(1.) THIS appeal which has been preferred by the Karnataka Power Corporation Limited is directed against certain parts of the order passed by the trial Court effectively decreeing the Plaintiff's suit. A few broad features of the case require to be stated. The Plaintiff was the Proprietor of a Transport Company by the name of M/s. Shaik Basha Transport and Civil Contractor, Raichur. The contract in question pertains to the transport of a consignment of steel of approximately 1,500 metric tons from Ambewadi Stores in Karnataka to the project site in Raichur District. The dispute is within a narrow compass in so far as there is no doubt about the fact that the contract was awarded to the Plaintiff on 18.1.1982, that it was valid for two months and that by 12.3.1982 the Plaintiff had already transported the bulk of the consignment leaving only a small portion of 370.560 MT. On 12.3.1982 he received a one sentence termination letter asking him to stop transporting the rest of the consignment. That letter is Ex.P -2 and does not set out any reasons or grounds. The Plaintiff replied that letter five days later pointing out that the action had been abrupt that it was unjustified and more importantly, that he has suffered very heavy loss and damage as a result of the action. According to the Plaintiff, the rate agreed upon was Rs. 540/ - per M.T. and it is his grievance that pursuant to the letter Ex.P -2 and the correspondence exchanged that all his payments were held up including payments for the work already executed. Finally, the Plaintiff filed a composite suit before the trial Court for recovery of the outstanding dues and lastly, for the loss of profits along with interest at the rate of 18 percent per annum. The Plaintiff's case was that since he is a small businessman that the withholding of the substantial amount of money due to him had virtually crippled him and even in order or keep his business going, since his capital was locked up that he had no option except to raise money from alternative sources where the prevailing rate of interest was not less than 18% per annum. This was the ground on which the interest was claimed at that rate.
(2.) THE Corporation defended the suit. The ostensible reason set out by them for the termination of the contract was because the Corporation had indicated in the original tender that the transport had to be done through trailers and according to the Defendants the Plaintiff had not used a single trailer for the transport but that he had used a fleet of trucks. It was the Corporation's case that the contract was not being executed in the manner in which the Corporation had originally intended i.e. by using trailers, and that therefore, the termination was justified, the obvious implication being that the Plaintiff had been guilty of breach of the terms of contract. In amplification of the defence, the Corporation contended that as against the rate of Rs. 540/ - per M.T. which according to the Corporation was the acceptable rate for the use of trailers that the existing rate for transport using trucks works out to only approximately Rs. 140/ - per M.T. that there was a huge difference between the two rates and since the Plaintiff was billing at the rate applicable to trailers and in fact using trucks that the Corporation was justified in stopping any further transport of its material by him. With regard to the non -payment for the work executed, the defence was that there would have to be a total revision of the rates for the aforesaid reason and that therefore the bill submitted for the contracted rate would have to be scaled down. As far as the interest was concerned, the Corporation disputed its liability in so far as the allegation was that if the contract had to be terminated due to the breach on the part of the Plaintiff that no liability could be foisted on the Corporation. In view of the aforesaid defence, the Corporation also contended that it could not be held liable either for expenses allegedly incurred by the Plaintiff for the non -performance of the contract or for loss of profits.
(3.) AT the hearing of the appeal, the Corporation's learned Advocate submitted that the tender which preceded the issuance of the contract is the material document because the tender notice very clearly and very unequivocally specified that the transport was to be done using trailers. He also submitted that this aspect would be self -evident from the fact that the accepted rate for the use of trailers works out to Rs. 540/ - per M.T. whereas similar figures for the use of trucks was as low as Rs. 140/ - per M.T. and his submission therefore was that even assuming that in the formal contract the word 'truck' had not been scored out, that on a perusal of the document, it would have to be held that the understanding between the parties was that the Plaintiff was to use trailers if he wanted to be paid at the rate of Rs. 540/ - per M.T. His submission was that in this background, when it came to the notice of the Corporation that the Plaintiff was virtually taking the Corporation for a ride that it became necessary since it is public body, to take immediate steps to stop any further loss accruing. This is the pious justification for the revocation of the contract on 12.3.1982. This position has been seriously disputed by the Respondent's learned Counsel who submitted that the contract was effectively for the movement of the steel from Point A to Point B and that irrespective of what the original tender document stated that it is the final contract between the parties that represents the true state of affairs and he submitted that as long as the Plaintiff satisfactorily transported the steel and delivered it within the prescribed period of time that the Corporation cannot be heard to question the type of vehicles in which the material was carried. There is considerable substance in the plea canvassed by the Respondent's learned Counsel because it is a well known business practice that irrespective of the specifications in the tender notice, that pursuant to discussions and negotiations what ultimately emerges in the final contract may admit to many variations. To my mind therefore, the trial Court was fully justified in recording the view that the Plaintiff was within his rights to carry the material in trucks provided it did not cause any prejudice to the Corporation. On the question of the cost factor, to my mind, the trial Court was right in refusing to go into the comparative figures for the simple reason that if on the face of the contract the option was left to the contractor and if he decided to work more efficiently, then he was legitimately entitled to higher earnings. Under these circumstances to my mind, the entire defence pleaded by the Corporation is not only hallow but totally devoid of any substance. I have applied the reverse test in this case for purposes of ascertaining as to whether any prejudice can be said to have been caused to the Corporation from what happened. The material in question was steel, it was not a delicate or perishable commodity and there could always be many options when it came to the method of transporting. Between the two types of vehicles, a smaller truck would have been probably faster and more efficient but the real question is that the Corporation wanted its material to be transported from point A to point B through the use of either of the two types of vehicles. The Corporation fixed the rate with open eyes and there is a total prohibition in law from back tracking from this position.