(1) Whether each purchase of the cake alleged in the plaint is an independent contract, or whether they are all part of the same contract as alleged in the plaint? (2) Whether the stipulation in the confirmation note is the essence of the contract as alleged in the plaint? (3) Whether the alleged telegram, dated 26.12.1984 said to have been given by M/s. Krishna & Company, Madras, is true and binds the defendants? 2025:APHC:15018 (4) Whether the plaintiffs failed to supply the cake during the months stipulated in the confirmation note, and if so whether it amounted to termination of the contract? (5) Whether the plaintiffs failure to supply the cake in time resulted in any loss to defendants, and if so how much loss was causes and whether the plaintiffs have to compensate the defendants for the said loss? (6) Whether the plaintiffs failed to stick on the terms of the confirmation note with regard to gunny bags and what is the loss sustained by the defendants on account of it and whether the plaintiffs have to reimburse the same to the defendants? (7) At what price or prices the plaintiffs are entitled to claim value of the cake? (8) Whether the plaintiffs supplied the entire quantity of case stipulated and whether the alleged deficiency in the supply resulted in any loss to the defendants, and if so, how much amount and whether the plaintiffs are therefore liable to compensate the defendants? (9) Whether the account of the defendants with the plaintiffs is a running account and whether the suit claim of the plaintiffs is in time? (10) Whether the plaintiffs are entitled to claim any interest on the suit claim and if so, at what rate and from which date? (11) To what relief?

APHC010387982002

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

[3397]

THURSDAY ,THE SEVENTEENTH DAY OF APRIL

TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA

KRISHNA RAO

FIRST APPEAL NO: 2305/2002

Between:

Indian Oils And Fertiliser Corporation and Others ...APPELLANT(S)

AND

M/s Sikalollu Subba Rao Co and Others ...RESPONDENT(S)

Counsel for the Appellant(S):

1..

2.T SREEDHAR

3.K KOUTILYA

Counsel for the Respondent(S):

1.P NAGENDRA REDDY

The Court made the following:

JUDGMENT: -

This Appeal, under Section 96 of the Code of Civil Procedure [for short

‘the C.P.C.’], is filed by the Appellants challenging the decree and judgment,

dated 25.09.2002 in O.S.No.32 of 1989, on the file of Senior Civil Judge,

Kandukur [for short ‘the trial Court’].

2025:APHC:15018

2. The appellant Nos.1 to 7 herein are the defendant Nos.1 to 7;

respondent Nos.1 to 8 herein are the plaintiffs and respondent Nos.9 and 10

herein are the defendant Nos.8 and 9 in O.S.No.32 of 1989.

During the pendency of the appeal, the respondent Nos.2 and 4 died

and their legal representative was already on record as 8th respondent.

3. The plaintiffs filed the suit for recovery of Rs.69,534/- due under the

suit transaction and to grant future interest thereon and for costs.

4. Both the parties in the Appeal will be referred to as they are arrayed

before the trial Court.

5. The brief averments of the plaint in O.S.No.32 of 1989 are as under:

(i) The 1st plaintiff firm is a trading firm and doing business in

manufacture of oils and oil cakes at Singarayakonda and the plaintiffs 2 to 5

are its partners. The 1st defendant firm is a manufacturer and exporter of deoiled rice bran, de-oiled cakes and oils and is situated at Nellore and the

defendant Nos.2 to 9 are its partners. The 1st plaintiff firm is doing business in

manufacture of oils and oil cakes and are supplying the same to the

defendants and others through the orders booked by the brokers and

commission agents. As per the orders of the brokers and commission agents,

the 1st plaintiff firm used to supply goods to the purchasers according to the

terms and conditions enumerated in the confirmation note. The 1st defendant

is having running katha with the 1st plaintiff. During the business transactions,

