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Brijlal and Co. Vs. Madhya Pradesh Electricity Board - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberCommercial Cause Suit No. 477 of 1972
Judge
Reported inAIR1975Cal69
ActsCode of Civil Procedure (CPC) , 1908 - Section 10
AppellantBrijlal and Co.
RespondentMadhya Pradesh Electricity Board
DispositionApplication dismissed
Cases ReferredLaisram Rasmon Singh v. H. D. Sharma
Excerpt:
- .....to the contractor to amend their written statement, the contracor's claim being in excess of the board's claim, they cannot get their relief in line jabalpur suit. in my view, therefore, the calcutta suit is much more comprehensive than the jabalpur suit in respect of the entire controversy between the parties.10. there is another difficulty in accepting the contention of the petitioner. it is well settled that under order 8. rule 16 of the code of civil procedure, the claim for set-off can be raised by a defendant in the written statement in a suit for a sum of money. but there is no express provision in the code for a counter-claim by the defendant in the written statement in the plaintiffs suit for money if the defendant's claim far exceeds the plaintiff's claim for money. mr......
Judgment:
ORDER

S.A. Masud, J.

1. This is an application on behalf of the defendant-respondent under Section 10 of the Code of Civil Procedure, 1908 for stay of the plaintiff's suit in this Hon'ble Court. The relevant facts are stated as follows.

2. In 1970 Madhya Pradesh Electricity Board, a statutory body, hereinafter described as 'the Board', had invited tenders for the supply of galvanised bolts and nuts for high tension and transmission lines. The terms and conditions of supply, specification of the bolts and nuts and quantity were contained in the Board's specification (1) 'Project TR-47'. The plaintiff M/s. Brijlal and Company a registered partnership firm at 22, Burtolla Street, Calcutta, hereinafter described as 'the Contractor' duly submitted its tender which was accepted by the Board. Free samples of bolts and nuts were submitted fay the Contractor to the Board. The said samples were approved and formal order was placed by the Board on 30th October. 1970. It was agreed between the parties that the petitioners would open a Letter of Credit in Calcutta after receipt of the security deposit from the Contractor. The contractor submitted the Bank guarantee in respect of security deposit which was accepted by the Board on November 30, 1970. The Board also issued instructions for opening the Letter of Credit on the Central Bank of India, Brabourne Road Branch, Calcutta. The said letter of Credit was opened for Rs. 5.09.422.92 P., being 95% of the value of 151 tonnes and 2200 Nos. of galvanised bolts and nuts including inter-State Sales Tax @ 3%. The Contractor's case, however, is that the Board should have opened the Letter of Credit for a sum of Rs. 16.69,941.90 P. which, according to the Contractor, was total contracted price for goods to be supplied, exclusive of sales tax and Rs. 50.098.26 P. which would be the sales tax @ 3% on the said full value. According to the petitioner, the Contractor commenced the despatch of bolts and nuts on or about 6th December, 1970. The parties subsequently agreed that the goods should be sent on the basis of 'Freight to pay' and not 'Freight paid'. According to the Board, since February, 1971, the Contractor was supplying bolts and nuts not according to the specifications and that the goods were defective. The said defective supplies constituted gross breach of the terms and conditions of the contract. It has been alleged that the Contractor failed to replace the said defective goods. Further, the contractor also committed breach of contract on the ground of short supply of the goods. Under these circumstances the Board cancelled the order for the balance quantity of the goods on April 6, 1971.

3. The contractor instituted a suit being Suit No. T. S. 330 of 1971 at the City Civil Court, Calcutta for a declaration that the contract between the parties was still subsisting, for injunction restraining the Board from claiming encashment of the security from the Rank of India, and for other reliefs. On August 21, 1971 a written statement was filed by the Board in the said City Civil Court suit. On March 12, 1972 the Board instituted a Civil Suit No. 1-B of 1972 (Madhya Pra-desh Electricity Board v. Brijlal and Company) praying for a decree for a sum of Rs. 1,45,940.13 p., Rs. 3,891.68 p. and for other reliefs. In September, 1972 the contractor made an application before the City Civil Courts for withdrawal of their suit. By an order dated September 12, 1972 the contractor was .permitted to withdraw the suit with liberty to bring a fresh suit of a comprehensive nature on the same subject-matter. On September 15, 1972 a Writ of Summons of the Jabalpur Suit filed by the Board was served on the Contractor. On September 29. 1972 the present suit was instituted in Calcutta by the Contractor against the Board. In January, 1973 the contractor filed their written statement in the Jabalpur Suit. On February 12. 1973 the present application has been filed.

