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Judgment
Instant memo of appeal has been filed by appellantâ€"M/s Hindustan Petroleum Corporation Limited, against judgment and decree dated
29.12.2015, passed by Learned Principal District Judge Jammu(hereinafter referred to as learned “Trial Courtâ€) on File No. 76/Civil titled as M/s
Banke Behari Gandotra Vs. M/s Hindustan Petroleum Corporation Ltd. & another.Â
The judgment of learned Trial Court is challenged on the grounds that same has been passed on assumptions and presumptions; that learned trial
Court has committed a great illegality in holding that suit of plaintiff for recovery of Rs.52,18,756.00 along with interest @ 9% p.a. from the date of
filing of the case till realization is decreed with costs; that learned trial court has failed to distinguish between rates finalized in new contract of
12.06.2000 with respondent and rates fixed in 2003 and there is no basis for seeking a claim of rates of transportation for the period, from 12.06.2000
to 2003, as it was covered under a different concluded contract; that entire controversy of rates cropped up for the period when there was no
contract between 01.09.1999 and 11.06.2000 and appellant had to carry on the work of transportation in public interest in this period due to operation
of stay; that the claim cannot be accepted for a rate later than 12.06.2000 under any circumstances; that learned trial Court did not afford sufficient
opportunity of being heard to appellants; that impugned judgment is violative of principles of natural justice and it renders impugned judgment bad in
law; that by rejecting application seeking permission to lead evidence in defence vide order dated 26.11.2015, learned trial Court has committed a
great illegality as grounds set out in order, are not germane to principles of a fair trial with adequate opportunity to respondent in accordance with law;
that learned trial Court placed reliance on official note to decree the suit which cannot be treated to be any admission or settlement of claim of the
respondent and cannot be treated as legal evidence in favour of respondent; that the findings in this regard are non-est and learned trial Court was not
justified to decree the suit on the basis of a letter seeking management approval of D Panda X OPS. OFFICER PLANT MANAGEMENT 9ACTG0
JAMMU and alleged recommendation by Senior Regional Manager and by saying that it was concurred by DGM Commercial. By treating it as
implied admission of claims of plaintiff, a perverse finding has been recorded by misinterpretation of letters and its evaluation as a piece of legal
evidence. Thus, it is contended that impugned judgment and decree be set aside and the suit be dismissed with costs.
Respondent-firm resists the appeal on various grounds by contending that respondent firm was allotted a contract for transportation of packed LPG
Cylinders from EX Jammu LPG Plant to various places from 01.09.1996 to 31.08.1999. It is insisted that fresh tender was floated for transportation
contract from 01.09.1999 which could not be finalized by appellant company on account of litigation, therefore, appellant company requested
respondent-firm to continue with transportation contract till finalization of new contract. It is also contended that appellant company had agreed to
grant the rates finalized in new contract with retrospective effect w.e.f. 01.09.1999, and that fresh contract was also allotted in favour of respondent
firm w.e.f. 12.06.2000. However, the amount, due to respondent on account of revision of rates, was not paid to respondent, and therefore, he filed a
suit, which has been decreed by learned trial Court vide judgment and decree dated 29.12.2015 and a decree for a sum of Rs.52,18,756.00 along with
interest @ 9% per annum has been passed against appellant company.Â
Before discussing the arguments, it would be profitable to give brief facts of the case, which are summarized as under:-
(a) Respondent herein (plaintiff before the learned trial Court) is a sole proprietorship concern comprising of Shri Banke Behari Gandotra S/o Lt. Sh.
Roop Chand Gandotra;
(b) Respondent firm had been undertaking and executing transportation contracts for carriage of packed LPG Cylinders for and on behalf of appellant
company for quite some time;Â
(c) One of such carriage contracts was allotted to respondent firm by appellant company on 01.09.1996 initially for a period of one year with two
options of renewal of one year each;Â (d)Appellant company renewed aforesaid contract allotted to respondent firm on two occasions for extended
term of one year each which had to expire on 31-8-1999.
(e) Before expiry of extended term of aforesaid carriage contract allotted to respondent firm, the appellant company issued a Local Purchase Order
(LPR ) No. 0417/028 dated 10.11.1998 which was forwarded by Jammu LPG R.O to NZ (Northern Zone) for initiating tender process in order to
finalize new transportation contract effective from 01.09.1999 for a period of one year with two options of renewal of one year each.Â
(f) As per requirement of LPR No. 0417/028 dated 10.11.1998, tenders were invited vide NIT /Tender Notice dated 03.02.1999 from interested
parties.
