Delhi High Court
M/S J.C. Enterprises (Regd.) vs Ranganatha Enterprises on 31 January, 2011
Author: V.K. Jain
Bench: V.K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 19.01.2011
Judgment Pronounced on: 31.1.2011
+ CS(OS) No. 1443/1999
M/s J.C. Enterprises (Regd.) .....Plaintiff
- versus -
Ranganatha Enterprises .....Defendant
Advocates who appeared in this case:
For the Plaintiff: Mr. S.C. Singhal and Mr. Sanjay
For the Defendant: Mr. R.N. Sharma
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
V.K. JAIN, J
1. This is a suit for recovery of Rs.43,82,473/-. It is
alleged in the plaint that M/s J78.C. Enterprises, which was
a partnership firm, was dissolved vide Dissolution Deed
dated 1.4.1997 and thereafter, the plaintiff Rakesh Sharma
CS(OS)No. 1443/1999 Page 1 of 29
has been running this firm as his proprietorship concern.
The defendant Suresh is running business under the name
and style of M/s Ranganatha Enterprises. It is alleged in
the plaint that under an oral agreement between the parties,
the defendant was appointed as a stockiest of State lotteries
including Daily Lotteries etc., on wholesale rate basis. As
per the terms and conditions of the agreement, the plaintiff
was required to dispatch lottery tickets to the defendant
from Delhi as per the requirement of the defendant. The
defendant was required to make payment to the plaintiff
within a week from the date of the draw. In default of
payment, the plaintiff was entitled to interest at the rate of
18% per annum for the period beyond 15 days from the date
of draw. It is alleged that the defendant is liable to pay a
sum of Rs.20,97,566/- to the plaintiff towards price of the
lottery tickets, after adjustment of part payment of Rs.1
lakh made by him on 6th June, 1996. The plaintiff has also
claimed interest on that amount at the rate of 18% per
annum, which comes to Rs.22,84,907/-, thereby making a
total sum of Rs.43,82,473/-.
2. The defendant has contested the suit. He has
taken preliminary objections that this Court has no
CS(OS)No. 1443/1999 Page 2 of 29
territorial jurisdiction to try the suit and the suit is barred
by limitation. It is further alleged that since the agreement
was executed between the defendant and M/s J.C.
Enterprises, the plaintiff has no cause of action and no right
to sue the defendant.
3. On merits, it is alleged that the defendant was in
the business of sale of lottery tickets till the year 1993 and
had purchased some consignments of lotteries from M/s
J.C. Enterprises, payments of which were promptly settled
and nothing is due from him. The defendant has also
denied the alleged oral agreement between him and M/s
J.C. Enterprises, as also the agreement to pay interest. As
regards the payment of Rs.1 lakh, it is alleged that this
amount was paid to the plaintiff on 6th June, 1996 as a
loan.
4. The following issues were framed on the pleadings
of the parties:-
(i) Whether there is no cause of action for
the suit and whether the plaintiff does
not have the right to sue? OPD
(ii) Whether the suit is barred by law of
limitation? OPD
(iii) Whether this Court has no territorial
jurisdiction to try and decide the
CS(OS)No. 1443/1999 Page 3 of 29
present suit? OPD
(iv) Whether there is any oral agreement
entered into between the plaintiff and
the defendant in the month of
December, 1991 and if so, what were
the terms and conditions of the same?
OPP
(v) Whether the defendant was required to
submit his accounts and make
payments at New Delhi for the tickets
alleged to have been received by him?
OPP
(vi) Whether the plaintiff is entitled for
recovery of an amount of
Rs.43,82,473/- from the defendant as
claimed in the suit? OPP
(vii) If the aforesaid issue is answered in
favour of the plaintiff whether the
plaintiff is also entitled for payment of
any interest and if so, at what rate and
for which period? OPP
(viii) Relief.
Issue No.1
5. On this issue, the plaintiff Mr. Rakesh Sharma, in
his affidavit by way of evidence, stated that M/s J.C.
