1983 Supreme(HP) 28

High Court Of Himachal Pradesh
V.P.GUPTA
HIMACHAL FRUIT GROWERS CO-OPERATIVE MARKETING AND PROCESSING SOCIETY LTD., SIMLA - Appellant
Versus
UPPER INDIA FOOD PRESERVERS AND PROCESSORS (P.) LTD., PARWANU - Respondent
Civil Suit No. 53 of 1980
Decided On : 07/06/1983

A counterclaim filed by a defendant under Order VIII, Rule 6A of the Code of Civil Procedure is not a separate suit for the purposes of the Code, although it has to be treated as a cross-suit and a plaint for the purposes of procedure only.

Headnote:

CONTRACT - Breach of contract - Liability for damages - Counterclaim - Maintainability - Notice under Section 76 of the Himachal Pradesh Co-operative Societies Act, 1969.

Fact of the Case:

Plaintiff, a registered society, entered into a contract with Defendant No. 2 for storage of apple boxes in Defendant No. 2's cold storage. Defendant No. 1 claimed to be an owner/agent of Defendant No. 2 and started operating the business with the Plaintiff. Plaintiff paid storage charges to both defendants. In July 1980, 4509 apple boxes of the Plaintiff were lying in the cold storage with Defendant No. 2. Defendant No. 2 did not deliver these boxes to the Plaintiff and committed a breach of contract. Plaintiff suffered losses due to the acts of the defendants. Plaintiff filed a suit for recovery of Rs.51.550. Defendants filed a written statement and counterclaimed for recovery of Rs. 78,007-98, alleging that the apple boxes were to be stored at a temperature between 300 to 320. They had been storing the apple boxes from 4th Sept., 1979 to 15th July, 1980, by which time 4509 apple boxes were left with the defendants for storage. Plaintiff did not take delivery of these apple boxes after 15th July, 1980 and also did not pay any hire charges. Defendants had to issue notice to the Plaintiff calling upon the Plaintiff to lift the stocks. Defendants repeatedly demanded their payment for storage of apple-boxes, therefore, the Plaintiff issued a post dated cheque for Rs.10,000 on 15th July, 1980, as part payment of rental charges. Plaintiff refused to lift the apple boxes and pay the storage charges. As a last report the defendants had to auction the apple boxes for which they gave advertisements in different newspapers and also by circulation of handbills. The auction was held on 1st March, 1981, and the apples were sold for Rs. 22,545. Defendants suffered losses and the total claim of the defendants on account of rental charges after adjusting the amount Received by them in auction is Rupees 78,007-98.

Finding of the Court:

1. The terms and conditions of the contract between the parties were as per Exhibits P-2 and P-3. Plaintiff was to store the apple boxes with the defendants and take delivery of the same after paying rental charges. 2. Plaintiff was not ready and willing to pay the rental charges of the apple boxes stored with the defendants. Plaintiff committed a breach of the terms of the contract and was liable to compensate the defendants for their losses. 3. Defendants were justified in not allowing the Plaintiff to lift the apple stocks as Plaintiff failed to pay the rental charges. 4. Plaintiff was not entitled to any damages or interest as claimed. 5. Defendants were entitled to auction the apple boxes in accordance with the settled terms and conditions mentioned in Exhibit P-3. 6. No financial loss was caused to the Plaintiff due to the wrongful acts of the defendants or breach of any terms of the contract by the defendants. 7. Counterclaim of the defendants was maintainable as it was not a separate suit but only the procedure of a suit was to be followed for the decision of a counterclaim. 8. No notice under Section 76 of the Himachal Pradesh Co-operative Societies Act, 1969 was required to be served in the present case. 9. Defendants were entitled to claim Rs. 64,265-38 from the Plaintiff, by way of counterclaim.

Issues: 1. What were the terms and the conditions of the contract entered into between the parties? 2. Are defendants liable for breach of contract or for wrongful acts thereby causing business/financial loss to the plaintiff? If so, to what extent? 3. If issue No. 2 is proved, are defendants liable for further damages/interest to the plaintiff? If so, to what extent? 4. Whether defendants claim in the counter-claim is not maintainable for want of legal notice to the plaintiff and non-production of books of accounts, etc., as alleged in the preliminary objection by the plaintiff? 5. Whether the defendants are entitled to claim any amount from the plaintiff in the counter-claim made by them? If so, to what extent?

Ratio Decidendi: 1. A counterclaim by a defendant can be filed under Order VIII, Rule 6A of the Code of Civil Procedure, which has the effect of a cross-suit but only one final judgment is to be pronounced in the suit on the original claim and the counterclaim of the defendant. 2. A counterclaim is to be treated as a plaint and governed by the rules applicable to plaints, but it is not a separate suit for the purposes of the Code of Civil Procedure. 3. The purpose of notice under Section 76 of the Himachal Pradesh Co-operative Societies Act, 1969 is to ensure that the party concerned has full knowledge about the cause and the disputes between the parties. However, in a case where a suit is filed against the defendant, the disputes between the parties are already known to the plaintiff, and therefore, the giving of a notice loses its significance. 4. The defendant cannot be precluded from filing a counterclaim simply for the reason that a notice as required under Section 76 of the Act has not been issued, as this would indirectly defeat the defendant's claim and deprive the defendant of the opportunity to file a counterclaim. 5. In the present case, the counterclaim of the defendants was maintainable as it was not a separate suit, although it had to be treated as a cross-suit and a plaint for the purposes of procedure only.

Final Decision: Plaintiff's suit was dismissed and the counterclaim of the defendants for recovery of Rs.64,265-38 was decreed against the Plaintiff.