Bangalore District Court
O.S./5758/2017 on 10 February, 2022
IN THE COURT OF XXXIX ADDITIONAL CITY CIVIL JUDGE,
[CCH-40], BANGALORE CITY
Dated on this the 10th day of February, 2022
-: PRESENT :-
Sri.Khadarsab, B.A., LL.M.,
XXXIX Additional City Civil & Sessions Judge,
Bangalore City.
ORIGINAL SUIT NO. 5758/2017
Plaintiff :-
M/s.Aditya Birla Fashion And Retail Ltd.,
(formerly known as Pantaloons Fashion
and Retails Ltd.,), Having its Divisional
Office at Madhura Fashion & Lifestyle
Office at No.5B, Regent Gateway,
Doddanakundi Village, KIADB Industrial
Area, ITPL Road, Bengaluru 560 048.
Represented by its authorised signatory
Miss Nidhi Menon, 25 Years, D/o.
D.Ashok Kumar.
[By Sri.M.N.Premnath, Advocate]
/ VERSUS /
Defendant :-
M.R.Raghuram S/o. M. S. Ramaiah, 48
Years, authorised signatory of
M.R.Raghu Ram Retail, Address at Shop
No.48/2, Vaishnavi Badri, 5th Main,
Jayamahal Extension, Bengaluru - 46.
/2/ O.S.No.5758/2017
(By Sri.Harsha P.Banad, Advocate)
¯¯¯¯¯
Date of Institution of the
: 22.08.2017
suit
Nature of suit : Money Suit.
Date of commencement of
: 11.09.2018
evidence
Date on which the
: 10.02.2022
judgment is pronounced
Years Months Days
Duration taken for disposal :
04 05 16
***
JUDGMENT
Plaintiff - company has filed the present suit for recovery of Rs.24,57,990/- along with interest at the rate of 24% p.a. compounded monthly rests from the date of suit till realisation.
2. The brief facts of the plaintiff - company's case are that : -
Plaintiff is a company registered under the Companies Act. Plaintiff - company is engaged in the business of manufacture, design, sale and distribution of /3/ O.S.No.5758/2017 readymade apparels and accessories under the trade names Louie Phillipe, Van Heusen, Allen Solly, Peter England, People, etc., and operates its business through exclusive company stores, franchises stores, buy and sell stores, etc., across India and abroad. Defendant is the authorised signatory as well as power of attorney holder of proprietor of M/s.Raghuram Retail. The defendant showing his interest in the setting up of a showroom for the sale of ready-made garments, approached the plaintiff firm and after due discussions and negotiations, agreed to the terms and conditions of the plaintiff. The defendant accordingly in the capacity of authorised signatory as well as power of attorney holder of proprietor of M/s.M.R.Raghuram Retail has entered into an agreement termed as Value Stores Buy And Sell Dealer Agreement on 11.2.2014. After having entered into the said agreement, defendant had credit /4/ O.S.No.5758/2017 transactions with the plaintiff agreeing to pay the same as per the agreed terms after setting up a showroom at his costs as per the terms of the agreement. Defendant has placed purchase orders with the plaintiff for supply of textile products as required. As per purchase orders placed by the defendant, plaintiff has supplied and delivered the textile products on credit basis to the defendant by raising credit invoices. All the products have been delivered to the defendant and duly acknowledged having received by the defendant. The defendant having agreed to the agreement entered between plaintiff and defendant, as per agreement defendant is required to make credit payments within a stipulated period of each date of invoices and there was a condition in the agreement that failing to pay within time attracted for payment of interest on the outstanding at the rate of 24% p.a. from the due date till /5/ O.S.No.5758/2017 date of actual payment. Defendant was initially paying the dues as per agreement. Subsequently, started to delay the payment and also not paying the invoice amount. The defendant has violated the terms of buy and sell agreement. Therefore, plaintiff made several requests to the defendant, even then the defendant has failed to pay the invoices amounts. The defendant has continued deliberately delay the payments of outstanding by putting forward untenable excuse. As the plaintiff could not continue with such belated payments, there was a meeting called on 13.6.2014 to reconcile the issues and to settle the accounts. The defendant attended the said meeting and has admitted his liability. Accordingly, he has issued cheque bearing No.313980 dated 28.5.2014 for Rs.3,12,957.95, cheque bearing No.313981 dated 19.6.2014 for Rs. 1,14,551.55 and cheque bearing No.313990 dated 20.6.2014 for /6/ O.S.No.5758/2017 Rs.10 Lakh. All these 3 cheques were drawn on Karnataka Bank, Gokul Branch, Bengaluru - 54. The defendant had promised and assured that the said cheques would be honored on presentation.
