As the selling agent of the State Trading Corporation the appellant from time to time submitted its accounts to the State Trading Corporation in respect of the cement so supplied to the Nagarjunasagar Control Board retaining with itself the price at the rate of Rs.47.50 per ton as the producer of cement.
There was also a prayer for reference to arbitration.
The factory companymenced production in February, 1958.
O.S.A. No.5/74 was filed by the appellant against the decree which was passed against them in C.S. No.1/70 while O.S.A. No.9/74 was filed by the State Trading Corporation in respect of the judgment and order in S.No.1/70 in so far as it directed the State Trading Corporation to pay companyrt fee on its claims separately.
By this time the appellant was brought on the schedule of the Cement Control Order on 25.1.1958.
While these negotations were going on the Cement Control Order, 1956 came into effect from 1.7.1956.
Thus the appellant as the selling agent of the State Trading Corporation companylected from the Nagarjunasagar Control Board the State of Andhra Pradesh the price of Rs.47.50 per ton.
It seems that drafts were exchanged between the parties but numberconcluded agreement was arrived at.
Hence the appellant, as the selling agent of the State Trading Corporation started supplying cement directly to the said project from 18.4.1958.
It is the companytention of the State of Andhra Pradesh that the price which the appellant had agreed to charge to the Control Board for supply of cement for the said project was a fixed price of Rs.47.50 per ton, and that the appellant had recovered excess amounts from the State of Andhra Pradesh by charging companytrolled price less rebate of Rs.7/ .
This is recorded in the letter dated 12th of April, 1955 from Mr. Ramakrishna to the Secretary to the Government of India in which he has stated that he was enclosing the final companyfirmation to supply cement for the said project at the rate of Rs.48/ per ton loose ex factory.
The Chairman of the appellant company offered to supply cement to the Nagarjunasagar Project at the rate of Rs.48/ per ton loose from the proposed factory site at macherla.
For the supply during the period from 1.10.56 to 31.3.1958, however, the rate charged would be the flat rate of Rs.47.50 per ton plus excise duty and sales tax without any variation.
In the statements of accounts, however, which were submitted by the appellant to the State Trading Corporation, the appellant did number show any rebate and claimed the full amount of the companytrolled price from the State Trading Corporation which it retained with itself by debiting the full price to the State Trading Corporation in the statements of accounts.
Thereafter the Nagarjunasagar Control Board desired that the draft agreement which was to be entered into with the appellant company should be scrutinised by the two companycerned State Governments.
The appellant was appointed by the State Trading Corporation as their selling agent for the purpose of supplying cement to the Nagarjunasagar Control Board.
It, therefore, companytinued negotiations with the appellant for a further reduction in the price of cement which was to be supplied for the said project.
It has number taken any steps against the State of Andhra Pradesh to recover the amount of rebate so granted by it although its bills after 1.11.1961 do number show the rebate.
Three appeals were filed from this companymon judgment and order before the Andhra Pradesh High Court under clause 15 of the Letters patent.
In the bills which were drwan by the appellant, the price was shown as the companytrolled price less rebate of Rs.7/ .
It also prayed that cement supplied by the appellant to the Control Board should be paid for at the rate of Rs.47.50 per ton irrespective of the changes in the companytrolled price from time to time.
Both these suits were tried and decided by a companymon judgment.
The appellant also showed this amount as rebate in the bills which were drawn by it for the supply of cement upto 1.11.1961.
The High Court has also pointed out that in fact the appellant gave a rebate of Rs.7/ on the companytrolled price in respect of the cement supplied for the said project and it companytinued to give this rebate upto 1.11.1961.
In view of the companying into force of the Cement Control Order of 1956, in the draft agreement a clause was added to the effect that it would be subject to the sanction of the State Trading Corporation.
The Andhra Pradesh High Court by the impugned judgment and order which is a companymon judgment in the three appeals, has dismissed these appeals and has awarded companyts as set out in the impugment and order.
It was number entitled to withdraw this rebate after 1.11.1961.
From 1st of November, 1961, however, when the new Cement Control Order, 1961 came into operation, the appellant did number show any rebate in the bills supplied to the Nagarjunasagar Board and claimed the price as fixed under the Cement Control Order.
On 30th of April, 1956 there was a meeting of the Negotiating Committee of the Nagarjunasagar Control Board with the Chairman of K.C.P. Limited when it was agreed that the appellant company would charge Rs.47.50 per ton of portland cement plus excise duty and sales tax subject to variations upwards and downwards due to new taxation.
The rebate would be passed on to the Nagarjunasagar Control Board, the purchaser.
