The General Manager Telecommunication Factory, Raichhai, Department of Telecommunications, Jabalpur v. M/S Industrial Speciality Chemicals Ollur, Thrissur

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.T.SANKARAN & THE HONOURABLE MR. JUSTICE P.D.RAJAN TUESDAY, THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936 ## **AS.No. 400 of 2000 (E)** AGAINST THE JUDGMENT IN OS.NO.1449/1994 OF THE II ADDL.SUB COURT,THRISSUR DATED 22-12-1999 ## APPELLANT: DEFENDANT: THE GENERAL MANAGER TELECOM FACTORY, RAICHHAI DEPARTMENT OF TELECOMMUNICATIONS JABALPUR - 482 009 (M.P.). BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL ADV. SRI.P.S.SREEDHARAN PILLAI, SCGSC ADV. SRI.P.S.SREEDHARAN PILLAI, SCGSC ADV. SRI.P.VIJAYAKUMAR, SC, BSNL ## RESPONDENT: PLAINTIFF: M/S.INDUSTRIAL SPECIALITY CHEMICALS OLLUR, THRISSUR - 680 306 KERALA STATE. ## BY ADV. SRI.K.P.SREEKUMAR THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 23-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **C.M.P.NO.3700/2000 IN A.S.NO.400/2000** DISMISSED 23/09/2014 SD/- **K.T.SANKARAN, JUDGE** SD/- **P.D.RAJAN, JUDGE** //TRUE COPY// AHZ/ ## **K.T.SANKARAN & P.D.RAJAN, JJ.** **---------------------------------------------------A.S. NO. 400 OF 2000 (E) ---------------------------------------------------Dated this the 23[rd] day of September, 2014** ## **JUDGMENT** ## **K.T.Sankaran, J.** The defendant in O.S.No.1449 of 1994 on the file of the Court of the II Additional Sub Judge, Thrissur, is the appellant. The suit was filed by the respondent for realisation of a sum of `67,900/-, the amount being the value of industrial chemicals supplied by the plaintiff to the defendant, and 6% additional central sales tax. 2. The plaintiff is an industrial unit, which was registered as a small scale industry under the Industries Department, Government of Kerala. It is a partnership firm. The plaintiff is engaged in the manufacture of industrial chemicals such as galvanising flux, soldering flux, phosphating chemicals etc. The defendant invited quotations for supply of Acid Inhibitor marketed by the plaintiff under the name 'Pickle Chemi-II' for the galvanising process. The plaintiff submitted quotation. The defendant accepted the same and placed ## **A.S. NO. 400 OF 2000 (E)** :: 2 :: their order dated 25.7.1991 for the supply of four metric tonnes of 'Pickle Chemi-II' to the defendant. The price quoted and accepted was `19.50 per kg. plus excise duty, special excise duty and central sales tax. The security deposit of `8,500/- was demanded from the plaintiff and the plaintiff deposited the same. The plaintiff sent a quantity of 1050 kgs., consisting the first lot of chemicals, on 14.8.1991 and the defendant received the same. According to the plaintiff, the defendant agreed to make the payment within thirty days from the date of receipt of the goods. However, the defendant did not pay the bill. The second lot of 1050 kgs. was despatched to the defendant on 21.11.1991 and it was duly delivered to the defendant. The defendant rejected the goods by Ext.A11 rejection memo dated 7.12.1991 on the ground of shortage of efficiency. According to the defendant, the efficiency of liquid inhibitor was 37% and 48% for the two lots as against the efficiency of the sample at 99%. According to the plaintiff, the chemical despatched in both the consignments conform to the standards of the sample. The same product sent to other companies was accepted by them without any complaint. On receipt of the rejection memo, the plaintiff deputed their representatives to Jabalpur where the establishment of the ## **A.S. NO. 400 OF 2000 (E)** :: 3 :: defendant is situated. The plaintiff's representatives met the officials of the defendant in their factory. It was revealed that the chemical sent by the plaintiff had been poured into acid tank in the defendant factory and no balance was left in both the consignments sent by the plaintiff. The defendant was not in a position to convince the plaintiff's representatives that the chemicals despatched by the plaintiff were not up to the standard and there was shortage of efficiency as mentioned in the rejection memo. The officers of the defendant represented to the plaintiff's representatives that the defendant would be satisfied if small quantity of additive was sent to them in order to strengthen the solution for the requirements of the defendant. Accordingly, the plaintiff despatched four carbouys of additive to the defendant on 8.2.1992 which was duly received by the defendant. The plaintiff contended that in spite of the demands on several occasions, the defendant did not pay the amount. Ext.A12 registered notice was sent by the plaintiff to the defendant on 28.4.1992. But, there was no reply by the defendant. Ext.A14 lawyer notice dated 27.6.1994 was issued to the defendant to which the defendant sent Ext.A15 reply dated 13.8.1994. According to the plaintiff, the contentions put forward by the defendant in the reply ## **A.S. NO. 400 OF 2000 (E)** :: 4 :: notice were unsustainable. It was alleged that in the absence of sending “C” forms and “D” forms to get concessional rate of sales tax, the plaintiff was forced to pay 10% central sales tax instead of 4% and the plaintiff claimed the balance of 6% central sales tax from the defendant. 