Delhi High Court
Narendra Kumar Rajgarhia vs M/S. Vao Techmash Export & Anr. on 31 August, 2017
Author: S.P.Garg
Bench: S.P.Garg
* IN THE HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON : 18th AUGUST, 2017
DECIDED ON : 31st AUGUST, 2017
+ CS(OS) 176/2000
NARENDRA KUMAR RAJGARHIA ..... Plaintiff
Through : Mr.C.Mukund, Advocate with
Mr.Ashok Jain, Mr.Amit Kasera &
Ms.Priyanka Dass, Advocates.
VERSUS
M/S. VAO TECHMASH EXPORT & ANR. ..... Defendants
Through : Mr.P.K.Manohar, Advocate
with Mr.Kuldeep Pablay, Advocate for
Defendant No.2.
CORAM:
HON'BLE MR. JUSTICE S.P.GARG
S.P.GARG, J.
1. The present suit for rendition of accounts and recovery of money found to be due has been filed by Narender Kumar Rajgarhia carrying on business under the name and style of M/s.Texcomash Exports as sole proprietor (hereinafter referred to as 'plaintiff') against the defendant No.1 M/s. VAO Techmashexport having its place of business at No.101850, Moscow Centre, Maroseyka Str. 12, Russia (hereinafter referred to as 'defendant No.1') and M/s. Anglo French CS(OS) 176/2000 Page 1 of 11 Textiles, a unit of M/s. Pondicherry Textile Corporation Ltd. (hereinafter referred to as 'defendant No.2').
2. Plaintiff's case is that he is engaged in the business of sale of spare parts of looms; he is also commission agent of defendant No.1 in India. Defendant No.1 is a manufacturer and an international trader as well as is engaged in exports and imports of selling its products all over the world. Defendant No.2 is the manufacturer of various textile products at its factory situated at Pondicherry. On around 23.12.1985, a protocol was signed between the Government of India and Government of USSR to increase the business relations between the two nations. In terms of the said protocol and the conditions agreed between the defendants in 1987, defendant No.2 purchased 200 pieces shuttleless looms from defendant No.1 vide contract No.88/05/80088 dated 02.11.1987. Though the defendant No.1 performed its part of the contract, the defendant No.2 neglected to pay his dues. Again, the defendants entered into another two contracts on 05.07.1991, one for supply of 200 looms and the other for 20 open end machines. It is averred that there was default to perform the obligations by defendant No.2 and he committed breach of terms of the contracts. Various disputes and differences arose between defendants No.1 & 2; the defendant No.2 wrongfully and illegally cancelled the contract which caused huge loss and damages to the plaintiff and defendant No.1. Subsequently, various settlement talks were carried out at Delhi and Moscow.
3. Plaintiff's further case is that he had rendered various assistances and cooperations to the defendants and was entitled to get CS(OS) 176/2000 Page 2 of 11 commission for every transaction and payment between defendants No.1 & 2. Further claim of the plaintiff is that he had sold various spare parts to the defendant No.2 in his individual capacity. However, the defendant No.2 failed to make any payment thereof without any valid reasons. On 31.03.1997, the defendant No.2 confirmed that a sum of `97,26,172.84 paise was due and payable to plaintiff on account of arrears of the plaintiff and on account of sale of spare and machinery parts. It is further averred that the commission payable to the plaintiff is unascertainable without scrutinizing the accounts of the defendants. The defendants were requested to make the payment several times but in vain. Hence, the suit.
4. Defendant No.1 did not appear despite service and was proceeded ex-parte.
5. Defendant No.2 has contested the suit. In the written statement, it was averred that the plaintiff had no locus standi to file the instant suit and there was no privity of contract between him and defendant No.2. No document has been placed on record by the defendant to show if he was defendant No.1's agent and was entitled to any remuneration, etc. Defendant No.1 has ceased to exist as a legal entity after the disintegration of the erstwhile State of USSR. The delivery orders of spare parts were placed by the second defendant on the first defendant through its representative i.e. the plaintiff and not on the plaintiff as the sole proprietor of his business M/s.Texcomash Exports. There was no direct transaction between the plaintiff and defendant No.2 and no commission was agreed to be paid to him. It is further averred that this Court has no territorial CS(OS) 176/2000 Page 3 of 11 jurisdiction and the claims filed by the plaintiff are beyond limitation. There existed an arbitration clause and if there was any claim due, defendant No.1 was under legal obligation to invoke arbitration clause. It was further stated that a sum of `107.70 lacs was received by the first defendant. `7 lacs of the second defendant due to the first defendant was lying with the plaintiff. The suit filed by the plaintiff is not maintainable in the present form.
