Food Corporation of India & Others v. K.A. Noushad

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **THURSDAY, THE 19TH DAY OF JULY 2018 / 28TH ASHADHA, 1940** **RFA.No. 396 of 2012** **AGAINST THE DECREE AND JUDGMENT DATED 20-01-2012 IN OS 451/2007 of ADDL. SUB COURT, KOTTAYAM.** ## **APPELLANTS/DEFENDANTS :** **1 THE FOOD CORPORATION OF INDIA, HEAD OFFICE, 16-20, BARAKHAMBA LANE, NEW DELHI-110 001, REP.** **BY ITS MANAGING DIRECTOR.** **2 THE ZONAL MANAGER, ZONAL OFFICE, FOOD CORPORATION OF INDIA, CHENNAI-6.** **3 THE SENIOR REGIONAL MANAGER, FOOD CORPORATION OF INDIA, KESAVADASAPURAM, THIRUVANANTHAPURAM - 695 004.** **4 THE DISTRICT MANAGER, FOOD CORPORATION OF INDIA, DISTRICT OFFICE, CHANNANIKKADU P.O., KOTTAYAM-33.** **5 THE DISTRICT MANAGER, FOOD CORPORATION OF INDIA, DISTRICT OFFICE, WEST HILL, CALICUT-03.** **BY ADVS.SRI.VIVEK VARGHESE P.J.** **SRI.XAVIER CHERIAN** **SRI.VARUGHESE M EASO.** **RESPONDENT/PLAINTIFF :** **K.A.NOUSHAD, S/O. K.M.ABDUL KHADER, HANDLING & TRANSPORTING CONTRACTOR, KIZHAKKETHIL HOUSE, CHENGALAM VILLAGE, KUMMANAM P.O., KOTTAYAM-686 035.** **BY ADVS. SRI.M.NARENDRA KUMAR. SMT.LAYA SIMON.** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 19-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## A.HARIPRASAD, J. -------------------------------------- ## R.F.A No.396 of 2012 -------------------------------------- Dated this the 19th day of July, 2018 ## J U D G M E N T Dissatisfied with the judgment and decree passed by the Additional Sub Judge, Kottayam in O.S No.451 of 2007, the Food Corporation of India and its officers have preferred this appeal. Plaintiff is the respondent in the appeal. 2. Heard the learned Senior counsel for the appellants and the learned counsel appearing for the sole respondent. 3. Short facts, relevant, are as follows : Plaintiff/respondent was selected as the authorized transporting R.F.A No.396 of 2012 2 contractor of the first defendant Food Corporation of India (in short 'F.C.I') for transporting goods and commodities to and from the food storage depots of the first defendant at Chingavanam to Ernakulam and Kochi to Arakulam during 1999-2000, 2000-2001 and 2002-2003. He was appointed as transport contractor from West Hill to Meenagadi for the period from 23-10-2002 to 23-01-2003. The respondent had already deposited an amount of Rs.7,32,620/- and another sum of Rs.5,15,000/- with the F.C.I as security deposit for the above work 4. As per terms of the contract, the respondent/plaintiff was responsible for safety of the goods from time to time when they were loaded in the trucks from railway station or godown until they were unloaded from the trucks. According to the set procedure for transportation, trucks would be weighed empty as well as with the load and that would be indicated in the truck chit issued from the godown. After R.F.A No.396 of 2012 3 weighment, the entire consignment would be covered with tarpaulins that would then be tied using ropes and would be sealed on the knots by using sealing wax with the emblem of the first defendant. Again at the destination depot, the load would be weighed and the seal and bags would be checked. The details would be indicated in the truck slips. Bills would be submitted by the respondent claiming transporting charges after certification by the Assistant Manager of F.C.I employed in the depots to the concerned District Managers enclosing the truck sheet and works slip. The weigh-bridges of the F.C.I were being used for weighing the goods. Weigh-bridges at Chingavanam, Kochi, Angamaly and Kozhikode were quite old, more than 30 years. They were showing erratic weighments. Weigh-bridges at Arakkulam and Meenangadi were comparatively new ones. During the initial few months, weighments done by using the weigh-bridge at Arakulam showed excess weight in the consignments R.F.A No.396 of 2012 4 received. No charge will be paid to the respondent for the excess weight, but in case of shortage in the weight, the respondent would be penalized by improperly applying clause (d) of paragraph XII of the agreement. 5. The appellants had arranged escorts to the trucks of the respondent and they were convinced that there was no transit loss of commodities transported by the respondent. They were also convinced that there were defects in their weigh-bridges. On that basis, credit was given to the respondent during the initial periods for excess weight of the goods by applying the principles of set off. The amounts withheld by the appellants were also disbursed to the respondent on being convinced about the defects in the weigh-bridges. Accordingly, the respondent continued work and submitted supplementary bills to the 4th appellant for refund of the alleged transit loss on the route Chingavanam to Arakulam. Total amount comes to Rs.3,07,155/-. The appellants had honoured all the R.F.A No.396 of 2012 5 supplementary bills and amounts were sanctioned also. Similarly, other bills were also sanctioned on understanding that the weigh-bridges were defective. 