APHC010387982002 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3397] THURSDAY ,THE SEVENTEENTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA KRISHNA RAO FIRST APPEAL NO: 2305/2002 Between: Indian Oils And Fertiliser Corporation and Others ...APPELLANT(S) AND M/s Sikalollu Subba Rao Co and Others ...RESPONDENT(S) Counsel for the Appellant(S): 1. . 2. T SREEDHAR 3. K KOUTILYA Counsel for the Respondent(S): 1. P NAGENDRA REDDY The Court made the following: JUDGMENT: - This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellants challenging the decree and judgment, dated 25.09.2002 in O.S.No.32 of 1989, on the file of Senior Civil Judge, Kandukur [for short ‘the trial Court’]. 2. The appellant Nos.1 to 7 herein are the defendant Nos.1 to 7; respondent Nos.1 to 8 herein are the plaintiffs and respondent Nos.9 and 10 herein are the defendant Nos.8 and 9 in O.S.No.32 of 1989. During the pendency of the appeal, the respondent Nos.2 and 4 died and their legal representative was already on record as 8th respondent. 3. The plaintiffs filed the suit for recovery of Rs.69,534/- due under the suit transaction and to grant future interest thereon and for costs. 4. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court. 5. The brief averments of the plaint in O.S.No.32 of 1989 are as under: (i) The 1st plaintiff firm is a trading firm and doing business in manufacture of oils and oil cakes at Singarayakonda and the plaintiffs 2 to 5 are its partners. The 1st defendant firm is a manufacturer and exporter of de- oiled rice bran, de-oiled cakes and oils and is situated at Nellore and the defendant Nos.2 to 9 are its partners. The 1st plaintiff firm is doing business in manufacture of oils and oil cakes and are supplying the same to the defendants and others through the orders booked by the brokers and commission agents. As per the orders of the brokers and commission agents, the 1st plaintiff firm used to supply goods to the purchasers according to the terms and conditions enumerated in the confirmation note. The 1st defendant is having running katha with the 1st plaintiff. During the business transactions, M/s. Krishna & Company, who are brokers and commission agents at Madras sent an order under confirmation Note No.168, dated 02.02.1984 to the 1st plaintiff firm to supply to the 1st defendant tobacco seed cake 10 lorries, each lorry weighing about 10 M.T. F.O.L. delivery at Singarayakonda at the rate of Rs.75/- per bag weighing 70 Kgs. including gunny and sales tax to be supplied in the months of April, May and June of the year 1984. In pursuance thereof, the 1st defendant firm vide T.S.C./84-85, dated 30.03.1984 confirmed the said order of its agents M/s. Krishna & Company, dated 02.02.1984. The 1st plaintiff firm was waiting for the communication from the above said brokers, Krishna & Company to dispatch the goods under order to the 1st defendant firm. On 26.12.1984 the said M/s. Krishna & Company sent a telegram asking the plaintiff firm to load goods under confirmation No.168 to the 1st defendant firm. (ii) As per the contract in accordance with both the credit bills, the total value comes to Rs.2,55,737-70 ps. The total amount sent under various drafts to the 1st plaintiff firm on various dates comes to Rs.2,26,145-95 ps. The 1st defendant is still due an amount of Rs.29,591-75 ps. As per the ledger account for the year 1986-87 at page 96, the 1st defendant firm sent a letter, dated 02.08.1986 along with a demand draft for Rs.1,145-95 ps. drawn on the Andhra Bank, Singarayakonda and the same was received by the 1st plaintiff on 04.08.1986 stating that the amount sent is towards full and final settlement of the account. The letter, dated 02.08.1986 amounts to acknowledgement of the liability. The calculation arrived at by the 1st defendant firm is wrong and as against the amount due to Rs.30,737-70 ps. The 1st defendant firm sent only Rs.1,145-95 ps. alleging that it is for full and final settlement of the account. In the account statement, the 1st defendant firm has shown some amounts as difference in price and debited the amounts unilaterally without any approval of the 1st plaintiff firm which is false to the knowledge of the 1st plaintiff firm. The 1st plaintiff demanded several times to pay the balance amount found due in terms of the credit invoice deducting the amount paid by way of draft, dated 02.08.1986, by the 1st defendant firm, but they did not give proper reply. Therefore, the plaintiffs are constrained to file the suit. 6. The 1st defendant