Judgment:
Ashok B. Hinchigeri, J.
1. Although the matter is listed for admission, I have taken up the appeal for final disposal with the consent of both the learned advocates.
2. This appeal is directed against the judgment, order and decree passed by the Court of DC Additional City Civil and Sessions Judge (CCH-2), Bangalore, in O.S. No. 7621/1980.
3. The facts of the case in brief are that the appellant and the respondent entered into three agreements for the calendar years 1073, 1974 and 1975. Under these agreements, the appellant was appointed as the agent to receive, cure, store the coffee and thereafter deliver the same. The amounts received by the respondent were to be kept in the Pool Fund Account with the State Bank of Mysore. On the supply of coffee seeds to the appellant, the consideration was to be passed on to the coffee growers towards the said supply. The appellant transferred some amounts from the Pool Fund Account to his personal account and made advance payments to the coffee suppliers in anticipation of securing the coffee seeds. This irregularity was noticed by the respondent, which put the appellant on the show-cause notice. The appellant thereafter stopped the practice of transferring the amount. The amounts which were already disbursed from his personal account to the coffee seeds suppliers, were adjusted from out of the amounts payable by the appellant to the coffee seeds suppliers from the Pool Fund Account. Taking the stand that the respondent had to pay interest on the transferred amounts, it deducted a sum of Rs. 75,264.78 from the bills of the appellant. The said deduction was after the confirmation of the appellant's liability adjudicated at the hands of the Marketing Committee.
4. The respondent filed its elaborate written statement, denying the claim of the appellant and justifying the deductions of a sum of Rs. 75,264.78.
5. Aggrieved by the aforesaid deduction, the appellant filed the suit praying for a judgment and decree for the said amount with current and future interest thereon.
6. Based on the rival pleadings, the Trial Court framed the following issues:
1. Whether the plaintiff was not liable to pay interest for the amount transferred from pool account to the personal account of plaintiff ?
2. Whether the defendant had no authority under Clause VI 8(i)(ii) of the agreement to effect cut or deduction of the agreement to effect out or deduction of the amount?
3. Whether the claim of defendant for deduction or cut had become time barred ?
4. Whether the plaintiff is entitled for recovery of the amount deducted by the defendant ?
5. Whether plaintiff is entitled for interest ?
6. For what relief the parties are entitled ?
7. The appellant got himself examined as PW 1, marking the documents at Ex.P1 to Ex.P17. On behalf of the respondent, its former employee, namely, Sri Sathyananda came to be examined as DW-1, marking the documents at Ex.D1 to D9.
8. On considering the pleadings, oral and documentary evidence placed on its record, the Trial Court answered the contentious issues in favour of the respondent and dismissed the suit of the plaintiff. Aggrieved by the dismissal of the suit, this appeal is presented.
9. Sri Shivakumar, the learned Counsel for the appellant submits that the judgment under appeal suffers from non-application of mind. The Trial Court has held that the transaction between the appellant and the respondent is a continuing transaction, although there is absolutely no basis for coining to such a conclusion. He brings to my notice. Clause 2 of Ex.D1 (agreement between the parties). The said Clause reads as follows:
(2) The tenure of this appointment shall he only for the calendar year commencing from 1.1. 1973 to 31.12.1973.Provided that the Agent shall continue to be liable to render the services as per these presents until alt the coffee harvested during 1972/73 crop season has been completely pooled, marketed, and payments to growers who have delivered coffee to the surplus pool have been completely disbursed.
10. By the operation of Clause 2, the contractual period has come to an end on 31.12.1973. Sri Shivakumar further submits that the proviso cannot be pressed into service, because no part of the service remained to be done by the appellant. If the transactions were to be of continuing nature, Sri Shivakumar contends that there would not have been any need for the respondent to enter into the agreement for the subsequent years, namely 1974 and 1975. The very fact of entering into the agreement for these subsequent years shows that the agreements for the previous years have spent themselves. As the contract between the parties ended on 31.12.1975, the deduction of the amount on 14.07.1979 is time-barred.
11. Sri Shivakumar also raised a threshold bar to the entertainability of any defence put up by the respondent He brings to my notice that DW-1 is only an ex-employee. He has not produced the resolution passed by the respondent Board nor any authorisation letter issued by the respondent. Therefore, he was not competent to give any evidence on behalf of the respondent Without prejudice to this submission, he also submits that even if whatever DW-1 has stated is taken to be true on its face value, then also no defence is made out for dismissing the suit
12. The third submission urged on behalf of the appellant is that no document whatsoever is produced to show that the respondent actually paid the interest on the transferred amount No evidence is adduced to substantiate that the respondent indeed paid interest on its availing of the overdraft facility. No statement of accounts is produced and no Bank Manager is examined by or on behalf of the respondent The respondent has nor discharged its burden of showing that any interest was paid and if paid, it was paid at what rate. Further, as the respondent has not at all shown that it has suffered any losses, the question of its claiming the damages or deducting any amount towards damages would not arise at all. He submits that the levying of damages cannot be justified even by invoking the Clause 8 of the agreement
13. Per contra, Sri M.V. Seshachala, the learned Counsel for the respondent prays for the dismissal of this appeal. He submits that as DW-1 was a former employee of the respondent and that as he was instructed to give the evidence, there is no legal impediment in his giving the evidence on behalf of the respondent It is his further submission that the respondent is a statutory body and that therefore the insistence for resolution by the respondent Board or for an authorisation letter is not warranted. Sri Seshachala submits that, assuming without admitting, ABH DW-1 had no competence to give the oral evidence, the documents produced and marked are themselves adequately indicative of the breach of the agreement by the appellant
14. He also submits that the deduction of the amounts is only on account of the interest paid by the respondent to the Bank, for using the overdraft facility, which itself was caused by the unauthorised transfer of the funds by the appellant from the Pool Fund Account to his personal account
15. I have gone through the tower Court records.
16. On hearing the learned advocates and perusing the L.C.R.s, the following questions would fall for my determination:
01. Whether DW-1 (Sathyananda) had the authorisation to give the evidence on behalf of the respondent ?
Whether its evidence constitutes enough defence for the dismissal of the suit ?
