BHARAT COKING COAL LTD Vs. SHASHI BALA

JUDGEMENT

(1.) THIS appeal, at the instance of the appellant, is directed against the judgment dated 8.8.1989 and decree dated 21.8.1989 passed in Money Suit No. 22/84, whereby and whereunder the suit of the plaintiff has been decreed on contest with cost.

(2.) THE case of the plaintiff -respondent in brief is that the respondent is the sole proprietor of Mazda Cable Company, a company manufacturing and supplying various types of cables such as telephone cable of armoured, unarmoured, railway and control cables etc. The production of the plaintiff is also approved by the Director General of Mines Safety and many other Government and Semi -Government organizations including Government Company. In pursuance of tender invited by the defendant by tender notice No. PUR /702179/ Telephone -RC./81 -82, plaintiff submitted quotations for the said under ground armoured telephone cables vide letter dated 11.6.1981 from her regional office at Hyderabad and defendant -appellant accepted the offer of the respondent, vide his letter No. PUR /702179/Telephone/81 -1586 -dated 8/13 -8 -1981 and order was placed on the plaintiff under the defendant 'sreference No. PUR/702179/Telephone/81/ 397 dated 2/9. 4.1982 for Rs. 18.34.360.00 plus excise duty and sales tax etc. The respondent dispatched the goods after the goods were duly inspected by Shri P.P. Singh, Executive Engineer and authorised competent senior officer of the defendant. The goods were also Inspected by the defendant. It is further submitted that the respondent in consideration of the price of cable supplied to the appellant on 20.7.1982 and 9.9.1982 drew hoondies upon defendant at Delhi and negotiated the same through State Bank of India, Dhanbad. The appellant accepted the hoondies which were on valid consideration and agreed to pay and honour the same on 12.1.1983 being the amount mentioned in the hoondies in the Bank. There were two hoondies, one for Rs. 19,37,679.31 paise dated 12.9.1982 and another is for Rs. 1,94,635.38 paise dated 29th July, 1982/25.12.1982. The defendants retired the documents after accepting the hoondies oil 26.11.1982 towards the payment of the goods supplied as aforesaid. In terms of the contract, the hoondies were valid for 45 days from the signed draft i.e. the payment was to be made 45 days after it was presented. It is further submitted that the defendant has failed to honour the hoondies on maturity and make payment thereof when presented by the Bank. Respondent went on reminding appellant for early payment and the State Bank of India was also requested to get payment from the defendant but respondent received a memo dated 7.2.1983 from the State Bank of India, Dhanbad about information that payment was not coming. Thereafter on 17.2.1983 the respondent again requested the State Bank of India, Dhanbad to represent the above hoondies to the defendant. The State Bank of India, Dhanbad again wrote to the defendant for making payment to the respondent on the hoondies vide letter dated 7.3.1983. The respondent 'srepresentative went in person to the State Bank of India and made enquiries but he was informed that payment is not forthcoming from the defendant. According the respondent served a legal notice dated 30.3.1983 to the defendant through B.B. Sharma, Advocate, Delhi for dishonouring the said hoondies and demanded payment for the goods supplied against hoondies. The appellant received the notice dated 30.3.1983 on 5.4.1983 but compliance was not made. The Manager, State Bank of India retuned the hoondies back to the plaintiff uide letter dated 21.6.1983. Thereafter the respondent addressed a letter to the Chairman of the defendant but to no avail. The respondent thereafter claimed interest @ 18% per annum from 12.1.1983 and the interest is due on the entire amount,

(3.) 1982 and a liquidated clearance 1/2% per weak or part thereof subject to the maximum of 5% of the price of all the articles, which the supplier failed to supply within the delivery period, which has been provided. Further, the plaintiff had agreed to supply six items of armoured cable as described as per specification stated in the purchase order in accordance with the terms stated in the purchase order and as per the contract for the purpose of installation of underground mines telephone lines of BCCL. Further case of the plaintiff is that the inspection made by Shri B.P. Singh, Executive Engineer of the defendant company, was neither proper nor sufficient, as he was not authorised to inspect the goods at the firms place i.e, at the plaintiffs place. Shri B.P. Singh submitted his report on visual inspection of the materials and there is no document to support the imaginary test certificate, which has been made on the basis of the inspection note. Some test certificates had been given by the plaintiff to Shri B.P. Singh, which were wholly un -authenticated and will not even disclose as to the person, who tested the same or as to the place of testing nor that report bore signature of B.P. Singh. Further, as per terms, goods were to be inspected by Materials Manager at the consignee 'splace and B.P. Singh had no written authority to inspect materials at consigner 'splace. On the other hand, defendant submitted that after receipt of the materials, defendant got the same tested by a competent expert including the defendant and renowned expert and according to their opinion, materials supplied by the plaintiff were totally spurious and of substandard quality. Defendant had never accepted the materials and defendant had informed the plaintiff that goods were not supplied by the plaintiff within the time specified in the purchase order and this defendant was under no obligation to accept the materials. The defendant had further made out doubt regarding quality and storage have been verified and authenticated by thorough scrutiny and materials supplied, have been found to be spurious and sub -standard and not in accordance with the specifications laid down in the purchase order. Further, hoondies were signed by the defendant but they were not for valuable consideration. The plaintiff did not sent the required documents as per terms and condition along with the railway receipts or signed note, which were not sent through bank or otherwise and, therefore, defendant is under no obligation to make payment. The materials were not dispatched by the railway but were dispatched to the plaintiff by the railway and road. It is further submitted that the plaintiff attempted to defraud the defendant by supplying spurious and substandard materials and the defendant was under no obligation either to accept the supply or to make any payment against the same. The plaintiff has not supplied ,the materials within the stipulated period. It is further submitted that the plaintiff has no right to demand payment of the goods supplied against the hoondi. The plaintiff is not entitled to get a decree on the basis of alleged two hoondies as the hoondies were signed by the defendant in good faith. It is further submitted that the committee were constituted by the defendant to examine the materials supplied by the plaintiff. The committee is of the opinion that the materials, which were supplied to the defendant, were not up to the mark and not fit for consumption. The defendant pray that the plaintiff has no valid cause of action or right to sue or the suit is fit to be dismissed with cost. 4 On the pleadings of the parties, following issues were framed by the learned Court below for determination in the suit.