IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA OSA No.:32 of 2001 & Cross Objection No. 39 of 2001 Reserved On. 23.09.2008. Date of decision: 26.09.2008 Swarup Vegetable Products Industries Ltd. … Appellant. Versus M/s Ashian Minerals and others. … Respondents Coram The Hon’ble Mr.Justice Deepak Gupta, J. The Hon’ble Mr. Justice V.K.Ahuja, J. Whether approved for reporting?1 No. For the appellant: Mr.Bhupender Gupta , Advocate. For the respondents No.1 to 5: Mr. Bimal Gupta, Advocate. Per Deepak Gupta, J. By this judgement we shall dispose of OSA No. 32 of 2001 filed by the defendants as well as Cross-Objection No. 39 of 2001 filed by the plaintiffs. The undisputed facts are that the plaintiff No.1, which is a partnership firm, of which plaintiffs No. 2 to 5 are partners, is engaged in the extraction of lime-stone. Defendant No.1 is a company and one of the units of the Company is Sir Shadi Lal Sugar Mills, Mansoorpur. The undisputed facts are that negotiations were held between the two parties for supply of lime-stone by the plaintiff to the defendants. These negotiations culminated in a quotation dated 27.10.1986 submitted by the plaintiff to the defendants. According to this quotation, the ex-mine rate 1 Whether the reporters of the local papers may be allowed to see the Judgment? yes . 2 of the lime stone was quoted at Rs.50/- per metric tone (P.M.T), freight from mine to the sugar factory at Mansoorpur was quoted at Rs.161/- P.M.T and labour charges were quoted at Rs.40.50 P.M.T. After taking into consideration CST of 4% on the ex-mine rate, the same worked out to Rs.52/- P.M.T. In addition thereto Rs.5/- each was to be paid at the H.P. barrier tax and U.P. Forest tax. The rate FOR Mansoorpur was quoted at Rs.263.50 per metric tone. This quotation has been exhibited as Ext.PX. Pursuant to the quotation of the plaintiffs, the defendants placed an order for supply of 6000 metric tones of lime-stone at the rate of Rs.263.50 P.M.T FOR Mansoorpur. This order was placed vide Ext.PY dated 29.11.1986. The plaintiffs thereafter supplied lime-stone to the defendants on various dates. It maintained a running account of the supply made by the plaintiffs to the defendants. In this account, credit was given for the payments received from the defendants. According to the plaintiffs, it had supplied lime-stone worth Rs.12,31,415.68 paise in the financial year 1986-87 but the defendants had only paid an amount of Rs.6,82,500/- and therefore the plaintiffs were entitled to claim the balance amount of Rs.5,48,915.68 paise. According to the plaintiffs, at the close of the financial year 1987-88 the defendants owned to it a sum of Rs.7,67,093.07/- which included interest. During this year defendants made payment of Rs.2,65,000/- and at the close of the financial year a sum of Rs.5,02,093.07/- was due from the defendants to the plaintiffs. This balance was carried forward to the financial year 1988-89 when the defendants paid Rs.1,16,463/- on different dates leaving a balance of Rs.4,79,471.17/-. In the next financial year i.e. 1989-90, the defendants paid a sum of Rs.30,000/- only leaving a balance of Rs.5,03,713.22/- . The plaintiffs also claimed 3 compound interest at the rate of 20% per annum and on this basis filed a suit for Rs.5,21,200/-. The suit was contested by the defendants on various grounds, including the ground that the suit was barred by the limitation, that the suit was bad for non-joinder of necessary parties. The jurisdiction of this Court to hear the matter was also contested. On the merits of the case, the defendants did not deny the dealings between the parties. They denied the terms of the quotation and submitted that the rate was much lower than mentioned in the quotation Ext.PX. It was, however, admitted that they had received supply of 5,180.270 metric tones of lime-stone from the plaintiffs. The defendants also set up the plea that they had paid the amount on full and final settlement of the claim of the plaintiff. On the pleadings of the parties, the following issues were framed:- 1. Whether the suit is time barred? OPD. 2. Whether the suit is bad for non joinder of necessary parties or mis-joinder of parties, as alleged? OPD. 3. Whether this Court has got no jurisdiction to take cognizance of the suit? OPD. 4. Whether the plaintiffs are estopped from filing the instant suit as alleged in preliminary objection No.3 of the written statement? OPD. 5. To what rate of interest the plaintiffs are entitled to sale proceeds? OPP. 6. Whether the plaintiffs are entitled to recover the suit amount or any other amount from the defendants? 7. Relief. The learned Single Judge held that the suit was partly within limitation and restricted the claim of the plaintiffs from two supplies made after 12.1.1989, i.e. three years prior to filing of the suit on 12.1.1990. It would be pertinent to mention that suit was instituted on 12.1.1990. The plaintiffs had claimed that there was a mutual and 4 current account and since the last payment was made in October, 1989 they claimed that the suit for the entire amount was within limitation. The learned trial Court rejected the contention of the defendants that there was non-joinder of parties. It was held that this Court had jurisdiction to try the suit. The learned trial Court further held that the plaintiffs were entitled to claim the entire amount as per the quotation including the transportation charges and came to the conclusion that the agreed rate of interest between the parties was 20% per annum compound interest. On this basis the suit of the plaintiffs was decreed for a sum of Rs.3,25,728/-. However, as far as the future interest is concerned, the learned Single Judge restricted the same to 6% per annum from the date of filing of the suit till realization of the amount. Aggrieved by the said judgement and decree of the learned Single Judge, the defendants have filed the appeal and the plaintiff has filed the cross- objection. We have heard Shri