w w w . L a w y e r S e r v i c e s . i n



M/S. Pavithra Publishers & Printers (P) Limited, Rep. by its Director v/s M/S. Kumudham Publications (P) Limited, Rep. by Secretary P.V. Parthasarathy

    C.S.No.516 of 1997

    Decided On, 29 November 2010

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MS. JUSTICE R. MALA

    For the Plaintiff: C. Ramesh, Advocate. For the Defendant: R. Amizhdu, Advocate.



Judgment Text

(Prayer: Plaint filed under Order IV Rule 1 of O.S. Rules read with Order VII Rule 1 C.P.C. seeking for a Judgment and decree against the defendant (a) directing the defendant herein to pay Rs.46,20,000/- together with interest at 18% per annum on the principal amount of Rs.30 lakhs from the date of plaint till date of realisation; (b) for costs.)

1. The plaintiff has filed this suit praying for directing the defendant herein to pay Rs.46,20,000/- together with interest at 18% per annum on the principal amount of Rs.30 lakhs from the date of plaint till date of realisation and directing the defendant to pay the costs of the suit to the plaintiff.

2. The averments in the plaint are as follows:-

The plaintiff wanted to purchase printing machineries which were available with the defendant for Rs.195 lakhs. The plaintiff sent Rs.30 lakhs through demand draft along with its letter dated 09.08.1994 and the defendant also confirmed on receipt of the same. Subsequently, due to unavoidable circumstances, the plaintiff was not able to purchase the machinery and the same was informed to the defendant over telephone. The defendant also confirmed in its letter dated 24.10.1994. Then, the plaintiff sent another letter dated 30.01.1995 and he also gave liberty to the defendant to sell the machineries and requested the defendant to refund the amount paid by the plaintiff. The defendant has not paid that amount and he also threatened the plaintiff to honour the contract within a week from the date of receipt of the letter dated 18.08.1994. The plaintiff sent a suitable reply dated 10.02.1995. Hence, the plaintiff has come forward with this suit for recovery of amount paid by him together with interest and prayed for a decree.

3. Gist and essence of written statement filed by the defendant is as follows:-

(i) On 09.08.1994, the plaintiff agreed to purchase from the defendant three printing machines for Rs.195 lakhs and an advance of Rs.30 lakhs was paid by the plaintiff to the defendant on 10.08.1994. The plaintiff also requested the defendant to dismantle these machines for despatch and install in the plaintiff's premises. The defendant complied with same. So, the contract of purchase of these machines was concluded.

(ii) As per the clear understanding between both the parties, the plaintiff ought to have paid a part amount on 18.08.1994 and the balance amount before 15.09.1994. So, the plaintiff had no right whatsoever to unilaterally cancel the purchase order by its letter dated 30.01.1995. Since the plaintiff has cancelled the contract, the defendant incurred loss to the tune of Rs.99,18,278/-. Hence, the plaintiff has to pay the defendant Rs.69,18,278/- after deducting the advance amount of Rs.30 lakhs paid by the plaintiff. After settling off Rs.30 lakhs, the balance he is entitled to Rs.35,00,000/-. Hence he prayed for dismissal of the suit with costs.

4.Gist and essence of reply statement filed by the plaintiff is as follows:-

(i)The counter claim is an abuse of process of law and Court and it is true that the plaintiff agreed to purchase from the defendant three printing machines and an advance of Rs.30 lakhs was paid to the defendant on 10.08.1994. The defendant has to prove that at request made by the plaintiff, the defendant had dismantled the machinery.

(ii)There is no understanding either express or imply between both the parties to pay the portion of the amount on 18.08.1994 and the balance amount before 15.09.1994.

