IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. RFA 207 of 1999. Date of decision 27.5.2008. M/S J. Mitra and Brothers Private Ltd. …Appellant. Versus M/S Bhaskar Surgical & Medicine Traders …Respondent. Coram: The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 Yes. For the petitioner: Mr. Ramakant Sharma, Advocate. For the respondent: Mr. Bhupinder Gupta, Senior Advocate, with Mr. Janesh Gupta, Advocate. Dev Darshan Sud, J. (Oral) The defendant has appealed against the judgment and decree passed by the learned District Judge awarding a sum of Rs.3,40,000/- with costs and interest @ 12% per annum from 3.9.1993 till its payment. The case of the plaintiff- respondent herein is that the plaintiff is engaged in the 1 Whether Reporters of Local Papers are allowed to see the judgment? yes. - 2 - business of liaison work for various firms, which supply medicines, surgical items, laboratory equipments, hospital equipments etc. According to the plaintiff, an agreement was entered into between the plaintiff and defendant vide Ex.PW- 6/H, which reads: “ JML/610 2nd March 93. Regd. M/S Bhasker Surgical & Medicine Traders, Albion Building, Near Tourism Lift, PB No. 50, The Mall, Shimla-171001. Dear Sir, SUB: Tender No. HFW-H (FWAP)-B (3)-2/91-Vol-IV. The Project Director, Family, Welfare Area Project Govt. Niwas Shimla- 171002, for Blood Analyzer. Opened on 25.2.93. This has reference to the above mentioned tender and the discussion you had with us regarding liaison charges for procuring order in our favour against the above mentioned tender. We are pleased to confirm that you will be eligible for 20% ex-works value of the order as liaison - 3 - charges subject to procuring order in our favour before 31st March, 1993. The liaison charges would be paid to you after execution of order and receipt of 100% payment from the customer. You will also have to provide us comparative statement of the tender and should inform us all future developments in respect of finalization of tender from time to time. Kindly acknowledge receipt. Thanking you, Yours faithfully for J.Mitra & Bros Pvt. Ltd.” The defendant pleads that this agreement could not furnish any cause to the plaintiff as time was the essence of contract and the supply order, (subject matter of the suit), was not obtained by the last date as mentioned in this agreement, i.e. 31.3.1993. The plaintiff led evidence in support of his claim that time was not of the essence of the contract and that it subsisted between the parties till the issuance of communication Ex.PW-6/N terminating the business relationship between the parties on 25.8.1993 and that the plaintiff was - 4 - entitled to 20% commission on the total value of the goods in respect of which the plaintiff procured supply orders in favour of the defendant from various Organizations, Institutions and Departments of government etc. The plaintiff claimed a sum of Rs.3,40,000/- along with costs and interest from the defendants. The defendant has not led any evidence despite repeated opportunities having been granted to him. The record of the trial Court shows that on 23.9.1998, the plaintiff closed his evidence. The case was then listed for recording evidence of the defendants on 28.10.1998, 31.12.1998, 19.2.1999 and 22.3.1999 but no witnesses were summoned and no oral or documentary evidence was produced. On 22.3.1999 when the matter was taken up by the Court, the defendant’s witness was present but he had not brought the summoned record, therefore, he was directed to appear with the entire record on 26.3.1999, but he did not appear on that day. Even after permission under Order 18 Rule 17-A of the Code of Civil Procedure had been granted to the plaintiff to prove certain documents on record, it was stated on behalf of - 5 - the defendant on 31.5.1999 that they would not like to lead any evidence. Initially the case was instituted on the Original Side of this Court, but later on with the increase in the pecuniary jurisdiction of this Court, the case was transferred to the Court of learned District Judge for trial in accordance with law. On a detailed consideration of the evidence on record, the learned trial Court concluded that supply order Ex.PW-6/K for supply of 56 units of Blood Analyzers was placed on the defendant solely due to the efforts of the plaintiff-respondent herein and that the defendant having received the benefit of this order could not resile from agreement Ex.PW-6/H. The evidence of the other witnesses from the office of the Health Department etc. also corroborated the plaintiff‘s case that he was responsible for procuring the order for the defendant. The Court held that in terms of Section 55 of the Indian Contract Act, 1872 if time was of the essence of the contract, it was open to the defendant to have rescinded the contract which was not done. Having accepted the benefit under the agreement, the - 6 - intention of the parties was not that time should be treated as sine qua non of the performance of the contract. I have heard the learned counsel for the parties and have gone through the record. The submission of learned counsel appearing for the appellant is that the learned trial Court was in error in not granting an opportunity to the appellant-defendant to lead evidence in support of his case. He has placed reliance on a judgment of the Supreme Court in Lal Devi and another v. Vaneeta Jain and others, 2007 (7) SCC 200 that the Court should not be bound down by the technicalities, but should further the cause of substantive justice. I cannot persuade myself to accept this plea of the appellant, more especially when more than five opportunities were given to the defendant to produce evidence which was not done. Even after permission under Order 18 Rule 17-A of the Code of Civil Procedure had been granted to the plaintiff to prove certain documents on record, it was stated on behalf of the defendant on 31.5.1999 that they would not like to lead any evidence. The principle of law - 7 - that substantial justice must be done cannot