NATIONAL SUGAR INDUSTRY Vs. NARALA VENKAIAH

JUDGEMENT

(1.) The Appeal is against the judgment and decree passed by the learned District Judge, Adilabad in O.S.No. 24 of 1972 dated 12-10-1981. The learned District Judge decreed the suit for recovery of a sum of Rs. 40,000/- together with costs and interest at 6% per annum from the date of the suit till the date of realisation. The appellants are the defendants. The plaintiff is dead and his legal representative is prosecuting the proceedings. As a convenient course, the parties will be referred to as the plaintiff and defendants in the status they occupy in the suit.

(2.) The facts and controversies may be recorded in brief: The plaintiff as a proprietor of M/s Maruthi Khandasari Sugar Factory Nirmal, Adilabad district wanted to establish a Khandasari Sugar Factory at Manchiryal under the said name and style. The defendants are the counterparts of the two units of the firm - National Sugar Industries at Madras and Meerut City, Uttar Pradesh. The plaintiff wanted the machinery for the sugar factory to be established and for that purpose, he placed orders with the defendants to supply the machinery at a total cost of Rs. 2,34,715/-. The defendants agreed to supply the machinery to the plaintiff for the said purpose. The terms of the agreement appear to be that out of the total cost of the machinery, the plaintiff was to pay 25% amounting to Rs. 58,000/- initially and the balance at the time of delivery of the machinery by the defendants. The plaintiff paid Rs. 40.000/- towards the agreed 25% of the total cost, by means of a Bank demand draft and he was to pay the balance of Rs. 18.000/-. It appears that the defendants sent a letter to the plaintiff dated 27-10-1969 seeking the remittance of the balance outstanding towards the advance of 25%. In the meanwhile, the plaintiff having not able to estabieh the Khandasari Sugar Factory, intimaied the first defendant by telegram dated 27/28-10-1969 to keep the order pending and not to proceed with the said order. Defendant No.1 replied to the letter of the plaintiff on 14-11-1969 intimating that the work had already been commenced and it was not possible to refund the amount paid by the plaintiff until he got alternative purchase. It is alleged that there was negotiation between the plaintiff and defendant No.1 regarding the refund of Rs. 40.000/- paid by the plaintiff to the defendants. There was exchange of notices between the parties wherein the plaintiff demanded the refund of Rs. 40,000/- paid to the defendants and the defendants denied their liability to refund the same. Ultimately neither the plaintiff paid the balance of the agreed amount nor the defendants were able to supply the machinery as agreed. The plaintiff alleged that in view of his decision not to establish the Khandasari Sugar factory as proposed, it was intimated to the defendants as alleged and the conditions of the order being that the manufacture of the machinery will start only on the payment of the 25% of the cost price of the machinery, there was no concluded contract. It is further alleged that inspite of negotiations and the demands by the plaintiff to refund the amount of Rs. 40,000/- by the defendants and inspite of the registered notice, there was no response and therefore, he had to file the suit for recovery of the same.

(3.) The defendants denied that there was a concluded contract between the parties wherein the plaintiff had already paid a portion of the cost-price of the machinery and in respsonse to the same, defendant No.1 had already commenced the manufacture of the machinery by investing huge amounts and therefore, the plaintiff having committed breach of contract in not paying the balance of the cost price out of 25% could not enforce his alleged right to get refund of Rs. 40,000/-. On the other hand, the defendants contended that the plaintiff having committed breach of contract is liable to pay the damages to them, regarding which they would file a separate suit. The defendants denied the plaintiff's right to recover Rs. 40,000/- from them much less the interest thereon or the costs of the suit. It is contended by the defendants that the trial court had no jurisdiction to try the suit since the contract was entered into and concluded upon outside the jurisdiction of the trial court, as it was stipulated that the delivery of the machinery was to be taken by the plaintiff at Madras and the balance of the cost-price was also payable at Madras. As a whole, the defendants sought for the dismissal of the suit with costs.