-hoc contractors and as accepted by the corporation was 157%

above the scheduled rate which was disproportionately higher than the

rate quoted by the transport-contractor (the respondent). But in order

to saving the public distribution system from collapse and for lifting the

accumulated food grains from FSD, Churaibari, those ad-hoc

contractors were appointed at the risk of the transport-contractor (the

respondent). But the corporation did not rescind the contract, awarded

to the transport-contractor. Thus, she was at liberty to carry on the

transportation in terms of the said contract. It appears further that

those ad-hoc contractors transported the food grains from FSD,

Churaibari to FSD, Chandrapur in that highly escalated rate until expiry

of the period of six months on 23.06.2011. Thereafter, the regional

office of the corporation by their letter dated 22.06.2011 appointed

another ad-hoc contractor for six month at the risk and cost of the

transport-contractor (the respondent) for the period from 24.06.2011

to 23.12.2011. The corporation has claimed that they were constrained

to appoint the ad-hoc contractors, as the regular contractor (the

respondent) suspended the transportation abruptly. The said

arrangement for transportation of the food grains etc. from FSD

Churaibari to FSD Chandrapur was made at the risk and cost of the

regular contractor (the respondent).

04. The corporation for realising the cost as emerged 'for breach

of contract' has instituted the suit being MS 28/2019 after raising the

demand for the loss and cost they have claimed to have suffered for

non-performance of the contractual obligation by the transport-

contractor in the manner as follows:

[a] For carrying food grains from 24.12.2010 to 23.06.2011 at the

scheduled rate of Rs.797.66 ASOR 157% 249.98 per metric ton

[total rate of transportation at Rs.2049.98] and as such the

transport-contractor has to reimburse the additional expenses to

the extent of Rs.873.44 per metric ton. Thus, the total amount

quantified to be paid by the transport-contractor for the said ad-

hoc transportation, is Rs.96, 60, 753/-.

[b] For carrying the food grains at Rs.2034.03 for the period from

24.06.2011 to 30.07.2011, the contractor is liable to pay the

additional cost at Rs.857.49 per metric ton vis-a-vis the scheduled

rate at Rs.797.66 ASOR 155%. The transport-contractor,

according to the corporation, is liable to pay the sum of

Rs.26,50,860/- on account of risk and loss.

05. According to the corporation, before instituting the suit, the

said loss was quantified and the contractor was asked to meet the said

demand by several demand notices under No.F.9/DO-AGT/RNC/demand

notice/2011 dated 19.03.2011 for a sum of Rs.22,58,638/-, dated

02.04.2011 for a sum of Rs.12,80,739/-, dated 18.06.2011 for a sum of

Rs.45,494/-, dated 21.07.2011 for a sum of Rs.16,20,883/- and dated

26.08.2011 for a sum of Rs.26,50,860/-. The contractor was therefore

asked to deposit the said amount for the period from December, 2010

to July, 2011 covering risk and loss for the said ad-hoc transportation.

Since the contractor, the respondent herein, did not deposit the said

amount, the suit was instituted for recovery of the said loss which has

been claimed to have incurred by the corporation as a result of breach

of the contract by the transport-contractor. It is to be noted that the

said action was taken, according to the corporation, in terms of the

Clause-X(c) of the contract which provides that the contractors shall be

responsible to supply adequate and sufficient labour,

scales/trucks/carts/any other transport vehicles for loading/unloading,

transport and carrying out any other services under the contract in

accordance with the instruction issued by the General Manager or an

Officer acting on his behalf. If the contractors fail to supply the requisite

number of labour, scales and trucks/carts, the General Manager shall at

his entire discretion without terminating the contract, be at liberty to

engage other labour, scales, trucks/carts, etc. at the risk and cost [has

meant loss] of the contractors, who shall be liable to make good to the

corporation all additional charges, expenses cost or losses that the

corporation may incur or suffer thereby. The contractors shall not,

however, be entitled to any gain resulting from the entrustment of the

work to another party. The decision of the General Manager shall be

final and binding on the contractors.

