Case: Union of India Vs. Assam Iron and Steel Company and Another

FAZAL ALI, J.1. This appeal by certificate is directed against a judgment of the Division Bench of the Calcutta High Court reversing in part a decree passed by the Single Judge of that Court acting in exercise of its original jurisdiction.2. The plaintiff-appellant brought a suit for recover of Rs. 70, 350.00 plus Rs. 3, 851.00 as interest from the defendant on account of the charges to be paid to the appellant as per agreement entered into between the parties which is Annexure A to the plaint and by virtue of which the defendant was appointed as a controlled stockholder for iron and steel in Assam.3. We have gone through the terms of the agreement particularly Clauses 6, 7 and 9 which are extracted below :-"6. Notwithstanding the rates at which the producers might have booked your order, you will pay for all supplies into your Controlled Stock at such prices current at the time of delivery as will be notified by the Government of India.7. For all supplies from Controlled Stock you will charge the buyer as follows :-(i) Such prices as may be notified by the Government of India current at the time of delivery which shall include Stockists remunerations at the rate sanctioned by government based on services rendered and expenses incurred by you.(ii) Such delivery charges as may be agreed between you and the Iron and Steel Controller from time to time. In all cases of delivery f.o.r. your own siding or ex. your yard, no delivery charges will be made.(iii) Cutting and Wastage charges, if incurred at a rate to be agreed between you and the buyer.Rates of Stockists remuneration are on the basis of cash payment to you at the time of delivery. Any question of credit facilities to buyers will be a matter for settlement between you and the buyer.9. In the event of any rise in prices as laid down in 6 above, you will pay to the government or the government will pay to you the different in value on your stocks calculated on the tonnage of stock lying in your stockyard at the time of such rise or fall. Such payment will be made within 14 days from the date when the statement of accounts has been certified by Iron and Steel Controller."4. It is common ground that the price of iron and steel were raised by Rs. 50.00 per ton with effect from July 1, 1952. The stand taken by the Government was that the defendant/respondent was liable not only to pay the cost of 306 tons of iron and steel which were actually lying on that date in the stock-yard of the defendant at Gauhati but also of 1101 tons of the commodities which were then in transit. The High Court has given cogent reason for accepting the case of the defendant that the appellant was not entitled to charge any higher amount resulting from the increase of the price for the goods in transit. It is the admitted case of the parties that in pursuance of the direct despatch programme, these goods were sent directly by the producer to the various registered stockists and were never intended to be transferred to or stored at the stock-yard of the defendant. In this connection the High Court rightly pointed out that the difference in the price was not to be paid in respect of the tonnage of the entire stock, but only that of the stock lying in the defendants stock-yard. The High Court further held that even assuming that these goods were destined for the defendants stock-yard and should therefore be treated as notionally lying therein on June 30, 1952 for the purpose of Clause 9, even then they were not subject to revaluation under Clause 9. We find ourselves in complete agreement with the reasons given by the High Court in reversing the judgment of the learned trial Judge on this point.

Decision reasoning: 0[ds]4. It is common ground that the price of iron and steel were raised by Rs. 50.00 per ton with effect from July 1, 1952. The stand taken by the Government was that the defendant/respondent was liable not only to pay the cost of 306 tons of iron and steel which were actually lying on that date in theof the defendant at Gauhati but also of 1101 tons of the commodities which were then in transit. The High Court has given cogent reason for accepting the case of the defendant that the appellant was not entitled to charge any higher amount resulting from the increase of the price for the goods in transit. It is the admitted case of the parties that in pursuance of the direct despatch programme, these goods were sent directly by the producer to the various registered stockists and were never intended to be transferred to or stored at theof the defendant. In this connection the High Court rightly pointed out that the difference in the price was not to be paid in respect of the tonnage of the entire stock, but only that of the stock lying in the defendantsThe High Court further held that even assuming that these goods were destined for the defendantsand should therefore be treated as notionally lying therein on June 30, 1952 for the purpose of Clause 9, even then they were not subject to revaluation under Clause 9. We find ourselves in complete agreement with the reasons given by the High Cour