UNION OF INDIA Vs. SHIAM SUNDER LAL

JUDGEMENT

(1.) This is a defendant's Second Appeal. The plaintiff who is carrying on the business of selling Ghee at Aligarh submitted a tender to the Union of India in its railway department for supply of Ghee. This tender was accepted and a purchase order was given to the plaintiff for supply of 120 maunds of Ghee by the 27th of Oct., 1948. It was stipulated in the contract:

(2.) The defence taken by the railway administration was that the plaintiff never asked them for supply of any railway wagon and the Ghee not having been supplied, the security deposit was liable to be forfeited. The plaintiff was therefore not entitled to the amount claimed.

(3.) The lower appellate court came to the conclusion that the defendant had failed to prove any agreement between the parties that security money would be forfeited in case supply of Ghee was not made. The lower appellate court also held in the alternative that the stipulation was in the nature of penalty and since the railway had not proved any loss, the plaintiff was entitled to the refund of the amount claimed. The decree of lie trial court dismissing the plaintiff's suit was thereby reversed and the lower appellate court passed a decree for Rs. 4700 as claimed. Against that decree, the Union of India has filed the present Second Appeal, and same contention have been raised in this Court.