Enterprises, which was a partnership firm till 1st April,
1997, was dissolved, vide Dissolution Deed dated 1st April,
1997 and now he is its proprietor. During his cross-
examination, he stated that after dissolution of the
partnership firm, he took over all its assets and liabilities
CS(OS)No. 1443/1999 Page 4 of 29
being its proprietor. Though the original Dissolution Deed
was not produced by the plaintiff and consequently its copy
filed by him could not be exhibited and was marked as
mark X-1 during his examination before the learned Joint
Registrar, even if the document Mark X-1 is excluded from
consideration, the unrebutted deposition of plaintiff is
sufficient to prove that M/s J.C. Enterprises was dissolved
with effect from 1st April, 1997 and all its assets and
liabilities were taken over by the plaintiff as its proprietor.
Another important factor to be noted in this behalf is that
no other partner of M/s J.C. Enterprises has sued the
defendant for recovery of the dues of the firm, which, in
turn, supports the oral deposition of the plaintiff that he
had taken over the assets and liabilities of the erstwhile
partnership firm with effect from 1 st April, 1997. The issue
is decided against the defendant and in favour of the
plaintiff.
Issue No.2
6. It is an admitted case that the defendant made
payment of Rs.1 lakh to the plaintiff, by way of demand
draft, on 6th June, 1996. Though, the case of the plaintiff is
that, in fact, the payment was received by him on 10th June,
CS(OS)No. 1443/1999 Page 5 of 29
1996, that would make no difference since the High Court
was closed in June, 1999 and the suit was filed during
vacation on 23rd June, 1999.
7. Section 19 of the Limitation Act, to the extent it is
relevant, provides that where payment on account of a debt
or of interest is made before the expiration of the prescribed
period by the person liable to pay the debt, a fresh period of
limitation shall be computed from the date when the
payment was made. In case, part payment by way of a
demand draft was made by the defendant to the plaintiff on
6th June, 1996, this being a payment in writing, a fresh
period of limitation commenced from that date and since the
High Court was closed in the month of June, 1999, the suit
having been filed during the same vacation on 23 rd June,
1999 would be within the prescribed period of limitation.
The dispute between the parties, however, is as to whether
the amount of Rs.1 lakh was paid as part payment towards
the dues outstanding against the defendant on the date of
payment as claimed by the plaintiff or it was paid as a
friendly loan by the defendant to the plaintiff, as alleged by
the defendant.
8. In his affidavit by way of evidence, the plaintiff
CS(OS)No. 1443/1999 Page 6 of 29
Rakesh Sharma has stated that part payment on account
was made by the defendant on 6th June, 1996 vide letter
Exhibit P/2 and receipt issued by the plaintiff in this regard
on 10th June, 1996 is Exhibit P/3. PW-2 Shri Manjit Singh,
who is working with the plaintiff, has corroborated the
deposition of the plaintiff in this regard and has stated that
last payment was received from the defendant vide Memo
No.181 dated 6th June, 1996 for Rs.1 lakh vide demand
draft, which was duly realized by the plaintiff. The original
Memo dated 6th June, 1996 is Exhibit PW-2/1. I see no
reason to disbelieve the oral testimony of plaintiff and his
employee Shri Manjit Singh as regards the nature of the
payment made by the defendant on 6th June, 1996. During
his cross-examination of PW-2 Shri Manjit Singh also no
suggestion was given to him that the document Exhibit PW-
1/1 was not issued by the defendant. When a witness
deposes a particular fact and no suggestion to the contrary
is given during his cross-examination, the party against
whom the deposition is made is made is deemed to have
admitted that part of the deposition, which thereby remains
unchallenged. Therefore, by not suggesting to PW-2 Shri
Manjit Singh that the document Exhibit PW-1/1 was not
CS(OS)No. 1443/1999 Page 7 of 29
issued by him, the defendant is deemed to have admitted
the issue of this document by him. Even otherwise, Exhibit
PW-1/1 on which the name as well as address and
telephone number of Ranganatha Enterprises, of which the
defendant admittedly is the proprietor, is correctly printed
does not appear to be a forged document. The memo
Ex.PW-2/1 shows that the payment of Rs.1 Lac was made