02. Whether the deductions effected by the respondent in the bills of the appellant towards the discharge of interest - liability were barred by limitation ?
03. Whether the respondent is entitled to claim damages?
04. Whether any fine can be imposed on the appellant for the breach of the agreement ?
17. In Re Question No. 1: DW-1 - Sathyananda had ceased to be an employee of the respondent on 06.04.1998. He gives the evidence on 31.03.1997, 19.12.2001 and 20.12.2001. While there can be no impediment for a former employee also to give the evidence, further evidence and to tender himself for cross-examination after retirement also, what cannot be lost sight of is the requirement of producing the authorisation letter. In the instant case, neither any resolution passed by the Coffee Board nor any authorisation letter is produced by the respondent The cross-examination of the ex-employee of the Corporation is recorded after his retirement and he has not produced any authorisation letter. If his evidence is scrutinised, what can be unmistakably seen is that he had no knowledge of anything. He states 'I do not know the defendant Board has taken a decision to deduct the amount due to the plaintiff on 22.12.1978, I do not know that actually the amount was deducted on 03.04.1979 by the defendant Board'. Thus, the evidence is not only without authorisation but it is also non-committal in nature. The first question is therefore bound to be answered in favour of the appellant.
18. In Re Question No. 2: The Trial Court holding that the deduction of the amounts by the respondent is not barred by limitation, as the transactions between them are continuing transactions is also without any basis. Clause (2), relied upon by the appellant's side and which is extracted herein above, unmistakably states that the tenure of the agreement Ex.D1 is till 31.12.1973. The same under Ex.D2 and Ex.D3 are 31.12.1974 and 31.12.1975.
19. If the transactions were of continuing nature then there would not have been any need for the respondent to enter into a fresh agreement for the subsequent two years. Further, the proviso also does not come to the rescue of the respondent in any way. Proviso can be pressed into service, if any part of the enumerated services had been left unperformed. It is nobody's case that the appellant's service had remained incomplete.
20. Further, the general rule in constructing a clause containing a proviso is to construe the main provision and the proviso together without making either of them redundant or otiose.
21. Even if the respondent were to file a suit against the appellant for the recovery of Rs. 75,264.78, the same ought to have been done within three years from the date of the expiry of the third agreement i.e. 31.12.1975. But the deduction in the instant case is made on 14.07.1979. Therefore, considering all these aspects of the matter, I have no hesitation in holding that effecting of the deductions by the respondent is barred by time.
22. In Re Question No. 3: My reading of the written statement and the evidence of DW-1 does not show that the respondent has indeed suffered any loss. Nowhere, there is an averment that if the amounts were not transferred from the Pool Fund Account to the personal account of the appellant, the respondent would not have been liable to pay the interest. Nothing is ABH placed on record to show that the respondent has actually suffered the loss of Rs. 75,264.78. Neither any statements of accounts are produced nor any Official of the concerned Branch of State Bank of Mysore is examined.
23. It is also not the case of the respondent that the appellant has embezzled or misappropriated the amounts. The case on hand only involves procedural irregularities. Some credence has to be given to yet another aspect of the matter, On being told that the transfer of amounts is not permissible, the appellant stopped the practice. Further the amounts, which were transferred from the Pool Fund Account to his personal account arid in turn made over to the coffee suppliers, were adjusted from out of the amounts, which the appellant was entitled to receive and which the respondent Coffee Board was obliged to give for being paid to the coffee suppliers after effecting the delivery of the coffee seeds. Thus, in the factual metrix of the case, the respondent is not entitled to demand the damages either independently or by way of interest
24. In Re Question No. 4: At the same time, it is also the Court's anxiety that a wrong done, be it in good faith or wanton, cannot go scotfree. The three documents at Ex.D1 to Ex.D3 clearly provide for the levying of the fine of Rs. 500/- for a minor breach of the agreement If the breach were of grave nature, then the respondent would not have continued the appellant's agency till 1999. Therefore, I am inclined to treat the breach as minor and impose a fine of Rs. 500/- for 26 transactions (I am informed at the Bar that on 26 occasions the amounts were transferred from the Pool Fund Account to the personal account of the appellant). The fine amount aggregates to (26 x 500) = Rs. 13,000/-. If the fine amount of Rs. 13,000/- is deducted from out of Rs. 75,264.78, it comes to Rs. 62,264.78.
25. I, therefore hold that the respondent is obliged and the appellant is entitled to receive a sum of Rs. 62,264.78 with interest thereon. Considering the peculiar facts and circumstances of the case, awarding interest at the rate of 6% per annum would meet the ends of justice. The interest is made payable on Rs. 62,264.78 at the rate of 6% per annum from 14.07.1979, the date of deducting the amount till the date of payment.
26. In the result, the judgment under appeal is set aside. The appellant's suit stands decreed in part in the above terms.
27. No order as to costs.