(iii)The plaintiff, subsequently came to know that the machineries which are offered for sale to them are not of good quality and could not be put to use effectively. Hence, in his letter dated 30.01.1995, they are unable to purchase the machineries from the defendant due to unavoidable circumstances. In the same letter, the plaintiff made it very clear that the defendant is at liberty to sell the machineries to others and accordingly made a request to the defendant to refund the advance amount already paid. There is no question of forfeiture or adjustment of the defendant's alleged loss as against the amount paid by the plaintiff. The plaintiff, however submitted that the very conduct of the defendant in restricting their claim to Rs.5 lakhs it would go to show that they have ventured into a speculative action. Hence, he prayed for the decree as prayed for in the plaint.

5.Gist and essence of additional written statement filed by the defendant is as follows:

(i) During the conclusion of the contract, the commission amount has been paid to the persons of the plaintiff. Since the plaintiff had wriggled out of contract of purchase of the machineries, the defendant wrote letters addressing the Directors of the plaintiff's Company to return the commission amount received by the persons on their behalf. The Directors of the plaintiff's Company has received the same, but they had not sent any reply. The failure to procure the machineries had caused a huge loss to the defendant and further fact that the machineries were dismantled by incurring a huge expenses coupled with the fact that the defendant had incurred a substantial expense of commission charges that too at the instance of the plaintiff.

(ii) Since the machineries were dismantled, so it was sold. The machineries would loose its validity if it was not reinstalled immediately after the dismantling. The machineries were dismantled at the request of the plaintiff immediately after the receipt of the advance amount on 10.08.1994 as per the terms of the agreement that the machineries has to be reinstalled in the place of plaintiff during 15.09.1994.

(iii)Originally, the plaintiff agreed to pay a sum of Rs.145 lakhs for the machines, but the defendant was not able to get the best offer during February 1998. Subsequent to the filing of the written statement and counter claim, the defendant sold the same for a sum of Rs.40,06,560/-. Hence, the defendant prayed for dismissal of the suit.

6. Gist and essence of the reply statement of the plaintiff to the additional written statement filed by the defendant is as follows:

(i) The defendant has been put on notice about the plaintiff's intention to cancel the contract and only after such notice, the contract has been put to an end.

(ii) The alleged letters claiming return of amount are only a fabricated documents. The defendant having received the substantial amounts has caused huge monetary loss to the plaintiff and is only trying to appropriate the amounts to themselves detrimental to the interest of the plaintiff.

(iii) The manner in which the defendant is trying to appropriate the advance amount of the plaintiff would itself amply demonstrate the intention of the defendant to appropriate the amounts due to the plaintiff. Hence, he prayed for a decree with exemplary costs.

7. On a perusal of pleadings in the plaint and written statement, the following issues are framed for trial:

"Original Issues:

1. Whether there is a concluded contract of purchase of machineries between the plaintiff and the defendant?

2. whether the defendant is liable to pay Rs.46,20,000/- to the plaintiff?

3. Whether the plaintiff had any right to unilaterally cancel the purchase order by letter dated 30.01.1995?

4. Whether the plaintiff is liable to pay Rs.69,18,278/- to the defendant?

5. To what relief, the plaintiff is entitled to?

Additional Issues:

1. Whether the advance amount paid by the plaintiff is forfeited or adjusted towards the alleged loss occasioned to the plaintiff?

2. Whether the alleged payment of portion of the advance amount by the defendant to the Directors of the plaintiff is true?

3. Whether the machineries forming the subject matter of the contract were sold only for a sum of Rs.40,06,560/-?"

8. Original issue No.1

(i) On the side of the plaintiff, P.W.1 was examined and Exs.P1 to P9 were marked. On the side of the defendant, D.W.1 was examined and Exs.D1 to D10 were marked. The defendant is the owner of the printing machineries. The case of the plaintiff is that he wanted to purchase the printing machineries from the defendant and he paid Rs.30 lakhs as an advance. Subsequently, the plaintiff did not want to purchase the machineries, he requested the defendant to return back the advance amount of Rs.30 lakhs. Since the defendant has not returned the amount he received, the plaintiff has come forward with this suit.