in account, which implies part payment. The receipt
Exhibit P-3, which is a computer generated receipt, as
stated by PW-2 Shri Manjit Singh, also shows that the
payment of Rs.1 lakh vide demand draft No.777626 dated
25th May, 1996 was received in the account of the defendant
maintained with M/s J.C. Enterprises. The letter Exhibit P-
2, which is written on the letterhead of the defendant, is the
forwarding letter whereby the aforesaid demand draft for
Rs.1 lakh was sent to M/s J.C. Enterprises. Though the
case of the defendant is that Exhibit P/2 is a forged
document, the fact and circumstance of the case indicate
that this is a genuine document whereby demand draft for
Rs.1 lakh was sent by the defendant to the plaintiff on 6 th
June, 1996. Another material circumstance in this regard
is that though the defendant claims that the amount of Rs.1
CS(OS)No. 1443/1999 Page 8 of 29
lakh was given as a friendly loan to the plaintiff, no notice
was ever issued by him demanding the aforesaid amount
from the plaintiff. No suit admittedly has been filed by the
defendant for recovery of this amount from the plaintiff.
Had the amount of Rs.1 lakh being given as a friendly loan,
the defendant would at least have demanded this amount
from the plaintiff and would also have filed a suit for
recovering it from the plaintiff. Therefore, I am satisfied that
the payment of Rs.1 lakh vide demand draft No.777626
dated 29th May, 1996 was made towards payment of the
amount, which was due from the defendant at that time. In
view of the provisions contained in Section 19 of the
Limitation Act, the suit, to the extent it pertains to the
amount, which had not become time barred on 6 th June,
1996, when the part payment was made, will not be barred
by limitation.
9. During the course of arguments, it was submitted
by learned counsel for the plaintiff that since, the parties
were maintaining a mutual open and current account in
which last entry was made on receipt of payment from the
defendant on 6th June, 1996, the suit having been filed on
23rd June, 1999, during summer vacation of the High Court
CS(OS)No. 1443/1999 Page 9 of 29
is well within limitation.
Article 1 of the Limitation Act, 1963, to the extent
it is relevant, provides that in a suit for the balance due on
a mutual, open and current account, where there have been
reciprocal demands between the parties, the period of
limitation is three years from the close of the year in which
the last item admitted or proved is entered in the account.
In order to an account to be mutual, there must be
transactions on each side creating independent obligations
on the other and not merely transactions which create
obligations on the one side, those on the other being merely
complete or partial discharge of such obligation. This
proposition of law was upheld by the Supreme Court in
Hindustan Forest Co. v. Lalchand, AIR 1959 SC 1349.
In the case before the Supreme Court, the parties entered
into an agreement for the supply of 5000 maunds of maize,
500 maunds of wheat and 1000 maunds of dal at the rates
and time, specified. A sum of Rs.13,000/- has been paid as
advance. The goods were delivered and the buyer was also
making payments. The last delivery of the goods was made
on 23rd June, 1947, and the suit was brought on 10 th
October, 1950, for the balance of the price due. The
CS(OS)No. 1443/1999 Page 10 of 29
Supreme Court pointed out that what had happened was
that the sellers had undertaken to make delivery of the
goods and the buyer had agreed to pay for them and had in
part made payments in advance and held that there could
be no question in such a case that the payments had been
made towards the price due and there were no independent
obligations on the sellers in favour of the buyer. This
proposition of law was again applied by the Supreme Court
in Keshari Chand v. Shilong Banking Corporation Ltd.,
AIR 1965 SC 1711. The real question to be seen by the
Court in such a case is to ascertain whether the
transactions between the parties gave rise to independent
obligations or they were merely a mode of liquidation of the
obligation already undertaken by one party. Even in a case
for price of goods sold and delivered, there may be obligation
on the part of the seller towards the buyer in case some
advance has been paid and has not been returned or the
payment made by the purchaser is more than the price of
the goods which he had to pay to the seller of the goods.
