IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. OSA No. 4 of 2008 Reserved on : 19.3.2010. Date of Decision : 9. 4. 2010. H.P.S.F.C. and another …Appellants. Versus Sita Ram . …Respondent. Coram The Hon’ble Mr. Justice Dev Darshan Sud, Judge. The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting ? No For the appellants : Mr. V.B.Verma, Advocate. For the Respondent : Mr. Rajnish Maniktala, Advocate. Per Kuldip Singh, Judge The appellants were plaintiffs and have filed the appeal against the judgment, decree dated 8.11.2007 passed by Hon’ble Single Judge in Civil Suit No. 81 of 1999 dismissing the suit of appellants for recovery of Rs.33,78,264/- along with interest at the rate of Rs.18% per annum. 2. The facts, in brief, are that the appellants had invited tenders for transportation of timber extracted from various lots of ______________________ 1 Whether reporters of Local Papers may be allowed to see the Judgment ? yes 2 Pangi Forest Working Division, District Chamba. The timber was to be floated from various launching points in the river and was to be collected at Atholi / Gulabgarh located in the State of Jammu and Kashmir. The tender of respondent was accepted. The appellants awarded the work to respondent, the respondent was to be paid a sum of Rs. 26.95 paise per scant for carriage of timber. It has been alleged that 3012.841 cubic meters timber of various species such as Deodar, Kail, Fir and Spruce etc. was to be transported. An agreement dated 5.9.1992 was executed. It has been alleged that 31,063 scants measuring 3012.841 cubic meters of timber were handed over to respondent for carriage but the respondent after carriage handed over 27565 scants measuring 2346.92 cubic meters at Atholi / Gulabgarh. There was shortage of 3498 scants measuring 665.916 cubic meters. The loss of 5% of the total value was permissible under the agreement. It has been alleged that the losses are attributable to the negligence of respondent who did not launch the ghall at appropriate time and also did not deploy sufficient labour for carrying out the operation. According to appellants the value of the timber which was not delivered by the respondent is as follows:- i) Deodar : 306.822 m3 Rs.8591/2 per Rs.26,35,908/- ii) Kail : 56.846 m3 Rs. 4946/- Rs. 2,81,155/- iii) Fir/Spruce : 151.607 m3 Rs.3160/- per m3 Rs. 4,49,078/- Total Rs.33,96,141/- (sic) 3. It has been alleged that respondent was to receive a sum of Rs. 7,42,877/- for carriage of timber, he had been paid 3 Rs. 7,25,000/-. Only an amount of Rs. 17,877/- (Rs.7,42,877 – Rs.7,25,000/-) was left to be paid to the respondent. The respondent was liable to pay Rs. 33,96,141/-, therefore, after deducting Rs. 17,877/-, the respondent is liable to pay Rs. 33,78,264/- (Rs.33,96,141 – Rs. 17,877/-) on account of loss caused to appellants for short supply of timber. The appellants have filed the suit after preparation of final accounts and have alleged that the cause of action accrued to appellants for filing the suit on 4.6.1997 on finalization of accounts. It has been alleged that when the respondent failed to pay the amount after notice, the suit was filed. 4. The suit has been contested by the respondent. He has not disputed the agreement, terms and conditions for carriage of timber nor he has denied the total quantity of scants received and handed over to the appellants. On merits, he has submitted that for collection of timber, boom was set up at a place fixed by the appellants which was objected by the Central Water Commission. On the instructions of appellants, the boom was shifted to another place keeping in view the topography and the safety. The shifting of site and repeated floods in the river led to delay in fixing the boom. The heavy floods damaged the boom which caused flow of timber downstream the Indian Border into the territory of Pakistan. The loss occurred due to the rough terrain of the river as a result of which sizeable quantity of timber went into the crevices from where the timber could not be extracted. The Border Road Organization was constructing a road along side river Chenab and heavy debris including big boulders were thrown into the river as a result of which timber got entangled, buried under them. 4 The river passes through the terrorist affected area of Jammu and Kashmir and lot of timber was burnt by the terrorists. The losses are not due to the negligence of the respondent but due to the inaction of appellants and also due to act of God. The respondents not only approved and cleared the bills of respondent but also awarded him further contracts. The respondent denied the claim of the appellants and prayed for dismissal of the suit. The appellants filed replication and reiterated their stand after denying the defence of the respondent. 5. On the pleadings of the parties following issues were framed on 16.4.2001 and 4.6.2002: 1. Whether the plaintiff is entitled to recovery of Rs.33,78,264/- with interest 18% per annum? OPP. 2. Whether the suit is not maintainable in the present form? ..OPD. 3. Whether the suit has not been filed through a competent person? OPD. 4. Whether the suit is barred by limitation. OPD. 5. Whether the plaintiff is estopped from filing the present suit by his act and conduct? OPD. 6. Whether the suit is bad for non joinder and mis joinder of necessary parties? OPD. 7. Whether there is no cause of action enabling the plaintiff to file the present suit? OPD 8. Relief. 