Food Corporation of India vs Sri Swarna and Company, Partnership Firm

R. Mala, J.—The First Appeal is filed against the judgment and decree, dated 29.4.2006 in O.S. No. 1315 of 2004 on the file of the

Additional District Court, Fast

Track Court No. 1, Chenai-1.

The averments in the plaint are as follows:

(a) The Plaintiff is a registered partnership firm, carrying on its business as a Transport Contractors. The Defendant-Food Corporation of India (for

short, FCI), a Government of India undertaking, invited tenders for transport of food grains from:

(i) Egmore to Pondicherry, for the period from 1.1.2000 to 31.12.2001;

(ii) Egmore to T.V. Koil, for the period 1.1.2000 to 31.12.2001 and (iii) FSD Arakknonam to FSD TV Koil, for the period from 10.2.2000 to

9.2.2002. The Plaintiff-firm submitted the tenders, which were accepted by the Defendant-FCI.

(b) Accordingly, the Defendant as awarded 3 contracts to the Plaintiff-firm for transport of food grains to the respective destinations. After

following the procedures, the Defendant accepted the security deposit. The Plaintiff-firm commenced operation and it executed the contract to the

satisfaction of the Defendant-FCI. The food grains were loaded at the originating station and the same were delivered to the destination station

without any fault on the part of the Plaintiff.

(c) In every statement showing the truck wise movement of goods, the Plaintiff-firm obtained an endorsement showing that the trucks have been

despatched with properly covered tarpaulin sealed in the presence of the Defendant-FCI and that the goods were despatched with proper weight.

The same endorsement was also obtained at the destination station and the goods were in proper condition.

(d) The Food Storage Depot of the Defendant-FCI had issued a ""5 point certificate"" to the Plaintiff-firm that there is no breach of contract by the

Plaintiff-firm and the certificate also pointed out that there is no negligence on the part of the Plaintiff and hence, the Plaintiff is not responsible for

loss or damages.

(e) The Plaintiff-firm in the course of the contract period, raised bills/invoices in respect of the above three contracts during the various dates of

contract. The Defendant-FCI, without adhering to the spirit of the contract and the work done by the Plaintiff-firm, deducted Rs. 6,93,195/-

(excluding interest) from out of the various invoices raised by the Plaintiff-firm towards the transit loss in respect of the above three contracts. In

fact, there cannot be transit loss in the movement of the food grains, especially when the trucks were fully covered by the Tarpaulin and were

examined by the officials of the Defendant-FCI, both at the originating station and the destination station and the food grains were weighed at the

originating stataion by the weighing machines used both at the originating station and the destination station used by the Defendant-FCI and the

Defendant-FCI. Hence, according to the Plaintiff-firm, there cannot be any transit loss in the transaction, since the seals were found to be in-tact in

the destination-station.

(f) In fact, the Defendant-FCI issued a letter dated 19.6.2000 indicating that the gain is only due to difference in the different weigh bridges used

by the Defendant-FCI. It is further alleged that the Defendant-FCI used different weigh bridges at the originating station and at the destination

station. If the Defendant admits that the gain is due to the different weigh bridges being used, the same logic should be extended to the loss, which

is also alleged to be due to the Defendant''s weighing bridges being used in the originating and festinating places, and hence, the Plaintiff-firm states

that the Defendant-FCI ought not to have deducted such huge sum from out of the bills submitted to the Defendant-FCI.

(g) It is alleged by the Plaintiff-firm that there is no violation of the terms and conditions prescribed in the contract. The Form No. 9 showing the

statement of truck wise movement of food grains, issued by the Defendant-FCI clearly reveals that in respect of each truck, there is either transit

gain or transit loss, due to difference in the different weigh bridges used by the Defendant-FCI and also due to moisture content. But the

Defendant-FCI did not adjust the transit loss with the transit gain.

(h) The Plaintiff-firm furnished month wise movement of the goods. The Plaintiff further submitted that the Defendant-FCI has no right in deducting

Rs. 6,93,195/-from and out of the bills/invoices raised by the Plaintiff-firm in respect of three contracts successfully completed by the Plaintiff-firm.

After issuance of invoice, the Plaintiff has come out with the suit.

(i) The Plaintiff-firm and Defendant-FCI exchanged legal notices/reply and since it went in vein, the Plaintiff filed for suit for recovery of Rs.