M/s. Krishna & Company, who are brokers and commission agents at Madras

sent an order under confirmation Note No.168, dated 02.02.1984 to the 1st

plaintiff firm to supply to the 1st defendant tobacco seed cake 10 lorries, each

lorry weighing about 10 M.T. F.O.L. delivery at Singarayakonda at the rate of

Rs.75/- per bag weighing 70 Kgs. including gunny and sales tax to be supplied

in the months of April, May and June of the year 1984. In pursuance thereof,

the 1st defendant firm vide T.S.C./84-85, dated 30.03.1984 confirmed the said

2025:APHC:15018

order of its agents M/s. Krishna & Company, dated 02.02.1984. The 1st

plaintiff firm was waiting for the communication from the above said brokers,

Krishna & Company to dispatch the goods under order to the 1st defendant

firm. On 26.12.1984 the said M/s. Krishna & Company sent a telegram asking

the plaintiff firm to load goods under confirmation No.168 to the 1st defendant

firm.

(ii) As per the contract in accordance with both the credit bills, the total

value comes to Rs.2,55,737-70 ps. The total amount sent under various drafts

to the 1st plaintiff firm on various dates comes to Rs.2,26,145-95 ps. The 1st

defendant is still due an amount of Rs.29,591-75 ps. As per the ledger

account for the year 1986-87 at page 96, the 1st defendant firm sent a letter,

dated 02.08.1986 along with a demand draft for Rs.1,145-95 ps. drawn on the

Andhra Bank, Singarayakonda and the same was received by the 1st plaintiff

on 04.08.1986 stating that the amount sent is towards full and final settlement

of the account. The letter, dated 02.08.1986 amounts to acknowledgement of

the liability. The calculation arrived at by the 1st defendant firm is wrong and

as against the amount due to Rs.30,737-70 ps. The 1st defendant firm sent

only Rs.1,145-95 ps. alleging that it is for full and final settlement of the

account. In the account statement, the 1st defendant firm has shown some

amounts as difference in price and debited the amounts unilaterally without

any approval of the 1st plaintiff firm which is false to the knowledge of the 1st

plaintiff firm. The 1st plaintiff demanded several times to pay the balance

amount found due in terms of the credit invoice deducting the amount paid by

way of draft, dated 02.08.1986, by the 1st defendant firm, but they did not give

proper reply. Therefore, the plaintiffs are constrained to file the suit.

6. The 1st defendant firm filed written statement before the trial Court

denying the allegations in the plaint which was adopted by the other defendant

Nos.2 to 7. The brief averments in the written statement are as follows:

(i) The 1st plaintiff is not a registered firm and the plaintiffs 2 to 5 are not

its partners. The defendant Nos.8 and 9 retired from the plaintiff firm as early

2025:APHC:15018

as on 01.01.1983, 1st defendant firm was dissolved on 30.03.1987 itself. The

1

st defendant has never had any running khata with the 1

st plaintiff firm and

the account filed by the plaintiffs in the suit is not running khata. The time was

essence of the suit contract. The said contract was also confirmed by the 1st

defendant as admitted by the 1st plaintiff in the plaint. There was absolutely

no necessity or conditions requiring any further communication or permission

either from the brokers or from the 1st defendant to dispatch the goods

covered under the contract. The necessity for any such communication

pleaded in the plaint is false, unwarranted and untenable. The 1st defendant

denies knowledge of any telegrams mentioned in the plaint said to have been

issued by the brokers M/s. Krishna & Company, Madras on 26.12.1984. The

failure on the part of the plaintiffs to supply the cake during the months of

April, May and June, 1984 automatically brought the contract to an end and

the said contract ceased to be in force after June, 1984.

(ii) The total number of bags to be supplied under this contract were

1430 and the defendants suffered a loss of Rs.14,300/- under this contract.