1-A. Whether the timber was destroyed by act of God in flash floods and by reason of construction of road by Border Road Organisation? OPD. The issues No.2, 3 and 6 were not pressed, issues No.4 and 7 were decided against the appellants, issues 1, 1-A and 5 were also decided against the appellants and the suit was dismissed. 5 5. We have heard the learned counsel for the parties and have also gone through the record. The learned counsel for the appellants has submitted that the Hon’ble Single Judge has erred in dismissing the suit. It has been wrongly held that the suit is not within limitation and appellants are not entitled to the suit amount. The oral and documentary evidence has not been properly appreciated while dismissing the suit. The learned counsel for the respondent has supported the impugned judgment, decree. 6. The plaintiff has examined five witnesses, defendant himself appeared as DW-1. PW-1 Ashwani Kumar has tendered some record of the H.P.Forest Corporation. PW-2 Vinod Kumar Tiwari has stated that he remained posted as Sub Divisional Manager, Forest Corporation at Pangi from June 1990 to September, 1992. He has proved tender notice Ex.PW-2/A, tender conditions Ex.PW-2/B, bid list Ex.PW-2/C. He has stated that bid/tender of defendant was accepted, bid list was signed by the defendant. The tender / bid was approved by the Director on 7.8.1992, the copy Ex.PW-2/D. He has proved the agreement Ex.PW-2/E. He has stated that floating rate was Rs.26.95 per scant and total scants to be floated were 30901. In cross- examination, he has stated that agreement was to be treated as concluded after stacking / retrieving of the launched timber at Atholi / Gulabgarh. 7. PW-3 Rattan Chand , forest Guard has stated that in the year 1993-94, again said that in the years 1992-93, 31063 scants of Deodar, Fir and Kail were handed over to the respondent at different launching points for river-floating. The scants were to be handed over 6 to the Corporation at Atholi Gulabgarh. The respondent had engaged 105 to 107 labourers. In cross-examination, he has stated that he had prepared the list of scants which respondent handed over to the Corporation at the destination in Jammu and Kashmir which is Ex.D-1. He has admitted that the net of iron-wire which was put at the site of the collection in the State of Jammu and Kashmir had given way at the time of the collection of the timber. He has also admitted that some of the timber when being carried through floating in the river Chenab, gets buried under the glaciers between the launching and collection points and some of the timber got buried under the debris, which the GREF people, while constructing the road had thrown in the river. 8. PW-4 Madan Singh has stated that in the year 1992-93 he was posted as Assistant Manager, Ghal Division, Pangi. The Assistant Manager of Timber Extraction Unit of Forest Corporation had handed over 30901 scants to him for floating. He had handed over the receipt to the Assistant Manager of the said Unit, a copy of which is Ex.PW-4/A. The entire timber was handed over to respondent for floating and his signatures were obtained on the receipt Ex.PW-4/A. The contractor had engaged about 100 labourers for the purpose of floating of the timber. The labour was sufficient for the job. He used to be present at the time of collection of the timber at its destination at Gulabgarh. The contractor had handed over only 29000 pieces of timber including broken pieces of some scants. In cross-examination, he has admitted his signatures on list Ex.D-1, he has admitted his signatures on Exts. D-2, D-3, D-4 and D-5. He has stated that Ex.D-6 is the copy of one of the reports regarding progress of floating which he 7 had signed. He has admitted that during the relevant period, the militants did not allow them to carry out timber by floating through river Chenab. The militants had destroyed several depots of timber of Jammu and Kashmir, Forest Department. He has stated that despite threats by militants, the respondent had been doing the job and had engaged sufficient labour. 9. PW-5 R.S.Banyal has stated that from September 1992 to June, 1994 he remained posted as Divisional Manager at Working Forest Division, Pangi. The respondent started the floating work as per agreement. The respondent was supposed to have engaged 120 labourers for floating the timber but he engaged lesser labourers. He had written letter Ex.PW-5/A requiring him to increase the number of labourers. He raised the number of labourers but not beyond 60. The job had been completed within the agreed time frame. He had written some letters Ex.PW-5/B and Ex.PW-5/C for increasing the strength of labourers. The respondent had been entrusted 31063 scants, the total volume of which was 3012 cubic meters at the launching site. He delivered to the Corporation only 27565 scants. He prepared the final statement of afloat account Ex.PW-5/D. The upper limit of maximum loss is 5% after giving discount for the permissible loss. He had issued notice Ex.PW-5/E to the respondent calling upon him to account for the loss. Notice Ex.PW-5/F was also issued to him followed by another notice Ex.PW-5/G. In cross-examination, he has stated that Ex.PW-4/A was prepared by their Assistant Manager. The