9,40,884.02/-along with pendente-lite and future interest @ 15% per annum on the principal sum of Rs. 6,93,195/-with quarterly rest, from the

date of plaint till the date of payment in full and also for costs.

The gist and essence of the written statement filed by the Defendant-FCI, are as follows:

(a) The Defendant-FCI being Government of India undertaking, invited tenders for transport of foodgrains:

(i) from Egmore to Pondicherry, for the period from 1.1.2000 to 31.12.2001;

(ii) from Egmore to T.V. Koil, for the period 1.1.2000 to 31.12.2001 and (iii) from FSD Arakknonam to FSD TV Koil, for the period from

10.2.2000 to 9.2.2002.

(b) The Plaintiff participated in the tenders and the tenders were also accepted by the Defendant-FCI. As per the terms and conditions of the

tender, the Plaintiff furnished security deposit and the same was also already refunded to the Plaintiff.

(c) The food grains were loaded in the trucks provided by the Plaintiff-firm after proper weighment and the same was fully covered with Tarpaulin

and sealed in the presence of the Plaintiff''s personnel. The shortage was noticed at the destination point at the time of unloading the food grains

when the weighments were held in the presence of the Plaintiff''s personnel and hence, the Plaintiff alone is liable for shortage.

(d) As per the terms of tender, in Clause XI(d), the transport contractor is liable to make good the value of any shortage, wastage or damage to

the goods in transit. The ""5 point certificate"" issued by Food Storage Depot of the FCI was only for the refund of security deposit and the same is

not the certificate for the purpose of the contractor.

(e) It is true that the Defendant-FCI deducted a sum of Rs. 6,93,195/-towards transit loss from various invoices raised by the Plaintiff-firm relating

to the above said contracts, which are only in the terms of the tender clause, which is the specifically authorised deduction in the event of transit

loss. The Plaintiff-firm cannot take any advantage of the alleged transit gain, since the Plaintiff is only the transporter and not the owner of the food

grains.

(f) It is the duty of the Plaintiff-firm to deliver the exact weighment of the food grains loaded at the originating point to the destination point and if

any shortfall is found, the Plaintiff-firm alone is responsible, since from the time of loading till the delivery of food grains at the destination point, the

food grains were under the control and custody of the Plaintiff-firm and they alone are responsible for any shortfall noticed in the weighment at the

destination point.

(g) The alleged transit loss as claimed by the Plaintiff-firm due to different weigh bridges and also due to moisture content, is incorrect. The

allegation of the Plaintiff that there is transit gain in the transportation of food grains, in most of the trips instead of transit loss, is also incorrect. The

Plaintiff-firm is only the transport contractor and not the owner of the food grains, and as such, it is the bounden duty of the Plaintiff to deliver the

exact quantity of the food grains loaded at the originating end to the destination end and they alone are responsible for the shortage detected at the

destination end.

(h) The Plaintiff-firm is very well aware of the tender conditions at the time of participating the tender proceedings and the deductions were made

only as per the terms of the tender condition.

The Defendant prayed for dismissal of the suit.

The trial Court, after considering the averments, both in the plaint and in the written statement, and after hearing the arguments of both counsel,

framed two issues for consideration. On a perusal of the oral evidence of P.W.1 and D.W.1 and the documentary evidence of Exs.A-1 to A-67

and Ex.B-1, decreed the suit as prayed for in the plaint with costs, with future interest @ 6%. Challenging the judgment and decree of the trial

Court, the Defendant-FCI has come forward with this First Appeal.

After hearing the arguments of both counsel, the following points are framed for determination in this First Appeal:

(i) Whether the Appellant/Defendant-FCI is right in deducting the transit loss as per Clause XX(7) of the terms and conditions of tender/contract ?

(ii) Whether the trial Court is correct in decreeing the suit, since the Respondent/Plaintiff has not made any objection while receiving the cheque for

transport charges, after deducting the transit loss ?

(iii) Whether the judgment and decree of the trial Court are sustainable ? and (iv) To what relief the Appellant-Defendant-FCI is entitled to ?

