THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR City Civil Court Appeal No.254 of 2004 Dated:- 28th April, 2011 Between:- Waterchem Laboratories, Hyderabad And another …Appellants AND The District Collector, (Panchayat Raj) Wing, Karimnagar and others …Respondents THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR City Civil Court Appeal No.254 of 2004 JUDGMENT:- (Per Hon’ble Sri Justice V.Eswaraiah) The plaintiffs are the appellants. The suit filed by the plaintiffs for recovery of a sum of Rs.20,40,229.67 ps., along with interest from the respondents – defendants was dismissed by the XIV Additional Chief Judge(Fast Track Court), City Civil Court at Hyderabad, by judgment and decree dated 28.02.2004 in O.S.No.582 of 1999, against which, this appeal is filed. 2. The parties will be hereinafter referred to as they were arrayed in the suit. 3. It is the case of the plaintiffs that the first plaintiff is the manufacturer of Chlorine Tablets and supplying its products to the Central and State Governments and to the public and private concerns. The second plaintiff is the authorized distributor of the first plaintiff to supply the products of the first plaintiff. The first defendant is the District Collector (Panchayat Raj Wing), Karimnagar, second defendant is the District Panchayat Officer, Karimangar and the third defendant is the Government of Andhra Pradesh represented by its Principal Secretary, Panchayat Raj Department. 4. It is stated that the Government, vide Ex.A.1 – Memo No.37892/RWS.III/a2/95 dated 13.02.1996, approved the products of the first plaintiff viz., Chloroscope, Chlorine Tablets and Halozone for supply of the same to the Gram Panchayats in all the Districts through the second plaintiff and further requested the District Collectors to ensure the purchase of the said products of the first plaintiff by the Gram Panchayats by constituting the District Level Purchase Committee for finalizing the purchases. The District Collectors were also requested to ensure that all the Gram Panchayats in their districts purchase the required quantities through the centralized indent by the District Panchayat Officer of the concerned district from the first plaintiff so as to have the disinfected and safe drinking water in the rural areas. 5. Pursuant to said Ex.A.1 Government Memo, the second plaintiff, who is the distributor of the first plaintiff, supplied the required quantities of Chlorine Tablets to defendants 1 and 2 mentioned in Ex.A.2 – Purchase order of indent letter dated 18.09.1996 through Exs.A.3 to A.5 – Delivery Challans (three) bearing Nos.11934, 11935 and 11936 dated 29.09.1996 respectively, and subsequently raised Exs.A.6 to A.8 – Invoices dated 28.10.1996 for a sum of Rs.10,48,653/-. But, in spite of receipt of the material, delivery of products and raising of invoices and several representations, the amount was not paid to the first plaintiff towards the cost of the material supplied and in the meanwhile, the Government cancelled Ex.A.1 Memo by Ex.B.1 – Cancellation Order in Memo No.37892-B/RWS- III/A2/95/4 dated 17.10.1996, which was also intimated to the plaintiffs’. The said Cancellation order of the Government in Ex.B.1, dated 17.10.1996 was questioned in this Court in W.P.No.32552 of 1988, which was disposed of with a direction to defendants 1 and 2 herein to dispose of the representations of the petitioners therein (plaintiffs herein). But, it is stated that the said order has not been complied with and thereafter, contempt case was filed which was subsequently closed. Now, the plaintiffs have filed the suit for recovery of the value of the products amounting to Rs.10,49,653/- along with compound interest at the rate of 30% per annum from 28.10.1996 and the total claim was Rs.20,40,229.67/- and for subsequent interest. 6. The written statement was filed by the defendant No.2 denying all the allegations except the existence of Ex.A.1, Ex.A.2 and Ex.B.1 and he has also disputed the placement of any indent by the District Panchayat Officer and receipt of the material by the District Panchayat Officer, Karimnagar. It is stated that in fact, the Government cancelled its Ex.A.1 Memo which authorizes the Gram Panchayats to purchase the said products of the first plaintiff and it was further stated that its distributor never supplied the Chlorine Tablets to the Gram Panchayats as per the memo and, therefore, the plaintiffs are not entitled for the suit claim. 7. A rejoinder was also filed by the plaintiffs to the written statement. 