(1) FA. 72.1995 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD FIRST APPEAL NO. 72 OF 1995 1. Government of Maharashtra Through:- The Collector, Beed. 2. General Manager, Government Dairy Scheme, Beed,Ta & Dist. Beed. 3. Regional Dairy Development Officer, Government Milk Scheme,Aurangabad,Post Aurangabad,Ta.& Dist. Aurangabad. 4. The Dairy Development Commissioner, Maharashtra State,Worli Dairy Compound Bombay-18. 5. The Chairman, Beed District Dudh Sangh (Milk Association ) Beed, Ta. & Dist. Beed. 6. The Chairman,Kaij Ta.Dudh Sangh Kaij,Ta.Kaij Dist.Beed. ... Appellants VERSUS. Rajaram S/o Ganpatrao Doke age 45 years,occup.agril. R/o Surdi,Ta.Kaij,Dist.Beed ... Respondent (2) FA. 72.1995 WITH CIVIL APPLICATION NO.1309 OF 1995 IN FIRST APPEAL NO. 72 OF 1995 1. Government of Maharashtra Through:- The Collector, Beed and others ... Applicants V E R S U S. Rajaram S/o Ganpatrao Doke age 45 years,occup.agril. R/o Surdi,Ta.Kaij,Dist.Beed ... Respondent ... Mr.N.R.Shaikh,A.G.P. for appellants-Applicants. Mr.S.K.Shelke, Advocate for the respondent. ... CORAM : A.V. NIRGUDE, J. DATED : 14th SEPTEMBER,2009 ORAL JUDGEMENT:- 1] The original defendants filed this appeal challenging the judgment and decree dated 30.08.1993 passed in favour of the respondent in Special Civil Suit No.123 of 1987, by the learned Civil Judge Senior Division Beed, decreeing the suit of the respondent to the extent of Rs.1,87,898/-. 2] The respondent/original plaintiff filed suit for recovery of Rs.2,38,000/-,cause of action of the suit in short can be narrated as under- (3) FA. 72.1995 . The appellant Nos. 1 to 4 awarded the contract of transportation of milk cans to the respondent for the period of 01.11.1985 to 30.10.1986. Accordingly, the respondent started work of Transportation on 2nd November,1985. Soon after the work began, the appellant Nos. 1 to 4 directed the respondent to carry blocks of ice from Beed to Kaij and Ambajogai. The respondent questioned the propriety of the demand, not being part of the contractual work. He demanded additional renumeration for the said work, but in vain. Before the term of contract could be over the appellant Nos. 1 to 4 terminated the contract on 30th September, 1986, vide their letter dated 21.08.1986. The respondent, therefore, demanded additional remuneration and damages through this suit. He also asserted that for the purpose of carrying blocks of ice from Beed to Kaij and Ambajogai, he engaged additional vehicle almost every day through out the contract period. He demanded additional renumeration for such work. He also demanded the damages for premature terminating of the contract. 3] The respondent Nos. 1 to 4 opposed the suit and took up various contentions such as carrying of ice was part of contractual work, termination was not illegal and that respondent’s claim is not valid. The trial Court, on the basis of the pleadings framed various issues and held that the (4) FA. 72.1995 termination of contract was unjust and wrongful and awarded Rs.22,435/- as damages. The learned trial Court also held that the transportation of blocks of ice was out side the work agreed between the parties and awarded Rs.1,60,050/- as transportation charges. In addition to this the learned Judge of the Trial Court held that the respondent was entitled to Rs.36,000/- as loss of income for the period from 01.11.1986 to 28.02.1987 and Rs.15,000/- for mental and physical torture and for travel and correspondence expenses. On perusal of the pleadings, judgment of the Trial Court, upon hearing learned advocates appearing for the parties, the following Points arise for my determination, in this first appeal: I] Whether the transportation of ice from Beed to Kaij and Ambajogai was outside the contractual obligation of the respondent? II] Whether the respondent engaged one additional vehicle for transporting the ice? III] What amount is payable as remuneration to the respondent if the answer to the point no.1 is in the affirmative? IV] Whether the notice terminating the contract was lawful? V] If the answer to point no.4 is in the affirmative, what amount by way of damages is payable to the respondent? VI] Whether the appellants were permitted to reduce the distance of transportation without giving prior notice to the respondent? (5) FA. 72.1995 VII] If answer to point no. 6 is in negative, what amount as damages is payable to the respondent? VIII] Whether the appellants prove that the respondent caused loss of Rs.5,448/- on account of spoiling of milk transporting by the respondent? IX] Whether the respondent proves that he was entitled to additional remuneration on account of rise in price of diesel and at what rate? X] Whether the respondent was entitled to damages for mental agony suffered by him due to breach of contract and if the answer is in affirmative to what extent? XI] Do the appellants prove that the interest awarded by the impugned judgment is exorbitant and requires revision? POINT NO.I: Whether the transportation of ice from Beed to Kaij and Ambajogai was outside the contractual obligation of the respondent? 