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1963 Supreme(Ori) 15

HIGH COURT OF ORISSA
R. L. Narasimham, C. J. And S. Barman, J.
TATA IRON AND STEEL CO. LTD. - Appellant
Versus
R. N. GUPTA - Respondent
F. A.  66  Of  1960
Decided On : MARCH 13, 1963

Advocates Appeared:
B.K.PAL, K.N.SHARMA, R.C.MISRA, S.C.MOHAPATRA

A party cannot claim set-off in a suit where the cause of action is wrongful deduction from bills.

Headnote:

CONTRACT - SUPPLY OF RICE - REJECTION OF STOCK - DEDUCTION FROM BILLS - SET-OFF - LIMITATION - GUNNY BAGS.

Fact of the Case:

Plaintiff, a rice supplying contractor, sued the defendant for recovery of Rs. 36,854/3/- consisting of four several sums, namely Rs. 10,322/8/- as loss alleged to have been suffered by the plaintiff as cost incurred in re-sale, at a loss of certain bags of rice after alleged wrongful rejection of the same by the defendant, Rs. 13,566/13/- and Rs. 11,217/6/-both sums (aggregating Rs. 24,784/3/-) for alleged wrongful deduction from the plaintiff's bills and Rs. 1,747/8/-as price of gunny bags payable by the defendant under the terms of the contract.

Finding of the Court:

1. The defendant was justified in rejecting the stock supplied by the plaintiff as it was not according to sample. 2. The defendant was justified in deducting from the plaintiff's bill without claiming set-off as the cause of action on which the plaintiff filed the suit is wrongful deduction from the bills. 3. The plaintiff's claim for the said sum of Rs. 10,322/8/- was barred by limitation. 4. The plaintiff is entitled to the said sum of Rs. 951/2/wrongly deducted for driage on non-supplied quantity of rice and for the sum of Rs. 1747/8/- due on account of gunny bags aggregating Rs. 2698/10a.

Issues: 1. Whether the rejection of the stock by the defendant was justified? 2. Whether the defendant was justified in deducting from the plaintiff's bill without claiming set-off? 3. Whether the plaintiff's claim for the said sum of Rs. 10,322/8/- was barred by limitation? 4. Whether the plaintiff is entitled to the said sum of Rs. 951/2/wrongly deducted for driage on non-supplied quantity of rice and for the sum of Rs. 1747/8/- due on account of gunny bags aggregating Rs. 2698/10a?

Ratio Decidendi: 1. The defendant was justified in rejecting the stock supplied by the plaintiff as it was not according to sample as per the terms of the contract. 2. The defendant was justified in deducting from the plaintiff's bill without claiming set-off as the cause of action on which the plaintiff filed the suit is wrongful deduction from the bills. 3. The plaintiff's claim for the said sum of Rs. 10,322/8/- was barred by limitation as the suit was filed after three years from the date of rejection of the rice. 4. The plaintiff is entitled to the said sum of Rs. 951/2/wrongly deducted for driage on non-supplied quantity of rice and for the sum of Rs. 1747/8/- due on account of gunny bags aggregating Rs. 2698/10a as the defendant was liable to pay for the gunny bags under the terms of the contract.

Final Decision: The defendant's appeal is accordingly to the extent as aforesaid allowed with costs throughout. The decision of the Trial Court is modified accordingly. The plaintiff's cross appeal is dismissed without costs.

BARMAN, J.

( 1 ) DEFENDANT is the appellant. This appeal arises out of a rice supplying contractor's suit for recovery of Rs. 36,854/3/-consisting of four several sums, namely Rs. 10,322/8/- as loss alleged to have been suffered by trie plaintiff as cost incurred in re-sale, at a loss of certain bags of rice after alleged wrongful rejection of the same by the defendant, Rs. 13,566/13/- and Rs. 11,217/6/-both sums (aggregating Rs. 24,784/3/-) for alleged wrongful deduction from the plaintiff's bills and Rs. 1,747/8/-as price of gunny bags payable by the defendant under the terms of the contract.

( 2 ) THE plaintiff's case is this : In December 1954, the plaintiff who is a grain merchant submitted to the defendant a tender for supply of rice for the period from Januarys to June 1955. The said tender was accepted by the defendant as per clauses in the tender notice for supply of rice to the defendant at four different places including manganese mines at Joda as per sample submitted by the plaintiff-and at rates tendered by the plaintiff. In pursuance of the said contract the plaintiff supplied at the godown of the defendant at Joda seven wagon loads of rice weighing 3920 maunds of rice. The defendant wrongfully rejected the entire stock of rice supplied as aforesaid on the plea that it was not as per contract quality to sample. The plaintiff was asked to remove all the said rice stock from the deft. 's store-yard. The plaintiff had to take back the rice at his own cost and had to sell the rice at a loss. On this account the plaintiff is alleged to have suffered a loss of Rs. 10,322/8/-as per account stated in the plaint schedule. The plaintiff's claim is for the said amount for wrongful breach of the contract on the part of the defendant. As for the subsequent monthly supplies up to April 1955, which were to be made by ths plaintiff to the defen-dant under the contract, the plaintiff was informed by the defendant by a letter dated May 9/10, 1955 that the defendant had to procure rice from elsewhere because the plaintiff failed to fulfill his commitment and as such the plaintiff is liable to pay the difference in the cost incurred by the defendant in procuring its requirements from other sources. The defendant accordingly forwarded a debit biff for Rs. 13,566/13/-being the difference in the cost incurred by the defendant which the defendant claimed to recover from the plaintiff's bills. As to the period from May to June 1955 the defendant submitted a debit bill dated july 10, 1955 for Rs. 11,217/6/- (including a sum of Rs. 951/2/- under item 6 as 1 per cent driage losses on non-supplied quantity from January to June 1955) being the difference of value for rice supplied by

plaintiff and rice obtained by defendant from other sources, to meet defendant's requirement for the period from May to june 1955 which the defendant claimed to recover from the plaintiff's bills. The plaintiff's case is that the claim of defendant for debiting the said sum of Rs. 13,566/13/- and Rs. 11,217/6/-against the plaintiff is not sustainable. It is alleged that these sums were wrongfully deducted from the dues of the plaintiff's bills. On september 30, 1955 the plaintiff by letter objected to the same improper deduction made from the bills and requested the defendant to pay the same. The plaintiff's further claim is for Rs. 1747/8/-as dues on account of gunny bags which under the contract the defendant was to supply. The defendant having not supplied the gunny bags the plaintiff had to purchase new gunny bags for which the defendant is liable to pay.

( 3 ) THE defendant, while denying the plaintiffs allegations, stated that the stock supplied was not according to sample, and justified the defendant's refusal to accept the stock. The further defence plea is that the alleged claim, if any, is barred by limitation.

( 4 ) THE Trial Court disallowed the plaintiff's claim of Rs. 10,322/8/- as barred by limitation and decreed the suit for the rest of the cl































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