firm filed written statement before the trial Court denying the allegations in the plaint which was adopted by the other defendant Nos.2 to 7. The brief averments in the written statement are as follows: (i) The 1st plaintiff is not a registered firm and the plaintiffs 2 to 5 are not its partners. The defendant Nos.8 and 9 retired from the plaintiff firm as early as on 01.01.1983, 1st defendant firm was dissolved on 30.03.1987 itself. The 1st defendant has never had any running khata with the 1st plaintiff firm and the account filed by the plaintiffs in the suit is not running khata. The time was essence of the suit contract. The said contract was also confirmed by the 1st defendant as admitted by the 1st plaintiff in the plaint. There was absolutely no necessity or conditions requiring any further communication or permission either from the brokers or from the 1st defendant to dispatch the goods covered under the contract. The necessity for any such communication pleaded in the plaint is false, unwarranted and untenable. The 1st defendant denies knowledge of any telegrams mentioned in the plaint said to have been issued by the brokers M/s. Krishna & Company, Madras on 26.12.1984. The failure on the part of the plaintiffs to supply the cake during the months of April, May and June, 1984 automatically brought the contract to an end and the said contract ceased to be in force after June, 1984. (ii) The total number of bags to be supplied under this contract were 1430 and the defendants suffered a loss of Rs.14,300/- under this contract. The 1st defendant was not aware of any such telegram surprisingly without any demand or request from the 1st defendant. Mr. S. Venkateswarulu, the brother of the 2nd plaintiff and father of plaintiffs 4 and 5, who manages plaintiffs’ business was contacted immediately and it was made clear to him that the 1st defendant would take delivery if only the value to be paid was at the then prevailing market rate of Rs.55/- per bag of 70 kgs. The 1st plaintiff firm failed to supply the entire quantity of 20 lorry loads as the prices of the cake have started to raise once again. Only 19 lorries were supplied in an extended period of March and April, 1985. The 1st defendant had suffered losses once again on account of plaintiffs failure to supply the entire stock within the stipulated time. (iii) At every stage, the plaintiffs sole aim and attempt was to exploit the defendants to the maximum extent on some pretext or the other. On account of increasing the number of gunny bags, the 1st defendant had suffered loss of cake of an equal weight, a total of 4500 gunny bags were used as per the bills. Out of them, 391 gunny bags were said to be extra and total amount of Rs.977-50 ps. was debited against the defendants under two contracts at the rate of Rs.2-50 per gunny. Taking average prices of the cake at Rs.1,100/- per M.T. on at the then prevailing market, the 1st defendant finalized the account of the plaintiffs as per the letter, dated 02.08.1986 and paid the entire balance amount of Rs.1,145-95 ps. by way of a demand draft towards full and final settlement of their account. The plaintiffs received the draft along with the account copy enclosed with the letter, dated 02.08.1986 and accepted it. They did not raise any protest or any claim either immediately or within a reasonable time, or at any time thereafter before filing the suit. It is, therefore, evident that the plaintiffs have accepted the payment towards full and final settlement of their claim and they are now stopped from making any such further claims. The plaintiffs claim is clearly barred by time. The suit is clearly barred by limitation and it was not filed within the period of limitation either from the respective dates of the contracts or the credit bills. The letter, dated 02.08.1986 enclosing the account of the plaintiffs by the defendants is not as acknowledgment of any debt. 7. Based on the above pleadings, the trial Court framed the following issues: (1) Whether each purchase of the cake alleged in the plaint is an independent contract, or whether they are all part of the same contract as alleged in the plaint? (2) Whether the stipulation in the confirmation note is the essence of the contract as alleged in the plaint? (3) Whether the alleged telegram, dated 26.12.1984 said to have been given by M/s. Krishna & Company, Madras, is true and binds the defendants? (4) Whether the plaintiffs failed to supply the cake during the months stipulated in the confirmation note, and