(g) NIT dated 03.02.1999 was involved in litigation and therefore, tendering process got delayed and fresh carriage contract could not be finalized
before expiry of earlier carriage contract up to 31.08.1999, which had been allotted to respondent firm.Â
(h) In order to avoid disruption of supply of packed LPG cylinders, appellant company vide its letter No. RNM/RKG/TPT dated 278-1999 sought
consent of respondent firm for performing job of packed LPG transportation on same rates and terms and conditions of earlier existing contract. Â
(i) Aforesaid offer of appellant company dated 27.08.1999, was replied by respondent firm vide its letters dated 24.09.1999 and 25.09.1999, agreeing
to perform job of packed LPG transportation on same terms and conditions of existing agreement effective from 01.09.1999 subject to the condition
that rates finalized in new contract shall be effective from 01.09.1999 and same will be paid to respondent firm on retrospective basis, i.e., new
contract shall take effect from 01.09.1999.  Â
(j) Appellant company vide its letter no. JLRO/RNM/TPT dated 01.10.1999 accepted offer of respondent firm and agreed to continue using fleet of
trucks of respondent firm till finalization of new contract and it was further undertaken that rates so finalized in new contract will be paid to
respondent firm w.e.f. 01.09.1999 on retrospective basis.Â
(k) Respondent firm thereafter was allowed to carry on carriage contract of packed LPG Cylinders till finalization of new contract on the condition
that rates so finalized in new contract will be paid to respondent firm w.e.f. 01.09.1999 on retrospective basis.Â
(l) Appellant company initiated a fresh process of allotment of contract by issuing a fresh Local Purchase Order being LPR No. 0417/064 dated
19.04.2000 for a period from 01.09.1999 to 31.08.2000 with an option to extend contract for one more year.
(m) LPR dated 19.04.2000 became basis for issuance of fresh NIT/tender No. TPT/NZ/LPG/PUR/HVA-061 dated 25.04.2000 which was finalized
with opening of price bids on 12.06.2000.Â
(n) On the basis of aforesaid tendering process, respondent firm being lowest bidder, the contract came to be allotted to respondent firm after price
bids were opened on 12.06.2000 for an initial term of one year with option of one extension of one year. However, according to respondent firm, said
contract though finalized on 12.06.2000 was to take effect from 01.09.1999 as per letter of appellant company dated 01.10.1999 and LPR No.
0417/064 dated 19.04.2000 which was the basis of fresh NIT.
(o)Respondent firm after allotment of fresh tender and execution of fresh agreement, started making representations to appellant firm for giving
effect to fresh tender w.e.f. 01-9-1999 as per commitment made by appellant company vide its letter No. JLRO/RNM/TPT dated 01.10.1999 and
also LPR No. 0417/064 dated 19.04.2000 and NIT issued on that basis. However, appellant company despite receipt of said representations did not
respond to the same and continued to make on account payments to respondent firm.
(p) Appellant company extended the contract till 11.06.2003 and during this period, there had been protracted correspondence on behalf of respondent
firm with appellant company for giving effect to fresh contract allotted to it w.e.f. 01.09.1999 and making payments accordingly by proper application
of escalation/de-escalation of the HSD as per the terms of contract.Â
(q) On persistent representations forming part of plaint, appellant company held a meeting at Hotel Asia, Jammu, in the month of October, 2003, for
resolving the issue of payments to respondent firm in terms of contract being made operational from 01.09.1999 on retrospective basis. This meeting
was attended by senior most officials of appellant company including DGM, LPG (NZ) and an assurance was extended to give effect to contract
allotted to respondent firm from 01.09.1999 and to make payments accordingly.
(r) That despite assurance extended in meeting in October 2003, no further action was taken prompting respondent firm to issue letter no.
BBG/1/99/00-0004 dated 12.12.2003 wherein request for due payments was made by taking the contract rates effective from 01.09.1999. In this
letter, respondent firm tentatively fixed payments due to it by more than 32 Lacs.
(s) On another representation of respondent firm dated 15.01.2004, Appellant Corporation responded to request and advised its officers to calculate
payments by taking contract effective from 01.09.1999.Â
(t) Appellant company provided rates for period effective from 01.09.1999 and on the basis of which, respondent firm submitted supplementary bills
amounting to Rs.34,69,206/- to appellant company. This is evidenced in the communications attached with the plaint.