06. In this regard it may be noted as a matter of fact that

Clause-XII of the said contract provides that the contractors shall be

responsible for meeting loss etc. suffered by the corporation. The said

provision is fundamentally structured for realising all costs,

damages/demurrages, wharfages, forfeiture of wagon, registration fees,

charges and expenses suffered or incurred by the corporation due to

the contractor's negligence and unworkman like performance of any

services or breach of any term thereof or their failure to carry out the

work with a view to avoid incurrence of demurrage, etc. and for all

damages and losses occasioned to the corporation due to any act

whether negligent or otherwise of the contractors themselves or their

employees. The decision of the General Manager regarding such failures

of the contractors and their liability for the losses, etc. suffered by the

corporation shall be final and binding on the contractors. It further

provides that the corporation shall be at liberty to reimburse

themselves of any damages, losses, charges, cost or expenses suffered

or incurred by them due to the contractor's negligence and un-workman

like performance of service under the contract or breach of any terms

thereof. The total sum claimed shall be deducted from any sum due or

which at any point of time after the contract is entered into, may

become due to the contractors under this or any other contract with the

corporation. Further procedures for such reimbursement have been laid

under Clause-XII(b). Interestingly, Clause-XII(c) provides for liquidated

damages as follows:

"c)I. In the event of failure of the contractor to provide number of trucks per day, Liquidated Damage @ Rs.300/- per truck per day for a 9 MT Truck will be levied from the contractor upto the minimum number of trucks required per day. For higher capacity trucks, the levy of liquidated damages shall be increased proportionately.

II. In the event of delay on the part of contractor in providing other services as mentioned in the MTE i.e. labour, weighment machines, weights any other services mentioned in the agreement efficiently and to the entire satisfaction of the General Manager(Region) or any other Officer acting on his behalf, the General Manager(Region) without prejudice to any other right and remedies under the agreement have the lawful right to levy Liquidated Damage from the contractor @Rs.2000/- per day or such lesser amount per day or part of the day in case of delay as the General Manager(Region) in his absolute discretion may determine subject to total Liquidated Damage not exceeding 15% of the contract value during the operation period of the contract.

The decision of the Corporation in regard to levy of Liquidated Damage under Para(I) & (II) above shall be final and binding on the parties."

07. But it is apparent from the plaint that the plaintiffs did not

resort to clause-XII(c) in ascertaining the liability of the contractor for

loss etc. as claimed to have suffered by the corporation. It has been

stipulated categorically that despite appointment of the adhoc

contractors at the risk and cost of the transport-contractor, the regular

contract with the transport-contractor was in force and the transport-

contractor was at liberty to carry on all the transportation and improve

her performance. The plaintiffs (the appellants herein) made such

requests several times to the regular contractor [the transport-

contractor] but without any result. According to the corporation, they

had suffered total loss of Rs.1,23,11613/-. The plaintiffs asked the

transport-contractor (the defendant in the suit) to make good of the

said loss, but the transport-contractor defied the said demand. It has

been clearly stated in para-18 of the plaint that the plaintiff had no

other alternative under the contract to make her obliged to pay risk and

cost. Suspension of the work had compelled the plaintiff No.1 (the

corporation) to invoke the Clause X(c) of the said agreement/contract.

As the corporation had a clear cause of action to institute the suit for

realisation of the loss they had suffered and quantified at

Rs.1,23,11,613/- arising from negligence and non-performance of the

work in violation of the terms of the agreement. On the basis of those

pleadings as noted before, the following relief has been sought in the

suit, i.e. for recovery of Rs.1,23,11,613/- (Rupees one crore twenty

three lakhs eleven thousand six hundred and thirteen) only along with

interest @ 12% p.a. since 24.11.2010 (when Clause X(c) of the

contract agreement was imposed) till the date of realisation. It has

been urged by the plaintiffs to pass the money decree against the

defendants.

08. The defendant, the respondent herein, by filing the written

statement has denied the liability of meeting the demand as stated

before. The fundamental pleadings were all denied by the defendant.

The defendant (the respondent herein) flatly denied the statement

regarding crisis in the PDS distribution or such crisis had necessitated

engagement of some other contractors for transporting the food grains

at the risk and cost of the defendant (the transport contractor). The

decision of the corporation engaging the ad-hoc contractors for

transporting the food grains was not based on the foundation as laid by

the plaintiff. According to the defendant, the loss as ascertained or

claimed is fictitious and without any basis in the evidence. Such claim

therefore be dismissed as wholly untenable. According to the

defendant, her so called failure has nothing but figment of imagination,

as the food grains as estimated to be transported was by them was

transported by her [para-26 of the written statement].

