Delhi District Court
Through Its Proprietor vs (1) Sh. Ravinder Jain on 2 January, 2023
IN THE COURT OF SH. PRITU RAJ: CIVIL JUDGE : NORTH
DISTRICT, ROHINI COURTS : DELHI
Suit No. 37904/16
CNR No. DLNT030014492016
In reference:
M/s. K.L.S. Industries
7/127, Sameypur
Delhi110042
Through its proprietor
Shri Ankit Malhotra ........... Plaintiff
VERSUS
(1) Sh. Ravinder Jain
(2) Sh. Amit Jain
S/o Sh. Ravinder Jain
Proprietors of M/s. Valco Home Appliacnes
Both R/o A8/146, Ground Floor
Sector 17, Rohini
Delhi ............ Defendants
Date of Institution : 23.05.2016
Date of reservation of Judgment : 23.12.2022
Date of Judgment : 02.01.2023
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 1 of 19
JUDGMENT
1. Vide this judgment, I will dispose of the suit filed by the plaintiff against the defendants seeking the relief as contained in the prayer clause of the plaint.
FACTS AS PER THE PLAINT :
2. The case of the plaintiff as per plaint in brief is that plaintiff claims to be dealing in business of manufacturing of pressure cooker handles of Bakelitest 7/127, Sameypur, Delhi110042 and further claims to be having business relations with the defendants who was stated to be doing business under the name and style of M/s. Valco Home Appliances, Sameypur, Delhi 110042. It is the case of the plaintiff that the defendants purchased the certain articles from the plaintiff for a sum of Rs. 76,849/ vide bill no. 80 and in lieu of making payment for the same, the defendant no. 1 issued two cheques to the plaintiff - cheque no. 626047 dated 07.11.2013 for a sum of Rs. 10,000/ and cheque no. 626046 dated 15.12.2013 for a sum of Rs. 26,850/, out of the total amount of Rs. 76, 849/. It is the case of the plaintiff that the defendants had assured tha the said cheques would be honored, however, when the same were deposited by the plaintiff on 15.12.2013 to its banker, they were returned back on 17.12.2013 with the remarks " insufficient funds". It is the case of the plaintiff that when he apprised the Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 2 of 19 defendant regarding the factum of dishonor, he was threatened by the defendant who refused to repay the money. Upon such conduct, the plaintiff called upon the defendant by way of legal notices dated 08.03.2016 and 28.03.2016 to repay the amount owed, but to no avail. It is the further case of the plaintiff that defendant no. 2 had also issued a cheque bearing no. 819643 dated 20.05.2013 to the plaintiff for a sum of Rs. 23,700/ signed by the defendant no. 2, which returned by the bank on account of it be out dated. The plaintiff claims that the sole purpose of defendants was to grab the hard earned amount of the plaintiff and despite repeated communications with the defendants, they have failed to repay the money owed, leading to the present suit.
PRAYER:
3. Following reliefs have been sought on behalf of the plaintiff in the plaint:
(a) That a decree for Rs. 76,849/ alongwith pendente lite and future interest @ 18% p.a. till realization of the suit be passed in favour of the plaintiff and against the defendants.
(b) Cost of the suit be awarded in his favour of plaintiff.
(c) Relief.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 3 of 19 DEFENCE :
4. Defendants entered appearance on 02.08.2016 and filed their separate written Statement on the same date. While defendant no. 1 took the preliminary objection of the suit being barred on account of the plaintiff firm not being registered and the plaintiff failing to provide any proof of his alleged proprietorship, he further took the preliminary objection that defendant no. 1 has been impleaded without any cause of action since the plaintiff sold goods to M/s. Valco Home Appliances as per the averments of the plaintiff. The usual defences / objections of the plaintiff not coming to the Court with clean hands and suit being based on concocted facts were also relied upon. On merits, the entire case of the plaintiff was denied in toto.
