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IN THE HIGH COURT OF CALCUTTA
Manjula Chellur and Banerjee, JJ.
The Associated Cement Companies Ltd. - Appellant
Versus
G.S. Fertilisers Pvt. Ltd. - Respondent
APD No. 110 of 2014, C.S. No. 311 of 1998
Decided On : 22-9-2014
CONTRACT - SUPPLY OF CEMENT - PRICE VARIATION - ADMISSIONS IN EVIDENCE - SECTION 58 OF THE EVIDENCE ACT - INTERPRETATION - APPLICATION TO CASE.
Fact of the Case:
A dispute arose between the appellant (defendant) and the respondent (plaintiff) over the supply of cement. The respondent claimed that the price agreed upon for the supply of cement was Rs. 1900 per metric tonne, while the appellant claimed that the price was valid for two months and could be increased thereafter. The respondent placed orders in the open market for the balance quantity of cement and claimed the difference in price between the contract price and the price at which the balance supply of material was purchased. The respondent also claimed an excess amount of Rs. 2,03,700 and unloading charges of Rs. 8,655.
Finding of the Court:
The court held that the contract between the parties was concluded by the respondent's acceptance of the appellant's offer at Annexure B, which specified a price of Rs. 1900 per metric tonne during the pendency of the order. The court found that the appellant did not seek any clarification or refuse the offer, and that the subsequent correspondence between the parties indicated that the price was to remain at Rs. 1900 per metric tonne. The court also held that the appellant was not justified in allowing the respondent's claim for the excess amount of Rs. 2,03,700 and the unloading charges of Rs. 8,655, as these claims were not supported by sufficient evidence.
Issues: 1. Whether the price agreed upon for the supply of cement was Rs. 1900 per metric tonne or whether it could be increased after two months. 2. Whether the respondent was entitled to claim the difference in price between the contract price and the price at which the balance supply of material was purchased in the open market. 3. Whether the respondent was entitled to claim an excess amount of Rs. 2,03,700. 4. Whether the respondent was entitled to claim unloading charges of Rs. 8,655.
Ratio Decidendi: 1. The court held that the contract between the parties was concluded by the respondent's acceptance of the appellant's offer at Annexure B, which specified a price of Rs. 1900 per metric tonne during the pendency of the order. The court found that the appellant did not seek any clarification or refuse the offer, and that the subsequent correspondence between the parties indicated that the price was to remain at Rs. 1900 per metric tonne. 2. The court held that the respondent was entitled to claim the difference in price between the contract price and the price at which the balance supply of material was purchased in the open market, as the appellant was under an obligation to supply the entire quantity of 1500 metric tonne at Rs. 1900 per metric tonne. 3. The court held that the appellant was not justified in allowing the respondent's claim for the excess amount of Rs. 2,03,700, as this claim was not supported by sufficient evidence. 4. The court held that the appellant was not justified in allowing the respondent's claim for unloading charges of Rs. 8,655, as this claim was not supported by sufficient evidence.
Final Decision: The appeal was allowed in part. The claim of Rs. 7,38,400 was affirmed to be paid with interest at the rate as awarded by the learned Judge. The balance claim of Rs. 2 lakh and odd and unloading charges of Rs. 8 thousand and odd were rejected.
This appeal is directed against the judgment and order dated 7.2.2014 wherein the appellant-defendant was directed to pay certain amounts claimed by the respondent-plaintiff. The facts that lead to the filing of the suit are as under.
The respondent-plaintiff for setting up a plant at Orgram in Burdwan, West Bengal required large quantities of cement for the construction of the plant. The appellant-defendant, a manufacturer of cement, negotiated with the respondent plaintiff for supply of cement and the correspondence between the parties indicate on what terms and conditions the supply of cement was agreed.
2. According to the respondent-plaintiff, till the completion of the supply of cement under the order, the price was agreed to be Rs. 1900/- (Rupees one thousand nine hundred) per metric tonne but according to the defendant, it was the price agreed for the supplies made till the end of January, 1998 provided, the orders were placed within November, 1997. According to the respondent plaintiff, after May, 1998 no cement was supplied by the defendant and on the other hand they demanded Rs. 2600/- (Rupees two thousand six hundred) per metric tonne which was outside the terms of concluded contract between them. The plaintiff further claimed damages, as the construction of the plant was under progress and they had to place orders for supply of cement in the open market and they were made to pay Rs. 2600/- (Rupees two thousand six hundred) per metric tonne. Therefore, they are entitled for the amount, the difference in the price of cement purchased from the market and the price at which the cement was to be supplied by the appellant-defendant. They have also claimed another sum of Rs. 2,03,700/- (Rupees two lakh three thousand seven hundred) as the amount lying in deposit with the appellant-defendant for which no supply of cement was made and the amount is in excess when compared to the quantity of supply of cement. They have also claimed Rs. 8,655/-(Rupees eight thousand six hundred fifty-five) on account of unloading charges at the time when the contract was in force between the parties.
3. The plaintiff has led oral evidence but the appellant-defendant did not examine any one on their behalf. In appraisal of material, the learned Judge opined that the plaintiff was entitled for the claims made in the suit as per the oral and documentary evidence brought on record. Further, 12 (twelve) per cent interest was awarded on and from the respective dates from which the plaintiff was found to be entitled to the respective amounts from the appellant-defendant till realisation.
4. Aggrieved by the same, the appellant-defendant is before us. Mr. Dhruba Ghosh, learned Counsel arguing for the appellant, mainly relies upon the admissions said to have been made by the witness for the plaintiff in the evidence during the cross-examination. He contends that those admissions would clearly indicate terms of the contract. Over and above, the correspondence, the custom in the cement trading was that the price agreed between the parties would be valid for two months and, therefore, there is no justification in the claim of the plaintiff. He further contended that as the price did not vary subsequent to the conclusion of the contract till May, 1998, there was no occasion for the defendant to address any letter till 8.5.1998 indicating that there was increase in the price and they would supply the material only at Rs. 2600/- (Rupees two thousand six hundred) per metric tonne. He also took us through the contents of a sheet of paper at page 174 of the paper book contending that this sheet of paper said to be the accounts pertaining to the supply of cement and the mode of payments and the quantum of payments made by the defendant are not substantiated by any ledger or book of accounts in respect of the business contracts. Therefore, reliance cannot be placed on this piece of paper. Similarly, he contended that they should not be made to pay Rs. 8 (
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