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M/s. Sachdeva Trading Company & Ors v. Karnal Co-op.Sugar Mills Ltd - RSA-2244-2004 [2007] RD-P&H 1012 (29 January 2007)

R.S.A. No.2244 of 2004 1


R.S.A. No. 2244 of 2004

Date of decision: January 25,2007

M/s. Sachdeva Trading Company and others V,. Karnal Co-op.

Sugar Mills Ltd

Present: Shri Arun Jain,Advocate, for the appellants.

Shri Pawan Mutneja, Advocate,for the respondent.

Viney Mittal,J.

Defendants are the appellants before this court. A suit for recovery filed by the plaintiff- Society has been decreed by the trial court. The appeal of the defendants has failed before the first appellate Court.

A suit for recovery of Rs.6,90,000/- was filed by the plaintiff, Karnal Co-operative Sugar Mills Limited against the defendants, It was pleaded that defendant No.1 had submitted a tender on the basis of an advertisement for sale of 10,000 quintals of molasses. Defendant No.1 had submitted the tender to purchase the said molasses at the rate of Rs.235/- per quintal ex-factory, excluding duties and taxes and being the highest was accepted.

According to the plaintiff, the defendants had violated the terms and conditions and had lifted only 4493.90 quintals of molasses upto March 23,1995. They sought extension of time for a period of two months. The said extension was granted. The defendants were required to lift molasses as early as possible and in any case by May 25,1995. It was made clear that in case of failure, the balance quantity of molasses would be sold and the costs would be recovered from them. The plaintiff further pleaded that only 303 R.S.A. No.2244 of 2004 2

quintals molasses were lifted upto May 25,1995 and in the meantime, the price of molasses in the market crashed. On June 20,1995, the defendants expressed their inability to lift the balance molasses and claimed half of the amount of security. In these circumstances, the plaintiff sold the balance of malasses in open market at the risk and responsibility of defendant No.1-firm. The said molasses were sold at the rate of Rs.121/- per quintal and therefore, the plaintiff-Society suffered a loss at the the rate of Rs.114/- per quintal, the total loss being Rs.5,93,153.

In these circumstances, the plaintiff claimed that after deducting the security amount of Rs.1,00,000/- deposited by defendant No.1, the balance amount of Rs.4,93,153 along with interest was recoverable.

The basic facts were not disputed by the defendants.

The acceptance of their tender and non-lifting of the total quantity of 10,000 quintals of molasses was conceded. The defendants maintained that since the price had crashed from Rs.235/- to Rs.107/- per quintal and there was no buyer in the State of Haryana, therefore, defendant No.1 could not lift the molasses within time.

Further the defendants maintained that as per the terms and conditions of the agreement only the amount of security was liable to be forfeited and no further amount could be recoverable by the plaintiff.

Learned trial court on the basis of the evidence available on the record held that the plaintiff not only was entitled to forfeit the security amount but as per the terms and conditions of the tender, defendants were liable to pay to the plaintiff at the rate of Rs.114/- per quintal for a total of 555.10 quintals of molasses from May 25,1995.The plaintiff-Society was also held entitled to interest. The R.S.A. No.2244 of 2004 3

amount of security was liable to be adjusted.

The defendants filed an appeal before the appellate Court. With regard to certain observations made by the trial court, cross-objections were also filed by the plaintiff-Society.

Learned appellate court reappraised the entire evidence and came to the conclusion that not only in terms of sections 73 and 74 of the Contract Act but also in view of the terms and conditions of the tender and terms of allotment,defendants were liable to make good the loss suffered by the plaintiff-Society.

Consequently, the appellate court held that the plaintiff-Society was entitled to recover an amount of Rs.4,93,153/- from the defendants along with proportionate costs and interest at the rate of 6% per annum.

It is in these circumstances that the present appeal has been filed by defendants.

I have heard Shri Arun Jain, learned counsel appearing for the defendant-appellants and Shri Pawan Kumar Mutneja, learned counsel appearing for the plaintiff-respondent and with their assistance have also gone through the record of the case.

Shri Arun Jain, learned counsel for the defendant- appellants has argued that as per terms and conditions of the agreement, plaintiff-Society was only entitled to forfeit the security amount of Rs.1,00,000/- and no further amount could have been recovered. Learned counsel has maintained that any subsequent and unilateral change of conditions by the plaintiff-Society could not be taken to be binding upon the defendants and, therefore, the claim made by the plaintiff had wrongly been decreed by the two courts below.

Having duly considered the aforesaid contention of the R.S.A. No.2244 of 2004 4

learned counsel for the appellants and having gone through the observations made by the first appellate Court, which has discussed the entire evidence in detail, I do not find any merit in the contention raised by the learned counsel for the appellants.

The appellate court has rightly held that condition No.13 incorporated in letter Ex.P6 specifically provided not only for forfeiture of security amount deposited with the plaintiff-Society but also provided that in case the allotted quantity was not lifted, then the unlifted quantity would be sold at the risk of the tenderer and the difference of the amount would be recoverable from him. The aforesaid stipulation was in furtherance of the terms and conditions of contract Ex.P2 and was legally binding upon the defendants.

Nothing has been shown that the findings recorded by the two Courts below suffer from any infirmity or are contrary to the record.

No question of law, much less any substantial question of law, arises in the present appeal.


January 25,2007 ( Viney Mittal )

sks Judge


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