Case: K.C.P. Limited Vs. State Trading Corporation of India and Another

Pradesh against the judgment and order dismissing their suit. O.S.A. No.5/74 was filed by the appellant against the decree which was passed against them in C.S. No.1/70 while O.S.A. No.9/74 was filed by the State Trading Corporation in respect of the judgment and order in C.S.No.1/70 in so far as it directed the State Trading Corp oration to pay court fee on its claims separately. The Andhra Pradesh High Court by the impugned judgment and order which is a common judgment in the three appeals, has dismissed these appeals and has awarded costs as set out in the impugment and order. The present appeals are filed by appellant from this judgment and order in so far as it upholds the claim of the State Trading Corporation against the appellant. 7. The Andhra Pradesh High Court has examined in detail the entire correspondence which was exchanged between the appellant and/or its Chairman and the Government of India as also the Government of the concerned States in connection with the setting up of the factory of the appellant and the concessional rate at which the appellant offered to supply cement for the nagarjunasagar Project. The High Court has come to the conclusion that there was no concluded contract between the parties for the supply of cement for the said project at a fixed price of Rs.47. 50. We do not see any reason to take a different view in the light of the facts and circumstances which are set out at length in the judgment of the Division Bench of the High Court of Andhra Pradesh. In view of this finding the question of the alleged agreement being drawn up in accordance with the provisions of Article 299 of the constitution of India, or its non-enforceability on that count, does not arise. The High Court has, however, held that in view of the facts and circ umstances which are set out in the judgment, the appellant had offered a rebate of Rs.7/- on the Control Price of cement in respect of the cement supplied for the Nagarjunasagar Project. It was in the light of this concessional rate offered by the appellant that licences were issued from time to time to the appellant for the Cement factory and for expansion of its capacity. The High Court has also pointed out that in fact the appellant gave a rebate of Rs.7/- on the controlled pr ice in respect of the cement supplied for the said project and it continued to give this rebate upto 1.11.1961. The appellant also wrote to the State Trading Corporation informing it that the appellant had agreed to give a rebate of Rs.7/- on the Control Price of Cement in respect of the cement which was to be supplied by it for the Nagarjunsagar Project and the State Trading Corporation accepted this arrangement. The appellant also showed this amount as rebate in the bills which were drawn by it for the supply of cement upto 1.11.1961. It was not entitled to withdraw this rebate after 1.11.1961. In fact, even after 1.11.1961 it continued to recover only the concessional price. It has not taken any steps against the State of Andhra Pradesh to recover the amount of rebate so granted by it although its bills after 1.11.1961 do not show the rebate.8. In view of the above the High Court has, in our view, rightly come to the conclusion that the State of Andhra Pradesh was entitled to the supply of cement from the appellant at control Price less a rebate of Rs.7/- during the period when the Cement Control Orders were in operation. As the State of Andhra Pradesh has in fact paid this price, that is to say, Control Price less rebate of Rs.7/-, no further relief is required to be granted as its claim to recive cement at the fixed price of Rs.47.50 per ton has been negatived. Although the appellant declined to give this rebate in its b ills after 1.11.61 it has in fact not filed any suit for the recovery of this rebate of Rs.7/- as against the State of Andhra Pradesh. In these circumstances the High Court has rightly come to the conclusion that the State of Andhra Pradesh is liable to pay for the cement supplied, control price less a rebate of Rs.7/-. The State Trading Corporation was only a canalising agency and it had agreed to pass on a rebate of Rs.7/- to the State of Andhra Pradesh in view of the agreement which was entered into between the appellant and the State of Andhra Pradesh. The High Court has rightly observed that it is difficult to see how the appellant can at all make a complaint against the State Trading Corporation for the amount of rebate which was granted by the appellant to the State of Andhra Pradesh. It has, therefore, held that the appellant was not entitled, to claim the amount of rebate from the State Trading Corporation after 1.11.1961 as was done in the statements of accounts submitted by it to the State Trading Corporation. It has, therefore, upheld the claim of the State Trading Corporation for recovery of the excess amount for which credit was thus taken by the appellant. It has held that as selling agent, the appellant was receiving the full price minus Rs.7/- per ton given as rebate. It is only that price which should have been paid to the appellant as producer. The reversal of entries in the accounts made by the appellant as selling agent of the State Trading Corporation is unwarranted and clearly illegal. The State Trading Corporation was justified in filing the suit and claiming the amount of rebate which had been wrongfully debited to their account by the appellant by making reversal entries. The High Court has, therefore, dismissed the appeal filed by the appellant being O.S.A. No.5 of 1974 with costs. We agree with the reasoning and conclusion of the Andhra Pradesh High Court for reasons set out above.