8. On behalf of the plaintiffs, the Managing Partner of the first plaintiff firm was examined as P.W.1 and Exs.A.1 to A.44 were marked. P.W.1 has admitted that he cannot say who signed on Exs.A.3, A.4 and A.5 at the place of the receivers and his designation and that Exs.A.3 to A.5 did not contain the value of the goods and they are only delivery challans in which, there is no mention of the order number, date, rate of value of goods and that there is no batch number. Except examining PW.1 and marking said documents, the plaintiffs have not examined any other witnesses on their behalf. 9. The second defendant was examined as D.W.1 and he stated in his chief examination that pursuant to the letter addressed by the first plaintiff requesting the Government to use its products of Chlorine tablets in spite of bleaching powder for disinfection of water in the rural areas, Government issued Ex.A.1 – Memo dated 13.12.1996 to all the District Collectors to ensure that all the Gram Panchayats in the districts will purchase the required quantities through the centralized indent by the District Panchayat Officer concerned from the manufacturing unit of the first plaintiff. He further deposed that in pursuant to the said Government memo in Ex.A.1, he issued Ex.A.2 letter to the first plaintiff requesting to supply the said Chlorine Tablets to all the Gram Panchayats in Karimnagar District and permitting the Gram Panchayats to purchase and procure the said products of the plaintiff with their own funds and that the plaintiffs have to collect the money from the concerned Gram Panchayats alone as the District Collector was not provided with any budget either to purchase or to be paid by the District Panchayat Officer. It is also stated that the plaintiff had not supplied his products pursuant to its Ex.A.2 – letter dated 18.09.1996 to the Gram Panchayats of Karimnagar District and in the meanwhile, Government, vide its memo in Ex.B.1, cancelled the earlier authorization authorizing the Gram Panchayats to purchase the products of the first plaintiff under Ex.A.1 and that subsequently, he addressed a letter dated 01.03.1997 to the second plaintiff stating that the Government has already cancelled the contract dated 13.02.1996. It is stated that the second plaintiff approached the then District Panchayat Officer, Karimnagar, requesting to provide some accommodation in order to preserve the said products and that the second respondent made available one of the shops to the second plaintiff for storing their products, but the plaintiff neither supplied its products to the concerned Gram Panchayats nor vacated the said shop and, therefore, the department issued Ex.B.2 – Telegraphic letter to the advocate of the second plaintiff requesting the plaintiffs to vacate and handover the vacant possession of the said shop. It is further stated that the plaintiff failed to supply the medicines to the concerned Gram Panchayats as directed by the Department and, therefore, the defendants are not liable to pay the suit claim. 10. In his cross-examination, D.W.1 stated that he never received the products of the plaintiff and that there is no endorsement on Exs.A.3 to A.5 from the office of the defendants and that the alleged stock has not been received physically by the defendants and that a Junior Assistant made certain initials on Exs.A.3 to A.5 and that there is also seal of the office of the defendants on it. 11. The Junior Assistant of the Office of the second defendant has been examined as D.W.2. He stated that he has not purchased the products from the plaintiffs. D.W.2 further stated that he has forcibly put his initial on Exs.A.3 to A.5 at the instance of the then District Panchayat Officer. 12. An Advocate Commissioner was also appointed in the suit, who filed his report stating that when he has inspected the shop on 24.01.2004 and break opened the locks, he observed some material as described in the delivery challan dated 28.09.1996 and the same are in damaged condition and as such, he was unable to count the material. 13. The Court below, on appreciation of oral and documentary evidence on record, held that the stock was found in the shop of the Government and that as per the Government orders, the material has to be supplied to each Gram Panchayats individually and the Gram Panchayat is liable to make payments on behalf of the Government. The learned judge further held that the District Panchayat Officer was not authorized to receive the stock and make any payment as admittedly, no funds were made available with him and that he received the stocks unauthorizedly. The Court below further held that when the District Panchayat Officer was not authorized to make any payment, his conduct in receiving the stocks and keeping them in a shop does not bind the Government and if at all the plaintiffs wanted to proceed against the District Panchayat Officer, they can proceed against him in person and that if at all Government has to be made liable for the tortuous act committed by the District Panchayat Officer, he should be made as a party independently by his name. Holding so, the Court below dismissed the suit. 14. We have heard the learned counsel appearing for both the parties. 