4. The short point to be decided in this application is whether the issues in the Calcutta High Court are directly and substantially an issue in the Jabalpur Suit between the same parties. Admittedly, the petitioner's suit was instituted earlier than the Calcutta High Court Suit and the parties are the same. The legal principles underlying Section 10 of the Code of Civil Procedure are well established and it is not necessary to reiterate the large number of decisions on the point. In order that the petitioner succeeds it is not necessary that the issues in the two suits must be identical or that the subject-matter of the controversy in both these suits must have to be the same in all its particulars. Apart from the disputes and differences between the parties in the two suits, the Court should find out whether the suit which is to be stayed would be disposed of on the basis of the decision in the other suit on the principles of actual or constructive res judicata. The entire object of the said section is to avoid multiplicity of the proceedings on the controversy between the parties and also conflict of judgments between two Courts on the same issues. The counsel for both the parties have relied upon the observations of the Appeal Court in Arun General Industries Ltd. v. Rishabh ., : AIR1972Cal128 which read as follows :

'It was held that Section 10 did not contemplate identity of decisions in the two suits nor that the matter in issue in the two suits should be entirely the same or identical and that all that the section requires was the matter in issue in the two suits should be directly and substantially the same. It was also held that there Should be identity of the subject-matter and field of controversy between the parties in the two suits must be same but the identity and controversy contemplated need not be identical and same in every particular, but the identity and the field of controversy must be substantially the same. We respectfully agree that the views of the Division Bench of the Bombay High Court and we think Chagla, C. J. has correctly and appropriately laid down the extent of the identity of the subject-matter in the two suits.'

5. Applying these principles, in, my view, the disputes and differences between the parties in the Calcutta suit cannot be finally determined in the Jabal-pur Suit. The reasons why I have come to the said conclusion are as follows:

6. The earlier suit in the Jabalpur Court had been described in the plaint as 'Suit for refund of price for defective and short supplies or materials and for interest, total valued at Rupees 1,49,831.81 P.' In Calcutta Suit, however, the Contractor has claimed for damages for the sums of Rs. 41,800, Rs. 2,96.560 alternatively for Rs. 35,822.50 P. and Rs. 2,57.380 and interest and damages. It is true that the subject-matter and the basis of the disputes and differences between the parties, as strongly urged by Mr. Bachawat and Mr. Sen on behalf of the Board, is breach of contract between the parties on account of defective and short supplies of the stipulated goods. But, unfortunately, the Board in the Jabalpur Suit has confined its claim only to a limited extent that is, claim for refund of the sum of Rs. 1,45,940.13 P., which the contractor had withdrawn against the letter of Credit opened by the Board, as stated above, in respect of the goods supplied by the Contractor under the despatch instructions of the Board. In fact, Mr. Sen has admitted before me that the plaint has not been happily drawn up in the Jabalpur Suit. The Board in the Jabalpur Suit has not claimed for damages under Section 73 of the Indian Contract Act. There is no doubt that the Board was at liberty to abandon its own claim in their suit, but the pleadings in Jabalpur suit, as they stand, show that the scope of Jabalpur suit is much more limited than the scope in the Calcutta Suit. In my view, the claim of the contractor in the Calcutta Suit is much more comprehensive in its scope and extent with respect to the controversy between the parties. It is premature to decide that the contractor has raised exaggerated or speculative claims. The fact remains that the contractor has claimed in this suit various sums of money as damages for breach of contract on separate causes of action. To illustrate, in the Calcutta Suit the Contractor has stated that the total contracted price of the stipulated goods amounts to Rs. 16,69,941.90 P. and not Rupees 5.35,413.88 P. as contended by the Board. In fact, the contractor furnished security deposit by Bank guarantee from the Bank of India for a sum of Rs. 33,399 which appears to be 2% of Rs. 16,69,941.90 P. Admittedly, the Board opened a Letter of Credit with the Central Bank of India for the sum of Rs. 5,09,422.92 P. in favour of the contractor. Thus apart from the question of quality and quantity of the goods supplied by the Contractor to the Board which is the common issue between the parties in the two suits there is an additional dispute with respect to the Contractor's claim for damages on account of the alleged cancellation of the contract to supply the balance quantity of goods.

7. In paragraph 11 of the plaint in the Calcutta Suit the Contractor has stated that the Board committed breach of the contract on the following grounds :

(a) On or about last week of January 1971 the Board instructed the Central Bank of India in Calcutta to stop the said Letter of Credit. The Board prevented the Contractor from despatching the stipulated goods covered by the original despatch instructions.

(b) The Board failed and neglected to give any despatch instructions in respect of the balance of the contracted goods.

(c) The Board did not open any Letter of Credit for the balance of the said goods.

(d) The Board gave notice to the Bank of India. Burrabazar Branch in Calcutta to the effect that they would withdraw the said security deposit of Rupees 33,399.

(e) By a letter dated the 9th April, 1971 the Board in breach of the contract cancelled and/or repudiated the said contract

8. It is true that the said repudiation had been accepted by the Contractor by its letter dated 4-9-72 but that cannot prevent the Contractor from raising its claim for damages for breach of con-tract in respect of goods to be supplied. The Contractor in his plaint in Calcutta Suit has claimed large sums of money as damages on various grounds. The contractor in respect of goods already supplied claimed a sum of Rs. 41,800. The Contractor also claimed a sum of Rs. 2,96.560 as damages for which no despatch instructions were given at all by the Board -- vide paragraph 14 of the plaint in Calcutta Suit The Contractor has also claimed alternatively a sum of Rs. 35822,50 P. in respect of goods which have been supplied with despatch instructions and Rs. 2,57,380 in respect of other part of the contract. The Contractor has further claimed Rs. 17.496.73 being 5% of the value of the goods (that is the balance due after 95% of the value covered by the Letter of Credit) supplied. Thus there is no doubt that there are common issues between the Jabalpur Suit and the Calcutta Suit in respect of defective quality and short supply of goods but the fact remains that the Contractor has raised various other disputes in respect of alleged wrongful cancellation of the contract and also for damages.