09. The defendant, the respondent herein, has stated that at the

initial period of contract, the plaintiffs allowed the defendant to carry

load of 16-19 metric ton per vehicle and payments were also made

accordingly. Indents were also issued by the plaintiffs for carrying 16 to

19 MT per truck, but due to sudden change in the situation, the

defendant was allowed to carry a load of 8 to 10 MT per truck and that

was because of interference by the police authorities on the basis of a

judgment of the apex court which was earlier not implemented. As a

result, it became impossible on the part of the defendant (the transport

contractor) to continue with the work at the contractual rate. The

defendant had requested the plaintiffs for enhancement of rate of

transportation in the changed situation, but the plaintiffs did not

consider the request. The Deputy General Manager, Food Corporation of

India, Regional Officer, NEF Region Shillong- 3 without issuing any show

cause notice and without afford any hearing and even without any

jurisdiction had purportedly invoked the clause X(c) of the

contract/agreement by the letter dated 24.11.2010 and directed that

the work would be carried out at the risk and cost of the defendant for

the remaining period of contract. The plaintiffs subsequently engaged

some contractors without floating any regular tender at unusually high

rate by the back of the defendant and without giving opportunity to the

defendant in taking part in the competition and subsequently the

plaintiffs sent some demand notices to the defendant claiming money

on the plea of additional expenditure. The defendant has categorically

stated in para-26 of the written statement as follows:

"The Defendant further states that the Defendant out of 24 months of contract period had carried food grains for about 20 months and within 20 months the Defendant had carried more than the quantity the Defendant was required to carry under the contract during the entire period of two years and consequently the Defendant had no liability and in the circumstances the Defendant had instituted Money Suit 44/2011 as back as on 17.12.2011 and the Plaintiffs as Defendants had also appeared in the said suit and had also filed written statement on or about 27.04.2012 and they preferred not to make any counter claim. It appears that the Plaintiffs have not filed a separate suit in M.S. 28 of 2013 on the same subject matter between the same parties in respect of same matters in issue and consequently, the suit filed by the Plaintiffs cannot proceed and is required to be stayed under section 10 of the CPC. As a matter of fact the suit filed by the Plaintiffs is only a counter blast against the suit filed by the Defendant. The suit filed by the Plaintiff is malafide and the Plaintiffs are not entitled to any relief in the suit."

10. Based on the rival pleadings, the District Commercial Court

No.2 framed the following issues:

(i) Is the Suit maintainable in its present form and nature?

(ii) Whether plaintiffs have any cause of action to institute this money suit?

(iii) Whether plaintiffs are entitled to get recovery of money of Rs.1,23,11,613/- along with interest since 24.11.2010 for breach of contract by the defendant?

(iv) What other relief/reliefs the plaintiffs are entitled to get?

11. Thereafter the plaintiffs (the appellant herein) adduced one

witness namely Indranil Mandal (PW-1), but no documentary evidence

has been laid in the suit nor such document according to the District

Commercial Court was produced by the plaintiffs on record. The

defendant examined herself as DW-1 and admitted as many as 33

documents [Exbt.1-Exbt.33]. Those are various correspondences, the

bills demand notices etc. Having appreciated the evidence, the District

Commercial Court has returned the finding that from the evidence of

PW-1, the Area Manager of FCI, particularly from his cross-examination

it has emerged that the defendant-contractor completed the volume of

work as contained in the tender within 20 months, meaning thereby,

the defendant did not breach the contract and furthermore, PW-1 in his

cross-examination has stated that the contract period was extended for

six months and the plaintiffs had claimed for additional expenses when

the defendant was not at all a contractor within the meaning of the said

contract. If the terms and conditions of the agreement were discharged,

there cannot be any liability to be discharged by the defendant-

contractor. It has been further observed by the District Commercial

Court that the Clause-X(c) of the agreement/contract had not been at

all enforceable against the defendant. More so, the plaintiffs have failed

to prove their case by sustainable evidence and hence, they are not

entitled to get any decree for recovery of money for breach of contract

as claimed. As the defendant had completed his transportation in terms

of the contract, the defendant cannot be treated any more as the

contractor under the said contract. Having observed thus, the suit was

dismissed by the judgment dated 31.01.2019. Being dissatisfied with

the said judgment dated 31.01.2019 the present appeal has been filed

by the plaintiffs.

12. Mr. A. Bhaumik, learned counsel appearing for the appellants

has submitted that the said finding of the District Commercial Court is

perverse inasmuch as the evidence laid by the plaintiffs was not

properly appreciated. However, he has admitted that no further

evidence except the oral evidence of PW-1 had been adduced by the

plaintiffs. PW-1 according to Mr. Bhaumik, learned counsel has proved

the plaint-case by clearly stating that for the breach, committed by the

defendant in transporting the food grains, the corporation had to

engage adhoc transport-contractors with much higher rate and in the

course, the Corporation had lost additional sum of Rs.1,23,11,613/-.

For that sum, before approaching the civil court, the demand notices

were served on the defendant asking her to deposit the said amount for

mitigating the loss of the plaintiffs. When queried by this court, Mr.