(ii) The learned counsel appearing for the plaintiff submitted that there is no concluded contract of purchase of machineries between the plaintiff and the defendant. He further submitted that since there is no concluded contract, there is no written Agreement of Sale also, hence he prayed for return of the advance amount he paid.

(iii) Per contra, the learned counsel appearing for the defendant submitted that there is a concluded contract and price has been fixed for the machineries of Rs.195 lakhs and an advance of Rs.30 lakhs has been paid. The plaintiff himself admitted that there is a concluded contract, since unilaterally he cancelled the Sale Agreement, he is not entitled to refund of advance amount.

(iv) Another limb of argument advanced by the learned counsel for the defendant is that after the negotiation of the sale and the oral contract has been finalised, the sale price has been fixed at Rs.195 lakhs, out of which, Rs.30 lakhs has been given as an advance. As per the direction of the plaintiff's Directors, Rs.10.5 lakhs has been paid to the name mentioned by the plaintiff's Directors as a commission. He further submitted that at the request of plaintiff's Directors, the machinery was dismantled, since the value of the machinery is very high, it was embedded with earth by immediate installation, the machineries were dismantled with the help of the technical person, so he incurred heavy expenses for the above. He further submitted that the plaintiff has unilaterally cancelled the sale, the defendant has suffered loss for selling the printing machines for lowest price, hence he is not liable to the advance amount paid by the plaintiff.

(v) Now, this Court has to decide whether there is any concluded contract of purchase of machineries between the plaintiff and the defendant. Ex.P1 is the letter written by plaintiff to defendant on 09.08.1994, in which, it was stated as follows:

"Sub: Purchase of printing machinery.

With reference to the above subject, I am herewith sending Rs.30,00,000/- through demand draft drawn in favour of M/S.Kumudam Publications (P) Ltd., as Advance for the following Webb offset and other printing machinery as agreed."

In the same letter, the particulars of demand draft for Rs.30 lakhs has been given. In the last paragraph, it is stated as follows:

"The total cost of the above three machineries will be about Rs.195 lakhs and out of this, now we are paying Rs.30,00,000/- as an advance."

Furthermore, the details of the machineries such as serial number, current price, price negotiated and fixed and all taxes and levies as applicable extra, have been mentioned in that letter. So, this document has clearly proved that there is a concluded contract.

(vi) Furthermore, the learned counsel appearing for the plaintiff relied upon Ex.P2, in which, a new condition has been imposed. So it was not accepted by the plaintiff, so the contract is not concluded and enforceable contract. There must be a consensus ad idem is necessary between both the parties. But here, there is no acceptance from the plaintiff in respect of the conditions imposed in Ex.P2. So there is no concluded contract.

(vii) At this juncture, it is appropriate to consider Ex.P2-letter written by the defendant to plaintiff dated 10.08.1994, in which, it was stated in the first paragraph that it was acknowledged the receipt of Rs.30 lakhs and then it was stated as "this is to inform as advance for the price of the following machines:-(CST @4% on CST form)". Furthermore, it was stated in the said letter as follows:

"The balance amount as agreed upon is to be paid before 15th September (a part by 18th August 1994 and balance by 15th September 1994) and conclude the transaction."

As we have already incurred and will be incurring heavy expenses towards dismantling and Erection Engineers of this machine and other incidental expenses, we will adjust this advance towards the same on your not concluding the deal before 15th September 1994."

But, Ex.P3-letter written by plaintiff to defendant dated 30.01.1995, in which, it was stated as follows:

"We are not able to purchase the machinery from you. You are at liberty to sell the above machinery to others. We request you to refund the advance amount paid by us. Sorry for the inconvenience caused to you."

(viii) At this juncture, it is appropriate to consider the pleadings of the plaintiff in his reply statement. It was stated in para-3 of the reply statement of the plaintiff is as follows:

"The plaintiff states it is true that they agreed to purchase from the defendant three printing machines and an advance of Rs.30,00,000/- was paid to them on 10.08.1994. .. .."

