1. The instant appeal has been filed by the appellant challenging the judgment and decree dated 05.08.2017 passed by learned First Additional District Judge of 2nd Additional Judge, Raipur in Civil Suit No. 7-B/2014 whereby the learned trial Court allowed the suit filed by the plaintiff/respondent and directed the defendant/appellant to pay the principal amount of Rs. 13,68,271/- along with interest of Rs. 17,99,276/- and the total interest amount on the principal amount of Rs. 13,68,271/- at the rate of 3% per month from the date of filing of claim till the date of payment to the plaintiff within two months from the date of judgment.
2. The admitted facts of the case, are that the defendant company was in need of some iron products i.e. M.S. angle, H.T. angle plate etc. for fabrication work in the power plant of the defendant company. Iron products worth about Rs. 3,50,98,615/- (Three Crore Fifty lacs ninety eight thousand six hundred and fifteen) for the period from 02.07.2012 to 14.09.2012 and from 09.07.2012 to 23.11.2012 were supplied by Shri Picco Private M/s Transmetal to M/s Transmetal (defendant) at its premises from the plaintiff and the defendant company also paid the plaintiff for all the remaining transactions except the disputed transaction. The plaintiff issued a notice to the defendant on 14.08.2013 by post, the receipt of which was sent by the defendant to the plaintiff on 14.08.2013. it is also an admitted fact in this case that name of the defendant company was R.S. Metals Limited with has been changed to M/s. ARS Energy Private Limited.
3. The pleadings made in the plaint by the plaintiff (respondent herein) that the defendant (appellant herein) company for running a power plant and for fabrication work contacted the plaintiff (respondent herein) through his representative Picco, proprietor of Transmetal of Chennai, thereafter, the plaintiff, between 02/07/2012 and 29/11/2012 sold/supplied iron product worth Rs. 3,50,98,615/- (Three crore Fifty lacs ninety eight thousand six hundred and fifteen only) and the defendant had paid the respective amount for purchase of iron products of an amount of Rs.2,65,95,170/- through bank, but purchase of H.T. Angle on 14/09/2012, the defendant has not paid an amount of Rs.13,68,271/-. Further, the case of the plaintiff is that between 09/07/2012 and 23/11/2012, the plaintiff supplied iron products to the defendant power division company amounting to Rs 71,35,174/- and the respective amount has already been paid by the defendant through bank on 29/11/2012.
As per the plaintiff, he had sold iron products to the defendant amounting to Rs. 3,50,98,615/- for that the defendant company in lieu of Central Sales Tax had issued two declaration letters of "form C" and send it through email to the plaintiff on 01/12/2012 and 04/12/2012. Further, the case of the plaintiff is that the plaintiff supplied the iron products to the defendant as per the instructions of the defendant and for that the defendant paid amount for the respective purchase from the plaintiff. As per the plaintiff, disputed amount of iron products was supplied to the defendant at its working place i.e. Eguvarpalayam Village, GummidiPoondi- District Thiruvallur, Tamil Nadu as per the instruction of representative of the defendant and the instruction was received from the representative vide email dated 12/09/2012. Thereafter, the representative of the defendant received the delivery of product issuing receipt of the same and plaintiff had continuously requested for the disputed amount from the defendant through means of communication via telephone and email.
Further the case of the plaintiff, is that they did not receive any information with regard to return of disputed products from the defendant therefore, plaintiff sent a legal notice through post on 14/08/2012 to the defendant. After receiving the said notice, defendant replied on 24/09/2012 denying all the allegations levelled by the plaintiff. Therefore, the suit was filed by the plaintiff against the defendant for recovery of the said disputed amount.