Bhaumik, learned counsel has candidly accepted the position that no

document has been introduced by the plaintiff not even the original

contract based on which the suit for recovery of money has been

instituted. However, Mr. Bhaumik, learned counsel has submitted that

no supervening circumstances had prevailed at the relevant time which

might have or compelled the transport-contractor to abandon the

transportation abruptly. Thus, the plaintiff-corporation was right to

invoke the clause-X(c) of the said agreement/contract for engaging the

adhoc contractors for clearing the accumulated stock and for

transporting them for purpose of infusing the food grains in the Public

Distribution System. Since the defendant had agreed to mitigate the

risk and cost for the loss that might be incurred by the corporation, she

has to mitigate the said loss. In a query that whether the agreement or

the work order had stipulated about the volume of food grains was to

be transported by the defendant, Mr. Bhaumik, learned counsel has

referred to the Clause-IX of the said contract where it has been

provided that the contract shall remain in force for a period of two

years from the date of award of the contract or till such time which may

be decided by the General Manager. The General Manager reserves the

right to extend the period of contract at his sole discretion even for

more than two years. Thus, the claim of the defendant that after

transportation of the volume of food grains as estimated by value the

contractual obligation came to an end cannot be accepted by this court.

The period of contract has been admitted by the defendant in her

Money Suit being MS 44 of 2011 by stating that the contract period was

of two years. The appellants never restrained her from transporting the

food grains, but she had herself suspended the transportation causing

serious threat to the Public Distribution System. According to Mr.

Bhaumik, learned counsel document catalogue of the documents were

appended to the plaint, but those were not read in the evidence. But,

on scrutiny of the record it is found that no document was admitted in

the evidence by PW-1 or by the plaintiffs. On the contrary, it is found

that DW-1, Namita Paul, the respondent herein, introduced 35

documents, list of which is available in the examination-in-chief which

was recorded on 02.05.2017 and those documents were consecutively

marked as Exbt.1 (as a whole) to Exbt.35 (as a whole). During the

cross-examination, DW-1 [the defendant] denied the fact as suggested

by the plaintiffs.

13. Mr. Bhaumik, learned counsel appearing for the appellants

has strenously submitted that Clause X(c) of the contract/agreement

provides that if the contractor fails to supply the requisite number of

labour, scales and trucks/carts, the General Manager shall be his

discretion and at liberty to engage without terminating the contract

other labour, scales, trucks/carts, etc. at the risk and cost of the

contractors, who shall be liable to make good to the Corporation all

additional charges, expenses, cost or losses that the Corporation may

incur or suffer thereby. According to him, the case of the defendant is

based on the ground that she faced serious difficulty for implementation

of the judgment of the apex court in Paramjit Bhasin and Others vs.

Union of India and Others reported in (2005)12 SCC 642 whereby

the state was directed to enforce the provisions of Section 113 of the

Motor Vehicles Act read with Section 114, Section 194 of the said Act.

As a result, the defendant was obstructed from carrying the weight

more than 9 metric ton per vehicle inconsideration of their capability,

which according to the defendant pushed her to a situation that she had

been pushed suffer huge loss if the transportation were carried in terms

of the rate as agreed. As earlier noted, the defendant was carrying the

load of 18 to 19 metric ton per vehicle in violation of Sections 113-115

of the Motor Vehicles Act. This has been admitted by the defendant in

the written statement. It has been also admitted that the defendant

had asked the plaintiff to enhance the rate and that was not done.

According to Mr. Bhaumik, learned counsel deduction from the security

deposit is permissible under the contract. There is no dispute in this

regard that the plaintiffs can reimburse themselves from the pending

bills of the defendant but to avoid any controversy regarding the

assessment of the loss, the plaintiffs have instituted the money suit.

14. Mr. R. Datta, learned counsel appearing for the respondent

(the defendant in the suit) has submitted that the defendant had

discharged her contractual obligation by transporting the volume of

work as assigned in terms of the said contract (Exbt.5). Mr. Datta,

learned counsel has drawn our attention to the notice inviting tender

dated 03.01.2009 [Exbt.2] whereby the tenders for the transportation

was invited from the eligible transport contractors, wherefrom it is

gathered that estimated value of the contract was Rs.9,49,00,000/- for

two years for the work of transportation from railway siding from FSD

Churaibari to FSD Chandrapur. Thereafter Mr. Datta, learned counsel

has drawn our attention to the cross-examination of PW-1, where the

PW-1 has made a clear statement in the following terms:

"The estimated volume of work as contained in the tender was completed by the defendant within 20 months."

