1 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. RFA No. 174 of 1999 Date of decision: 18.9.2008 H.P. State Forest Corpn & anr Appellants. Vs Laxhmi Singh Negi ….Respondent. Coram The Hon’ble Mr. Justice R.B. Misra, Judge. Whether approved for reporting? For the Appellants: Sh.Neel Kamal Sood, Advocate. For the Respondent: Mr. Neeraj Gupta, Advocate R.B. Misra, J. (Oral) Heard Mr. Neel Kamal Sood, learned counsel for the appellants ( in short “ Forest Corporation”)and Mr. Neeraj Gupta, learned counsel for the respondent. 2. The present first appeal preferred under section 96 of the Code of Civil Procedure has arisen against the judgment and decree passed by learned District Judge, Shimla in Civil Suit No. 24-S/1 of 1997 titled (Laxmi Singh Negi Vs. H.P. State Forest Corporation and another), whereby learned District Judge has decreed the suit of the respondent/plaintiff for a sum of Rs. 2,84,255/- with interest @ 12 % per annum from the date of institution of suit till the date of payment. Whether the reporters of the local papers may be allowed to see the Judgment ?. 2 3. It appears that respondent/plaintiff preferred suit for a sum of Rs. 3,09,205/- against the appellants/defendants (H.P. State Forest Corporation and Divisional Manager, H.P. State Forest Corporation ) by saying that the respondent/plaintiff was allotted the work of felling and converting trees of lot No.2/95-97 of Shili beat and also of transporting the timber to be extracted from that lot, vide order No. 451/53 dated 26.4.1995. In reference of the final bill, an amount of Rs. 11,80,078/- was submitted by the respondent/plaintiff and the same was duly verified and approved by the Assistant Manager of the Corporation and was forwarded to the Divisional Manager of Forest Corporation . Consequent upon, respondent/plaintiff was paid Rs. 9,33,187/- but a sum of Rs. 2,46,891/- remained due to him. Despite legal notice and actual demand since such payment was not made, therefore, respondent/plaintiff also claimed Rs. 61,104/- towards interest at the rate of 18 % per annum and Rs. 1210/- as cost of the legal notice. 4. The said suit was contested by the appellants- defendants by filing written statement converting that a sum of Rs. 2,46,891/- was deducted from the bill on account of certain recoveries due from the plaintiff. According to the appellants/defendants, a sum of Rs. 20,777/- was deducted on account of income tax @ 2.24% and Rs. 58,300/-as a shortfall in the extraction of sawn standard sizes of timber as per condition 3 No.7 of the schedule of agreement. According to the appellants/defendants, respondent/plaintiff was earlier awarded work vide letter dated 7.10.1991 of lot No. 12/91-93 and on completion of that work, a sum of Rs. 1,80,187/- was paid to him in excess and such amount was deducted from the amount of bill. 5. According to the appellants/defendants, as per condition No.7 of agreement, an excess amount of Rs. 1,80,187 was since paid to the respondent/plaintiff and this was made him to know while making the last payment of Rs. 1,36,754 on 21.5.1996. 6. In the replication filed on behalf of respondent/plaintiff before learned District Judge, it was contended that the agreement in respect of lot no. 12/91-93 executed on 10.10.1991 has been superseded by subsequent agreement dated 30.9.1992 and as regards the work of lot No. 2/95-97 is concerned, there were some shortfall in the extraction of standard sawn sizes, but it was alleged that the deduction made on account thereof was on the higher side and the amount had not been properly calculated. According to the respondent/plaintiff, deduction was to be made at the rate varying between two and five percent, in respect of that kind of timber only in which there was shortfall and not the entire volume of the timber of the lot. 7. Learned District Judge has examined as many as five witnesses, namely, PW-1 Sh. Krishan Dutt, PW-2 Sh. Krishan Dutt, Shri Laxmi Singh, PW-3, Sh. M.P. Vashisht, PW-4, Shri 4 C.B. Pandey, PW-5 and Sh. B.D. Suyal, DW-1 and Exhibits P-1 to P-24, Ext P-25, Exts P-26 and P-27 were also considered and proved. On the basis of the testimony of the witnesses and material on record, following issues were framed: 1) Whether the agreement dated 10.10.1991, has been superseded by the agreement dated 30.9.1992, and on account of supersession of the said agreement deductions could not have been lawfully made by the defendants from the amount representing the value of the work done by the plaintiff. ?.......OPP. 2) If issue No.1 is proved, whether the deductions worth Rs. 2,59,264/- made by the defendants from the amount of the value of the work done by the plaintiff are unjustified, unlawful and the plaintiff is entitled to recover the aforesaid amount of money from the defendants along with interest ?....OPP. 3) Whether the suit is barred by limitation ?....OPD 4) Whether the plaintiff is estopped to sue by his acts, deeds and conduct, as alleged ?.....OPD. 5) Relief. 8. While adjudicating issues No.1 and 2, it is necessary to note that the last page of the agreement dated 10.10.1991( Ext P- 4) was not signed by the parties. This page reflects the alleged conditions that in the event of variation in the estimated percentage of the kinds, the respondent/plaintiff would be paid for the size/forms which would be extracted on pro rata basis at the sanctioned schedule of rates, tender rate of auction rate, whichever might be less. Undisputedly, the said agreement dated 10.10.1991 was superseded by a subsequent agreement ( Ext P-15) dated 30th 5 Sept, 1992, where all the pages of the said agreement had been signed by the parties and testimony of PW-5 Sh. C.B. Pandey, Divisional Manager also corroborated that earlier agreement dated 10.10. 