15. The points that arise for consideration in this appeal are whether as per Ex.A.1 – Government Memo dated 13.02.1996, the District Panchayat Officer is authorized to receive the stock and whether the District Panchayat Officer placed any centralized indent with the first plaintiff to facilitate the supply of Chlorine Tablets to the Gram Panchayats and whether Ex.A.2 – Purchase order of indent letter dated 18.09.1996 amounts an indent by the District Panchayat Officer for supply of Chlorine Tablets of the first plaintiff in his favour? 16. As per Ex.A.1 Memo dated 13.02.1996, the Government requested the District Collectors to ensure the purchase of the products of the first plaintiff by all the Gram Panchayats in the Districts by constituting a District Level Purchase Committee for finalizing the purchases. The District Collectors were further requested by the Government to ensure that the Gram Panchayats purchase the required quantity of Chloroscope, Chlorine Tablets and Halozone from the first plaintiff through centralized indent by the District Panchayat Officer concerned for arranging payments from the office of the Gram Panchayat directly. 17. On perusal of the entire record, we did not find any proceedings pertaining to constitution of a District Level Purchase Committee for finalizing the purchase of Chlorine Tablets from the first plaintiff. We also did not find any indent made by the Gram Panchayats for supply of the aforesaid products. In fact, the said Ex.A.1 Government Memo dated 13.02.1996 indicates that after finalizing the purchase by the District Level Purchase Committee, the District Panchayat Officer of the concerned District has to place a centralized indent giving the particulars of the requirement of the Chlorine Tables by the concerned Gram Panchayats. Unless the Gram Panchayat makes an indent to the District Panchayat Officer and unless the purchase is finalized by the District Level Purchase Committee, the District Panchayat Officer cannot place any indent. In fact, the so called indent in Ex.A.2 said to have been placed by the District Panchayat Officer only indicates that 1166 non- notified Gram Panchayats, 17 notified Gram Panchayats and 9 major Gram Panchayats are permitted to purchase the aforesaid products from the first plaintiff with the funds of the Gram Panchayats and the first plaintiff was requested by the District Panchayat Officer to supply the said products to the concerned Gram Panchayats through his dealer, i.e., the second plaintiff. 18. In the instant case, plaintiff No.2 never supplied the aforesaid products to any of the Gram Panchayats in the Karimnagar District. The so called indent of the District Panchayat Officer in Ex.A.2 only authorizes the plaintiff to supply the aforesaid products to the Gram Panchayats but not to the District Panchayat Officer. If the Gram Panchayats makes an indent for supply of the aforesaid products, obviously it should make available the funds also. Even assuming that the Gram Panchayats have placed an indent, the fact remains that admittedly, no products have been supplied to any of the Gram Panchayats as per the indent of the first plaintiff by the second plaintiff. Therefore, there was no indent and also there was no supply of any products as per the so called indent. 19. Therefore, we are of the opinion that the District Panchayat Officer is not authorized to place any centralized indent to supply of the said products for himself, as the so called memo of the Government only authorizes the District Panchayat Officer to supply the products to the concerned Gram Panchayats. 20. A perusal of Ex.A.1 memo dated 13.02.1996 read with Ex.A.2 – Purchase order of indent letter dated 18.09.1996 clearly indicates that the products of the first plaintiff have to be supplied to the Gram Panchayats directly through his dealer, i.e., the second plaintiff. As there was no supply of the aforesaid products of the first plaintiff through his dealer, i.e., second plaintiff to the Gram Panchayats, the question of payment of amount to the first plaintiff does not arise at all. 21. In view of the above discussion, we see no reasons to interfere with the well reasoned judgment of the Court below. The appeal is devoid of merits and the same is liable to be dismissed. 22. Accordingly, the City Civil Court Appeal is dismissed. No costs. _____________________ Justice V.Eswaraiah ___________________________ Justice B.Chandra Kumar 28th April, 2011 Bvv