IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE FIFTEENTH DAY OF FEBRUARY TWO THOUSAND AND ELEVEN PRESENT THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO CITY CIVIL COURT APPEAL No.18 OF 2001 Between: M/s. Alpha Steels Pvt. Ltd., A company Regd. Under Indian Companies Act, Rep. by its Managing Director, Omprakash Kedia, Having Regd. Office at VI Floor, Taramandal, Saifabad, Hyderabad. - - - Appellant/ Defendant. AND M/s. Steel Authority of India Ltd., A Govt. of India Undertaking Branch at VII Floor, Taramandal complex, Saifabad, Hyderabad, Rep. by its Branch Manager And G.P.A. Holder T.K. Patnaik. - - - Respondent/ Plaintiff. This Court made the following : THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO CITY CIVIL COURT APPEAL No.18 OF 2001 JUDGEMENT: The defendant in O.S. No.1005 of 1991 on the file of V Additional Senior Civil Judge, City Civil Court, Hyderabad, is the Appellant herein. The suit was filed for recovery of a sum of Rs.3,43,835/- with interest at the rate of 18% p.a. and costs. The allegations in the plaint in brief are that the plaintiff is a supplier of his marketing steel and the defendant is the customer and during the business transactions between the plaintiff and the defendant, the defendant has placed some indents for supply of the steel and in pursuance of the indents given below ___________________________________________________________ Invoice No. Date Invoice Gross Quantity Amount ___________________________________________________________ 006771 04-08-88 20-290 Mts. Rs.3,89,986-00 006773 04-08-88 23-285 Mts. Rs.3,88,236-00 006772 04-08-88 23-250 Mts. Rs.3,87,652-00 006848 04-08-88 23-309 Mts. Rs.3,88,636-00 006847 05-08-88 22-625 Mts. Rs.3,77,233-00 ___________________________________________________________ the goods were supplied and the defendant has paid the invoice money and also took delivery of the goods. According to the case of the plaintiff, the prices are to be regulated by the Indian Tin Plates Manufacturers Association (for short, ‘The ITMA’) and as per the contract conditions there is a provision for revision of the prices and it was pleaded as below : “The prices (including extra and other charges) payable for the goods shall be those prevailing on the date of delivery as fixed by Steel Authority of India Limited/The Iron and Steel Controller/The Joint Plant Committee/Tin Plates Producers Consultative Committee or any Statutory or other bodies, as the case may be, irrespective of whether (1) the property in goods has passed to the buyer before delivery (2) any payment has already been made towards the price mentioned herein. The prices mentioned in the office/sale orders shall be deemed to be provisional and subject to such addition or reduction or revision s may be announced/made by the above bodies but however always subject to adjustment, if any according to such terms and conditions as may be prescribed by the Steel Authority of India Limited from time to time. The date of delivery in case of rail deliveries shall be the date of railway receipt in the case of all single date/RRs and latter date in case of all bi- dated RRs and in all other cases the date of actual delivery”. 2. It was also further pleaded that there is a provision for price revision clause : “Price Revision Clause : The prices payable on the goods will be based on the main producers joint plate committee’s prices ruling at the time of delivery, which in case of railway dispatches from our stock yard is the date of railway receipt and in other cases is the date of actual physical delivery from our yards. This clause will operate notwithstanding the fact that payment may have been made earlier for the whole or part of the offer at the prices mentioned on reverse or any other prices at any time prior to dispatch/delivery and all such payments till actual delivery will be deemed to be only advance payments”. 3. According to the case of the plaintiff, the ITMA has revised the prices of the electrolytic tin plates with effect from 04/05-07-1988 and the said circular or information was not available with the plaintiff and consequently the prices collected to the supplies made by the plaintiff to the defendant is lower and consequently invoices were given claiming a sum of Rs.2,62,074/- ___________________________________________________________ Supplementary Date Supplementary Gross Invoice No. to Invoice No. Amount ___________________________________________________________ 500613 14-09-88 006771 Rs.52,908-00 500615 14-09-88 006773 Rs.52,671-00 500614 14-09-88 006772 Rs.52,592-00 500640 14-09-88 006848 Rs.52,725-00 500641 14-09-88 006847 Rs.51,178-00 ------------------------ Rs.2,62,074-00 ------------------------ __________________________________________________________ 4. Therefore, according to the case of the plaintiff, even though the price was paid and claimed as per the rate which was in the notice of the plaintiff by the date of invoices in view of the agreement between the plaintiff and the defendant that the revision of the prices shall be binding on the defendant and any lesser price paid earlier shall be treated only as an advance and consequently the defendant has to make good the amount claimed by the plaintiff. The notice was given to the defendant, the defendant has denied several allegations made by the plaintiff and therefore the suit was filed by the plaintiff for recovery of the said amount. 