Accordingly, plaintiff presented the said cheques for encashment. But, cheque No.313980 and 313981 returned with an endorsement "payment stopped" and cheque No.313990 returned with an endorsement "refer to drawer". Defendant immediately on getting the information of plaintiff having presented the said cheques for encashment, in order to evade his liability, has got an untenable notice issued on 25.8.2014 raising inconsistent, misconceived and illegal demands. In reply thereto to the said notice, plaintiff communicated to the defendant by reply notice dated 12.9.2014 stating the true state of affairs and also demanded the outstanding dues. The said reply notice duly served upon the /7/ O.S.No.5758/2017 advocate for defendant. Even after receipt of the said notice, defendant has not paid the said amount. Hence, defendant is liable to pay Rs.14,27,509/- towards goods purchased by him and Rs.10,24,990/- towards interest at the rate of 24% p.a. from 25.8.2014 to 21.8.2017.
Defendant is liable to pay Rs.5,491/- towards notice charges and miscellaneous expenses. In all, the defendant is liable to pay Rs.24,57,990/-. Accordingly, prayed for decreeing the suit.
3. In response to suit summons, defendant appeared and filed his written statement by denying the claim of the plaintiff. Defendant admitted the value store buy and sell dealer agreement dated 11.2.2014 entered between plaintiff and defendant. Defendant has denied the issuance of cheques to the plaintiff. Defendant specifically contended that the textile supplied by the plaintiff are of defective qualities.
/8/ O.S.No.5758/2017 Hence, 60% of the textile have been returned to the plaintiff. The cheque bearing No.313990 dated 20.6.2016 for Rs.10 Lakh was the only cheque given with date and amount mentioned by the defendant against promised supplies of goods to be made by the plaintiff on or before 18.6.2014 and no supplies were made, the plaintiff ought not to have deposited the said cheques since no payments were due to them. Plaintiff has played fraud and has presented the cheques for encashment. The cheque No.313980 and 313981 have been collected while entering into the agreement. There is no liability or dues to the plaintiff. The plaintiff has obtained the blank cheques. Obtaining blank cheques is an extremely deceitful trade practice. Since the defendant has invested huge money for establishment of outlet, due to the act of plaintiff defendant sustained heavy loss. Plaintiff has filed the present suit only with /9/ O.S.No.5758/2017 an intention to gain by unlawful means. Hence, prayed for dismissal of the suit.
4. On the basis of pleadings and evidence of the parties following issues have been framed by my predecessor in office on 20.3.2018 :
ISSUES (1) Whether the plaintiff proves that defendant issued three cheques towards his liability of outstanding dues as alleged in para 12 of plaint ?
(2) Whether the defendant proves that the cheques bearing No.313980 dated 28.5.2014 and cheque bearing No.313981 dated 19.6.2014 were the blank cheques and obtained fraudulently by the plaintiff as contended in the written statement ?
(3) Whether the plaintiff is entitled for the suit claim as sought ?
(4) What order or decree ?
/ 10 / O.S.No.5758/2017
5. In order to establish its case, the authorized officer of the plaintiff viz., Mahesh Venkat has been examined as P.W.1 and got marked the documents Exs.P.1 to P.45. In order to establish his defence, defendant himself examined as D.W.1 and got marked the documents Exs.D.1 to D.5.
6. Heard and perused the written arguments of both sides.
7. My findings to the above issues are as follows :
Issue No.1 : In the affirmative.
Issue No.2 : In the negative.
Issue No.3 : Partly in the affirmative. Issue No.4 : As per final order, for the following :
REASONS
8. Issues No.1 to 3 :- These issues are interlinked with each other. In order to avoid repetition / 11 / O.S.No.5758/2017 of facts, evidence and law, they are taken up together for discussion.
9. Plaintiff - company has filed the present suit for recovery of Rs.24,57,990/- along with interest at the rate of 24 % p.a. It is the case of the plaintiff - company that the it has supplied the goods to the defendant and the defendant has utilised the same for his commercial purpose and benefited from the said goods, but has failed to pay the invoice amount. Therefore, it has filed the present suit. Defendant appeared and has filed written statement. Though the defendant has denied the plaint allegations in part, but has admitted the supply of goods. The only contention of the defendant is that the goods supplied by the plaintiff - company is not in accordance with the agreed quality of goods and the defendant has paid the amount to the plaintiff - company towards goods purchased by him.