6. The respondent received a letter dated 20-07-2002 from the 4th appellant stating that transit loss was re-assessed and the respondent should remit back the above certain amounts received by him from the appellants. Respondent met the 4th appellant and he assured that he would do the needful after discussing the matter with the 3rd appellant. In violation of the assurance, on 11-09-2002, a notice was issued to the respondent stating that he was liable to pay a sum of Rs.10,32,493/towards transit loss for the period from 1999-2001 from Chingavanam and Angamaly to Arakulam. It is the case in the plaint that the appellants, after satisfying that there was no transit loss, refunded the recovered amount as per the above mentioned supplementary bills. R.F.A No.396 of 2012 6 7. Respondent/plaintiff filed a writ petition before the High Court as W.P(C) No.37549 of 2002. However, that petition was dismissed. With the above allegations, the plaintiff/respondent filed a suit for realization of Rs.22,31,560/- recovered from him by way of wrong assessment by the appellants. 8. The appellants filed a written statement contending that the suit is barred by limitation. Contention that the weigh-bridges at Chingavanam, Cochin, Calicut were showing erratic weighments is denied. It is the case of the appellants that the weigh-bridges were installed and maintained by reputed companies and were covered by annual maintenance contracts. Regular servicing were done in every three months. The Legal Meteorology Department of the Government of Kerala also certified and stamped the weigh-bridges to ensure their accuracy. 9. Even though the Road Transport Contractors are transporting R.F.A No.396 of 2012 7 food grains along with gunny containers, no credit will be given for the excess quantity noticed on the receipt, as there is no condition for giving such credits. However, for sometime, excess weight noticed would be adjusted towards the loss noticed taking the quantity transported during one month as a unit. The appellants were forced to allow some of the demands raised by the respondent as he threatened to stop transporting the essential food items. If the respondent stopped transporting goods, it could adversely affect the public distribution system, which may invite public criticism. The amounts refunded under above circumstances were also ordered to be remitted back by the contractor as per conditions in the tender and instructions from the Head Quarters. Contention raised by the respondent/plaintiff that the appellants/defendants were convinced that there was no transit loss of the commodities is denied. The amounts demanded from the plaintiff were based on calculations. R.F.A No.396 of 2012 8 10. The court below raised the following issues : 1. Whether the suit is not maintainable ? 2. Whether the suit is barred by limitation ? 3. Whether the plaintiff is entitled to realise - any amount from the defendants as alleged ? 4. Relief and costs ? It considered Exts.A1 to A85 series on the side of the plaintiff/respondent and Exts.B1 to B14 on the side of the defendants/appellants. Exts.X1 to X18 are the documents produced on summons. PW's 1 to 4 and DW's 1 to 7 testified on both sides. 11. Learned Senior counsel contended that the court below committed an error in decreeing the suit. It is seen from the averments in the plaint that the plaintiff had made an estimation of the amount due at Rs.17,76,322/- with 12% interest and the actual amount claimed comes to Rs.22,31,560/-. What was granted by the court below after appreciating R.F.A No.396 of 2012 9 the evidence is only Rs.13,57,697/-. 12. The court below for valid reasons found that the suit is maintainable in view of the fact that it is a civil suit filed under Section 9 of the C.P.C. 13. Regarding the question of limitation, the court below considered the matters at length and found that the plaintiff is entitled to get benefit of Section 14 of the Limitation Act since he was prosecuting a writ petition against the appellants for the reliefs claimed in the suit. 14. Court below relied on World Tel Ink & Another v. Union of India ((2001) 10 S.C.C 513), to appreciate the contention of the respondent that under Article 226 of the Constitution of India, the High Court could not have resolved the disputes relating to vexed questions of fact through the summary proceedings in a writ petition. Instead, the parties should have been directed to the civil court in such cases is the dictum by the R.F.A No.396 of 2012 10 Supreme Court. 