M/s. P.N. Dhoot Investment Company Pvt. Ltd. vs M/s. Goa Sintered Products Pvt. Ltd.

R.P. Sondurbaldota,J.

This second appeal arises out of the judgment and order dated 17th January 2011 of the District Court allowing the first appeal and decreeing Special Civil Suit No. 55/2000/I filed by the respondent. The brief facts leading to the proceedings are that the respondent a Private Limited company carries on business of manufacturing sintered bushes. The appellants were their regular customers since the year 1996. In compliance of the purchase order dated 2/9/1996 and of the subsequent schedule of supplies dated 31/12/1996 the respondent supplied the goods to the appellants by sending through M/s. Ghatge Patil Transports Ltd., Margao. They also forwarded the relevant documents for payment through theirs bankers Union Bank of Margao Branch to the bank of the appellants State Bank of India Aurangabad Maharashtra. Despite receipt of the documents the appellants failed to make the payment through the bankers to get the documents released for taking delivery of the consignment within twenty days from the date of intimation from their bankers. The respondent therefore instituted suit for recovery of the sum of Rs.2,55,021/- together with interest thereon at the rate of 20% per annum. The claim of the respondent in the suit included the demurrage charges payable to the transporters.

The appellants in their written statement disputed that there was any order placed by them with the respondent. In addition there were three technical objections raised by them They contended that firstly the suit was barred by limitation, secondly that it was bad for non-joinder of necessary parties and thirdly that the Court at Margao had no territorial jurisdiction to entertain the suit and that the jurisdiction was with the Court at Aurangabad. When the parties went to trial the appellants gave up all the three technical defences to the suit. It was therefore tried only on its merits. By the judgment and order dated 17/3/2008, the trial court dismissed the suit holding that the respondent had failed to establish that there was concluded, clear and definite contract in respect of the supply of suit goods. The respondent challenged the decree in the District Court vide Regular Civil Appeal No. 216 of 2010. The appeal came to be allowed by the order impugned herein.

The first appellate court held that the finding of the trial court that the respondent had failed to establish that there was concluded contract between the parties was not correct. It found on the basis of the evidence led by the parties that there was a definite and concluded contract between the parties for supply of goods of the quantity as supplied. The first appellate court noted that the appellants did not dispute in their pleadings that they were regular customers of the respondent since the year 1996. The appellants had placed purchase order dated 2nd September, 1996 which was duly complied with by the respondent. Thereafter, they had addressed letter dated 31st December 1996 to the respondent mentioning therein a tabulated form a schedule of their requirements of supplies for the month January 1997 with a specific request to the respondent to plan their production accordingly. The respondent had exactly as per the schedule dispatched the goods in the same manner as per the earlier supplies they supplied the goods vide bills/invoices No. 670, 677 and 690 dated 21/01.1997, 23.01.1997 and 30.01.1997 respectively. The appellants by their letter dated 17th August 1997 (Exhibit 47) informed the transporter that they were unable to get the goods released for non-availability of relevant documents and requested the transporter to contact the respondent for further course of action. By another letter dated 25th April 1998 (Exhibit 50) the appellants referred to the demurrage charges of the transporters and expressed their inability to accept the same, further seeking guidance of the respondent in the matter. At no point of time was there any dispute raised by the appellant relating to existence of the contract.

It is sought to be argued by Mr. Rivonkar the learned only an invitation to offer and not an offer for acceptance by the respondent. As has been rightly held by the first appellate court considering the fact that the appellants were regular customers of the respondent and the trade practice involved, the schedule of supplies sent by the appellants was an offer which was accepted by the respondent by performance. In the absence of any pleading and evidence for requirement of acceptance in a prescribed specific form the unconditional performance by the respondent was acceptance and gave rise to concluded contract. In the circumstances no fault can be found with the decision of the first appellate court on this aspect.

The second argument of Mr. Rivonkar is with reference to Section 73 of the Indian Contract Act. He submits that since the suit filed by the respondent is for damages it was obligatory on the part of the respondent to take steps to mitigate the damages. According to Mr. Rivonkar the respondent ought to have collected the goods from the transporter and sold the same to the other buyers. In my considered opinion submission advanced is not correct. The respondent had already handed over the goods to the transporter and sent the relevant documents through its bankers to the banker of the appellant for delivery of the goods to the consignee i.e. the appellants. Therefore, the goods were out of control of the respondent. In any case at the request of the appellants, efforts had been made by the respondent to get the demurrage charges reduced which is borne out by the correspondence at Exhibit 47, Exhibit 48, Exhibit 50, Exhibit 51 and Exhibit 54. This would mean that the respondent had taken all possible steps to mitigate the damages. Besides as has been rightly submitted by Mr. Usgaonkar, the learned counsel for the respondent the obligation of taking steps to mitigate the damages relates only to computation of damages. It is merely a factor to be taken into account for assessment of damages.

As regards the three technical objections to the suit, the same had been given up by the appellants at the trial stage itself. Hence, it was not open for the appellants to raise the same at the appellate stage. Despite the fact the first appellate court has considered the questions raised and answered the same in favour of the respondent. I find no infirmity in the reason given therefore. In the above circumstances no substantial question of law arises in the appeal for consideration of the Court. Hence, the appeal is dismissed in limine.