15. According to Mr. Datta, learned counsel, even if the contract

was unilaterally extended, by extension no obligation can be saddled on

the transport-contractor as she had in clear terms stated that in view of

enforcement on the load per vehicle, unless the rate is enhanced, she

was unable to continue with the transportation of the food grains.

During the period of unilateral extension when the transport contractor

has shown her difficulty to proceed further with transportation of food

grains etc., that cannot be treated as the breach under Clause-X(c) of

the contract/agreement. Therefore, the entire claim on account of risk

and loss cannot be sustained and the District Commercial Court has

correctly discarded such claim.

16. Mr. Datta, learned counsel has thereafter submitted that

there is no evidence to prove that the corporation has suffered any loss

for any act of the defendant (the respondent in this appeal). Since the

loss has not been assessed on the basis of clause-XII but on the basis

of Clause-X, the plaintiffs had heavy burden to discharge proving that

the loss has occurred and that has occurred actually, and the same is

quantifiable. Unless these two burdens are discharged, the suit for

realisation of loss on account of breach of contract cannot succeed.

Having referred Fateh Chand vs. Balkishan Dass reported in AIR

1963 SC 1405, of the Indian Contract Act Mr. Datta, learned counsel

has submitted that Section 74 is the section which may be made the

base of measuring the damages, but we are constrained to observe that

Section-74 of the Indian Contract Act provides the law as to the liability

upon breach of the contract where compensation is by agreement pre-

determined or where there is stipulation in the form of penalty. In our

considered view, Section-74 would have been applied if the action was

taken for realising the loss under Clause-XII of the

Contract/Agreement. But that is not the case here, Mr. Datta, learned

counsel is substantially correct when he has contended that even if, the

loss is to be measured under Section 73, the plaintiff has to prove that

the loss had been actually suffered. In this regard, Mr. Datta, learned

counsel has further contended that there is no evidence to that effect.

We should note that even when the law/damages are to be measured

under Section 74 [see in Fateh Chand (supra)], it has been observed

that there shall be evidence that the loss has been actually suffered by

the plaintiffs in consequence of the default of the defendant.

17. Mr. Datta, learned counsel has placed his reliance on a

decision of the apex court in Union of India vs. Rampur Distillery

and Chemical Company Limited reported in (1973) 1 SCC 649. In

that report, it has been held, inter alia, as follows:

"It is important that the breach of contract caused no loss to the appellants. The stipulated quantity of rum was subsequently supplied to the appellants by the respondents themselves at the same rates. The appellants, in fact, made no attempt to establish that they had suffered any loss or damage on account of the breach committed by the respondents."

18. Thereafter, having referred to an earlier decision of the apex

court in Maula Bux vs. Union of India reported in (1969) 2 SCC

554, it has been held that the high court was rightly rejected the

appellant's claim that they were entitled to forfeit the security deposit.

Mr. Datta, learned counsel has placed his further reliance on a decision

of the apex court in Chief Executive Officer and Vice Chairman

Gujrat Maritime Board vs. Asiatic Steel Industries Limited and

Others reported in 2020 SCC Online SC 949. The apex court has

observed in that report that a public body is charged to uphold the rule

of law. Its conduct has to be fair and not arbitrary. If it has any

meaningful justification for withholding the amount, such justification is

to be demonstrated from their action. In Dilbagh Rai Jarry vs. Union

of India reported in (1974) 3 SCC 554. In Dilbagh Rai Jarry

(supra), the apex court having extracted from a decision of the Kerala

High Court approvingly has stated that the State is no ordinary party

trying to win a case against one of its own citizens by hook or by crook;

for the State's interest is to meet honest claims, vindicate a substantial

defence and never to score a technical point or overreach a weaker

party to avoid a just liability or secure an unfair advantage, simply

because that the legal devices provide such an opportunity. The State is

a virtuous litigant and looks 'with unconcern on immoral forensic

successes' so that if on the merit, the case is weak, the government

shows a willingness to settle the dispute regardless of prestige and

other lesser motivations which move private parties to fight in court.

The layout on litigation costs and the executive time by the state and

its agencies is so staggering these days because of the large amount of

litigation in which it is involved that a positive and wholesome policy of

cutting back on the volume of law suits by the twin methods of not

being tempted into forensic showdowns where a reasonable adjustment

is feasible and ever offering to extinguish a pending proceeding on just

terms, giving the legal mentors of the government some initiative and

authority in that behalf.