5. The defendant filed a detailed written statement denying most of the allegations in the plaint about the liability to pay the revised rates of the electrolytic tin plates. According to the defendant, as per the invoices and the contract, the price which is available only at the time of delivery is to be aid and in fact all the money due to under the invoices and the supplies made by the plaintiff can not be paid and received by the plaintiff. It was further pleaded any interest made by the ITMA is not known to the defendant and however it does not bind the defendant who is not a member of the ITMA. It was further pleaded that on the basis of the price paid to the plaintiff by the defendant under the invoices in August, 1988 only the defendant ha sold the property in the market and any liability to pay at higher rate subsequently will be made to loss and injury and therefore there is no liability. According to the defendant, the revision of the prices is inequitable and not enforceable and therefore the defendant is not liable to pay the said amount. Furthermore, according to the defendant the clause of price revision is self explanatory and it does not show that the defendant has to pay anything excessive. A counter claim was also made by the defendant for payment of Rs.60,000/- which is said to have been in deposit with the plaintiff and consequently he claimed that the said amount has to be paid. But, however the plaintiff seems to have adjusted that amount towards the excess amount payable by the defendant towards the revised rates. The defendant claimed that there is no application to pay the amount claimed by the plaintiff. Therefore, it is pleaded for dismissal of the suit. 6. On the basis of the above pleadings, the following issues have been framed for trial : 1. Whether the plaintiff is entitled to the suit amount with subsequent interest and costs as prayed for? 2. Whether the defendant is entitled for recovery of Rs.60,000/- with interest at 18% p.a. by way of counter-claim ? 3. To what relief? 7. On behalf of the plaintiff, PWs.1 to 3 were examined and marked Exs.A-1 to A-21. On behalf fo the Defendant, DW.1 was examined and marked Exs.B-1 to B.-7. 8. After considering the evidence eon record, the learned V Senior Civil Judge, City Civil Court, Hyderabad, decreed the suit of the plaintiff with interest at the rate of 12% p.a. from the date of the suit till the date of realization. Aggrieved by the said judgement, the present Appeal is filed. 9. Now, the points for consideration are : 1) Whether the plaintiff is entitled to claim the difference of the price of the tin material sold to the defendant? 2) Whether there is any contractual obligation by the defendant to pay such amount? 3) Whether the judgement and decree passed by the learned V Senior Civil Judge, City Civil Court, Hyderabad, is legal and sustainable? 10. Points: The facts in this case are not much in dispute. The plaintiff being the supplier of the material and the defendant having purchased the same under the invoices Exs.B-1 to B-4 and having paid the said price towards the material supplied under the invoices under Exs.B-1 to B-4 is also not in dispute. The fact that the defendant got delivery of the goods is also not in dispute. The short point in controversy between the parties is whether there is a valid contractual obligation on the part of the defendant to pay the revised prices of the electrolytic tin plates after the supply made to the defendant and after having received the price as agreed upon under the invoices between the parties. 11. Evidently, the invoices do not stipulate any such obligation on the part of the defendant to pay any increased prices. The plaintiff has relied upon a special contract between the parties. The indent or the confirmation letter which is said to have been given by the defendant is not filed before the Court as it is not available. The lower Court considering the evidence of the defendant as having that Ex.A-18 is a particular proforma of the indent between the customer and the plaintiff inferred that such a proforma should have been between the plaintiff and the defendant. The learned counsel for the plaintiff fairly concedes that the documents relevant to the confirmation which was pleaded in Para No.3 (c) of the plaint is not available and consequently not filed before the Court is there is all argument is only the allegations made in the plaint and also the plea taken by the defendant in the written statement. According to him when a specific plea was made in the plaint about the facts and circumstances of the contract and the liability of the defendant it was not specifically denied and on the other hand, the contents of the allegations made in Para 3 (c) of the plaint have been admitted. Added to that a specific plea was made in Para No.12 of the plaint about the price revision and the defendant in the written statement in Para No.11 has not denied that and on the other hand he has specifically admitted that such a term of contract exists between the parties. Therefore, in view of the above circumstances, according to the counsel for the plaintiff, there is no further proof required by the plaintiff to produce any such document to establish the liability of the defendant. In fact the counsel for the defendant also could not seriously disputed about these facts and his grievance is only that the prices fixed by the ITMA are not binding on him. The clauses which are about the price revision have been already set forth in the earlier part of the judgement, a reading of the above clauses clearly goes to show that the price which was received by the plaintiff is only tentative and it shall be treated as an advance and parties have mutually agreed to pay any change or revision of the prices which has to be fixed by the Joint Plant Committee and the Tin Plates Producers Committee. 