(u) Respondent firm submits that though recommendations were made by Senior Manager of appellant company for payment of the amount found
due in favour of respondent firm, however, the same was not done.Â
(v) It was only in the year 2005 that Senior Manager, LPG (E&P) North Zone of the appellant company vide his letter No. NZ/LPG/HSJ/TPT dated
28-12-2005 declined to consider the representations of the respondent firm for giving effect to fresh tender w.e.f. 01.09.1999 and declared letter No.
JLRO/RNM/TPT dated 01.10.1999 issued by the then Regional Manager as null and void.
(w) Respondent firm was thus constrained to file recovery suit for an amount of Rs. 52,18,756/- which included an amount of Rs. 34,69,206/- as a
principal amount and Rs. 17,49,550/- as interest against the appellant company (defendants in the suit).
(x) Defendants (appellants herein) appeared in the suit and filed their written statement and contested the claim of respondent firm.Â
(y)Application filed by respondent firm seeking permission to file replica to written statement of appellant herein was allowed by learned trial court
and thereafter replica was filed by respondent firm.
On the basis of the pleadings of the parties, learned trial court vide order dated 09.05.2011 framed the following issues:-
(i) Whether the plaintiff is entitled to recover from the defendants transportation charges for carrying packed LPG cylinders to different places w.e.f.
1st Sept. 1999 to 11th of June 2003 at those rates which the defendants had agreed to pay the plaintiff for carriage of packed LPG cylinders from
12th of June 2000 to 11th of June, 2003? OPP
(ii) Whether the defendant has illegally withheld an amount of Rs. 34,69,206.00 from the bills of plaintiff? OPP
(iii) Whether the plaintiff is entitled to recover an amount of Rs. 52,18,756/- on account of principal amount and interest @ 12% p.a. from the
defendants and also interest pendentelite and future interest at the rate of 18% p.a. from the defendants? OPP
(iv) Whether the suit has not been properly valued, if so, what is the correct valuation? OPD
(v) Whether the suit of the plaintiff is time barred? OPD
(vi) Whether the defendants have not been served with notice under Section 80 CPC, if so what is its effect? OPD
(vii) Relief? O.P. Parties.Â
It is stated that learned trial Court before framing issues had not recorded statement of parties under Order 10 CPC. Respondent firm moved an
application for admission/denial of the documents placed by the parties on the court file, which application, however, was rejected by learned trial
Court. This constrained the respondent firm to file an application under Order 11 Rule 12 of CPC for directing defendant/appellant company to
produce following documents which were in their power and possession:
(i) Order Letter No. BBG/1/99/00-005 dated 15-1-2004.
(ii) File Note No. JLRO/032 dated 30-10-2000.
(iii) File Note No. LPR/0417/064 dated 19-4-2000.
(iv) File Note No. JLRO/042 dated 3-7-2004.
(v) Original supplementary bills submitted by the plaintiff dated 27-4-2004.
(vi) Complete record of the NIT and other tendering process of the tender which was finalized on 12-62000 and allotted to the plaintiff.Â
Appellant company in response to application moved by respondent firm, submitted its reply on the affidavit and stated that all the aforementioned
documents are in fact in their power and possession. However, appellant company only produced few documents, viz. Order Letter No.
BBG/1/99/00-005 dated 15.01.2004, File Note No. JLRO/42 dated 03.07.2004 and original supplementary bills submitted by the plaintiff dated
27.04.2004. Rest of the documents mentioned in application were not produced on the plea that same were lying in Delhi Office of appellant
company. However, appellant company did not deny or dispute the contents of the rest of the documents.Â
 8. On the basis of issues drawn in the case and the documents produced by respondent firm and also those produced by appellant company
pursuant to application filed under Order 11 Rule 12 CPC, respondent firm proceeded to lead its evidence in the case. The respondent firm / plaintiff
thereafter led evidence by filing affidavits of Shri Banke Behari Gandotra (plaintiff) and Shri Arun Gandotra (witness/attorney holder) and the said
witnesses were also cross-examined by appellant/defendant. The defendant / appellant, however, despite granting number of opportunities, failed to
lead any evidence and its right to lead evidence was closed by learned trial Court vide its order dated 27.07.2015. Appellant company thereafter
moved an application dated 29.10.2015 for permitting it to lead evidence. Respondent/plaintiff filed its objections to the said application. Learned trial
Court dismissed the said application. Thus, it is contended on behalf of the respondent firm that this order of learned trial Court remained
unchallenged and thus became final. Â
Thereafter learned trial Court, after hearing the arguments of the parties and after going through the record placed on the court file as well as the
evidence led by the plaintiff/respondent, vide its judgment dated 29.12.2015 decreed the suit for an amount of Rs. 52,18,756/- with pendente lite and
future interest @ 9% per annum from the date of filing of the suit till its realization as also the costs of the suit, in favour of the plaintiff/ respondent
firm and against the defendant/appellant company, which decree is under challenge in the present appeal. Â
Heard learned counsel for the parties and perused the record.
