STATE OF MADHYA PRADESH Vs. JAGDISH RAI JAIN

JUDGEMENT

(1.) STATE of M.P. and its functioneries have preferred this appeal challenging the orders dated 25.9.93, and 7.12.93 passed by the learned Distt, Judge, Satna in C.S. No. 42 -A/92.

(2.) THE facts as have been unfurled are that in response to a tender notice dated 17.6.91 for disposal of tendu leaves contained in lot No. 1964 and others consisting of 1485. 755 slandered bags, the plaintiff/respondents No. 1 offered a tender to purchase the same @ Rs. 677 -10 per standard bag. The aforesaid was accepted and an agreement was executed. In pursuance of the agreement the respondent No. 1 furnished a bank guarantees to the tune of Rs. 3,01,802/ - equal to 30% of the purchase price (excluding taxes). The delivery was to be made on receipt of four equal instalments, payable on 1.10.91, 15.11.91, 1.1.92 and 15.2.92. The respondent 1 paid the first instalment amounting to Rs. 51, 501 -10 and obtained delivery against the aforesaid payment equal to 1/4th of the total lot. As far as second instalment is concerned, he did not obtain delivery of possession by making cash payment but against the bank guarantee which had been furnished by him. The delivery was made against the bank guarantee in view of the terms of the agreement. The said delivery was effected on 11.9.91. Thus the respondent 1 received the delivery of the of the stock by making payments in the aforesaid manner. The plaintiff took away the leaves and the present appellants requested the bank to make payment against the bank guarantee. When there was a request to the bank for encashment of the same the respondent instituted the civil suit bearing No. 42 -A/92 before the Distt. Judge, Satna and moved an application restraining the defendants from encahing the bank guarantee. By order dated 9.5.92 the Distt. Judge, Satna passed an order of temporary injunction restraining the defendants from emchashing the bank guarantee. Subsequently on 30.6.92 he modified the earlier order and held that the plaintiff was obliged to pay the purchase price of the second instalment of which he had already taken delivery. By order dated 27.1.93 the learned Distt. Judge further directed the plaintiff to make the payment of purchase price of tendu leaves of instalment No. 2 and thereafter he was to be permitted to the good leaves out of the remaining stock of the lot. The plaintiff/respondent 1 paid the sum of Rs. 315380.80 against the payment of Rs. 318882 -58 which included the purchase price and the interest thereon amounting to Rs. 67301.40. On this payment being made the plaintiff moved an application before the learned Distt. Judge praying therein that the amount of interest demanded and paid by him was not justified and the amount of interest should be refunded to him. The learned Distt. Judge by order dated 4.3.92 directed not to charge the amount of interest in case the plaintiff furnished security to the tune of Rs. One lakh. The security was furnished before the Court on 11.3.93. On furnishing the security the plaintiff made a request for refund of the interest already received from him. He also took delivery of 15.55 standard bags of tendu leaves out of the remaining stock which was to be delivered on payment of 3rd and 4th instalments by making payment of Rs. 677 -10 per bag amounting to Rs. 12612.60 Tendu leaves which were to be delivered against payment of 3rd and 4th instalments and which were not taken by plaintiff/respondents 1 had to be resold for the breach of the terms of the conditions of the agreements. As the leaves are perishable commodity, it was thought proper to sell them in auction. The appellants sold 729.329 standard bags of tendu leaves out of total lot of 1485.755 standard bags, in an open auction Rs. 55/ - per standard bag. The appellants had no option but to resale tendu leaves, as the plaintiff had failed to honour the terms of the agreement and had not paid 3rd and 4th instalments. Before putting the lot to reauction the agreement was terminated. The plaintiff had directed to pay a sum of Rs. 534548 -06 towards the difference in the sale price.

(3.) ASSAILING the aforesaid order Shri S.L. Saxena learned Advocate General alongwith Mr. M.L. Chaubey has submitted that the approach of the Court below is absolutely erroneous in as much as the claim advanced by the appellants is Rs. 534548/ - and the amount covered in the bank guarantee is Rs. 301882/ - and even after adjustment of Rs. 51421/ - there will be no coverage for more than Rs. 170000/ - and, therefore, there was no justification on the part of the Court below to direct the appellants to pay the amount.