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2014 Supreme(AP) 1510
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
D.B. Bhosale and M. Seetharama Murti, JJ.
N.W. Export Ltd. - Appellants
Vs.
State Trading Corporation India Ltd. – Respondent
CCCA No. 63 of 2004
Decided On : 18.12.2014
For The Appellant : M. Gunneswara Rao
For The Respondents: Deepak Bhattacharjee
Headnote:
Civil Law – Civil Suit – Civil Procedure Code, 1908 – Suit for recovery of money – Whether the plaintiff can supply tapioca dried chips Thereupon, by a fax message, the plaintiff had contacted the defendant and made enquiries with the defendant as to whether the defendant could supply the goods. By a reply fax message dated defendant had agreed to supply the Indian Tapioca Dried Chips of semi peeled in a quantity of 7000 Metric Tonnes packed in bulk at the contracted price to the foreign buyer on C & F (Clearing and Forwarding) Free out 1 safe Berth Italy Basis. In the said message, the defendant had also stated that the terms, other than those stated in the fax message, will be as per Grain and Feed Trade Association, London (hereinafter referred to as the GAFTA) Contract Nos. 100 and 119/125 including arbitration clause. In view of the said offer made by the defendant, the plaintiff, in turn, had sent a fax message 5 to the foreign buyer confirming the supply and it was also mentioned that the defendant is the supplier –Held, Under Point Nos. 1 and 2, this Court held that the civil Court is having jurisdiction to entertain the suit and that there is a concluded contract. Under point No. 3, this Court had further held that the defendants plea that the contract is frustrated is untenable. The defendant having entered into a contract to supply 7000 MT of Indian Tapioca dried chips at the agreed price had failed to fulfill its obligations under the contract and having defaulted raised unsustainable contentions that there is no concluded contract and that the contract, if any, is frustrated. The further contentions that the correspondence is not voluntarily made are also held untenable. The defendant could not prove by adducing necessary evidence any of its defences. On account of the breach of the contract committed by the defendant, the plaintiff, in turn, could not fulfill its contractual obligations under the contract between the plaintiff and the foreign buyer. Therefore, the foreign buyer after exchange of correspondence treated the plaintiff as a defaulter and referred the parties to arbitration having appointed an Arbitrator and made a tall claim of damages of USD 168,000,000. Under Exhibit A24, the letter, the plaintiff communicated to the defendant the foreign buyers claim and further informed the defendant that ultimately, any penalties, damages or other liabilities that may be imposed finally by the buyers on the plaintiff will be passed on to the defendant. The plaintiff having put the defendant on notice had appointed solicitors to represent the plaintiff before the Arbitrator.. After receiving its letter dated 31.12.1996, the defendant with a view to defeat the claim and as a counter-blast got issued a notice dated 10.1.1997 through their lawyers at Mumbai to the plaintiff with all false allegations and denying their liability – Appeal shall stand closed.
M. Seetharama Murti, J.
1. This is a first appeal suit by the unsuccessful defendant assailing the judgment dated 20.2.2004 of the learned VII Additional Senior Civil Judge, City Civil Court, Hyderabad passed in OS No. 1657 of 1997 filed for recovery of money. Since this Court of first appeal is the last Court of fact, it is necessary to refer to the pleadings of the parties in the first instance.
2. The plaint averments, in brief, are as under: 'The plaintiff-the State Trading Corporation of India Limited is a Government company. The plaintiff had received an inquiry from Louis-Drafus-Italia SPA via Ponte Masiuo 41, 48100 Revenna, Italy ('the foreign buyer', for brevity) whether the plaintiff can supply tapioca dried chips ('the goods', for brevity). Thereupon, by a fax message, the plaintiff had contacted the defendant on 20.2.1995 and made enquiries with the defendant as to whether the defendant could supply the goods. By a reply fax message dated 23.2.1995, the defendant had agreed to supply the Indian Tapioca Dried Chips of semi peeled in a quantity of 7000 Metric Tonnes packed in bulk at the contracted price to the foreign buyer on C & F (Clearing and Forwarding) Free out 1 safe Berth Revenna Italy Basis. In the said message, the defendant had also stated that the terms, other than those stated in the fax message, will be as per Grain and Feed Trade Association, London (hereinafter referred to as 'the GAFTA') Contract Nos. 100 and 119/125 including arbitration clause. In view of the said offer made by the defendant, the plaintiff, in turn, had sent a fax message on 23.2.1995 to the foreign buyer confirming the supply and it was also mentioned that the defendant is the supplier. Accordingly, the plaintiff had entered into a contract with the foreign buyer (the Italian Company) on 23.2.1995. Simultaneously, on 24.2.1995, the plaintiff had informed the defendant the confirmation that the foreign buyer had placed the order as per the details given in the said letter. However, by a fax message dated 1.3.1995, the defendant had requested for certain terms regarding presentation of documents. The plaintiff had sent a reply fax message on 2.3.1995 to the defendant informing that as per the request the defendant can delete the words 'ascertained by scale' and insert the words 'Ascertained by Scale/Weigh Bridge'. The plaintiff had further informed the defendant that in respect of the stipulation in the reimbursement clause that it should be made by the issuing bank within three working days, the plaintiff was informed by the foreign buyer that the letter of credit will be governed by the provisions of UCP 500 which embodies the time limit within which payment has to be made by the opening bank. The defendant was further informed in the same message that as per the UCP 500, the reimbursing bank will dispose of the documents within seven banking days following the date of the receipt of the documents. The plaintiff had further promised the defendant that the matter would be followed by its office at Frankfurt once the documents are sent by the negotiating bank to the opening bank, so that the reimbursement is effected immediately on presentation of the documents. The plaintiff had requested the defendant not to insist upon insertion of a definite time limit for reimbursement and had requested the defendant to confirm its consent for the same, so that the foreign buyer can be informed accordingly. By a letter dated 9.3.1995, the plaintiff had informed the defendant that the foreign buyer had opened the letter of credit on 6.3.1995 for USD 10,85,000 and that the original credit will be assigned to the defendant in due course. The defendant was informed by the said letter that in the mean while, back-to-back contract would be sent for its signature and return along with corporate guarantee by the defendant as per the discussions held. With the covering letter dated 14.3.1995, the back-to-back contract in triplicate was sent to t