The above para shows that there is a concluded contract between both the plaintiff and defendant and in pursuance of that Rs.30 lakhs has been paid as an advance to the defendant.

(ix) At this juncture, it is appropriate to consider the documents filed by both sides. The learned counsel appearing for the defendant relied upon the letters Exs.D5 and D6. Those letters were marked through P.W.1, when he was in witness box. Those letters have clearly proved that the plaintiff has entered into a sale Agreement. So, it was a concluded contract.

(x) Now it is appropriate to consider the oral evidence of P.W.1, in which, he has stated as follows:

".. .. At the time of our inspection the machinery was not in a running position and it was fixed with the land. All three Directors and Mr.P.V. Parthasarathy discussed about the price of the machineries and we have arrived at conclusion that price of the machineries was fixed at Rs.195 lakhs. Afterwards, we have given Rs.30,00,000/- as an advance amount. .. .."

So, the evidence of P.W.1 in his cross-examination has clearly proved that there was a concluded contract between the plaintiff and the defendant in respect of the purchase of machinery from the defendant.

(xi) At this juncture, it is appropriate to consider the decision relied upon by the learned counsel for the plaintiff reported in 1996 (2) SCC page 667 in U.P.Rajkiya Nirman Nigam Limited v. Indure Pvt. Ltd. and others in Paragraph-7, it was held as follows:

"7. Section-3 of the Indian Contract Act, 1872 envisages communication of proposal, acceptance of proposal and the revocation of the proposal and comes to the knowledge of the person to whom it is made. Communication of an acceptance is complete-as against the proposer, when it is put in the course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer. Under Section-7 "in order to covert a proposal into a promise, the usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. .." Under Section-10 "all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void". Section-31 defines "contingent contract" to mean "a contract to do or not to do something, if some event, collateral to such contract, does or does not happen". A contingent contract to do or not to do anything, if an unforeseen future event happens, cannot be enforced by law, under Section-32, unless and until that event has happened. If the event becomes impossible, such contract becomes void. Section-2(a) of the Act defines "arbitration agreement" to mean "a written agreement to submit, present or future differences, to arbitration, whether an arbitrator is named therein or not". To constitute an arbitration agreement, there must be an agreement between the parties, viz., the parties must be ad idem. The parties are not ad idem unless they agree to the terms and conditions mentioned in the agreement. As seen, under the Contract Act unless there is an agreement, i.e. there is an acceptance of the proposal, the contract is not complete. .. ..".

(xii)But the above citation is not applicable to the facts of the present case, because the averments in the reply statement as well as the oral evidence of P.W.1 were already culled out in the earlier paragraph and the conduct of the parties and Exs.P1 and P2 have clearly proved that there is a concluded contract of purchase of machinery between the plaintiff and the defendant. Original Issue No.1 is answered against the plaintiff.

9. Original Issue No.3

(i) The learned counsel appearing for the defendant submitted that the plaintiff has unilaterally cancelled the purchase order by his letter dated 30.01.1995. But, he has no right to cancel the sale agreement unilaterally. So he is not entitled for refund of advance amount.

(ii) At this juncture, the learned counsel appearing for the defendant relied upon a decision reported in AIR 1958 Kerala page-195 in Hajee M.Ahamed Koya and another v. E.Murugesa Mudaliar son and Co., in paragraph-40, it was held as follows:

"40. The further contention of Mr.Srinivasa Ayyengar is that the defendant has already cancelled the contract by sending Ex.B5 as early as 18.12.1950. This letter has not been received by the plaintiff and the learned Judge has not chosen to accept the evidence of the defendant regarding Ex.B5 or the press copy marked as Ex.B38(a). A perusal of the evidence of the defendant clearly shows that there is a lot of contradiction in the matter of sending this letter and we entirely agree with the learned Judge that the evidence of the defendant regarding the sending of this letter, cannot be accepted.

