Delhi High Court
Taneja Skins Co. Pvt. Ltd. vs Bharath Skins Corporation on 29 August, 2001
Equivalent citations: AIR2002DELHI179, 2002(61)DRJ1, AIR 2002 DELHI 179, (2002) 61 DRJ 1
JUDGMENT V.S. Aggarwal, J.
1. M/s Taneja Skins Co. Pvt. Ltd. has filed the present suit against M/s. Bharath Skins Corporation (for short the defendant) for recovery of Rs. 26,30,000/-.
2. The facts alleged are that the defendant has been purchasing from the plaintiff skins and hides of various qualities on credit basis from time to time. The plaintiff had opened an account of the defendant in its books of accounts and the purchases so made by the defendant from the plaintiff were duly and regularly debited to the said account of the defendant. Similarly, the payments received from the defendant from time to time have also been duly and regularly credited to the said account of the defendant maintained by the plaintiff in its books of accounts. The books of accounts are regularly maintained in the ordinary course of business. In this process, the defendant had opened a running account wherein purchases made by the defendant from the plaintiff were duly debited from time to time. Similarly. the payments received from time to time were also duly credited. On 1.7.1978 a sum of Rs. 1,00,518.05 was outstanding from the defendant. The said balance outstanding was adjusted by the defendant on 23rd October, 1978. The defendant continued to make purchases of skins and hides from the plaintiff and the said purchases made by the defendant from the plaintiff had been duly debited to the running account of the defendant maintained by the plaintiff in the ordinary and regular course of business. Details of the purchases made have been given in the plaint. It is asserted that a sum of Rs. 19,45,982.26 was outstanding to the plaintiff on 6.6.1985.
3. As per the plaintiff, defendant had promised to make the payment of the balance amount and to clear the dues of the plaintiff in the first week of June 1985. It had failed to make the payment. A notice in this regard dated 26th June, 1985 was served by the plaintiff. After receipt of the notice a reply was sent and a further payment of Rs. 2,000/- in cash on 24th July, 1985 and Rs. 5,000/- vide cheque dated 30th July, 1985 had been received. Interest is also claimed on the balance amount at the rate of 18% per annum and on basis of these facts the present suit has been filed.
4. In the written statement filed the civil suit has been contested. It is admitted that defendant had been purchasing from the plaintiff skins of various qualities from time to time. The last supply of skins was made by the plaintiff to the defendant on 3rd September, 1982. This was to a sum of Rs. 49,980/-. The said amount of Rs. 49,980/- was paid by the defendant vide one cheque of Rs. 1,000/-, draft of Rs. 20,000/- and three cheques of Rs. 10,000/-, Rs. 7,000/- and Rs. 7000/- respectively. They were drawn on Punjab National Bank, Madras. On account of some of the goods being sub-standard reduction of Rs. 5880/- was made and adjusted against the payments as mentioned above. Upon the cheque of Rs. 7,000/- being returned without payment a fresh payment was made vide a cheque dated 28th January, 1983. In this process, the entire supply was completed. Defendant contended that it is not aware of the manner in which the transaction between the parties were recorded in the books of accounts of the plaintiff. However, it is denied that account was mutually opened and current account, as alleged by the plaintiff. It is insisted that last transaction between the plaintiff and the defendant as mentioned above was fully paid. Even with respect to the earlier supplies full and complete payments are stated to have been made. It is denied that there was a running account between the parties.
5. The defendant pleads that during the period 11-8-1978 to 3-9-1982 the defendant made purchases indicated by the plaintiff except certain items of the year 1979 which are stated to be in dispute. It is denied that purchases of these items were made. It is also denied that defendant had promised to make payments of the balance amount. The suit is also stated to be barred by time and further plea has been raised that civil courts at Delhi have no jurisdiction to entertain the suit.
6. The plaintiff preferred a replication and assertions of the defendant to the contrary were controverter. It is denied that goods or any part were found to be sub-standard or that any reduction in the amount of Rs. 5,880/- was allowed. It is insisted that the account was mutually opened and are running account.
7. From these pleadings of the parties this court on 10th April, 1987 had framed the following issues:-
1. Whether this court has territorial jurisdiction to try the suit?
2. Whether the suit is within time?
3. Whether the plaintiff supplied the goods vide Bills No. 3680 dated 12.9.1979, 3688 dated 15.9.1979, 3700 dated 25.9.1979, 3707 dated 28.9.1979, 3758 dated 29.9.1979, 3714 dated 6.10.1979, 3720 dated 10.10.1979, 3721 dated 10.10.1979 to the defendant?
