Nand Lal Shaw vs. Union Of INDIA And Ors

Facts

The petitioner, Nand Lal Shaw, was the successful bidder in an e-auction for 489.659 metric tons (MT) of scrap materials, paying Rs.1,27,15,886/- (without GST) to the Railways. The petitioner was permitted to cut the scrap for loading. By February 9, 2019, 434.659 MT was allegedly delivered, supported by e-Way Bills and weighbridge receipts. A Joint Note dated February 9, 2019, signed by both parties, admitted that some scrap material lying on the riverbed and in muddy soil could not be recovered due to ongoing construction work, with a possibility of fresh recovery efforts. The petitioner subsequently communicated that approximately 55 MT of materials could not be recovered and sought delivery or refund. The respondents controverted this, claiming full delivery had been made. The petitioner's initial claim was for 55 MT, but a chart later suggested 63.475 MT based on weighbridge receipts.

Held

The Court held that the Joint Note dated February 9, 2019, was an admitted document clearly indicating that the entire materials were not supplied and some remained unrecovered. The respondents failed to produce any document to controvert the petitioner's Requisition and Issue Notes. Therefore, the petitioner's contention that 55 MT was still due was accepted. The Court found the petitioner's chart indicating 63.475 MT to be contrary to their pleadings and weighbridge receipts to have insufficient evidentiary weight. The Court determined the value of the undelivered 55 MT by multiplying it with the sale price of Rs.25,666/- per MT, arriving at Rs.14,11,630/-. Since further recovery was not feasible as per the Joint Note, the Court directed a refund of this amount with interest at 6% per annum from February 9, 2019. The claim for GST and TCS was rejected as the original payment was without GST. The Court expressly left undecided the issue of whether the respondents could have recovered more material if they had made further efforts.

Key Issues

1. Whether the respondents are liable to deliver the balance quantity of scrap material or refund its value, and if so, what is the quantum of undelivered material? (Mixed question of law and fact, concerning contract performance and evidence). Petitioner's arguments: The petitioner contended that the Joint Note dated February 9, 2019, clearly indicated that the entire materials were not supplied and that some were unrecovered. They relied on Requisition and Issue Notes and their consistent claim of 55 MT undelivered material. They sought delivery of the balance 55 MT or, alternatively, a refund of the sale value, GST, TCS, and interest. Respondents' arguments: The respondents argued, based on internal communications and an affidavit, that no short delivery occurred and the full quantity had been handed over. They relied on the same Joint Note but interpreted it to mean that no delivery was due to the petitioner.