6. In the replication, the plaintiff reiterated the pleas taken in the plaint and controverted the assertions of the defendant No.2 in the written statement.
7. On the basis of pleadings of the parties and documents on record, following issues were framed vide order dated 20.09.2005 :
"1. Whether this court has no territorial jurisdiction to try and determine the present suit? OPD
2. Whether the suit is within time? OPP
3. Whether the plaintiff is the sole proprietor of M/s. Texcomash Exports? OPP
4. Whether the plaintiff was appointed as an agent of defendant No.1? OPP
5. Whether the defendant No.1 is liable to the plaintiff? OPP
6. Whether there is any privity of contract between the plaintiff and defendant No.2? OPP
7. Whether the plaintiff is entitled to a decree of rendition of accounts? If so against which of the defendants? OPP
8. Whether the plaintiff is entitled to recovery of any amount on such rendition? If so against which of the defendants? OPP
9. Whether the plaintiff is entitled to interest? If so at what rate, for what period and on which amount? OPP CS(OS) 176/2000 Page 4 of 11
10. Relief."
8. The plaintiff examined himself as PW-1 to prove its case. The defendant No.2 did not produce any evidence.
9. I have heard the learned counsel for the parties and have examined the file. Issue-wise findings are as under :
Issues Nos.3, 4, 5 & 610. These issues are taken together for disposal as they are interconnected.
11. Perusal of the pleadings and documents on record reveals that the claim of the plaintiff is two-fold. One is for recovery of the commission on the transactions occurred between defendants No.1 &
2. The other is regarding the spare parts sold by him to defendant No.2 as sole proprietor of M/s.Texcomash Exports.
12. It is not in dispute that numbers of contracts were entered into by the defendant No.2 with defendant No.1. It has also come on record that the plaintiff was defendant No.1's representative in India. The moot question is whether the plaintiff as defendant No.1's representative was entitled to get any commission from defendant No.2 for the transactions entered between them, and if so, to what extent. Record reveals that the plaintiff has not placed on record any document to show if there existed any contract or agreement whereby he was entitled to commission on the transactions entered into between the defendants or on the payment made by defendant No.2 to defendant No.1. It is also not revealed as to what was the rate of commission and who was liable to pay. Record further reveals that CS(OS) 176/2000 Page 5 of 11 the plaintiff was not the defendant No.2's representative or agent and no transaction as such was entered into by defendant No.2 with defendant No.1 through his agency. In the cross-examination the plaintiff at first stage disclosed that he had an agreement with defendant No.1 of being representative and agent and could produce the said agreement, however, the plaintiff failed to produce any such agreement despite opportunity availed. The plaintiff further admitted in the cross-examination that he was unable to produce any document to show himself to be the commission agent. He was fair enough to admit that as an individual he did not have any contract with defendant No.2. Various correspondences have been placed on record, however, admittedly there is no stipulation in the contracts regarding payment of commission to him. In the absence of any document on record it cannot be inferred that the plaintiff was entitled to any commission on the transactions entered into between defendant No.1 and defendant No.2 or the payments made by defendant No.2 to defendant No.1. The plaintiff himself has produced on record various documents whereby different contracts were executed between the defendants. There is no whisper in any of these contracts, if the plaintiff was entitled to any commission or who was liable to pay it. Apparently, there was no privity of contract between the plaintiff and defendant No.2. Being the representative of defendant No.1, the liability (if any) towards rendering certain services was against him (defendant No.1). The plaintiff has not specified as to how much commission he was entitled to on the transactions entered between the defendants. No CS(OS) 176/2000 Page 6 of 11 such book of accounts has been placed on record to ascertain as to how much amount due from the defendant No.2 is reflected therein.