The 1st defendant was not aware of any such telegram surprisingly without

any demand or request from the 1st defendant. Mr. S. Venkateswarulu, the

brother of the 2nd plaintiff and father of plaintiffs 4 and 5, who manages

plaintiffs’ business was contacted immediately and it was made clear to him

that the 1st defendant would take delivery if only the value to be paid was at

the then prevailing market rate of Rs.55/- per bag of 70 kgs. The 1st plaintiff

firm failed to supply the entire quantity of 20 lorry loads as the prices of the

cake have started to raise once again. Only 19 lorries were supplied in an

extended period of March and April, 1985. The 1st defendant had suffered

losses once again on account of plaintiffs failure to supply the entire stock

within the stipulated time.

(iii) At every stage, the plaintiffs sole aim and attempt was to exploit the

defendants to the maximum extent on some pretext or the other. On account

of increasing the number of gunny bags, the 1st defendant had suffered loss of

2025:APHC:15018

cake of an equal weight, a total of 4500 gunny bags were used as per the

bills. Out of them, 391 gunny bags were said to be extra and total amount of

Rs.977-50 ps. was debited against the defendants under two contracts at the

rate of Rs.2-50 per gunny. Taking average prices of the cake at Rs.1,100/- per

M.T. on at the then prevailing market, the 1st defendant finalized the account

of the plaintiffs as per the letter, dated 02.08.1986 and paid the entire balance

amount of Rs.1,145-95 ps. by way of a demand draft towards full and final

settlement of their account. The plaintiffs received the draft along with the

account copy enclosed with the letter, dated 02.08.1986 and accepted it. They

did not raise any protest or any claim either immediately or within a

reasonable time, or at any time thereafter before filing the suit. It is, therefore,

evident that the plaintiffs have accepted the payment towards full and final

settlement of their claim and they are now stopped from making any such

further claims. The plaintiffs claim is clearly barred by time. The suit is clearly

barred by limitation and it was not filed within the period of limitation either

from the respective dates of the contracts or the credit bills. The letter, dated

02.08.1986 enclosing the account of the plaintiffs by the defendants is not as

acknowledgment of any debt.

7. Based on the above pleadings, the trial Court framed the following

issues:

(1) Whether each purchase of the cake alleged in the plaint is an

independent contract, or whether they are all part of the same

contract as alleged in the plaint?

(2) Whether the stipulation in the confirmation note is the essence of the

contract as alleged in the plaint?

(3) Whether the alleged telegram, dated 26.12.1984 said to have been

given by M/s. Krishna & Company, Madras, is true and binds the

defendants?

2025:APHC:15018

(4) Whether the plaintiffs failed to supply the cake during the months

stipulated in the confirmation note, and if so whether it amounted to

termination of the contract?

(5) Whether the plaintiffs failure to supply the cake in time resulted in

any loss to defendants, and if so how much loss was causes and

whether the plaintiffs have to compensate the defendants for the

said loss?

(6) Whether the plaintiffs failed to stick on the terms of the confirmation

note with regard to gunny bags and what is the loss sustained by the

defendants on account of it and whether the plaintiffs have to

reimburse the same to the defendants?

(7) At what price or prices the plaintiffs are entitled to claim value of the

cake?

(8) Whether the plaintiffs supplied the entire quantity of case stipulated

and whether the alleged deficiency in the supply resulted in any loss

to the defendants, and if so, how much amount and whether the

plaintiffs are therefore liable to compensate the defendants?

(9) Whether the account of the defendants with the plaintiffs is a running

account and whether the suit claim of the plaintiffs is in time?

(10) Whether the plaintiffs are entitled to claim any interest on the suit

claim and if so, at what rate and from which date?

(11) To what relief?

8. During the course of trial in the trial Court, on behalf of the Plaintiffs,

PW1 was examined and Ex.A1 to Ex.A36 were marked. On behalf of the

Defendants, DW1 was examined and Ex.B1 to Ex.B14 were marked.

