Delhi District Court
M.L.Kalra vs Avtar Singh on 7 April, 2007
1
IN THE COURT OF DR.SUDHIR KUMAR JAIN, ADDITIONAL DISTRICT JUDGE, DELHI .
Suit No.02/2005 (172/2002)
Date of Institution: 23.07.2002
Date of Decision : 07.04.2007
M.L.Kalra,
S/o M.L.Kalra,
126, Anupam Apartment,
M.B.Road, Opp.Saket,
New Delhi.
... Plaintiff
Versus
1. Avtar Singh,
Managing Partner,
Aero Shoes (Prop.Aeroplane Shoe Factory),
21/68, Gurudwara Road,
Karol Bagh,
New Delhi - 110 005.
2. Harkirat Singh ( Patner ),
Aero Shoes ( Prop.Aeroplane Shoe Factory),
21/68, Gurudwara Road,
Karol Bagh,
New Delhi - 110 005.
3. Ripu Daman Kaur ( Partner ),
8, Kautilya Marg,
New Delhi.
4. P.R.Verma,
Manager Account,
Aero Shoes ( Prop.Aeroplane Shoe Factory),
21/68, Gurudwara Road,
Karol Bagh,
New Delhi - 110 005.
(Defendant no.4 is deleted vide order dated 21.01.2003).
Appearances:
For the plaintiff : Sh.Aman Mehta, Advocate.
For the defendants no.1 to 3 : Sh.Yashvir Sethi, Advocate.
Suit for Recovery of Rs.12,21,374/-(Twelve Lacs Twenty One Thousand
Three Hundred and Seventy Four Only).
2
JUDGMENT
This judgment shall decide a suit for recovery of Rs.12,21,374/- filed by the plaintiff against the defendants.
2. The relevant facts as stated by the plaintiff are that the plaintiff was appointed by the defendants no.1 to 3 for rendering supervisory consultancy services for the smooth functioning of export business of the defendants no.1 to 3 in the region assigned to the plaintiff i.e.all over the world except Canada and Russia; the plaintiff worked with the defendants no. 1 to 3 from 01.04.1998 till 24.07.1999 when the plaintiff resigned from the services of the defendants no. 1 to 3; the defendant no.1 had agreed and confirmed the terms and conditions of the services to be provided by the plaintiff to the defendants no. 1 to 3 on 01.04.1998; the defendants no. 1 to 3 have agreed to pay a total commission of 1% on the total FOB value of order that is true total turn over on the export region; the defendants no. 1 to 3 have also agreed to pay tentative quarterly commission of Rs.50,000/- at the end of each quarter which was to be adjusted at the end of each financial year; the defendants no. 1 to 3 in the financial year 1998-1999 have made export to the regions assigned to the plaintiff amounting to Rs.7,12,00,159/- and for the financial year 1999-2000 upto the period when the plaintiff left the job of the defendants no. 1 to 3 on 24.07.1999 amounting to Rs.3,31,09,956/-; total amount of export promotion in 3 terms of Rupees handled by the plaintiff till he left the defendants no. 1 to 3 on 24.07.1999 was amounting to Rs.10,43,10,115/-and as per the terms and conditions settled on 01.04.1998 the total commission which is to be paid by the defendants no. 1 to 3 to the plaintiff works out to Rs.10,43,101/- out of which defendants no. 1 to 3 have paid a sum of Rs.2,37,250/- after deducting the TDS from Rs.2,50,000/-; the defendants no. 1 to 3 have not paid Rs.7,93,101/- as total commission on export promotion minus total tentative quarterly commission received by the plaintiff; the defendantsno. 1 to 3 have failed to pay the said amount despite request letter dated 16.08.1999 and legal notice dated 21.05.2002; the defendants no. 1 to 3 are liable to pay Rs.7,93,101/- as outstanding dues and Rs.4,28,274/- as interest @ Rs.18% p.m.for the period w.e.f.24.07.1999 till the filing of the suit at 18% p.m. total amounting to Rs.12,21,374/-. Hence the suit.