be stretched to an extent where Court proceedings are reduced to a mere formality and the process and procedure of law to be set in motion at the whim of a litigant who can manipulate it at will. There is no explanation coming forth on record as to why these opportunities have not been availed. This argument is accordingly rejected. Learned counsel appearing for the appellant then urges that time was the essence of the contract and irrespective of the fact whether the plaintiff had been responsible for getting the work order or not, he was not entitled to any claim having accepted the terms of the contract Ex.PW-6/H. He placed reliance on Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram and others , AIR 1954 SC 236, State of Gujarat (Commissioner of Sales Tax, Ahmedabad), v. M/S. Variety Body Builders, AIR 1976 SC 2108, Jainarain Singh and another v. The State of Bihar and others, AIR 1980 Patna 24, Bharat Fire & General Insurance Ltd. v. Parameshwari Prasad Gupta, AIR 1968 Delhi 68, Andard Mount (London) Ltd. v. Curewel (India) Ltd., AIR 1985 Delhi 45 and M/s. China Cotton - 8 - Exporters v. Beharilal Ramcharan Cotton Mills Ltd., AIR 1961 SC 1295. This submission again cannot be accepted as revocation of the business relationship between the parties came to an end vide Ex.PW-6/N issued by the defendant on 25.8.1993 and received by the plaintiff on 1.9.1993. The communication reads: “JML/PSS/ SPEED POST 25.8.93. M/S Bhasker Surgical & Medicine Traders, Albion Building, Near Tourism Lift, PB No. 50, The Mall, Shimla-171001. Dear Sir, SUB: SUPPLY OF OUR DIAGNOSTIC PRODUCTS. In view of the prevalent situation and circumstances and your non cooperative attitude and conduct, we feel that it is no more feasible to continue business relationship with you. Therefore your dealership in respect of our products is terminated with immediate effect. Thanking you. Yours faithfully, For J.Mitra & Bros. Pvt. Ltd.” - 9 - The only conclusion from the evidence on record is that the plaintiff – respondent was responsible for having procured the order Ex. PW- 6/K dated 24.6.1993. There is no evidence on record to show that the earlier subsisting agreement between the parties Ex.PW-6/H had been varied or revoked by the defendant. Sections 55 and 66 of the Indian Contract, 1872 provide: “55. Effect of failure to perform at fixed time, in contract in which time is essential.- When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified time, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee,if the intention of the parties was that time should be of the essence of the contract. Effect of such failure when time is not essential- If it was not the intention of the - 10 - parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Effect of acceptance of performance at time other than that agreed upon.- If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non- performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so.” “66. Mode of communicating or revoking rescission of voidable contract: The rescission of a voidable contract may be communicated or revoked in the same manner, and subject to the - 11 - same rules, as apply to the communication or revocation of a proposal.” The record shows and it has been proved by the plaintiff that the performance of the agreement Ex.PW-6/H was accepted by the defendant even after the stipulated time as provided for in the agreement. In this situation, it was not open to the defendant to have alleged that time was of the essence of the contract and that he was not liable to compensate the plaintiff for his efforts in procuring the order Ex.PW-6/K. Once having accepted the benefit of the orders procured by the plaintiff, the defendant was bound to compensate the plaintiff. The record also does not show that the contract was treated as voidable at any time and that it was rescinded in the manner as set out in Section 66 of the Act. The only communication is much after the order has been procured and the benefit taken by the defendant. One other fact needs to be noticed and that is that despite repeated opportunities having been given, the defendant deliberately chose not to lead any - 12 - evidence. An adverse inference needs to be drawn against the defendant. The defendant having chosen to take the benefit of the supply order cannot now turn around and plead that time was of the essence of contract. The intention of the parties as to whether time was or was not the essence of contract has to be inferred from the documents on record and surrounding circumstances. In the present case, it was only on 25.8.1993 that vide Ex.PW-6/N the business relationship between the parties has been put to an end. The evidence on record has established that it was the plaintiff who was responsible for procuring the order which was the subject matter of the suit. If the defendant did not want to pay any commission etc. to the plaintiff, he should have revoked the contract much earlier than the order Ex.PW-6/K. He could not enjoy the benefit of contract and deny the commission to the plaintiff-respondent. Learned counsel for the appellant then urged that the learned District Judge was not correct in law in awarding interest @ 12% per annum. He submits that under Section 34 of the - 13 - Code of Civil Procedure, the rate of interest could not exceed 6% per annum. Learned counsel for the plaintiff submits that the transaction being commercial, the plaintiff was entitled to a higher rate of interest and the learned District Judge has rightly awarded interest @ 12% per annum. I have gone through the record of the case and do not find that there is any evidence on record that commercial rate of interest was at 12% per annum. In the circumstances, considering that the transaction was of a commercial nature, it would be in the interest of justice if the interest is reduced to 9% per annum payable as ordered by the learned District Judge. This appeal is accordingly disposed of. There shall be no order as to costs. May 27, 2008 (PC). (Dev Darshan Sud), J.