Learned Counsel for the Appellant-Defendant-FCI submitted that for transporting the food grains from Egmore to Pondicherry and other

destinations, tenders were called for and the Respondent/Plaintiff-firm submitted the tender, which was accepted, pursaunt to which, the

Respondent/Plaintiff furnished security deposit, and after fulfilling the procedures, the transport operation commenced. During transportation,

admittedly, there is a transit loss. As per Clause XX(7) of the terms and conditions of tender/contract, the Respondent-Plaintiff-transporter-firm is

liable to pay the transit loss. Learned Counsel further submitted that as soon as the transportation is over, the Plaintiff submitted bills/invoices,

which were passed and after deducting I.T., service charges, transit loss, etc., the cheque has been issued for the balance amount. The amount had

been received by the Respondent/Plaintiff without any objection and protest and hence, the Plaintiff is estopped from claiming the amount. He

further submitted that the trial Court has failed to consider the said aspects. The trial Court also failed to consider the ""5 point certificate"" marked

as Ex.A-7 in which, it was specifically mentioned that all the claims of the contractor have been settled and none is pending. Since the

Respondent/Plaintiff relied on Ex.A-7--""5 point certificate"", when once the Respondent/Plaintiff accepted ""one point"", the Plaintiff-firm ought to

have accepted the entire document and not in piecemeal. The Defendant-FCI even refunded the security deposit to the Plaintiff-firm. The trial

Court placed reliance on the plea of the Plaintiff regarding the weighing of the goods in different weighing machines, which is totally unwarranted

and unsustainable. Learned Counsel for the Appellant/Defendant/FCI prayed for allowing the First Appeal.

Per contra, learned Counsel appearing for the Respondent/Plaintiff submitted that admittedly, the goods were loaded and covered with

Tarpaulin and the seal has been affixed in the originating loading place, which was verified at the destination point, i.e. the unloading place and in

the presence of both parties'' representatives, after the seal was found in-tact, then only unloading commenced and hence, there is no negligence on

the part of the Respondent-Plaintiff to cause loss during transit and if at all, there is any transit loss, it is only due to the moisture/monsoon change.

Learned Counsel for the Plaintiff further submitted that there is transit gain also. Furthermore, weighing machine in both the places are different

and there is a chance for error in indicating the weight of the food grains and when once the Appellant-Defendant-FCI accepted the transit gain,

they ought to have accepted the transit loss also and adjusted the same. The transit loss is lesser than the transit gain and so, the trial Court

considered this aspect in proper perspective and decreed the suit as prayed for.

Learned Counsel for the Respondent-Plaintiff-firm further submitted that merely because the Respondent-Plaintiff has not raised any

objection/protest while raising the transport charges then and there, it does not amount to estoppel or waiver of the Plaintiff''s claim. He further

submitted that the Appellant/Defendant-FCI has not raised such a plea in the written statement and when once the Defendant-FCI accepted the

transit gain, it ought to have adjusted/accepted the transit loss also, since the entire load had been covered by the Tarpaulin and the seal was also

found in-tact at the destination point. The trial Court considered all the aspects in correct circumspection. To support his submissions, learned

Counsel for the Respondent/Plaintiff relied on various of decisions of Apex Court/this Court for the proposition that the claim is not hit by the

principle of estoppel and waiver. Learned Counsel for the Respondent-Plaintiff-firm prayed for dismissal of the First Appeal.

Points (i) and (ii):

The Respondent as Plaintiff filed the suit for recovery of money from the Appellant-Defendant-FCI, which deducted for transit loss occurred while

the food grains of the Appellant/Defendant/FCI had been transported from the originating point, i.e. Egmore and other place to various other

destinations. Calling for the tender, submission of the tender by the Respondent/Plaintiff and acceptance of the tender of the Respondent/Plaintiff,

furnishing of security deposit, are all not in dispute and for each and every transport of food grains, the bills/invoices have been raised . The

transport charges have also been received and in some bills/invoices, after deduction of IT, service charges, the transit loss has also been deducted

and balance amount paid to the Respondent/Plaintiff-firm.

The only dispute is as to whether the Appellant/Defendant-FCI is entitled to deduct the transit loss, since the loading was properly covered

with Tarpaulin and the seal affixed, which was found in-tact at the destination point at the time of unloading in the presence of both sides''

representatives.

In this regard, it is relevant to notice various documents marked on either side before the trial Court. Exs.A-1 to 3 are the tender documents

submitted by the Respondent-Plaintiff. The work orders are marked as Exs.A-4 and 5. The letter from the Defendant to the Plaintiff is Ex.A-6.

The ""Five Point Certificate"" issued by the Appellant/Defendant/FCI after completion and conclusion of the contract, is marked as Ex.A-7. Exs.A-8

to A-59 are invoices then and there submitted by the Respondent/Plaintiff and in pursuance of the same, the transport charges have been paid.

