1985 (3) TMI 312 - HC - Indian Laws

Summary

Issues Involved:

1. Agreement to purchase 4,200 old spindles.
2. Delivery of goods.
3. Payment of Rs. 10,000 by the defendant.
4. Entitlement to recovery of Rs. 92,440.18.
5. Entitlement to interest.
6. Territorial jurisdiction.
7. Defendant's entitlement to recovery of Rs. 10,000 with interest.
8. Relief.

Detailed Analysis:

Issue 1: Agreement to Purchase 4,200 Old Spindles
The plaintiff, a public limited company, decided to sell 4,200 spindles with motors and accessories for Rs. 1,02,440.18. The defendant agreed to purchase these spindles, making an initial payment of Rs. 10,000 and agreeing to pay the balance by 30th September, 1973. This agreement was documented in a letter dated 5th July, 1973 (Ex. P-4).

Issue 2: Delivery of Goods
The defendant denied the delivery of the spindles, stating that the transfer required permission from the Textile Commissioner, which was not obtained. However, the plaintiff contended that possession had already been delivered to the defendant, as mentioned in Ex. P-4.

Issue 3: Payment of Rs. 10,000 by the Defendant
The defendant sent a cheque for Rs. 10,000 towards part payment, as evidenced by Ex. P-2. The plaintiff raised a bill dated 5th July, 1973, in the name of M/s. Gupta Hosiery Mills, confirming this payment.

Issue 4: Entitlement to Recovery of Rs. 92,440.18
The plaintiff sought recovery of Rs. 92,440.18, being the balance of the agreed purchase price, along with interest. The defendant argued that the agreement was void as it contravened the Woollen Textiles (Production and Distribution) Control Order, 1962, which required prior permission from the Textile Commissioner for the sale of spindles.

Issue 5: Entitlement to Interest
The plaintiff claimed interest at the rate of 15% per annum from 1st October, 1973. However, the court found no evidence to support this claim.

Issue 6: Territorial Jurisdiction
The issue of territorial jurisdiction was not pressed by the defendant during the proceedings.

Issue 7: Defendant's Entitlement to Recovery of Rs. 10,000 with Interest
The defendant sought the recovery of Rs. 10,000 paid as an advance. The court held that since the agreement was void, the defendant's claim for refund was also not maintainable. The claim was not raised by way of any counter-claim.

Issue 8: Relief
The court concluded that the agreement was illegal and unenforceable due to the prohibition under the Woollen Textiles (Production and Distribution) Control Order, 1962. The court observed, "The prohibition against acquisition and sale of spindles is absolute in the absence of any permission from the Textile Commissioner." Therefore, the suit was dismissed, and both parties were left to bear their own costs, as they were in pari delicto (equally at fault).

Conclusion:
The court dismissed the suit, holding that the agreement was void and unenforceable due to the lack of required permission from the Textile Commissioner. Both parties were ordered to bear their own costs.