BALAJI TRADING COMPANY Vs. E UNGAYYA AND CO

JUDGEMENT

(1.) This is the defendants' appeal against the judgment and decree passed by the learned Subordinate Judge, Gudivada, on 31-3-1982 in O.S.No.17 of 1976 filed for recovery of Rs. 25,915/- from the defendants towards the value of 177 bags of Chemical fertilizer supplied to them.

(2.) Facts culminating in this appeal and necessary for its disposal briefly stated are that the plaintiff, a firm by name, Edupuganti Lingayya and Company, Gudivada, represented by its Managing Partner Edupuganti Lingayya, was doing business in chemical fertilizers etc. The first defendant, a firm by name, Sri Balaji Trading Company, Pedana, represented by its Managing Partner, Kolluri Radhakrishna Murthy - the second defendant, was doing business in chemical fertilizers. Defendants 2 to 4 and Kuralla Madhava Rao were partners of the first defendant-firm. Consequent on the death of Kuralla Madhava Rao, his heirs were impleded as defendants 5 to 8. On 10-1-1976, the second defendant on behalf of first defendant-firm contacted E. Lingayya, Managing partner of the plaintiff firm, on telephone and agreed to buy 9 tonnes of "Grow More N.P.K. 14:35:14" fertilizer of parry and Co. at concessional rate of Rs. 142-15 ps per bag from the plaintiff. The terms of the contract were that the first defendant should bear both loading and transport charges and pay the price of the fertilizer to the plaintiff firm at Gudivada. The plaintiff, after obtaining required particulars from the second defendant on telephone on 12-1-1976, sent 177 bags of fertilizer by lorry No. APD-1982 along with credit bill No. 36/51 and way bill No. 3/3 dated 12-1-1976. On the same day, the second defendant received the goods and paid the loading and transport charges to the driver of the lorry. The first defendant did not pay the price of the goods supplied in spite of requests in that regard. The second defendant postponed the payment and issued a registered notice on 16-2-1976 to the plaintiff alleging that they did not buy the material as stated by the plaintiff and that they should take them back. A reply notice was issued on behalf of the plaintiff on 24-2-1976 setting out its case. The second defendant got issued another notice on 1-3-1976 to the plaintiff reiterating the facts mentioned in his earlier notice. Under those circumstances, the plaintiff filed suit O.S. No.17 of 1976 for recovery of Rs. 25,915/- with subsequent interest at 6% per annum on the principal amount of Rs. 25,160/- from the defendants.

(3.) The defendants resisted the suit by filing written statements pleading inter alia that the plaintiff and the first defendant were retail dealers in chemical fertilizers and that both of them buy fertilizers from Parry and Co., the wholesale dealer in chemical fertilizers. The fertilizer "Grow More N.P.K. 14:35:14" was newly introduced in the market and was not popular and had no demand in the market. The wholesale dealer, Parry and Co., was pressurising the retail dealers to sell this new product along with other popular brands of fertilizers supplied by them. The first defendant had placed an order for 6 tonnes of the same fertilizer with Parry and Co., which they received on 12-1-1976, and there was no further need of the same commodity. The plaintiff's managing partner requested the second defendant on telephone to buy his stocks at concessional rate for which the second defendant did not agree and in fact, it was mentioned that purchase of fertilizers by one retail dealer from another retail dealer was contrary to rules and public policy. The managing partner of the plaintiff pleaded that he would talk to Mr. C.V.Reddy, the supervisor of Parry and Co. , and speak to him latter on. On 12-1-1976, Simhachalam, plaintiff's clerk informed the second defendant on telephone that his boss had talked to Mr. C.V.Reddy, who okayed the idea of sale at concessional rate. But, the second defendant clearly told Simhachalam that they could not enter into this contract unless Mr. C.V.Reddy, spoke to him personally and agreed not to insist on their order for the same fertilizer. The second defendant did not authorise his clerk to receive the stocks from the plaintiff. When the second defendant returned to the shop in the evening, he learnt that the stocks from Parry and Co. had arrived and later on, the stocks sent by the plaintiff also arrived and since his clerk could not take a decision on his part, paid the transport charges and allowed the stocks to be placed in the shop. In fact, the said expenditure was debited to the account of the plaintiff. On 14-1-1976, the second defendant met the managing partner of the plaintiff and told him that it was unfair on his part to send the stocks without his consent and that the plaintiff must take back the same. The second defendant also sent his clerk to the plaintiff to request them to take back the stocks. A notice was issued to the plaintiff setting out the true facts in this regard. The plaintiff got issued a reply with false allegations. Ultimately, all the stocks, except 12 bags, were sold at prices ranging from Rs. 115/- to Rs. 120/- per bag to minimise the damage and thereby, realised a total sum of Rs. 19,059/-. As the alleged sale of fertilizers by one retail dealer to another retail dealer was opposed to public policy and contrary to Section 23 of the Contract Act, the plaintiff is not entitled to any relief.