HON’BLE SRI JUSTICE G. BHAVANI PRASAD C.C.C.A. No. 43 of 1994 DATED: 18.02.2010 Between: M/s. Jagadamba Chemical Company Rep by its partner .. Appellant/ Defendant And A.P. State Trading Corporation Rep. By its Chairman and Managing Director .. Respondent/ Plaintiff JUDGMENT:- The defendant in O.S. No.458 of 1983 on the file of the First Additional Judge, City Civil Court, Hyderabad, filed this appeal against the judgment and decree dated 06.08.1993, by which, the trial Court decreed the suit for Rs.24,641.92 with costs and future interest at 12% per annum. The plaintiff-respondent filed the suit alleging that the defendant, who manufactures sodium silicate, requested the plaintiff to supply Soda Ash, which is raw-material for the product, and also enclosed a demand draft for Rs.10,000/- as initial payment. The defendant-Company expressed their requirement to be 100 tonnes initially per month, and by a further letter dated 24.09.1979, the defendant sent a demand draft for another sum of Rs.10,000/-. It also sent Rs.52,500/- through another demand draft, dated 06.12.1979, and as per the request of the defendant to get soda ash imported, the plaintiff informed the defendant that while the correct rate of such imported soda ash has to be worked out separately, it is tentatively fixed at Rs.2,900/- per M.T. The plaintiff, accordingly, supplied the material valued at Rs.97,091.92 and after adjusting the amount of Rs.72,500/- paid as advance, a balance of Rs.24,591.92 was still due at the rate of Rs.3,698.74 per M.T. The defendant was demanded to pay such balance through number of letters, but the defendant, by a reply dated 21.11.1981, ultimately denied the liability. A suit notice was issued and in view of the absence of response from the defendant, the plaintiff filed the suit. The defendant resisted the suit contending that while the payment of Rs.72,500/- from time to time was true, the correct rate was agreed to be worked out only after finding out the rate of soda ash indigenously manufactured. The rate of Rs.2,900/- per M.T agreed was, of course, tentative, but the rate claimed by the plaintiff at Rs.3,698.74 was exorbitant. Indigenously manufactured soda ash was only Rs.1,625/- per M.T. at that time and the plaintiff would have imported soda ash at not more than half of the price charged by them. Therefore, the defendant stuck to its stand in the reply notice denying its liability and desired the suit to be dismissed. On such pleadings, the trial Court framed the following issues for trial: (i) Whether the plaintiff is an incorporated Company and whether the plaint is signed by the person having authority? (ii) What was the prevailing rate at the time of supply? (iii) To what amount the plaintiff is entitled to? (iv) To what relief? PW1 and DW1 were examined during the trial and Exs.A1 to A10 and Exs.B1 to B4 were marked. The trial Court rendered the impugned judgment referring to the evidence of PW1 and DW1 extensively and noting that there was no truth in the contention of the defendant that the indigenous rate of soda ash was only Rs.1,635/- per M.T. and referred to the claim about such rate being Rs.3,100/- to Rs.3,500/- per M.T. The trial Court also noted that PW1 admitted that Exs.A1 to A9 did not disclose the particulars of actual cost involved in procuring the material. It further referred to the claims of DW1 about the plaintiff’s claim being excessive and observed that the cost of Rs.2,900/- per M.T. was only tentatively agreed and that the soda ash of 25 M.T. was imported as agreed by the plaintiff and was supplied to the defendant . The contention of the defendant that the rate claimed without obtaining the prior consent of the defendant was exorbitant was not accepted, and the supply of imported material by the plaintiff at the request of the defendant was opined to be not by misleading the defendant. While refusing to refer to the prevailing rate of soda ash at the relevant time, the trial Court considered that the plaintiff is entitled to recover the suit claim, and accordingly, decreed the suit with costs. The defendant challenges the said judgment and decree contending that the correct rate of soda ash was agreed to be worked out only with reference to then prevailing rate of soda ash indigenously manufactured but the rate claimed by the plaintiff was very exorbitant even without any proof of the cost working out at that rate for the plaintiff on import. The defendant also contended that the impugned judgment is based on surmises and conjectures and is liable to be reversed. Sri Srinivas Basava, learned counsel representing Sri C.V.Mohan Reddy, learned senior counsel for the appellant and Sri P.Vinayaka Swamy, learned counsel for the respondent are heard at length. The point that arises for consideration is the extent to which the claim of the plaintiff for any higher price for the soda ash supplied can be sustained on the understanding between the parties? The General Manager of Exports and Imports of the plaintiff- Corporation as PW1, while