However, I find that there is no allegation in the
plaint that the parties were having a mutual, open and
current account in which there have been reciprocal
CS(OS)No. 1443/1999 Page 11 of 29
demands between the parties. There is no allegation in the
plaint that the plaintiff owed any amount to the defendant
at any point of time whether on account of excess payment
or otherwise. The case as set up in the plaint is based only
on the part payment of Rs.1 lakh sent by the defendant on
6th June, 1996. In para 10 of the plaint it has been
specifically alleged that the suit has been filed within the
period of limitation since on account part payment last
made by the defendant to the plaintiff at New Delhi on 6th
June, 1996 was received on 10th June, 1996. No plea of the
parties maintaining a mutual, open and current account
with reciprocal obligations on the part of both the parties
was set up even in the replication to the written statement.
Hence, the period of limitation in this case cannot be
calculated under Article I of Limitation Act. The issue is
decided accordingly.
Issue No.4
10. In his affidavit by way of evidence, the plaintiff has
stated that there was an oral agreement between the parties
in December, 1991 and the terms and conditions of that
agreement were accepted at New Delhi. He further stated
that as per the terms and conditions of the agreement, the
CS(OS)No. 1443/1999 Page 12 of 29
plaintiff was required to dispatch lottery tickets to the
defendant from Delhi and the plaintiff had accordingly been
dispatching lottery tickets to the defendant from time to
time, the last consignment having been dispatched on 22 nd
July, 1993. He further stated that the defendant was
required to make payment to the plaintiff at Delhi for the
lottery tickets received by him. PW-2 Shri Manjit Singh also
has stated that tickets to the defendant used to be
dispatched at Delhi and the payment used to be received at
Delhi.
In his affidavit by way of evidence, the defendant
has stated that in the year, 1990 Mr. J.C. Sharma one of
the partners of M/s J.C. Enterprises had approached him in
his office at Bangalore and had started supplying the lottery
tickets to him. He further stated that he never came to
Delhi in or around December, 1991 and did not enter into
any oral or written agreement with the plaintiff. He further
stated that most of the consignments were handed over to
him in person either by the partner or the representatives of
the plaintiff firm.
The plaintiff has filed a large number of bills issued
by M/s R. South Courier, Ram Nagar, New Delhi in respect
CS(OS)No. 1443/1999 Page 13 of 29
of the lottery tickets dispatched to the defendant from M/s
J.C. Enterprises. Some of these bills are Bill Nos.087019
dated 17th December, 1992, 093076 dated 8th February,
1993, 093082 dated 12th February, 1993, 006705 dated 10th
May, 1993, 019705 dated 8th June, 1993, 018986 dated
10th July, 1993 and 015610 dated 12th July, 1993. This
documentary evidence clearly shows that the tickets used to
be dispatched by the plaintiff to the defendant from Delhi
and used to be delivered through M/s R. South Courier,
which used to receive the lottery tickets from the plaintiff at
Delhi and deliver the same to the defendant at Bangalore.
11. In A.B.C. Laminart Pvt. Ltd. and Another v. A.P.
Agencies, Salem, (1989) 2 SCC 163, the Supreme Court
while dealing with the issue of territorial jurisdiction of the
Court observed that the jurisdiction of the Court in the
matter of a contract will depend on the situs of the contract
and the cause of action arising through connecting factors.
It was further observed that a cause of action is a bundle of
facts, which, taken with the law applicable to them, gives
the plaintiff a right to relief against the defendant and
comprise every fact necessary for the plaintiff to prove to
enable him to obtain a decree, through it has no relation
CS(OS)No. 1443/1999 Page 14 of 29
whatever to the defence which may be set up by the
defendant. It was also held that the performance of a
contract being part of cause of action, a suit in respect of its
breach can always be filed at the place where the contract
should have been performed or its performance completed.
