Delhi District Court
M/S Olam Agro India Ltd vs Vishal Bhatia on 5 October, 2012
IN THE COURT OF SH. DINESH BHATT, PO,MACT/ ADJ/(N)/ TIS HAZARI
COURTS, DELHI
Civil Suit No.:38/11
Unique ID no.:02401C0255142011
M/s Olam Agro India Ltd.
Regd Off: DLF Building No. 8,
TowerA, Ground Floor,
Cyber City, Phase II,
Gurgaon ..........Plaintiff
Versus
Vishal Bhatia
Prop. of VV Traders
514, Katra Ishwar Bhawan,
Khari Baoli, Delhi ..........Defendants
Date of Institution : 03/06/2011
Date on which order was reserved : 01/10/2012
Date of Decision : 05/10/2012
J U D G M E N T:
1. This is a suit for recovery of Rs. 10,70,670/ from the defendant on account of outstanding amount of value of goods supplied alongwith interest.
2. Plaintiff's case is that it was a incorporated company and has authorized Sh. Sanjeev Mishra its Company Secretary vide Board Resolution dated 28/03/2011 to sign, Civil Suit no.:38/11 Page 1/15 verify and institute the present suit. Defendant proprietor of VV Traders was engaged in business of almonds and dry fruits. On 15/03/2010 defendant had placed with plaintiff an order of supply of 150 bags of almonds, which were supplied on 31/03/2010 vide invoice for an amount of Rs. 10,07,148/. Defendant made part payment but failed to clear the outstanding payment of Rs. 8,86,960/. Vide confirmation dated 24/11/2010 defendant acknowledged the said outstanding liability. Plaintiff again vide letter dated 08/01/2011 requested for the payment of the outstanding amount but no payment was made. After several correspondence and efforts, defendant towards part payment issued 04 cheques for total amount of Rs. 7,35,000/ but the said cheques were also returned unpaid vide memo dated 10/02/2011 with remarks 'insufficient funds'. Legal notice of dishonour of cheques on 14/02/2011 was sent but even then no reply/payment was received. Plaintiff has claimed recovery of Rs. 8,86,960/ together with interest @ 18% p.a.
3. Defendant has filed written statement stating that the suit was not maintainable as entire outstanding payment had already paid and there was no outstanding amount against him. The 04 cheques in question were in fact handed over to the plaintiff as security cheques, which were to be returned after receipt of payment by the plaintiff, but, despite having received payment the said cheques were not returned to him. It is also stated that the present suit was not maintainable as the same was not filed, verified or instituted by duly authorized person by the Board of Directors of the plaintiff company.
On merits, status of plaintiff as company, being engaged in business with defendant is admitted. The Board Resolution dated 28/03/2011 is denied. It is stated that the plaintiff company through Sh. Ravinder Mehta had taken the said 04 cheques in question from defendant only as security. Defendant after clearing all his payment of the goods sent through invoice in question had requested the concerned officials of the plaintiff company Civil Suit no.:38/11 Page 2/15 for returning of the cheques but had conveyed him that the said 04 cheques had been misplaced. Ravinder Mehta, General Manager of plaintiff had undertaken that as and when the cheques would be found they would be returned to the defendant. But plaintiff's intention became dishonest and by misusing the said security cheques in question had filed a false case U/s 138 N.I. Act and the present suit. Defendant had also lodged a criminal complaint against the said Ravinder Mehta for committing fraud. Acknowledgment of the outstanding amount as per confirmation dated 24/11/2010 is denied. It is stated that the said document was forged and that defendant had neither acknowledged nor signed the said document. Receipt of notice dated 14/02/2011 is also denied. Claim of plaintiff is denied on the ground that there was no outstanding amount against the defendant. Entitlement of interest is also denied.
4. Plaintiff has filed replication wherein contents of plaint were reiterated. Preliminary objections of defendant are denied. It is stated that the said 04 cheques in question were issued by the defendants towards part payment of the outstanding amount and not as security. Further defendant had assured them that balance outstanding amount would be paid by the end of 2011.
5. From the pleadings of parties followings issues were framed for consideration:
1. Whether the plaintiff is entitled to recovery of Rs.
10,70,670/ from the defendant, as alleged? OPP.
