HON’BLE SRI JUSTICE R.KANTHA RAO S.A.M.P.No.698 of 2011 In S.A.No.532 of 2004: Between: M/s. Thermal Instruments &Equipments, Hyderabad. …Petitioner/respondent And The Chief Admn.Officer,Directorate of Plant Protection, Quaranting & Stones,Faridabad and three others. …Respondents/Appellants HON’BLE SRI JUSTICE R.KANTHA RAO S.A.M.P.No.698 of 2011 In S.A.No.532 of 2004: ORDER; This miscellaneous petition arises out of the judgment, dated 04.03.2011 passed by this Court in S.A.No.532 of 2004. 2. I have heard the learned counsel appearing for the parties. 3. For the sake of convenience, the parties will be referred to as the’ plaintiff’ and the ‘defendants’ i.e. as they were originally arrayed in the suit. 4. The brief facts necessary for considering the present petition may be stated as follows: The defendants called for quotation for supply of deep freezers (quick freezers) and the plaintiff offered to supply the said items. In its offer, the plaintiff submitted the terms of supply of the deep freezers, which is marked as Ex.A-1. The price of quick freezer is mentioned as Rs.22,600/-. The version of the plaintiff is that the taxes like excise duty and sales tax are extra vide Ex.A-2. The defendants placed orders dated 25.01.1989 and later on 14.03.1989. There is no dispute about the fact that the terms and conditions in respect of both the transactions are one and the same. The plaintiff was asked to deposit the earnest money and accordingly deposited an amount of Rs.1130/- twice in respect of two orders. The plaintiff supplied the quick freezer and sent a bill for its price Rs.22,600/- plus excise duty of Rs.7,560/- i.e. for a total amount of Rs.31,366.40 ps. However, the defendants paid an amount of Rs.23,504/- which includes sales tax of Rs.904/- and according to the plaintiff an amount of Rs.7,862.40 ps. respectively relating to two orders was due from the defendants. The plaintiff subsequently issued the notice under Section 80 of CPC calling upon the defendants to pay the balance amount, for which the defendants had sent reply refusing to pay the alleged balance amount and thereafter the plaintiff instituted the suit for recovery of an amount of Rs.15,724.80 ps. plus interest of Rs.5,579.87 ps. which is calculated @ 18% per annum. 5. The learned trial Court dismissed the suit holding that as per the contract entered into between the parties in respect of the two transactions, the defendants are not liable to pay the said amount. However, the learned appellate Court held that the defendants are liable to pay the said amount and also interest accrued thereon. 6. Against the said judgment of the first appellate Court, the defendants preferred second appeal. 7. This Court heard the appellants’ counsel and as there was no representation on behalf of the respondent, rendered the judgment on merits holding that as per the terms and conditions of the contract, the defendants are not liable to pay the suit amount and reversed the judgment passed by the first appellate Court. This Court expressed the view that the first appellate Court reversed the judgment of the trial Court and the said judgment is contrary to the terms and conditions of the contract, which were borne out from the documents on record. 8. Against the said judgment of this Court, the present petition is filed to recall the judgment passed by this Court mainly on the ground that due to unavoidable circumstances, the respondents’ counsel (petitioners’ counsel) could not address the arguments and therefore, after setting aside the judgment, the matter may be re-heard and the judgment may be rendered on merits. Thereafter, this Court heard both the counsel on the maintainability of the application to recall the judgment and also the second appeal on merits. 9. Since it was submitted by the learned counsel appearing for the petitioners (respondents) that on the date of hearing of the appeal he was engaged before another court in some other matter and the matter was disposed of without hearing him, that he has arguable point which is in favour of the petitioner/plaintiff and therefore, it may be heard. Considering the submission made by the learned counsel, this Court is of the view that by exercising its powers under Sections 108 and 151 of CPC, this Court can afford opportunity to the petitioner/plaintiff. 10. Coming to the merits of the case this Court taking the view held that the defendants placed an order dated 25.01.1989 Ex.A-2 in pursuance of the quotation of the plaintiff for supply of the deep freezer, the order does not state anything about the payment or non-payment of excise duty. When the order was received by the plaintiff, the plaintiff acknowledged the said offer and communicated to first defendant and it was accepted by Ex.A-3. This Court expressed the view that from Ex.A-3 acceptance letter time is also extended for delivery up to 25.03.1989 and that the first defendant accepted the terms and conditions stipulated by the plaintiff in Ex.A-3 for supply of deep freezer and therefore, the contention of the defendants that they never indicated their acceptance for payment of excise duty cannot be accepted. Further, this Court was of the view that if the defendants are not liable to pay the excise duty, it is the duty of the defendants to reject the goods sent under the bills Exs.A-10 and A-11 or to accept the goods under protest. They also did not issue any notice after receiving Exs.A-5 and A-10 and as such they are not liable to pay excise duty. The plaintiff issued notice Ex.A-12 dated 24.10.1990 to first defendant demanding him to pay balance of amount due under the bills Exs.A-5 and A-10 with regard to excise duty and part of the sales tax. This Court also took into consideration the Ex.A-19 which is the reply notice dated 09.05.1991 sent by the defendants wherein at para 2, it has been clearly mentioned as follows: “The terms and conditions of the supply order on the basis of which your client has supplied the items also did not put us under any obligation for payment of excise duty. Your client no doubt pointed out that excise duty is to be paid in addition to the quoted rate but the defendants had never communicated its concurrence for payment of the said excise duty. In view of the foregoing, the question of payment of any excise duty to your client does not arise.” 11. The said reply notice was issued to the notice Ex.A-12 issued by the plaintiff under Section 80 of CPC demanding to pay the balance of amount due under Exs.A-5 and A-10 towards excise duty. 12. This Court took the view that since the defendants had never specifically agreed to pay the excise duty and never communicated their consent to pay excise duty and ultimately allowed the second appeal filed by the defendants. 