It was further held that part of cause of action arises where
money is expressly or impliedly payable under the contract.
12. In a suit for price of the goods sold and delivered
which in effect is also the suit for breach of contract on the
part of the defendant by not paying the price of the goods in
terms of the agreement between the parties, the cause of
action, within the meaning of Section 20(c) of the Code of
Civil Procedure arises at the following places:-
(i) The place where the contract was made.
(ii) The place where the contract was to be performed
which in such a contract would mean the place
where the goods were delivered to the purchaser
and
(iii) The place where money in performance of the
contract was payable, expressly or impliedly.
The plaintiff, may in his choice, sue the defendant
at any of these three places unless the parties by agreement
CS(OS)No. 1443/1999 Page 15 of 29
have restricted the jurisdiction to a particular place, by
agreeing that in the event of a dispute arise between them,
the Court at a particular place alone would have jurisdiction
to resolve the same.
As per illustration (a) to Section 20 of the Code of
Civil Procedure, if A, a tradesman in Calcutta sells goods to
B who is carrying on business in Delhi and on the request
of B, A delivers the goods to Railway in Calcutta, A may sue
B for price of goods either in Calcutta, where the cause of
action has arisen or in Delhi, where B carries on business.
This illustration clearly shows that cause of action does
arise at the place where the goods are delivered by the seller
to the purchaser.
13. If the goods are handed over to the carrier for
delivery directly to the consignee, the property in the goods
passes to the consignee, the moment they are delivered to
the carrier/courier for the purpose of delivering them to the
consignee, since the consignee thereafter has no control in
those goods and the carrier/courier is bound to deliver them
only to the consignee. Section 23(1) of the Sale of Goods
Act, 1930 provides that where there is a contract for the
sale of unascertained or future goods by description and
CS(OS)No. 1443/1999 Page 16 of 29
goods of that description and in a deliverable state are
unconditionally appropriated to the contract, either by the
seller with the assent of the buyer or by the buyer with the
asset of the seller, the property in the goods thereupon
passes to the buyer. Such assent may be express or
implied, and may be given either before or after the
appropriation is made. Sub-Section 2 of this Section, to the
extent it is relevant, provides that where, in pursuance of
the contract, the seller delivers the goods to the buyer or to
a carrier for the purpose of transmission to the buyer and
does not reserve the right of disposal, he is deemed to have
unconditionally appropriated the goods to the contract.
Since the goods handed over to the courier at Delhi were
deliverable to the defendant and not to the order of the
plaintiff or his agent, the plaintiff did not reserve any right
of disposal of those goods, while handing them over to the
courier. Therefore, the property in the lottery tickets
handed over by the plaintiff to the courier at New Delhi
passed to the defendant, the moment the goods were
handed over to the courier for delivery to him and, therefore,
the tickets shall be deemed to have been delivered to the
defendant at New Delhi. Section 39(1) of the Sale of Goods
CS(OS)No. 1443/1999 Page 17 of 29
Act, to the extent it is relevant, provides that where, in
pursuance of a contract of sale, the seller is authorised or
required to send the goods to the buyer, delivery of the
goods to a carrier, whether named by the buyer or not, for
the purpose of transmission to the buyer, or delivery of the
goods to a wharfinger for safe custody, is prima facie
deemed to be a delivery of the goods to the buyer. Since the
lottery tickets for price of which the present suit has been
filed were delivered to the defendant at Delhi through R.
South Couriers, the part of cause of action arose in the
jurisdiction of this Court and, therefore, in view of the
provisions contained in Section 20(c) of the Code of Civil
Procedure, Delhi Court has jurisdiction to try the suit.
