The High Court ruled a suit for recovery of debt where plaintiff millers claimed money due due to short delivery of imported oils. The court held the defendants liable but allowed a small deduction for one instance of excess delivery.
Decree for Rs.10,33,654.29/- with interest @ 12% p.a. from date of suit.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUIT NO. 1516 OF 1981
The Malwa Vanspati and Chemicals
Co.Ltd ......Plffs.
vs.
The State Trading Corpn. of
India Ltd ......Defnds.
---------
U.J. Makhija with D.V. Singh i/b. M/s. Thakordas
and Madgaonkar for the plffs.
K.H. Modi i/b. Little and Co. for the defnds.
CORAM: S.U. KAMDAR, J.
DATE : 3RD AUGUST, 2005.
JUDGMENT :
1. The present suit has been filed by the
plaintiff for the recovery of sum of
Rs.10,77,280.29/- alongwith interest at the rate of
18% p.a on the principal amount of
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Rs.7,44,344.27/-.
2. Some of the material facts in the background
of which the present suit is filed is briefly set
out as hereunder :
3. The defendant is a canalising agency of the
government of India and under the various import
export policies promulgated commenced from time to
time by the government the defendant is entitled to
import exclusively various oils as a canalising
agency and distribute the same to the various
consumers in India. The plaintiffs are the
manufacturers of hydrogenated and refined oil
extractions and soaps etc. and are carrying on
business at Indore in the state of Madhya Pradesh.
The defendants after import of certain oils offered
the same to various mills as per the quotas
allocated to them. Similarly the plaintiff mills
were also allocated certain quotas for the imported
oils. Under the said allocation the plaintiff was
entitled to the delivery of the various oils
imported by the defendant against issue of the
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delivery order. The practice of the plaintiff has
been to issue delivery orders on receipt of the
full payment in respect thereof. After receiving
the said delivery order, the plaintiff was required
to take delivery of the said oil either from Bombay
or Calcutta or Kandla as the case may be.
Inrespect of the aforesaid deliveries there has
been a mutual and current running account between
the plaintiff and the defendant. It is the case of
the plaintiff that between the parties an
arrangement was that in an event if there is any
short delivery then the defendant would give either
delivery of the said goods or refund excess
payments made by the plaintiff then the goods
actually delivered by the defendant.
4. It is the case of the plaintiff that between
9.11.1976 to 14.12.1978 the defendant issued
various delivery orders from time to time for
delivery of Palm Oil, Rapeseed Oil, and Soyabean
Oil, to the value of Rs.12,88,494.61/-. It is
further the case of the plaintiff that inrespect of
the said goods which are delivered by the defendant
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from time to time during the aforesaid period there
has been on some occasion short delivery of the
goods and thus there was deficit in the quantity of
the oil received by the plaintiff from the
defendants then what was actually allocated and for
which the entire price was paid in advance by the
plaintiff to the defendants.