4. In his written statement, except the admitted facts, the appellant/ defendant denied all the averments made by the respondent/plaintiff. The defendant specifically stated that for completion of job work pertaining to fabrication work, the defendant had given a work order of iron products i.e. SS Angle, HT Angle and plates to the Picco Proprietor Transmetal Chennai on 02/07/2012. The defendant company had never given any order for supply of iron products directly to the plaintiff. The plaintiff had supplied iron products between 02/07/2012 till 14/09/2012 to Picco Proprietor Transmetal and for the said transaction the defendant had deposited the entire amount. It is further stated that the claimed supply of HT Angle amounting to Rs.13,68,271/- on 14/09/2012 by plaintiff, had never been received by the defendant nor has been supplied by the plaintiff to the defendant. According to the invoice dated 14/09/2012, the said supply to the tune of Rs.13,68,271/- was made to the Picco Proprietor Transmetal at their premises ie. Gummidipoondi Chennai. Further, on 26/11/2012, the defendant had cancelled the order which was received through the aforementioned invoice and specifically stated to the Picco Proprietor Transmetal to cancel the order and intimated the Picco to return the entire product to the plaintiff. After intimating the same, there remains no cause of action between the defendant and plaintiff. There had been no contract between the plaintiff and the defendant which can be claimed by way of specific performance as the defendant never gave any order for supply of iron products to the plaintiff, rather defendant gave order of supply to one Picco Proprietor Transmetal Chennai and the defendant in his reply of notice issued by the plaintiff have specifically stated the above facts. The plaintiff only on the basis of presumption stated that the Picco Transmetal Chennai is representative of the defendant. The defendant further contended in the written statement that in the recovery suit, that, the suit is not maintainable as the Picco proprietor Transmetal Chennai has not been impleaded as a necessary party wherein the transaction of plaintiff was with Picco proprietor Transmetal and not with the defendant, and the defendant cannot be confounded as party being privity to the transaction between plaintiff and Picco Transmetal. Therefore, the suit filed by the plaintiff is liable to be dismissed. Further, it was claimed by the defendant for an amount of Rs.5 lacs as compensation from the plaintiff.
5. After hearing the pleadings of both the parties, learned trial Court framed as many as 7 issues and after recording statements of the witnesses and considering the documents, decreed the suit in favour of the plaintiff.
6. Learned counsel for the appellant/defendant submits that the judgment and decree are bad in law and procedure, contrary to the material on record and therefore, liable to be set aside. Learned trial Court erred in considering the fact that the plaintiff has no agreement/deed with the defendant company for supply of iron products nor the defendant company has made any order to the plaintiff company for supply/sale of such products. The defendant company gave job work for fabrication to Picco Proprietor Transmetal, Chennai who had purchased the respective products for supply/completion of job work from the plaintiff company. Picco Proprietor Transmetal purchased iron products from the plaintiff from 02/07/2012 to 29/11/2012 and asked for payment which had been paid to the plaintiff company. The plaintiff had not sold the products directly to the defendant as described in Schedule A and Schedule B submitted by the plaintiff to the defendant company from 02/07/2012 to 14/09/2012 nor the defendant company received any goods directly from the plaintiff company. The said iron products were demanded by M/S Transmetal Metal Proprietor Picco and received by the same who directly made the payments to the Plaintiff.
It is further stated that M/S Transmetal Proprietor Picco is not representative of the defendant company neither is the authorized company of the defendant company. M/S Transmetal India ordered for itself the goods purchased from the plaintiff and the plaintiff supplied the goods to M/S Transmetal India, hence the defendant company is not responsible for any claim as made against them. The invoice No. 972 dated 14/09/2012 for supply of H.T. Angle as claimed, was never supplied by the plaintiff to the defendant company, rather it had been supplied to the Picco Proprietor Transmetal. The iron product- HT Angle has been received by Picco Transmetal India which was rejected by the defendant company on 26/11/2012 and M/S Transmetal India has given acknowledgment for return of the goods to the defendant company.
The learned trial Court did not consider the fact that the plaintiff had not made Picco Proprietor Transmetal Chennai as necessary party and has neither impleaded it in the suit of recovery of amount. Therefore, on this ground the suit filed by the plaintiff deserved to be dismissed. The learned trial Court committed error by ignoring the statement of the plaintiff witness wherein he had specifically stated that as per document- Ex.P/3 (E-mail), the iron products were ordered by Shri Picco Transmetal Chennai and not by the defendant, and also according to the invoice No. 972 dated 14.09.2012, the iron products have been received by Shri Picco Transmetal India and not by the defendant. The burden of proof with respect to the supplied iron products to the defendant lies on the plaintiff/respondent to which the plaintiff has utterly failed to prove it. Learned trial Court did not consider the oral and documentary evidence in its true perspective and gave wrong finding. Therefore, the impugned judgment and decree are liable to be dismissed.
Reliance has been placed on the decisions of Hon’ble Supreme Court in the matter of Tirumala Venkateswara Timber & Bamboo Firm Vs. CTO; AIR 1968 SC 784, State of Mysore Vs. Mysore Spg. & Mfg. Co. Ltd., ; AIR 1958 SC 1002, Gordon Woodroffe & Co Vs. Sheikh M.A. Majid & Co.; AIR 1967 SC 181, P. Krishna Bhatta Vs. Mundila Ganapathi Bhatta; AIR 1955 Mad 646, Loon Karan Sohan Las Vs. Firm John and Co., 1965 SCC OnLine All 440; AIR 1967 All 308, State of Bihar Vs. Dukhulal Das and Anr.; AIR 1962 Pat 140, Ganesh Export and Import Co. Vs. Mahadeolal Nathmal; AIR 1956 Cal 188, Lakshminarayan Ram Gopal and Son Vs. The Government of Hyderabad; AIR 1954 SC 364, Syed Abdulkhader Vs. Rami Reddy & Ors.; (1979) 2 SCC 601 and State of Madras Vs. Jayalakshmi Rice Mill Contractors Co.; AIR 1959 AP 352.
