- 1 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 4TH DAY OF FEBRUARY, 2025 PRESENT THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA REGULAR FIRST APPEAL NO. 100307 OF 2020 (MON) BETWEEN: TRL. KROSAKI REFECTORIES LTD., REPRESENTED THROUGH ITS MANAGING DIRECTOR, BELPAHAR-768218, JHARSUGUDA, ODISHA-STATE. …APPELLANT (BY SRI. B.S. KAMATE, ADVOCATE) AND: 1. BAGALKOT CEMENT AND INDUSTRIES LTD., A COMPANY REGISTERED UNDER THE INDIAN MANUFACTURING UNIT T MUCHAKHANDI ROAD, BAGALKOT-587102 IN BAGALKOT DISTRICT, KARNATAKA STATE, DULY REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR. ABBAS S/O. RAJESAB NIDASHESI, AGE:47 YEARS, OCC: MANAGER LEGAL IN BAGALKOT CEMENT AND INDUSTRIES, R/O: BAGALKOT-587103. 2. M/S. PADMAJA INC REPRESENTED THROUGH ITS MANAGING DIRECTOR, REFECTORIES AND CONSTRUCTION CHEMICALS A-9 CO-OPERATIVE, Digitally signed by BHARATHI H M Location: HIGH COURT OF KARNATAKA Date: 2025.02.11 14:55:33 +0530 - 2 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 INDUSTRIAL ESTATE, POST OFFICVE LANE, BALANAGAR, HYDERABAD-500037. …RESPONDENTS (BY SRI. S.B. HEBBALLI, ADVOCATE FOR R1; NOTICE TO R2 IS DISPENSED WITH, V/O. DATED 11.01.2021) THIS RFA IS FILED UNDER SECTION 96 OF CPC., PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND DECREE DATED 28.02.2020 PASSED BY THE 1ST ADDL. SENIOR CIVIL JUDGE AND JMFC BAGALKOT IN O.S. NO.128/2014 AND DISMISS THE SUIT BY ALLOWING THIS RFA WITH COST IN THE INTEREST OF JUSTICE. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI) This Regular First Appeal is filed by the appellant, challenging the judgment and decree dated 28.02.2020 passed in O.S.No.128/2014 by the learned First Additional Senior Civil Judge and JMFC, Bagalakote. - 3 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 2. For convenience, the parties are referred to, based on their ranking before the trial Court. The appellant was defendant No.2, respondent No.1 was the plaintiff and respondent No.2 was the defendant No.1. 3. The brief facts leading rise to the filing of this appeal are as follows: The plaintiff filed a suit against the defendants for recovery of money of Rs.40,55,237/- with interest @ 21% by way of damages from 12.10.2014. It is the case of the plaintiff that defendant No.1 is an authorized agent/representative of defendant No.2 and a supplier of bricks to the customers. Defendant No.2 is a manufacturer of local bricks and supplier of the same through some agent – Defendant No.1. Plaintiff-Company placed the purchase orders to defendant No.1 for the supply of local bricks, and defendant No.1 accepted the said proposal for supply bricks, manufactured by defendant No.2. Defendant No.1 supplied the bricks as per the terms and specification mentioned in the purchase order and defendant No.1 had agreed to supply the said bricks, after obtaining the same through its - 4 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 suppliers, i.e. defendant No.2. Therefore, both defendants are bound by the contract. The plaintiff contended that the defendants acknowledged the liability for fulfilling the contract, but the supplied bricks were not good quality, due to this, the plaintiff– Company suffered a loss. Defendant Nos.1 and 2 failed to supply the required bricks as per the specification of quality mentioned in the purchase order, and they are guilty of willful negligence and of making unlawful gain and cheating on account of burning the said bricks supplied by the defendants. The plaintiff – Company was constrained to stop the operation of the kiln after 24.02.2013 and it was only operated with the said bricks from 17.02.2013 to 24.02.2013, This caused heavy production loss and has to be compensated by both the defendants, as defendant No.1 is vicariously liable for the act of defendant No.2. 4. The plaintiff issued legal notice on 18.02.2014 calling upon the defendants to pay a sum of Rs.44,05,303/- towards the cost of bricks, interest, and damages. Defendant No.2 gave a reply on 19.04.2014, which was - 5 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 adopted by defendant No.1. Hence, a cause of action arose for the plaintiff to file the suit for recovery of money and damages. 