5. Defendant no. 2 filed his separate WS and reiterated that the present suit is not maintainable since the same has been filed by an unregistered partnership firm. He also reiterated that the suit needs to dismissed as no cause of action exists against him and alleged invoice no. 80 relied upon by the plaintiff is a forged document. The usual defences / objections of the plaintiff not coming to the Court with clean hands and suit being based on concocted facts were also reiterated. On merits, the entire case of the plaintiff was denied in toto.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 4 of 19 REPLICATION:
6. In the replication filed by the plaintiff, the contentions of the defendants were denied in toto and the averments made in the plaint have been reiterated and reaffirmed.
ISSUES:
7. After completion of pleadings, vide order dated 24.01.2017, the following issues were framed:
1) Whether the plaintiff is entitled for recovery of amount, as prayed for? OPP.
2) Whether the plaintiff is entitled for the interest, if any and if yes at what rate and for what period? OPP.
3) Whether the present suit is maintainable as it has been filed in the name of a firm, which is not a legal entity? OPD.
4) Relief.
DOCUMENTS & EVIDENCE:
8. In support of the case of the plaintiff, the proprietor of plaintiff has been examined as PW1 by way of affidavit Ex.PW1/A wherein the plaintiff has repeated the contents of the plaint and same is not repeated for the sake of brevity. The plaintiff has further relied upon the following documents:
(a) Ex.PW1/1 (colly) being certified copy of complaint Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 5 of 19 case alongwith documents.
(b) Ex.PW1/2 being copy of legal notice dated 08.03.2016.
(c) Ex.PW1/3 (colly) are the postal receipts /report.
(d) Ex.PW1/4 (Colly) are original two AD cards and postal receipts dated 28.03.2016.
(e) Mark A being the copy of bill dated 26.12.2013 ( same was deexhibited).
(f) Ex.PW1/6 (Colly) being the return cheque bearing no. 819643 dated 20.05.2013 alongwith bank memo/ deposit slip.
9. During crossexamination by the hand of Ld. Counsel for the defendants, PW1 stated that he is running a firm not a company. He further deposed that he has not placed on record any documents showing that he is the proprietor of the firm, however, he can bring the documents, if required. He further deposed that no purchase order was issued by the defendant and that the bill no. 80 was raised on 26.12.2013. He further deposed that there is no receiving on the bill by the defendant and that the defendant issued two cheques in the form of advance. He further deposed that the goods were sent to the defendant by rickshaw (thela rickshaw). He further deposed that he does not have any name or number of the rickshaw puller. It is admitted that the complaint under Section 138 against the Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 6 of 19 defendant has already dismissed. He further deposed that he has not filed on record sale tax return, however, he can bring the documents, if required. He further deposed that he has sent a legal notice to the defendant in the January, 2014 for recovery of payment. It is admitted that he has filed the present case in the name of the firm and not in my individual capacity. It is denied that no goods were supplied. It is wrong to suggest that I have not file the sales tax return on record as it does not show the transaction in question. It is denied that he has not filed any proof of his being the proprietor of the firm as he is not the proprietor. It is denied that he did not send any legal notice in the year 2014. It is denied that cheques were given by the defendant as security cheques. It is denied that he is deposing falsely.
10. Thereafter, PE was closed vide order dated 08.07.2019.
11. In defence, despite multiple opportunities, the defendants did not lead any DE and accordingly, their right to lead DE was closed on 06.12.2022.
12.Final arguments on behalf of plaintiff and defendants were heard on 23.12.2022 and matter was fixed for judgment.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 7 of 19 FINDINGS OF THE COURT:
13.Before embarking to decide the present case, it would be appropriate to reiterate the burden of proof required to be discharged in civil proceedings. As laid down in Postgraduate Institute of Medical Education and Research v. Jaspal Singh, (2009) 7 SCC 330, the burden which ought to be discharged in civil proceedings in not as strict as in criminal cases and in order for any party to succeed, he/it is required to prove his/its case on the preponderance of probabilities. The relevant portion of the aforesaid pronouncement is hereby produced here for the sake of brevity:
It has been held that there is a marked difference as to the effect of evidence, namely, the proof, in civil and criminal proceedings. In civil proceedings, a mere pre ponderance of probability is sufficient, and the defendant is not necessarily entitled to the benefit of every reason able doubt; but in criminal proceedings, the persuasion of guilt must amount to such a moral certainty as con vinces the mind of the court, as a reasonable man, be yond all reasonable doubt."