Ex.A-60 is the instructions in respect of abnormal transit gain while in despatch operation on road movement to TV Koil, issued by the District

Manager of FCI, Vellore to Assistant Manager, FCI, Arakkonam. The Respondent-Plaintiff-firm-M/s. Sri Swarna & Co., issued Ex.A-61 notice

dated 15.2.2002, to release the transit losses deducted against the Bills, which is less than 0.25% of the total quantity moved by the Plaintiff-firm

and for payment of security deposit. Ex.A-62 is the letter of the Plaintiff-firm, dated 2.7.2001, reiterating the stand taken under Ex.A-61. Ex.A-63

is the statement showing the transit loss and gain for various periods of contract. Ex.A-64 is the Plaintiff''s advocate notice to the

Appellant/Defendant-FCI for refund of Rs. 6,93,195/-claimed under various bills and also for return of security deposit. The acknowledgement

card is marked as Ex.A-65. The Appellant/Defendant sent reply under Ex.A-66, in which they stated that for the quantity short delivered, the

contractor is responsible in terms of Clause XX(7) and so, the recovery is in order. In respect of the refund of security deposit, the Appellant-FCI

demanded that ""No Demand Certificate"" to be given by the District Office concerned. Ex.A-67 is the details of statement of account filed by the

Respondent/Plaintiff.

Both the counsel mainly focussed upon Ex.A-7 ""Five Point Certificate"". It is seen that the security deposit has also been refunded to the

Respondent/Plaintiff. Even though the Respondent-Plaintiff filed the statement of accounts/letters, in Exs.A-63 and 67, there is no dispute on the

side of the Appellant-Defendant that the quantum of loss and gain shown by the Respondent Plaintiff, is not correct.

It is pertinent to note that only after conclusion of the tender/contract, the Respondent-Plaintiff is entitled to refund of security deposit. At that

time only, the Plaintiff made a request for return of the amount deducted for transit loss alleged to have been deducted by the Appellant-Defendant.

It is to be noted that Ex.A-60 instructions issued by the Appellant-Defendant-FCI, District Office, Vellore, to the Assistant Manager of the FCI,

Arakkonam Branch Office, to the effect that,

It is seen from the Road Movement Contractor Bill from 1-7 that transit gain noticed at the receiving end, i.e. Asst. Manager (D), FSD, TV Koil"",

as detailed therein, and it was further observed in Ex.A-60 ...

.... the transit gain is due to improper/excess weighment at the loading point. Therefore, the Asst. Manager (D) is requested to have a check

personally on every now and then to avoid such gain in the receiving end otherwise it will be deemed that despatching end is sending the stock on

excessive weighment and necessary action will be initiated against the defaulter"" ....

The above extract of Ex.A-60 shows that the Appellant/Defendant/FCI staff committed fault while weighing the food grains. This would go to

show that at the time of loading, the weight of the food grains is different from the weight of the food grains at the destination point.

On 13.2.2003, the Respondent/Plaintiff-firm sent Ex.A-64 notice through their counsel, which has been received as per Ex.A-65

acknowledgement. In the said notice ExA-64 sent by the Respondent/Plaintiff''s counsel, it is stated as follows:

.... My clients state that there are no transit loss in the movement of food grains from FSD, Egmore to FSD Pondicherry and T.V. Koil. In fact

all the trucks were fully covered with tarpaulin and were sealed by FSD Staff only after loading the trucks to FSD, Chennai and Arakonam.

Similarly each truck was examined by your staff at Pondicherry and T.V. Koil and were also certified that the truck is fully covered and seals are in

tact. Hence there is no question of transit loss in the said transport. In fact technically speaking there is only a transit gain instead of transit loss. It

can be noticed there is a transit gain of 53.129 Mts as against transit loss of 32.834 Mts. In fact my client by their letter dated 16.9.2002 had given

a detailed statement showing the monthly moved quantities with corresponding losses and gains along with amounts deducted towards transit loss.

The above factual position is clearly accepted by you and there is no dispute regarding the above statement. ...

From the said extract of notice Ex.A-64, it is seen that the food grains have been loaded fully covered with Tarpaulin and were sealed by the

FSD staff only after loading the trucks at FSD Chennai and Arakkonam. Similarly, each truck was examined by the Appellant/Defendant-FCI at

Pondicherry and TV Koil and were also certified that the truck is fully covered and seals are in-tact. Then only, unloading process commenced.