Even if the defendant has proved the sending of the letter, Ex.B5 cancelling the contract, in our opinion, he is not entitled in law to so cancel a concluded contract unilaterally. Having entered into an agreement, it is not open to the defendant to resile from the same on untenable grounds as he pleases. Therefore, such a cancellation has no effect in law, so far as the plaintiff's rights are concerned."

(iii)As per Ex.P3-letter written by plaintiff to defendant, in which, it was stated as follows:

"To

Sri.P.V.Parthasarathy, Publisher

M/S.Kumudam Publications Private Ltd.,

No.151, Purasawalkam High Road,

Madras-600 010.

Sir,

Sub: Purchase of printing machinery –

regarding.

Ref: (1)Our letter dated 09.08.1994.

(2)Your letter dated 10.08.1994.

-----

With reference to the above subject, due to unavoidable circumstances, we are not able to purchase the machinery from you. You are at liberty to sell the above machinery to others. We request you to refund the advance amount paid by us. Sorry for the inconvenience caused to you."

The above letter shows that due to unavoidable circumstances, the plaintiff is not able to purchase the machinery. So, he has requested the defendant to refund the advance amount paid by him and also given liberty to the defendant to sell the machinery.

(iv)On the side of the defendant, Exs. D1 to D10 were marked. Admittedly, the plaintiff has not filed any documents to show that the plaintiff has sent a letter to the defendant that he has not accepted the terms mentioned in Ex.P2 dated 10.08.1994. He kept quite all along for nearly four months. On 30.01.1995 only, the plaintiff had sent a letter i.e. Ex.P3. However, the defendant had written a letter under Ex.P9 on 24.10.1994, in which, it was stated as follows:

"Further to our telephonic conversation, this is to confirm that you are not interested in purchasing Miller Offset printing machine from us." i.e. Serial No.2 in Ex.P1.

The above para which shows that there was a telephonic conversation between both the plaintiff and defendant till the plaintiff issued Ex.P3-letter.

(v) The defendant sent a letter dated 29.11.1994 i.e. Ex.D1 to one of the plaintiff's Director Mr.Shanmugam/P.W.1 and requested him to return a sum of Rs.10.5 lakhs received from the defendant jointly with Mr.Babu Prasad.

(vi) At this juncture, the learned counsel for the plaintiff submitted that though Exs.D1 to D6 were marked through P.W.1, but the contents of the same are not proved, hence, those documents cannot be relied upon. To substantiate the argument, he relied upon the decision reported in 1996 (2) L.W. Page-637 in T.H.S. Rahmath Fathima v T.K.Kaer Mohideen, in paragraph-15, it was held as follows:

"15. Even though a document was marked without any objection, we have to consider whether the parties to the said (sic) are competent to prove the same. The parties are utter strangers to Ex.P5. Hence they are not competent to prove the same. Then we have got only the production and marking of the document. A mere marking of a document with consent will not amount to proof of its contents. It is so held in the decision reported in A.I.R. 1971 S.C.1865 (S.T. Khimchand v.Y.Satyam). In that case, at page-1868, their lordships have held as follows:

"The plaintiffs wanted to rely on Exhibits A-12 and A-13, the day book and the ledger respectively. The plaintiffs did not prove these books. There is no reference to these books in the judgments. The mere marking of an exhibit does not dispense with the proof of document."

The same is the case in the decision reported in A.I.R. 1981 S.C.2085 (Ramji Dayawala and Sons (P) Ltd. v. Invest Import). In that case, their lordships held thus:-

"Undoubtedly, mere proof of the hand writing of a document would not tantamount to proof of all the contents of the facts stated in the document, if the truth of the facts stated in a document is in issue mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the facts or contents of the documents. The truth or otherwise of the facts or contents so state would have to be proved by Admissible evidence, i.e., by the evidence of those persons who can vouch safe for the truth of the facts in issue." (Emphasis supplied)"

But the above citation is not applicable to the facts of the present case. Those documents were marked only through the P.W.1-Shunmugam, who received Exs.D1 to D4. So, he is the competent person to speak about Exs.D1 to D4 and he has not denied the same. In such circumstances, the above citation is not applicable to the facts of the present case. But the letter dated 26.02.1996 under Ex.D4 has been returned. Before that, as per Ex.P9-letter dated 24.10.1994, the defendant was aware of the fact that the plaintiff is not intended to purchase Serial No.2 of the machinery mentioned in Ex.P1.