2. Whether the plaintiff is also entitled to interest @ 18% p.a., as alleged? OPP.
3. Whether the suit is not maintainable? OPD.
4. Whether the suit is not properly signed, verified and Civil Suit no.:38/11 Page 3/15 instituted by a duly authorized person? OPD
5. Relief.
Plaintiff has examined 04 witnesses and defendant has examined 02 witnesses.
6. PW2 is the AR and Company Secretary of the plaintiff and stated that vide Resolution Ex. PW2/1 had been authorized to file, sign, verify and persue the present suit. He stated that defendant as proprietor of VV Traders was dealing in business of almond and dry fruits, on 15/03/2010 had placed an order with plaintiff for supply of 150 bags of almonds which was delivered to him on 31/03/2010 vide invoice Ex. PW2/2. Defendant paid some amount but Rs. 8,86,960/ was outstanding which was never paid and was also confirmed by him vide Ex. PW2/3 confirmation dated 24/11/2010. The satement of accounts maintained in usual course of business in respect of defendant was Ex. PW2/4. Defendant was sent letter dated 08/01/2011 informing the balance amount and after several correspondence and efforts, defendant issued 04 cheques Ex. PW1/1 to Ex. PW1/4 all dated 04/02/2011 for a total sum of Rs. 7,35,000/ as part payment of the outstanding amount. The said cheques were however, returned unpaid with remarks 'insufficient funds' vide returning memo Ex. PW1/5 to Ex. PW1/8. Legal notice Ex. PW2/5 was sent through courier to defendant, the same was delivered vide Ex. PW2/6 and the proof of delivery is Ex. PW2/7. Defendant despite various reminders and opportunities had not paid the outstanding amount. Thus plaintiff was entitled to Rs. 8,86,960/ together with interest @ 18% p.a. In cross examination PW2 stated that he was Company Secretary. Four cheques in question were received by their operation department but he had no personal knowledge of the cheques in question as they were received in offical channel in usual course of business. It is stated that the said cheques were not filled in his presence and could not comment about the cheques whether the same were filled and signed in different inks. He denied the suggestion that the Civil Suit no.:38/11 Page 4/15 cheques in question were handed over by defendant only as security cheques and that the same were manipulated by adding date, figure and amount by the company. He stated that he had no knowledge if the entire amount of cheques were received by Ravinder Mehta but denied the suggestion that the entire payment of present transaction had been received by Ravinder Mehta in January, 2011 from defendant in cash. He also stated that the company had not received the outstanding amount from the defendant. Witness also stated that he was not aware as to on which dates what amount of goods were delivered to the defendant and also was not aware as to who on behalf of plaintiff had negotiated the said business deal and who had received the said goods. He admitted that Ravinder Mehta was dealing in regard to all transactions of the company with the defendant. He stated that Ex. PW2/2 i.e. invoice were for more than Rs. 10 lakhs. But the claim was filed only for Rs. 8,86,960/ as some amount was received by the company and the credit of the same was given to the defendant. He stated that no previous Resolution prior to Ex. PW2/1 for the present case was passed in his favour. He also admitted that invoice Ex. PW2/2 was signed by Ravinder Mehta. He denied the suggestion that even though Ravinder Mehta had received the total transaction amount, company had falsely refused to issue the receipt and had filed a false case.
7. PW1 official from the Court of Ld. MM/KKD/Delhi produced the record file of case U/s 138 N.I. Act by the plaintiff against the defendant and exhibited 04 cheques and their returning memo as Ex. PW1/1 to Ex. PW1/8.
8. PW3 official from ICICI Bank of the plaintiff produced the record relating to the dishonour of the said 04 cheques. The report being Ex. PW3/1.
9. PW4 produced the certificate issued by the banker of the defendant and the statement of accounts of defendant's account for February, 2011 as Ex. PW4/2.