4. Whether the defendant made cash payment of Rs. 300/- on 6.6.1985 and Rs. 2000/- on 24.7.1985 towards the goods supplied by the plaintiff?
5. Whether the defendant made payment of Rs. 5000/- by cheque on 13.7.1985 for fresh supply of goods?
6. To what amount, if any, the plaintiff is entitled?
7. Whether the plaintiff is entitled to interest? If so at what rate?
8. Relief.
8. Issue No. 1: On behalf of the defendant it was insisted that all the payments were made in Tamil Nadu and the goods were also supplied at Tamil Nadu. Consequently it was insisted the civil courts at Delhi has no jurisdiction to entertain the suit.
9. In support of this plea R. Srinivasan had appeared as DW1. He is the partner of the defendant firm. He stated that goods used to be sent by the plaintiff by transport to the tanneries of the defendant either at Dindigul or at Trichi. The plaintiff used to collect the payments by way of cheques drawn at Madras. By coming to the place of the defendant at Madras the cheques used to be presented by the plaintiff to its bankers at Delhi. During cross-examination the witness stated that goods used to be transported in lorries. In the lorry receipts plaintiff used to be shown as consignor. He insisted that skins used to be inspected by the tanneries people and not at Delhi but he admitted that defendant used to send Sales Tax Declaration forms to the plaintiff at Delhi. In the case of skins purchased from the plaintiff inspection used to be carried only in Tamil Nadu. He further stated that one Rahim was the commission agent of the defendant but not the employee. Rahim used to purchase goods on their behalf and defendant used to pay commission to him. He stated that account of the commission paid by the defendant to Rahim was available but he had not brought the same. Rahim was stated to be working not in Delhi but at Amritsar. He denied the suggestion that in fact he was working at Amritsar. He further denied that they used to send payments at Delhi. As against this evidence, G.C. Taneja had appeared as PW1. He was the Director of the plaintiff company. As per this evidence the defendant used to purchase the skins from the plaintiff. One employee of the defendant Rahim was posted at Delhi. He used to select the goods and purchase it on behalf of the defendant. He used to bring the truck and get the goods loaded in it. In the goods received the plaintiff used to be shown as the consignor and defendant as the consignee.
10. It was not disputed during the course of submissions that even under Section 20 of the Code of Civil Procedure if cause of action had arisen at Delhi indeed civil courts at Delhi will have jurisdiction to entertain the civil suit.
11. From the evidence on the record it is patent firstly that one Rahim used to act on behalf of the defendant though defendant asserts that he was only a commission agent. The plaintiff's contention is that he in fact was an employee of the defendant. The defendant feels shy of producing the employees register to indicate that he was not the employee and therefore necessary inference has to be drawn against the defendant in this regard. Rahim should be taken to be an employee acting on behalf of the defendant.
12. Once he was coming to Delhi and accepting the goods and the transport travel receipts were given at Delhi it must be taken that delivery was taken at Delhi. It was the carrier to whom goods were handed over as is evidence which used to carry the goods. Necessary consequence would be that it must be held that delivery of the goods to the defendant was made at Delhi and consequentially the civil courts at Delhi will have jurisdiction to entertain the suit.
13. Reference in this connection can well be made to the decision of the Supreme Court in the case of Agricultural Market Committee v. Shalimar v. Chemical Works Ltd. . In the cited case, the goods were ascertained. It was one of the terms of the contract that seller could be liable for any future loss of the goods. The payment of the goods by the purchaser was done in his State but the delivery was effected in the State of the seller. It was held that sale could be said to have taken place in the State of the seller and not in the State of the purchaser. Identical would be the position of the present case. Once delivery had been taken at Delhi as held above, the conclusions are obvious that civil courts at Delhi has the jurisdiction to entertain the suit. The issue is decided in favor of the plaintiff.