(vii)So I am of the view that even though it is a concluded contract, there was a telephonic conversation between both the plaintiff and the defendant, on the basis of the telephonic conversation, the defendant has confirmed the same by way of sending letter dated 24.10.1994 under Ex.P9. Then only, the defendant sent a letter under Ex.D1, requesting the plaintiff to return the sum of Rs.10.5 lakhs received by P.W.1 along with one Babu Prasad and the reminders were marked as Exs.D2 to D4.

(viii) In such circumstances, I am of the view that before the receipt of Ex.P3, the defendant has issued a letter under Ex.D1 dated 29.11.1994. After that only, the plaintiff gave permission to sell Serial No.2 of the machinery mentioned in Ex.P2 and the same was confirmed by the defendant under Ex.P9 on 24.10.1994. Immediately, the defendant sent a letter to the plaintiff requesting to return the amount received from him by P.W.1 along with Babu Prasad. So the argument advanced by the learned counsel for the defendant that the plaintiff has unilaterally cancelled the purchase order under Ex.P3 does not merit acceptance. So the decision reported in AIR 1958 Kerala page-195 (cited supra) is not applicable. Much prior to Ex.P3, there was an oral telephonic conversation between both the parties. Therefore, I am of the view that the plaintiff has cancelled the purchase order with the knowledge of the defendant. Original issue No. 3 is answered accordingly.

10.Additional Issue Nos.1 to 3:

(i)The learned counsel appearing for the defendant would submit that the plaintiff has unilaterally cancelled the contract. Hence, the plaintiff is not entitled to the advance amount. Therefore, the amount is forfeited or adjusted towards the alleged loss sustained to the defendant.

(ii)Admittedly, there was no written contract of sale. So there is no clause for forfeited or adjusted towards the loss suffered by the defendant.

(iii)Admittedly, it is only a oral concluded contract. In Ex.P2, the last paragraph shows that there is no clause for forfeiture but only to adjust towards the alleged loss suffered by the defendant.

(iv)In Issue No.2, it was decided that the plaintiff has not unilaterally cancelled the agreement, so I am of the view that he is not entitled to forfeit the advance amount.

(v) The learned counsel appearing for the plaintiff relied upon the decision reported in 2001 (4) CTC 680 in K.N.Keerthi Rao v. The General Manager, Southern Railways, Madras-3 and another, in which, it was stated as follows:

".. .. Agreement not providing for forfeiture of EMD for any default or non performance of contract - EMD could not be forfeited."

But the above citation is not applicable. Admittedly, there is no written contract and hence, it is not applicable to the facts of the present case. But however, the defendant is entitled to adjust the amount towards the loss sustained and suffered by him.

(vi)At this juncture, it is appropriate to consider the decisions relied upon by the learned counsel for the defendant reported in (1) AIR 1957 Orissa page-8 in Sriram Agarwalla and others v. Sagarmal Modi, in paragraph-2, it was held as follows:

"2. That the contract was silent as to what was to happen to the sum of Rs.1,000/- in the event of a breach of contract. The equitable rule in such case would be that the earnest-money was forfeited in order to cover possible loss that may be incurred by the party not guilty of breach. In this case, however, the defendant did not allege that he had suffered any loss on account of the plaintiff's failure to perform his part of the contract. Hence, the plaintiff should be held entitled to get a refund of the sum of Rs.1,000/- deposited by him with the defendant."