Civil Suit no.:38/11 Page 5/15
10. DW1 reiterated the stand of his written statement stating that he was having business dealing with the plaintiff but had cleared all the outstanding amount and that there was no amount which was required to be cleared on his part. He stated that Ravinder Mehta, General Manager of the plaintiff company had taken the said 04 cheques in question as security from him against the goods sold to him and after making the payment he had requested the plaintiff company for returning the cheques in question but cheques were not returned and finally was told that the cheques had been misplaced. Ravinder Mehta had promised him that whenever the said cheques would be found he would return the same to him. Plaintiff's officials became dishonest and therefore, misused the said cheques in question and lodged a false complaint U/s 138 N.I. Act against him. He had also filed a criminal complaint against the said Ravinder Mehta for committing fraud and cheating and has produced the copy of his complaint Ex. DW1/1 and postal receipts Ex. DW1/2 & Ex. DW1/3. He stated that plaintiff had already received the amount of the 04 cheques in question. He further stated that plaintiff had received the due amount in cash through its General Manager, Ravinder Mehta. He also stated that cheques in question were manipulated by the plaintiff's official by filling the amount, date and name in cheques in question and was filled in different pens and different inks. In crossexamination he stated that he had paid the outstanding payment of Rs. 8,86960/ in cash to Ravinder Mehta on 10/01/2011and at his shop at Khari Baoli, Delhi. He however, did not obtain the receipt for the said payment. He stated that he had given the said 04 cheques in question to the plaintiff company in SeptemberOctober, 2010 prior to the dealing between the parties. He stated that he could not remember the date when he had given the order for the suit transaction to the plaintiff. He could not admit or deny if the date of said order was 15/03/2010. He stated that he came to know about dishonour of the cheques in question on the same day of their Civil Suit no.:38/11 Page 6/15 dishonouring. He denied the suggestion that he had issued the said cheques towards part satisfaction of the due amount of the plaintiff. He stated that he had not written any letter to the plaintiff company about the return of cheques or even after dishonour of the cheques. He stated that he did not sent any reply to the notice U/s 138 N.I. Act as he had not received any notice. He also did not sent reply to the legal notice of the suit as the same was also not received. He stated that he had asked Ravinder Mehta to return the cheques but could not remember the date when he had first asked for return of cheques. He had asked him for return of cheques whenever he was visiting him in the market. He stated that the complaint against Ravinder Mehta Ex. DW1/1 was filed on 06/08/2011. But did not remember the date when he had received summons for the present case or for the N.I. Act case. He stated that he had been told by Ravinder Mehta about 1012 months ago that he had left the services of plaintiff and also that the cheques had been lost. He stated that he had not asked Ravinder Mehta as to who had lost the cheques but it was to be presumed that Ravinder Mehta had lost the cheques. He also stated that he did not write any letter to the company in regard to being informed by Ravinder Mehta about the loss of cheques. He denied that the said cheques were not security cheques as claimed by him or that he was liable for the suit amount.
11. DW2 is the brother of defendant who stated that he was working with his brother at his business. He stated that Ravinder Mehta, General Manager of the plaintiff company had taken the said cheques as security from his brother in his presence and the said Ravinder Mehta had undertaken to return the cheques after the receiving of payment of goods. Defendant had paid the outstanding amount of the plaintiff to Ravinder Mehta in cash but plaintiff did not return the security cheques. Plaintiff had became dishonest and therefore, had filed false and frivolous civil and criminal case against defendant. In cross Civil Suit no.:38/11 Page 7/15 examination he stated that he was not having any designation in his brother's business but was helping his brother in the business. His brother was into business since 1999 but he was not aware about the turnover of his brother's business. He stated that he was knowing Ravinder Mehta from 200607. The security cheques in question were delivered in August, 2010 by his brother. But he did not know the Bank to which the said cheques were pertaining. The cheques in question were unfilled cheques. He stated that the amount of Rs. 8,86,000/ (approx.) was paid by his brother in his presence and the payment was made in denomination of Rs. 500/ and Rs. 1000/ but later stated that he had heard about payment of Rs. 8,86,000/ being made by his brother. The payment was made in cash on 10/01/2011. The last transaction by defendant with the plaintiff was in August, 2010 but he was not aware about details of the last transaction. He also stated that he was not aware as to when defendant firstly requested for return of cheques to Ravinder Mehta, he clarified that the said fact was within the knowledge of his brother defendant. He stated that no receipt was given by Ravinder Mehta in respect of the payment received by him but had promised to deliver the same which was however, never delivered. He denied the suggestion that no payment was made and therefore, no receipt was being produced.
