State of Madhya Pradesh and Others vs The Hoshangabad Zila Stationary Udyoik Sanstha

Sanjay Yadav, J.—State of Madhya Pradesh through its functionaries being aggrieved by the Judgment and Decree dated 31.10.2006 passed in Civil Suit No. 4-B/2005 by the Third Additional District Judge, Hoshangabad, decreed for sum of Rs. 3,25,188/- and the simple interest thereon @ 6 % per annum from the date of filing of suit, has preferred this Appeal u/s 96 of the Code of Civil Procedure, 1908. The suit at the instance of respondent was for recovery of amount of Rs. 3,25,192/- and the interest @ 18 % towards damages from 20.11.1996 till payment, in lieu of the Stationery and other articles such as printing material, writing material supplied in the office of Project Administrator/Collector, Tawa Ayacut Development Authority, Water Resources Department, Hoshangabad on various dates between the period from 11.9.1996 to 14.10.1996 in furtherance to respective supply order placed from the office of Project Administrator/Collector, Tawa Ayacut Development Authority, Hoshangabad. On respondent raising the bill and the direction by the Appellants No. 2 and 3 on 25.10.1996 vide letter No. fl-/96/1343 Hoshangabad for facilitating the payments, the Executive Engineer, Handia Branch Canal Division, Harda vide correspondence No. 347/

- dated 21.11.1997 (Ex. P/64) declined to make payment on the pretext of non allocation of funds. This led to various correspondence and legal notices which having failed to bear any result led the respondent to file the suit for recovery of the said amount and the interest thereon.

The claim was denied by the Appellants/Defendants. It was contended that the supply orders on the basis whereof the alleged supply of stationery and other materials were fabricated and false. Even the supply of materials were denied. It was also stated that it was not within the powers of the Appellants/Defendants No. 2 and 3 to have placed the supply orders. It was contended that it was in collusion with the then Project Administrator, the documents were fabricated and supply was shown. The notice u/s 80 Code of Civil Procedure, 1908 was also contended to be illegal and, therefore, not replied at. It was contended that the State government cannot be held accountable for the act of Appellants/Defendant Nos. 2 and 3 who beyond their financial powers allegedly placed the orders for supply of stationery and other office materials. The claim was thus denied in toto.

The Trial Court on the basis of rival pleadings framed the following issues:

Whether the plaintiff institution is manufacturer of Stationery writing and printing material and materials for office use in Hoshangabad city?

Whether the plaintiffs supply materials on receiving orders from Government and Non-Government offices and institutions?

Whether the defendants No 2 and 3 had made a request to the plaintiff from time to time between 09.09.96 to 09.03.97 for supplying the writing material and stationery? If yes, the material of total amount of Rs. 3,25,192=00 or of any amount was obtained from time to time on the said date?

Whether the plaintiffs are entitled to receive an amount of Rupees 3,25,192=00 or any other amount from the defendants No 2 and 3?

Whether the plaintiffs are entitled to receive interest on the aforesaid amount at the rate of 18 % yearly or at any other rate?

Relief and costs?

Additional Issues: -

Whether the suit is time barred?

Whether the defendant No 2 was entitled to purchase the material without the permission of defendant No 3?

Whether the defendants No 1 and 3 are responsible for the payment of the transaction amount in dispute?

(Translated from Devnagri Script)

The respondent/plaintiff examined himself and the witnesses, viz., Shri K.K. Narware, Police Inspector, Economic Offence Wing, Government of Madhya Pradesh and Rajendra Kumar, Assistant Grade II, District Panchayat Office, Hoshangabad to prove the documents in substantiation of the pleadings. Whereas, the Appellants/Defendants also examined three witnesses, viz., Shri J.S. Thakur, Executive Engineer, Tawa Project Division, Itarsi, Shri S.L. Motwani, Executive Engineer, Water Resources Department Seoni and Shri G.C. Rajne, Incharge Superintending Engineer, Water Resources Department, Division Seoni Malwa, Hoshangabad, to bring home the pleadings.

The trial court after carefully analyzing the entire evidence, documentary and oral, on record answered issues Nos. 1, 2, 3, 4 and 6 in favour of respondent/plaintiff. In respect of issue No. 5 which related to claim of interest @ 18% towards compensation, the trial court held the respondent/plaintiff entitled for 6% simple interest per annum. Regarding issue No. 7 the trial court observed that, the same would be subject to outcome of the pending departmental enquiry.

In respect of allegation qua collusion the trial court in paragraph 22 of the judgment recorded a categorical finding that the appellants/defendants have failed to prove the same. This finding is on the basis of Exhibits P/1, P/4, P/7,P/40,P/47 and the oral evidence of PW/3.

The Trial Court on the basis of cogent material on record returned the specific findings of material being supplied in furtherance to supply order placed from the office of Appellants/ Defendants Nos. 2 and 3.

In our considered opinion the trial court in the event of collusion not being proved and the supply order was placed by the Authorities concerned in discharge of their official duties is justified in holding that an internal office memorandum qua non-delegation of financial powers, will not non-suit the respondent/plaintiff as it was a pure commercial transaction.

We are not commended to any material on record as would support the pleadings by the Appellants/Defendants regarding non-receiving the materials in question. In the result appeal fails and is hereby dismissed. Cost of the appeal to be borne by the appellants.