IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN WEDNESDAY, THE 21ST JULY 2010 / 30TH ASHADHA 1932 AS.No. 242 of 1996() -------------------- OS.31/1986 of PRINCIPAL SUB COURT,ALAPPUZHA .................... APPELLANT/DEFENDANT: --------------------------- GREAVES COTTON & CO. LTD., 13, SECOND LINE, BEACH, P.B.NO.207, MADRAS - 600 001. BY ADV. SRI.K.ANAND (A.201) RESPONDENT/PLAINTIFF: --------------------------- FOAM MATTINGS (INDIA) LTD., ALAPPUZHA KERALA STATE REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV.SRI.P.R.ROJAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO.1595 OF 1996 IN A.S.NO.242 OF 1996. //DISMISSED// 21.07.2010. SD/- THOTTATHIL B.RADHAKRISHNAN, JUDGE SD/- S.S.SATHEESACHANDRAN, JUDGE. /TRUE COPY/ THOTTATHIL B.RADHAKRISHNAN & S.S.SATHEESACHANDRAN, JJ. ------------------------------------------- A.S.No.242 OF 1996 ------------------------------------------- Dated this the 21st day of July, 2010 JUDGMENT Thottathil B.Radhakrishnan, J. 1.The defendant in a suit for recovery of money is the appellant. 2.The plaintiff, a Government company, is manufacturer of latex backed coir mattings. It was using imported oil burner for their boiler installed in the factory at Alleppey. Since that burner uses light diesel oil as fuel, the plaintiff decided to take appropriate opinion to convert it to a burner using furnace oil because light diesel oil is 20% costlier than furnace oil. Accordingly, the plaintiff required KITCO, a consultant in industrial and technical sector, to find out suitable alternatives. KITCO found that the defendant has offered to replace the existing burner with a fully automatic AS.242/96 2 pressure jet burner, the make of which is described in the plaint. Following negotiations, the plaintiff placed order with the involvement of KITCO, thereby requiring the defendant to supply the product. The terms of the agreement between the parties are included in Ext.A3. Ultimately, it turned out that the replaced burner did not work and the plaintiff could not utilise it. Following different correspondence and attempts by the defendant as also KITCO and plaintiff to rectify the burner and its user, the plaintiff concluded that the burner cannot be put to use. The defendant took the stand that the tank in which fuel is kept by the plaintiff should be kept at a still higher level and the capacity of the injecting tube should also be varied to provide free flow of the fuel at the desired pressure. Ultimately, the net result of the exercise was that the plaintiff could not put the burner to use. Consequently, after issuing suit notice, the plaintiff filed the suit for recovery of amounts it showed in its tabular statement forming part of the valuation statement at the foot of the AS.242/96 3 plaint. The court below, after trial, decreed the suit partly in as much as the claim of Rs.41,700/- made by the plaintiff towards salary and wages paid to employees left without work during the suspension of operation attributed to the faulty burner was refused. The plaint claim on other counts were sustained and granted with interest at 12% from the date of suit till the date of decree and 6% future interest. 3.In support of this appeal, it is argued that the plaint claim ought to have been rejected in the light of the evidence of PW2, the Manging Director of KITCO and the consistent version of DW2 an Engineer of the defendant corroborated by the documentary evidence disclosing the stand taken by the parties during the course of the transaction. It is pointed out that the contract was only for supply of the equipment and therefore, any fault owing to the other necessary accessories and their installation cannot be passed on to the defendant and but for the fault of the fuel tank and the fuel leading pipe AS.242/96 4 which continued to exist in spite of modifications suggested, the furnace would have worked. It is also argued that the grant of Rs.33,000/- towards the cost of light diesel oil purchased by the plaintiff from 3.3.1983 and Rs.4,700/- towards the cost of furnace oil is illegal and unfounded. Learned counsel also pointed out that though the transaction could be treated as a commercial one, there is no agreement between the parties for payment of any interest and therefore, the court below acted illegally in granting 12% interest during suit and the rate of such interest, if at all to be granted, ought to have been pegged at 6%. 4.Per contra, learned counsel appearing for the respondent plaintiff argued that the nature of the transaction clearly discloses that what is ultimately required is the proper commissioning of the unit after installing the burner for which the parties had agreed. The materials on record, according to the learned counsel, clearly show that the AS.242/96 5 defendant never responded appropriately to its demand that the engineers of the manufacturer visit and carry rectification works as the defendant was only an agent. He supported the decree as granted by the trial court. 5.A perusal of the depositions of PW2 the Managing Director of KITCO which was the advisor and consultant in relation to the contract in question and the evidence of DW2, the Engineer of the defendant, would categorically show that the bargain between the parties was not merely one for supply of goods. The purpose of the supply and the reason for the contract was the requirement of the plaintiff to have a new furnace in place so that the fuel which it was using till then could be changed from light diesel oil to furnace oil. The defendant identified a particular manufacturer and agreed to supply “Westerworks WELMAT-100 fully automatic pressure jet burner”. The documentary evidence, particularly Exts.A19 and A21, would tend to show that the plaintiff and AS.242/96 6 the consultant KITCO repeatedly wanted the defendant to have an Engineer to look into the problem, including regarding the connection terminals, which appear to have been the core problem. It is a matter of record, going by the evidence, that the Engineer of the manufacturer never visited the site and the defendant took upon themselves the responsibility to state that they would carry out rectification works through their Engineer. PW2 corroborates the version in Ext.A19 specifically charging the defendant of neglect to KITCO's and plaintiff's requirement regarding the rectification works. Even the goods that reached Alleppey were found to have been defective, going by the records. It is also an admitted situation, going by the materials, that the unit was not commissioned in as much as there was no proper utility available from the machinery as contemplated by the parties to the contract. Under such circumstances, we do find any illegality in the court below having granted the decree authorising the plaintiff to recover the amounts paid AS.242/96 7 by it while placing the order and the other amounts paid at the time of delivery. In so far as the recovery allowed towards the price of the light diesel oil and furnace oil is concerned, we are inclined to think that utility of fuel is a matter incidental to the manufacturing process and it would not also be accepted as a wise managerial decision to have spent fuel in excess of what may be immediately required to ensure that there is an appropriate trial run and that the machinery is properly commissioned. With that, we would vacate the decree granted by the trial court for Rs.37,770/- towards price of fuel, i.e., furnace oil and light diesel oil. We are also of the view that the plaintiff being the owner of the control panel board could not have asked the defendants for the painting cost of the control panel board. The decree granted to recover Rs.800/- under that head also deserves to be vacated. However, on the totality of the facts and circumstances and taking into consideration the submissions on behalf of the parties, we are of the view that the plaintiff AS.242/96 8 could be granted a lump sum amount of Rs.5,000/- towards incidentals, including price of fuel that could have been reasonably spent in its attempt to put the furnace in question to use. We are also of the view that the interest before the suit should get trimmed down to be at the rate of 6% per annum. 6.In the result, this appeal is allowed in part, modifying the decree granted by the court below to the effect that the plaintiff would be entitled to a total amount of Rs.1,48,820/-, with interest at the rate of 6% per annum, from 18.7.1983 till the date of recovery. The parties are directed to bear the respective costs. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. Sd/- S.S.SATHEESACHANDRAN, Judge. kkb.17/07.