The decree passed by learned trial Court has been challenged by the appellant on the grounds viz that the trial Court has passed the decree
without giving its finding on each and every issue framed in the case; that the decree has been passed on assumption and presumption without any
legal evidence; that the trial Court has placed reliance on the official note to decree the suit which cannot be treated to be any admission or settlement
of claim of the respondent firm and the same cannot be treated as legal evidence in favour of the respondent firm; that the trial Court was not
justified to decree the suit on the basis of letter seeking management approval of D Panda Ex-OPS Officer Plant Management (ACTG) Jammu and
the alleged recommendation by the Senior Regional Manager and by saying that it was concurred by DGM Commercial and the trial Court did not
afford sufficient opportunity of being heard to the appellant company; and that the suit was barred by limitation and that no interest could have been
awarded in absence of any provision for the same in the contract.Â
On the other side, stand of the respondent firm is that the sequence of events leading to finalization of contract along with combined reading of
letter/communication No. JLRO/RNM/TPT dated 01.10.1999 issued by Regional Manager of appellant company, whereby appellant company had
undertaken that the rates so finalized in new contract will be paid to respondent firm w.e.f. 01.09.1999 on retrospective basis and LPR No. 0417/064
dated 19.04.2000 which became basis for issuance of NIT dated 25.04.2000, would show that parties always intended to give effect to the new
contract w.e.f. 01.09.1999 on retrospective basis. Mere fact that the new rates in respect of NIT dated 25.04.2000 were finalized on 12.06.2000
have no effect insofar as commencement of period of contract is concerned.Â
The evidence of plaintiff-respondent firm that he was transporting/ carrying packet LPG cylinders to different places w.e.f. 1st Sept. 1999 to 11th
June 2003, at those rates which defendants-appellant company had agreed to pay to plaintiff-respondent firm for carriage of packet LPG cylinders
from 12th of June 2000 to 11th of June 2003 has not been rebutted by appellant company and further that plaintiff was required to prove that
defendant-company has illegally withheld an amount of Rs.34,69,206.00 from the bills of plaintiff-respondent firm, which has also been proved by
cogent reasons. On the other side, in rebuttal, defendant-appellant company has not produced any evidence. Law is very much clear that if a party to
suit does not appear before the Court for recording the statement on oath, an adverse inference can be drawn by the Court that the defense taken is
false. In the present case also despite granting various opportunities, defendants-appellant company have not produced any evidence, so the defense
taken by them can be termed as false. Further there are documents of Defendant Company which also corroborate the claims of plaintiff-respondent
firm.Â
It is to be noted that in every contract, intention of parties is to be gathered from inter se communications. In the present case, both parties
intended commencement of contract from 01.09.1999 as per rates finalized on 12.06.2000. This intention is not only gatherable from communication
of appellant company dated 01.10.1999 but also from the LPR No. 0417/064 dated 19.04.2000, which clearly indicates the period of contract from
01.09.1999 to 31.08.2000 in the first instance. This intention is further fortified by the File Note No. JLRO/042 dated 03.07.2004, where appellant
company recommended payment of dues payable to respondent firm by taking contract period from 01.09.1999 to 11.06.2003 as per escalation/de-
escalation of rates of HSD and quantified the same to the tune of Rs.34,69,206/-. This was on the basis of supplementary bills submitted by
respondent firm on the rates provided by appellant company. The entire recommendations along with supplementary bills were produced in the Court
by appellant company in response to application under Order 11 Rule 12 CPC. Otherwise also in the realm of contract, it is usual, rather accepted as
normal practice, to give effect to a contract from a particular date on retrospective basis.
