A.S. No. 374 of 2000 (E). Case: The Kerala State Civil Supplies Corporation Ltd. Vs Siva Polymers. High Court of Kerala (India)

Case NumberA.S. No. 374 of 2000 (E)
CounselFor Appellant: George Poonthottam, Lakshmi Narayan, N.D. Premachandran, SCs and V.R. Kesava Kaimal, Adv. and For Respondents: Joseph Markose, Sr. Adv., Abraham Joseph Markose, Adv. and Liji J. Vadakedom, Adv. (Amicus Curiae)
JudgesV. Chitambaresh and Sathish Ninan, JJ.
IssueCode of Civil Procedure, 1908 (CPC) - Order VIII Rules 6, 6A
Citation2017 (1) KLT 398
Judgement DateJanuary 18, 2017
CourtHigh Court of Kerala (India)


V. Chitambaresh, J., (At Ernakulam)

1. There was a short supply of polythene bags (intended for the retail sale of rice, pulses etc.) by the plaintiff to the defendant contrary to the tender specifications. The defendant therefore had to invite fresh tenders for the supply of the requisite polythene bags which was responded to ofcourse at a higher rate. The loss suffered by the defendant on account of the retender was deducted while settling the bills of the plaintiff for the polythene bags supplied. The sum of ` 1,92,131/- so deducted by the defendant has been claimed in the suit along with interest on the amount already released.

2. The defendant contended that Ext. B1 tender conditions itself provide for the set off of liquidated damages consequent to the breach of the contract. Unliquidated damages were sustained by the defendant on account of retender for the supply of polythene bags at a higher rate solely because of the breach of the plaintiff. The damages to the tune of ` 1,92,131/- were adjusted towards the loss and the balance including the security deposit was paid by the defendant. The court below has decreed the suit for the sum of ` 1,92,131/- with interest thereon and interest on the amount already released was however declined.

3. The defendant has come up in appeal contending inter alia that the plea of adjustment should have been considered notwithstanding the absence of counter claim. We heard Mr. N.D. Premachandran, Advocate on behalf of the appellant and Mr. Abraham Joseph Markose, Advocate on behalf of the respondent. We also heard Mr. Liji J. Vadakedom, Advocate as amicus curiae who has done a commendable job with his usual calm, composed and sober approach.

4. Clauses 16 and 14 of Ext. B1 tender conditions providing for the liquidated damages and set off govern the parties to the contract and are extracted below:-16. Liquidated Damages:

In case the supplier fails to supply the ordered quantity within the stipulated period or the extended period, the Corporation reserves the right to purchase stock at the risk and cost of the defaulted supplier from any source and recover the damages excess expenses caused thereby from the defaulted supplier.

14. Set Off: Any sum of money due and payable to the contractor (including the Security deposit returnable to them) under this contract may be appropriated by the Civil Supplies Corporation and set off against any claim of the Corporation for the payment of any sum...

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