P S E BOARD Vs. A T T AGENCIES AMBALA

JUDGEMENT

(1.) This is defendant's appeal against whom the suit for the recovery of Rs.60,000/- by way of damages has been decreed by the trial Court.

(2.) The plaintiff-respondent M/s. Abnash Textile Trading Agencies, Ambala City, filed the suit for the recovery of Rs.1,00,000/- on account of the damages for the breach of the contract including the refund of the security amounting to Rs.36,000/-. According to the plaintiff, it was a partnership firm carrying on the business of retail and wholesale sale of cloth and is duly registered under the Partnership Act. The defendant-appellant, Punjab State Electricity Board (hereinafter called the Board) issued tender notice in The Tribune, Chandigarh, dt. July 27, 1973 for the supply of 10,000 metres of khaki woollen cloth 145 cms. x 605 cms. per lineal metre. It, in compliance with the conditions governing the tender for the supply of the cloth, gave its offer in the form of tender vide letter dt. Aug. 10, 1973, for three items. The relevant item was : wool khaki serge as per the sample of which the rate quoted was 35.89 per metr,e. The said tender submitted by it was accepted by the Board at the said rate and telegram of acceptance thereto was sent to it asking it to deposit the security amount of Rs.35,000/-. Thus, a completed contract came into existence between the parties for the supply of wool khaki serge at the rate of Rs.35.89 per metre. The Board also sent the letter of confirmation with endorsement dt. Sept. 13, 1973, which was received by it on Sept.17, 1973 (by ordinary post. Thereafter, it deposited the security amount of Rs.35,000/-. In pursuance of the completed contract between the parties, the defendant handed over the purchase order dt. Sept. 24,1973, Ext. P. 9, to its representative for the supply of 12,000 metres of wool khaki serge at the rate of 35.89 per metre. Since, it had agreed to supply the contracted goods within 60 days, it placed order with M/s. Bhag Mal and Sons, Amritsar, for manufacturing 10,000 metres of wool khaki serge and also deposited a large amount of security with the said firm. Before it could start the supply, to its surprise, it received letter dated Oct. 9, 1973, from the Board wherein it was informed that the Board did not propose to enter into any contract with it for the purchase of woolen cloth and, therefore, it was directed to withdraw its security deposit immediately. Since there was completed contract between the parties, none of them was competent to rescind the same. The Board itself committed the breach of the contract. Later on the Board entered into a contract with some firm at Ludhiana and started purchasing from it. Thus, it had suffered a loss of Rs.60,000/- as damages which it assessed on the basis of the difference of the price which it had to pay to the manufacturer with whom it had entered into the contract, and supply to the Board at the rate agreed with the latter. It was also entitled to the refund of Rs.35,000/-on account of the security deposited by it. Besides, it also claimed a sum of Rs.4,000/- on account of the damages which it was likely to pay to the manufacturer with whom it had entered into the agreement to manufacture the goods. The defendant resisted the suit on the allegations that no completed contract had come into existence between the parties. The telegram, if any, was neither a valid acceptance of the offer made by it, nor it amounted to an agreement between the parties. Such an agreement could be valid only if it was duly and properly executed between the parties. The Board was a corporate body and the contract made and entered into on its behalf must be in its name. It was denied that any purchase order was issued or handed over to the plaintiff. According to the Board, as a matter of fact, the plaintiff vide letter dt. Sept. 28, 1973, requested it to issue the purchase order. It sent the letter dt. Oct. 7, 1973, to the effect that it did not want to enter into the contract for the purchase of 10,000 metres of cloth. Furthermore, the plaintiff did not deposit the security amount within four days as intimated to it. The defendant was therefore free to enter into any contract with any firm and as such the plaintiff was not entitled to any damages. On the pleadings of the parties, the trial Court framed the following issues : 1. Whether the plaintiff firm is a registered firm under the Partnership Act? 2. Whether there was a completed contract between the parties for the purchase and supply of cloth as alleged? 3. Whether the defendant is guilty of the breach of contract? 4. If issue No. 3 is proved, to what amount of damages the plaintiff is entitled? 5. Whether the suit is not maintainable? 6. Whether the Court has got no jurisdiction to entertain the suit? 7. Whether the defendant is entitled to special costs? 8. Relief. Under issue No. 1, the trial Court found that the plaintiff was a registered firm under the Partnership Act. Under issue No. 2, it was concluded that the contract between the parties for the supply of 12,000 metres of cloth was complete and, thus, the said issue was decided in its favour. Issue No. 3 was also decided in its favour and against the Board as it was held thereunder that the breach of the contract was committed by the Board. On the most material issue No. 4, it found that the plaintiff suffered a loss of Rs.5/- per metre which came to Rs. 60,000/- on 12,000 metres of cloth. In view of this finding, the plaintiffs suit was decreed for a sum of Rs. 60,000/- because the counsel for the plaintiff had made the statement on Sept. 21,1976, that the Board had refunded the amount of Rs. 35,000/- to it which it had deposited as security with the Board. Dissatisfied with the same, the Board has filed this appeal in this Court.

(3.) The only contest in this appeal is as to the findings of the trial Court under issues Nos. 2 and 4.