What is important is the date of commencement of execution of contract. The agreement can be drawn subsequently during execution of contract on
retrospective basis from the date of commencement of contract. This is exactly what has happened in the present case. Both parties intended the
contract to commence from 01.09.1999 on the rates to be finalized pursuant to NIT dated 25.04.2000. Once the rates came to be finalized on
12.06.2000, the same were to give effect to the contract commencing from 01.09.1999 only. There is enough evidence on this score on the Court file.
Therefore, the very basis of denial of the payments due to respondent firm by appellant company was totally illegal. Subsequently letter issued on
28.12.2005 by Senior Manager, LPG (E&P) NZ, has no force in the eye of law, being contrary to terms of NIT as well as letter dated 01.10.1999.Â
As narrated above, learned Trial Court framed as many as seven issues and out of which, the onus of issues nos.(i) to (iii) were connected issues
and onus whereof was placed upon respondent/plaintiff and with respect to the rest of the issues, the onus was placed upon appellant/defendant. The
plaintiff/respondent firm led its evidence to prove aforesaid three issues by referring to documents produced by appellant company itself. Learned
Trial Court has decided aforesaid issues in favour of respondent firm as all the said three issues being interconnected. All the three interconnected
issues, onus whereof was laid on the plaintiff/respondent firm, related to the entitlement of plaintiff/respondent firm to the claimed amount by taking
the period of contract from 01.09.1999 to 11.06.2003. The issues being interconnected and evidence led thereto being common, thus, there was no
requirement for giving finding on each and every issue, particularly so when there was no evidence in rebuttal on behalf of appellant/defendant.Â
In the evidence led by respondent firm, averments made in plaint and documents enclosed therewith were duly proved. Further sequence of
events as referred to hereinabove were also proved by filing affidavits in the shape of evidence and also by referring to various documents produced
by both appellant company and respondent firm, particularly the documents which were produced pursuant to the application under Order 11 Rule 12
CPC.Â
The thrust of the evidence of the respondent firm/plaintiff was regarding the contents of LPR No. 0417/64 dated 19.04.2000 which became the
very basis for issuance of NIT dated 25.04.2000 which provided the period of contract effective from 01.09.1999 to 31.08.2000 with an option of
appellant company to extend the same for one more year. Coupled with this is the categoric admission of the appellant company that the rates
finalized pursuant to NIT dated 25.04.2000 would be made applicable to the contract to be allotted to successful bidder from 01.09.1999 on
retrospective basis as per letter of appellant company dated 01.10.1999. All the relevant documents relating to finalization of contract placed with the
Court file and also various representations/ correspondences made by respondent firm with appellant company was duly proved. In this manner,
respondent firm proved contents of communications exchanged between parties and also supplementary bills prepared by respondent firm on the
rates furnished by appellant company and duly submitted to appellant company along with respondent firmâ€s letter dated 27.04.2004. Further
contents of the file note of appellant company, being JLRO/042 dated 3rd July 2004, produced in the Court by appellant company, in response to the
application under Order 11 Rule 12 CPC, per seproved the assertions of respondent firm made in the plaint as well as in the affidavits in the shape of
evidence as also the amount due to respondent firm as per supplementary bills submitted to appellant company. This file note gives entire
background as well as sequence of events leading to finalization of fresh contract w.e.f. 01.09.1999 and applicability of finalized rates from the said
date. Since the documents pertained to the appellant company and had been produced in the Court by the appellant company, its contents are required
to be read as it is unless disputed or rebutted by the appellant company. In this manner, respondent firm was able to prove its case by leading
cogent evidence. The witnesses of plaintiff/respondent firm were cross-examined by appellant company. However, not a single question was asked
to dispute the contents of correspondences referred to by witnesses in their affidavits. Having said that, it was proved that new contract was required