12. In this connection, it is usual to note that in fact Ex.A-21 is the letter dated 04-07-1988 issued by the Indian Tin Plates Manufacturers Association wherein the revision of the prices has taken place. Therefore, even by the time the invoices were placed and also supply of the goods were made the prices collected by the plaintiff is against the ruling price fixed by the Indian Tin Plates Manufacturers Association. The claim of the plaintiff is since the plaintiff was not informed of such revision by the date of the invoices dated 04/05-07-1988 a mistake has crept in and bonafidely the goods were sold for a lesser rate. It is also to be noted that the said letter Ex.A-21 is said to have been received by the defendant after 56 days from the date of delivery of the goods by the plaintiff to the defendant stating the revised prices to be effective from 04-07-1988. Therefore, it is quite clear even on the date when the goods were supplied to the defendant, the price fixed by the ITMA is more than as to what was actually offered by the plaintiff to the defendant. It clearly goes to show that it is not a case where after the purchase by the defendant the rates varied or changed. If the contention of the plaintiff that documents are to be taken into consideration it appears bonafidely and without knowing the change of the price, the plaintiff has sold the goods for a lesser value. Therefore, in view of the above circumstances, it is clear that it is not a variation of the prices after the purchase by the defendant and it is a case where even before the invoices were placed indent was placed and invoices were given out of the price existing was much higher and it is the price which governs the transaction between the parties. 13. Therefore, in view of the above circumstances it is not a case where the plaintiff is trained to make any encashment by taking advantage of the subsequent increases but it is only a case where the plaintiff is trying to make good the loss of the value which was suffered for sale of the goods at lesser rate even though the Indian Tin Plates Manufacturers Association has fixed at a higher rate even by July 1988. Therefore, in view of the circumstances, even if the claim is to be made subsequently even without any reference to the price revision clause the defendant has to pay the price which was available on the date of indent and the invoices and the price which was claimed now to be recoverable by the plaintiff is the price which was the real price as on the date of the transaction between the plaintiff and the defendant. Therefore, the contention of the defendant that a subsequent revision is sought to be pressed into service and burdened the defendant can not be taken into consideration. In fact, it appears to be a bona fide mistake and lack of information on the part of the plaintiff to know the real and actual price which the ITMA has fixed by the date of invoice and therefore it can not be said that the claim made by the plaintiff is not legal or untenable. The entire facts of the case have to be viewed differently taking into consideration Ex.A-21 which was issued by July, 1988 and therefore it is not a variation of any contractual terms after the delivery and after the invoices were placed by the defendant. Therefore, I have no hesitation in holding that the judgement passed by the V Senior Civil Judge, City Civil Court, Hyderabad, is legal and sustainable and the plaintiff is entitled for the realisation of the difference of increased amount and in fact it is the actual price which the defendant should have paid on the date of the invoices and it is not a valid price which was said to be contended and defeated by the defendant. Therefore, for the above circumstances, I find that the defendant has to make good the difference of the price of Rs.2,62,074/- to the plaintiff. The plaintiff has claimed interest at the rate of 18% p.a. in the suit and I feel it appears to be on a higher side. The plaintiff will be entitled to interest at the rate of 12% p.a. from 14-09-1998 till the date of suit and subsequent interest at 9% p.a. Accordingly the points were answered. In the result, the Appeal is partly allowed and the suit of the plaintiff is decreed for a sum of Rs.2,62,074/- with interest at 12% p.a. from 29-09-1988 till the date of the suit less Rs.60,000/- which is in deposit with the plaintiff and it is to be adjusted thereafter at the rate of 9% p.a. from the date of suit till the date of realization. Each party do bear their own costs in the Appeal. _______________________ N.R.L. NAGESWARA RAO, J Date:15-02-2011. Dsh.