/ 12 / O.S.No.5758/2017
10. In order to substantiate the plaintiff -
company's claim, its authlorised officer viz., Mahesh Venkat has been examined as P.W.1, who filed affidavit in lieu of examination-in-chief, wherein he has reiterated the plaint averments. In support of oral testimony, the plaintiff has placed reliance on the documents - Exs.P.1 to P.45. P.W.1 deposed that, plaintiff-company has authorised him to depose in this case. Accordingly, authorisation letter has been issued as per Ex.P.1. Plaintiff - company is engaged in the business of manufacture, design, sale and distribution of ready made garments under the name and style Louie Phillipe, Van Husein, Peter England, Allen Solly, etc., and operates its business through exclusive company stores, franchises, buy and sell stores, etc., across India and abroad. Accordingly, plaintiff and defendant have entered into buy and sell agreement on 11.2.2014 as per / 13 / O.S.No.5758/2017 Ex.P.2. As per agreement, the plaintiff - company has supplied the goods to the defendant as per Exs.P.12 to 40 - Invoices. After receipt of the said goods, defendant has returned some goods, accordingly credit notes have been issued as per Exs.P.41 to 44. Ex.P.45 is the list of credit note adjustment against invoices. After receiving the textile, the defendant has returned certain materials as per Exs.P.41 to 44. Though the defendant received the goods, but has not made payment promptly. Therefore, a meeting was conveyed on 13.6.2014 to reconsign the issue and settle the accounts. The defendant attended said meeting and has admitted the liability and also agreed to pay the dues. Accordingly, in discharge of his liability, he has issued cheques as per Exs.P.3, 5 and 7. The said cheques were presented for encashment, Exs.P.3 and P.5 returned with an endorsements 'payment stopped'. Accordingly, bank / 14 / O.S.No.5758/2017 authorities have issued endorsements as per Exs.P.4 and P.6. Ex.P.7 returned with an endorsement 'referred to drawer', accordingly bank authorities have issued endorsement as per Ex.P.8. After coming to know about the presentation of cheques for encashment, the defendant has issued legal notice dated 25.8.2014 as per Ex.P.9. In the said notice defendant claimed Rs.93 Lakh. Subsequently plaintiff has issued legal notice to defendant on 12.9.2014 as per Ex.P.10. The said notice duly served upon the defendant. Ex.P.11 is the postal acknowledgement. Even after receipt of the said notice, defendant has failed to pay the due amount. Hence, defendant is liable to pay Rs.14,27,509/- towards goods purchased by it and also liable to pay interest at the rate of 24% p.a., i.e., Rs.10,24,990/- from 21.8.2014 to 21.8.2017. Defendant is also liable to pay Rs.5,491/- towards notice charge and miscellaneous expenses. In / 15 / O.S.No.5758/2017 all, defendant is liable to pay Rs.24,57,990/-. Hence, prayed for decreeing the suit.
11. The counsel for defendant cross-examined P.W.1 in length, witness adhered to his original version. The counsel for defendant made a suggestion that plaintiff - company has issued GPA to one Jyothi V.K. and said Jyothi V.K. has issued authorisation letter as per Ex.P.1. Witness admitted the said suggestion. The counsel for defendant made a suggestion that said Jyothi V.K. has no authority to issue Ex.P.1- authorisation letter. Witness denied the said suggestion. The counsel for defendant further made a suggestion that there was an agreement between plaintiff and defendant as per Ex.P.2, one Priyadarshini Raghuram is the owner of M/s.Priyadarshini Raghuram - firm and defendant is the authorised person of said M/s.Priyadarshini Raghuram firm and has put his signature on Ex.P.2. Witness / 16 / O.S.No.5758/2017 admitted the said suggestion. The counsel for defendant further made a suggestion that while entering into agreement as per Ex.P.2 defendant has paid Rs.2 Lakh as security deposit and the said Rs.2 Lakh has not been returned to defendant. Witness admitted the said suggestion. The counsel for defendant further made a suggestion that while entering into an agreement as per Ex.P.2, plaintiff has obtained blank cheques as per Exs.P.3 and P.5 from the defendant. Witness denied the said suggestion. The counsel for defendant further made a suggestion that defendant has paid Rs.16,71,925/- on 17.6.2014 to the plaintiff and defendant has returned the goods to the tune of Rs.15,74,808/-. Witness admitted the said suggestion. Except this nothing worth has been elicited from the mouth of P.W.1.
