OM PRAKASH JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) Om Prakash Jain, plaintiff filed this suit alleging that the firm -V.K. Industries and Fabricators was constituted on or about 10th September, 1966 and dissolved on or about 10th May, 1967 by mutual consent of the partners. He was a partner in that firm alongwith defendants 4 to. 6. Firm-V.K. Industries was duly registered under Small .Scale Industries Scheme vide S.S.I.No.-D- 1/UP/MTC/4219 dated 4th May, 1963 with the Government of Uttar Pradesh. Under an agreement dated 19th August, 1966, the plaintiff purchased the assets and goodwill of V.K. Industries. Thereafter V.K. Industries and Fabricators alognwith the letter dated 1st October, 1966 forwarded the application forms duly completed in triplicate to the Director of Industries, Kanpur for grant of S.S.I, registration number as re-roller in its favour in place of said V.K. Industries..

(2.) It is alleged that defendants 1 to 3 through their auctioneer-M/s. Thakur and Company held a public auction for sale of re- rollable scrap on 5th November, 1966 at Shakurbasti Track Depot, Delhi. Four conditions of auction in its supplementary clause provided as under:-

(3.) It is further alleged that at the time of auction it was representated by the said auctioneer at the instance of Presiding Officer that the said conditions had been modified and the purchasers were required to produce the certificate of registration as re-rollers during the course of their taking delivery and in any event before taking delivery of the last instalment of the auctioned goods so purchased and it was not necessary that the bidder should be a re-roller on the date of bid. This declaration was acted upon by defendants 1 to 3 in the case of other bidders including the firm-M/s. Altair Steel Rolling Mills who were not the certified re-rollers and obtained the certificate of registration-two months after auction. It is stated that V.K. Industries and Fabricators through its representative Janki Prasad Tyagi gave bid and purchased 400 M.Ts. ol scrap rails @ Rs. 460.00 per MT. The firm deposited Rs. 46,000.00 being 25% of the total sale consideration by way of earnest money with the said auctioneer who issued receipt No. 71 dated 5th November, 1966 on behalf of defendants 1 to 3. It further deposited a sum of Rs. 1,38,000.00 with the Chief Cashier & Pay Master, Northern Railway, Delhi vide cash receipt No. 162/512472 dated 16th November, 1966 towards the balance sale consideration. Rs. 1,400.00 were further deposited by the firm towards loading charges vide receipt No. 990925 dated 18th November, 1966. It is further pleaded that V.K. Industries and Fabricators took delivery of 61.920 M.Ts. of scrap rails on 21st and 22nd November, 1966 of the total value of Rs. 28,699.92 including loading charges. It also submitted an attested copy of registration certificate No. Dl/UP/MTC/4219 in respect of V.K. Industries alongwith letter dated 3rd December, 1966 with the Track Supply Officer for taking delivery of the rails 2ft. to 12 ft. purchased in the auction. It appears that the said certificate was considered insufficient. The firm received a letter dated 9th December, 1966 from the Track Supply Officer stating that it should produce a correct certificate in terms of the conditions of auction. The firm, therefore, sent a reminder dated 12th January, 1967 to the Director of Industries, Kanpur in continuation of its application dated 1st October, 1966 for amendment in aforesaid SSI No. Dl/UP/MTC/4219, in the name of V.K. Industries and Fabricators. The Director of Industries, Uttar Pradesh by its letter dated 24th February, 1967 informed the firm that the item of re-rolling and fabrication has been added in the registration certificate with amended name. Thereafter, the firm wrote to the Controller of Stores forwarding therewith an attested copy of the registration certificate being No. Dl/UP/MTC/4219 dated 24th February, 1967. By the letter dated 11th May, 1967, the firm called upon the Controller of Stores to release the balance quantity of material in its favour without any delay. On receiving no rely thereto, the' firm got a notice dated 17th February, 1968 issued to defendants 1 to 3. Yet another notice dated 30th May, 1968 was got' issued through Sh. Bawa Shiv Charan Singh, Advocate by the firm to defendants 1 to 3 calling upon them to deliver the balance quantity of material etc. It is pleaded that a reply dated 5th December, 1968 was received from the said defendants to the notice dated 30th May, 1968 stating that as the balance material sold in the auction was the subject matter of investigation being conducted by the S.P.E., the balance quantity of material could be released on superdari in its favour on obtaining a release order from the competent Court by it. It is claimed that the stand taken by defendants 1 to 3 to that effect is illegal and the plaintiff is entitled the return of the sum of Rs. 3,32,204.00 paid towards the balance material not lelivered with interest thereon @ 12% per annum from 23rd November, 1966 to 23rd March, 1976 and thereafter from 21st April, 1976 till the date of realisation together with Rs. 75,000.00, towards compensation as detailed in the Schedule annexed to the plaint. The firm got yet another statutory notice under Section 80 Civil Procedure Code served on the defendants. It was prayed that a decree of specific performance of the contract may be passed in favour of the plaintiff and defendants 1 to 3 be directed, to deliver 338.080 M.Ts. of scrap rails to the plaintiff. In the alternative, suit be decreed for Rs. 4,07,204.00 with interest @ 12% per annum on that amount against defendants 1 to 3 in addition to awarding the costs of the suit.