UNION OF INDIA Vs. S SINGH SAWHNEY

JUDGEMENT

(1.) THIS is the plaintiffs suit for recovery of Rs. 40756.22 against the defendant with the following averments: - The defendant, it is alleged, is an army contractor. He entered into three contracts on 28 -2 -1957 with the plaintiff through GCC XV Corps for supply of meat on hoof and meat dressed at Udhampur and Akhnoor and meat on hoof at Samba for the period of 1st April, 1957 to 30th of September, 1957 vide CD No. 2, CD No. 3 and CD No. 4 of 1957 -58 respectively. According to the terms and conditions of these contracts, the defendant had to maintain the reserve of livestock representing 14 days requirements of meat and to tender supplies in accordance with ASC specifications and special conditions attached thereto for the aforesaid period at the delivery points at Akhnoor, Udhampur and Samba. Except for a few days the defendant failed and neglected to carry out his contractual obligations and to meet the demands placed on him by the concerned operating officers under the aforesaid contracts for the supply of meat on hoof and dressed meat referred to above. The defendant also failed to build up and maintain the requisite reserve of live -stock and ensure regular day to day supplies to troops and according to the terms of the contracts. Written and verbal warnings given to the defendant had no effect on him. On account of persistent failure and neglect of the defendant to comply with the demands of the contracts, the concerned operating officers were compelled to purchase and procure the supplies at the risk and expense of the defendant. Because of the failure of the defendant to carry out the contractual obligations the contracts were rescinded on 27th of May, 1957 and purchases were made at the expenses of the defendant to recover the said excess cost and incidental charges from him. Because of the default of the defendant the plaintiff had to incur lot of extra costs and incidental charges which after adjustment of bills and securities of the defendant comes to Rs. 40756.22P. This amount the plaintiff claims from the defendant. It is further averred that the defendant apprehending the steps for recovery of extra costs and incidental charges incurred would be taken against him filed a suit in the court of the Munsiff Jammu on 16 -5 -57 for mandatory injunction restraining the plaintiff from adjusting or deducting extra costs and incidental charges on account of risk purchase made by the concerned officers on failure of the defendant to meet their demands from the bills of the defendant. The suit was ultimately dismissed on 31 -12 -58. Thereafter the defendant again sued the plaintiff in forma pauperis on 18th December, 1959 in the High Court for recovery of Rs. 393761/9/6 in respect of the aforesaid contracts. The application was, however, dismissed in the year 1960 on the ground that the defendant was not a pauper and this decision was affirmed on 11 -12 -1961 by a Division Bench of the High Court in an appeal under the letters patent. A notice in respect of the payment of Rs. 40756.00 on account of extra costs and incidental charges for risk purchases made by the plaintiff at his risk and expenses was given to him, but this did not invoke any favourable response from the defendant and he did not make the payment. Hence the suit.

(2.) THE defendant in his written statement has pleaded that the suit is barred by time. The plaint does not disclose as to how the suit amount has been arrived at and therefore the suit is not maintainable. The execution of the contracts is admitted. The terms of the contracts are also admitted, but it is pleaded that the defendant was always keeping the reserve complete but the operating officers in collusion with some interested persons who had failed to secure the contracts wrongfully and arbitrarily rejected drastically the animals in the defendants reserve supplies. However, even full time of 30 days for completing the reserve was not allowed to the defendant by the officers and they prematurely began to put the defendant on risk purchase by securing the supplies from another party. The defendant lodged a strong protest with the D. D. ST XV Corps. These actions of the officers completely shattered the arrangements of the defendant, which made it absolutely impossible for him to function. It is denied that any concessions were afforded to the defendant. It is also denied that the defendant failed to discharge his contractual obligations. There was no failure or negligence on the part of the defendant to comply with the demands of the operating officers. The attitude and the conduct of the plaintiffs officers was not helpful and the funds blocked by the authorities amounting to lakhs of rupees including securities and bills left the defendant absolutely destitute and helpless. Even the 50% payment agreed to be released to the defendant was not so far released. The entire responsibility for all this lay on the authorities. The recission of the contract was wholly mala fide, unauthorised and ultra vires of the agreement and not made by a competent officer. Risk purchases were not made according to the demands and due credit of the balance was not afforded to the defendant. Purchases were made in excess of the demands and requirements of the purchases were not made honestly. The defendant was not therefore liable to be burdened with the excess costs and incidental charges. Further, it is pleaded that the plaintiff has not given any details of the amount sued for. No credit of the bills and securities has been afforded. The institution of the two suits one for injunction against the plaintiff and the other for the recovery of the money due to the defendant and their dismissal is admitted. But it is pleaded that the pendency of these proceedings would not save limitation as there was nothing to prevent the plaintiff from bringing the present suit in time. The defendant has claimed a set off for an amount of Rs. 393761/60 from the plaintiff for the supplies and securities and interests etc. etc. in respect of the contracts in question and other contracts. The defendant has claimed a decree for this amount.

(3.) ON pleadings of the parties the following issues were raised in the case on 4th of June, 1964 : -