R.S.A.No.1205 of 2009 (O&M) 1 In the High Court of Punjab and Haryana at Chandigarh R.S.A.No.1205 of 2009 (O&M) Date of decision: 4.3.2011 Food Corporation of India ......Appellant Versus M/s Moga Roller Flour Mills (P) Ltd. .......Respondent CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr.H.P.Verma, Advocate, for the appellant. Mr.Amit Jain, Advocate for the respondent. **** SABINA, J. Plaintiff Food Corporation of India (FCI for short) filed a suit for recovery against the rice mill-defendant. The case of the FCI, in brief, was that a policy had been framed by the Central Government and under the said policy the FCI used to purchase paddy from the market and give it to the millers for shelling. Defendant-mill had agreed to shell the paddy as per its storage capacity. The paddy stored under the mill was to remain in R.S.A.No.1205 of 2009 (O&M) 2 joint custody of the FCI and the mill. As per the policy of the Central Government, 67 % of superfine rice was required to be delivered out of the paddy supplied to the defendant. The defendant had agreed to abide by the terms and conditions of the said agreement. The defendant had furnished the requisite security in terms of the agreement. The defendant was also responsible for the safe custody of paddy supplied to it for milling and delivery of rice as per the agreement. Losses, if any, incurred during the transit or storage were to be made good by the defendant @ 1 ½ time of economic costs of the variety of paddy/ rice. The defendant was required to deliver the rice within ten days of issuance of supply of paddy at regular intervals. As per schedule, 20% of rice was to be delivered in the months of October/ November 1994, 26% in December 1994 and 26% in the month of January 1995 and 28% in the month of February 1995. The defendant had, however, failed to shell the paddy and as such it became liable to pay 1 ½ time of economic costs of paddy supplied to it. The total paddy stored in the premises of the defendant was 6720 bags weighing 4367 quintals of superfine paddy. Since, the defendant had failed to shell the paddy, the defendant dispatched 6400 bags weighing 4006.40 quintals of paddy before 31.5.1995. Cost of the remaining paddy was assessed at ` 876.21 per quintal @ 1 ½ time of the economic cost i.e. ` 3,15,961/- on 1.6.1995. Out of remaining paddy, 320 bags were retrieved and their value was assessed at ` 395/- per quintal weighing 192.20 quintals amounting to ` 75,959/-. FCI was entitled to recover ` 2,40,002/- from the defendant. An expenditure of `1,920/- was incurred by the R.S.A.No.1205 of 2009 (O&M) 3 FCI on retrieving the paddy and hence, FCI was entitled to recover ` 2,41,922 plus ` 1,12,492/- towards interest. Defendant, in its written statement, averred that the plaintiff firm stored the paddy on the premises of the defendant on rental basis, which were lifted by the plaintiff by 19.2.1995 and the alleged agreement is dated 23.2.1995. Hence, no amount is due and recoverable from the defendant. On the pleadings of the parties, following issues were framed by the trial Court:- “1. Whether the plaintiff is entitled to the recovery of ` 3,54,414/- as prayed along with interest ? If so, at what rate? OPP 2. Whether this Court has no jurisdiction to try and entertain the present suit ? OPD 3. Whether the suit is not maintainable in the present form ? OPD 4. Whether the defendants are entitled to the costs under Section 35A of the CPC? OPD 5. Whether the plaintiff is stopped by its act and conduct from filing the present suit? OPD 6. Whether the agreement as alleged by the plaintiff is forged and fabricated document ? OPD 7. Relief.” The suit filed by the plaintiff was dismissed by the trial Court vide judgment and decree dated 9.11.2005. In appeal, the suit filed by the plaintiff was decreed by the Additional District Judge, R.S.A.No.1205 of 2009 (O&M) 4 Faridkot vide judgment and decree dated 30.9.2008 for recovery of ` 94,682/- with proportionate costs. The FCI was further entitled to recover interest @ 12% per annum w.e.f.1.6.1995 till realisation. Hence, the present appeal by plaintiff. Learned counsel for the appellant has submitted that the agreement entered between the parties, vide which the paddy was given to the mill for shelling, had been duly proved on record. As per the said agreement, in case of any loss/ storage, the mill was required to pay 1 ½ time of economic costs of paddy/ rice. Hence, the suit of the plaintiff for recovery was liable to be decreed as claimed. Learned counsel for the respondent, on the other hand, as submitted that the FCI had failed to prove its case. The alleged agreement had not been proved on record. In fact, the paddy had been kept in the Mill for storage purposes. Since the loss of weight of paddy was due to atmospheric condition, the Mill was not at fault. After hearing learned counsel for the parties, I am of the opinion that the present appeal is devoid of any merit and deserves dismissal. Learned first Appellate Court, after appreciating the evidence led by the parties on record, held that the alleged agreement qua handing over of the paddy for shelling was not duly proved on record. However, it was established on record that the paddy had been stored in the Mill by the FCI and some shortage had occurred. Basing calculations on the said shortage, the suit filed by the FCI for recovery was decreed. DW-2 Girdhari Lal, admitted that 6720 bags of paddy had been stored in the Mill premises. He also R.S.A.No.1205 of 2009 (O&M) 5 admitted the factum of deposit of security of ` 40,000/- with FCI by the Mill. PW-1 Joginder Singh stated that no agreement between the parties was executed in his presence. PW-2 Harbhajan Singh showed his ignorance qua execution of any agreement between the parties. PW-3 Paramjit Singh deposed that an agreement had been executed between the parties but the same was signed by some un- known persons on behalf of the defendant. He admitted that none of the directors had signed the agreement. Out of the stored paddy with the Mill, FCI established that 6400 bags were dispatched upto 31.5.1995 and out of the remaining 320 bags only 192.30 quintals of paddy was retrieved. Since the FCI had failed to establish the agreement which entitled it to claim shortage @ 1 ½ times of economic cost, the learned first Appellate Court rightly decreed the suit of the plaintiff- FCI, after calculating the shortage of paddy at ` 584.14 paise. No substantial question of law arises in this regular second appeal, which would warrant interference by this Court. Accordingly, the same is dismissed. (SABINA) JUDGE March 04, 2011 anita