12. The counsel for defendant argued that the goods supplied by the plaintiff are of defective and the / 17 / O.S.No.5758/2017 defective goods have been returned to the plaintiff, there is no due payable to the plaintiff. He further argued that P.W.1 admitted in his cross-examination that he has no personal knowledge about the transaction, hence, his evidence cannot be considered.
13. Admittedly, P.W.1 is the employee of plaintiff, accordingly plaintiff - company has issued authorisation as per Ex.P.1. On the basis of authorisation and documents he is deposing. Hence, there is no water in the argument advanced by the counsel for defendant.
14. In order to establish his defence, defendant himself examined as D.W.1 and got marked the documents Exs.D.1 to D.5. The examination-in-chief of D.W.1 is nothing but replica of written statement averments. D.W.1 deposed that plaintiff lured him to invest heavily to set up a show room and induced to / 18 / O.S.No.5758/2017 enter agreement dated 11.2.2014 with the plaintiff. At the time of entering into agreement, the plaintiff exploited the volumaribility as he has invested heavily in setting up the new show room, by coercing him to handing over 5 blank undated cheques bearing No.313977 to 313981 with the explicit commitment that the same shall be presented only with the prior intimation and permission. The same has been recorded in writing and duly acknowledged and signed by the representative of the plaintiff viz., Sanketh on 20.3.2014 as per Ex.D.1. The said Sanketh is one of the witness to the agreement dated 11.2.2014. Plaintiff contrary to the terms and conditions accepted blank undated cheques, but the said Sanketh induced him to issue the aforesaid cheques assuring that the said cheques will not be presented to the bank without prior permission and intimation. The act of the plaintiff in obtaining blank / 19 / O.S.No.5758/2017 cheques is an extremely deceitful trade practice. After entering into agreement, the plaintiff has supplied the sub-standard goods. The goods supplied by the plaintiff are of low quality and damaged, for which he has suffered heavy loss. Accordingly, he has sent e-mails as per Exs.D.2, 3 and legal notice has been issued to the plaintiff on 25.8.2014. Plaintiff has supplied the goods totally to the tune of Rs.28,78,133/-. Subsequently, plaintiff convened the meeting on 13.6.2014 and in the said meeting assured that it will supply the seasonal and salable materials on or before 18.6.2014 by receiving back all defective materials. Therefore, against the assurance made by the plaintiff for supply of salable materials, he has issued cheque bearing No.313990 dated 20.6.2014 for Rs.10 Lakh, which was the only cheque given with the date and amount against the promised supplies of goods to be made by the plaintiff.
/ 20 / O.S.No.5758/2017 Even after receipt of the said cheque, plaintiff has not supplied the goods. He has paid an amount of Rs.16,71,925/- to the plaintiff. Even after receipt of the said amount plaintiff has not supplied the salable goods. Therefore, he has given instruction to the bank authorities to stop payment as per Ex.D.5. Plaintiff has fabricated Exs.P.12 to 40 - Invoices. Plaintiff has misused the signed undated cheques i.e., Exs.P.3 and P.5. There is no due payable to the plaintiff. Hence, prayed for dismissal of the suit.
15. The counsel for defendant argued that plaintiff is a company, it has authorised one Jyothi V.K., but P.W.1 has no authority to depose on behalf of plaintiff. P.W.1 also in his cross-examination at page No.10 clearly admitted that plaintiff - company has authorised Jyothi.V.K. and also executed GPA in favour of Jyothi V.K. Plaintiff has not produced the GPA allegedly executed by / 21 / O.S.No.5758/2017 plaintiff in favour of Jyothi V.K. The said Jyothi V.K. cannot delegate the powers to P.W.1. Hence, evidence of P.W.1 cannot be considered. Per contra, the counsel for plaintiff argued that plaintiff has produced the copy of the GPA executed by plaintiff - company in favour of Jyothi V.K., in which there is a provision for delegation, hence, the evidence of P.W.1 is admissible.
16. On perusal of GPA dated 2.2.2018 executed by plaintiff - company in favour of Jyothi V.K., Head, Legal of the plaintiff - company in which at page No.3., Clause No.7 it is clearly mentioned that, "7.Delegation for better and more effectively doing, effectuating, executing and performing of the several matters and things herein contained, to delegate all or any of the powers and authorities herein contained to be exercised of such powers or authorities by the said attorney.", which clearly goes to show that the said Jyothi V.K. has / 22 / O.S.No.5758/2017 got power to delegate. Accordingly, she has issued authorisation letter as per Ex.P.1. On the basis of Ex.P.1 one of the employee viz., Mahesh Venkat has deposed on behalf of plaintiff - company. As per Section 85 of the Indian Evidence Act, the court shall presume that every document purporting to be a power of attorney, and to have been executed before, and authorized by a notary public. Hence, GPA dated 2.2.2018 executed by plaintiff
- company in favour Jyothi V.K. has got presumptive value and defendant cannot deny the same. Hence, the evidence of P.W.1 is in accordance with law and his evidence is reliable.