Furthermore, as rightly pointed out by the learned Counsel appearing for the Respondent-Plaintiff, when once the Appellant-Defendant-FCI

admitted the transit gain, they ought to have accepted the transit loss also, and there is no tamper of Tarpaulin cover and seals were in-tact.

Furthermore, in respect of the transit gain at 53.129 Mts, the transit loss of 32.834 M Ts. That factum has not been disputed or denied by the

Appellant/Defendant while issuing reply under Ex.A-66. But since the goods are food grains, it is common knowledge that during transit, there

might have been some variation in the weight of the goods due to moisture/monsoon, and the Appellant/Defendant accepted that there is a

difference in weighing machines in both at the destination places and the originating points, and this factum has been fortified by Ex.A-60 letter,

which contains the instructions given by the FCI, Vellore to the FCI, Assistant Manager, Arakkonam.

Furthermore, since the goods transported are only food grains, during transit, the food grains could have gained or lost weight due to

moisture/weather condition, and considering the same, 53.129 M Ts gain and 32.834 Mts loss, were calculated.

In the written statement, the Appellant/Defendant-FCI in paragraph 5 has stated that as per the terms of tender, Clause XI(d), the transport

contractor is liable to make good the value of any shortage, wastage or damage to the goods in transit. But while perusing Exs.A-1 to A-3 tender

conditions, the relevant Clause is only Clause XX(7). It is true that as per Clause XX(7) of the terms and conditions governing contract for

transport of food grains from the originating point to the destination place, the contractor shall be responsible for the safety of the goods while in

transit in their trucks/carts/any other transport vehicles, and for delivery of quantity despatched from the railheads/god owns, etc., as the case may

be, to the destination or to the recipients to whom the grain etc., is required to be transported by the contractors. In Clause XX(7), it is further

stated that the contractors shall provide tarpaulins on the decks of the trucks so as to avoid the loss of grains, etc. through the holes, crevices in the

decks of the trucks. The contractors shall also exercise adequate care and take precautions to ensure that the food grains bags are not damaged

while in transit in their trucks/carts/any other vehicles. They shall be liable to make good the value of any shortage, wastage, losses or damage to

the goods in transit at two times the central issue rate for PDS (not RPDS) as fixed by the Government of India as applicable from time to time for

all food grains.

Admittedly, before deducting the amount for transit loss, while passing the bills/invoices for transport/freight charges, the Appellant/Defendant-

FCI did not ascertain as to whether the Respondent/Plaintiff was negligent in taking care of goods transported.

As already stated, at both the ends, i.e. at the originating place and the destination place, the goods were loaded and covered by Tarpaulin and

seals have been also affixed in the presence of both sides'' representatives, and at the destination point, in the presence of both sides''

representatives, the seal had been examined and only after it was found to be in-tact, the unloading process commenced. So, there is no negligence

on the part of the Respondent/Plaintiff. In such circumstances, I am of the view that Clause XX(7) of the terms of the tender/contract, could not

help the Appellant/Defendant to blame the Respondent/Plaintiff for any default.

Furthermore, while perusing the invoices/bills, there is no shortage of the number of bags indicated therein during transit from the point of

loading to destination. In some trucks, there was a gain and in some trucks, there was loss. This loss is very meagre than what was gained. For

example, while perusing Ex.A-8 invoice/bill, in the case of two trucks out of 166, it is calculated as follows:

SlNo DespatchDateTC TruckNo.No. DespatchWt.ReceivedDateReceivedbagsReceived Difference

No ofBags(Net) Wt.(Net) - +

23 2.9.2k 3021 PY-01- 140 12.965 2.9.2k 140 12,960 05 -

K-7034

25 2.9.2k 3527 TN-04- 140 12.845 2.9.2k 140 12,850 - 05

A-5049

This shows that there is a meagre loss and gain, which is due to the moisture content and variation in the weigh bridges. In Ex.A-8 invoice/bill, it

was mentioned that the total loss is 25 points, whereas the total gain is 315 points and on that basis only, the Assistant Manager of the FCI made a

bill, in which he has deducted only IT and service charges.

On a perusal of Ex.A-18, which is another bill/invoice, it is noticed that the total loss is 247 points and the total gain is 446 points. The bill has

been passed on 26.2.2001, indicating that the claim was for Rs. 87,099/-and after making deductions of IT, service charges, etc., the amount

arrived at was Rs. 7,585/- and total amount payable was indicated as Rs. 79,514.