7. Per contra, Shri Prafull N. Bharat, learned Senior counsel for the respondent supports the impugned judgment and decree and submits that the learned trial Court minutely appreciated the oral and documentary evidence and rightly passed the judgment and decree in favour of the plaintiff/respondent. He further submits that the learned trial Court found that there is valid commercial transaction between the parties and after appreciation of oral and documentary evidence of both the parties, passed the impugned judgment in accordance with facts and circumstances of the case and contract between the parties. Therefore, the instant appeal is liable to be dismissed. To buttress his submission, he has placed reliance on the judgment of Hon’ble Supreme Court in the matter of Chairman, Life Insurance Corpn. and others Vs. Rajiv Kumar Bhasker; 2005 (6) SCC 188.
8. Heard counsel for parties and perused the material available on record.
9. It is an admitted position before the learned trial Court that the iron products worth about Rs. 3,50,98,615/- (Three Crore Fifty lacs ninety eight thousand six hundred and fifteen only) for the period from 02.07.2012 to 14.09.2012 and from 09.07.2012 to 23.11.2012 were supplied by Shri Picco Private M/s Transmetal to M/s Transmetal (defendant) at its premises from the plaintiff. It is also an admitted position in this case that the defendant company also paid to the plaintiff for all the remaining transactions except the disputed transaction. The plaintiff issued a notice to the defendant on 14.08.2013 by post, the receipt of which was sent by the defendant to the plaintiff on 14.08.2013. It is also not a disputed fact in this case that the name of the defendant company was R.S. Metals Limited with has been changed to M/s. ARS Energy Private Limited.
10. On the basis of pleadings of both the parties, the learned trial Court framed 7 issues and out of which, the relevant issues are as under:-
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11. Main objection of the appellant is that he never purchased products directly from the plaintiff and all these transactions were done through Picco Transmetal company and Picco Transmetal company is necessary party in this case. Therefore, the suit filed by the plaintiff deserves to be dismissed, but it is clear from record of the learned trial Court that the learned trial Court framed issue in this regard and issue No. 4 framed by learned trial Court is as under:-
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12. Learned trial Court found that as per Section 233 of Indian Contract Act, 1872, Picco Transmetal company is not a necessary party in this case and before and after the disputed bill, all other transactions were admitted by the defendant and also bill was paid by the defendant in previous transaction.
13. In the matter of Chairman, Life Insurance Corpn. and others Vs. Rajiv Kumar Bhasker; 2005 (6) SCC 188, Hon’ble Apex Court held in paras 25, 26, 27, 28, 36 and 40 as under:-
"25. Section 182 of the Contract Act, 1872 reads as under: "182. Agent' and 'principal' defined- An 'agent' is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the 'principal.”
26. The definition of "agent" and "principal" is clear. An agent would be a person employed to do any act for another, or to represent another in dealings with third parties and the person for whom such act is done or who is so represented is called the principal. It may not be obligatory on the part of the Corporation to engage an agent in terms of the provisions of the Act and the Rules and Regulations framed thereunder, but indisputably an agent can be appointed for other purposes. Once an agent is appointed, his authority may be express or implied in terms of Section 186 of the Contract Act.
27. For creating a contract of agency, in view of Section 185 of the Indian Contract Act, even passing of the consideration is not necessary. The consideration, however, so far as the employers are concerned as evidenced by the Scheme, was to project their better image before the employees.
28. It is well settled that for the purpose of determining the legal nature of the relationship between the alleged principal and agent, the use of or omission of the word “agent” is not conclusive. If the employee had reason to believe that his employer was acting on behalf of the Corporation, a contract of agency may be inferred.
36. A somewhat similar view was taken by the House of Lords in Branwhite v. Worcester Works Finance Ltd.; (1969)1 AC 552 in the following terms: (All ER p. 122 D-G)
"In the Garnac case; (1967) 3 WLR 143 Lord Pearson, with the concurrence of the House, used these words:
'The relationship of principal and agent can only be established by the consent of the principal and the agent. They will be held to have consented if they have agreed to what amounts in law to such relationship, even if they do not recognise it themselves and even if they have professed to disclaim it. The consent must, however, have been given by each of them, either expressly or by implication from their words and conduct.'
