TRIVENI ENGINEERING WORKS LTD Vs. SEHGAL PAPERS LTD

JUDGEMENT

(1.) THE petitioner entered into agreement with respondent No. 1 on March 17, 1980 for the supply of Turbo Alternator Set (for short, the 'machinery') for a price of Rs. 18,00 009/ -. The petitioner despatched the machinery on June 16 1980 from Bangalore to Mohindergarh through M/s O Kay Transport Corporation. The documents relating to the despatch of machinery namely, Invoice No. 2/79-80/232, dated 16-6-1980 for Rs 12 80 448/- Demand Draft No. B/29-80/232, dated 16-6-1980 for Rs 9 53 946/-' and RR/gr No. 00031, dated 16-6-1980 were sent through State 'bank of Patiala, Nehru Place, New Delhi to the Union Bank of India Gandhinagar Branch, Bangalore In the letter it was mentioned that if the documents are not retired within the stipulated period the petitioner had to be contacted and for further instructions The carrier unloaded the machinery at the works of respondent No. 1. The petitioner was informed by their Banker vide letter dated August 25 1981 that respondent No. I had failed to make payment and retire the' documents. The petitioner vide letter dated April 9, 1981 requested respondent No. 1 to permit them to remove the machinery. Respondent No. 1 was ordered to be wound up by an order of this Court dated April 8, 1983 passed in C. P. No. 64 of 1981. The petitioner addressed a communication to the Official Liquidator for permission to lift the machinery. Respondent No. 2 and some other financial institutions have a charge on the properties pledged with them. In these premises a prayer was made that a declaratory decree be passed in favour of the petitioner to the effect that it was owner of the machinery and respondent No. 1 did not acquire the proprietary rights since the invoice and R. R. /g. R. were not retired through the bank and a consequential relief for permission to remove the machinery from the premises of respodent No. 1.

(2.) RESPONDENT No. 1 controverted the allegations made in the petition and pleaded that the petitioner had been paid more than 30% of the total sale consideration of the machinery. Consequently, the petitioner was not entitled to the declaration sought for. The petitioner was not a secured creditor and had no right on the property of the respondent-company. Respondent No. 1 had paid a sum of Rs. 6,40,448/-, which represents almost 30% of the total sale consideration of the machinery which is alleged to have been supplied by the petitioner. It was also pleaded that there is no stipulation in the agreement that in case 70 per cent of the sale consideration is not paid, the petitioner will be entitled to the return of the machinery.

(3.) FROM the pleadings of the parties, following issues were framed:1. Whether the suit for declaration simpliciter is competent? OPP 2. Whether the present suit is not maintainable because 30% of the sale price had been paid to the plaintiff by way of earnest money ? OPD 3. Whether the suit is within limitation ? OPP