9. Mr. Sen has urged that the issue as to the cancellation of the contract and the claim for damages are only consequential to the decision on the issue of defective quality and short supply of goods. Assuming the said contention to be correct in my view, there are difficulties in accepting this submission. The written statement has already been filed by the contractor in the Jabalpur suit and the issue as to the damages has not been raised in the said written statement. Even if a direction, which would be unusual, is given to the contractor to amend their written statement, the contracor's claim being in excess of the Board's claim, they cannot get their relief in line Jabalpur suit. In my view, therefore, the Calcutta suit is much more comprehensive than the Jabalpur suit in respect of the entire controversy between the parties.

10. There is another difficulty in accepting the contention of the petitioner. It is well settled that under Order 8. Rule 16 of the Code of Civil Procedure, the claim for set-off can be raised by a defendant in the written statement in a suit for a sum of money. But there is no express provision in the Code for a counter-claim by the defendant in the written statement in the plaintiffs suit for money if the defendant's claim far exceeds the plaintiff's claim for money. Mr. Bacha-wat has drawn my attention to D. M. Jackson v. Clifford Hockley, (1951) 88 Cal LJ 90 in support of the proposition that there is no difficulty in law for the Jabalpur Court to pass a decree allowing the alleged damages claimed by the contractor. But P. B. Mukharji J. in the said case at P. 94 has stated 'As I have already indicated, there is no provision for counter-claim under Order 8, Rule 6 of the Code or under any provision of the Civil Procedure Code.'' Mr. Bachawat has frankly conceded that it was a suit on set-off and that the defendant's claim there did not exceed the plaintiff's claim. It appears from the decision in Bansidhar Kuniilal v. Lalta Prasad, AIR 1934 All 543 where Bennet J. at P. 546 has stated :

'Set-off under Order 8, Rule 6 is wider than & set-off at English law. but it is not so wide as a counter-claim.' Similarly in Baijnath Chaubey v. Varajlal Moolji. (1944) 48 Cal WN 481 McNair J., at page 482 has stated

'It is perhaps unfortunate that under the rules of this Court and the Code of Civil Procedure no counter-claim is permissible.'

Similarly Justice Gentle in the said case at p. 483 has made an observation to the following effect,

'But even so, assuming it is a set-off, in my view, that is a defence and nothing more '

11. Further Order 8, Rule 6 of the Code has no application to the case inasmuch as Order 8, Rule 6 to 'ascertained claim' which means a fixed amount known to the parties. Unliquidated damages arising out of breach of contract cannot be identical with 'ascertained' sums. The contractor's suit is a suit for unliquidated damages which are calculated uni-laterally.

12. Further the contractor has already filed a suit and paid the court-fees for the suit in Calcutta. Even assuming that the counter-claim for the contractor's claim for damages can be pleaded in the written statement in Jabalpur suit or written statement in the Jabalpur suit is amended, the contractor may have to pay the court-fee again in the Jabalpur Court for his claim there.

13. Mr. T. P. Das. counsel for the contractor, has drawn my attention to Laisram Rasmon Singh v. H. D. Sharma, AIR 1964 Manipur 2 in support of his contention that the question whether the issues in both the suits are substantially the same or not can be determined only after the written statements are filed in both the suits. According to him the Board has not filed their written statement in the Calcutta suit and accordingly the application under Section 10 is premature. In my view, it is true that ordinarily issues can be settled or spelt out after the pleadings are complete. But there might be cases where it is possible for the court to know the issues in the two suits even if pleadings are not complete. In this case the claim of the Board is clear in Jabalpur suit and the claim of the contractor is obvious from the plaint in the Calcutta suit. Further, affidavits have been filed in the present application which also show disputes and differences between the parties. In the premises I, therefore, cannot accept this contention of Mr. Das.

14. Mr. Das has also referred to Section 59 of the Sale of Goods Act stating that his client's claim for damages is under Section 59 of the Sale of Goods Act whereas the Board's claim was only for the refund of the price for defective quality and short supply of goods. Section 59 deals with the remedy for the breach of warranty. It is possible to argue that the failure to supply defective quality of goods in this particular case is a breach of conditions and not a breach of warranty. Further, no grounds have been mentioned by Mr. Das on his contention that the Jabalpur suit has been instituted on the basis of breach of warranty.

15. It may be added here that the counsel for the parties have not made submission before me on the balance of convenience. For the reasons, stated above, this application is dismissed. The costs of this application will be costs in this suit.


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