3. The defendants no.1 to 3 filed the written statement. The defendants no.1 to 3 stated that the suit is barred by limitation as plaintiff has claimed the commission on exports till 29.06.1999; the plaintiff had worked with Aero Group of defendant no.1 and his family since 1985; the plaintiff drew salary from M/s.Aero Club when he settled all his accounts and ceased association with the Aero Group; the plaintiff in 1998 has offered services for the export promotion and expansion of the export of the defendants business; a letter dated 01.04.1998 was prepared by plaintiff and signed by the defendant no.1 4 in good faith; it was agreed upon between the plaintiff and the defendant no.1 that the appointment was for a trial period of one year and any amount of commission in excess of the minimum stipulated quarterly fee will be payable to the plaintiff only on the European incremental business and if there was an increase of more than 20% in the value of exports over the exports in each previous year; the plaintiff was unable to increase the export of the defendants; the plaintiff was to be paid salary upto June, 1999 and minimum stipulated commission of Rs.50,000/- upto June 30, 1999 was paid in full and final settlement of his account; the defendants are not entitled to pay the suit amount; the defendants did not receive the legal notice dated 21.05.2002 as alleged. The defendants no.1 to 3 controverted other allegations of the plaintiff. The defendant no.4 was ordered to be deleted vide order dated 21.01.2003.
4. The plaintiff filed replication to the written statement of defendants no.1 to 3. The plaintiff in the replication reasserted and reaffirmed the previous stand and denied the pleas/defence taken by the defendants no.1 to 3.
5. The following issues were framed vide order dated 25.07.2003:-
1. Whether the suit is barred by limitation? OPD.
2. To what amount the plaintiff is entitled to recover and against whom? OPP.
3. Whether the plaintiff is entitled to any interest, if so, on what amount, at what rate and for what period? OPP
4. Relief 5
6. The plaintiff tendered his affidavit in evidence which is Ex.P1. The plaintiff as PW1 referred documents which are Ex.PW1/1 to Ex.PW1/10. The plaintiff also examined Mohd.Rafi Haider, Officer from Dena Bank, Karol Bagh Branch, New Delhi who proved documents Ex.PW2/1 to Ex.PW2/55. The defendants no. 1 to 3 have examined the defendant no.1, Avtar Singh as DW1 who tendered his affidavit which is Ex.D1. The defendant no.1 referred documents which are Ex.DW1/1 and Ex.DW1/2.
7. Sh.Aman Mehta, Advocate, counsel for the plaintiff and Sh.Yashvir Sethi, Advocate, counsel for the defendants no.1 to 3 heard. Record perused. My issue wise findings are as under:--
8. Issue No.1.
Whether the suit is barred by limitation? OPD.
The defendants no.1 to 3 in preliminary submission no.1 stated that the suit is barred by limitation and the plaint is liable to be rejected under Order VII Rule 11 of Code of Civil Procedure, 1908. The defendants no.1 to 3 also stated that the plaintiff is claiming the commission on exports as per the averments made in the plaint till 29.06.1999 and the suit is filed on 23.07.2002 as such suit is barred by limitation. The plaintiff has stated that he has worked with the defendants no.1 to 3 till July, 1999 as per the terms and conditions entered upon between the plaintiff and defendant no.1 on 01.04.1998 as per letter Ex.PW1/1 ( Ex.P1). The defendants no.1 to 3 also stated that the plaintiff has 6 withdrawn salary from M/s.Aero Club till July, 1999 when he settled all his accounts. The defendants no.1 to 3 in para no.1 of reply on merits stated that the plaintiff was working as Supervisory Consultant for promotion of the export business for defendants no. 1 to 3 from 01.04.1998 till 24.07.1999. The plaintiff is claiming the commission on the basis of actual turnover for the period 1998- 1999, 1999-2000 i.e.upto 24.07.1999. The cause of action for filing the suit accrued in favour of the plaintiff on 24.07.1999 when the plaintiff has stated to resigned from the services of the defendants no.1 to 3. Even as per Article 7 of the Schedule attached to the Limitation Act, 1963, the suits relating to contract for wages in case of any other person can be filed within a period of three years when the wages accrued due. The wages as per the terms of the agreement Ex.PW1/1 (Ex.P1) accrued in favour of the plaintiff on 24.07.1999. The suit was filed on 23.07.2002. The suit was filed within a period of three years from the date when the wages have accrued in favour of the plaintiff and against the defendants no.1 to 3. The suit is within the period of limitation. The issue no.1 is decided in favour of the plaintiff and against the defendants no.1 to 3.