Issue wise findings:
12. Issue no. 1: Plaintiff has stated that as per order placed by defendant vide invoice Ex. PW2/2 on 31/03/2010 they have delivered 150 bags of almonds for Rs. 10,07,148/ to the defendant. Defendant made part payment but did not clear the outstanding amount of Rs. 8,86,960/. The same was confirmed vide confirmation Ex. PW2/3 signed by defendant. Extract of statement of accounts of the pending amount of defendant is Ex. PW2/4. Defendant towards part payment of the outstanding amount issued 04 cheques Ex. PW1/1 to Civil Suit no.:38/11 Page 8/15 Ex. PW1/4. The said cheques on presentation were also dishonoured due to reason 'insufficient funds' and information of the said dishonoured cheques was received by plaintiff vide Ex. PW1/5 to Ex. PW1/8. Vide Ex. PW2/5 plaintiff sent legal notice to the defendant for dishonour of cheques and also for clearing of the outstanding amount. Ex. PW2/6 is the courier receipt of sending of the said notice, proof of delivery is stated to be Ex. PW2/7.
Defendant has admitted the delivery of goods of 150 bags of almonds vide invoice dated 31/03/2010 and stated that one Sh. Ravinder Mehta, General Manager of plaintiff was dealing with defendant and had received unfilled 04 cheques as security for the outstanding amount. Defendant had cleared the outstanding payment by paying the said amount in cash to Ravinder Mehta and therefore, the security cheques received by Ravinder Mehta were to be returned as promised but plaintiff even after receiving the payment plaintiff did not return the cheques instead conveyed that the said cheques had been misplaced/lost. Plaintiff thus, in a fraudulent manner manipulated the said unfilled security cheques by filling the same on their on and filed false N.I. Act cases and the present case against the defendant.
Ld. Counsel for defendant has argued that the copies of invoice Ex. PW2/2 could not be exhibited as the same was a photocopy and also that legal notice Ex. PW2/5 was unsigned document. The invoice Ex. PW2/2 is not denied in written statement by defendant and also no objection was raised by defendant at the time of exhibition of the documents. The document Ex. PW2/2 is therefore, not disputed. In respect of legal notice Ex. PW2/5 defendant's stand is that the said document was never received by him and the document is also not signed. Ld. Counsel for plaintiff stated that the legal notice was not legally required to be sent before filing of the suit. This document being unsigned and the Civil Suit no.:38/11 Page 9/15 author of the document having not been examined, accordingly, is not proved and thus was not a substantial piece of evidence.
The undisputed facts of the case are that defendant received goods from the plaintiff as per invoice Ex. PW2/2 for an amount of Rs. 10,07,148/. Plaintiff has stated that they had received some amount from the defendant and thereafter, the outstanding liability of defendant was Rs. 8,86,960/. The disputed facts are that as per defendant he had paid the said outstanding amount in cash to Ravinder Mehta, General Manager of plaintiff. But as per plaintiff no amount was paid and as part satisfaction 04 cheques for an amount of Rs. 7,35,000/ were delivered which were also dishonoured. Legal notice was sent and case U/s 138 N.I. Act against defendant was also filed. The only material disputed fact is thus, as to whether defendant had cleared the outstanding amount of Rs. 8,86,960/ of the plaintiff.
Thus, when the delivery of goods and their value is admitted, the onus to prove payment of the outstanding amount of Rs. 8,86,960/ to the plaintiff shifted on defendant. Defendant stated that the amount was paid in cash to Ravinder Mehta but admitted that no receipt or document to prove payment was available with him as no receipt was issued.
In support of the plaintiff's case, plaintiff has also produced copies of 04 cheques dated 04/02/2011 issued as part payment of the due amount by the defendant. The same were dishonoured and their returning memos are Ex. PW1/5 to Ex. PW1/8. Ex. PW3/1 is the report of dishonour of cheques by banker of plaintiff and Ex. PW4/1 is the certificate of the banker of defendant in respect of the said dishonoured cheques. Plaintiff issued legal notice and filed case against defendant U/s 138 N.I. Act in the KKD Courts, Delhi.