Prior to 1956 the Government of the companyposite State of Madras was companysidering establishment of a cement factory in Kurnool District of Rayalaseema, by a private enterprise Mr. Ramakrishna, Chairman of the appellant company offered to start such a factory and applied for a licence to start the factory, to the Government of India through the Government of Madras.
From 1.1.1966 cement was decontrolled.
The appellant informed the State Trading Corporation on 2nd of February, 1958 that it had entered into an agreement with Nagarjunasagar Control Board for the supply of cement for the said project at the companycessional rate of Rs.47.50 per ton loose ex factory insted of the companytrolled price of Rs.54.50 fixed under the Cement Control Order.
The appellant, however, companytinued to give a rebate of Rs.7/ to the Nagarjunasagar Board while supplying cement.
The State of Andhra Pradesh filed a suit being C.S. No.2 of 1970 against the appellant and the State Trading Corporation praying that a formal agreement embodying the term that cement would be supplied by the appellant to the Control Board at a fixed price of Rs.47.50, be directed to be executed.
As the producer of cement, the appellant became entitled to receive the price of cement so supplied from the State Trading Corporation.
When the Cement Control Order, 1956 came into effect the appellant had number started production of cement and hence the factory of the appellant was number mentioned in the schedule to the Cement Control Order of 1956.
In the suit the State of Andhra Pradesh also claimed a refund of the excess amount recovered from them by the appellant.
It recovered the price from the purchaser as agent of the State Trading Corporation.
The numberified price of cement was increased from Rs.54.50 to Rs.60.50 with effect from 1.7.1958.
The Board the State of Andhra Pradesh , however, paid to the appellant the companytrolled price less a rebate of Rs.7/ .
This project which was intially named Nandikonda Dam Project later came to be known as the Nagarjunasagar Project.
The present appeals are filed by appellant from this judgment and order in so far as it upholds the claim of the State Trading Corporation against the appellant.
The State Trading Corporation by its letter dated 5th of February, 1958 stated that the rebate of Rs.7/ per ton, that is to say, the difference between the ex works price allowed to the appellant which was fixed by the Government of India at Rs.54.50, and the companycessional rate of Rs.47.50, would be allowed, and the appellant would be paid by the State Trading Corporation the ex works price less rebate.
The High Court has companye to the companyclusion that there was numberconcluded companytract between the parties for the supply of cement for the said project at a fixed price of Rs.47.50.
On 31.10.1955 the Government of India wrote a letter to the appellant saying that they proposed to issue a licence subject to the companydition inter alia that almost the entire production of the factory shall be used locally by Nandikonda Dam Project as it was then known for the next 4 or 5 years.
The State Trading Corporation filed a suit against the appellant being C.S. No.1 of 1970 for the recovery of the rebate of Rs.7/ which the appellant had recovered from the State Trading Corporation by reversal of entries in the accounts for the period after 1.11.1961.
The suit filed by the State of Andhra Pradesh against the appellant and the State Trading Corporation was dismissed while the suit filed by the State Trading Corporation against the appellant was decreed.
The Andhra Pradesh High Court has examined in detail the entire companyrespondence which was exchanged between the appellant and or its Chairman and the Government of India as also the Government of the companycerned States in companynection with the setting up of the factory of the appellant and the companycessional rate at which the appellant offered to supply cement for the nagarjunasagar Project.
This was because by virtue of the Cement Control Order, 1956, the State Trading Corporation was appointed as a canalising agency for the purchase of cement at a companytrolled price fixed under the Cement Control Order of 1956.
The Nandikonda Control Board, however, was desirious of getting the price of cement further reduced.
Mrs. Sujata V. Manohar.
J. These appeals arise from a companymon judgment of the Andhra Pradesh High Court dated 3.2.1976 in O.S. Appeal Nos.
O.S.A. No.7/1974 was filed by the State of Andhra Pradesh against the judgment and order dismissing their suit.
5, 7 and 9 of 1974.
Some of the relevant facts for the purposes of these appeals are as follows The appellant K.C.P. Limited has a cement factory situated at Macherla in Guntur District, Andhra Pradesh.
The appellant also wrote to the State Trading Corporation informing it that the appellant had agreed to give a rebate of Rs.7/ on the Control Price of Cement in respect of the cement which was to be supplied by it for the Nagarjunsagar Project and the State Trading Corporation accepted this arrangement.
In the bills drawn by the appellant the sale price was being shown as fixed by the Cement Control Order and a rebate of Rs.7/ was shown as being deducted from the ex works price.
At this time there was a proposal to companystruct a dam over the River Krishna near Nandikonda.
It was proposed that the appellant would establish a cement factory at Macherla near the project site and would supply cement to the said project.
In fact, even after 1.11.1961 it companytinued to recover only the companycessional price.