14.Further, Section 101 of the Evidence Act, 1872 defines " burden of proof" and laid down that the burden of proving a fact always lying upon the person who asserts the facts. Until such burden is discharged, the other party is not required to be called upon to prove his case. The court has to examine as to whether the Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 8 of 19 person upon whom the burden lies has been able to discharge his burden. Until he arrives at such conclusion, he cannot proceed on the basis of weakness of other party. In view of Section 103 of Evidence Act, the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lied on any particular person. Further, Section 58 of the Indian Evidence Act contains that no fact need to be proved in any proceedings which parties thereto or their agents agree to admit at the herein, or which, before the hearing, they agree to admit by any writing under their hands or which by any rule of pleadings enforce at the time they are deemed to have admitted by their pleadings.
15.Having determined the burden of proof required to be discharged in civil cases, this court will now proceed to give it issue wise findings as per the issues framed on 24.01.2017, as follows: Issue No. 3
3) Whether the present suit is maintainable as it has been filed in the name of a firm, which is not a legal entity? OPD.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 9 of 19
16. I will be taking up this issue for determination before proceeding to determine the remaining issues. The burden of proving the present issue lay upon the defendants.
17. It has been vehemently argued by the Ld. Counsel for the defendants that the present suit is not maintainable as the same has been filed in the name of M/s. K.L.S. Industries, which is an unregistered proprietorship firm with Ankit Malhotra being shown as the proprietor of the firm. A perusal of the memo of parties shows that the suit has been instituted in the name of M/s. K.L.S. Industries and not in the personal capacity of Ankit Malhotra, who has been shown as the proprietor of the said firm.
18. The laws as regards the maintainability of the suits by an unregistered proprietorship firm is no longer res integra. The Hon'ble High Court of Delhi in Svapn Construction v. IDPL, Employees Coop Group Housing Society Ltd & Ors., 2006 (1) RAJ 486 (Del), held that, The petition has been filed in the name of M/s Svapn Constructions and not in the name of Shri.A. K. Khanna its sole proprietor. In the petition filed by the petitioner, no prayer has been made seeking amendment to sue in the name of the sole proprietorship firm. Even according to the averments made in the petition, though it is stated Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 10 of 19 that Mr.A.K. Khanna is the sole proprietor of the firm, M/s.Svapn Construction, however, no permission has been sought to sue in the name of the sole proprietorship firm. If the sole proprietorship firm is not a legal entity, the petition should have been filed by the sole proprietor in his name on behalf of his sole proprietorship firm and not in the name of sole proprietorship firm. Considering it from any point, the inevitable inference is that a petition in the name of a sole proprietorship firm's name which is not a legal entity is not maintainable. Therefore, in the facts and circumstances, the petition which has been filed by a sole proprietorship firm, which is not a legal entity, is not maintainable and it is, therefore, dismissed. However in the facts and circumstances of the case, parties are, left to bear their own costs."