floating was to commence in September, 1992 and thereafter launching was to continue from different dates right upto December, 8 1992. He has stated that Ex.DX/1 is the copy of telegram which was sent by him. He has stated that Ex.DX/2 was written by him. He has stated that de-launching list is Ex.D-1. He does not remember having received letter Ex.DX/3. The floating account was prepared on the basis of the timber received at the sales depot. He has admitted that there was terrorism in the State of Jammu during those days. He was not personally associated with the execution of the floating work which was allotted to the respondent. He might have received letter Ex.DX/4. He might have received letter Ex.D-6. The rates for calculating the compensation based on the deficiency of timber are those at which the Corporation timber was auctioned at Bhardroya sales depot. He has not produced any record pertaining to the rates at which the timber was auctioned at the aforesaid sales depot. 90% of the amount for the work in question, stands released. 10. DW-1 Sita Ram has stated that in February, 1993 due to melting of glaciers and flowing of ice, the boom had washed away twice in floods in February 1993 and March, 2003 resulting into washing away of the timber. He had engaged 125 to 130 labourers for executing the job. He has denied having received any notice from the appellants to increase the labour for executing the work. At the relevant time and place, Border Road Organisation was constructing the road which resulted into throwing of boulders and debris in the river and consequently approximately 3000 to 4000 scants were damaged due to flowing of debris in the river and breakage of boom. The damage report was prepared by the officials of the appellants which is Ex.D-6. Approximately 29000 scants were handed over to 9 the department and list to this effect Ex.D-1 was prepared. He has received the entire consideration except Rs. 5000/- to Rs.6000/-. During the pendency of the suit, the proposal Ex.DX3 was given by the appellants. The area where the work was executed was affected by militants. In cross-examination, he has denied that he had not deputed the requisite number of people for the execution of the work. He has also denied that there were no floods. He has also denied that floating of timber was not adversely affected by the construction of road by Border Road Organization along the side of the river. He has denied that he is liable to pay any amount to the appellants. 11. The agreement Ex.PW-2/E is dated 5.9.1992 and as per clause 13 period of work was from date of signing of agreement to 31.3.1993. In para 19 of the written statement, the respondent has specifically pleaded that the operation of ghal was completed as per terms of the agreement as back as 1992 (sic 1993) for which the payments were also made by the Department in the year 1993. The Corporation slept over the matter regarding amount due from the respondent which could have been raised within the period of limitation. The appellants have filed the replication to the written statement and in answer to para 19 of the written statement, it has been pleaded that para 19 of the written statement is wrong and contents of para 19 of the plaint are reiterated. The most pertinent facts with regard to completion of contract pleaded by the respondent in para 19 of the written statement have not been answered specifically. In other words, the appellants have not denied that the work was completed in the year 1993 and the payments were also 10 made to the respondent in the year 1993. The appellants in the plaint have pleaded that cause of action for filing the suit has accrued on 20.7.1992 when the tender was submitted, on 5.9.1992 when the agreement was executed, on 6.1.1993 and 27.6.1993 when the respondent had received running payment and when the final accounts were prepared. 12. PW-3 Rattan Chand has stated that he had prepared the list of scants Ex.D-1 which the respondent handed over to the Corporation at the destination. PW-4 Madan Singh has also stated that he has signed list Ex.D-1. PW-5 R.S.Banyal has stated that he had prepared the final statement of afloat account Ex.PW-5/D. The afloat account Ex.PW-5/D bears the signatures of Divisional Manager, Forest Working Division, Kullu dated 23.10.1996. It is thus clear that final afloat account was prepared on 23.10.1996. The suit has been filed on 17.4.1999. PW-2 has stated that agreement was to be treated as concluded after stacking / retrieving of launched timber at Atholi / Gulabgarh. PW-5 has stated that job had been completed within the agreed time frame. DW-1 has stated that he had floated the timber in 1992-93. In cross-examination, he has clearly stated that he handed over 30901 scants of timber to the appellants in the year 1993. This stand of DW-1 has not been disputed in further cross-examination of this witness nor the appellants have led any other evidence to contradict the statement of DW-1 that the timber was not handed over to the appellants in 1993 but it was handed over much later. It has also come on record that appellants have also paid to respondent almost entire amount in the year 1993 on account of floating of timber. 