SUMEET STEEL TRADERS Vs. SURENDRA ENTERPRISES

JUDGEMENT

(1.) Both the appeals are decided by this common judgment. CCCA No.46 of 1997: Appellant is the plaintiff who filed a suit being O.S. No.454 of 1989 which was dismissed by the Trial Court on 28.10.1996. The suit was laid for recovery of Rs.7,66,920-31 ps towards principal and Rs.6,91,488.29 ps towards surcharge on the delayed payments with future interest at the rate of 33% p.a.

(2.) The plaintiff asserted in the plaint that the plaintiffs firm was carrying on business as stockists, suppliers and commission agents of iron steel, hardware and pipes etc. The plaintiff and the Defendant No. 1 entered into an understanding which was reduced into writing on 31.8.1985 agreeing that the plaintiff shall supply steel block tubes of ISI standard to the defendants' work site. Pursuant to the said understanding the defendants from time to time placed orders with the plaintiff and the plaintiff supplied the materials under delivery challans. Subsequently the agreement entered into between the parties was altered and the material was delivered to the defendants at the places desired by them and all the material supplied by the plaintiff were used by the defendants. By letter dated 9.6.1986 the defendants raised a dispute regarding the rates of goods. There was correspondence between the parties. On all occasions the plaintiff demanded settlement of outstanding dues, but the defendants continuously postponed the same on one pretext or the other. But on continuous persuation, the liability of 1st defendant was admitted and the plaintiff was authorized to collect the payments from the debtors of the defendant. The defendant, on 30.9.1986, addressed letters to his debtors directing them to pay the outstanding dues to the plaintiff. On 2.12.1986 the defendant also addressed a letter to M/s. Magna Hardtemp Ltd. And Magna Fourdriner Ltd. directing them to pay their outstanding dues to the plaintiffs. But in spite of attempts the plaintiff failed to collect the outstanding dues from the debtors of defendant. On 29.12.1986 the plaintiff informed the position to defendants and got issued a legal notice on 19.8.1988 calling upon the defendants to make payment of the dues. The defendants in reply denied the liability. Therefore the suit was filed.

(3.) The defendants in their written statement denied their liability to pay the suit amount. It was contended that the 2nd defendant was the proprietor of 1st defendant, Prasad Reddy, the brother of 2nd defendant was looking after the affairs of the defendant as a General Power of Attorney holder. The plaintiff agreed to collect certain dues from third parties on behalf of Prasad Reddy amounting to Rs.6,45,000/- and obtained authorization, as such the plaintiff was estopped from claiming the amounts from the defendants. The plaintiff was not entitled to claim any surcharge.