9. Issue No.2 To what amount the plaintiff is entitled to recover and against whom? OPP.
The plaintiff is claiming that he was appointed as a supervisory 7 consultant for the smooth functioning of export business of the defendants no. 1 to 3 all over the world except Canada and Russia by the defendant no.1 vide letter dated 01.04.1998 Ex.PW1/1 (Ex.P1). The plaintiff in support of his claim tendered affidavit which is Ex.P1. The plaintiff in affidavit Ex.P1 deposed that he was appointed to provide the supervisory consultancy services for the smooth functioning of export business of the defendants all over the world except Canada and Russia w.e.f.01.04.1998 on terms and conditions as contained in letter dated 01.04.1998 Ex.PW1/1 (Ex.P1) and he continued to work with defendants no.1 to 3 till 24.07.1999 when he resigned from the services of the defendants. The plaintiff further deposed that the defendants no.1 to 3 have agreed to pay a total commission of 1% on the total FOB value of order that is true total turn over on the export in consideration of the services rendered by him. The plaintiff further deposed that the defendants have agreed to pay tentative quarterly commission of Rs.50,000/- at the end of each quarter which was liable to be adjusted and deducted from the total commission of 1% of the FOB value of total export. The plaintiff further deposed that during the financial year 1998-1999 and 1999-2000 i.e.upto 24.07.1999 total export to the regions handled by the plaintiff was amounting to Rs.10,43,10,115/-, as such he is entitled to have Rs.10,43,101/- . The plaintiff further deposed that he has received a sum of Rs.2,37,250/- after deducting TDS on Rs.2,50,000/-and as such defendants no.1 to 3 are liable to pay Rs.7,93,101/-as balance commission 8 for the said period. The plaintiff also proved the copies of export proceeds for 1998-1999 upto July, 1999 as Ex.PW1/2. The plaintiff further deposed that he has requested the defendants no.1 to 3 to pay the balance commission of 1% on the export proceed vide letter dated 16.08.1999 Ex.PW1/3 and notice dated 21.05.2002 Ex.PW1/8. The plaintiff also proved the letters confirming the receipt of payment of Rs.2,37,250/- as Ex.PW1/4 and Ex.PW1/5.
10. The defendants no.1 to 3 stated that the plaintiff is the first cousin of the defendant no.1 and due to this relation, the plaintiff has worked with the Aero Group of the defendant no.1 and his family in various capacities since 1985. The plaintiff in the year 1998 has offered his services for the export promotion and expansion of the export of the defendant business for which the plaintiff has prepared a letter dated 01.04.1998 which was signed by the defendant no.1 in good faith. The defendants no.1 to 3 stated that any amount of commission in excess of minimum stipulated quarterly fee will be payable to the plaintiff only on the European incremental business if there was an increase of more than 20% in the value of exports over the exports in previous years. The defendants no.1 to 3 stated that the plaintiff has been paid upto July, 1999 by M/s.Aero Club towards full and final settlement of account.
The defendants no. 1 to 3 in support of defence tendered the affidavit of DW1 Avtar Singh which is Ex.D1. The defendant no.1 in affidavit Ex.D1 stated that the plaintiff has offered services for the export promotion and 9 expansion of export business of defendants for which he prepared a letter dated 01.04.1998 Ex.PW1/1 (Ex.P1) which was signed by defendant no.1 in good faith. The defendant no.1 deposed that plaintiff was entitled for the payment over the minimum quarterly stipulated fee only on the European incremental business and if there was an increase of more than 20% in value of exports over the exports of the previous year. The defendant no. 1 further deposed that the plaintiff could not promote the export business of Aero Shoes and as such the services of the plaintiff was removed after payment of his minimum stipulated commission of Rs.50,000/- upto June, 1999 in full and final settlement of his accounts. The defendant no.1 deposed that plaintiff has never introduced even a single foreign buyer during his tenure to defendants no.1 to 3 and M/s.Helioform of Netherland was not introduced during his tenure which in fact was in business terms with the defendants no.1 to 3 as clear from the invoices Ex.DW1/1 and Ex.DW1/2.
11. The few facts are clear from the respective pleadings and evidence of the parties. The plaintiff and defendant no.1 are the close relatives i.e. plaintiff is the first cousin of defendant no.1. The defendants no.1 to 3 are running their business under the name and style of M/s.Aero Shoes, M/s.Aero Club etc. The plaintiff had worked with the defendants no.1 to 3 in various capacities since 1985. The plaintiff was appointed as a supervisory consultant by the defendant no.1. The plaintiff has worked as Supervisory Consultant till 24.07.1999. The 10 plaintiff was paid a sum of Rs.2,37,250/- after deducting TDS from Rs.2,50,000/- as minimum stipulated commission.
The dispute between the plaintiff and defendants no.1 to 3 is that as per the plaintiff, he was appointed as a supervisory consultant vide letter Ex.PW1/1 (Ex.P1) w.e.f.01.04.1998 for providing supervisory consultancy services for the smooth functioning of the export business with European and other countries as may be entrusted to the plaintiff from time to time while as per the defendants no.1 to 3, the plaintiff was appointed to provide supervisory consultancy services only for the promotion of export business of defendants no.1 to 3 w.e.f.01.04.1998 to 24.07.1999 on the condition that there will be an increase of more than 20% in the value of exports over the exports of the previous year and the letter Ex.PW1/1 (Ex.P1) which was prepared by the plaintiff was signed by the defendant no.1 in good faith.
