BIHAR STATE ELECTRICITY BOARD Vs. VIJAY ELECTRICALS LTD.

JUDGEMENT

(1.) This first appeal has been preferred by the defendants-appellants (hereinafter referred to as "defendants" for sake of convenience) against the judgment and decree dated 08.06.2007 passed by learned Sub Judge-2nd, Patna in Money Suit No. 134 of 1995 by which and whereunder the learned Sub judge decreed the aforesaid money suit on contest against the defendants directing them to pay all the three claims as claimed by the respondent-plaintiff to the respondent-plaintiff (hereinafter referred to as "plaintiff" for sake of convenience) with interest at the rate of 9% from the date of filing of writ petition pendente lite and future interest till the date of realization within 90 days failing which the plaintiff will get the said amount through the process of the court.

(2.) The plaintiff filed above stated Money Suit No. 134 of 1995 against the defendants seeking relief for issuance of direction to defendants to make payment of Rs. 97,473/- towards payment due on pending bills, Rs. 1,16,970/- towards interest at 21% P.A. compounded annually from 15.05.1991 to the date of filing the suit on the amount of Rs. 97,473/-, Rs. 5,28,060/- towards payment of interest/compensation for the loss sustained due to the refusal of defendant no. 1 to receive the balance 146 numbers of transformers, Rs. 7,76,250/- towards payment of interest/compensation at the rate of 21% P.A. compounded annually for the loss sustained due to delay in payment of amount of Rs. 5,28,060/- from 09.10.1990 to the date of filing the suit, Rs. 13,27,792/- towards refund of penalties recovered from the bills, Rs. 25,28,380/- towards interest/ compensation at the rate of 21% P.A. compounded annually for loss due to delay in refunding the amount of Rs. 13,27,792/- from 05.12.1989 to the date of filing the suit, Rs. 80,43,238/- towards interest/compensation for loss due to delay in payment of bills up to 31.10.1991 and Rs. 81,79,970/- towards further interest/compensation at the rate of 21% p.a. compounded annually for loss due to delay in payment of amount of Rs. 80,43,238/- from 01.11.1991 to the date of filing the present suit and furthermore, the plaintiff sought interest at the rate of 21% P.A. compounded annually from the date of filing the suit till the date of realization of above stated amounts.