5. On 6.3.1979 a letter was addressed by the
plaintiff to the defendants inter-alia recording
therein that there has been short delivery of the
goods to the extent of 224.103 metric tones
inrespect of the aforesaid delivery. The plaintiff
also submitted a statement giving details of the
various deliveries which they actually ordered and
for which the payment has been made. It is the
case of the plaintiff that there was a short
delivery during the said period and thus the
plaintiffs are entitled to the refund of the
balance amount for the quantities not supplied. It
is further case of the plaintiff that on 9.4.1979
the defendant addressed a letter inter-alia stating
therein that the statement of account of the
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plaintiff in their books of account has been
finalised and the same is forwarded to their
account department for verification and
confirmation of the quantity delivered and amount
paid. On 7.5.1979 the defendants once again
addressed a letter to the plaintiff inter-alia
pointing out that they should be paid the excess
amount which was recovered from them by the
defendants. On 23.6.1979 the defendants addressed
a letter to the plaintiff stating that they have
scrutinised the account and they confirmed the
quantity shown as delivery except certain items as
mentioned in the said letter. Thereafter the
plaintiffs sent further reminders on 3.9.1979 and
15.9.1979 to the defendants to pay the excess
amount. In response thereof the defendants have
forwarded a letter dated 19-20.12.1979 alongwith a
cheque for sum of Rs.4,82,522.90/- to the plaintiff
and contended that, that is the amount due and
payable by the defendant to the plaintiff as per
their books of accounts. However it was the case
of the plaintiff that much larger amount was due
and payable by the defendant and even after
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adjusting the amount paid by the defendant being
sum of Rs.4,82,522.90/- the plaintiff is still
entitled to receive from the defendant a sum of
Rs.7,44,344.286/- as due and payable. Accordingly
a letter was addressed to the defendants by the
plaintiffs advocate on 27.2.1981 and called upon
the defendant to make payment of the aforesaid
amount of Rs.7,44,344.287/- alongwith interest at
the rate of 18% p.a. within two weeks from the
receipt of the said letter. Inspite of the notice
of the advocates the defendants neither made the
payment nor forwarded any reply and in view thereof
the plaintiff filed the present suit for the
recovery of the aforesaid amount. The defendant
has resisted the present claim by filing written
statement. It has been interalia alleged by the
defendant that after full reconciliation of the
Statement of account by the defendant in their
books of accounts infact it is the case of the
plaintiffs who are liable to pay to the defendant a
sum of Rs.14,485.17/-. Thus it is contended that
there is no question of any decre being passed
against the defendant. It has been contended in
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the written statement that there has been various
supplies by the defendants to the plaintiffs which
was in excess and the said excess delivery of the
oil is not taken into consideration by the
plaintiff while raising the aforesaid claim. It is
the case of the defendant that they are entitled to
additional payment from the plaintiffs against the
excess supplies of the oil as well as also entitled
to certain payments for not lifting the delivery of
the goods in time. In view thereof the defendants
submitted that there is no amount due and payable
by the defendants to the plaintiffs and on the
contrary the plaintiffs must pay the said sum of
Rs.14,485.17/-.
6. On the aforesaid pleadings between the parties
the issue were framed by this court on 22.6.2001
which reads as under :
1. Whether the plaintiffs prove that an
amount of Rs.10,77,280.29/- is due and payable
by the defendants ?
2. Whether the plaintiffs prove that they
are entitled to interest on Rs.7,44,344.27/-
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at the rate of 18% p.a. from the date of the
suit till payment ?
3. Whether the plaintiffs are entitled to
costs of the suit ?
4. Whether the suit should be dismissed
with cost for want of any cause of action as
alleged in para 1 and 13 of the written
statement ?
5. What order/decree ?
7. On trial the plaintiffs have led the oral
evidence of one of the witness namely Tarun
Matadeen Purohit. The defendant has also led
evidence of one witness of one Mr. M.K.
Venugopal. The plaintiffs have filed affidavit of
documents being Ex.P.2 to P.14 which inter-alia
contains the statement of accounts, correspondence
the invoices and advocates notice. In the evidence
the plaintiff has deposed that there been a
delivery of the goods from time to time and in
respect of which the plaintiff is entitled to the
recoveries of certain amounts. It has been deposed
that after adjustment of the aforesaid payment of
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Rs.4,82,522.90/- the plaintiff is entitled to the
balance claim of Rs.7,44,344.27/- as due and
payable by the defendant to the plaintiff and
interest thereon. The plaintiff is cross examined
by the learned counsel for the defendant. In the
course of his cross-examination the plaintiffs
witness has infact confirmed the aforesaid amount
as due and payable and inrespect of the cross
examination pertaining to the document particularly
Exh.p.12 which is statement of account. The
witness has stated as under :
"It is true that as on 4.4.81 the
balance of the entries were yet not
reconciled in the accounts of the
plaintiffs and the defendants. We
have reconciled our own statement of
accounts. We have given credit to the
plaintiff in our books of accounts at
the time of reconciliation of
Rs.744,344.27/- which is a suit
claim."