14. Exhibit PW-2/1 to which I have earlier adverted
indicates that the payment of Rs.1 lakh to the plaintiff was
sent from Bangalore to Delhi. The letter Exhibit P/2 clearly
shows that the draft of Rs.1 lakh was sent from Bangalore
to Delhi. The computer generated receipt Exhibit P/3 is the
most important document in this regard and this document,
which could not have been issued at Bangalore, leaves no
reasonable doubt that the payment of Rs.1 lakh was
received by the plaintiff at Delhi vide demand draft No.
CS(OS)No. 1443/1999 Page 18 of 29
777626 dated 25th May, 1996. Therefore, besides oral
evidence in the form of deposition of plaintiff and PW-2 Shri
Manjit Singh, there is ample documentary evidence
produced by the plaintiff to prove that the payment of
lottery tickets used to be received by M/s J.C. Enterprises
at Delhi. In fact, a large number of documents have been
filed by the plaintiff which show that payment of lottery
tickets used to be sent by the defendant to M/s J.C.
Enterprises from Bangalore. These documents have been
collectively exhibited as Exhibit PW-2/2. These documents
include a large number of letters whereby payment was sent
by the defendant to M/s J.C. Enterprises from Bangalore on
various dates. One such letters bears Sr. No.10272 and is
dated 8th April, 1993. Another such letter bearing No.10299
is dated 15th April, 1993 and contains reference to payment
of Rs.1,22,510/- vide demand draft No.903061 dated 24th
April, 1993. Document bearing No.10300 dated 15 th April,
1993, document bearing No.10405 dated 28th April, 1993,
document bearing No.10451 dated 7th May, 1993, document
bearing No.10452 dated 7th May, 1993, document bearing
No.10406 dated 28th April, 1993, document bearing
No.10492 dated 13th May, 1993, document bearing
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No.10494 dated 13th May, 1993, document bearing
No.10583 dated 20th May, 1993, document bearing
No.10584 dated 20th May, 1993, document bearing
No.10604 dated 25th April, 1993 and document bearing
No.10605 dated 25th May, 1993 are amongst numerous
such documents filed by the plaintiff. The authenticity of
these documents was not disputed by the defendant during
cross-examination of PW-2. All these documents start with
the words "We are herewith sending payments as follows",
which clearly show that payments used to be sent by the
defendant from Bangalore to M/s J.C. Enterprises at Delhi.
Thus, it can hardly be disputed that payments used to be
sent by the defendant from Bangalore to Delhi and used to
be received by M/s J.C. Enterprises at Delhi. The receipt of
payment at Delhi proves the case of the plaintiff that the
agreement between the parties envisaged payment of price
of the tickets at Delhi. The payment of price of the goods is
an integral and important part of an agreement for sale of
goods and if the payment was to be made and used to be
made in the jurisdiction of this Court, it cannot be disputed
that for this reason alone part of the cause of action arose at
Delhi. Consequently, Delhi Court has jurisdiction to try the
CS(OS)No. 1443/1999 Page 20 of 29
present suit.
Issue Nos. 4 to 6
15. In his affidavit by way of evidence, the plaintiff has
stated that a sum of Rs.20,97,566/- is payable by the
defendant towards the price of lottery tickets sold to him.
He has also proved the copies of his ledgers, which are
Exhibit P-4 (Colly). PW-2 Shri Manjit Singh, in his affidavit
corroborated the deposition of the plaintiff in this regard
and stated that the defendant is liable to pay
Rs.43,82,473/- inclusive of interest. In rebuttal, the
defendant has stated that every penny of dues of M/s J.C.
Enterprises had been cleared and settled.
16. I see no reason to disbelieve the entries made in
the ledger book of the plaintiff. According to the plaintiff, he
has been maintaining regular books of accounts in respect
of his business transactions. According to PW-2 Shri Manjit
Singh, he used to maintain the account books being
accountant of the plaintiff company. Copies of the ledger
book filed by the plaintiff shows that the principal amount
claimed by him is payable by the defendant to M/s J.C.
Enterprises.