(3.) The case of the plaintiff is that the plaintiff is a limited company and manufacturer of electrical transformers. The defendant no. 1, Bihar State Electricity Board invited tenders for supply of 8,800 numbers of 63 KVA, 11/0.433 KV Conventional Aluminum Wound Distribution Transformers on 27.01.1989. The plaintiff submitted his tender on 10.02.1989 in response to the above stated invitation of the defendants. The defendant no. 2 sent to the aforesaid letter of intent dated 30.05.1989 for supply of 2500 numbers of 63 KVA, 11/0.433 KV Distribution Transformers at F.O.R. destination price of Rs. 19400/- per transformer and accordingly, a contract was entered into between plaintiff and defendant no. 1 vide contract no. 79 dated 29.06.1989. According to terms and conditions of the contract, the plaintiff agreed to deliver the materials inconformity with the provisions of general conditions of NIT and other documents and the commencement of delivery period shall be reckoned from the date of contract agreement or date of expiry of 30 days after notification of letter of intent by the purchaser whichever is earlier at the rate of 800 numbers per month and the defendant no. 1 (Board) agreed to pay the plaintiff on due performance of the contract the price of Rs. 4,85,00,000/- in the manner and in accordance with the terms specified in the NIT and furthermore, the purchase order will form part of the contract. In compliance of the aforesaid agreement, the defendant no. 2 issued purchase order in favour of the plaintiff vide purchase order no. 79 dated 10.07.1989. The plaintiff submitted his drawing to the defendant no. 2 for his approval vide letter dated 03.07.1989 and subsequently, the defendant no. 2 approved the drawing and forwarded the same to the plaintiff. The aforesaid purchase order contained a condition that materials are to be inspected by the Board's representative during the process of manufacturing and prior to dispatch and the plaintiff was requested to intimate the progress of manufacturing and testing at least 15 days in advance to Electrical Superintending Engineer(Stores), Bihar State Electricity Board, Patna with copies to Chief Engineer(S&P) and Electrical Superintending Engineer(Purchase), Bihar State Electricity Board, Patna to enable them to depute an officer or an authorized representative for inspection. In compliance of the aforesaid terms and conditions of the purchase order, the plaintiff requested the defendant no. 2 vide letter number S-502/89/1450 dated 14.07.1989 to depute inspecting officer for inspection of transformers. In reply to the aforesaid letter, the defendant no. 2 informed the plaintiff vide letter dated 01.08.1989 that Sri M.C. Agrawal, A.E.E. (Purchase), Bihar State Electricity Board, Patna would inspect the materials on their workshop and the aforesaid authorized officer inspected 800 numbers of transformers from 04.08.89 to 07.08.89 and gave his report on 07.08.89 having found the aforesaid transformers satisfactory. Thereafter, defendant issued dispatch allocation to the plaintiff vide letter no. 08.08.89 for supply of 800 numbers of 63 KVA transformers. Again, on the request of the plaintiff for deputation of an inspecting officer to inspect the transformers, the defendants informed through telex message that above stated Mr. M.C. Agrawal would inspect the transformers and subsequently, on 19.09.1989, 20.09.1989 and 21.09.1989 Mr. M.C. Agrawal inspected 1010 numbers of 63 KVA transformers and cleared them for dispatch having found the aforesaid transformers satisfactory and on 19.09.89 the defendant no. 2 issued dispatch allocation vide letter dated 19.09.89 for supply of 800 numbers of 63 KVA transformers. Again, on 12.10.89 the defendant no. 2 further informed through telex message that Sri D.K. Choudhary, Electrical Executive Engineer (P) would inspect 690 numbers of 63 KVA transformers and subsequently, defendant no. 2 issued dispatch allocation to the plaintiff vide letter dated 13.10.1989 for supply of 900 transformers. The above stated D.K. Choudhary inspected 690 numbers of transformers on 19.10.1989, 20.10.1989 and 21.10.1989 and having found the aforesaid transformers satisfactory cleared them for dispatch. The plaintiff supplied 2354 transformers and as regards the remaining 146 transformers, the plaintiff requested for issuance of revised dispatch instruction vide letter dated 07.11.1989. After receiving 2354 numbers of transformers the 2nd defendant issued "Stores Received and payment authorizing vouchers" to the plaintiff. After receipt of "stores received and payment authorizing vouchers" the plaintiff submitted its bill to the Deputy Director of Accounts(S and P), Bihar State Electricity Board, Patna and the same were passed for payment. Further case of the plaintiff is that on the request of the plaintiff, the 2nd defendant approved the Price Variation Claims vide his letter dated 11.11.89 as per the terms of the agreement. The plaintiff sought dispatch instruction but after delay of more than ten months, the second defendant vide letter dated 19.09.1990 informed the plaintiff not to deliver balance 100 KVA distribution transformers and 63 KVA distribution transformers against purchase order no. 77 dated 08.07.89, purchase order no. 79 dated 10.07.1989 and in response to the aforesaid letter, the plaintiff vide letter dated 08.10.1990 requested the defendant no. 2 to issue dispatch instruction for balance of 146 numbers of 63 KVA transformers lying in its factory for nearly 14 months but was of no avail and as substantial amounts payable to the plaintiff were locked up with the defendants for considerable periods, the plaintiff had to borrow huge amounts from Bank and suffered heavy loss for his no fault and thereafter, the plaintiff again requested vide letters dated 12.11.1991 and 13.06.94 to the defendant no. 2 to pay early mentioning amounts due to it but no response was given by the defendants. The bills submitted on 15.04.1991 amounting to Rs. 97,473/- remain unpaid till the date of filing of the suit. The defendants without any rhyme and reason refused to take delivery of balance 146 numbers of transformers covered by the purchase order dated 19.09.1990 and the defendant no. 2 failed to issue revise dispatch instruction though the plaintiff had requested earlier vide his letter dated 07.11.1989 that the plaintiff was ready and willing to deliver the same but due to refusal of the defendants, he suffered heavy loss. Further case of the plaintiff is that defendants levied and recovered penalties from the bills of the plaintiff amounting to Rs. 13,27,792/- on the ground of alleged delay in the supply of transformers against his purchase order no. 79 but as a matter of fact, delay in supply of the transformers was not due to laches and negligence of the plaintiff rather the delay in supply of the transformers happened on account of negligence of the defendants as the delay was made in issuance of purchase order as well as in deputing the inspecting officers for inspection. Further case of the plaintiff is that contract agreement was entered into on 29.06.1989 but the purchase order was issued on 10.07.1989 and the same was received to plaintiff on 01.08.89 and similarly inspection call was given by the plaintiff on 14.07.89 for deputing the inspection officer for inspection but the inspection officer inspected and cleared the first lot for dispatch only on 07.08.1989 and similarly, for second lot of transformers inspection call was given by the plaintiff on 02.09.1989 for deputing the inspecting officer but the inspecting officer inspected and cleared second lot of 1010 numbers of transformers for dispatch on 21.09.1989 and similarly, for the balance of 690 numbers of transformers inspection call was given by the plaintiff on 27.09.1989 for deputing the inspector but the inspecting officer inspected and cleared the transformers for dispatch on 21.10.1989 and, therefore, delay was caused due to negligence of the defendants and furthermore, due to unprecedented heavy floods rail and road traffic was cut off in the month of August 1989 and that was the reason of delay of 15 days in dispatching the transformers to different consignees in Bihar from Hyderabad and the aforesaid circumstance shall beyond the control of the plaintiff. On the basis of aforesaid pleadings, the plaintiff sought the reliefs as stated above.