4] As regards this, the respondent specifically stated in the plaint that transportation of ice was an additional burden on him. The appellants in the written statement, denied this saying that as per the terms of the contract, the respondent was under obligation to carry not only empty cans but also ice which was a preservative of milk. 5] In order to answer this question, one must first see term of the contract. The contract was in writing and has come on record at Exh.73. It simply (6) FA. 72.1995 says that, the respondent would engage his vehicle for transporting the liquid milk for the route (Beed via Kaij to Ambajogai and back) for "156 cans of milk". Pursuant to this contract the appellants’ officer vide letter dated 6th November 1985 (Exh.44) stated that the respondent must keep his vehicle ready every day at about 9.00 P.M. at Central Milk Dairy Centre, Beed. The letter further states that, the vehicle would be then loaded with empty milk cans and ice which was to be delivered for Kaij Taluka Dudh Sangh and Ambajogai Chilling Centre. The letter further contemplated that the respondent would keep same vehicle ready on next day at Ambajogai where it would be loaded with milk filled cans and that the respondent would then drive the vehicle to Kaij, where he would get more milk filled cans loaded in the truck and thereafter the vehicle should arrive in stipulated time at Beed Central Milk Dairy Centre. 6] The question is whether the directions given to the respondent to carry ice meant to be delivered at two chilling centres viz: Kaij and Ambajogai, was out side scope and purview of contractual obligations. Answer is in affirmative. The original contract as stated above did not contemplate carrying ice from from Beed to Kaij and Ambajogai. It clearly contemplated transportation of only 156 cans of milk from Kaij, Ambajogai to Beed. This (7) FA. 72.1995 means when the vehicle would travel from Beed to Kaij and Ambajogai it would only carry the empty cans. Even number of cans is specified to be 156. The respondent since beginning made grievance about the additional work load of carrying ice. He wrote number of letters to the appellant's Officers. First such letter was of 23rd December, that is within two months from the commencement of contractual work. He kept on writing such letters which are on record. (Exhs. 46, 47, 48, 49, 50, 51, 52, 53, 54, 55 and 56.) The appellant nos.1 and 2’s officer while responding to these letters took rather evasive stand. Their first letter is of 3.9.1986 (Exh. 58/C). In this letter the Regional Manager of Milk Centre Aurangabad clearly indicated that, the work of transportation of ice from Beed to Ambajogai and Kaij was not of the State Government, but it was a 'service' rendered to the appellant nos. 5 and 6 which are independent Co-Operative milk Societies. He suggested to the respondent that, he should take his grievance to them directly(for getting remuneration). In the second letter (Exh. 98), the General Manager of Government Milk Scheme at Beed reiterated that the work of transportation of ice was a service rendered to the appellant nos. 5 and 6. These circumstances thus clearly establish that the transportation of ice was outside the contractual obligation of the respondent. (8) FA. 72.1995 POINT NO.II: Whether the respondent engaged one additional vehicle for transporting the ice? 7] From the evidence on record, it seems rather belatedly, the respondent took up a stand that for transporting ice as well as milk he almost every day engaged two vehicles and therefore, the appellants were liable to pay him transportation charges of the additional vehicle. 8] Mr. Shelke the learned counsel appearing for the respondent brought to my notice the contents of exhibit 54 (letter of the respondent dated 28.10.1986) and contents of letter exhibit 49 (letter dated 17.2.1986). In these two letters, the respondent certainly made mention about requirements of use of two vehicles for carrying milk cans as well as ice from Beed to Ambajogai. These letters according to the record were sent during the contractual period. After termination of the contract, the respondent sent several letters in which he made mention that he had engaged two vehicles for transportation work. As said above, the respondent brought on record deposition of witnesses who stated that they provided truck on higher basis to the respondent during the contractual period for carrying ice and cans from Beed to Ambajogai. Even they mentioned the vehicle number. The two witnesses mentioned that they