13. Learned counsel appearing for the petitioner/plaintiff argued that in view of their contention that the defendants never expressed their willingness to pay the excise duty did not adduce any evidence, this Court ought to have drawn adverse inference against their version. In support of his contention, he relied on a decision in ISWAR BHAI C. PATEL ALIAS BACHU BHAI PATEL, v. HARIHAR BEHERA AND ANOTHER[1] wherein the Supreme Court held as follows: “Applying the principles stated above to the instant case, it would be found that in the instant case also the appellant had abstained from the witness box and had not made any statement on oath in support of his pleading set out in the written statement. An adverse inference has, therefore, to be drawn against him. Since it was specifically stated by respondent No.2 in his statement on oath that it was at the instance of the appellant that he had issued the cheque on the account of respondent No.1 in the Central Bank of India Ltd. Sambalpur Branch, and the appellant, admittedly, had encashed that cheque, an inference has to be drawn against the appellant that what he stated in the written statement was not correct. In these circumstances, the High Court was fully justified in decreeing the suit of respondent No.1 in its entirety and passing a decree against the appellant also.” 14. The learned counsel appearing for the petitioner/plaintiff also brought to the notice of this Court Ex.A-1 the quotation for deep freezer where in the terms and conditions it is mentioned that the taxes will be charged extra (term No.1) and the excise duty or any devices of state, local or central are statutory the same will be as per rules and regulations on the date or dates of delivery. These cannot be predicted now (term No.4). The learned counsel also brought to the notice of this Court the Ex.A-3 letter of acceptance addressed to the defendants wherein it is specifically mentioned that ‘the statutory taxes, excise duty will be charged extra as per gate pass amount paid by our principals M/s. Remi.’ Therefore, according to the learned counsel, the defendants are fully aware about the condition that the taxes will be charged extra and the same being part of the contract, they cannot turn round and say that they are not liable to pay the taxes. In support of his contention, he relied on a judgment of Supreme Court in A.B.C. LAMINART PVT. LTD. AND ANTOHER v. A.P. AGENCIES, SALEM[2] wherein it is held as follows: ‘The first question to be decided, therefore, is whether Clause 11 as aforesaid formed part of the agreement. Mr. javali submits that Ex.B-1 is an order of confirmation No.68/59 dated 02-10-1974 from the Sales Executive for the first appellant to the respondent acknowledging the receipt of their order and registering the same subject to the terms and conditions ‘overleaf. The general terms and conditions printed overleaf included the aforesaid Clause 11. We are unable to agree. Admittedly the parties have transacted the business on inter alia basis of Clause 11. There is, therefore, no escape from the conclusion that Clause 11 formed pt of the agreement and the parties would be bound by it so long as they would be bound by the contract itself. It is not open to the respondent to deny existence of Clause 11. The submission of Mr.Javali has, therefore, to be rejected.” 15. Lastly, the learned counsel invited the attention of this Court to Section 64-A of the Sale of Goods Act which lays down that the increase or decrease in duty should be taken note of in the case of contracts concluded prior to the increase or decrease and no party should be made to unnecessarily gain or suffer on account of State action in increasing or decreasing duty. The learned counsel in support of his contention relied on a decision in M/S. SRAMAJIBI STORES, CALCUTTA v. UNIION OF INDIA[3] in which case “ ‘A’ made a contract with ‘B’ to supply waterproofed coals and capes made of cotton canvas, special (chemically) treated and made waterproof by the chemical treatment. Subsequent to the contract being entered upon, excise duty payable on cotton canvas was increased. ‘A’ claimed a further sum on account of increase in costs of production of the articles agreed to be supplied. Claim was rejected on ground that the duty was increased on the raw material i.e. on cotton canvas and not on the finished goods, which were required to be supplied under the contract.” As against this, the Division Bench of the Delhi High Court held that though cotton canvas, special (chemically) waterproofed was no doubt the raw material from which the coals and capes had to be fabricated only those coats and capes which were fabricated from cotton canvas, special (chemically) waterproofed could answer the description of the contracted goods. In such a situation if the excise on raw material went up, it could not be said that Section 64-A of the Sale of Goods Act was not attracted. Further keeping in view Article 14 of the Constitution, a purposeful or a fair approach has to be adopted in contracts between the State and the citizens. Accordingly, the Division Bench of the Delhi High Court reversed the judgment of the learned single Judge. 16. Having gone through the provisions of Section 64-A of Sale of Goods Act and the terms and conditions of the contract in which the defendants were made aware at the first instance that the taxes will be charged extra and considering the ratio laid down in the judgments referred above, and also taking into account that no evidence is let in by the defendants in proof of their contention that they never accepted the terms and conditions of the contract, this Court is of the view that the judgment passed by this Court is required to be reviewed. 17. In view of the foregoing discussion, the defendants are liable to pay the suit amount together with interest, which is towards the taxes, which is one of the terms and conditions of the contract. The judgment passed by this Court dated 04.03.2011 holding that the defendants are not liable to pay the suit amount together with interest is therefore reviewed and it is held that the defendants are liable to pay the suit amount with interest as was held by the learned first appellate Court. The review petition is therefore allowed and the second appeal stands dismissed. There shall be no order as to costs. _______________ R.KANTH RAO,J Date:24-02-2012 CCM HON’BLE SRI JUSTICE R.KANTHA RAO S.A.M.P.No.698 of 2011 In S.A.No.532 of 2004: Date:24-02-2012 [1] AIR 1999 SC 1341 [2] AIR 1989 SC 1239 [3] AIR 1982 DELHI 76