17. The counsel for defendant argued that plaintiff has to discharge his initial burden that the defendant is in due and accordingly the defendant has issued cheques as per Exs.P.3, 5 and 7, but the plaintiff has / 23 / O.S.No.5758/2017 utterly failed to discharge its initial burden and also relied upon the following decisions :
"[1] (2014) 11 Supreme Court Cases 790 in case of A.C.Narayan Vs, State of Maharastra, wherein the Hon'ble Apex Court held at para No.32 as under : Similar substantial questions were raised in the appeal arising out of SLP (Crl.) No.2724 of 2008, which stand answered as above. Apart from the above questions, one distinct query was raised as to whether a person authorised by a company or statute or institution can delegate powers to their subordinate/others for filing a criminal complaint ? The issue riased is in reference to validity of sub-delegation of functions of the power of attorney. We have already clarified to the extent that the attorney holder can sign and file a complaint on behalf of the complainant payee. However, whether the power-of-attorney holder will have the power to further delegate the functions to another person will completely depend on the terms of the general power of / 24 / O.S.No.5758/2017 attorney. As a result, the authority to sub- delegate the functions must bve explicitly mentioned in the general power of attorney. Otherwise, the sub-delegation will be inconsistent with the general power of attorney and thereby will be invlid in law. Nevertheless, the general power of attorney itself can be cancelled and be given to another person."
[2] Civil Appeal No.2014/2011 in case of State Bank of Travancore Vs. M/s.Kingston Computers (I) P.Ltd., in which the Hon'ble Apex Court held that, "In his evidence, which was filed in the form of an affidavit, Shri Ashok K.Shukla cliamed that he is one of the Directors of the company and has been authorised by Shri Raj K.Shukla vide authority letter dated 2.1.2003 to file the suit. In cross-examination, Shri Ashok K.Shukla claimed that he was the only Director in the company and that the Board of Directors of the company had passed resolution authorising Shri Raj K.Shukla to take decisions independently. He also claimed that / 25 / O.S.No.5758/2017 he had been given power of attorney on behalf of the company, which was filed on record. He however admitted that no resolution was passed by the Board of Directors authorising him to sign, verify and file the plaint".
[3] (2005) 2 Supreme Court Cases 217 -
Janki Vashdeo Bhojwani and another Vs. Indusind Bank Ltd. And others, in which the Hon'ble Apex Court held at para No.13 as under : "Order 3 Rules 1 and 2 C.P.C. empower the holder of power of attorney to "act" on behalf of the principal. In our view the word "acts" employed in Order 3 Rules 1 and 2 C.P.C. confines only to in respect of "acts" done by the power of attorney holder in exercise of power granted by the instrument. The term "acts" would not include deposing in place and instead of the principal. In other words, if the power of attorney holder has has rendered some "acts" in pursuance of power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the cts done / 26 / O.S.No.5758/2017 by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined."
[4] (2010) 11 Supreme Court Cases 108 in case of Pradip Buragohain Vs. Pranati Phukan, wherein the Hon'ble Supreme Court held at paras Nos. 28 and 29 as under : "Non-
production of the documents admittedly available with the appellant that would lend credence to the version set up by the appellant that the incident of corrupt practice was reported to him and/or his election agent would give rise to an adverse inference against the appellant that either such complaints were never made or if the same were made they did not contain any charge regarding the commission of corrupt practices by the respondent in the manner and on the dates and the places alleged in the petition.
/ 27 / O.S.No.5758/2017
29. We may in this regard refer to illustration (g) to Section 114 of the Evidence Act, 1872 wich permits the Court to draw an adverse presumption against the party in default to the effect that evidence which could be but is not produced would, if produced, have been unfavourable to the person who withholds it. The rule is contained in the well-known maxim : omnia praesumuntur contra spoliatorem. If a man wrongfully withholds evidence, every presumption to his disadvantage consistent with the facts admitted or proved will be adopted".
