The main legal point established in the judgment is the determination of a binding contract and the entitlement of the plaintiff to compensation for the 18 godowns. The judgment emphasizes the importance of the agreement dated 19th March, 1977, the conduct of the parties, and the obligations under the agreement in reaching the decision.

JUDGMENT :

Soumen Sen, J.

1. The appellant is aggrieved by a decree for a sum little over 18.50 lakhs directed to be paid towards godown rents for 18 months.

2. Shorn of details, in or about October, 1976, the defendant nos. 1, 2 and 3 formulated a scheme to increase their hired storage capacity of Food Corporation of India (hereinafter referred to as “FCI”) by offering private parties guaranteed occupation of such godowns for three to five years, implying a mechanism to repay the loans that may be advanced by banks to private entrepreneurs availing the scheme out of the rent receivable. In order to achieve the purpose, the said Scheme provided for constructing of godowns for storing foodgrains and other food stuff by FCI, the nationalized banks and the defendant no.3 would meet the financial requirement of private parties. The commitment of the banks in the shape of financial assistance would be up to 75% of the money required, the balance 25% would be borne by the owners of the godowns and the defendant no.3 would give refinance assistance to banks to the extent of 80% of the loans given. The plaintiff availed of the scheme and constructed 20 godowns for the defendant no.1 at Burdwan. According to the plaintiff, the defendant no.1 had agreed to take on rent 20 godowns to be constructed by the plaintiff for an agreed period at an agreed rate. The plaintiff constructed the godowns in accordance with the specifications of the defendant no.1. The plaintiff alleged that although the plaintiff had constructed 20 godowns and offered all the godowns to the defendant no.1, the said defendant, however, took on rent only two godowns and refused to take the remaining 18 godowns. The plaintiff thereafter approached this Court and obtained leave to let out those 18 godowns to third parties. The 18 godowns were thereafter let out to third parties on and from November 20, 1980. The plaintiff accordingly has prayed for compensation on account of rent for a period of 19 months at the agreed rate of 40 paise per sq. ft. for the remaining 18 godowns along with a claim for interest of the bank loans from 6th April, 1979 to 20th November, 1980.

3. The defendant no.1 entered appearance in the suit and filed its written statement. The defendant no.1 alleged that the construction of the godowns was not as per specifications. Moreover the construction of the godowns was not completed within the stipulated time. There were defects in the godowns constructed which the plaintiff did not cure and as such the defendant no.1 is not liable to pay any rent or compensation.

4. It appears from the impugned judgment that though the plaintiff claimed various reliefs, it limited its claim at the hearing of the suit to two claims, namely the claim for compensation on account of unpaid rent for the period between 6th April, 1979 and 20th November, 1980 for about 19 months at the agreed rate of 40 paise per sq. ft. for an aggregate area of 238560 sq. ft. and a direction upon the learned Advocate on record for the defendant no. 1 holding the sums receivable by the plaintiff as rent to be made over to the plaintiff.

5. On the basis of the pleadings and the evidence, both oral and documentary, the learned Single Judge has arrived at a finding that the plaintiff would be entitled to a sum of Rs.18,59,515.20p being the rent liable to be paid for 18 months for the period from May, 1979 till October 1980. The defendant was directed to pay the said sum within one month of the date of decree. In default, the plaintiff would be entitled to interest at the rate of 6% per annum on the said sum of Rs.18,59,515.20p on and from 1st November, 1980 till realization.

6. In so far as the two godowns are concerned, it was held that the plaintiff would be entitled to the rent deposited in respect of two godowns of which the defendant no.1 had possession. The plaintiff would be entitled to the proceeds of the fixed deposits made by the Advocate-on-Record for the defendant no.1 together with all