5. Summons were served on defendant No.1 and 2. Despite the service of summons, defendant No.1 remained unrepresented and placed ex-parte. Defendant No.2 filed a written statement denying the averments made in the plaint. It is denied that there is a privity of contract between the plaintiff and defendant No.2, and it is contended that defendant No.2 is not a party to the transaction. It is contended that defendant No.2 has dispatched the bricks to the consignee i.e. plaintiff-company, as per the specification of the order and no performance guarantee had ever been offered to the plaintiff-company. Defendant No.1 has not acted as an agent for defendant No.2. Hence, defendant No.2 is not liable to pay anything to the plaintiff. On these grounds, prays to dismiss the suit against defendant No.2. 6. The trial Court, based on the plaint averments of the parties, framed the following issues: - 6 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 Issues 1. Whether the plaintiff proves that, is has supplied bricks manufactured by defendant No.2 on 27.07.2012 through defendant No.2? 2. Whether the plaintiff proves that, the defendant No.2 is vicariously liable for the act of defendant No.1? 3. Whether plaintiff proves that, defendants have not supplied the bricks as per the specification and requirement of the plaintiff as per contract done between the plaintiff and defendants? 4. Whether plaintiff proves that, defendants have committed a breach of contract? 5. Whether plaintiff proves that defendants are liable to pay Rs.40,55,237/- along with interest in his favour by the defendants as claimed by both the defendants jointly and severally as claimed in the plaint? 6. Whether defendant No.2 proves that, there was no contract with the plaintiff for the claimed materials? 7. Whether defendant No.2 proves that, there is no performance of guarantee was offered to the plaintiff by this defendant in the offer letter? 8. Whether defendant No.2 proves that, the low life of bricks arising out of operational issues of the plaintiff and not due to the low quality of bricks supplied by the defendant? 9. Whether plaintiff proves that, he is entitled to the relief as claimed in the plaint? - 7 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 10. What order or decree? 7. The Plaintiff, to prove their case, Working Manager legal, was examined as PW-1 and marked 39 documents as Exs.P1 to P39. On behalf of defendant No.2, the Deputy General Manager was examined as DW1 and marked 4 documents as Exs.D1 to D4. The trial Court, after recording the evidence, hearing on both sides and on the assessment of oral and documentary evidence, answered issued Nos.1 to 5 and 9 in the affirmative and issue No.6 to 8 in the Negative and issue No.10 as per the final order. The suit of the plaintiff was decreed with cost. The defendants were directed/ordered to pay Rs.40,55,237/- in favour of the plaintiff-Company by defendant Nos.1 and 2 jointly and severally with interest @ 21% per annum from 12.10.2014 till the realization of the entire amount, within two months from the date of the judgment. 8. Defendant No.2 aggrieved by the judgment and decree passed in O.S.No.128/2014, filed this first appeal. - 8 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 9. Heard learned counsel for defendant No.2 and also learned counsel for plaintiff. 10. Learned counsel for defendant No.2 submits that defendant No.2 has taken specific defence in the written statement that there is no privity of contract between the plaintiff and defendant No.2. He also submits that defendant No.2 has taken several contentions in the written statement. The contention of defendant No.2 was not considered by the trial court. He submits that the impugned judgment passed by the trial Court is not a speaking judgment. He further submits that the trial Court has not applied its mind while passing the impugned judgment. Hence, on these grounds, he prays to allow the appeal, set aside the judgment and decree passed by the trial court and remand the matter to the trial Court for fresh consideration. 