3. The defendant contended that they are bound to pay the price of the goods only if they accepted the goods. Since the goods were rejected, there is no question of payment. It was contended that the chemicals supplied by the plaintiff were having efficiency of liquid inhibitor up to 37% and 48% respectively in respect of the two consignments. The matter was intimated to the plaintiff and a representative of the plaintiff visited the office of the defendant. He was satisfied about the lack of efficiency of the item supplied. Even after adding the additive, there was no improvement in the efficiency of the quality. It was contended that the balance quantity of the additive and the chemicals are still kept in the custody of the defendant and this was informed to the plaintiff. The plaintiff did not take back the goods. The plaintiff was satisfied about the inferior quality of the chemical supplied and that was the reason why they ## **A.S. NO. 400 OF 2000 (E)** :: 5 :: sent the additive in order to improve the quality of the chemical. The plaintiff is estopped from contending that the chemicals supplied were of the quality of the sample. The plaintiff is not entitled to receive any amount and the defendant is not bound to pay. 4. Before the court below, the plaintiff was examined as PW1 and Exts.A1 to A21 were marked on the side of the plaintiff. No documentary or oral evidence was adduced by the defendant. 5. The court below held that the suit is maintainable, rejecting the contention raised by the defendant. The partnership deeds were produced by the plaintiff and it was duly proved that there was a registered partnership. While answering issue Nos.2 and 3, the court below held that the silence on the part of the defendant would show that the chemicals supplied by the plaintiff were of the required quality and quantity. It is not proved that there was any shortage of efficiency of the products sent by the plaintiff. Though reasonable time was available for the defendant to raise objection regarding the quality of the products after the first consignment, they did not raise any objection to that effect. The first consignment was sent on ## **A.S. NO. 400 OF 2000 (E)** :: 6 :: 14.8.1991 and the second consignment was sent on 21.11.1991. Rejection of the chemicals was made by the defendant only on 7.12.1991, as per Ext.A11 rejection memo. Had the goods been of inferior quality, one would expect that the defendant should inform the plaintiff about the same and reject the goods immediately so that the plaintiff need not have supplied the chemicals as per the second consignment. The witness examined on the side of the plaintiff as PW1 stated before Court that the defendant had mixed the products in acid when the representative of the plaintiff visited the premises of the defendant. Even additives were supplied as requested by the defendant. The court below did not accept the contention put forward by the defendant that the plaintiff supplied the additives only when the defendant expressed their view about the lack of efficiency of the product. The court below accepted the evidence of PW1 that the additives were supplied only to reduce fumes emanating from the acid tank. The court below held that the defendant used the products and subsequently they raised objection regarding lack of quality of the product. It was held that in these circumstances, the defendant cannot contend that they are not liable to pay the value of the goods supplied. It was also held by the court below that the ## **A.S. NO. 400 OF 2000 (E)** :: 7 :: plaintiff is entitled to claim difference in sales tax. Accordingly, the suit was decreed for a sum of `67,900/- with interest at the rate of 12% per annum on `65,307.88 from the date of suit till the date of decree and thereafter interest at the rate of 6% per annum till realisation. 6. The learned counsel for the appellant submitted that as per the terms of the contract, the matter should have been settled in arbitration and therefore, the suit was not maintainable. Such a contention was not put forward either in the reply notice or in the written statement. Therefore, we do not think that the appellant could be allowed to raise this plea at this belated stage. The suit was filed in the year 1994 and even after twenty yeas, the matter has not attained finality. 