Defendant had not disclosed the date or time of alleged payment of the outstanding amount to Ravinder Mehta in his pleadings or in his examinationinchief, but only in crossexamination stated that payment was made on 10/01/2011. DW2 also in cross Civil Suit no.:38/11 Page 10/15 examination gave the date of payment as 10/01/2011. There was therefore, a material omission on the part of defendant in regard to the said claim of payment. Defendant's case in respect of dishonoured cheques is that the said cheques were delivered to Ravinder Mehta only as security cheques and once outstanding payment of the goods in question was cleared, the said cheques were to be returned to the defendant. DW1 stated that the cheques were not returned by the said Ravinder Mehta on the ground that the said cheques had been misplaced/lost. Thus, if this contention of the defendant is presumed to be correct, then, defendant before making payment should have insisted for receipt or acknowledgment of the payment being made by him, particularly, in view of the fact that neither the alleged security cheques were returned nor any written promise for the same was made. As per DW1 and DW2 the said payment to Ravinder Mehta was made on 10/01/2011. The cheques were stated to be lost by Ravinder Mehta 1012 months prior from the date of recording of their statements in Court i.e. from May, 2012. This means defendant was conveyed about the loss of cheques between MayJuly, 2011. Defendant also admitted that he did not send any letters or communication either in respect of payment of outstanding amount or even return of the cheques with the plaintiff at any point of time. N.I. Act cases for dishonour of the said cheques against defendant were filed through Ravinder Mehta in March, 2011 (which is clear as per certified copy of documents of N.I. case filed by defendant after arguments). The present suit was filed on 03/06/2011, defendant had appeared in the present case on 16/07/2011. It is thus admitted position that till this day of appearance in the Court, defendant had not taken any steps either to communicate with the plaintiff in regard to the alleged payment made by him or even in respect of non delivery or misuse of the cheques in question. The conduct of the defendant therefore, does not support the case of the defendant. Plaintiff has also placed on record balance confirmation letter Ex. PW2/3 dated 26/11/2010 Civil Suit no.:38/11 Page 11/15 with signatures and seal of defendant. Defendant has disputed his signatures and seal on the document. But as per DW1 & DW2 the outstanding amount of Rs. 8,86,960/ was paid to Ravinder Mehta on 10/01/2011 which means that on 26/11/2010 the outstanding amount was admittedly not paid. The case U/s 138 N.I. Act against the defendant was admittedly filed by said Ravinder Mehta on behalf of plaintiff. This prima facie shows Ravinder Mehta was disputing payment. Ld. Counsel for defendant argued that Ravinder Mehta was under control of the plaintiff and as they had failed to examine him in their evidence therefore, they having withheld best evidence consequently, adverse inference should be drawn against them. Ld. Counsel for plaintiff stated that said Ravinder Mehta had left the services of the plaintiff and since their case was based on documents maintained in usual course of business there was therefore, no requirement for them to examine said Ravinder Mehta. In this regard it is important to note that it was the defendant's plea that the outstanding amount of Rs. 8,86,960/ was paid in cash to Ravinder Mehta and no receipt was obtained. They had also not sent any letters or communication in respect of the payment or the return of the security cheques with the plaintiff. Thus once defendant having admitted the delivery of goods, the onus to prove the payment of the same shifted on him. Therefore, if plaintiff did not examine the said Ravinder Mehta, defendant on his behalf could have taken steps to either examine the said witness or produce other corroborative evidence, which was not done. Defendant though has examined his brother DW2 but the said witness does not appear to be reliable, in view of the fact that on one occasion he stated that payment to Ravinder Mehta was made in his presence but on the second occasion stated that he had heard about the payment of Rs. 8,86,000/ being made to Ravinder Mehta. The said witness also stated that he was helping his brother in his business from morning to evening but was not aware about the bank of defendant or even about the turnover of the defendant. Defendant thus, cannot take Civil Suit no.:38/11 Page 12/15 advantage of nonexamination of Ravinder Mehta by the plaintiff.
Defendant stated that he had lodged complaint against Ravinder Mehta for committing fraud against him on 06/08/2011. This complaint was thus made after a considerable delay of alleged payment by him on 10/01/2011 or filing of case U/s 138 N.I. Act or the present suit. This complaint therefore, appears to be an afterthought and not a natural response of the defendant. Defendant has thus failed to prove that he had cleared the outstanding amount of Rs. 8,86,960/ to the plaintiff.
Accordingly, issue no. 1 is decided in favour of the plaintiff.