11 13. The Hon’ble Single Judge has held that the limitation in the case is governed by Article 55 of the Limitation Act, 1963 and for taking this view, the Hon’ble Single Judge has relied on H.P.State Forest Corporation and others vs. Achhar Singh and others, 2001 (1) Shimla Law Cases, 206, H.P.State Forest Corporation Ltd. and another vs. Paras Ram and another 2001 (1) SLJ 486 and H.P.State Forest Corporation Ltd. Vs. M/s J.J. Ropeways and Company, 2003 (2) Shimla Law Cases 28. It has been held that the period of three years would start to run for compensation for breach of contract, when the contract is broken or when the breach takes place for which the suit is instituted. The alleged short fall had taken place in March/April, 1993. In these circumstances, the suit should have been filed by March/April, 1996. The preparation of final account Ex.PW-5/D and notices issued by the appellants to the respondent would not extend the limitation. The cause of action, if any, for filing the suit had accrued in favour of the appellants in March/April, 1993. 14. In OSA No. 12 of 2001 decided on 4.7.2008 the Division Bench has held that unilateral act of plaintiff will not extend the period of limitation. Once there was a breach of the terms of the contract limitation started to run. The inaction of the plaintiff will not extend the period of limitation. The plaintiffs could have prepared the afloat account immediately when the contract was completed. The delay had occasioned due to the fact that the Corporation had not prepared the accounts. The Division Bench has ultimately held that the suit is barred by limitation. In the present case also, the breach of contract, if any, had occurred in March/April, 1993, the afloat account Ex.PW-5/D 12 will not extend the limitation. The Hon’ble Single Judge has rightly held that the suit is barred by limitation. 15. PW-3 has admitted that list Ex.D-1 bears his signatures. Similarly, PW-4 has stated that list Ex.D-1 is signed by him. Ex.D-1 indicates receipt of 29000 scants. The explanation of respondent for delivery of only that much of timber to the appellants is that he was required to shift the boom, there were unprecedented floods. The course of the river where the timber was floated was rough, many scants got entangled in the debris and buried under the boulders which were thrown by Border Road Organisation while constructing the road along the side of river, the destruction caused by terrorists to the timber. It has been submitted that respondent was negligent in floating the timber in the river. It has also been submitted that respondent had deployed inadequate labour for floating the timber. 16. PW-3 has admitted that net of iron-wire was put up at the site of the collection in the State of Jammu and Kashmir, had given way at the time of the collection of the timber. He has also admitted that some timber in the river Chenab, gets buried under the glaciers between the launching and collection points. He has also admitted that some of the timber got buried under the debris, which the GREF people, while constructing the road towards the river. PW-4 has stated that he had been sending periodical reports to the Divisional Manager about the progress of floating. The labour was sufficient for the job, he used to be present at the time of collection of timber at its destination i.e. Gulabgarh. He has stated that during the relevant period, the militants did not allow them to carry out timber by floating 13 through river Chenab. The militants had destroyed several depots of timber of Jammu and Kashmir Forest Department. The respondent had been doing his job despite threats by militants and had engaged sufficient labour. PW-5 has also admitted that there was terrorism in the State of Jammu and Kashmir during those days. It is thus clear from the evidence of appellants themselves that short fall, if any, of the timber occurred not due to acts attributed to respondent but due to acts which were beyond his control like terrorism, act of God and throwing of debris, boulders by the third party into the river under which some scants were buried or entangled. The appellants have failed to show negligence on the part of the respondent for floating the timber and for causing shortage of the scants at the delivery point. The witnesses of the appellants have stated that the respondent had deployed sufficient labour for floating the timber. Ex.D-6 report regarding progress of floating also supports the case of the respondent. The learned counsel for the appellants has failed to establish that Hon’ble Single Judge has erred on any point. The mis- construction, mis-reading of the evidence by the Hon’ble Single Judge has not been proved. We are in agreement with the view taken by the Hon’ble Single Judge in dismissing the suit, there is no merit in the appeal. 17. No other point was urged. 18. The result of the above discussion, the appeal fails and is accordingly dismissed with no order as to costs. ( Kuldip Singh ), (Dev Darshan Sud), April 9 , 2010. Judge. Judge. (GR) 14 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. OSA No. 4 of 2008 Reserved on : 19.3.2010. ___________________________________________________ H.P.S.F.C. and another …Appellants. Versus Sita Ram . …Respondent. Judgment for consideration, please. ( Kuldip Singh), Judge. I agree / do not agree ( Dev Darshan Sud), Judge. List for pronouncement of judgment on___________. ( Dev Darshan Sud), Judge. Court Secretary.