[4] 2011 (3) MWN (Civil) 657 in case of Robert A.Heflin Vs. Revathi Ramachandran and others, in which the Hon'ble High Court of Madras held that : "Evidence Act, 1872 (1 of 1872), Section 3 - Principles of preponderance of Probabilities - Applicability in Civil cases - Nature and scope - Principles to be followed - Proof required for any Civil case is merely to extent of preponderance of probabilities -
/ 28 / O.S.No.5758/2017 Plaintiff, who filed a suit for recovery of money, relied upon certain Invoices during trial but failed to mention in Plaint - Documents produced by Plaintiff must be reliable and supported by oral evidence, so as to win confidence of Court - Plaintiff has not stated about Invoices either in Plaint or in pre-suit notice - Presumption cannot be drawn in favour of plaintiff in absence of oral and documentary evidence."
[5] (1998) 4 Supreme Court Cases 539 -
Punjab Urban Planning & Development Authority Vs. Shiv Saraswati Iron & Steel Re-rolling Mills, in which the Hon'ble Supreme Court held that :
"Plaintiff/appellant must succeed or fall on his own case and cannot take advantage of weakness in the defendant /respondent's case to get a decree. No interference by Supreme Court called for."
[6] ILR 1981 Kar 40 - Smt. Parameshwar Bai Vs. Muthojirao Scindia, wherein the Hon'ble / 29 / O.S.No.5758/2017 High Court of Karnataka held that : "The right of a party can be considered to have been defeated on the absis of an alleged admission by him, the implication of the statement made by him must be clear and onclusive. There should not be any doubt or ambiguity in the admission, it would be necessary for the Court to read the other parts of the evidence and the stand taken by him in the pleadings."
[7] (2009) 13 Supreme Court Cases 729 -
Vishnu Dutt Sharma Vs. Daya Sapra (Smt), in which the Hon'ble Apex Court held at para No.8 as under : "There cannot be any doubt or dispute that a creditor can maintain a civil and criminal proceeding at the same time. Both the proceedings, thus, can run parallel. The fact required to be proved for obtaining a decree in the civil suit and a Judgment of conviction in the criminal proceedings may be overlapping but the standard of proof in a criminal case via-a-vis a civil suit, indisputably is different. Whereas in a criminal case the prosecution is bound to / 30 / O.S.No.5758/2017 prove the commission of the offence on the part of the accused beyond any reasonable doubt, in a civil suit "preponderance of probability" would served in purpose for obtaining a decree." [8] (2019) 5 Supreme Court Cases 418 in case of Basalingappa Vs. Mudibasappa, in which the Hon'ble Apex Court held that, "The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable / 31 / O.S.No.5758/2017 has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plead they did not exist."
There is no dispute regarding the ratio laid down by the Hon'ble Apex Court, Hon'ble High Court of Madras and the Hon'ble High Court of Karnataka in the above said decisions. As discussed supra, defendant in his written statement and in his evidence admitted the transaction taken place between himself and the plaintiff and further admitted the issuance of cheques as per Exs.P.3, 5 and 7 to the plaintiff and in his cross- examination clearly admitted his liability. Hence, the / 32 / O.S.No.5758/2017 above said decisions will not come to the aid of defendant.
18. Defendant claims that plaintiff has played fraud and obtained blank cheques as per Exs.P.3, 5 and
7. Defendant in his written statement at para No.11 pleaded that he had issued cheque bearing No.313990 dated 20.6.2014 for Rs.10 Lakh which was the only cheque given with the date and amount mentioned by the defendant against promised supply of goods to be made by plaintiff on or before 18.6.2014. He further pleaded in the same page i.e., para No.11(ii) that, "Further, in this context it is very pertinent to point out that the defendant made a huge payment of Rs.16,71,925/- vide cheque No.313989 favouring Aditya Birla Nuvo Ltd., on 17.6.2014." The pleadings of defendant clearly goes to show that even after issuing cheque as per Ex.P.7 he has made payment for / 33 / O.S.No.5758/2017 Rs.16,71,925/- through cheque on 17.6.2014. There is no explanation from the defendant why he has made payment to the plaintiff even after issuance of cheque as per Ex.P.7. The pleadings of defendant and evidence of D.W.1 clearly goes to show that he was in due to the plaintiff, therefore, he has made payment even after issuance of cheque as per Ex.P.7.
19. The counsel for defendant argued that plaintiff has played fraud and obtained blank cheques as per Exs.P.3 and P.5. Admittedly, the said cheques have been issued on 28.5.2014 and 19.6.2014. if at all plaintiff played fraud and has obtained Exs.P.3 and P.5 - cheques definitely the defendant would initiate action against the plaintiff, but till today defendant has not initiated any action against the plaintiff for alleged fraud and coercion.
