Karnataka High Court
Mohanlal vs Ogarchand Jain on 10 January, 2014
Author: Ashok B.Hinchigeri
Bench: Ashok B. Hinchigeri
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH DAY OF JANUARY 2014
BEFORE
THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI
R.F.A.No.1469 OF 2013 (MON)
BETWEEN:
1. Mohanlal
S/o Late Ghanshamdas
Aged about 68 years.
2. Sri Ashok,
S/o Sri Mohanlal,
Aged about 44 years.
Both were R/at No.3,
2nd Cross Road, II Floor,
R.V.Setty Layout,
Mahalakshmi Temple Street,
Seshadripuram,
Bangalore - 20.
And carrying on business
M/s Rithika's Poopali Agencies,
No.168, Commercial Street,
Bangalore - 560 001,
And Zenith No.135, Commercial Street,
Bangalore -1.
Presently R/at No.6,
Deepa Niwas, 7th Main,
1st Floor, Pipeline,
Malleswaram,
Bangalore - 560 003. ... Appellants
(By Sri K.S.Bheemaiah, Advocate)
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AND:
Ogarchand Jain,
S/o Ghewarchand,
Major,
Prop:M/s Metro Exports,
No.37, 1st Floor,
9th Cross, H.Siddaiah Road,
Bangalore - 560 027. ... Respondent
(By Sri P.D.Surana, Advocate)
This RFA is filed under Section 96 r/w O-XLI, Rule-1 of CPC,
against the judgment and decree dated 12.06.2013 passed in
OS.No.8693/2004 on the file of the XXX-Addl. City Civil Judge,
Bengaluru, decreeing the suit for recovery of money and etc.
This RFA, coming on for admission, this day, the Court
delivered the following:
JUDGMENT
This appeal is directed against the judgment and decree, dated 12.06.2013 passed by the Court of the XXX Additonal City Civil Judge, Bangalore City, in O.S.No. 8693/2004.
2. The facts of the case in brief are that the respondent plaintiff is in the business of manufacturing ladies garments and selling them. It is his further case that the appellant - defendants approached him to purchase the export surplus 3 garments and to make payment within 45 days from the date of the supply of the goods. The failure to make the payment within 45 days would attract the interest at the rate of 12% p.a. Claiming that he supplied the garments worth `2,27,180/- under 7 invoices and that the appellants have not paid the principal and interest, he filed the suit for recovery of the amounts.
3. The appellant - defendants filed the written statement stating that it is the plaintiff who approached the defendants to sell the export quality goods which had remained unsold and pay the amount after selling them. As the goods supplied by the plaintiffs were defective, the defendants sent them back to the plaintiff. They denied their liability to pay any amount.
4. Based on the rival pleadings, the Trial Court formulated the following issues:
1) Whether the plaintiff proves that he has supplied goods worth `2,27,180/- to the defendants on different dates?4
2) Whether the defendants prove that the majority of the goods supplied by the plaintiff were defective and not as per the requirements of the defendants and hence, they were returned back to the plaintiff?
3) Whether the plaintiff proves the liability of the defendants to pay the suit claim?
4) What order or decree?
5. The plaintiff examined himself as PW1 and marked documents at Exs. P1 to P7. On behalf of the defendants, the second defendant was examined as DW1, an auto driver Sadiq Ahmed Khan was examined as DW2. No documents are marked for the defendants. Based on the pleadings and the oral and documentary evidence placed on record, the Trial Court answered the issues against the defendants and decreed the suit. Aggrieved by the same, the defendants are in appeal before this Court.
6. Sri K.S.Bheemaiah, the learned counsel for the appellant defendants submits that the amounts shown on the 7 invoices are erroneously believed to be their actual price. He contends that the ingredients of the sale of goods 5 are not present in the instant case. There is no purchase order and delivery challan. The defendants have not sold the materials as they were found to be defective.