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]7. The Andhra Pradesh High Court has examined in detail the entire correspondence which was exchanged between the appellant and/or its Chairman and the Government of India as also the Government of the concerned States in connection with the setting up of the factory of the appellant and the concessional rate at which the appellant offered to supply cement for the nagarjunasagar Project. The High Court has come to the conclusion that there was no concluded contract between the parties for the supply of cement for the said project at a fixed price of Rs.47. 50. We do not see any reason to take a different view in the light of the facts and circumstances which are set out at length in the judgment of the Division Bench of the High Court of Andhra Pradesh. In view of this finding the question of the alleged agreement being drawn up in accordance with the provisions of Article 299 of the constitution of India, or itson that count, does not arise. The High Court has, however, held that in view of the facts and circ umstances which are set out in the judgment, the appellant had offered a rebate of Rs.7/on the Control Price of cement in respect of the cement supplied for the Nagarjunasagar Project. It was in the light of this concessional rate offered by the appellant that licences were issued from time to time to the appellant for the Cement factory and for expansion of its capacity. The High Court has also pointed out that in fact the appellant gave a rebate of Rs.7/on the controlled pr ice in respect of the cement supplied for the said project and it continued to give this rebate upto 1.11.1961. The appellant also wrote to the State Trading Corporation informing it that the appellant had agreed to give a rebate of Rs.7/on the Control Price of Cement in respect of the cement which was to be supplied by it for the Nagarjunsagar Project and the State Trading Corporation accepted this arrangement. The appellant also showed this amount as rebate in the bills which were drawn by it for the supply of cement upto 1.11.1961. It was not entitled to withdraw this rebate after 1.11.1961. In fact, even after 1.11.1961 it continued to recover only the concessional price. It has not taken any steps against the State of Andhra Pradesh to recover the amount of rebate so granted by it although its bills after 1.11.1961 do not show the rebate.8. In view of the above the High Court has, in our view, rightly come to the conclusion that the State of Andhra Pradesh was entitled to the supply of cement from the appellant at control Price less a rebate of Rs.7/during the period when the Cement Control Orders were in operation. As the State of Andhra Pradesh has in fact paid this price, that is to say, Control Price less rebate ofno further relief is required to be granted as its claim to recive cement at the fixed price of Rs.47.50 per ton has been negatived. Although the appellant declined to give this rebate in its b ills after 1.11.61 it has in fact not filed any suit for the recovery of this rebate of Rs.7/as against the State of Andhra Pradesh. In these circumstances the High Court has rightly come to the conclusion that the State of Andhra Pradesh is liable to pay for the cement supplied, control price less a rebate of Rs.The State Trading Corporation was only a canalising agency and it had agreed to pass on a rebate of Rs.7/to the State of Andhra Pradesh in view of the agreement which was entered into between the appellant and the State of Andhra Pradesh. The High Court has rightly observed that it is difficult to see how the appellant can at all make a complaint against the State Trading Corporation for the amount of rebate which was granted by the appellant to the State of Andhra Pradesh. It has, therefore, held that the appellant was not entitled, to claim the amount of rebate from the State Trading Corporation after 1.11.1961 as was done in the statements of accounts submitted by it to the State Trading Corporation. It has, therefore, upheld the claim of the State Trading Corporation for recovery of the excess amount for which credit was thus taken by the appellant. It has held that as selling agent, the appellant was receiving the full price minus Rs.7/per ton given as rebate. It is only that price which should have been paid to the appellant as producer. The reversal of entries in the accounts made by the appellant as selling agent of the State Trading Corporation is unwarranted and clearly illegal. The State Trading Corporation was justified in filing the suit and claiming the amount of rebate which had been wrongfully debited to their account by the appellant by making reversal entries. The High Court has, therefore, dismissed the appeal filed by the appellant being O.S.A. No.5 of 1974 with costs. We agree with the reasoning and conclusion of the Andhra Pradesh High Court for reasons set out above.