2025:APHC:15018

9. After completion of the trial and hearing the arguments of both sides,

the trial Court decreed the suit with costs vide its judgment, dated 25.09.2002,

against which the present appeal is preferred by the unsuccessful defendant

Nos.1 to 7 in the suit questioning the Decree and Judgment passed by the trial

Court.

10. Heard Smt. S. Rajani learned counsel, representing Sri T. Sreedhar,

learned counsel for the appellants and heard Sri P. Nagendra Reddy, learned

counsel for the respondent Nos.1 to 8.

11. Learned counsel for the appellants would contend that the decree

and judgment passed by the trial court is contrary to law, weight of evidence

and probabilities of the case. She would further contend that the trial Court

erred in came to a conclusion and decreed the suit though the appellants

discharged the amount due to the plaintiffs by way of demand draft towards

full and final settlement of the debt. She would further contend that the appeal

may be allowed by setting aside the decree and judgment passed by the

learned trial Judge.

12. Per contra, learned counsel for the respondents 1 to 8 would

contend that on appreciation of the entire evidence on record, the learned trial

Judge rightly decreed the suit and there is no need to interfere with the finding

given by the learned trial Judge and the appeal may be dismissed by

confirming the decree and judgment passed by the learned trial Judge.

13. Now the points for determination in the first appeal are:

1) Whether the alleged discharge of amount to the plaintiffs as

pleaded by the appellants is true and proved by the appellants?

2) Whether the trial Court is justified in decreeing the suit?

14. Point Nos.1 and 2:

2025:APHC:15018

The case of the plaintiffs is that the 1st plaintiff firm is a trading firm and

doing business in manufacture of oils and oil cakes at Singarayakonda and

the plaintiffs 2 to 5 are its partners and the 1st defendant firm is a

manufacturer and exporter of de-oiled rice bran, de-oiled cakes and oils and is

situated at Nellore. The plaintiffs further pleaded that the defendant Nos.2 to

9 are the partners of the firm of the 1st defendant and the 1st plaintiff firm doing

business in manufacture of oils and oil cakes and they supplying the same to

the defendants and others through the orders booked by the brokers and

commission agents and M/s. Krishna & Company is the broker between the

plaintiffs and defendants for doing business. The plaintiffs further pleaded that

as per the contract in accordance with both the credit bills, the total value goes

to Rs.2,55,737-70 ps. and the total amount sent under various drafts to the 1st

plaintiff firm on various dates comes to Rs.2,26,145-95 ps. and the 1st

defendant is still due an amount of Rs.29,591-75 ps. as per the ledger account

for the year 1986-87 at page 96. The 1st defendant firm sent a letter, dated

02.08.1986 along with a demand draft for Rs.1,145-95 ps. by informing that

the amount is sent towards full and final settlement. The plaintiffs further

pleaded that the defendants failed to discharge the total debt and that the

plaintiffs are constrained to file the suit.

15. In order to prove the case of the plaintiffs, the plaintiffs relied on the

evidence of P.W.1 and also relied on Ex.A.1 to Ex.A.36. PW.1 is one of the

partners of the 1st plaintiff firm. Ex.A.2 is the true copy of partnership deed and

Ex.A.1 shows that the 1st plaintiff firm is a registered firm and plaintiffs 2 to 5

are the partners of the 1st plaintiff firm. P.W.1 deposed in his evidence that

one M/s.Krishna & Company, Madras is the broker of 1st defendant and also

to the 1st plaintiff and the said M/s.Krishna & Company placed orders on

behalf of the 1st defendant to the 1st plaintiff to send 10 lorries of tobacco seed

cakes and Ex.A.3 is the order placed by M/s.Krishna & Company and Ex.A.4

is the confirmation letter and the plaintiffs also relied on relevant entries in the

books of account of the plaintiffs.