19. Having appreciated the submission of the counsel for the

parties and scrutinized the records, the pertinent question that falls for

consideration in determining this appeal is that whether the plaintiff has

discharged the burden by proving the facts as pleaded in the plaint in

order to achieve the reliefs. On appreciation of the evidence of the

plaintiffs through PW-1, we do not have any hesitation to hold that no

evidence of substance has been laid even by PW-1 as the content of the

documents as narrated by him has not been proved. Thus, it is

impermissible to take the content of the document as proved when the

defendant has categorically denied such assertion in the plaint. Section

61 and 62 of the Indian Evidence Act for this purpose may be revisited.

Section 61 of the Indian Evidence Act clearly postulates that the

contentss of the documents may be proved either by primary or by

secondary evidence. Section 62 of Indian Evidence Act has defined

'primary evidence' by stating that primary evidence means the

document itself be produced for inspection of this court'. Even though

some documents have been filed by the defendants and we have, for

fair ends of justice, appreciated their documents while appreciating the

claim of the plaintiffs. We find that the volume of transportation has

been estimated by money in the Notice Inviting Tender [Exbt.2] dated

03.01.2009, where the estimated value of the transportation has been

quantified at Rs.9,49,00,000/-.

20. PW-1 has clearly testified that the defendant had completed

the estimated volume of work, as specified in the tender, within 20

months. The plaintiff has not stated that how in such circumstances,

they could suffer any loss when the tender has been satisfied. When the

volume of work as estimated has been completed by the transport-

contractor, the plaintiffs cannot saddle any liability on the defendant.

Moreover, we are in complete agreement with the submission of Mr.

Datta, learned counsel appearing for the respondent that there is no

evidence to demonstrate that any loss has been suffered by the

plaintiffs. Section-73 of the Indian Contract Act provides that when

a contract has been breached, the party who suffers from such breach

is entitled to compensation for the loss/costs from the party who has

breached the contract. Unless it is shown that the contract has been

breached and thereby the loss or damage has been occasioned to the

other party, no compensation can be granted by any civil court. On

both accounts, the plaintiffs have failed to discharge their burden and

hence, we do not find any infirmity in the finding so returned by the

District Commercial Court.

21. In the result, the appeal being RFA 16 of 2019 stands

dismissed. The judgment dated 31.01.2019 stands affirmed.

22. In RFA No.17 of 2019 [The Food Corporation of India &

Anr. vs. M/S Namita Paul], the judgment dated 31.01.2019 delivered in

Commercial Suit 07 of 2017 by the District Commercial Judge, Court

No.2, West Tripura, Agartala has been challenged. The said commercial

suit was instituted by the respondent (the transport-contractor) for

recovery of money to the extent of Rs.46,63,400/- with interest. Out of

that Rs.46,63,400/-, a sum of Rs.40,08,286/- was against the

deduction of the security deposit and the remaining Rs.6,55,114/- as

the loss of profit. The dispute which arose from the same contract gave

the basis for institution of the suit. It has been placed that in response

to the notice inviting tender dated 03.01.2009, the plaintiff (the

respondent in the appeal) quoted her rate @Rs.1176.54 per M.T. i.e.

47.5% above the scheduled rate. Her rate was accepted by the Food

Corporation of India (the appellants herein) by the letter dated

29.04.2009. The respondent (the plaintiff in the suit) found it difficult to

carry on the performance with the agreed rate. The plaintiff's plea is the

police has been enforcing the load capacity of the vehicles strictly in

terms of the Motor Vehicles Act. The said contract with relevant clauses

has been discussed in the other appeal. For sake of brevity those were

not being repeated, but the facts which is unique to the appeal being

RFA 17 of 2019 has been separately noted. Such rigorous enforcement

on the load capacity of the vehicle was intensified in the wake of

Paramjit Bhasin & Ors. vs. Union of India & Ors. (supra).

23. The plaintiff (the respondent in the appeal) has clearly stated

by several letters that unless the rate is augmented, it will be very

difficult on her part to continue with the transportation on the basis of

the old rate. In that perspective, the corporation invoked Clause-X(c) of

the contract/agreement as noted above and engaged adhoc

contractors. In terms of Clause-X of the contract/agreement, the

defendant No.4 i.e., the Area Manager, Food Corporation of India,

Agartala raised demand by the demand notices dated 19.03.2011,

02.04.2011, 18.06.2011, 21.07.2011 and 26.08.2011 claiming

Rs.22,58,538/-, Rs.12,80,739/-, Rs.45,00,494/-, Rs.16,20,883/- and

Rs.26,50,850/- respectively on account of additional expenditure that

the corporation had to make by appointing the adhoc transporters on

the plea that as the plaintiff (the respondent herein) had abruptly

suspended the transportation of the food grains to them, there had

been no alternative within the frame work of the contract. Such

enforcement had created a widespread grievance in the transporters.