Bhupender Gupta, learned Senior counsel for the defendants and Shri Bimal Gupta learned counsel for the plaintiffs. It is not disputed before us that quotation Ext.PX was submitted by the plaintiffs. As per this quotation, the rate of limestone FOR Mansoorpur was Rs.263.50 per metric tone. Condition No.2 of the quotation clearly stipulated that the payment of the material including freight charges, labour charges, CST, taxes, etc. will be paid by the defendants within 15 days from the receipt of the material through bank draft payable at Paonta Sahib, Nahan and that cheques would not be accepted. In case of non-payment of the amount within the stipulated time, 20% compound interest would be charged. The quotation specifically provides that 4% CST, Himachal Pradesh Barrier Export tax of Rs.5/- PMT and U.P.Forest tax at the rate of Rs.5/- PMT would be paid by 5 the consignee. All disputes were made subject to the jurisdiction of the Himachal Pradesh courts only. In response to this quotation, the defendants sent Ext.PY, which reads as follows:- “With reference to your quotation, and personal discussion with our Chief Executive, we are pleased to place an order of 6000 tones lime stone of the quality mentioned in your quotation at the rate of 263.50 PMT FOR Mansoorpur.” The aforesaid acceptance by the defendant leads no manner of doubt that the rate fixed between the parties was Rs.263.50 per metric tone FOR Mansoorpur. The plea of the defendants that they were not liable to pay transport charges, etc. cannot be accepted in view of the clear cut stipulation in Ext.PX and Ext.PY to the contrary. The learned Single Judge rightly held that the plaintiffs were entitled to claim the payment for the supplies made at the rate of Rs.263.50 per metric tone. As far as the jurisdiction of this Court is concerned, we are of the considered view that in view of the stipulation made in the quotation it was obvious that the payment had to be made by the defendants to the plaintiffs at Paonta Sahib within Himachal Pradesh. The supplies were also being sent from within Himachal Pradesh to Mansoorpur. Therefore, there can be no manner of doubt that part of cause of action has arisen within Himachal Pradesh and the Courts in Himachal Pradesh would have jurisdiction to decide the matter. As far as the issue of non-joinder of necessary parties is concerned, it has been urged that the supplies were made to M/s Sir Shadi Lal Sugar Mills, Mansoorpur, which is not a party to the civil suit and, therefore, the suit is bad for non-joinder of necessary parties. From the facts proved on record, it is proved, that Sir Shadi Lal Sugar Mills, Mansoorpur, has no separate identity. It is a unit of M/s Swarup Vegetable Products 6 Industries Limited, which is the Company incorporated under the Companies Act. It is this Company which placed the order with the plaintiffs. Therefore, it is definitely liable to pay this amount and the suit cannot be said to be bad for non-joinder of necessary parties. As far as the issue of limitation is concerned, Shri Bimal Gupta, learned counsel for the plaintiffs, has urged that there was a running mutual account between the parties and the suit was governed by Article- 1 of the Limitation Act. He has failed to point out even a single transaction which created mutuality of dealings between the parties. It was only the plaintiff, which were making supplies of goods to the defendants. The defendants were not making any reciprocal supplies and they were only to pay the amount. The learned Single Judge has rightly held that the suit was governed by Article 14 and hence the plaintiffs could only claim the amount for the supplies made after 12.1.1987. We uphold this finding of the learned Single Judge. The learned Single Judge has calculated the decretal amount on the basis of the supplies made after 12.1.1987. No serious objection has been raised to the quantity of the supplies. The defendants have only contested the rate and their argument is that the plaintiffs had never asked for the transportation charges and therefore had waived this right to claim transportation charges. The parties were governed by the terms of the agreement which are embodied in the quotation and the letter of acceptance of quotation Ext. PX and Ext.PY. There is also sufficient material on record to show that the plaintiffs had been sending bills which included the transportation charges. Therefore, defendants were liable to pay for the supplies at the rate of 263.50 per metric tone agreed between the parties. 7 As far as interest is concerned, in the quotation Ext.PX the plaintiffs had made a stipulation that in case the amount is not paid within the stipulated period the defendants would be liable to pay compound interest at the rate of 20% per annum. This being the agreed interest, the learned Single Judge was right in applying this rate of interest till the date of filing of the suit. Shri Bimal Gupta, learned counsel for the plaintiffs has urged that in view of the agreement between the parties, the learned Single Judge should have awarded future interest also at the rate of 20% per annum compound interest. We are unable to accept this contention. After the suit is decreed, it is the discretion of the Court as to what rate of interest should be awarded. The learned Single Judge has exercised his discretion. While exercising his discretion, he has obviously taken into consideration the fact that the plaintiffs have been charging rather high rate of interest in terms of the agreement entered into between the parties and the interest has been capitalized and has become the principal amount. Therefore, the interest now being awarded includes interest upon interest. Therefore, the rate of interest awarded by him is just and reasonable calling for no interference. In view of the above discussion the appeal and the cross objections are both dismissed, with no order as to costs. ( Deepak Gupta ), J. September 26, 2008 ( V.K.Ahuja ), J. ™