(2) AIR 1997 Madhya Pradesh 68 in M/S.J.K.Enterprises, v. State of M.P. and others, in paragraph-11, it was held as follows:

"11.Another limb of Shri.Dhande's submission is that respondents was not put to any loss and as such they cannot be permitted to forfeit the earnest money. In the return the respondents have clearly stated that the lot in question was put to re-auction and the same was sold at the rate of Rs.5.50 per standard bag whereas the offer of the petitioner was Rs.30/- per standard bag. Thus there is nothing on the record brought by the petitioner to controvert, the aforesaid statement made by the respondent in their return. In that view of the matter, I have no option than to hold that the respondents suffered a loss. Consequently, their action cannot be faulted on the ground of 'no loss' urged on behalf of the petitioner. Thus, I do not find any merit in the submission of the learned counsel for the petitioner."

(vii) Considering the above citation, I am of the view that the defendant is entitled to adjust the amount towards the loss sustained by him.

(viii)Now this Court has to decide whether the defendant has sustained any loss. But he has not filed any documents to prove that he has sustained loss, except Exs.D8 to D10. But admittedly, Exs.D8 to D10 are all taken place in the year 1998 during the pendency of the suit, i.e., an invoice dated 07.01.1998 under Ex.D8, Gate pass delivery note dated 13.02.1998 under Ex.D9 and Challan dated 02.03.1998 under Ex.D10. But the suit was filed on 01.08.1997. During the pendency of the suit only, the defendant sold the machinery. But he has not obtained any permission from the Court for selling all these machineries. In such circumstances, I am of the view that during the pendency of the suit, the defendant had sold the machineries, without obtaining permission of this Court and it will not fasten liability to the plaintiff. Hence, no reliance can be placed on Exs.D8 to D10.

(ix)The learned counsel appearing for the defendant submitted that at request of the plaintiff, the defendant dismantled the machineries with the help of technical Engineer, so he has incurred more expenses for the same and hence, he is entitled to adjust the amount. But admittedly, no scrap of paper has been filed to show that how much amount has been paid to the technical Engineer for dismantling the machineries by the defendant.

(x) At this juncture, the learned counsel appearing for the plaintiff submitted that D.W.1 in his deposition stated as follows:

"6. .. .. The machine was dismantled at the request of the plaintiff immediately after the receipt of the advance amount on 10.08.1994 as per the terms of the agreement that the machinery has to be reinstalled in the place of plaintiff during 15.09.1994, the plaintiff had miserably failed its obligation and conveyed the decision vide its letter dated 30.01.1995 only renders the value of the machine to a scrap value as it was kept idle for more than four months. .. .. "

(xi) In cross-examination, the D.W.1 has admitted as follows:

"On 20.08.1994, the machineries were dismantled. The machine was huge machine. Any Engineer can dismantle the machine with mechanic. On 20.08.1994, no list was prepared for the machineries. It was removed from the earth and place it out side. No letter was written by the plaintiff stipulating the date on which the amounts to be paid by them. .. .."

In Ex.P4, it is mentioned there the defendant contracted the foreign contract for the purpose of dismantling and running of the machines at plaintiff's side. I deny the suggestion that on 06.02.1995, the machine was not dismantled. .. ..

I deny the suggestion that the defendant never dismantled the machines before the plaintiff withdrew the offer. The machineries were dismantled for two days. We have not given any advertisement to sell the machineries after the rejection by the plaintiff. We call offers through machine brokers. There was no written offers. After the dismantling of machineries, it was informed to the plaintiff. we have informed through telephone. We have not given any written letter about the dismantling of machineries by the defendant. .. .."

(xii) In Ex.P2, the last paragraph was stated as that "As we have already incurred and will be incurring heavy expenses towards dismantling and Erection Engineers of this machine and other incidental expenses". But there is no proof on the side of the defendant for payment of charge to the Engineer to dismantle the machineries. Furthermore as narrated above, there is no specific date has been given, in which date the machineries were dismantled. So I am of the view that the defendant has miserably failed to prove that in which date the defendant dismantled the machineries and how much he paid as a fee to the Engineer. Since the defendant has failed to prove the expenses for dismantling, he is not entitled to adjust the same towards the advance received by the defendant.