12. Sh.Aman Mehta, Advocate, counsel for the plaintiff has argued that the plaintiff was appointed to provide supervisory consultancy services for the smooth functioning of export business of defendants no.1 to 3 all over the world except Canada and Russia and for that services to be rendered by the plaintiff, the defendant no.1 has agreed to pay 1% commission on the total FOB value of order that is the true total turnover in the region for which the services were to be rendered by the plaintiff; the letter Ex.PW1/1 (Ex.P1) was prepared and signed by the defendant no.1 after going through its contents; 11 and the defendants no.1 & 3 have not replied paras 1,3,4,5 and 6 of the plaint specifically .
Sh.Yashvir Sethi, Advocate, counsel for the defendants no.1 to 3 argued that the letter Ex.PW1/1 (Ex.P1) was prepared by the plaintiff himself and signed by the defendant no.1 in good faith due to his relation with plaintiff; the plaintiff was appointed as a supervisory consultant for the promotion of export business of defendants no.1 to 3; and it was agreed that there should be at least an increase of 20% in the value of exports over the exports of the previous year; the plaintiff was paid upto 24.07.1999 for the services rendered by him after full and final settlement of his accounts; the plaintiff during cross examination deposed that he was got introduced M/s.Helioform of Netherland which in fact was having the business dealings with the defendants no.1 to 3 prior to 01.04.1998 as clear from the invoices Ex.DW1/1 and DW1/2; and the suit is liable to be dismissed.
13. To resolve the controversy between the parties, it is necessary to go through the contents of Ex.PW1/1 (Ex.P1). The contents of letter Ex.PW1/1 ( Ex.P1) are reproduced as under for the facility of reference :-
Mr.M.L.Kalra Dear Sir, We hereby confirm the following terms and conditions agreed between w.e.f.April Ist,1998:--
You shall provide us Supervisory Consultancy Services for the smooth functioning of our Export Business with Europe and other countries as may be entrusted to you from time to 12 time.
In consideration of the services rendered by you, We shall pay you a total commission of one percent (1%) on the total (FOB) value of order as the case may be that is true total turnover on the export in the above region as agreed upon. The aforesaid commission payable to you shall be inclusive of all incidental, out of pocket expenses and as well as other office or administrative expenses that may be incurred by you in the performance of the services accordingly shall be borne by you.
You will be entitled to receive tentative quarterly commission of Rs.50,000/-(Rupees Fifty Thousand only) at the end of each quarter and the same will be adjusted at the the end of each financial year.
All payments made to you, shall be on account and adjustment towards commission due on stated above. Any difference arising upon final calculation shall be either paid to you or refunded by you as the case may be.
You may kindly sign and return the duplicate copy as confirmation of the aforesaid terms and condition.
Yours sincerely, FOR AERO SHOES (Partner)
14. The perusal of letter Ex.PW1/1 ( Ex.P1 ) reflects that it is signed by the defendant no.1 at point A. The plaintiff was appointed to provide supervisory consultancy services for the smooth functioning of export business of defendants no.1 to 3 with Europe and other countries as may be entrusted to him from time to time. The letter ExPW1/1 also contained clause regarding the payment of commission. It appears that the defendant no.1 has agreed to pay a total commission of 1% on the total FOB value of order as the case may 13 be that is true total turnover on the export in the region in consideration of the services rendered by the plaintiff. The commission was inclusive of all incidental, out of pocket expenses as well as other office or administrative expenses that may be incurred by the plaintiff in performance of the services. The plaintiff was also entitled to receive tentative quarterly commission of Rs.50,000/- at the end of each quarter subject to adjustment at the end of each financial year.
It is reflected from letter Ex.PW1/1 (Ex.P1) that the plaintiff was entitled for the payment of total commission of 1% on the total FOB value of order as the case may be that is true total turnover on the export in the regions assigned to the plaintiff. The execution of letter Ex.PW1/1 (Ex.P1) is not denied by the defendants no.1 to 3. The letter Ex.PW1/1 ( Ex.P1) does not contain the stipulation that it was agreed upon between the plaintiff and defendant no.1 that the appointment was for a period of one year and that any amount of commission in excess of minimum stipulated quarterly fee will be payable to the plaintiff only on the European incremental business and if there was an increase of more than 20% in the value of exports over the exports in each previous year. The plaintiff vide letter Ex.PW1/1 ( Ex.P1) was only appointed to provide supervisory consultancy services for the smooth functioning of export business of the defendants no.1 to 3. The plaintiff was not appointed for the promotion of export business of defendants no.1 to 3 as 14 alleged in the written statement. The plea of the defendants no.1 to 3 that the defendant no.1 has signed the letter Ex.PW1/1 (Ex.P1) in good faith does not inspire confidence. The defendant no.1 himself made correction in Ex.PW1/1 (Ex.P1) regarding the payment of tentative quarterly commission of Rs.50,000/- at the end of each quarter. This correction appears to have been made by the defendant no.1 after going through the contents of letter Ex.PW1/1 (Ex.P1).