1991 ( Ext P-4) was not signed by the parties. It may also be noted that the respondent/plaintiff was to extract the timber of following kinds/sizes: i) Swan standard 45.910 Cubic metre ii) Axe-hawn 114.504 Cubic metre iii) Dim-dimas 10.427 Cubic metre iv) Round ballies 102.598 Cubic metre v) Hakkries 1242.430 Cubic metre 9. Undisputedly, the above quantity of wood/timber was extracted in consonance to the agreement Ext P-15. Nothing is available from the record that the appellants/defendants have made any payment to the respondent/plaintiff in respect of work of lot in excess. 10. It is also being noted that the payment made in respect of the aforesaid extracted timber has been correctly worked out as per rates given in Ext P-15. Therefore, I am of the considered view that the payment to the respondent/plaintiff was to be made in terms of the agreement of 30th September, 1992 (Ext P- 15) and in reference to the bill pertaining to lot No. 2/95-97. 11. On perusal of the record, it could be noticed that deductions of an amount of Rs. 20,777/- towards income tax 6 could be said to be justifiable . Coming to the deduction of Rs. 58,300/- towards shortfall in sawn sizes pertaining to lot No. 2 of 1995-97, respondent/plaintiff has proved from the record that various kinds/sizes of the timber which were required to be extracted and the figures of the timber of various sizes/kinds actually extracted are given in Ext P-22. As per office note, Ext P- 22, respondent/plaintiff was supposed to have extracted 929.891 cubic meters of sawn sizes, whereas, he had actually extracted 660.538 cubic meters of sawn size. As such, there appears to be shortfall of 29 percent and as per agreement, Ext P-20, penalty could be imposed, varying between two percent and five percent, and in the event of shortfall in the sawn sizes only, and no penalty was to be imposed for the shortfall in other kinds/sizes of timber. 12. From the testimony of B.D. Suyal, DW-1 and from his cross examination, it appears that the penalty at the rate of 5 % was to be imposed only on the deficient volume of sawn sizes and the earnings therefrom. The deficiency in the sawn size was to the tune of 269.353 cubic meters. Further, as per agreement between he plaintiff and the defendants, the plaintiff was to be paid felling, conversion and manual carriage at the rate of Rs. 890/- cubic meters. The aforesaid rate was, inclusive of manual carriage charges, which as per note, copy Ext P-22 were Rs. 62.50 cubic meter, per kilometer and the total distance was 9 Kms. That means the rate of Rs. 890/- per cubic meter was inclusive of manual 7 carriage charges, which were to the tune of Rs. 562 x 50 (62.50 x 9 = 562.50). The remaining amount of Rs. 327.50, per cubic meter was the earnings from felling and conversion. As already noticed, there was shortfall of 269.353 cubic meters of sawn sizes and by multiplication of this figure by the rate of felling and conversion, i.e. 327.50 per cubic meter. The amount works out at Rs. 88,213/- and it is on this amount that penalty at the rate of 5 percent per annum was required to be imposed, as per condition No.7, to the schedule Ext P-15. The amount of penalty rightly may be worked out at Rs. 4410/- only. 13. It appears that respondent/plaintiff as per note (Ext P-22), extracted 1326.209 cubic meters of timber, in all and carried the whole of it to the destination which was 9 Kms way from the forest. As per agreement, he was to be paid at the rate of 890/- cubic meter on account of felling of trees and conversion of such trees into timber and manual carriage of timber. As such for conversion and carriage of 1326.209 cubic meters of timber comes to Rs. 11,80,326/-, whereas an amount of penalty calculated above, to the tune of Rs. 4410/- has to be deducted from it and, therefore, the actual amount comes to Rs. 11,75, 916/-. It appears that a sum of Rs. 26,340/- was to be deducted at source at the rate of 2.24 percent by income tax. As such actual amount comes to Rs. 11,49, 576/-. Since the respondent/plaintiff was paid Rs. 9,06,754/-, therefore, the payment of Rs. 2,42,822/- to the plaintiff with 8 interest at the rate of 12 % per annum is justifiable keeping in view the prevailing facts and circumstances. Since last payment of Rs. 1,36,754/- was made to the respondent/plaintiff on 20.5.1996, to the date of the institution of the suit i.e. 22.10.1997, as such, amount of interest of Rs. 41433/- would be payable to him. As such an amount of Rs. 2,42,822/- + Rs. 41433/- (equal to Rs. 2,84,255/-) was payable to the respondent/plaintiff on the date of institution of the suit. 14. In view of the aforesaid analysis, I am of the considered view that issues No.1 and 2 have rightly been adjudicated by the learned District Judge. Issue No.3 on the basis of material on record has also rightly been adjudicated by holding that the suit was within time of limitation. I have no occasion to interfere in the finding arrived at by the learned District Jude in respect of issue No.4 as the issues No. 1 and 2 have been adjudicated in favour of respondent/plaintiff and against the appellants/defendants. During adjudication of the suit against the claim of interest @ 18 % on the remaining amount of payment to be made to the respondent/plaintiff, learned District Judge, in the prevailing facts and circumstances and prevalent rate, has rightly awarded payment of interest @ Rs. 12 % per annum. 15. I do not find any impropriety and illegality in the impugned judgment and decree dated 14.6.1999 passed by the learned District Judge while adjudicating the civil suit, therefore, 9 respondent/plaintiff is entitled to be paid to Rs. 2,84,255/- with interest at the rate of 12 % PA, as indicated in the impugned judgment and decree. The present appeal being devoid of merit, hence it is accordingly dismissed and the judgment and decree passed by the learned District Judge passed in Civil Suit No. 24- S/1 of 1997 dated 14.6.1999 is affirmed. In view of the disposal of the main appeal, application (s) if any, are also dismissed. ( R. B. Misra ), J. 18th Sept, 2008 (sl)