JUDGMENT:

This Civil Miscellaneous Appeal is filed by the appellant – appellant – respondent questioning the legality and validity of the orders dated 25.02.2010 passed in O.P.No.382 of 2008 by the learned District Judge, Adilabad.

2. The brief facts of the case are that the appellant agreed to purchase 10,400 quintals of cotton seed from the respondent – M/s.Cotton Corporation of India Limited (in short “Corporation”), Adilabad during the year 2003-04. The appellant lifted 7,010 quintals of cotton seed from the respondent – Corporation. The respondent – Corporation would intimate to the appellant about the availability of cotton seed as soon as the cotton seed was available after ginning and would inform him to lift the cotton seed as per the contracts entered into, by paying full value of the cotton seed. The appellant failed to lift the cotton seed of 3271.86 quintals. There was shortage of 128.14 quintals of cotton seed out of 10,400 quintals. The Corporation issued a notice dated 12.05.2004 requesting the appellant to lift the cotton seed within 15 days. The appellant failed to lift the cotton seed. As such, the Corporation resold the un-lifted quantity of cotton seed in public auction on 04.06.2006 after giving paper publication in Adilabad and Maharashtra State. The price difference after the value obtained in resale was Rs.8,65,549/-. As per the Corporation, it sustained loss on account of breach of contract committed by the appellant and it was also entitled for carrying charges as per the contracts entered. It sustained total loss of Rs.12,44,895/- [Rs.8,65,549/- (price difference after value of resale) +

Rs.3,79,246/- (carrying charges)]. It was having a credit balance of

Rs.1,95,362/- and a sum of Rs.10,000/- towards Earnest Money Deposit (for short “EMD”) deposited by the appellant and by deducting the said amount, calculated the loss as Rs.10,39,533/-. The Corporation issued a final notice dated 08.07.2004 to the appellant demanding the said amount. The appellant issued a reply denying his liability. As such, the Corporation filed the claim petition before the Arbitrator claiming an amount of Rs.10,39,533/- with interest and costs.

3. The appellant, who was the respondent in O.S.No.5 of 2006 (award passed by the Arbitrator) filed his counter contending that he made advance payment of 10% before lifting the cotton seed. The sale of seed by the Corporation was a forward sale. After processing the cotton, intimation was given to the respondent with a delay of one month from the date of contract. Due to the said delay, most part of the cotton was damaged. The Corporation used JCB machine for shifting the cotton from heap, as labor could not do the work due to bad smell. The respondent (appellant) informed several times to the Corporation Officials about the non-availability of the seed at various centers and also informed to cover the seed properly to avoid damage. But the centre in-charge never cared to do so, resulting in damages to the seed. The respondent had not received any final notice as alleged nor did he receive any telephone calls from the centre in-charge to lift the seed. The open auction conducted by the Corporation would reveal the actual value of cotton seed, as such there would not be a loss of Rs.12,44,895/-. The sale would be concluded only when the total quantity of seed was made ready. The respondent was not liable for the alleged loss. The Corporation of India was liable to pay

Rs.1,95,362/- and also Rs.10,000/- lying with them.

4. Basing on the said pleadings, the learned Arbitrator framed the issues as follows: (i) Whether the respondent entered into contracts and if so what are the contracts and for how much quantity?

(ii) Whether the claimant gave intimation for lifting the seed even though the seed is not available as alleged by the respondent?

(iii) Was there any damage