"It is true that the amount of
Rs.7,44,344.27 was due and payable to
the plaintiffs before carrying out the
reconciliation. We have not paid the
aforesaid amount because we were
entitled to recover certain amounts
from the plaintiffs."
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8. However in the course of his evidence he has
also admitted that in so far as one particular
entry at serial no. 18 in the statement of account
Ex.P.12 is concerned there has been an excess
delivery and for which he has in place of giving
credit to the defendant he has wrongly debited the
said account of the plaintiff herein. In so far as
the evidence of the defendants is concerned it is
very significant to note that the defendants have
produced no documentary evidence of any nature
whatsoever. The so called reconciliation made by
the defendant and at the foot of which the
defendants are claiming to the sum of Rs.14,485.17
Even the said reconciliation statement has also not
been produced by the defendant. The defendant has
also not produced any books of accounts to show
that infact nothing is due and payable by the
defendants to the plaintiffs. The defendants have
failed to discharge the burden to prove that that
there was any excess delivery of the goods because
inrespect of none of the transactions the
defendants have produced any evidence to show an
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excess delivery of the goods. No details are
furnished for such excess delivery or of the amount
recoverable by the defendants from the plaintiffs
on that account. However from the evidence of M.K.
Venugopal in para-5 thereof he has admitted that at
one point of time there was an amount of
Rs.8,08,824.29/- was payable. However he has
stated in his evidence in the said para-5 that it
is true that the amount of Rs.8,03,824.29/- was
payable. He says that the same is credited against
the claim of the defendant for excess delivery and
other lifting charges etc. and therefore the
amount payable is only Rs,14,485.60/-. Thus in
view of the fact that the defendant has not
produced any material to show that there was any
excess lifting or carrying charges then in that
event by virtue of para-5 of the evidence the said
claim of Rs.7,44,344.22/- stands admitted. Apart
therefrom in the cross examination of the said
witness of the defendant it has been admitted by
him that he has nothing to show that there was an
infact excess delivery of the goods or the amount
is recoverable by the defendants towards so called
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carrying charges etc. In so far as the evidence on
this aspect is concerned in cross examination he
has stated as under :
It is true that as on 4.4.81 the
balance of the entries were yet not
reconciled in the accounts of the
plaintiffs and the defendants. We
have reconciled our own statement of
accounts. We have given credit to the
plaintiff in our books of accounts at
the time of reconciliation of
Rs.7,44,344.27 which is a suit claim.
It is true that the amount of
Rs.7,44,344.27/- was due and payable
to the plaintiffs before carrying out
the reconciliation. We have not paid
the aforesaid amount because we were
entitled to recover certain amounts
from the plaintiffs."
9. The larned counsel for the defendant has
though sought to argue that he is entitled to the
set off and or adjustment of the excess delivery of
the goods and which has not been paid and the same
has been adjusted by the defendant and thus nothing
has been due and payable. However he has fairly
conceeded that he has neither produced any books of
accounts nor produced any document to show that
there was either excess delivery inrespect of the
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transactions or he is entitled to any claim of set
off or adjustment of the sum of Rs.7,44,344.27/-.
However he has contended before me that Exh. P.12
which has been produced by the plaintiff pertains
to only short delivery of goods and that
deliberately the excess delivery has not been
included. It is therefore contended that Ex.P.12
ought not to be taken into consideration. However
he has also pointed out that inrespect of item
no.18 there is excess quantity shown in the said
list. Further in the place of giving credit to the
said excess delivery the plaintiff has debited the
said amount. He has also drawn my attention to
Ex.P.8 which is a letter from the defendant and it
has been mentioned therein that if the plaintiff
sends their statement of account then they would
reconcile the same with their account and settle
the said matter. However according to the
defendants they did not sent any statement of
account for reconciliation and therefore the
defendants have reconciled their own books of
accounts. However I am unable to accept the
aforesaid contention because the defendants have
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produced no evidence whatsoever of any nature in
the form of documents to show that the statement
has been reconciled or there has been excess
delivery charges payable by the plaintiffs to the
defendants. On the contrary from the evidence
produced it has been established that at foot of
the account there has been a due and payable by the
defendants to the plaintiffs a sum of
Rs.7,44,344.27/-. If the defendant is claiming
adjustment against the said claim then it is for
the defendants to show that they are entitled to
set off the same as against the excess delivery.