to be given effect from 01.09.1999. Not to speak of controverting averments and correspondence, even a suggestion was not put to witnesses in
this regard. In the light of this, the learned Trial Court was absolutely right in its conclusion that plaintiff had succeeded in proving its case and
decreed the suit accordingly.Â
On the Issue Nos.(iv) to (vi), onus whereof was placed upon appellant. The appellant had not led any evidence in this regard. Even no argument
was advanced on these issues by appellant company and therefore, learned Trial Court was absolutely right in coming to the conclusion that in
absence of appellant company not leading any evidence on the issues, the defence taken by it, is false. Even during arguments in appeal, the appellant
companyâ€s counsel could not point out as to how the suit is not properly valued or the same is barred by limitation which otherwise is a mixed
question of law and facts. Even otherwise, the claim was raised during the currency of contract and the contract expired on 11.06.2003 and the claim
of respondent firm was rejected on 28.12.2005. The suit having been filed on 22.05.2006, it is well within limitation period and therefore, any
argument on that score is wholly misplaced. So far as issue No. (vi) regarding notice under Section 80 CPC is concerned, it is contended that the
appellant company is a Public Sector Undertaking and there is no requirement of any notice as argued. Having said so, it is made abundantly clear
that having led no evidence and no arguments advanced on that score, there was no requirement for learned Trial Court to return findings on each
individual issue, the burden whereof lay on appellant company. Learned Trial Court rejected the defence of appellant company on all aforesaid three
issues as it had failed to lead any evidence in regard thereto.Â
In the JLRO / 042 dated 03.07.2004 produced by appellant company on the court file pursuant to application filed by respondent firm under Order
11 Rule 12 CPC, it is clearly mentioned that tender, finalized on 12.06.2000, was on retrospective basis for the period commencing from 01.09.1999 to
11.06.2000 and recommended for the release of differential transportation payment (escalated/de-escalated due to revision in HSD prices) for the
period from 12.06.2000 to 11.06.2003. It was further provided in the said JLRO dated 03.07.2004 that respondent/plaintiff had submitted
supplementary bills, amounting to Rs. 34,69,206/- vide its letter dated 27.04.2004 for the period from 01.09.1999 to 11.06.2003 and the said file note
prepared by EX-OPS Officer Plant Manager (ACTG) Jammu LPG Plant was recommended by Senior Manager, Jammu, LPG RO. It will be
relevant to mention here that Mr. T.A. Kirmani, the then Senior Regional Manager, Jammu LPG RO who had recommended for payment of
aforesaid amount to respondent firm on account of escalated/ deescalated HSD price from 01.09.1999 to 11.06.2003 had filed written statement on
behalf of appellant/defendant before learned Trial Court and had not denied the averments made in paragraphs Nos.11 and 12 of the plaint, which
fact is also corroborated from aforesaid JLRO/ 042, brought by appellant itself on the record of the Court file. It will be also relevant to mention here
that the original letter/order No. BBG/1/99/00005 dated 15.01.2004, issued by respondent firm to Regional Manager of appellant company was also
brought on record by appellant itself, wherein Accounts Officer has put a note “HSD rates received from POL Depot. Please calculate the
revised rate w.e.f. 01.09.1999†which again goes to show that new contract allotted to respondent firm was to be given effect from 01.09.1999 on
retrospective basis and therefore, rates were to be given to respondent firm w.e.f. 01.09.1999.Â
As submitted above, no evidence whatsoever was led by appellant/ defendant company despite grant of number of opportunities by learned Trial
Court to rebut the evidence led by respondent/plaintiff firm. So much so, no official of appellant company appeared in witness box to rebut JLRO/042
dated 03.07.2004 or recommendations made on the letter dated 15.01.2004 of respondent firm. It is important to point out here that despite being in
possession of LPR No. 0417 / 064 dated 19.04.2000, complete record of NIT and other tendering process and File note No. JLRO/032 dated
30.10.2000, appellant company did not produce the same before the Court for obvious reasons as the same would have revealed the exact date of the
commencement of the contract as per LPR No. 0417/064 dated 19.04.2000 which formed the basis for issuance of NIT dated 25.04.2000. This
clearly led the Court to draw adverse inference against appellant company. However, the file note No.JLRO/042 dated 03.07.2004 which was
