C SANGHVI AND CO Vs. CALAMA INDUSTRIES PVT LIMITED BOMBAY
LAWS(GJH)-1988-7-12
HIGH COURT OF GUJARAT
Decided on July 29,1988

C Sanghvi And Co Appellant
VERSUS
Calama Industries Pvt Limited Bombay Respondents

JUDGEMENT

P.M.CHAUHAN - (1.)In suit for Accounts the learned Judge City Civil Court (Court No. 2) Ahmedabad passed the final decree in favour of the appellant-plaintiff for the amount of Rs. 23 242 ps. with 6 per cent interest on the amount of Rs. 14 143 ps. from the date of the suit till realisation and on the amount of Rs. 9098-68 ps. from the date of the suit till 6/08/1976 as that amount was deposited in the Court as per the previous order by the Court. The appellant is aggrieved by the partial decree as according to the appellant the decree for the amount of Rs. 1 65 190 ps. should have been passed by the trial Judge. The appellant has accordingly preferred the appeal for additional amount of Rs. 1 41 950 ps. which includes Rs. 85 791 ps. for the commission in respect of Government business Rs. 17 935 for the commission disallowed by the trial Court under clause 8 of the contract (Ex. 82) Rs. 12 192 ps. for overriding commission on the Government business allowed by the Court at 22 per cent instead of 5 per cent as per the contract agreement (Ex. 82) Rs. 23 740 amount of the commission disallowed on the grounds that the transaction not related to the agency period for the Government and private business and also for annual commission at the rate of 2 per cent from the private business and Rs. 40.00 for the mistake in calculation of the commission.
(2.)The admitted facts are that the respondent-defendant M/s. Calama Industries Private Ltd. a company incorporated under the Companies Act was engaged in manufacturing submersible pump units (a pump unit comprises a pump and a motor) at its factory-cum-work shop at Bombay. The appellant-plaintiff M/s. C. Sanghi and Company a sole proprietory concern of Shri Chinubhai Bhogilal Sanghvi was appointed exclusive agent for the said pumps and motors for Gujarat and Saurashtra territories by an agreement dated 6/07/1966 (Ex. 82). As per the terms of the contract (Ex. 82) the appellant was entitled to the discount on the pumps motors and cables sold by or through the appellant to the private parties and the overriding commission on the pumps and motors supplied to Government of Gujarat or the Government agencies. Accordingly the said articles were supplied to Government and the private parties. By the letter of termination dated 14/08/1967 which was received by the appellant on 17/08/1967 (Ex. 316) the agency is terminated. The appellant asserted that it was entitled to 17 1/2 per cent commission on the business with the Government or Government agencies while according to the respondent the appellant was entitled to only 5 per cent commission on the pumps and motors supplied to the Government or the Government corporations and no commission was ever agreed for supplying of the cables and subsequently for 74 pumps and motors to be supplied to the Government there was ratification of the contract and the appellant had agreed to only 2 1/2 per cent commission. There was also some dispute regarding 16 pumps which according to the respondent the business was secured prior to the agreement and that was out of the 22 pumps for which the specific reference is made in the contract at Ex. 82 and excluded from the range of commission. There were also some minor disputes about some other pumps. The respondents had agreed for 2 per cent commission for the after sales service and that was paid upto 31/03/1967 as per the contract but according to the respondents the after sales service was not satisfactory and therefore the appellant was not entitled to any after sales service commission at the rate of 2 1 per cent from 1/04/1967 till the date of termination. The appellant also asserted for the discount and commission for certain business for which the preliminary preparation was made or the tenders were submitted before the date of the termination but the goods were supplied subsequently. On considering the rival contentions the learned trial Judge held that the appellant was entitled to only 5 per cent commission on the Government business and that too so far as one tender item of 74 pumps was concerned the parties had agreed for the reduced commission at the rate of 2 1/2 per cent and the appellant was not entitled to 17 1/2 per cent commission as claimed by the appellant. For the private business the learned trial Judge held that the appellant was entitled to 10 per cent discount for the pump units 12 1 per cent discount on the cables and 2 1/2 additional discount on the business upto 31/03/1967 for after sales service etc. About 16 disputed pumps the learned trial Judge held that the appellant was not entitled to the commission as the business was secured prior to the date of the contract and that was specifically mentioned in the contract (Ex. 82). The learned trial Judge considered various items and upheld the claim of the appellant for certain items of the pump set etc. as discussed in the judgment. As stated above the appellant being aggrieved by the judgment and decree as the decree for the amount of Rs. 1 41 950 ps. is not passed in the favour of the appellant by the learned Judge preferred the present appeal.
(3.)Mr. M. D. Pandya learned Counsel for the appellant submist that the contract being in writing only the terms of the contract should be considered and no surrounding circumstances including the oral evidence should be considered for ascertaining the terms of the contract and considering the contract writing it is apparent that there was no distinction for the commission on the Government business and the private business but the appellant is entitled to 5 per cent more overriding commission over and above the commission which the appellant would have got for the private business. The grievance is made that the learned trial Judge has considered the surrounding circumstances and oral evidence and has erred in holding that the clause 4 provided only for the discount for the private business and clause 7 only provided for the Government business. Shri A. L. Shah learned Advocate for the respondent submitted that two different terms viz. discount and commission are used in clauses 4 and 7 respectively and therefore it is clear that the discount was to be given only for the private business while the commission was to be given for the Government business. For various reasons which we will record we agree with the learned trial Judge that the appellant was entitled to 5 per cent commission for the Government business. We however do not agree with the learned trial Judge that the commission was reduced to 26 per cent for the business of 74 pumps for which we will record the reasons at the proper stage.
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