However the defendants have failed to do so.
10. On the other hand it is contended by the
plaintiffs that I must ignore the entry at serial
no.18 which has been found in the statement of
account of the plaintiffs themselves at Ex.P.12.
The said admitted entry on Ex.P.12 indicates that
there has been an excess delivery inrespect of one
quantity. The coloumn-5 of the said Ex.P.12 in so
far as Item no.18 is concerned indicates that the
ordered quantity was of 32.200 metric tones as
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against which the column no.8 which indicates the
actual delivered quantity was for 35.92 metric
tones thus there has been an excess delivery of
3.725 metric tones. In place of giving credit of
3.725 metric tones the defendant has debited the
account by Rs.14,888.68/- on the ground that there
has been short delivery of 2.480 metric tones. It
has been admitted that if this amount of
Rs.14,888.68/- is reversed and the credit is given
of 3.725 metric tones then there will be a credit
required to be given of Rs.44,626/-. Thus while I
hold that the defendant is liable to make payment
to the plaintiffs of Rs.744,344.27/- I grant
deduction to the defendants of sum of Rs.44,626/-
which amount is recoverable by the defendants from
the plaintiff towards the excess quantity of the
goods lifted as far the entry at serial no.18 of
the said statement is concerned. The aforesaid
amount of Rs.44,626/- is payable towards the said
3.725 metric tones. Learned counsel for the
defendants have miserably failed to prove excess
delivery except the one strifle instance mentioned
herein above the defendants have neither produced
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invoices nor produced any delivery orders to show
that there been excess delivery of the goods for
which they are entitled to any price. On the other
hand the learned counsel for the plaintiff has
contended that the fact that there was a short
delivery is mentioned in the statement of account
the figure in the statement of account including
the amount outstanding of Rs.744,344.27/- has
already been admitted by the defendant in their
evidence before the court. In view thereof the
plaintiffs have established and proved short
delivery of the goods. This leads me to the last
contention namely the liability to pay interest in
the present suit which has been claimed by the
plaintiff at the rate of 18% p.a. on the balance
amount due and payable of Rs.744,344.27/-. Learned
counsel for the plaintiff has fairly stated that
the interest from the date of the suit till payment
is always in the discretion of the court. He
however submitted that at the relevant time the
interest prevailing in the market was at the rate
of 18% and therefore this court should grant
interest at the said rate. On the other hand the
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defendants have submitted that the court has to
take note of the fact that the rate of the interest
is falling day by day and therefore interest rate
should be reduced. I am of the opinion that
considering the fact that the defendant is a public
sector enterprise and considering the fact that the
interest rate has been falling consistently. I
grant interest in favour of the plaintiff at the
rate of 12% I accordingly pass the following
decree.
There shall be decree in favour of the
plaintiff and against the defendants
for the sum of Rs.10,77,280.29/- less
Rs.44,626/- being Rs.10,33,654.29/-
with further interest at the rate of
12% p.a on the principal amount of
Rs.7,44,344.27/- from the date of the
suit till payment and or realisation.
There shall be no order as to costs.
sd/-
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**************
3 issues framed by the court
Whether the plaintiffs prove that an amount of Rs.10,77,280.29/- is due and payable by the defendants?
Whether the plaintiffs are entitled to interest at the rate of 18% p.a. from the date of the suit till payment?
Whether the defendants are entitled to any set-off for alleged excess delivery or lifting charges?
The Malwa Vanspati and Chemicals Co.Ltd
The State Trading Corpn. of India Ltd
S.U. KAMDAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court