In the absence of a formal contract, compensation for the supply of goods can be determined based on the provisions of Section 70 of the Indian Contract Act, 1872.

( 1 ) SHRI Kishan Dass supplied coal to the Municipal Corporation of Delhi for use by Delhi Electric Supply Undertaking ofrs. 16,00,000. 00, out of which Rs. 10,00,000. 00 were paid and the supplier filed asuit for recovery of the balance amount and interest thereon.

( 2 ) AT the outset it may be noted that in order to have a legal contractwith the Municipal Corporation of Delhi there has to be a formal contract, asrequired by Section 203 of the Delhi Municipal Corporation Act, 1957 read withthe rules and since in this case without execution of any formal contract, on thebasis of request made by the Municipal Corporation of Delhi, supplies of coalwere made, the case has to be decided keeping in view the provisions of Section 70 of the Indian Contract Act, 1872 to compensate the supplier for thesupply of coal to the Municipal Corporation of Delhi. There is no dispute inthis behalf between the parties.

( 3 ) AFTER trial, the learned Single Judge fixed the price of 12597. 5 metric tonnes of coal regarding which no analysis was conducted by the Municipalcorporation of Delhi on the basis of the price contained in the written agreement (not formal agreement) between the parties, Ext. P9 at pages 100 and 101of the paper book.

( 4 ) FOR the coal of the most inferior quality, called mineral not vendable as coal (for short "mnvc"), because the ash contents were beyond 35 percent, the learned Single Judge allowed compensation at the rate of Re. l. 00 permetric tonne.

18364. 7 metric tonnes of coal was analysed and on analysis it wasfound of two categories : (i) ash upto 28 per cent, (ii) ash from 29 per cent to 35 per cent. For these qualities of coal, price was allowed after making deductionsas per the agreement annexure P9. In the result, the learned Single Judge passed a decree for Rs. . 2,53,453,03, the price of the coalandrs. 96,701. 00onaccount of interest at the rate of 12 per cent with proportionate costs byjudgment and decree dated 1/02/1978. R. F. A. (OS) II of 1978 is bythe plaintiff and R. F. A. (OS) 16 of 1978 is by the defendants. Since crossappeals arise out of the one suit and same judgment and decree, they are beingdisposed of by common order.

( 5 ) IN the appeal of the plaintiff, the controversy relates to payment ofproper price, for 18,364. 7 metric tonnes of coal. which was duly analysed andfor "mnvc" qualitify of coal and interest as well.

( 6 ) ADVERTING to the appeal of the defendants, the ground raised is thaton the non-analysed coal, the learned Single Judge has wrongly allowed theagreed rate. There is also a reference of the application of the defendantsunder Section 151 of the Code of Civil Procedure for permission to place furthertest reports relating to 8000 metric tonnes of coal.

( 7 ) ADVERTING to the plaintiff s appeal, we are of the view that "mnvc"quality of coal, in which ash contents were more than 35 per cent, there is noscope for interference. The plaintiff has not led any reliable evidence as to whatis the market rate of "mnvc" coal. Moreover, according to the material onrecord and as found by the learned Single Judge, such quality of coal has hardlyany value and, therefore, we maintain the judgment and decree of the learnedsingle Judge, with regard to the "mnvc" coal.

( 8 ) COMING to the analysed coal, weighing 18364. 7 metric tonnes,according to the analysis conducted by the defendants, it is of two qualitiesone with ash contents upto 28 per cent and the other with ash contents from29 per cent to 35 per cent. According to the statement of Mr. Narendraahiuwalia, D2w3 read with agreement of the defendant with Bharat Cookingcoal Limited, copy of which has been on the record of RFA (OS) 11 of 1978along with C. M. 1372 of 1991, for permission to produce it by way of additional evidence, we are of the opinion that coal with ash contents upto 28 percent is considered coal of grade III-A and with ash contents from 29 per centto 35 per cent, the coal is graded as Ill-B.

( 9 ) BEFOR