alternatively provided one truck to the respondent (9) FA. 72.1995 for carrying the additional load. But this part of the case of the respondent is not at all believed. The contract definitely relates to use of one vehicle. It expected the contractor to carry 156 cans from one station to other. The contract expected that this transportation would be made by motor vehicle. The contract further contemplated that for this work, the contractor would be entitled to Rs.2=50 per km. The contract certainly indicates that this was in respect of one vehicle. It did not suggest requirement of two vehicles for carrying of 156 cans. Even the letters on record clearly suggest that the respondent was using one vehicle every day for the contractual work. Had the Officers of Milk Scheme in such background demanded to the respondent that he should use more than one vehicle for completing such work, any prudent man would have refused to oblige. The respondent being such person, would have certainly refused to use second vehicle for such work. When the respondent states that he engaged another vehicle for his work, it is possible that he engaged other vehicle when his own vehicle was not available. Had the respondent engaged two vehicles at one time, he would have certainly recorded such use through either his letters or through certain documents which he would have secured from the Officers of the Milk scheme. The case of the respondent that he used two vehicles all throughout the contractual (10) FA. 72.1995 period is figment of his imagination and he raised this ground only as an after-thought. This part of the respondent’s case is not at all believable and acceptable. I am therefore, inclined to reject this part of the claim of the respondent. POINT NO.III: What amount is payable as remuneration to the respondent if the answer to the point no.1 is in the affirmative? 9] Since, answer to point no.1 in affirmative, it is now for me to calculate renumeration payable to the respondent for additional work of transportation of ice. It is held that the respondent transported ice from Beed to Kaij and Ambajogai every day during contractual period. For plying the vehicle from Beed to Ambajogai via Kaij and back, the respondent was paid Rs.2.50 per K.M. as remuneration. The question is, in addition to this amount, how much more should the appellants pay for transportation of the ice. Had appellants engaged independent vehicle for transportation of ice they would have paid almost similar amount as renumeration. I think 50% of this rate would be agreeable renumeration only to the extent of the distance between Beed and Ambejogai. So the respondent is entitled to Rs.1.25 per K.M. for carrying the ice from Beed to Ambejogai. The distance between Beed to Ambajogai, is 97 K.M. This work was done for a period of 300 days. Therefore, the amount should be Rs.1.25 Per K.M. X (11) FA. 72.1995 97 K.M.X 300 days which comes to Rs.36,375/-. The respondent is also entitled to interest at the rate of Rs.10% per annum on this amount from the date of commencement of contract till amount is paid. POINT NO.IV: Whether the notice terminating the contract was lawful? 10] It is admitted fact that, the notice of terminating the contract was issued on 1st September, 1986 stating that the contract would stand terminated with effect from 01.10.1986. The agreement contemplated one months notice for terminating the contract. The notice was send by registered post. It is not the appellant’s case that, this notice was served on the respondent on 1st September,1986. On the other hand, the respondent contended that he did not receive one month clear notice, thereby suggested that he received notice after 1st September,1986. It is, clear that the appellants failed to give one month clear notice to respondent before terminating the contract. I think, the respondent thus, proved that notice terminating contract was not lawful. POINT NO.V:. If the answer to point no.4 is in the affirmative, what amount by way of damages is payable to the respondent?: 11] Since the notice of termination of contract is held to be insufficient obviously, the respondent (12) FA. 72.1995 would be entitled to damages. I think the above mentioned formula of Rs.1.25 Per K.M. multiplied by the distance in Kilo meter and further multiplied by the unexpired term of contract would be sufficient compensation/damages to the respondent. This amount in my view would represent the profit the respondent would have made during this time had he continued the work uninterrupted. Thus, the compensation on this count (Rs.1.25 Per Kilo Meter X 194 K.M. X 31 days), comes to Rs.7517/-. POINT NO.VI: Whether the appellants were permitted to reduce the distance of transportation without giving prior notice to the respondent? 