2025:APHC:15018

16. The plaintiffs relied on Ex.A.1 to Ex.A.36 as stated supra. Ex.A.2 is

the partnership deed and Ex.A.1 is the acknowledgement of firm and Ex.A.5 is

the telegram issued by M/s.Krishna & Company who is the broker and

commission agent between the parties. As per Ex.A.5, the goods have to be

supplied during the month of April, May and June, 1984. Ex.A.15 is

confirmation letter issued by M/s.Krishna & Company to dispatch the goods in

the month of March, 1984 and the 1st defendant also issued another

confirmation letter under Ex.A.4 Ex.A.18 is the telegram issued for not send

the goods. Ex.A.19 is another telegram to send the goods from 25th March,

1985 onwards. P.W.1 deposed in his evidence in view of Ex.A.18 telegram

they have stopped to send TS cakes and later after receipt of Ex.A.19

telegram, they sent TS cakes to the 1st defendant. As per the own case of the

defendants, they have not issued any notice to the plaintiffs stating that they

have sent the cakes subsequent to the credit period and that they have not

accepting the same. As per the evidence of D.W.1, he kept the goods aside

without entering into the ledger and contacting father of P.W.1 by name

Venkateswarulu and father of P.W.1 agreed to reduce the cakes price from

Rs.75/- to Rs.55/- per bag. Admittedly, there is no evidence on record to show

that the defendants contacted the father of P.W.1 and father of P.W.1 reduced

the price of cakes from Rs.75/- to Rs.55/- per bag. In fact, Venkateswarlu i.e.,

father of P.W.1 is no way concerned with the 1st plaintiff firm either he is not a

partner of the firm or he is not having any capacity in the 1st plaintiff firm. The

plaintiffs seriously contended that father of P.W.1 is no way connected with

the plaintiff partnership firm. The suit is filed in the year 1989.

17. The contention of the appellants is that they sent an amount of

Rs.1,145-95 ps. by way of demand draft towards full and final settlement

along with Ex.B.11 letter on 02.08.1986 and the same is received by the

plaintiffs without protest and all of a sudden, the plaintiffs filed the suit in the

year 1989. Admittedly, the suit is filed on 02.08.1989, the 1st defendant sent

an amount of Rs.1,145-95 ps. by way of demand draft on 02.06.1986. The

2025:APHC:15018

appellants contended that the said amount is sent towards full and final

satisfaction. The contention of the plaintiffs is that they made a phone call to

the defendants subsequently by narrating the facts and demanding to pay the

remaining amount. The contention of the appellants is that Ex.A.3 and Ex.B.7

shows that the stock has to be dispatched by April, May and June, 1984 and

agreed price is Rs.75/- per bag and since the price is increased, they did not

supply the goods, as the plaintiffs sent goods subsequent to the period of

June, 1984, the 1st defendant firm refused to receive the stock. The

contention of the plaintiffs is that as per Ex.A.18 telegram, dated 13.03.1985,

the 1st plaintiff firm did not dispatch the TS cakes to the defendants, soon after

receiving another telegram under Ex.A.19, dated 23.03.1985 from M/s.Krishna

& Company, the 1st plaintiff firm dispatched TS cakes and the defendants

received the same. The contention of the appellants is that the 1st plaintiff firm

did not raise any objection for the same at the time of encashment of the

demand draft. As per the admission of D.W.1, they have not sent the

demanded amount at Rs.75/- per bag. The contention of the appellants is that

the father of P.W.1 reduced the price from Rs.75/- to Rs.55/- per bag. It is a

fact that father of P.W.1 is not either Managing Partner of the 1st plaintiff firm

or Partner of the firm. The plaintiffs seriously contended that the father of

P.W.1 is no way connected with the 1st plaintiff business, therefore, it is for the

defendants to summon the father of P.W.1 to discharge their burden, but they

failed to do so. As per the case of the defendants, they have sent an amount

of Rs.1,145-95 ps. by way of demand draft on 02.08.1986 towards full

payment of debt. The contention of the plaintiffs is that the said amount is not

towards full and final settlement and the defendants have to discharge some

more amount as per ledger books produced by the plaintiffs and they have

also made a phone call to the defendants by narrating the entire facts. In order

to establish the case of the plaintiffs, the plaintiffs relied on documentary

evidence apart from the evidence of P.W.1. The evidence on record coupled

with the documentary evidence produced by the plaintiffs supports the case of

the plaintiffs.