CS(OS)No. 1443/1999 Page 21 of 29
In view of the provisions contained in Section 34 of
Evidence Act, once it is shown that an entry has been made
in a book of accounts and that book of accounts has been
regularly kept in the course of business, the requirement
contained in the first part of the Section is fulfilled and the
entry becomes admissible as relevant evidence. However,
the statement made in the entry will not alone be sufficient
to charge any person with liability. The rationale behind
admissibility of parties' books of account as evidence is that
the regularity of habit, the difficulty of falsification and the
fair certainty of ultimate detection give them in a sufficient
degree a probability of trustworthiness. Since, however, an
element of self-interest and partisanship of the entrant to
make a person - behind whose back and without whose
knowledge the entry is made - liable cannot be ruled out the
additional safeguard of insistence upon other independent
evidence to fasten him with such liability, has been provided
for in Section 34 by incorporating the words "such
statements shall not alone be sufficient to charge any
person with liability".
17. In M/s. Gannon Dunkerlay & co. Ltd. vs. Their
Workmen 1972 3 SCC 443 it was found that the register in
CS(OS)No. 1443/1999 Page 22 of 29
which entries had been made in the regular course of
business was admitted in evidence by the Tribunal without
any objection from the Union of India. Supreme Court was
of the view that it was for the union to challenge the
authenticity of the register by cross-examining the person,
who proved the register on the points which could throw
doubts on its authenticity.
18. In R.V.E. Venkatachala Gounder vs. Arulmigu
Viswesaraswami and V.P. Temple and another AIR 2003
SC 4548, the appellant was found to be maintaining books
of account. During cross-examination, he was not
questioned regarding authenticity of the books or the entries
made thereunder. Some of the entries in the books had
been made by the deceased-father of the appellant, who was
not available to depose incorporation of the entry. The
subordinate Court felt no need of any further corroboration
before acting upon the entries in the ledge book made by the
deceased-father of the appellant. As regards the entries
made by the appellant, he had deposed to making of those
entries and had corroborated the same in his own
statement. The appellant was believed by the trial Court as
also by the appellate Court and his statement was found to
CS(OS)No. 1443/1999 Page 23 of 29
be enough corroboration of the entries made by him.
However, the fining of the trial Court and the first appellate
Court was reversed by the High Court. Supreme Court
found no justification for the High Court reversing the
findings and was of the view that the High Court had erred
in ruling out the books in consideration, on the ground that
the same were not duly maintained or were not proved in
the absence of the maker having stepped in the witness box.
In Kulamani Mohanty vs. Industrial
Development Corporation of Orissa Ltd. AIR 2002 Orissa
38 it was held that if the books of accounts are produced as
primary evidence and oral evidence is led as corroborative
evidence relating to the entries in the books of accounts
maintained in the regular course of business, unless the
contrary is proved or any doubt is raised through evidence
regarding genuineness of such books of account or any of
the entries, then such books should be regarded as proved.
In Kalipada Sinha vs. Mahaluxmi Bank Ltd. AIR
1961 Calcutta 191 the entries made in the statement of
accounts coupled with the oral deposition were found to be
sufficient to prove the case of the respondent. Similar view
was taken by a Division Bench of Punjab High Court in
CS(OS)No. 1443/1999 Page 24 of 29
Kaka Ram Sohanlal and others vs. Firm Thakar Das
Mathra Das and another AIR 1962 PUNJAB 27. In taking
this view, the High Court relied upon the decision of Lahore
High Court in Firm Jodha Mal Budhu Mal vs. Ditta
AIR1925 Lah 242 (1) and the decision of the Allahabad High
Court in Suraj Prasad vs. Mt. Makhna Devi AIR 1946 All
127.
19. In the case before this Court, PW-2 Manjeet Singh,
who has been maintaining the books of accounts of the
plaintiff, has duly proved the entries made in account
books. The authenticity of the books of accounts of the
plaintiff was not impeached during his cross-examination.