7. Sri Bheemaiah submits that the plaintiff has not approached the Court with clean hands. The plaintiff has not furnished the statement of accounts, the particulars regarding the turnout of the exports, etc.
8. The learned counsel submits that the documents at Exs. P1 to P7 are neither the invoices nor the delivery challans; they are just estimates. He submits that the said documents do not mention the credit period and contain no provision for levying the interest. There is absolutely no basis for levying the interest and much less at the rate of 12% p.a.
9. The learned counsel submits that the claims under Exs. P1 to P6 are hopelessly barred by time. Only the supply of the garments under Ex.P7 is within the period of limitation. The plaintiff's claims ought to have been entertained only to the extent of `6,375/-.
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10. The learned counsel submits that the cross- examination of DW1 is misconstrued. He has only answered the general questions pertaining to the procedure in vogue. He had not admitted that the defendants are liable to pay interest at the rate of 12% p.a. from the date of expiry of 45 days from the date of the supply of the goods. In the absence of any documentary evidence, the oral evidence of the defendants ought to have been relied upon by the Trial Court. He denies that the defendants have ever affixed their signatures on Exs. P1 to P7.
11. He has also relied on the decision of the Madras High Court in the case of THE STATE OF MADRAS vs. M/S.CANNON DUNKERLEY & CO. (MADRAS) LTD. reported in AIR 1958 SC 560. He read out its head-note portion which is extracted hereinbelow:
"According to the law both of England and India, in order to constitute sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which presupposes capacity to contract, that it must be supported by money 7 consideration and that as a result of the transaction property must actually pass in the goods. Thus, if merely title to goods passes but not as a result of any contract between the parties, express or implied, there is no sale. So also if the consideration for the transfer was not money but other valuable consideration it may then be an exchange or barter but not sale. And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a complete sale."
12. Sri P.D.Surana, the learned counsel appearing for the respondent - plaintiff submits that the 45 days credit period is contemplated. PW1 has spoken of that in the course of his evidence. Further, it is also admitted by DW1 in the course of his cross-examination. The relevant cross- examination reads as follows:
"¤±Á£É ¦ 1 jAzÀ ¤±Á£É ¦ 7 gÀ ¥ÀæPÁgÀ ªÀiÁ®ÄUÀ¼ÀÄ £ÀªÀÄUÉ vÀ®Ä¦ªÉ ªÀÄvÀÄÛ CªÀÅUÀ¼À£ÀÄß ¹éÃPÀj¹zÉÝêÉ. 45 jAzÀ 90 ¢£ÀUÀ¼À M¼ÀUÁV £ÁªÀÅ ¥ÉêÉÄAmï ªÀiÁqÀ¨ÉÃQvÀÄÛ. CAzÀgÉ ¤±Á£É ¦ 1 jAzÀ ¤±Á£É ¦ 7gÀ°è PÁt¹zÀAvÀºÀ ªÉÆvÀÛ. ¤±Á£É ¦ 1 gÀ ¥ÉêÉÄAmï£ÀÄß ¢£ÁAPÀ:13.01.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃPÁVvÀÄÛ. ¤±Á£É ¦ 2 gÀ°è£À ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 27.01.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ. ¤±Á£É ¦ 3 gÀ°è£À ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 01.02.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ. ¤±Á£É ¦ 4 gÀ°è£À ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 09.02.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ. ¤±Á£É ¦ 5 gÀ°è£À ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 25.02.2002 8 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃPÁVvÀÄÛ ¤±Á£É ¦ 6 gÀ ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 24.02.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ. ¤±Á£É ¦ 7 gÀ°è£À ªÉÆvÀÛªÀ£ÀÄß ¢£ÁAPÀ 26.02.2002 gÀAzÀÄ ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ."
13. For the transaction under Ex.P1, the defendants had the time to make payment till 13.02.2002 without interest. Under Article 15 of the schedule to the Limitation Act, 1963 it was open to the plaintiff to file the suit any time before 13.01.2005 and the suit is filed on 25.11.2004 itself. He would therefore contend that the Trial Court is justified in over-ruling the defendants' objections regarding the point of limitation.
