Food Corporation Of India & Ors vs Vikas Majdoor Kamdar Sahkari Mandli Ltd

2. Challenge in these appeals is to the judgment of a Division Bench of the Gujarat High Court holding that the suit filed by plaintiff (respondent) was to be partly decreed for recovery of Rs.68,02,973/- from the defendants i.e. present appellants together with pendente lite and future interest at the rate of 6% per annum with appropriate cost throughout. It is to be noted that the respondent had filed a suit (Civil Suit No. 6040 of 1994) before learned City Civil Judge Ahmedabad for injunction restraining the appellant No.1- Corporation and its functionaries from recovering and/or withholding any amount from the bills of the respondent herein and also for a declaration that action of appellant No.1- Corporation in recovering various amounts without deciding the rates for extra work was bad in law and for directing the appellant-Corporation to make payment for the extra work at the rates demanded by the respondent. It was averred that as per the tender notice the respondent herein was required to handle 750 MT per day as per the charter party and for handling for which rate was fixed at Rs.108 per MT. It was further stated that the appellant-Corporation by the letters dated 30.9.1994, 14.10.1994 directed the respondent herein to handle more cargo than what was prescribed above and consequently the respondent herein started handling cargo to the tune of 1200 to 1300 MT per day against the contracted rate of 750 M.T. In view of the accelerated discharge, the respondent had to incur additional expenses towards enhanced rate of wages, payment to the workers and demurrage to wagons. The respondent claimed that its entitlement for enhanced transportation charges was Rs.45 per MT in place of Rs.15 per MT which was stipulated in the contract. The appellant No.1-Corporation in its written statement took the stand that it had no intention of withholding any payment demand as per the terms of the contract and that whatever bill was raised as per the terms of the contract had been paid and the final bill had not been settled as yet. On the claim towards additional expenses due to the accelerated discharge, the Corporation contented that as per the terms of the contract the respondent herein was bound to carry out discharge so as to avoid any demurrage being incurred and it was bound to follow the rules and regulations of the Port authorities under which it had to discharge at a faster rate. The Corporation also denied that the respondent had incurred any extra expenses because of the accelerated discharge. The appellant-Corporation also denied the claim towards enhanced rate for transportation charges. Subsequently the respondent herein amended the claim to an amount of Rs.68,07,113.20 with interest at the rate of 18% per annum from the due date. Towards stevedoring charges the respondents herein claimed Rs.215/- per MT instead of agreed rate of Rs.108/- per MT. A sum of Rs.51,20,263.70 was claimed as the difference. The respondent further claimed the enhanced transportation charges and on that account claimed an additional sum of Rs.12,84,847.50. The appellant-Corporation filed its additional written statement denying the claim for enhanced compensation.

6. On the basis of the aforesaid findings the suit was dismissed. Aggrieved by the above judgment respondent herein filed First Appeal No. 2678 of 1999 before the Gujarat High Court. A Division Bench of the Gujarat High Court reversed the judgment of the trial court and decreed the suit for a sum of Rs.68,02,973/- with interest at the rate of 6% from the date of suit.

XX - Services to be Performed by the Contractors:

18. In view of the above, we direct that the respondent- society shall be paid at the rate of Rs.108 per M.T. in terms of the contract up to 750 M.T. and at the rate of Rs.215 per MT for quantum beyond that. The interest rate shall be 6% as fixed by the High Court. The respondent-Society shall not be entitled to any amount beyond the agreed amount of Rs.15 per M.T. for transportation. Civil Appeal No.7440 of 2000 is allowed to the aforesaid extent.

19. The Society's appeal (Civil Appeal No.2540 of 2002) is sans merit and deserves dismissal, which we direct.

20. There shall be no order as to costs in both the appeals.