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PETITIONER: THE STEEL AUTHORITY OF INDIAAND ORS.

       Vs.

RESPONDENT: NEW MARINE COAL CO. (PVT.) LTD.

DATE OF JUDGMENT:       14/02/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. AHMAD SAGHIR S. (J)

CITATION:  1996 AIR 1250            JT 1996 (3)    62  1996 SCALE  (2)581

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      This appeal  by special leave arises from the  judgment and order  dated May  20, 1982  in F.A. No.30 of 1973 of the Division Bench  of the  High Court  of Patna  dated May  20, 1982. The  admitted facts are that M/s. Kirkend Coal Company which is  now renamed  as New  Marine Coal Company Ltd. [for short, the  ’plaintiff’] laid  a suit  to recover  a sun  of Rs.1,13,000/- towards  the value of the coal supplied to the appellant-defendant. The  case of the appellants is that the plaintiff was  to supply  Grade-I coal  between December  7, 1962 to  June 1967.  Instead of  Grade-I coal, Grade-II coal was supplied  but price of Grade-I coal was collected. Under the agreement Ext. C series, a clause in the contract was:      "We agree for any adjustment as may      be necessary  on account of quality      or quantity  of supply  to be  made      from our  bills or subsequent bills      ." Thereunder they are entitled to adjust the over payment made during  the  period  of  December  1962  to  June  1967  and accordingly they  made adjustment.  After framing  of issues and adduction of evidence, the trial Court found that though there was  such an  agreement  for  adjustment,  unless  the appellants plead  either set of or counter claim and pay the court  fee,   they  are   not  entitled   to   the   relief. Consequently, the  suit was  decreed. On  appeal,  the  High Court  found   that  in  the  light  of  the  agreement  and adjustment from future bills the appellants were entitled to adjust the  same from  the future  supplies since  fraud was discovered for the first time under Ext. D in the year 1969, After it  was pointed  out by  the Audit Department that the plaintiff had supplied Grade-II coal but collected the price of Grade-I  coal, the appellants were entitled to adjust the same. But  from the evidence on record about 12,038 tones of coal was  supplied but  what was  the total  quantity of the

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coal supplied between December 7, 1962 and June 1967 has not been brought  on record  and even  the price which prevailed for Grade-II and Grade-I coal during the relevant period was not produced.  Consequently, the appellant cannot succeed in avoiding the decree. Thus, the appeal was dismissed.      The question, therefore, is: whether the High Court was justified in dismissing the appeal and confirming the decree of the  trial Court  on the facts of this case? It was found by the  High Court,  as a  fact, and we agree with the same, that under  the agreement  between the parties the excess or over-payment was  required to  be adjusted in the pending or subsequent bills  and the  parties were  bound by  the same. Consequently, the  appellants are  entitled  to  adjust  the over-payments  from   the  future   supplies  made   by  the plaintiff. It  is also  found that  the plaintiff  committed fraud in  demanding and  collecting payment  of the price of Grade-I coal while in fact Grade-II coal was supplied to the appellants. After the discovery of the fraud, the appellants started adjusting  the amounts  of over  payments  from  the future bills  payable to  the plaintiff.  Having found  this fact, necessarily,  the High  Court either would have called for a  finding from trial Court, after giving opportunity to the parties, and adjudged the rights of the parties or would have remitted  the matter  to the  trial Court  to  give  an opportunity to the appellants to place on record evidence in that behalf.  We think  that the latter course would be more feasible.  Accordingly,  we  set  aside  that  part  of  the judgment of the High Court and the decree of the trial Court and remit  the suit  to the  trial Court. The trial Court is directed to  give an opportunity to the appellants to adduce evidence of  the total  supplies made during the period from December 7,  1962 to  end of  December  1967  and  also  the prevailing price  of Grade-I  and Grade-II  coal. It is seen that if the supply is in excess of 12,038 tones, as found by the High  court, the  same should also be taken into account to find  out what  was the  amount actually  of over-payment received by  the plaintiff,  adjust  the  same  towards  the amount payable  to the  plaintiff, and  then to  draw decree accordingly. This  would be  done within  a  period  of  six months from  the date  of the  receipt of  the copy  of  the order.      The appeal is accordingly allowed. No costs.