Allowed

The District Coordinator of Hospital Services, v. M/s. Yemminganuru Weavers Co-operative Production

Telangana HC9 Aug 2012SA/627/2011

Case brief

AI extract

What is this about?

In a contract dispute over supplies to the government department, the High Court held that when departmental rates are binding and no contract exists to pay promoted rates, the trial court's decree based on approved rates must be restored, dismissing the appeal against the decree for the excess amount claimed.

What did the court decide?

Second Appeal allowed; judgment and decree of first appellate court set aside; decree of trial court restored.

The District Coordinator of Hospital… — Contract and Commercial Disputes | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO SECOND APPEAL NO.627 OF 2011

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JUDGMENT:-

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The defendants in O.S.No.518 of 2002 on the file of the court of Principal Junior Civil Judge, at Vizianagaram, are the appellants herein. The plaintiff has filed the suit for recovery of a sum of Rs.42,930/- being the amount due under supply of 2000 meters of gauze cloth, as per the supply order dated 10-01-2000. The amount was not paid and consequently the suit was filed.

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The defendants herein have filed a written statement contending inter alia that the rates claimed by the plaintiff is not correct and the approved rate is only Rs.6/- per meter of gauze cloth and Rs.9/- per meter of bandage cloth as approved by the Commissioner of Industries. There is no contract to pay more than the said amount.

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Considering the material evidence on record, the court below has decreed the suit only for a sum of Rs.21,000/- as per the rates fixed by the Commissioner under Ex.B-1 proceedings @ Rs.6/- per gauze cloth and @ Rs.9/- per bandage cloth. The interest was granted from the date of the filing of the suit @ 6% p.a. As against that, the plaintiff has preferred an appeal and the District Judge, Vizianagaram in A.S.No.131 of 2005 has allowed the appeal and decreed the suit as prayed for. As against that the present Second Appeal is filed and the following substantial question of law is framed at the time of admission.

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“Whether there is valid contract between the plaintiff and the defendants for payment of the price as claimed by the plaintiff and granted by the first appellate court”.

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Evidently, the transaction between the plaintiff and defendants is a government transaction and generally in such transactions, the rates fixed by the competent authority are only enforceable and recoverable. In this case, there is absolutely no material to show that the defendants have offered to pay the amount as per the value claimed by the plaintiff. In fact, the plaintiff has claimed @ Rs.13/- per meter to the gauze cloth and Rs.27/- per meter to the bandage cloth; whereas the rates claimed by

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the plaintiff is not based on any offer given by him and accepted by the department. When there is no contract to pay the particular rate claimed by the plaintiff and when the rates fixed by the department are binding, the appellate court should not have easily discarded the binding value of the amount payable by the defendants. Merely because the plaintiff has made a claim and placed the bill, the defendants are not competent to pay the same violating the orders of the Commissioner. The evidence of Pw.2 cannot also be taken into consideration as he is no other than the employee of the plaintiff and Exs.A-6 to A-17 bills and Ex.A-18 advance receipt cannot be taken as conclusive to claim the value as claimed by the plaintiff. Therefore, in view of the above circumstances, there being no contract to pay the amount as claimed by the plaintiff, the parties are governed by the value fixed by the Commissioner from time to time and the suit for excess amount cannot be decreed.

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Therefore, I find absolutely no justifiable reasons for the first appellate court to interfere with the reasoned and legal judgment of the trial court, which has taken into consideration the absence of any contract to pay the different price rather than the price fixed by the Commissioner. Therefore, the Second Appeal is allowed setting aside the judgment and decree of the first appellate court and the decree of the trial court is restored. No costs.

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___________________ N.R.L. NĀGESWARA RĀO,J

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09-08-2012 TSNR

The District Coordinator of Hospital Services, v. M/s. Yemminganuru Weavers Co-operative Production

Case brief

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What did the court decide?

The District Coordinator of Hospital Services, v. M/s. Yemminganuru Weavers Co-operative Production

Case brief

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What did the court decide?

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