However, the Supreme Court's direction to enforce the provision of

Sections 113-115 of the Motor Vehicles Act was strictly carried out by

the enforcing agencies. According to the contract, the contractual

period was supposed to continue for two years. Thus, the said contract

was supposed to expire on 30.04.2011. Till 19.10.2020, the plaintiff

(the respondent herein) operated smoothly and there was no grievance

from any corner. The plaintiff has categorically pleaded that within the

period of two years, the plaintiff was supposed to transport the

materials of worth Rs.9,49,00,000/-. Since the plaintiff was awarded

1/3 of the contract she was supposed to carry the food grains of worth

Rs.3,27,55,720/-. The petitioner had carried more than the said volume

within the period of two years. After the corporation invoked clause-X

(c) of the contract/agreement, the plaintiff asked for refund of the

security deposit, but the respondents did not refund the said security

deposit. The plaintiff has received the payment of Rs.3,27,55,720/-

during the period of 20 months. The plaintiff was supposed to garner

further payment of Rs.65,51,144/- for the balance contract period of

four months. As such, the plaintiff would have earned the profit of

Rs.6,55,114/- during the remaining four months, which has lost due to

arbitrary action on the part of the defendants (the Corporation). Hence,

the petitioner is entitled to recover a sum of Rs.46,63,400/-

(Rs.40,08,286/- as refund of the security deposit and Rs.6,55,114/- as

loss of profit with interest) with interest at 12% p.a. It has been also

stated by the plaintiff that she had never prayed for the extension of

the contract period but that was so extended malafide to victimize the

plaintiff and cause loss to the plaintiff.

24. In the background of these facts, the plaintiff (the

respondent here) sought the decree of declaration declaring that the

demand notices as noted above are all arbitrary, illegal and

unsustainable. The plaintiff (the respondent herein) is entitled to

recover Rs.40,08,286/- as refund to the security deposit and another

sum of Rs.6,55,114/- as loss of profit from the defendant (the

appellants herein) with interest at12% p.a.

25. The appellants (the defendant in the suit) by filing a written

statement has denied such claim and categorically stated that since the

plaintiff (the respondent herein) had breached the contractual

obligation and occasioned loss to the corporation, the corporation is

entitled to reimburse themselves the amount which they have suffered

for abrupt suspension of the transportation of the food grains in breach

of the said contract. The defendants (the appellants in this appeal) in

the suit have categorically stated that they were never party in any

illegal claim breach of the statutory provision in respect of the

maximum load. They have further stated that the suit is liable to be

dismissed and no basis has been proved to get the decree as sought by

the suit.

26. On appreciation of the rival pleadings, the District

Commercial Court framed the following issues:

1) Is the suit maintainable in its present form and nature?

2) Is the Order bearing No. Cont. 9/NEFR/TC/CBZ-CDP/09, dated 24-11-2010 issued by the defendant No.5 void?

3)Is the Order bearing No.Cont.9/DO-ATT/TC/CBZ- CDR/Adhoc/20d10/2781, dated 24.12.2010 issued by defendant No.4 void?

4)Is the Order bearing No. Cont.9/NEFR/TC/CBZ-CDR/09, dated 24.03.2011 issued by the defendant No.2 void?

5)Is the Order bearing No. Cont.9/NEFR/TC/CBZ-CDR/AD hoc/2011, dated 22.06.2011 issued by defendant No.2 void?

6)Are the demand notices, dated 19.03.2011, 02.04.2011, 18.06.2011, 21.07.2011 and 26.08.2011 issued by the defendant No.4 void?

7)Is the plaintiff entitled to recover a sum of Rs.40,08,286/- as security deposits from the defendants? If so, is the plaintiff entitled to any interest thereon? If so, to what extent and from what period?

8)Is the plaintiff entitled to recover a sum of Rs.6,55,144/- toward loss of profit from the defendants? If so, is the plaintiff entitled to any interest thereon? If so, to what extent and from what period?

9)Whether the plaintiff is entitled to get any decree as prayed for?

10)To what relief/reliefs the parties to this suit are entitled?