2025:APHC:15018

18. The learned counsel for the appellants would contend that the 1st

plaintiff firm did not raise any objection for the same at the time of encashment

of demand draft given towards full and final settlement, for non-supply of

goods from April to June, 1984, they have sustained loss of Rs.14,300/- and

after deducting the same, they sent Rs.1,145-95 ps. But, in order to prove the

said defence, the defendants did not adduce any evidence. It was contended

by the defendants, they have not sent any telegram and they have not

instructed M/s.Krishna & Company to issue telegram to the plaintiffs for

stoppage of TS cakes and also issuance of another telegram to dispatch TS

cakes and the plaintiffs have to prove the same by examining the employee in

M/s.Krishna & Company. It is the case of the appellants that they have

discharged the amount to the plaintiffs towards full and final satisfaction of the

debt, therefore, the entire burden is on the appellants to prove that they have

sent an amount of Rs.1,145-95 ps. towards full satisfaction of the debt. As per

the case of both parties, M/s.Krishna & Company is the commission agent to

both the parties but the appellants failed to prove the same to show that they

sent an amount of Rs.1,145-95 ps. towards full satisfaction of the debt. The

plaintiffs relied on oral and documentary evidence to prove the claim of the

plaintiffs. The alleged discharge towards full satisfaction of the amount and

alleged negotiations in between D.W.1 and Venkateswarlu about reducing

price of TS cakes from Rs.75/- to Rs.55/- per bag as pleaded is not proved by

the defendants. It is for the appellants to prove the same but the appellants

failed to prove the same.

19. The evidence on record clearly proves that the defendants have to

pay an amount of Rs.29,591-75 ps. as on the date of 02.08.1986 after

deducting an amount of Rs.1,145-95 ps. which was sent by the defendants by

way of demand draft and the same was encashed by the plaintiffs. But the

appellants failed to prove the same that they sent an amount of Rs.1,145-95

ps. towards full satisfaction of the debt to the plaintiffs. The contention of the

plaintiffs is that the defendants have to pay the total amount due with interest

2025:APHC:15018

at 18% per annum. On appreciation of the entire evidence on record, the

learned trial Judge awarded interest at 10% per annum from the date of suit till

the date of decree and further awarded subsequent interest at 6% per annum

from the date of decree till the date of realization. Therefore, I do not found

any reason to interfere with the said finding of the learned trial Judge in

granting interest at 10% per annum from the date of suit till the date of decree

and subsequent interest at 6% per annum from the date of decree till the date

of realization, but the plaintiffs are not entitled any interest on Rs.29,591-75

ps. till the date of filing of suit, since the plaintiffs have not issued any legal

notice prior to filing of the suit and they waited on the last date of limitation and

filed the suit and that the plaintiffs are not entitled interest at 18% per annum

on the date of finalization of the accounts till the date of filing of the suit.

20. In the result, the appeal is partly allowed by modifying the decree

and judgment, dated 25.09.2002, on the file of Senior Civil Judge, Kandukur,

as the plaintiffs 1, 3 to 8 are entitled an amount of Rs.29,591-75 ps. with

interest at 10% per annum from the date of suit till the date of decree and

further awarded subsequent interest at 6% per annum from the date of decree

till the date of realization. Considering the facts and circumstances of the

case, each party do bear their own costs in the first appeal.

As a sequel, miscellaneous petitions, if any, pending in the Appeal shall

stand closed.

_________________________

V. GOPALA KRISHNA RAO, J

Date: 17.04.2025

PGR

2025:APHC:15018