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The Tamil Nadu Tea Plantation Corporation Limited by its Managing Director, Coonoor, Nilgiris District v/s M/s. Sundaram Engineering Works, by its Partner Jayachandran, Coimbatore & Others

    AS.No. 253 of 2007

    Decided On, 20 April 2022

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE A.A. NAKKIRAN

    For the Appellant: T. Arunkumar, AGP. For the Respondents: R1 & R2, D. Viyajakumar, Advocate.



Judgment Text

(Prayer: This Appeal Suit has been filed, under Order 41 Rule 1 read with Section 96 of CPC, against the judgement and decree, dated 28.04.2005, made in OS.No.5 of 2004, by the District Judge, Nilgiris District, at Uthagamandalam.)

1. This Appeal Suit has been filed, by the Plaintiff, against the judgement and decree, dated 28.04.2005, made in OS.No.5 of 2004, by the District Judge, Nilgiris District, at Uthagamandalam.

2. The case of the Plaintiff, as per the plaint, is that the Plaintiff Corporation had called for tenders on 23.03.1993 for supply and erection of fermenting drums in their Tea Plant and the Defendant Firm had offered to supply and erect the same at a cost of Rs.2,37,910/-. On 28.8.1993, the Defendant Firm had agreed to supply and install the same on or before 15.10.1993. The drums were erected only on 06.06.1995, with several manufacturing defects and the said drums collapsed on 09.05.1996 and the same was informed by the Plaintiff by letters dated 09.05.1996 and 22.05.1996 and the Defendant Firm had agreed to rectify the defects, by letter dated, 15.03.1996. On inspection, the Defendant Firm suggested to replace the drums. Since it was found that the Defendant Firm was not competent to manufacture proper drums, the Plaintiff had purchased new drums from M/s.Walker and Greig, Coonoor, for a sum of Rs.6,24,540/-, incurring a loss of Rs.5,05,585/-. As per the agreement, the Defendants are liable to pay the liquidated damages of Rs.100/- per set of drums per day of delay. Hence, the suit had been filed, for recovery of Rs.5,44,985/- from the Defendants with interest at 18% p.a. from the date of the suit till the date of realisation.

3. The case of the Defendants, as per the written statement, is that the tender of the Defendant was accepted and the drums were supplied and received. The erection was not completed on 06.06.1995. The delay in erecting the drums was on the part of the Plaintiff. The drums were not stored properly nor maintained by the Plaintiff and hence, the the drums got damaged. 90% payment had been released only after satisfactory working of the drums. The drums had worked from 03.08.1995 to February 1997. The balance payment of 10% was not released and the Plaintiffs illegally detained the drums. The Defendants had attended to the works/repairs by sending their men. The Plaintiff had dismantled the drums at their own instance and kept the same outside without informing the Defendants. The Plaintiffs had purchased new drums from M/s.Walker and Greig. The Plaintiffs are themselves guilty of contributory negligence. The Defendants offered to replace the drums. The Plaintiffs owes the Defendants Rs.1,91,233/- by way of payment of balance dues outstanding on their bills including interest. The Defendants claim this amount as a counter claim. Hence, the suit may be decreed for the above said amount.

4. On the pleadings of the parties, issues were framed by the Trial Court. Before the Trial Court, on the side of the Plaintiff, Ex.A1 to Ex.A14 were marked and PW.1 and PW.3 were examined. On the side of the Defendants, Ex.B1 to Ex.B6 were marked and DW.1 was examined. The Trial Court had dismissed the suit and allowed the counter claim of Rs.1,91,233/- with interest at 18% p.a. Aggrieved against the same, this Appeal Suit has been filed, by the Plaintiff.

5. This Court heard the submissions of the learned counsel on either side.

6. The learned counsel for the Appellant has submitted that the Respondents supplied defective drums and it was informed to them and they rectified the defects. Finally, the drums had collapsed and the same was also informed to the Respondents and they suggested for replacing the same as further repair would not be useful. Thereafter, as per the recommendation of the Committee constituted by the Plaintiff Firm, they purchased drums from M/s.Walker and Greig, Coonoor and so, the Respondents are liable to meet the loss sustained by the Appellant Corporation. The Appellant has proved its case by oral and documentary evidence. The Respondent Firm is not entitled to any payment. The court below erred in allowing the counter claim and dismissing the claim of the Appellant. Hence, he would pray for allowing this appeal. The learned counsel would rely on the decision reported in AIR 1955 Mad 435 (Hasenbhoy Jetha Vs. New India Corporation Limited).

7. The learned counsel for the Respondents would submit that there was absolutely nothing wrong with the drums. The drums were kept idle by the Appellant for six to seven months and the Appellant only caused damages to the drums. The Appellant was operating the drums continuously with heavy loads. The drums had worked over one year without any remarks. The Respondents were promptly attending the repair works to maintain proper relationship. Even the Respondents had affirmed to replace the drums with standard drums on payment of manufacturing cost of the drums. But, without any notice and information, the Appellant placed order to M/s.Walker and Greig, Coonoor. They have not returned the drums also. There was no fault from the side of the Respondents. The Respondents do not owe any amount to the Appellant. The Trial Court had rightly came to the proper conclusion and hence, this appeal is liable to be dismissed.

8. This Court considered the submissions of the learned counsel on either side and also perused the materials available on record.

9. On a perusal of Ex.A3, agreement entered into between the parties, it is seen that there is a provision for arbitration for settlement in case of any dispute arises between the parties, provided in paragraph 12 of the agreement, wherein it is stated as under:-

“12. If any dispute or difference, shall, at any time here after arise between the Tamil Nadu Tea Plantation Corporation Limited on the one part and the Supplier on the other part as to the rights or liabilities of either party in respect of any matter or thing relating to or arising out of the contract for supply of the meaning of all or any of the provisions herein contained the said dispute or differences shall be referred for settlement for arbitration of the Board of Directors of Tamil Nadu Tea Plantation Corporation Limited and their decision shall be final.”

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/> 10. Both the parties have made allegations and counter allegations against each other. When there is a specific provision for arbitration, the only remedy open to the parties is to initiate arbitration proceedings. Without invoking the arbitration clause as per the Ex.A3, agreement and without giving opportunity to the Defendants, the Plaintiff had filed the suit before the civil court. Both the parties have miserably failed to take note of the above arbitration clause and wrongly pursued the matter before the civil court. Hence, both the suit claim of the Plaintiff and the counter claim of the Defendants are not maintainable. 11. In fine, this Appeal Suit is dismissed. No costs.
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