12] The agreement contemplate eventuality of the appellants reducing distance of transportation without giving prior notice to the respondent. The term of the agreement reads as under- It should please be noted that in case there are any changes on the road alignment resulting in reduction of millage the contractor would be paid according to such reduce distance from the date of the road is opened to traffic with the consent of respective P.W.D Department. 13] In my view, as Mr. Shelke, learned advocate appearing for respondent submitted, this term in the contract is rater unconscionable. Because even (13) FA. 72.1995 though the distance of transportation is reduced abruptly, the over heads of transport business for the day would still continued. The appellants could incorporate this rather lopsidedly favourable term in written contract, because while negotiating the contract the respondent clearly was not in stronger position. He meekly accepted the terms of the contract that was put forward to him for his signature. In view of this, the reduction of millage of the contractual distance was illegal and therefore, the respondent would be entitled to damages. POINT NO.VII:. If answer to point no. 6 is in negative, what amount as damages is payable to the respondent? 14] Once again the formula utilised earlier is applicable for even calculating the damages under this head. The distance that was reduced for period of 37 days was 74 K.M. The amount of compensation would be Rs.1.25 multiplied by 74 KM multiplied by 37 days and it comes to Rs.3422.50Paise. POINT NO.VIII: Whether the appellants prove that the respondent caused loss of Rs.5,448/- on account of spoiling of milk transporting by the respondent? 15] The respondent’s grievance is that the appellant unilaterally deducted Rs.5,448/- from his bill saying that on 21.2.1986 entire milk transported by (14) FA. 72.1995 the respondent was spoiled and became unfit for consumption. The fact as to whether it was due to the respondent’s negligence the milk got spoiled was required to be proved by the appellants. Admittedly, no evidence was lead to prove it. The appellants simply stated that milk was spoiled on that day and they held respondent responsible for the loss. The respondent thus proved that deduction of Rs. 5,448/- was erroneous and he is entitled to the said amount. POINT NO. IX: Whether the respondent proves that he was entitled to additional remuneration on account of rise in price of diesel and at what rate? 16] With the help of the respondent’s Advocate Shri S.K. Shelke, I went through the record of the lower Court and came across document exhibit 67 which is the Government Circular suggesting certain rise in remuneration of contractors like the respondents, on account of rise in diesel price. It mentioned that the price of diesel increased with effect from 1.2.1986 and with effect from 17.6.1986. Both these dates fell within the suit contract period. The circular further mentioned in the case of the applicant which involve transportation of more than 150 cans, there should be 5 paisa per km. rise in the remuneration. With the help of the learned counsel for the parties, I calculated the amount of additional remuneration and it comes to Rs.4,050/-. (15) FA. 72.1995 POINT NO.X: Whether the respondent was entitled to damages for mental agony suffered by him due to breach of contract and if the answer is in affirmative to what extent? 17] In addition to this, the respondent demanded Rs. 15,000/- as damages for mental agony, the cost of the correspondence and the cost of travel which he was required to undertake on many occasions to see many Officers of the Government as well as the Milk scheme etc. It has come on record that from November, 1986 he was making his demands and ultimately, he filed this suit in 1987. The learned Judge of the lower Court accepted the case of the respondent on this point and awarded Rs.15000/- as damages. I am not inclined to interfere in this assessment. POINT NO.XI: Do the appellants prove that the interest awarded by the impugned judgment is exorbitant and requires revision? 18] There is nothing on record to justify reduction in the rate of interest awarded by the lower Court to the respondent. I am not inclined to interfere in this part of the judgment. 19] The appeal is partly allowed. The appellant shall pay Rs.71,812.50 Paise (Rs. seventy one thousand eight hundred and twelve and Paise fifty ) along with 10% interest to the respondent. There shall be no order as to costs as far as this appeal (16) FA. 72.1995 is concerned. 20] In view of the disposal of the First Appeal No. 72 of 1995, Civil Application no. 1309 of 1995, seeking stay also stands disposed of. Rule made absolute in the Civil Application. Interim relief stands vacated. Sd/- (A.V. NIRGUDE,J.) 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