15. The trial court properly relied on Consolidated Engineers Enterprises and another v. Principal Secretary Irrigation Department and Others ((2008)7 S.C.C 169) , to consider whether Section 14 of the Limitation Act could be applied to the facts in this case. Having regard to the contentions raised and the materials on record, the court below correctly found that the suit is not barred by limitation in the light of the settled principles of law. 16. The crucial issue is whether the plaintiff/respondent is entitled to realize any amount from the defendants/appellants. From the submissions of the learned counsel on both sides, it can be seen that two issues arise in this case. First one is the loss caused to the plaintiff regarding the faulty weigh-bridges belonging to the appellants which showed erratic weighments. Whenever the goods along with the truck were weighed on R.F.A No.396 of 2012 11 the machines, there could be difference from one depot to another. Resultantly, there would be transit loss/gain. No benefit was given to the plaintiff/respondent for transit gain, at the same time, penalized for transit loss. 17. Ext.A12 to A25 and Exts.A31 to 42 are the documents produced by the plaintiff to show that various officers of the appellants escorted the respondent's vehicle. Those documents are letters appointing specified officers for escorting the goods. It was evident that no pilferage occurred during the transit and the weight loss was occasioned only on account of defective weigh-bridges. 18. Respondent strongly relied on Ext.P9, copy of the report dated 06-06-2000 by Avery India Limited, who supplied the weigh-bridges after installation. Respondent also relied on Ext.A71, a copy of the letter confirming the mistake of weigh-bridges. R.F.A No.396 of 2012 12 19. Relevant clause in the agreement with respect to the transit or transit loss is Clause XII(d). It reads as follows : “ The contractors shall be responsible for the safety of the goods while in transit in their trucks/carts/any other transport vehicle and for delivery of quantity despatched from the railheads/godowns etc, as the case may be to the destination or to the recipients to whom the grains etc. is required to be transported by the contractor. They shall provide tarpaulin on deck of the trucks, so as to avoid loss of the grain, etc. through the holes/crevices in the decks of the trucks. They shall exercise adequate care and take precautions to ensue that the food grain bags are not damaged while in transit in their trucks/carts/any other vehicles. They shall deliver the number of bags and the weight of food grains R.F.A No.396 of 2012 13 received by them and loaded on their trucks. They shall be liable to make good the value of any shortage, wastage losses or damage to the goods in transit at 2 times the central issue rate for P.D.S (not RPDS) as fixed by Government of India as applicable from time to time for all food grains and commodities other than sugar and three time the central issue rate (G.O.I) as applicable from time to time in respect of sugar except when RM/SRM (whose decision shall be final) decides that the difference between the weights taken at the dispatching end and receiving ends is negligible and is due to the discrepancies between the scales, gain or loss in moisture or other causes ' ” beyond the contractor s control. On the basis of this clause, both parties are contesting the case. 20. PW1 is the plaintiff. PW2 is a retired Manager of F.C.I. PW3 is R.F.A No.396 of 2012 14 a retired official of F.C.I who had gone in escort with goods transported by the plaintiff and PW4 is a driver working with the plaintiff. I have carefully gone through the oral evidence adduced on the side of plaintiff/respondent. It can be seen that the case put forward by the appellants that there was transit loss is highly improbable. 21. Testimony of DW's 1 to 7 did not show that the transit loss occurred on each time was on account of the respondent's dereliction or willful acts. 22. The court below considered the implication of all the documents produced on the side of both parties and entered a finding that the appellants were bound to make good the plaintiff, the amount which they withheld or recovered from him towards transit loss. 23. The respondent claimed a sum of Rs.17,76,322/- with 12% interest from 25-10-2003, that makes up to a total claim of Rs.22,31,560/- R.F.A No.396 of 2012 15 in the plaint. As per Ext.A61 the final order issued by the appellants, it can be seen that total security amount lying with the defendants was Rs.12,46,620/-. The transit loss calculated was Rs.13,41,849.40/-. An amount of Rs.5,28,702/- was adjusted from the transit charges payable to the plaintiff/respondent. After adjusting the balance amount of Rs.8,13,147.40/- from the security deposit, it was determined that Rs.4,34,472.60/- was refundable. However, by virtue of Ext.A62, what was paid to the plaintiff/respondent was only Rs.4,18,625/-. The plaintiff received the above amount under protest. The lower court therefore rightly calculated that the amount due to the plaintiff was only Rs.17,76,322 - Rs.4,18,625 = Rs.13,57,697/-. The court below correctly applied Clause 11(d), which shows that no interest could been levied on the security deposit. Therefore, the court below decreed the amount of Rs.13,57,697/with 6% interest per annum from the date of the suit till realization with R.F.A No.396 of 2012 16 proportionate costs of the suit in favour of the plaintiff/respondent. After considering the documents produced and the evidence adduced in the case and after hearing the submission at the Bar, I find no reason to take a different view in this matter. In the result, the appeal is dismissed confirming the judgment and decree passed by the lower court. All pending interlocutory applications will stand dismissed. A. HARIPRASAD, JUDGE. amk