The significant words, for the present purpose, are 'if they have agreed to what amounts in law to such a relationship’. These I understand a pointing to the fact that, while agency must ultimately derive from consent, the consent need not necessarily be to the relationship of principal and agent itself (indeed the existence of it may be denied) but may be to a state of facts on which the law imposes the consequences which result from agency. It is consensual, not contractual. So interpreted, this formulation allows the establishment of an agency relationship in such cases as the present.”
40. Agency as is well settled, is a legal concept which is employed by the Court when it becomes necessary to explain and resolve the problems created by certain fact situations. In other words, when the existence of an agency relationship would help to decide an individual problem, and the facts permits a court to conclude that such a relationship existed at a material time, then whether or not any express or implied consent to the creation of an agency may have been given by one party to another, the Court is entitled to conclude that such relationship was in existence at the time, and for the purpose in question. [See Establishing Agency by GHL Fridman- 1968 (84) Law Qarterly Review 224 at p. 231.]”
14. In light of above, in the present case also, all other transactions were accepted by the defendant and payment was also done in this respect, thereofore, Picco Transmetal company is not a necessary party in this case. The learned trial Court also appreciated the provisions of Contract Act and decided this issue against the defendant. Therefore, the findings recorded by the learned trial Court are based on facts and circumstances of the case and also in accordance with provisions of Indian Contract Act. Thus, we do not find any illegality or irregularity in the said finding.
15. As regards other objection, the defendant objected that HD angle worth Rs. 13,68,271/- sold on 14.09.2012 was not supplied by the plaintiff to defendant company and the defendant company did not receive it either. As per invoice No. 972 dated 14.09.2012, the plaintiff supplied the said material to Shri Picco M/s Transmetal. The goods sent through the said invoice were rejected by the defendant company on the order of M/s Transmetal dated 26.11.2012 and all the goods of the cancelled order were sent to the plaintiff for return and the defendant company was assured of return of the goods. However, it is also clear from statements of the plaintiff witnesses and also the documents filed by the plaintiff that all orders were received by the plaintiff/company through Picco Transmetal company and the instant case has been filed for disputed invoice No. 972 dated 14.09.2012 amounting to Rs.13,68,271/- and this product was received by the Picco Transmetal company.
16. Defendant witness – N. Prabhu (N.A.W.-1) also admitted that their company made the payment to the plaintiff at the behest of Transmetal Company but product of disputed invoice was not received by the defendant/company and this product was returned by Transmetal company as per Ex. D/5 but in para 17, he admitted that, "This content is in vernacular language. Kindly email us at info@legitquest.com for this content."
17. Thus, it is clear that defendant admitted this transaction and also admitted documents (Ex.P/6 and P/7). Defendant witnesses explained that by mistake this entry was done and they wrote separate letter in this regard, however they did not file any letter showing as to how this entry was made by mistake. Plaintiff filed documents from Ex.P/1 to P/12 showing the transactions done between the parties. Defendant only denied this transaction on the basis of document (Ex.D/5). Ex. D/5 is invoice and and in the said invoice, it was noted in pen that’ “The material rejected and original documents received”. However, it is not clear from this document that as to who rejected this material and as to when all these products were sent back to plaintiff/company and defendant also did not file any receipt which shows that the plaintiff/company received rejected product or returned the product.
18. Learned trial Court also appreciated statement of both the witnesses and documents filed by both the parties and decided all issues in favour of the plaintiff and found that the plaintiff has successfully proved its case against the defendant that the product amounting to Rs. 13,68,271/- was supplied to the defendant and payment was not done by the defendant/company for the said product. Thus, the findings recorded by the learned trial Court are based on proper appreciation of oral and documentary evidence. We do not find any illegality and irregularity in the findings so recorded by the learned trial Court.
19. Learned counsel for the appellant also objected that in issue No.3, the learned trial Court wrongly awarded interest on higher side, therefore, it may be reduced to 6% or 9% per annum. Respondent strongly opposes the prayer of the appellant and states that this is commercial transaction and as per the agreement, the learned trial Court rightly decided rate of interest as 3% per month.
20. Learned trial Court found that as per Sales and Goods Tax, 1930, Section 61 of Sales and Goods Act, 1930, Section 73 of Indian Contract Act r/w 34 of CPC, these are commercial transactions and therefore, plaintiff is entitled to get interest @ 3% p.m. However, while maintaining the impugned judgment and decree of the learned trial Court awarding the original amount of Rs. 13,68,271/- with interest of Rs.17,99,276/- to the plaintiff/respondent, it is held that that the plaintiff is entitled for interest at the rate of 18% per annum in place of 3% per month on the original amount of Rs. 13,68,271/- from the date of filing of the suit till realization, which shall be payable by the defendant within a period of 2 months from today.
21. The impugned judgment and decree stand modified to the above extent only.
22. Let a decree be drawn up accordingly.