reiterating the claims made in the plaint with reference to the relevant documents, stated that the real rate was agreed to be assessed subject to the rate of the material in the international market and export and import customs duty and all incidental charges. He denied the rate agreed to be equal to the cost of the soda ash indigenously manufactured at the relevant time. PW1 admitted that the then rate of indigenously manufactured soda ash was Rs.3,100/- to 3,500/- per M.T. and he did not produce any document relating to the then prevailing international market price of soda ash or freight charges or port expenses or customs duty or local handling charges or miscellaneous charges which he claimed to be the components of the real price to be worked out as per the agreement between the parties. When the plaintiff seeks to claim a particular sum as justifiable price as per the agreement between the parties consisting of such components, and when the defendant is disputing the justification for such claim, burden of proving the incurring of such expenses on the international price of the product is squarely on the plaintiff. PW1 admitted that all the particulars as to the actual cost of the expenditure incurred in procuring the soda ash are in the accounts of the plaintiff’s company which was not disclosed by Exs.A1 to A9, and no reason has been stated by PW1 for non-production of such documentary evidence within the special knowledge and in the custody of the plaintiff. The evidence of DW1 in reiteration of the defence, more particularly, about the then prevailing rate of soda ash indigenously manufactured at Rs.1,625/- per M.T. is equally uncorroborated by any other independent evidence or by any documents, and the self-serving and interested testimony of DW1 is not open to acceptance, more so, when the defendant itself has agreed to pay the price tentatively at Rs.2,900/- per M.T. even before the supply, which could not have been done by the commercial company concerned unless the tentative price agreed to be paid is somewhere near the then prevailing market price. Even DW1 admitted that even the price of Rs.2,900/- per M.T. will have a straight higher margin though he denied the prevalence or justification of the rate claimed by the plaintiff. Therefore, while the evidence of PW1 and DW1 was without support from any definite documentary evidence to arrive at the price payable by the defendant to the plaintiff as per the agreement between them, the circumstances arising out of the evidence of PW1, who has no personal interest in the dispute except in the discharge of his official duties as an employee of the plaintiff can be taken as a dependable basis. While the rate claimed by the plaintiff at Rs.3,698.74 was not proved to be justified with reference to either the prevailing international market price or any expenses under the other permissible heads, PW1’s admission that the then prevailing rate of soda ash indigenously manufactured was Rs.3,100/- to Rs.3,500/- per M.T., can be taken as a satisfactory basis for deciding the claim. If the rate of Rs.3,500/- per M.T., being the higher end as stated by PW1, were to be adopted as a reasonable price, the parties can have no complaint about the same. In the absence of any material to show that the then cost of import of soda ash would have been significantly higher than soda ash indigenously manufactured at the relevant time, the price as was stated by PW1 has to be adopted for deciding the suit claim and the impugned judgment and decree have to be modified accordingly. If so, at the rate of Rs.3,500/- per M.T., an excess of Rs.4,956/- appeared to have been included in the suit claim which has to be deducted from Rs.24,641.92, and hence, the permissible sum that can be granted comes to Rs.19,685.92. The trial Court awarded interest at 12% per annum from the date of the suit till the date of realization as against the claim of 19.85% made by the plaintiff, but as about 27 years have lapsed since the suit till now and as about 16 years have lapsed since the appeal till now, the future interest at least from the date of the appeal can be reduced in the interest of justice exercising the judicial discretion of the Court under Section 34 of the Code of Civil Procedure though the transaction was of course a commercial transaction on which the agreed rate of interest could have been granted. Consequently, the impugned judgment and decree have to be modified concerning the future interest also. In the result, the suit in O.S. No.458 of 1983 on the file of I Additional Judge, City Civil Court, Hyderabad is decreed for a sum of Rs.19,685.92 with future interest thereon from the date of the suit till 25.04.1994, the date of the appeal, at 12% per annum and from 26.04.1994 till the date of realization at 6% per annum with proportionate costs, and the impugned judgment and decree are accordingly modified and the appeal is accordingly allowed in part. No order as to costs. _____________________ G. BHAVANI PRASAD, J. 18th February, 2010 bcj