Decided on October 03,1974

The United Timber Syndicate Appellant
The Kerala State Electricity Board Respondents


P.SUBRAMONIAN POTI,J. - (1.) THE Receiver appointed in O.S.199 of 1966 of the Sub Court,Palghat who is the plaintiff in a suit for recovery of money claimed as due under a contract is the appellant in this appeal.The suit was decreed in part and to the extent the decree was against the plaintiff,the matter has been taken up in appeal.The Kerala State Electricity Board,the defendant in the suit against whom the suit has been decreed in part by die court below,has not chosen to challenge the decree.
(2.) THE plaintiff is a firm which traded under the name The United Timber Syndicate ;.The Receiver represents the firm at the moment as one appointed by the court in a suit O.S.199 of 1966,that being a suit for dissolution of the partnership.The plaintiff firm entered into a contract with the Kerala State Electricity Board for supply of 50,000 teakwood poles at Kundara Yard.The contract was entered into on 13th August 1962.A security deposit of Rs.92,500 had to be made by the plaintiff,of which Rs.20,000 had to be paid initially and the balance had to be made up by retention of 5 per rent from the interim bills presented for payment.The period of supply of 50,000 poles was one year and the payment had to be made for every 1,000 poles selected and accepted.In accordance with the agreement the plaintiff deposited the security of Rs.20,000 and began supplying the teakwood poles.Interim payments were also received.When such payments were made to the plaintiff amounts were retained in compliance with the condition in the agreement that it will be so retained to make up the security of Rs.92,500.According to the plaintiff,by about October 1962,the Kundara Yard became congested so much so the check measurement and acceptance of the supply became difficult.Hence the defendant requested delivery of 10,000 poles to be made at Nallalam Yard near Kozhikode and 9,000 poles at Pallam keeping the supply at Kundara to 31,000 poles.According to the plaintiff there was congestion at the yard still and he sought extension of the period of supply and such extension was given for the period up to 30th June 1964.The plaintiff would say that even within this period the supply could not be made because by that time the plaintiff firm had discharged its workers and supply contractors and therefore required more time to supply for which,extension,when applied for was not granted.It is agreed now that out of the 30,000 poles to be supplied at Kundara(1,000 poles were later directed to be supplied at Nallalam Yard)only 26,322 poles were supplied at the Kundara Yard.At Pallam the entire supply of 9,000 poles were made.At Nallalam 10,000 poles were supplied and out of the further 1,000 only part was supplied and the balance defaulted.The supply to be made at Kundara was cancelled by the letter of the defendant,dated 19th November 1964 and the balance supply at Nallalam was also cancelled by letter dated 8th March 1965.According to the plaintiff this was really cancelled not because the plaintiff was unable to or unwilling to supply but because the defendant did not really require these materials. The complaint of the plaintiff is that two bills remained to be paid and he was entitled to recover the amount due under these bills.Besides,the security deposits along with the retention money which had been treated as security deposit had also to be returned with interest.
(3.) THE defendant filed a written statement and later an additional statement.The main contention raised by the defendant was that there was no congestion at the Kundara Yard,that the delay in the supply of these poles was entirely clue to the fault of the plaintiff,nevertheless the defendant extended time up to 30th June 1964,but the plaintiff still defaulted,that there was no justification for any further extension sought and therefore that was refused.It is claimed that as against the plaint claim of return of retention amount and security and the amount of the two bills the defendant was entitled to set off amounts by way of loss caused by the default of the plaintiff.According to the defendant,because of the short supply by the plaintiff,tenders had to be invited for fresh poles,such tenders for 4,200 poles were invited,agreements were entered into with Sri A.K.Poulose and another with one Sri T.K.Mathewkutty,this resulted in a loss of Rs.15,960.73 and further Mathewkutty having defaulted alternate arrangements had to be made which again caused a further loss which loss also had to be recovered from the plaintiff.It is also said that for the delay in supplying the goods the defendant was entitled to levy penalty as provided in the agreement.;

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