19. Similarly in Miraj Marketing Corporation vs Vishaka Engineering, 2004 (115) DLT 471 a Division Bench of the Hon'ble High Court of Delhi held that, "A proprietorship firm has no legal entity like a registered firm. A suit cannot be instituted in the name of an unregistered proprietorship firm and the said suit is to be instituted in the name of the proprietor. It is an admitted position in the plaint that the plaintiff is a proprietorship firm. There is, however, no statement Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 11 of 19 made in the plaint by the plaintiff as to who is the proprietor of the firm. Shri Amitabh Sharma is described in the cause title of the plaint only as an authorised representative. The name of the proprietor of the said proprietorship firm is not given in the plaint. The original plaint which is placed on record has a verification. However, the signature appended to the said verification appears to be that of Shri A.K. Pandey, who was examined in the suit as PW2, as the main witness. He stated in his crossexamination that he was the proprietor of the plaintiff firm. He also stated in his crossexamination that the plaint was signed, filed and verified by him. PW1 also in his crossexamination stated that the plaintiff firm was a proprietorship firm and that Shri A.K. Pandey was the sole proprietor of the plaintiff firm. It was, however, stated by him that the plaintiff firm was a registered firm but he could not state as to when the said firm was registered. It is apparent that Shri A.K. Pandey had not instituted the suit. He had only come as a witness. Even in the amended plaint the suit was shown to have been instituted in the name of the firm. A sole proprietorship firm is not a legal entity which can sue or be sued in its own name. Such suit relating to or against the affairs or claims of a proprietorship concern has to be brought or made against the person who is the sole Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 12 of 19 proprietor of the firm. The plaintiff was described to be a proprietorship firm and represented through Shri Amitabh Sharma. Shri Amitabh Sharma had neither signed the plaint nor he signed the power which was filed in the present case. In that view of the matter, we agree with the findings and the conclusions recorded by the trial court that the suit was not instituted by a duly authorized person. Accordingly, we find no infirmity in the judgment and order passed by the learned trial court dismissing the suit on the ground that the suit was not properly instituted."
20. In the present case, as observed above, the suit has been instituted in the name of M/s. K.L.S. Industries and the plaintiff has failed to bring on record any document to show that the said proprietorship concern was registered. Moreover, it is not the case of the plaintiff that the present suit has been instituted in the name of Ankit Malhotra, who has been claimed to be the proprietor of the plaintiff firm. PW Ankit Malhotra has also admitted in his crossexamination that he has filed the present case in the name of the firm and not in his individual capacity. However, no documents whatsoever has been furnished by the said Ankit Malhotra to show that he had been duly authorized by the plaintiff firm to file the present suit.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 13 of 19
21. In light of aforesaid, this court is of the considered opinion that the present suit has not been properly instituted in light of the law stated above as it has been instituted by a proprietorship concern which is unregistered and the same is barred and not maintainable. This issue is accordingly, decided in the favour of the defendants and against the plaintiff.
Issues No. 1 & 21) Whether the plaintiff is entitled for recovery of amount, as prayed for? OPP.
2) Whether the plaintiff is entitled for the interest, if any and if yes at what rate and for what period? OPP.
22. Both these issues are being taken up jointly for the purpose of adjudication as they are interlinked with each other and can be decided by a common appraisal of the evidence adduced by the parties. Onus to prove the aforesaid issues was upon the plaintiff.
23. Before proceedings any further, it would be essential to reiterate the fact that the case of the plaintiff is for the recovery of an amount of Rs. 76,849/ on the basis of business transactions / relations between the parties. In order to prove the same, the plaintiff had to prove the fact that the defendants owed the said amount to the plaintiff. In support of his contentions, the plaintiff has relied upon a bill dated 26.12.2013 wherein M/s Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 14 of 19 Valco Home Appliances has been shown to be liable for the aforesaid amount. Moreover, the plaintiff has also stated in his examination in chief that three cheques, two cheques bearing nso. 626047 dated 07.11.2013 for an amount of Rs. 10,000/ and 626046 dated 15.12.2013 for an amount of Rs. 26,850/ issued by defendant no. 1 and one cheque bearing no. 819643 dated 20.05.2013 for an amount of Rs. 23,700/ issued by defendant no. 1, were issued by the defendants in discharge of the liability in question.
24. This court will first proceed to determine the evidentiary value of the first document i.e. Bill No. 80 dated 26.12.2013, relied upon by the plaintiff.
25. It is settled law that documents have to be proved by leading primary evidence or secondary evidence. It is also settled law that documents have to be necessarily proved by leading primary evidence and secondary evidence can be adduced only in certain situations, as contained in Section 65 of Indian Evidence Act, 1872 (hereinafter called as "IEA"). Accordingly, the plaintiff was obligated by virtue of the provisions of the IEA to lead primary evidence of the document i.e. bill dated 26.12.2013 exhibited as Mark A and secondary evidence could be allowed or relied upon only upon the existence of situations / conditions contained in Section 65 IEA. However, in the Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 15 of 19 present case, no justification whatsoever has been furnished by the plaintiff for not adducing the best evidence i.e. original copy of the aforesaid bill nor has any application whatsoever been filed by the plaintiff to enable him to lead secondary evidence for the same. Accordingly, no reliance can be placed upon the xerox copy of the bill.