13. Regarding the plaintiff's claim to have sold certain spare parts in his individual capacity to defendant No.2 again there is no cogent and reliable evidence to confirm it. The plaintiff has not produced on record any document to show if on any particular date or time, any spare parts were made available at a particular price on demand by defendant No.2. Defendant No.2's case from the very inception is that certain payments were made to the defendant No.1 through the plaintiff. The plaintiff being the technical service consultant was to render services on behalf of the defendant No.1 to the defendant No.2 and others. The documents placed on record by the plaintiff himself reflect that such services were to be effected on behalf of defendant No.1 and not in his individual capacity. In the cross-examination, he admitted that the correspondence with defendant No.2 did not indicate if he was the representative and technical consultant in India; there was no specific letter informing defendant No.2 about his being technical consultant in India on behalf of defendant No.1. In the cross-examination, he was fair to admit that the spare parts were supplied by him to defendant No.2 as representative of defendant No.1. He further admitted that he did not serve any notice upon the defendant No.2 to claim `97,26,172.84 paise. He expressed his inability to inform if he ever communicated to the defendant No.2 that supply of spare parts was by him and not on behalf of the defendant No.1. He got time/adjournment to produce the record but on the next date of examination, he was unable to produce CS(OS) 176/2000 Page 7 of 11 any such record. The plaintiff also did not produce any books of accounts to show if any amount for sale of spare parts was due from the defendant or any proceedings were ever initiated to recover it. Since the defendant No.2 had imported certain machines from defendant No.1, it was the responsibility of defendant No.1 for its maintenance and in case of any difficulty in its operation, the spare works were made available by the plaintiff on behalf of defendant No.1. The plaintiff has thus miserably failed to establish if any spare part on any specific date was sold by him at a particular rate to the defendant No.2 in his individual capacity. Primarily, his claim (if any) was towards the defendant No.1 to whom he represented in India. In the instant suit, no specific claim has been raised against defendant No.1. It is informed that defendant No.1 is not in existence after disintegration of erstwhile USSR.
14. Plaintiff in the plaint has alleged that various contracts entered into by defendant No.2 with defendant No.1 were not performed by the defendant No.2 and he was in breach as a result of which defendant No.1 suffered huge loss. On being specifically asked if any proceedings regarding recovery of damages or compensation were ever initiated by defendant No.1 against defendant No.2, learned counsel for the plaintiff fairly informed that no such proceedings were initiated against the defendant No.2. Apparently, plaintiff cannot plead the case of the defendant No.1 for alleged violation of the terms and conditions of the contracts entered into with defendant No.1. No man can enforce a contract to which he is not a party, even though he has direct interest in the performance of it. Merely because, certain CS(OS) 176/2000 Page 8 of 11 negotiations of the officials of defendant No.1 took place in the plaintiff's presence, it does not give rise to any 'right' to the plaintiff to receive any commission on any transaction entered into between the defendants.
15. The plaintiff has thus failed to establish all these issues and these are decided against him and in favour of the defendants.
Issues No.7, 8 & 916. All these issues are taken together. The plaintiff has filed the instant suit for rendition of accounts. Record reveals that the plaintiff was aware as to what exact commission, he was entitled to from the defendants. He was aware as to for what consideration alleged spare parts were made available to defendant No.2. However, for the reasons best known to the plaintiff, instead of filing suit for recovery, he opted to file suit for rendition of accounts against the defendants. Number of documents exhibited on record reveal that the plaintiff was aware of all the necessary information to seek recovery of definite amount from the defendants but he did not do that perhaps to avoid limitation or payment of Court fee. Plaintiff has failed to show as to how in the absence of any privity of contract, he was entitled to seek rendition of accounts against defendant No.2. A suit for rendition of accounts can be maintained only if a person suing has right to receive an account from the defendant. Such a right can either be (a) created or recognized under a statute; or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee, or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which CS(OS) 176/2000 Page 9 of 11 will enable the person seeking accounts to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact amount due to him, as that will open the floodgates for converting several types of money claims into suits for accounts, to avoid payment of Court-fee at the time of institution of the suit. (K.C.Skaria vs. Govt. of State of Kerala & Anr., AIR 2006 SC 811).
17. As discussed above in preceding paragraph of the judgment, the plaintiff was unable to prove if he was entitled to claim any amount from the defendants on account of commission or supply of spare parts, the defendants, thus, cannot be compelled to render their accounts. These issues are decided in favour of the defendants and against the plaintiff.
Issue No. 118. The burden to prove this issue was upon the defendant. The defendant, however, did not produce any evidence. Plaintiff's case is that the defendant No.2 had an office in Delhi and the transactions were entered into here. Since there is no evidence on record produced by the defendant, the issue is decided in favour of the plaintiff and against the defendant.
Issue No.2
19. The plaintiff has failed to prove if the suit filed by him is within limitation. Under Article 113 of the Limitation Act, the period of limitation is three years from the date commission becomes dues. In respect of three contracts entered into between the defendants CS(OS) 176/2000 Page 10 of 11 apparently the said period to claim commission had expired on 04.07.1994 (first contract), 23.06.1996 (second contract) and 06.10.2010 (third contract). Moreover, even the plaintiff did not have any claim qua the contracts, as these were between the defendant No.1 and defendant No.2 and the plaintiff was not a party to it. This issue is decided in favour of the defendant and against the plaintiff. Relief
20. In view of my findings above, the plaintiff's suit is unmerited and is dismissed without costs.
21. Decree-sheet be prepared accordingly.
(S.P.GARG) JUDGE AUGUST 31, 2017 / tr CS(OS) 176/2000 Page 11 of 11