14. Issue No. 2: It is the assertion of the plaintiff that it was a running account wherein purchases made by the defendant were duly debited from time to time and payments received were also entered according. As per the plaintiff the last supply was effected on 3rd September, 1982 and the civil suit was filed on 2nd September, 1985 and thus is within time. On the contrary, the assertions of the defendant has been in terms that it was not a running account. With respect to the last supply referred to dated 3rd September, 1982 for Rs. 49,980/- the payment was made by virtue of certain cheques and drafts and goods worth Rs. 5880/- were found to be sub-standard. In other words, as per the defendant though there were no dues for the earlier supplies still in any case the said claim is barred by time. In support of this contention the learned counsel referred to certain precedents and it would therefore be in the fitness of things to make a reference to tem. In the case of Narayan Pillai v. Narayanan Vanajakshi AIR 1956 Kerala 93, it was held that in a case where goods were delivered to the defendant from time to time on account of cause of action may be one for all, for the items delivered starting point must be taken to be the date of delivery of the goods. Similarly in the case of A.K.S. Muhammad Sultan Rowther & Co. v. Manickam Chettiar when a similar question came up the consideration it was held:
"But if the date corresponding to that delivery and the dates of subsequent deliveries which remain unadjusted fall within the three year period of limitation, the claim for the corresponding amounts will be in time. Applying the aforesaid principle to the plaintiff's statement of account (which the learned district Munsif has found to be correct and acceptable) I find that the payments on the credit column are sufficient to wipe off all outstandings on account of the deliveries made prior to 4.12.1954....."
15. Reference with advantage can also be made to the decision of the Division Bench of the Patna High Court in the case of State of Bihar & Anr. v. Motilal Chamaria and Anr. AIR 1964 Patna 127. The Patna court held:
".....This Article applies to a case where balance is due on mutual, open and current account and when there had been reciprocal demand between the parties. If the account is like that, then three years limitation is provided for from the close of the year in which the last item admitted or proved has been entered in the account. The distinctive features of a mutual account are that there should be two sets of independent transaction between the parties and in one transaction one of the parties should be debtor and the other creditor, whereas, in the other transaction the parties should occupy reverse positions. Besides that, the dealings should indicate independent obligation on both sides and nor merely obligations on one side....."
16. The decision of the Supreme Court in this regard where there were reciprocal demands, Supreme Court held that there was no reciprocity of dealings. The payments had been made after the goods had been delivered. The court held that in that even the claim would be barred by time.
17. However, it must be stated that in the case of Hindustan Forest (supra) Supreme Court held that there was no hint that the account was mutual. In other words., if it is a mutual running account that is being maintained in that event limitation would not end with the supply but would keep on being extended when the last payment is made. With this backdrop one can revert back to the facts of the present case.
18. As mentioned above, the plaintiff's assertion is that there was a running account. The copy of the ledger has been produced as PW 1/59 to PW 1/70. Gokal Chand who appeared as PW 1 has also stated that a running account had been maintained in the books of accounts. The document was exhibited without any objection. As against this, the defendant felt shy and has not cared to produce their books of accounts which are stated to be maintained. The conclusions are obvious therefore that the best evidence that could have been produced has been withheld.
19. When a party in possession of the evidence does not produce the same, the court would be justified in drawing the adverse interference that had it been produced it would not have supported its case. From the aforesaid the conclusion drawn are that there in fact was a running account and therefore when suit has been filed within three years of the last supply and the payment it would be within time.
20. Great stress has been laid on the fact that the last supply was to a sum of Rs. 49,980/- and payment had been made in the from of one draft of Rs. 20,000/- dated 21st October, 1982 and 4 cheques of Rs. 1,000/-, Rs. 10,000/-, Rs. 7,000/- and Rs. 7000/- each dated 18.10.1982, 25.10.1982, 30.10.1982 and 5.11.1982 respectively. Indeed this will not establish the claim that has been set up. To crown all this, it was asserted that Rs. 5880/- was to be reduced on account of goods being sub-standard. The evidence in this regard is totally incomplete and insufficient to establish that this was only with respect to that particular supply of the goods. There is no written letter to show that this was being paid against any particular supply of the articles. Therefore, the said contention necessarily must fail and is rejected.
21. As already pointed above, when the payment had been made after the last supply the account was mutual and the suit has been filed within three years of the same it must be held to be within time. Issue is decided in favor of the plaintiff.
22. issue Nos. 3 to 6: All these issues are interconnected and can conveniently be disposed together. So far as the payment of Rs. 5000/- is concerned the same is admitted but there is little evidence to show that it was for fresh supply of goods. The statement of R. Srinivasan only indicates that he was stating on his memory by stating "I remember we had issued a cheque of Rs. 5000/- dated 30th July, 1985 to the plaintiff through its representative Ram Charan Dass for starting new business." This indeed does not establish what had been alleged. Consequently it cannot be held that it has been proved that Rs. 5000/- had been paid for fresh supply of goods. There was no occasion also for making such a payment.