There is no document shown by the Appellant/Defendant-FCI that before deducting the transit loss, they are giving opportunity to the Plaintiff-

firm to put forth their case.

As already discussed in the earlier paragraph of this judgment, the contractor must take precaution for any loss or damage of the bags during

transit. But admittedly, the goods were packed with Tarpaulin and the goods transported were not missing; since the goods were packed with

Tarpaulin, the goods could not have spilled over. So, without giving opportunity to the Respondent-Plaintiff-firm, the Appellant-Defendant-FCI

deducted the transit loss, even though the transit gain is higher than the transit loss, which is only meagre, and the same is illegal.

It is appropriate to consider the argument advanced by the learned Counsel for the Appellant/Defendant-FCI that the Respondent/Plaintiff is

entitled only to transport charges for the transit gain and not for the value of the transit gain for food grains transported. Admittedly, the

Respondent/Plaintiff has not claimed any money for transit gain, even though the total transit gain is higher than the transit loss, for which, the

Appellant/Defendant-FCI deducted a sum of Rs. 6,93,195/-. But the Appellant/Defendant/Foci''s defence is that after conclusion of the contract,

the Respondent/Plaintiff is entitled to refund of the security deposit/transit loss. They kept quiet all along and it will neither estop the Respondent-

Plaintiff from claiming that amount, nor the Respondent/Plaintiff has waived its right.

Furthermore, the Appellant-Defendant has not raised a plea that in each and every invoice/bill, the deduction has been made for transit loss,

even though the Respondent/Plaintiff has received cheque for the transport/freight charges, but they have never made any objection and so, they

are estopped from claiming the same and waive the right.

Learned Counsel for the Respondent/Plaintiff relied upon the judgment of the Supreme Court reported in 2003 (2) CTC 125 (SC) {Balwat

Singh v. Anand Kumar Sharma), and in the said case, the judgment of the High Court that mere acceptance of delayed rent by landlord did not

amount to waiver of statutory right to evict the tenant who committed wilful default, was confirmed by the Supreme Court. But in the present case,

first of all, the Appellant/Defendant-FCI has not raised the plea of waiver. But, in paragraph 5 of the written statement, the Appellant-Defendant-

FCI stated that as per Clause XI(d) of the tender conditions, they are liable to deduct the transit loss. Furthermore, after conclusion of the

contract, the Appellant/Defendant-FCI raised objection. In Ex.A-66 reply notice, the Appellant-Defendant-FCI stated that for the quantity short

delivered, the contractor is responsible in terms of Clause XX(7), and they justified that the recovery is in order. This shows that the

Appellant/Defendant-FCI deducted the transit loss only as per Clause XX(7). But, Clause XI(d) is not the relevant Clause for deduction in respect

of transit loss. Hence, I am of the view that the Appellant/Defendant/FCI is not entitled to deduct the amount of transit loss while passing the

invoices/bills for transport charges.

Learned Counsel appearing for the Respondent/Plaintiff also relied upon the decision of this Court reported in 2008 (6) CTC 229 (M. Kumar

Vs.S. Subbiah Kone and Shiek Mohammed) in which, it was held that there is no estoppel against the statute and the right of parties could not be

denied on future occasion unless the other party shows that, that party had taken already a stand, thereby, gaining an advantage which otherwise

was not available to persons questioning it; while the statute cast a duty on the party to perform, such party cannot recourse to the stand taken by

the other side.

Learned Counsel for the Respondent/Plaintiff relied on the decision of the Supreme Court reported in 2002 (2) CTC 628 (SC) (A.V.G.P.

Chettiar & Sons Vs.T. Palanisamy Gounder), wherein it is noted as follows:

Right of appeal of tenant cannot be denied on any principle of estoppel even if tenant had filed an undertaking before High Court to handover

vacant possession unless landlord could show that the tenant gained an advantage by giving an undertaking and obtaining stay of order of eviction

beyond period allowed for preferring appeal - Merely giving undertaking does not foreclose tenant from availing statutory remedies of appeal or

revision available under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 or under Constitution.

It is true that there is no estoppel against the statute. In this case, admittedly, Ex.A-7 namely ""5 point certificate"" has been issued and only after

that, the security deposit has been refunded to the Respondent-Plaintiff.