produced in the Court by the appellant company, fully explained the contents of LPR No. 0417/064 dated 19.04.2000 providing effective date of
contract being 01.09.1999. In this view of the matter, learned Trial Court was absolutely right in drawing the conclusion in favour of
plaintiff/respondent firm and against defendant/appellant Company. In this view of the matter, I am fortified by the view taken by their Lordships of
Honâ€ble Supreme Court of India in case titled Pushpa Devi Bhagat v. Rajinder Singh, reported in (2006) 5 SCC 566 wherein their Lordships in
Paragraph No.26 have held as under:-
26.The matter can be viewed from a different angle also. After the issues were framed by the trial court, the plaintiffs had examined two witnesses
and closed their evidence and thereafter the matter was set down for the evidence of defendants. The first defendant was treated as ex parte. As
defendants 2 and 3 did not lead any evidence in spite of numerous opportunities, their evidence was treated as closed. On 17.5.2001, the matter was
finally adjourned to 23.5.2001 for the evidence of defendants 4 and 5 with a condition that if they do not lead evidence on that date there evidence will
be closed. On 23.5.2001, defendants 4 and 5 did not lead any evidence. On the other hand, the counsel for defendants made a statement on oath that
the premises will be vacated on 22.1.2002. Thereafter, counsel for the plaintiff also made a statement agreeing to grant of time till 21.1.2002. There
was also agreement that the plaintiffs will be entitled to the payment of only Rs.4,800/- per month (equivalent to the rent) and nothing more up to
22.1.2002. The effect of it is that the parties have gone to trial on the issues and the only evidence led by defendants is that they will vacate the
premises on 22.1.2002. No other evidence being led, the necessary conclusion is that the defendants admitted the plaintiffs' claim and merely sought
time to vacate. Therefore, the suit can be said to have been decreed on the basis of evidence and the admissions made by the
defendants…….………………â€
Inanother judgment passed by Honâ€ble Supreme Court of India on the same issue in case titledas Union of India v. Ibrahim Uddin and
another, reported in (2012) 8Â SCC 148, wherein also their Lordships in paragraphs No.6 and 16 have held as under :-
Generally, it is the duty of the party to lead the best evidence in his possession, which could throw light on the issue in controversy and in case such
material evidence is withheld, the Court may draw adverse inference under Section 114(g)of the Evidence Act notwithstanding, that the onus of proof
did not lie on such party and it was not called upon to produce the said evidence. (Vide: Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi,
AIR 1917 PC 6; Hiralal & Ors. v. Badkulal & Ors., AIR 1953 SC 225; A.Raghavamma & Anr. v. A. Chenchamma & Anr., AIR 1964 SC 136; The
Union of India v. Mahadeolal Prabhu Dayal, AIR 1965 SC 1755; Gopal Krishnaji Ketkar v. MohamedHaji Latif & Ors., AIR 1968 SC 1413; M/s.
Bharat HeavyElectrical Ltd. v. State of U.P. & Ors., AIR 2003 SC 3024; Musauddin Ahmed v. State of Assam, AIR 2010 SC 3813; and Khatri
Hotels Pvt. Ltd. & Anr. v. Union of India & Anr., (2011) 9 SCC 126).
Thus, in view of the above, the law on the issue can be summarized to the effect that, issue of drawing adverse inference is required to be
decided by the court taking into consideration the pleadings of the parties and by deciding whether any document/evidence, withheld, has any
relevance at all or omission of its production would directly establish the case of the other side. The court cannot lose sight of the fact that burden of
proof is on the party which makes a factual averment. The court has to consider further as to whether the other side could file interrogatories or
apply for inspection and production of the documents etc. as is required under Order XI CPC. Conduct and diligence of the other party is also of
paramount importance. Presumption or adverse inference for non-production of evidence is always optional and a relevant factor to be considered in
the background of facts involved in the case. Existence of some other circumstances may justify non-production of such documents on some
reasonable grounds. In case one partyhas asked the court to direct the other side to produce thedocument and other side failed to comply with the
courtâ€sorder, the court may be justified in drawing the adverseinference. All the pros and cons must be examined before theadverse inference is
drawn. Such presumption is permissible,if other larger evidence is shown to the contrary.