According to the plaintiff, whatever was due to him was
reflected in the ledger and was also shown in his income-tax
returns. The oral deposition of the plaintiff, therefore, is
sufficient corroboration of the entries made in the account
books. This is more so when the defendant has failed to
produce his account books despite admitting that he had
been maintain such books.
20. In his cross-examination, the defendant has
admitted that he had been maintaining account books and
income tax return has been filed by him on the basis of
CS(OS)No. 1443/1999 Page 25 of 29
account books. He has also admitted that all credits, debits
and dues are mentioned in his account books. However, the
account books have not been produced by the defendant.
He claimed, during his cross examination, that in the year
1996-97, there was a problem in the lottery business and
the police had seized much of his record. He, however,
could not give the case number or FIR number in which his
documents were seized. He stated that though the case had
been closed and he had applied for return of account books,
the same had not been returned to him. In case, the
account books of the defendant were seized by the police, as
claimed by him, nothing prevented him from summoning
the account books from the Court where they have been
filed. This is more so when the defendant claims that he
had already applied for return of those account books.
Since the defendant had an opportunity to rebut the
account books of the plaintiff by producing his own account
books and he did not avail that opportunity, I see no reason
to disbelieve the account books maintained by the plaintiff,
who has also produced the author of the account books in
the witness box. In fact, an adverse inference needs to be
drawn against the defendant for not producing the account
CS(OS)No. 1443/1999 Page 26 of 29
books, which he could easily have produced. Section 114 (g)
of the Indian Evidence Act, 1872 provides that the Court
may presume that evidence which could be and is not
produced would, if produced, be unfavourable to the person
who withholds it. Therefore, an adverse inference can be
drawn that had the defendant produced the account books
in the Court, the entries showing the amount claimed by the
plaintiff would have been found shown outstanding in those
account books.
21. However, the plaintiff can recover only that much
amount, which has not become barred by limitation. Since
the payment made by the defendant on 6th June 1996 would
save, from limitation, only amount which had not become
time barred as on 6th June, 1996, when payment was made
by way of a demand draft, only the amount which was
legally recoverable on 6th June 1996 can be recovered by the
plaintiff as principal sum. The issues are decided
accordingly.
Issue No.7
22. A perusal of the delivery challans raised by M/s
J.C. Enterprises whereby goods were dispatched to the
defendant shows that the term regarding interest has been
CS(OS)No. 1443/1999 Page 27 of 29
specifically printed in the challans. Interest was payable at
the rate of 18% per annum on payment received beyond 15
days from the date of dispatch. Hence the plaintiff is
entitled to recover interest at the rate of 18% per annum on
the unpaid principal amount. The issue is decided
accordingly.
Issue No.8
23. Vide order dated 19th January, 2011, the plaintiff
was directed to file an affidavit stating therein the amount
which was due to him from the defendant on 6 th June,
1993. The affidavit filed by the plaintiff shows that
Rs.12,78,478/- was due to the plaintiff on 6th June, 1993.
The plaintiff has claimed a sum of Rs.22,84,907/- as interst
on the principal sum of Rs.20,97,566/- at the rate of 18%
per annum. Calculated on proportionate basis, the amount
of interest on Rs.12,78,478/-, being the principal amount,
comes to Rs.13,92,262/- at the rate of 18% per annum. In
view of my findings on the other issues, the plaintiff is
entitled to a sum of Rs.12,78,478/- as principal amount
and a sum of Rs.13,92,262/- as interest making a total sum
of Rs.26,70,740/-.
CS(OS)No. 1443/1999 Page 28 of 29
ORDER
For the reasons given in the preceding paragraphs, a decree for recovery of Rs.26,70,740/- with proportionate costs and proportionate pendente lite and future interest at the rate of 12% per annum is passed in favour of the plaintiff and against the defendant.
Decree sheet be prepared accordingly.
(V.K. JAIN) JUDGE JANUARY 31, 2011 Vk/Ag CS(OS)No. 1443/1999 Page 29 of 29