Andhra Pradesh High Court
LAKSHMAIAH
Andhra Pradesh State Electricity Board - Appellant
Versus
firm of Patel and Patel a registered partnership firm, Hyderabad - Respondent
Decided On : 04/23/1976
ELECTRICITY (SUPPLY) ACT, 1948 - SECTION 12, 82 - LIMITATION ACT, 1963 - SECTION 21 - CONTRACT - ESSENCE OF CONTRACT - DELAY IN DELIVERY - CANCELLATION OF ORDER - ACCEPTANCE OF GOODS - SUIT AGAINST BOARD - MAINTAINABILITY - NOTICE UNDER SECTION 80, C. P. C. - NECESSITY.
Fact of the Case:
Plaintiff supplied flexible copper earthing bonds to the defendant Electricity Board after the stipulated time. The Board cancelled the order and refused to pay for the goods. The plaintiff filed a suit for recovery of the cost of the goods.
Finding of the Court:
1. Time was not the essence of the contract, as evidenced by the Board's previous conduct in accepting delayed deliveries and imposing penalties instead of cancelling orders. 2. The Board accepted the goods by receiving them without objection and entering them in the stores receipt book. 3. The Board's cancellation of the order was not valid as it was not entitled to cancel the order under the terms of the contract. 4. The suit was maintainable against the Board as it was the real defendant, and the amendment of the cause title to reflect this did not constitute the addition or substitution of a new party. 5. The suit was not barred by limitation as it was filed within three years of the Board's letter acknowledging the plaintiff's claim.
Issues: 1. Whether time was the essence of the contract. 2. Whether the Board accepted the goods. 3. Whether the Board was entitled to cancel the order. 4. Whether the suit was maintainable against the Board. 5. Whether the suit was barred by limitation.
Ratio Decidendi: 1. The intention of the parties, as evidenced by their conduct, was that time was not the essence of the contract. 2. The Board's acceptance of the goods without objection constituted acceptance of the goods under the contract. 3. The Board was not entitled to cancel the order as it had not exercised its option to impose a penalty instead of cancelling the order. 4. The suit was maintainable against the Board as it was the real defendant, and the amendment of the cause title to reflect this did not constitute the addition or substitution of a new party. 5. The suit was not barred by limitation as it was filed within three years of the Board's letter acknowledging the plaintiff's claim.
Final Decision: The appeal was dismissed with costs. The decree was modified to be against the Board alone, and not against the defendants jointly and severally.
This appeal by the defendants is directed against the decree and Judgment made in O. S. No. 317 of 1969 on the file of the Court of the Fifth Additional Judge, City Civil Court, Hyderabad dated 28th November 1972.
2. The suit giving rise to the above appeal was filed seeking the recovery of Rs. 9,850 being the costs of material supplied by the plaintiff to the defendant with interest at 9% P. A. and for costs of the suit.
3. The case of the plaintiff is that the superintending Engineer (Operation) City Circle, A. P. State Electricity Board Hyderabad called for quotations from the plaintiff for supply of flexible copper earthing bonds and the plaintiff gave a quotation No. OP/CC/15/66, dated 13-12-1966, for the supply of the material from their ready stock at Calcutta stating therein that the validity of the quotation was for thirty days. The superintending Engineer placed an order for 100 kgs. Of Copper Earthing Bond at the rate of Rs. 188-25 Ps. Per K. G. through local purchase order dated 5-5-1967. The goods were delivered by the plaintiff to the supervisor in the Office of the Assistant Engineer on 25-9-1967, and a bill No. 266 dated 25-9-1967, for Rupees 9,825/- was forwarded by the plaintiff. That amount has not been paid in spite of reminders on 15-11-1967 and 12-1-1968. On 9-11-1967 a letter was received by the plaintiff from the superintending Engineer, the third defendant, to the effect that the order was cancelled as the goods have not been supplied before 30th June, 1967. The plaintiff gave a reply to that on 15-11-1967 drawing attention to clauses Nos. 9 and 10 of the purchase Order according to which in the case of delay, the Board can impose penalty but cannot cancel the order. The material which was to be supplied before 30-6-1967 was supplied on 25-9-1967 and the Electricity Board and the defendants accepted the goods without any objection. Therefore, the 3rd defendant has no right to cancel the order. A legal notice dated 2-12-1968, was sent to the defendants for which the 3rd defendant sent a reply dated 9-2-1969 stating that the plaintiff can take away the goods supplied. The allegations made in that reply notice are wrong and incorrect. The delay in delivery of the goods was due to the delay caused in procurement of the material from the Principals at Calcutta as the sample approved was an imported one and these facts were brought to the notice of the defendants at the time of supply of the material. The goods were accepted by the defendants unconditionally. The defendants have placed many other orders with the plaintiff for other materials and accepted delivery in spite of delay and payments were effected without any objections. Clause 9 (b) of the purchase order do not empower the Electricity Board to cancel the order. Therefore, the cancellation of the order and the non-payment of the bill are wrong.
4. In the written statement filed by the defendants it is stated that the A. P. State Electricity Board is a statutory corporation constituted under Section 5 of the Electricity Supply Act 1948. The Superintending Engineer (Operation) City Circle called for quotation from eight companies including the plaintiff and placed a local purchase order dated 5-5-1967, with the plaintiff for the supply of 100 Kgs. Of Flexible Copper Earthing Bonds at the rate of Rs. 188-25 Ps. Per Kg. It was expressly stipulated in that order that the goods should be supplied before 30-6-1967 but the plaintiff sent the goods on 26-9-1967. The goods were provisionally received by the Supervisor, of the stores pending decision of the competent authority. The purchase order placed against the plaintiff was cancelled by the Superintending Engineer (Operation) City circle, by letter dated 9-11-1967 and the plaintiff was requested to take back the goods, through letters dated 16-11-1967, 2-2-1968 and 2-5-1968. Instead of taking back the goods the plaintiff filed this suit. The goods cannot be said to have been accepted by the Boa
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