15. During the cross examination of plaintiff, a suggestion was put to the plaintiff that he is not entitled to get commission in respect of exports made by the defendants through him to Dubai and USA. It implies that the plaintiff was not entitled to receive commission on the exports made to Dubai and USA but was entitled to receive commission on the exports made to other countries. There is nothing on record which can suggest that the plaintiff was appointed for the expansion and promotion of export business of defendants no.1 to 3 and was also responsible to increase the export more than 20% in the value of exports over the exports in each previous year. The defendants no.1 to 3 are running business at international level. It cannot be expected from the defendant no.1 that he has signed the letter Ex.PW1/1 (Ex.P1) without going through its contents. It does not appeal to reasons that the defendant no.1 has signed the letter Ex.PW1/1 (Ex.P1) in good faith particularly when the terms and conditions of the appointment of the plaintiff was settled vide letter 15 Ex.PW1/1 (Ex.P1). No oral evidence can be taken into consideration for other terms allegedly agreed upon between the plaintiff and the defendant no.1 regarding the promotion and expansion of export business of defendants no.1 to 3. The plea of the defendants no.1 to 3 that the plaintiff has not introduced M/s Halloform of Netherland during his tenure for the period w.e.f.01.04.1998 to 24.07.1999 also does not provide much help to the defendants no.1 to 3 because it was not the duty of the plaintiff as per Ex.PW1/1 (Ex.P1) to expand and promote the export business of the defendants no.1 to 3.
16. The plaintiff is claiming that during the period 1998-1999 and upto July, 1999 the total FOB was Rs.10,43,10,115/- as clear from Ex.PW1/2. The total FOB for the said period is not denied and disputed by the defendants no.1 to 3. The plaintiff is entitled to 1% commission on the total FOB value of order in terms of letter Ex.PW1/1 (Ex.P1) which comes to Rs.10,43,101/-. The plaintiff has stated that he has already received Rs.2,50,000/- which was acknowledged vide letters Ex.PW1/4 and Ex.PW1/5. The defendants no.1 to 3 are liable to pay Rs.7,93,101/- as balance commission on the total FOB for the year 1998-1999 and upto July, 1999. The issue no.2 is decided in favour of the plaintiff and against defendants no.1 to 3.
17. Issue No.3 16 Whether the plaintiff is entitled to any interest, if so, on what amount, at what rate and for what period? OPP The plaintiff is claiming interest @ 18% per month. There was no agreement regarding the payment of interest by the defendants no.1 to 3 to the plaintiff in terms of letter Ex.PW1/1 (Ex.P1). The defendants no.1 to 3 have retained Rs.7,93,101/- to be payable to the plaintiff. The defendants no.1 to 3 are directed to pay interest @ 9% p.a. on Rs.7,93,101/- for the period w.e.f.24.07.1999 till realization. The issue no.3 is decided accordingly.
18. Issue no.4 Relief.
The suit of the plaintiff is decreed and a decree of Rs.7,93,101/- is passed alongwith interest @ 9% p.a. w.e.f. 24.07.1999 till realization alongwith proportionate cost in favour of the plaintiff and against defendants no.1 to 3. The decree sheet be prepared accordingly. File be consigned to the record room.
Announced in the open court (Dr.Sudhir Kumar Jain) Dated: 07.04.2007 Additional District Judge, Delhi 17 S.No. 02/05 30.03.2007 Present: Sh.Aman Mehta, Advocate for the plaintiff. None for the defendants no.1 to 3. Order not ready. Put up on 07.04.2007 for orders. (Dr.Sudhir Kumar Jain) Additional District Judge, Delhi. 07.04.2007 Present: None.
Vide separate judgment, the suit of the plaintiff is decreed and a decree of Rs.7,93,101/- is passed alongwith interest @ 9% p.a. w.e.f.24.07.1999 till realization alongwith proportionate cost in favour of the plaintiff and against defendants no.1 to 3. The decree sheet be prepared accordingly. File be consigned to the record room.
(Dr.Sudhir Kumar Jain) Additional District Judge, Delhi.
07.04.2007.