Learned Counsel for the Respondent/Plaintiff also relied on the judgment of the Supreme Court reported in Tamil Nadu Electricity Board and

another Vs. N. Raju Reddiar and another, , wherein, it was noted as follows:

Contract Act, 1872 - Section 10 - Tender for transport of iron and steel materials including unloading, weighment and stocking from various stock

yards of supplier to stores of Tamil Nadu Electricity Board - Transporter claiming payment on multi slab basis as was done in respect of certain

earlier bills - Mere passing of certain bills on multi slab basis cannot be basis of claim - It is for the transport Contractor to establish that in written

contract the Tamil Nadu Electricity Board agreed to pay on multi slab basis.

The above three citations reported in 2008 (6) CTC 229 (cited supra); 2002 (2) CTC 628 (cited supra) and Tamil Nadu Electricity Board

and another Vs. N. Raju Reddiar and another, , are not applicable to the facts of the present case.

Learned Counsel for the Appellant/Plaintiff mainly focussed upon Clause (a) of Ex.A-7 - ''5 point certificate'' which reads as follows:

(a) That there was no breach by the Contractor of the terms and conditions of the contract and no damage, loss and expenses were suffered by

the Food Corporation of India due to Contractor''s negligence or unworkman like performance.

The abovsaid Ex.A-7 ''5 point Certificate"" of the Appellant-FCI/Defendant''s FSD Office itself shows that there was no breach of contract of

the terms and conditions of the contract and no damage, loss and expenses were suffered by the FCI due to contractor''s negligence or

unworkman like performance. In such circumstances, the deduction of Rs. 6,93,195/-for transit loss, is illegal.

At this juncture, learned Counsel appearing for the Appellant/Defendant-FCI culled out Clause (e) of the said Ex.A-7 ''5 point certificate'', in

which, it is stated that ""all claims of the contractor have been settled and none is pending and he further submitted that since Ex.A-7 ''5 point

certificate'' had been accepted by the Respondent/Plaintiff, he is not entitled for 23 recovery/refund of the amount deducted for transit loss.

Considering the rival arguments put forth by both sides and considering Ex.A-7 - ''5 point certificate'', admittedly the same was issued by the

Appellant-Defendant-FCI official. The Appellant-Defendant-FCI itself stated that all the claims of the contractor have been settled and none is

pending and it will not bind the Respondent/Plaintiff, since the Plaintiff-firm is not signatory. Admittedly, Ex.A-7 ''5'' point certificate has been

issued after refund of security deposit to the Plaintiff. So, the argument advanced by learned Counsel for the Appellant-Defendant that Clause (e)

of Ex.A-7 ''5'' point certificate is binding on the Respondent/Plaintiff, is unacceptable and it is a self-serving clause made by the

Appellant/Defendant.

Admittedly, as per Exs.A-8 to 59 (bills/invoices), the Respondent/Plaintiff has transported the food grains and they have also received

transport/freight charges; in some invoices, the amount was deducted for transit loss besides deduction for IT, service charges, etc. The reason

given by the learned Counsel for the Respondent/Plaintiff that for concluding the contract period, they have waited and only thereafter, the

Appellant/Defendant issued notice and along with the notice, they have also sent statement of account as well as the weighment and the

documents/Exs.A-63 and 67, and the same were not objected or disputed by the Respondent/Plaintiff. So, the transit gain is more than the transit

loss. The Respondent/Plaintiff has not claimed any freight charges or the value of the gain, but only transit loss simpliciter which occurred only due

to difference in weigh bridges in the originating and destination points and the weight gain/loss variation would have also been due to moisture

content during transit.

In such circumstances, I am of the view that the trial Court has considered all the aspects in proper perspective and granted a decree as

prayed for by the Plaintiff. The Appellant/Defendant-FCI, without giving opportunity to the Respondent/Plaintiff-firm, invoked the provisions of

Clause XX(7) of the terms and conditions of the tender/contract, which is illegal. Points (i) and (ii) are answered accordingly.

41 Points (iii) and (iv): In view of the answer given to points (i) and (ii), it has to be held that the judgment and decree of the trial Court are

sustainable and the Respondent/Plaintiff is entitled to decree as prayed for in the plaint. Points (iii) and (iv) are answered accordingly.

For the foregoing reasonings:

(a) The First Appeal is dismissed.

(b) The judgment and decree of the trial Court are confirmed.

(c) No costs.