JUDGMENT :

The appellant-defendant has preferred the First Appeal against judgment and decree passed in Money Suit No.51 of 1998 whereby the suit has been decreed for a sum of Rs.32,78,664/- pendente lite and future interest at the rate of 18% per annum.

2. The plaintiffs’ case is that it is a partnership firm in transportation business, was engaged by defendant Company for transportation of Hard Coke from F.C.I., Sindri to Jamshedpur by Work Order No. RMPO/11/93/730956 dated 12.11.1993 for transportation of 6000 metric ton of Hard Coke per month at the rate of 232 per ton for the period of one year commencing from 01.10.1993 to 30.09.1994.

3. The terms and conditions of the contract inter alia provided as under:-

i. Terms of payment-95% payment to be released by the General Manager (Finance & Account), Jamshedpur against the bills submitted on monthly basis and balance 5% to be released after making adjustment of quantity and verification of Challans etc.

ii. Each truck loaded with Hard Coke, would be covered with double tarpaulin and sealed at the transporter’s cost and would be sampled individually at loading and unloading point by a public analyst.

iii. Penalty charge at the rate of Rs.4000/-per metric ton to be imposed in the event of any variation on account of quality and quantity of Hard Coke.

4. It is the case of the plaintiffs that the said consignment was transported within the contracted period but the defendant company deducted a total amount of Rs.25,41,600.00 during the period from August, 1994 to February, 1995. On representation, a sum of Rs.6,35,400.00 has been refunded on 19.12.1995 keeping a balance of Rs.19,06,200.00.

5. The case of the appellant-defendant is that as per the purchase order dated 12.11.1993, the penal charges were fixed at Rs.4000/-per metric ton. The break-up of this penalty amount was Rs.3000/-as the cost of coke and Rs.1000/-as penalty towards difference in quality of the coke received at the delivery point and in accordance with the report of the analyst. Out of the total deduction of Rs.25,41,600/- calculated at the rate of Rs.4000/-per metric ton, Rs.19,06,200/-was price of the coke found deficit in quantity at the delivery point at the rate of Rs.3000/-per metric ton. The penal charge of Rs.6,35,400/-regarding the deficiency, which was earlier imposed, has now been released.

6. On the basis of the pleadings of the parties, the following main issues were framed:-

v. Whether there is any breach of contract?

vi. Whether the defendant is entitled to deduct the amount from the bills for short supply to the extent of Rs.19,06,200/- and whether it is refundable to defendant?

vii. Whether the plaintiffs are entitled to the decree sought for?

viii. Is it fact that every truck was sampled individually by public analyst M/s. S.G.S. India Ltd.?

7. The learned Trial Court recorded a finding in favour of the plaintiffs for a money decree of Rs.19,06,200/-with interest at the rate of 18% per annum from 19.12.1995 till the institution of the suit.

8. The Trial Court held that in terms and condition of contract (Exhibits 1 & 2) in the event of any complaint regarding quantity or quality, it was to be made known to the plaintiffs in respect of each truck and within 30 days of the receipt of consignment, payment was to be made after adjustment of penalty, if any. As per para 20 of the written statement, the deductions were made after 30 days from receipt of consignment. Since the payment had to be made by the defendant company within 30 days, therefore, the Clause providing for imposition of penalty, was rendered redundant. The Trial Court also noted that each truck was not sampled individually. With regard to different letters (Exhibit ‘B’ series) regarding deficiency of quality and quantity, it has been noted by the Trial Court that these were addressed to S.G.S. India Ltd., not to the plaintiffs. The Trial Court concluded the defendant had failed to prove that any information with respect to shortage of material