if so whether it amounted to termination of the contract? (5) Whether the plaintiffs failure to supply the cake in time resulted in any loss to defendants, and if so how much loss was causes and whether the plaintiffs have to compensate the defendants for the said loss? (6) Whether the plaintiffs failed to stick on the terms of the confirmation note with regard to gunny bags and what is the loss sustained by the defendants on account of it and whether the plaintiffs have to reimburse the same to the defendants? (7) At what price or prices the plaintiffs are entitled to claim value of the cake? (8) Whether the plaintiffs supplied the entire quantity of case stipulated and whether the alleged deficiency in the supply resulted in any loss to the defendants, and if so, how much amount and whether the plaintiffs are therefore liable to compensate the defendants? (9) Whether the account of the defendants with the plaintiffs is a running account and whether the suit claim of the plaintiffs is in time? (10) Whether the plaintiffs are entitled to claim any interest on the suit claim and if so, at what rate and from which date? (11) To what relief? 8. During the course of trial in the trial Court, on behalf of the Plaintiffs, PW1 was examined and Ex.A1 to Ex.A36 were marked. On behalf of the Defendants, DW1 was examined and Ex.B1 to Ex.B14 were marked. 9. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 25.09.2002, against which the present appeal is preferred by the unsuccessful defendant Nos.1 to 7 in the suit questioning the Decree and Judgment passed by the trial Court. 10. Heard Smt. S. Rajani learned counsel, representing Sri T. Sreedhar, learned counsel for the appellants and heard Sri P. Nagendra Reddy, learned counsel for the respondent Nos.1 to 8. 11. Learned counsel for the appellants would contend that the decree and judgment passed by the trial court is contrary to law, weight of evidence and probabilities of the case. She would further contend that the trial Court erred in came to a conclusion and decreed the suit though the appellants discharged the amount due to the plaintiffs by way of demand draft towards full and final settlement of the debt. She would further contend that the appeal may be allowed by setting aside the decree and judgment passed by the learned trial Judge. 12. Per contra, learned counsel for the respondents 1 to 8 would contend that on appreciation of the entire evidence on record, the learned trial Judge rightly decreed the suit and there is no need to interfere with the finding given by the learned trial Judge and the appeal may be dismissed by confirming the decree and judgment passed by the learned trial Judge. 13. Now the points for determination in the first appeal are: 1) Whether the alleged discharge of amount to the plaintiffs as pleaded by the appellants is true and proved by the appellants? 2) Whether the trial Court is justified in decreeing the suit? 14. Point Nos.1 and 2: The case of the plaintiffs is that the 1st plaintiff firm is a trading firm and doing business in manufacture of oils and oil cakes at Singarayakonda and the plaintiffs 2 to 5 are its partners and the 1st defendant firm is a manufacturer and exporter of de-oiled rice bran, de-oiled cakes and oils and is situated at Nellore. The plaintiffs further pleaded that the defendant Nos.2 to 9 are the partners of the firm of the 1st defendant and the 1st plaintiff firm doing business in manufacture of oils and oil cakes and they supplying the same to the defendants and others through the orders booked by the brokers and commission agents and M/s. Krishna & Company is the broker between the plaintiffs and defendants for doing business. The plaintiffs further pleaded that as per the contract in accordance with both the credit bills, the total value goes to Rs.2,55,737-70 ps. and the total amount sent under various drafts to the 1st plaintiff firm on various dates comes to Rs.2,26,145-95 ps. and the 1st defendant is still due an amount of Rs.29,591-75 ps. as per the ledger account for the year 1986-87 at page 96. The 1st defendant firm sent a letter, dated 02.08.1986 along with a demand draft for Rs.1,145-95 ps. by informing that the amount is sent towards full and final settlement. The plaintiffs further pleaded that the defendants failed to discharge the total debt and that the plaintiffs are constrained to file the suit. 15. In order to prove the case of the plaintiffs, the plaintiffs relied on the evidence of P.W.1 and also relied on Ex.A.1 to Ex.A.36. PW.1 