(xiii)The learned counsel appearing for the defendant submitted that since he received Rs.30 lakhs, he paid Rs.10.5 lakhs as a commission to P.W.1. and Babu Prasad. As soon as the plaintiff cancelled the contract, he sent a letter for refund of the amount. It is true that as per Exs.D1 to D4, it was mentioned that there is return of the sum of Rs.10.5 lakhs received by the P.W.1 from the defendan

Please Login To View The Full Judgment!

t jointly with M/S.Babu Prasad. At this juncture, the learned counsel appearing for the plaintiff submitted that in Exs.D1 to D4, nothing has been mentioned that the amount has been paid as a commission to their transaction. (xiv) On perusal of cross-examination of D.W.1, it was stated as follows: "The defendant paid a sum of Rs.10,00,000/- towards commission. The amount is not specified in my proof affidavit. The amount was paid by cheque. Now I do not remember the details of the Bank and cheque number. The cheque amount is paid it will be shown in our accounts. I have not produced the accounts before the Hon'ble Court. The issue of cheque is available at the time of filing of the original written statement." But whereas P.W.1, who is the competent person, has admitted in his cross-examination that he has received the letters i.e. Exs.D1 to D3, which are addressed to him and he has not denied the same. Further, he has fairly conceded that "we have not given any reply letters to Exs.D1 to D4". (xv) In such circumstances, I am of the view that the P.W.1 has received Rs.10.5 lakhs as a commission along with Babu Prasad. So, the plaintiff is not entitled to Rs.10.5 lakhs. (xvi) In such circumstances, I am of the view that the plaintiff is not entitled to the amount of Rs.10.5 lakhs as received by P.W.1 along with Babu Prasad. Additional Issue Nos.1 to 3 are answered accordingly. 11. Original Issue No.4: The defendant is claiming counter claim of Rs.69,18,278/- stating that the plaintiff has unilaterally cancelled the agreement, and hence he is entitled to counter claim of Rs.69,18,278/-. But in view of the answer given to Original Issue No.3 that the plaintiff has not cancelled the agreement unilaterally, he is not entitled forfeiture of advance amount and the defendant has not proved that he sustained loss. Hence, I am of the view that the defendant is not entitled to Rs.69,18,278/- as a counter claim. Original Issue No.4 is answered accordingly. 12. Original Issue Nos.2 and 5: (i) The plaintiff has filed the suit for recovery of Rs.30 lakhs as an advance amount on the basis of the contract. Admittedly, Rs.10.5 lakhs has been received by P.W.1 along with Babu Prasad, as a commission. But the defendant has failed to prove that he suffered loss as well as incurred the expenses for dismantling the machineries by way of paying charges to the Engineer for dismantling the machineries. So the defendant has failed to prove that he has paid charges for dismantling the machineries. The defendant has only proved that he has paid Rs.10.5 lakhs to P.W.1 and Babu Prasad after concluding the contract. So the plaintiff is not entitled to Rs.10.5 lakhs, but he is entitled to Rs.19.5 lakhs. (ii) The plaintiff is entitled to decree to an extent of Rs.19.5 lakhs. There is no contract for payment of interest as per law from the date of filing the suit till decree. Therefore, he is entitled to the interest at 12% per annum from the date of filing the suit till the date of decree of the suit and he is entitled to the interest at 6% from the date of decree till realisation. So Issue Nos. 2 and 5 are answered accordingly. 13. In fine, 'The suit is decreed for Rs.19.5 lakhs with interest at the rate of 12% per annum from the date of filing of the suit till the date of decree of the suit and subsequently, with interest at the rate of 6% from the date of decree and till the realisation. The decree is passed accordingly, with proportionate costs. The counter claim of the defendant is dismissed.'
O R