23. It is in evidence that invoices were being issued. PW 1/3 to PW 1/58 are the copies of the same. In addition to that reference can well be made to the letter written by Bharat Skins Corporation to the plaintiff M/s. Tanjea Skins Co. Pvt. Ltd. dated 9th February, 1980. It is PW 1/58. The same reads as under:
"Dear Sirs, Re: Your bill Nos. 3611, 3619, 3629, 3645, 3053, 3654, 3659, 3663, 3668, 3731, 3732, 3680, 3700, 3688, 3707, 3708, 3714, 3720, 3721, 3731 and 3732 for supply of raw skin s of goat and sheep.
*** In respect of your bill Nos. 3611, 3619 and 3629, we had already issued 'H' forms and were sent to you some time Back.
As regards the other bills referred to above, we send herewith 'H' forms Nos. L248228 to 248243 receipt of which please acknowledge.
Yours faithfully for BHARAT SKINS CORPORATION Encl: 'H' Forms as above"
It is followed by the next letter written by the defendant through its partner to the plaintiff on 19.6.1980 and same also is reproduced for the sake of facility. The same is PW1/74.
"Dear Sirs, We should like to inform you that the following eight bills which are already in the name of Bharath Prime Tanners, Sembattu Trichi, now have been transferred in the name of Bharath Skins Corporation, Madras-3.
Bill No. Date Amount 3680 12.9.79 1,93,815.00 3688 15.9.79 2,48,538.00 3700 25.9.79 2,45,318.00 3707 28.9.79 72,704.00 3708 29.9.79 89,676.00 3714 6.10.79 2,13,662.00 3720 10.10.79 53,460.00 3721 10.10.79 2,30,676.00 Thanking you, Yours faithfully for BHARATH SKINS CORPORATION PARTNER"
24. The next correspondence that is the letter PW 1/76 written by Bharath Prime Tanners to Taneja Skins Co. (P) Ltd. clearly indicates that eight bills which were disputed had already been in the name of Bharath Prime Tanners and have been transferred to Bharath Skins Corporation. The letter is to the following effect.
"Dear Sirs, We would like to inform you that the following eight bills which are already in our name have now been transferred in the name of M/s. Bharath Skins Corporation, Madras 600 003.
Bill No. Date Amount 3680 12.9.79 1,93,815.00 3688 15.9.79 2,48,538.00 3700 25.9.79 2,45,318.00 3707 28.9.79 72,704.00 3708 29.9.79 89,676.00 3714 6.10.79 2,13,662.00 3720 10.10.79 53,460.00 3721 10.10.79 2,30,676.00 Thanking you, Yours faithfully for BHARATH PRIME TANNERS PARTNER"
25. The letters which are established on the record to have been sent in due course establishes that the goods had been supplied and therefore in pursuance thereto they were transferred in the name of the defendant for which the liability necessarily had accrued. There is no reason to discard the same and mere denial as such will not be of much consequence. The statement of the plaintiff witness in this regard therefore must prevail and it must be held that the said articles had been supplied.
26. It has already been referred to above that the defendant has not cared to produce his accounts books. The accounts of the plaintiff clearly show that the amount is due as claimed in the plaint. This is supported by the fact that the goods referred to above vide the eight disputed bills even had been supplied. Therefore, it must be held that the plaintiff's claim necessarily must be accepted and therefore issues have to be decided in favor of the plaintiff and against the defendant. Even the Central Sales Tax forms have been issued and signed by the defendants. The same were not in dispute and consequently it only lends support to the claim of the plaintiff that the amount is due.
27. Issue No. 7: The plaintiff has claimed interest at the rate of Rs. 18% per annum. On each of the bill the said amount has been mentioned to be the rate of interest. As already pointed out the vouchers have not been seriously disputed and had been issued. In other words, the same must be taken to be so accepted. As a consequence thereto it must be held that plaintiff is entitled to the interest at the rate of 18% per annum.
28. For these reasons given above the suit of the plaintiff is decreed to a sum of Rs. 26,30,000/- with costs and interest at the rate of 18% per annum from the date of the filing of the suit till the payment is made.