26. Furthermore, the plaintiff has alleged that the liability of the defendants also arising from the various cheques issued by them in discharge of the liability of Rs. 76,849/
27. As regards defendant no. 1, the plaintiff has alleged that the defendant no. 1 had issued two cheques bearing no. 626047 dated 07.11.2013 for an amount of Rs. 10,000/ and 626046 dated 15.12.2013 for an amount of Rs. 26,850/ in discharge of the liability. However, the plaintiff has not produced the said cheques during the course of examination in chief. Accordingly on account of failure of the plaintiff to bring on record either the aforesaid cheques or the certified copy of the same, no reliance can be placed upon the bald averments of the plaintiff that the same were issued by defendant no. 1 in favour of the plaintiff for discharge of the liability of Rs. 76,849/.
28. Further, as regards defendant no. 2, the plaintiff has stated that in discharge of the aforesaid liability, a cheque bearing no.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 16 of 19 819643 dated 20.05.2013 for a sum of Rs. 23,700/ was issued by defendant no. 2. in the favour of the plaintiff firm. In support of his contentions, the plaintiff has furnished the said cheque alongwith the deposit slip and the cheque return memo, exhibited as Ex.PW1/6 (Colly). A perusal of the said cheque reveals that it was issued on 20.05.2013 and was valid for a period of 3 months only. Moreover, a perusal of the cheque return memo shows that the said memo is dated 22.12.2014 and the reason for the dishonoring the said cheque has been mentioned as "The cheque is outdated". Moreover, the deposit slip relied upon by the plaintiff shows that the cheque was deposited on 20.12.2014 i.e. way after the expiry of the 3 months period during which the same had to be presented for encashment.
29. It is settled law that presenting a negotiable instrument /cheque for encashment within a period of 3 months is one of the three requirements necessary to constitute a cause of action qua the said cheque / negotiable instrument and in cases where a cheque is presented before the aforesaid period, no liability whatsoever can be imputed upon the maker of the said instrument. Reliance in this regard is placed on the decision of Hon'ble Apex Court MSR Leathers Vs. S. Palaniappan & Anr., 2012 (SCC) OnLine (SC 791) where it was held that " 14. presentation of the cheque and dishonor thereof within the period of its validity Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 17 of 19 or a period of 6 months is just one of the three requirements that constitutes ' cause of action' within the meaning of Sections 138 and 142 (b) of the Act, an expression that is more commonly used in civil law than in penal statutes...." and reiterated by the Hon'ble High Court of Delhi in Ansh Chug Vs. Pradeep Gupta, CRL. M.C. 2973/2018 and Crl. M.A.No.10513/18, DOD 03.02.2020.
30. In light of the aforesaid decisions, no reliance can be placed upon the cheque relied upon by the plaintiff to impute any liability upon defendant no. 2.
31. Accordingly, issues no. 1 and 2 are hereby decided in the favour of the defendants and against the plaintiff. It appears that the plaintiff's case is nothing but a speculative attempt by taking a chance against the defendants with the hope to succeed. The suit of the plaintiff stands dismissed as being devoid of merit.
32.In light of the facts of the case, parties are directed to bear their own costs.
33.Decree Sheet be prepared accordingly.
34.All pending applications (if any) are hereby disposed off as not pressed.
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 18 of 19
35.File be consigned to the record room after necessary compliance.
ANNOUNCED IN THE OPEN (PRITU RAJ)
COURT ON 02.01.2023 CIVIL JUDGE (NORTH)
ROHINI/DELHI/02.01.2023
Suit No.37904/16 M/s. K.L.S. Industries Vs. Sh. Ravinder Jain Page No. 19 of 19