27. For and on behalf of the plaintiff one witness (Parimal

Chandra Pal) was examined. The said witness had admitted the

documents (Exbt-1- Exbt.17 series) including the demand notices, a

copy of the notice inviting tender, the memorandum dated 12.07.2010

etc. For the defendants, the appellants herein, one witness (DW-7, Sri

Indranil Mandal) was examined to rebut the evidence of the plaintiff,

the respondent herein. After discussing the evidence the District

Commercial Court by the judgment dated 31.01.2019 has observed

that the act and conduct of the defendants caused undue hardship to

the plaintiff (the respondent herein) and the plaintiff is entitled to get

refund of the security deposit from the contesting defendants, the

appellants herein, but the plaintiff is not entitled to get any decree for

an amount of Rs.6,55,144/- towards loss of profit from the defendants

since there is no specific evidence on her part on that aspect. Further,

no question has been raised by the defendants that the suit is not

maintainable. Thereafter, it has been observed in the said judgment as

under:

"As the Issue No.1 is answered in favour of the plaintiff of the suit and issue No.2 to 6 in my considered view are not binding upon the present plaintiff and as such the Issue No.7 is decided in affirmative in favour of the plaintiff of this suit. But the plaintiff is not entitled to get any reliefs in respect of Issue No.8,9 and 10 in this suit."

As corollary, it has been declared that the plaintiff (the

respondent herein) is entitled to get the re-fund of security deposit to

the tune of Rs.40,08,286/- from the defendants (the appellants herein).

The defendants are directed to make the payment to the plaintiff within

a period of three months from the day of the judgment failing which the

plaintiff is entitled to interest @ 6% per annum till realization. But no

cost has been imposed on the defendants.

28. Mr. A. Bhaumik, learned counsel appearing for the appellants

has submitted that the security deposit has been not refunded as the

defendants were entitled to reimburse themselves against the loss

occasioned by the plaintiff. Mr. Bhaumik, learned counsel has further

submitted that the so called loss of profit is imaginary and the finding in

this regard of the District Commercial Judge is absolutely correct and

unassailable. But the finding that the plaintiff is entitled to get the

refund of the security deposit of Rs.40,08,286/- cannot be sustained

and as the defendant can reimburse the said amount against the total

amount of loss the defendants have suffered on account of loss

occasioned by the plaintiff by suspending the transportation of the food

grains abruptly. On query, he has admitted that the plaintiff had

expressed her inability much before the suspension.

29. Mr. R. Datta, learned counsel has submitted that the

defendant has failed to demonstrate by way of placing the evidence

that they suffered any loss at all in this regard. there is no such

evidence at all.

30. Having appreciated the submissions of the learned counsel

for the parties and scrutinized the records the only question that

remains to be responded to is that whether in view of the opinion

expressed in RFA 16 of 2019, this appeal can be sustained or not. The

opinion as expressed in RFA 16 of 2019 is unambiguous that non-

refund of the security deposit by the defendants (the appellants in the

said appeal) cannot be sustained. It has been clearly observed that the

defendants are not entitled to reimburse any amount on account of the

purported loss as claimed to have been suffered. When it has been

clearly observed that the appellants (the defendants in the suit) are not

entitled to recover any amount from the plaintiff (the respondent in the

suit), the appellants (the defendants in the suit) are not entitled to

withhold, reimburse or deduct any amount from the security deposit to

the extent of Rs.40,08,286/-. Thus, the defendants are liable to pay or

refund the plaintiff (the respondent herein) the said sum of

Rs.40,08,286/- within a period of 3(three) months from the date of

decree as it would be passed in this appeal, failing which the plaintiff

(the respondent herein) will be entitled to recover the said sum with

interest at 6% per annum from the day of the decree till realisation

through the process of the court. As there is no evidence to

demonstrate how the plaintiff had suffered loss to the extent of

Rs.6,55,144/- for the remaining four months of the contract period the

finding of the District Commercial Court does not suffer from any

infirmity. However, we would like to add that the said claim of the

plaintiff is hit by the principle of approbate and reprobate as in one

hand the plaintiff has pleaded and proved that the contract between the

plaintiff and the defendant had come to an end and on the other hand

she has raised the claim of loss in the profit for the purported four

months, the remainder of the term. Moreover, as the plaintiff (the

respondent herein) had suspended the transportation unilaterally, she

is not entitled to any loss whatsoever as the defendants, the appellants

herein, did not prohibit her in transporting the food grains. Further, we

have accepted that the said agreement had come to the end, so far the

parties are concerned and therefore, the declaration and the direction

for payment in the form of mandatory injunction is not liable to be

interfered with. We, therefore, affirm the finding of the District

Commercial Court as recorded in the judgment dated 31.01.2019.

In the result, this appeal too stands dismissed.

Draw the decrees in both the appeals in terms of the above.

Returned the LCRs thereafter.

           JUDGE                                       CHIEF JUSTICE




Moumita