14. As far as the issue of interest is concerned, Sri Surana submits that DW1 has agreed that if the payment is not made within the due date, the party has to pay interest from 12% to 15% p.a. thereon. He submits that even under Section 61 of the Sale of Goods Act, 1930, the interest can be levied even in the absence of any contract between the parties.
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15. He submits that there is no question or suggestion whatsoever put to PW1 that the goods were sent back by the defendants to the plaintiff.
16. The submissions of the learned counsel have received my thoughtful consideration. I have browsed through the lower court records.
17. There is no dispute that the goods were sent by the plaintiff to the defendants under Exs. P1 to P7. Even assuming that the defendants have not signed them, there is clear admission by DW1 in the course of cross-examination that they have received the goods sent under Exs.P1 to P7. He has this to say:
"¤±Á£É ¦ 1 jAzÀ ¤±Á£É ¦ 7 gÀ ¥ÀæPÁgÀ ªÀiÁ®ÄUÀ¼ÀÄ £ÀªÀÄUÉ vÀ®Ä¦ªÉ ªÀÄvÀÄÛ CªÀÅUÀ¼À£ÀÄß ¹éÃPÀj¹zÉÝêÉ."
18. The first question is whether the goods are of the value of `2,27,180/-. On receiving the goods, the defendants have not sent any letter to the plaintiffs demanding that their 10 rates be reduced. Nor there is any letter or notice issued on behalf of the defendants that the goods are defective.
19. The second question that falls for my consideration is whether the defendants have established that the goods are sent back to the plaintiff. No delivery challan is produced by the defendants to show that they sent back the goods to the plaintiff. Further, the defendants have not even put a question or suggestion to PW1 on their re-delivery version of the goods.
20. The responses elicited by the plaintiff from DW1 cannot be brushed aside or wished away as the responses to the general questions; the questions and responses are specific. That the payment ought to have been made within 45 days from the date of receipt of the goods under Exs. P1 to P7 are clearly stated. The said portions are also extracted in paragraph No.12 supra. Even Exs. P1 to P7 are not supported by the purchase order and even if the appellants' submission that Exs. P1 to P7 are neither the invoices nor the delivery 11 challan is accepted, then also the appellants cannot be absolved from their liability to pay the amount towards the supply of the garments. The authority relied upon by the appellant's side has no application for the facts of this case.
21. The third question that falls for my consideration is whether the suit was liable to be dismissed as barred by limitation. In view of the candid responses indicated by DW1 in the course of cross-examination and the provisions contained in Article 15 of the schedule to the Limitation Act, 1963, there is no legal impediment in filing the suit within three years from the date of expiry of the period of credit.
22. The last question that falls for my consideration is whether the Trial Court is justified in imposing the interest at the rate of 12% p.a. on the principal amount of `2,27,180/- from the date of the suit till the complete realization. Admittedly there is no written agreement governing the payment of interest between the parties. Based only on the plaintiff's assertions and what has been said by the 12 defendants in the course of cross-examination, the Trial Court has awarded the interest at the rate of 12% p.a. I am of the considered view that the ends of justice would be met by slashing the rate of interest from 12% p.a. to 6% p.a. from the date of the suit till payment.
23. In the result, the judgment and decree under appeal is substantially confirmed by making the modification in the interest rate from the date of the institution of the suit.
24. At this juncture Sri Surana, the learned counsel for the respondent prays for the direction to the office to release the amount deposited by the appellants pursuant to the interim order passed by this Court. Sri Bheemaiah, the learned counsel for the appellants has serious objection to the same, as the appellant may prefer the SLP. The office is directed to release the said amounts to the respondent after one month from the date of the expiry of the period for the filing of the SLP before the Hon'ble Supreme Court after ascertaining that no SLP is filed.
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25. This appeal is accordingly allowed in part. No order as to costs.
Sd/-
JUDGE Cm/-