The counsel for the appellant company referred to the agreement dated 7th August, 2000 executed between the parties wherein the period of
contract has been shown as 12.06.2000 to 11.06.2003. When pointed out that this period is handwritten with no initial of either party and further that
the said agreement provided for a contract initially for a period of 01 year expiring on 31.08.2000 with option of extension of 01 year, how could the
said contract be for a period of 03 years between 12.06.2000 to 11.06.2003 when it was allegedly executed on 7th of August, 2000, there was no
justification/reply of the appellant company in this regard which clearly goes to show that handwritten date “12.06.2000 to 11.06.2003†is
incorrect being contrary to the Clause 18 of the Contract Agreement as well as LPR dated 19.04.2000 and NIT dated 25.04.2000. It is contended
that no agreement can be contrary to the terms of the NIT on which it is based. The appellant companyâ€s counsel has further referred to letter at
Page No. 24 of the plaint whereby respondent firm has referred to withholding of an amount of Rs. 7.50 lac of transportation bills and therefore, the
amount being sought to be recovered by way of the present suit, is a false case. In this regard, it is contended that vide its letter no. BBG/1/99/00-
0004 dated 12.12.2003, the respondent firm had calculated the amount due to it on tentative basis to the tune of more than Rs.32.00 lacs in respect of
the contract-in-question. The said contract having ended on 11.06.2003, and the new contract has also been allotted to respondent firm; the figure of
amount of Rs.7.50 lac mentioned in paragraph 03 of the said letter at Page No. 24 and also at Page No. 25 dated 15.01.2004 does relate to
withholding of the amount under new contract. This is evidenced by the fact that so far as the amount falling due under the contract in question has
been quantified tentatively by respondent firm in its letter dated 12.12.2003 and which was specifically mentioned in the letter figuring at Page No. 24
and also at Page No. 25 dated 15.01.2004 of the plaint. In view of this, the submission of the appellant companyâ€s counsel holds no ground. Besides
the amount of Rs.34,69,206/- which was claimed by way of supplementary bills along with the communication dated 27.04.2004 figuring at Page No.
26 of the plaint was on the basis of the rates provided by the appellant company and having been confirmed by the appellant company, having
received it and also finding mention in JLRO/042 dated 03.07.2004. The submission made by the appellant counsel is thus without any basis.
Lastly the appellant companyâ€s counsel argued that learned Trial Court has awarded interest to respondent firm without there being any
provision in the contract agreement. It is contended that this argument is wholly without any basis, and in a suit for recovery, unless there is a term to
the contrary in the contract, a party is entitled to the decree of the principal amount along with interest from the date of suit to the date of decree in
addition to any interest adjudged on such principal sum for any period prior to the institution of suit with further interest at such rate as the Court may
deem reasonable on the aggregate sum so adjudged. This grant of interest is securely covered by Section 34 of the Code of Civil Procedure.Â
The respondent firm submits that Section 39 of the Evidence Act is a complete answer to the arguments advanced by the counsel for the
appellant company. Reference in this regard has been made by him to judgment reported in 2004 (12) SCC 360 titled FCI Vs. Assam State Co-
operative Marketing and Consumers Federation Limited, wherein the Supreme Court in paragraph No. 12 has held that “Section 39 of the
Evidence Act makes a reference to any statement of which the evidence is given forming part of connected series of letters or papersâ€. In the same
judgment, at another place, the Supreme Court has observed as under:-
“The Court further held that once the document has been marked as exhibit without any objection from a party then such party cannot object to
the admissibility of document and once a document is properly admitted the contents of that document are also admitted in evidence though those
contents may not be conclusive evidence.Â
The documents having been tendered in evidence without any demur by the defendants, the same coming from proper custody and forming part of
official record of the appellant Corporation and being part of the chain of correspondence can be said to have been proved by P.W. 1 more so when
his deposition to the effect that the two letters were received from the Federation was not disputed by the defendant â€" Federation either by
directing any cross-examination on that part of the statement or by making any suggestion to the contrary indicating the defendantâ€s case as regards
the said two letters. In our opinion, the documents were proved and their contents can be read in evidence. Needless to say, there is no rebuttal of the
letters on the part of the defendants by way of evidence adduced in the case.â€Â
In response to the aforesaid judgment cited by the respondent firmâ€s counsel, the counsel appearing for the appellant company submitted that
Section 39 of Evidence Act is not applicable to the present case as Section 39 of the Evidence Act can only be invoked in the case against the
Government. This assertion of the counsel for the appellant company is without any basis as Section 39 of the Evidence Act makes no distinction
between Government or Non-Government Organizations. In fact, in the case cited above, the dispute was between FCI and a Cooperative Society.
In this view of the matter, the submission made by the learned counsel for the appellant company is baseless. Learned counsel also relied on
various judgments passed by this Court and the Apex Court. I have gone through the said judgments, but the same are distinguishable to the facts of
the present case and do not render any helping hand. Â
Viewed thus, the findings recorded by the Court below are impregnable in nature. Therefore, I do not find any infirmity, warranting interference in
the impugned judgment. Accordingly, instant appeal is dismissed along with connected MP(s). Interim direction, if any shall stand vacated.
Record be sent down.