11. Per contra, learned counsel for the plaintiff supported the impugned judgment, stating that the trial Court has considered the entire defense of defendant No.2 and passed the impugned judgment. Hence, on these grounds, he prays to dismiss the appeal. - 9 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 12. Heard perused the records and considered the submissions of learned counsel for the parties, the points that arise for our consideration are: i. Whether the trial Court justified in passing the impugned judgment without considering the defense and evidence adduced by defendant No.2? ii. Whether defendants prove that the impugned judgment passed by the trial Court is not a speaking judgment? iii. What Order or decree? Point No.1 and 2: 13. Point Nos.1 and 2 are interlinked and are taken together for common discussion, to avoid the repetition of facts. 14. It is the case of the plaintiff that the plaintiff used to purchase the bricks from defendant Nos.2 through defendant No.1, and the plaintiff used to issue a purchase order with the specification of bricks for the supply of - 10 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 materials. Defendant No.2 through defendant No.1 used to supply the bricks. The bricks supplied by defendant No.2 are of inferior quality. Hence, the plaintiff has suffered a loss. The plaintiff was issued a legal notice claiming damages for defective goods supplied by the defendants. Defendant No.2 replied to the legal notice, and the same was adopted by defendant No.1. The plaintiff, to substantiate their case on behalf of the plaintiff-Company Working Manager legal was examined as PW-1, and he reiterated the plaint averments in examination-in-chief and also marked documents at Exs.P1 to P39. During the cross-examination, it was suggested by defendant No.2 that there is no privity of contract between the plaintiff and defendant No.2. The said suggestion was denied. On the other hand, on behalf of defendant No.2, the Company has examined the Deputy General Manager as DW1 and he has produced 4 documents, marked as Exs.D1 to D4. 15. We have perused the entire judgment of the trial Court. - 11 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 Though, defendant No.2 has made several contentions in the written statement and also made contentions in the evidence of DW1, the said aspect was not considered by the trial Court. The trial Court has not considered the evidence of PW-1 and documents produced by the plaintiff, i.e. Exs.P1 to P39 as well as evidence of DW1 and documents of defendant No.2 i.e. Exs.D1 to D4. The trial Court has passed the impugned judgment without assigning any reasons. The trial Court has passed the judgment very casually without application of mind. As the suit involves the recovery of money, the trial Court could have considered the matter seriously and passed the judgment. The trial Court has to consider all the evidence produced by the parties and has to answer each issue, by assigning reasons. The trial Court has not assigned any reasons while answering issue Nos.1 to 10. The judgment passed by the trial Court is non-application of mind. The matter requires reconsideration by the trial Court. In view of the above discussion, we answer point Nos.1 and 2 in the affirmative. - 12 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 Point No.3: 16. In view of the above discussion, we proceed to pass the following: ORDER i. The Regular First Appeal is allowed. ii. The Judgment and decree dated 28.02.2020 in O.S.No.128/2014 on the file of I Additional Senior Civil Judge and JMFC, Bagalkot is set aside. iii. The suit is restored. The trial Court is directed to consider the evidence placed on record by the parties and assign detailed reasons to issue Nos.1 to 9 and pass an appropriate judgment in accordance with law. iv. The parties are directed to appear before the trial Court on 10.03.2025 - 13 - NC: 2025:KHC-D:2171-DB RFA No. 100307 of 2020 without awaiting notice from the trial Court. v. This Court has not made any adjudication of a point on the matter in issue. vi. All the contentions of the parties are kept open. Office is directed to refund the Court Fee as per Section 64 of the Karnataka Court Fees and Suits Valuation Act, 1958. Office is directed to return the trial Court records. Sd/- (ASHOK S. KINAGI) JUDGE Sd/- (UMESH M ADIGA) JUDGE AG LIST NO.: 1 SL NO.: 17