13. Issue no. 2: Plaintiff has claimed interest @ 18% p.a. on the amount but Ld. Counsel for plaintiff admitted that there was no written contract in regard to agreed rate of interest in case of default in payment by the defendant. He has however, stated that since the transaction in question was a business dealing therefore, plaintiff was entitled to interest at the rate of commercial rate. As per the plaintiff legal notice for recovery of the amount was sent in February, 2011. Therefore, in the interest of justice and keeping in view the commercial nature of transaction between the parties, interest @ 6% p.a. from the date of delivery of goods i.e. 31/03/2010 till filing of suit and further interest @ 9% p.a. from the date of filing of the suit till realization is also allowed.
Accordingly, issue no. 2 is decided in favour of the plaintiff.
14. Issue no. 3 & 4: Issue no. 3 & 4 being interconnected are taken up together.
Defendant's case is that the suit has been filed by one Sanjeev Mishra without any authorization by the plaintiff company and that there was no Resolution by the Board of Civil Suit no.:38/11 Page 13/15 Directors in favour of AR Sanjeev Mishra. His second line of argument is that even if, Sanjeev Mishra as Company Secretary had signed and verified the plaint in terms of Order 29 Rule 1 CPC there was no power delegated on him to institute and file the present suit. The suit was therefore, filed by an unauthorized person and was liable to be rejected. Ld. Counsel for plaintiff has stated that the plaintiff was an incorporated company and vide Board Resolution dated 28/03/2011, minutes of the said meeting being Ex. PW2/1 had authorized 03 persons including Sanjeev Mishra, Company Secretary for filing, signing and maintaining the present suit. The said document is certified by its Director and Company Secretary.
Ld. Counsel for defendant has further argued that in fact this document was not the Board Resolution and only one Director had authorized Sanjeev Mishra to file the suit who himself was not authorized by the Board. This contention of Ld. Counsel for defendant is misplaced as document Ex. PW2/1 is only an extract of the minutes of meeting of Board Directors held on 28/03/2011 certified by its Director and Company Secretary. This document was also not issued by one Director authorizing Sanjeev Mishra to file the suit. Vide Resolution dated 28/03/2011 Board of Directors had authorized 03 persons including Sanjeev Mishra for filing of the present suit. Ld. Counsel for defendant also argued that plaintiff had not proved as to how many Directors had attended the Board meeting and as per Company Law, in any case more then 02 Directors should have attended the meeting. In this respect defendant did not raise the said issue either in pleadings or at the time of evidence. Defendant in crossexamination of PW2 only stated that he was not authorized by Board to file the suit. This issue was thus not raised and therefore, there was no occasion for plaintiff to substantite the same. The plea of defendant is thus of no consequence. Ld. Counsel for defendant has relied on 173 (2010) DLT 438 "Lucas Indian Services Ltd. Vs Sanjay Civil Suit no.:38/11 Page 14/15 Kumar Agarwal", AIR 1991 Delhi 25 "M/s Nibro Ltd. Vs National Insurance Co. Ltd.", AIR 2000 Delhi 239 "M/s Rajghria Paper Mills Ltd. Vs General Manager, Indian Security Press & Anr.", AIR 1981 Punjab and Haryana 113 "Food Corporation of India Vs Sardarni Baldev Kaur & Ors." & (2004) 118 Company Cases 328 "Apple Valley Resort Vs H.P. State Electricity Board & Anr. stating that the suit was not maintainable. The said judgments in question in opinion of this Court are not applicable to the present case as the facts of the present case are different from the referred cases. In those cases there was no Resolution of Board of Directors in favour of AR for filing of the suit. But in the present case a specific Board Resolution dated 28/03/2011 was passed and certified minutes of the same have been placed on record as Ex. PW2/1. Defendant has also not led any other evidence to dispute the status of Sanjeev Mishra for filing of the suit.
Accordingly issue no. 3 & 4 are decided against the defendants.
15. Relief: In view of the above said findings, the suit of the plaintiff is decreed in favour of the plaintiff for an amount of Rs. 8,86,960/ together with interest @ 6% p.a. from the date of delivery of goods i.e. 31/03/2010 till filing of suit and further interest @ 9% p.a. from the date of filing of the suit till realization with cost. Decree sheet be prepared. File be consigned to Record Room.
Announced in the open court (DINESH BHATT)
on 05/10/2012 PO,MACT/ADJ/Delhi
05/10/2012
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