7. The learned counsel for the appellant/defendant also raised a contention that notice under Section 80 of the Code of Civil Procedure was not issued before filing the suit and, therefore, the suit is not maintainable. Such a contention was also not raised in the written statement. Notice under Section 80 can be waived and ## **A.S. NO. 400 OF 2000 (E)** :: 8 :: the defendant having not raised a contention that notice under Section 80 should have been issued, it must be taken that they have waived notice under Section 80 of the Code of Civil Procedure. ## 8. In **Karthiayani Pillai Narayani Pillai** v. **Neelacanta Pillai Raman Pillai and another (1968 KLT 836)** , it was held thus: “The expression 'Jurisdiction' is used in different senses. In the sense of inherent Jurisdiction, it is a virtue of the Court and is not dependent on the consent or dissent of parties, and its lack would make orders and decisions ultra vires, nul and void and therefore challengeable even in collateral proceedings. On the other hand, in the sense of pecuniary jurisdiction or territorial jurisdiction which sets the limits of exercise of the powers of a Court it is waivable by the parties - such waiver will be presumed conclusively under Section 21 C.P.C., and Section 11 of the Suits Valuation Act if objection is not taken before settlement of issues for trial - and its want would make the decision, at the worst, only voidable in an appeal but unchallengeable in collateral proceedings. I have held in _Nandini Amma v. State of Kerala_ (A.I.R.1963 Kerala 114) that “S.80 C.P.C. is not a provision of public policy but one for the ## **A.S. NO. 400 OF 2000 (E)** :: 9 :: benefit of particular parties who are competent to waive or disregard it. The indication is then clear that the requirements of a notice and expiry of a particular period thereafter are not jurisdictional facts, for jurisdiction cannot be dependent on the consent or waiver of a party.” Nothing has been urged now to persuade me to adopt a different view here.” 9. In **Assistant Collector of Central Excise** v. **Ravi and others (1970 KLT 261)** , it was held that in cases where there had been inordinate delay in raising the contention that the suit is not maintainable as no notice under Section 80 of the Code of Civil Procedure has been given, a waiver on the part of the authorities could be inferred. The decision of the Supreme Court in **Dhirendra Nath Gorai** v. **Sudhir Chandra Ghosh (AIR 1964 SC 1300)** , which quoted with approval the decision of the Privy Counsel in **AL.AR. Vellayan Chettiyar** v. **Government of Madras (74 Indian Appeals 223)** , was relied on in **Assistant Collector of Central Excise** v. **Ravi and others (1970 KLT 261).** 10. Rule 2 of Order VIII of the Code of Civil Procedure ## **A.S. NO. 400 OF 2000 (E)** :: 10 :: provides that the defendant must raise by his pleadings all matters which show the suit not to be maintainable, or that the transaction is either void or voidable in point of law, and all such grounds of defence as, if not raised, would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the plaint. Had the defendant raised the question of lack of notice under Section 80 of the Code of Civil Procedure in the written statement, probably the plaintiff would have cured that defect or they could have withdrawn the suit with liberty to file a fresh suit after curing the defect. That opportunity was taken away in the present case since the defendant did not raise that contention at appropriate stage. We are of the view that this belated contention cannot be entertained and it shall be treated that the contention regarding lack of notice was waived by the defendant. 11. The learned counsel for the appellant also raised a contention that in the present case the sale was not a complete sale and therefore, the plaintiff is not entitled to demand the price of the goods supplied. This is a contention on a question of fact. Such a contention was not raised at all in the written statement filed by the ## **A.S. NO. 400 OF 2000 (E)** :: 11 :: defendant. Therefore, we are not inclined to entertain such a contention at this belated stage causing prejudice to the plaintiff. The plaintiff would be put to surprise if the defendant is allowed to raise such a contention at this belated stage. The defendant did not choose to adduce any oral evidence and no documents were also produced by them. In the present case, it was for the defendant to prove before Court that they conducted the test and found that the chemicals supplied were of inferior quality. The defendant did not adduce any evidence on that aspect nor did they produce any document to prove that the test conducted by the defendant disclosed lack of quality of the goods supplied by the plaintiff. The plaintiff in his evidence as PW1 stated that the goods supplied were of the required quality. He also deposed about the fumes that would be emanated from the acid tank in certain circumstances. There is no contra evidence on that aspect. The defendant was bound to speak but they failed to speak. They were expected to adduce evidence on material aspects but they did not take the Court into confidence. In **Vidhyadhar** v. **Mankikrao and another (AIR 1999 SC 1441)** , the Supreme Court held that where a party to the suit does not appear in the witness box and state his own case on oath ## **A.S. NO. 400 OF 2000 (E)** :: 12 :: and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct. On a careful consideration of the pleadings and documentary and oral evidence in the case, we do not find any ground to interfere with the well considered judgment of the court below. The appeal lacks merits and it is, accordingly, dismissed. No order as to costs. **(K.T.SANKARAN) Judge** **(P.D. RAJAN) Judge** ahz/