STATE OF TRIPURA Vs. SABITRI SALT SUPPLIES

JUDGEMENT

(1.) THE above appeal and cross appeal are against the Judgment and Order dated 21. 01. 2000 passed by learned District Judge, West Tripura, Agartala in Misc. (ARB) 6 of 1999 whereby the award dated 28. 12. 1998 passed by the Sole Arbitrator in Arbitration Ref. No. 4/98 has been affirmed.

(2.) IODISED salt being an essential commodity, the State Government collect the same from Jamnagar Zone, West Coast, Gujarat for sale at subsidized rate through Fair Price Shops under Public Distribution System (for short 'pds' ). On the requisition of the State Government, the Salt Commissioner allotted iodised salt for the year 1996, which was to be lifted from that Zone. The State Government (appellant herein) invited tenders in two spells for six months each for lifting and carrying the allotted salt from Jamnagar to Central Stores at Agartala and the godowns at Dharmanagar within the State and the respondent herein was selected for the job, its offered rate being acceptable. For the period from January to June, 1996 and for the period from July to December, 1996, two agreements were signed. The first agreement was dated 26. 02. 1996 for carrying four B. G. rakes of salt, the rate being Rs. 145. 41 per quintal for Agartala godowns and Rs. 116. 51 per quintal for Dharmanagar godown. The second agreement for the second spell from July to December, 1996 was signed on 16. 09. 1996 for six B. G. rakes of iodised salt. Thus as per the two agreements, the respondent was under obligation to lift and carry by railway and road ten B. G. rakes of salt. One of the salient features of the said agreements is that the respondent would itself buy the salt at Jamnagar against the quota allotted in favour of the State Government by the Salt Commissioner and supply the same to the respective godowns in the State bearing initially the entire cost and only after supply, it would raise bills for the quantity actually supplied at the accepted rate, which included both buying and transportation cost. It may be mentioned here that in the second tender the accepted rates were little higher, being Rs. 154. 92 per quintal for Central Store at Agartala and Rs. 125. 91 per quintal for godown at Dharmanagar. The respondent, however, booked at Jamnagar only seven B. G. rakes of salt out of ten. For the first spell, he booked 55,386 quintals in 73,710 bags, but received from the railway at Dharmanagar only 50,450. 98 quintals in 67,290 bags. There was thus a short fall of 4,815 quintals. During the second spell, the respondent booked 83,885 quintals in 1,12,417 bags where the railway delivered only 74,537. 49 quintals in 1,00,608 bags. Thus the short fall in the second spell was 8,992. 75 quintals. Again, during road transport from Dharmanagar railway station to respective godowns there was a further short fall to the extent of 4. 51% and 4. 75% respectively. The State appellant, in terms of the agreements between the parties under which the supplier is required to pay for the short fall beyond 6%, directed that the supplier should pay Rs. 42,10,409/- for the short fall of 12,029. 74 quintals of salt @ Rs. 350/- per quintal, which was the prevailing rate of iodised salt in the open market. The supplier submitted bills at the accepted rate only for the actual quantity of salt supplied from which the appellant deducted Rs. 24,71,861/- and asked the supplier to deposit Rs. 17,38,548/- to make the total amount of Rs. 42,10,409/- being the value of the total short fall.

(3.) THE supplier raised inter alia a dispute that it was not liable to pay for the short fall, as the same had occurred during transportation by railway, as would be evident from the railway receipts, which would unerringly show that the supplier had no control over the circumstances leading to the short fall. It was further contended that on earlier occasions in similar circumstances the short fall due to railway transportation was exempted from the liability therefor as per terms contained in the agreement. As regards the shortage due to road transport, it was argued that the agreement contained a clear provision that transport shortage to the extent of 6% of the total quantity would stand exempted. Admittedly, 4. 51% and 4. 75% of the total quantity were the short fall, which being within the permissible limit of 6%, should be exempted by the State appellant. Thus the entire shortage being due to railway transportation and road transportation, the supplier is not liable to pay for the same and for that reason the deduction made from the running bills of the supplier was improper.