is one of the partners of the 1st plaintiff firm. Ex.A.2 is the true copy of partnership deed and Ex.A.1 shows that the 1st plaintiff firm is a registered firm and plaintiffs 2 to 5 are the partners of the 1st plaintiff firm. P.W.1 deposed in his evidence that one M/s.Krishna & Company, Madras is the broker of 1st defendant and also to the 1st plaintiff and the said M/s.Krishna & Company placed orders on behalf of the 1st defendant to the 1st plaintiff to send 10 lorries of tobacco seed cakes and Ex.A.3 is the order placed by M/s.Krishna & Company and Ex.A.4 is the confirmation letter and the plaintiffs also relied on relevant entries in the books of account of the plaintiffs. 16. The plaintiffs relied on Ex.A.1 to Ex.A.36 as stated supra. Ex.A.2 is the partnership deed and Ex.A.1 is the acknowledgement of firm and Ex.A.5 is the telegram issued by M/s.Krishna & Company who is the broker and commission agent between the parties. As per Ex.A.5, the goods have to be supplied during the month of April, May and June, 1984. Ex.A.15 is confirmation letter issued by M/s.Krishna & Company to dispatch the goods in the month of March, 1984 and the 1st defendant also issued another confirmation letter under Ex.A.4 Ex.A.18 is the telegram issued for not send the goods. Ex.A.19 is another telegram to send the goods from 25th March, 1985 onwards. P.W.1 deposed in his evidence in view of Ex.A.18 telegram they have stopped to send TS cakes and later after receipt of Ex.A.19 telegram, they sent TS cakes to the 1st defendant. As per the own case of the defendants, they have not issued any notice to the plaintiffs stating that they have sent the cakes subsequent to the credit period and that they have not accepting the same. As per the evidence of D.W.1, he kept the goods aside without entering into the ledger and contacting father of P.W.1 by name Venkateswarulu and father of P.W.1 agreed to reduce the cakes price from Rs.75/- to Rs.55/- per bag. Admittedly, there is no evidence on record to show that the defendants contacted the father of P.W.1 and father of P.W.1 reduced the price of cakes from Rs.75/- to Rs.55/- per bag. In fact, Venkateswarlu i.e., father of P.W.1 is no way concerned with the 1st plaintiff firm either he is not a partner of the firm or he is not having any capacity in the 1st plaintiff firm. The plaintiffs seriously contended that father of P.W.1 is no way connected with the plaintiff partnership firm. The suit is filed in the year 1989. 17. The contention of the appellants is that they sent an amount of Rs.1,145-95 ps. by way of demand draft towards full and final settlement along with Ex.B.11 letter on 02.08.1986 and the same is received by the plaintiffs without protest and all of a sudden, the plaintiffs filed the suit in the year 1989. Admittedly, the suit is filed on 02.08.1989, the 1st defendant sent an amount of Rs.1,145-95 ps. by way of demand draft on 02.06.1986. The appellants contended that the said amount is sent towards full and final satisfaction. The contention of the plaintiffs is that they made a phone call to the defendants subsequently by narrating the facts and demanding to pay the remaining amount. The contention of the appellants is that Ex.A.3 and Ex.B.7 shows that the stock has to be dispatched by April, May and June, 1984 and agreed price is Rs.75/- per bag and since the price is increased, they did not supply the goods, as the plaintiffs sent goods subsequent to the period of June, 1984, the 1st defendant firm refused to receive the stock. The contention of the plaintiffs is that as per Ex.A.18 telegram, dated 13.03.1985, the 1st plaintiff firm did not dispatch the TS cakes to the defendants, soon after receiving another telegram under Ex.A.19, dated 23.03.1985 from M/s.Krishna & Company, the 1st plaintiff firm dispatched TS cakes and the defendants received the same. The contention of the appellants is that the 1st plaintiff firm did not raise any objection for the same at the time of encashment of the demand draft. As per the admission of D.W.1, they have not sent the demanded amount at Rs.75/- per bag. The contention of the appellants is that the father of P.W.1 reduced the price from Rs.75/- to Rs.55/- per bag. It is a fact that father of P.W.1 is not either Managing Partner of the 1st plaintiff firm or Partner of the firm. The plaintiffs seriously contended that the father of P.W.1 is no way connected with the 1st plaintiff business, therefore, it is for the defendants to summon the father of P.W.1 to discharge their burden, but they failed to do so. As per the case of the defendants, they have sent an amount of Rs.1,145-95 ps. by way of demand draft on 02.08.1986 towards full payment of debt. The contention of the plaintiffs is that the said amount is not towards full and final settlement and the defendants have to discharge some more amount as per ledger books produced by the plaintiffs and they have also made a phone call to the defendants by narrating the entire facts. In order to establish the case of the plaintiffs, the plaintiffs relied on documentary evidence apart from the evidence of P.W.1. The evidence on record coupled with the documentary evidence produced by the plaintiffs supports the case of the plaintiffs. 18. The learned counsel for the appellants would contend that the 1st plaintiff firm did not raise any objection for the same at the time of encashment of demand draft given towards full and final settlement, for non-supply of goods from April to June, 1984, they have sustained loss of Rs.14,300/- and after deducting the same, they sent Rs.1,145-95 ps. But, in order to prove the said defence, the defendants did not adduce any evidence. It was contended by the defendants, they have not sent any telegram and they have not instructed M/s.Krishna & Company to issue telegram to the plaintiffs for stoppage of TS cakes and also issuance of another telegram to dispatch TS cakes and the plaintiffs have to prove the same by examining the employee in M/s.Krishna & Company. It is the case of the appellants that they have discharged the amount to the plaintiffs towards full and final satisfaction of the debt, therefore, the entire burden is on the appellants to prove that they have sent an amount of Rs.1,145-95 ps. towards full satisfaction of the debt. As per the case of both parties, M/s.Krishna & Company is the commission agent to both the parties but the appellants failed to prove the same to show that they sent an amount of Rs.1,145-95 ps. towards full satisfaction of the debt. The plaintiffs relied on oral and documentary evidence to prove the claim of the plaintiffs. The alleged discharge towards full satisfaction of the amount and alleged negotiations in between D.W.1 and Venkateswarlu about reducing price of TS cakes from Rs.75/- to Rs.55/- per bag as pleaded is not proved by the defendants. It is for the appellants to prove the same but the appellants failed to prove the same. 19. The evidence on record clearly proves that the defendants have to pay an amount of Rs.29,591-75 ps. as on the date of 02.08.1986 after deducting an amount of Rs.1,145-95 ps. which was sent by the defendants by way of demand draft and the same was encashed by the plaintiffs. But the appellants failed to prove the same that they sent an amount of Rs.1,145-95 ps. towards full satisfaction of the debt to the plaintiffs. The contention of the plaintiffs is that the defendants have to pay the total amount due with interest at 18% per annum. On appreciation of the entire evidence on record, the learned trial Judge awarded interest at 10% per annum from the date of suit till the date of decree and further awarded subsequent interest at 6% per annum from the date of decree till the date of realization. Therefore, I do not found any reason to interfere with the said finding of the learned trial Judge in granting interest at 10% per annum from the date of suit till the date of decree and subsequent interest at 6% per annum from the date of decree till the date of realization, but the plaintiffs are not entitled any interest on Rs.29,591-75 ps. till the date of filing of suit, since the plaintiffs have not issued any legal notice prior to filing of the suit and they waited on the last date of limitation and filed the suit and that the plaintiffs are not entitled interest at 18% per annum on the date of finalization of the accounts till the date of filing of the suit. 20. In the result, the appeal is partly allowed by modifying the decree and judgment, dated 25.09.2002, on the file of Senior Civil Judge, Kandukur, as the plaintiffs 1, 3 to 8 are entitled an amount of Rs.29,591-75 ps. with interest at 10% per annum from the date of suit till the date of decree and further awarded subsequent interest at 6% per annum from the date of decree till the date of realization. Considering the facts and circumstances of the case, each party do bear their own costs in the first appeal. As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed. _________________________ V. GOPALA KRISHNA RAO, J Date: 17.04.2025 PGR