/ 34 / O.S.No.5758/2017
20. Further, D.W.1 in his examination-in-chief at para No.5 deposed that against the assurance made by the plaintiff for supply of salable materials, he has issued cheque bearing No.313990 dated 20.6.2014 for Rs.10 Lakh (Ex.P.7) which was the only cheque given by him with the date and amount. But, D.W.1 in his cross- examination deposed that plaintiff has obtained the blank cheques as per Exs.P.3, 5 and 7. It is well settled law that no one is permitted to approbate and reprobate. D.W.1 at one stretch claims that plaintiff has obtained blank cheques and at another stretch deposed that he has issued Ex.P.10 - cheque. The evidence of D.W.1 is contrary to his own pleadings.
21. That, in a decision reported in 2002 (3) KLJ 512 [Patel Thippeswamy Vs. Smt.Gangamma and others] in which the Hon'ble High Court of Karnataka clearly held that, "A party pleading fraud and / 35 / O.S.No.5758/2017 misrepresentation in respect of a transaction must give material particulars of allegations and in absence of such particulars, his plea is to be rejected. The defendants contended that the gift deed was got executed by misrepresentation and playing fraud on the third defendant. Defendants did not furnish the particulars of alleged misrepresentation and fraud. In the absence of particulars it cannot be held that the gift deed was obtained by misrepresentation." In another decision reported in (2011) 12 Supreme Court Cases 18 [Saradamani Kandappan Vs. S.Rajalaxmi and others] in which the Hon'ble Apex Court held at para No.62 that, "Whenever a party wants to put forth a contention of fraud, it has to be specifically pleaded and proved. It is significant that plaint does not allege any fraud by the defendants. Evidence shows that before the agreement was entered the purchaser's husband / 36 / O.S.No.5758/2017 and legal advisor had examined the xerox copies of the title deeds and satisfied themselves about the title of the vendors. The appellant in her evidence clearly admits that xerox copies of the title deeds were shown to her husband. The agreement of sale provided that the sale would depend upon the purchasers getting satisfied about the title of the vendors." The said decisions are squarely applicable to the case in hand. In this case also defendant has made stray allegation without any proper pleadings and proof as regards to the alleged fraud. Hence, without specific pleadings and proof, the Court cannot consider the defence of the defendant. Defendant has utterly failed to prove that the Exs.P.3, 5 and 7 have been obtained by playing fraud.
22. Though D.W.1 denied the claim of plaintiff, but in his cross-examination at page No.6 admitted that he / 37 / O.S.No.5758/2017 is the proprietor of M.R.Raghuram Retials and GPA holder of Smt. Priyadarshini Raghuram. He further admitted agreement - Ex.P.2 and also issuance of cheques as per Exs.P.3, 5 and 7. Though D.W.1 admitted the issuance of cheques, but deposed that he has issued blank cheques to the plaintiff. As the signatures in Exs.P.3, 5 and 7 - cheques, are admitted to be that of him, the presumption envisaged in Section 118 of the Negotiable Instruments Act can legally inferred that the cheques were made or drawn for consideration on the date which the cheques bears. Section 139 of the Negotiable Instruments Act enjoins on the Court to presume that the holder of the cheques received it for the discharge of any debt or liability. The burden is on the defendant to rebut the said presumption. Once the execution of cheques are admitted, Section 139 of Negotiable Instruments Act mandates presumption that / 38 / O.S.No.5758/2017 the cheques were for the discharge of any debt or other liability. The presumption under Section 139 of the Negotiable Instruments Act is a rebuttal presumption and the onus is on the defendant to raise the probable defence. The standard of proof for rebutting the presumption is of preponderance of probabilities. In a decision reported in 2022 (1) KCCR 1 (SC) in case of K.S.Ranganatha Vs. Vittal Sheety, the Hon'ble Supreme Court held in para No.9 as under :
"The learned senior counsel for the respondent on the other hand relied on the decision of this Court in Kalamani Tex & Anr. Vs. P. Balasubramanian, (2021) 5 SCC 283 which is as hereunder : -
"16. The appellants have banked upon the evidence of D.W.1 to dispute the existence of any recoverable debt. However, his deposition merely highlights that the respondent had an overextended credit facility with the bank and his failure to update / 39 / O.S.No.5758/2017 his account led to debt recovery proceedings.
Such evidence does not disprove the appellants' liability and has a little bearing on the merits of the respondent's complaint. Similarly, the appellants' mere bald denial regarding genuineness of the deed of undertaking dated 7.11.2000, despite admitting the signatures of Appellant 2 thereupon, does not cast any doubt on the genuineness of the said document.
17. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh Vs. Mukesh Kumar [Bir Singh Vs,. Mukesh Kumar, where this Court held that : (SCC p.209, para 36) "36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the / 40 / O.S.No.5758/2017 absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
23. In another decision reported in (2019) 4 SCC 197 in case of Bir Singh Vs. Mukesh Kumar, the Hon'ble Apex Court held at para Nos.33, 34 and 36 as under :
"33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
/ 41 / O.S.No.5758/2017
34. If a signed blank cheque is voluntarily presented to payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
24. Admittedly, the burden is upon the plaintiff to prove that the plaintiff - company had supplied the goods to the defendant. That, in order to show that the plaintiff - company has supplied the goods to the defendant, the plaintiff - company has produced / 42 / O.S.No.5758/2017 documents i.e., Exs.P.12 to P.40 invoices. D.W.1 also in his cross-examination admitted the supply of goods. The plaintiff further contended that, after receiving the goods, as per request of the defendant, plaintiff presented the cheques - Exs.P.3, 5 and 7 for encashment, but the said cheques were returned without encashment. Hence, plaintiff - company got issued Legal Notice as per Ex.P.10 dated 12.9.2014. The said notice has been duly served upon the defendant - company as per Ex.P.10. Even after the receipt of notice, defendant has failed to pay the arrears. On perusal of entire evidence of P.W.1, D.W.1, Exs.P.2 to P.40, it reveals that plaintiff has supplied the goods to the defendant to the tune of Rs.44,06,125/-. Though the defendant has denied the claim of the plaintiff, but D.W.1 in his cross-examination at page No.7 clearly admitted that, he has paid Rs.16,71,925/- to plaintiff.
/ 43 / O.S.No.5758/2017 After payment of said amount there was a due of Rs.19,86,835/-. Defendant has admitted the supply of goods by the plaintiff, but only allegation against the plaintiff is that it has supplied defective garments. The defendant has contended that the plaintiff has not supplied the salable garments as per agreement - Ex.P.2, it is well settled law that, once the defendant admits the supply of goods, the burden shifts upon the defendant to rebut the case of the plaintiff and to establish his defence. In this case, the defendant has utterly failed to establish the fact that plaintiff has supplied the defective garments.
25. On perusal of Exs.P.2 to P.40 it clearly establish that the plaintiff has supplied the goods to the tune of Rs.44,06,125/-, out of which, the defendant has made payment for Rs.16,71,925/- and has returned the goods to the tune of Rs.15,74,808/- [i.e., Rs.16,71,925 + / 44 / O.S.No.5758/2017 15,74,808/- = 32,46,733/-]. P.W.1 also in his cross- examination clearly admitted that defendant has returned the goods to the tune of Rs.15,74,808/- and further admitted that defendant has paid an amount of Rs.16,71,925/-. As per the evidence of P.W.1 and documents produced by the plaintiff, it clearly goes to show that plaintiff has supplied the goods to the tune of Rs.44,06,125/- in which, the defendant has returned the goods as per Exs.P.41 to 44 i.e., for Rs.15,74,808/- and defendant has made payment of Rs.16,71,925/-. The said amount of Rs.15,74,808/- and 16,71,925/- are to be deducted in Rs.44,06,125/-, which will come to Rs.11,59,392/-, whereas, the plaintiff claims that defendant is in due of Rs.14,27,509/-. The claim of the plaintiff is contrary to its own documents and evidence of P.W.1. P.W.1 admitted in his cross-examination at page No.14 that while entering into agreement as per / 45 / O.S.No.5758/2017 Ex.P.2 the defendant has paid Rs.2 Lakh as security deposit and the said Rs.2 Lakh has not been adjusted in the account of defendant. In view of the admission made by P.W.1, the said security deposit of Rs.2 Lakh is to be deducted in Rs.11,59,392/-. In all the defendant is liable to pay Rs.9,59,392/- to the plaintiff. Hence, plaintiff is entitled to the said amount only.
26. That, the plaintiff - company has claimed interest at the rate of 24% p.a. on the suit claim, which is higher one. Besides, there is no explanation by the plaintiff on what basis it has claimed interest at 24% p.a. Without any evidence Court cannot grant relief by mere asking. Hence, plaintiff - company is not entitled to interest at the rate of 24% as claimed. Since it is a commercial transaction, it is just and proper to grant interest at the rate of 18% p.a., on Rs. 9,59,392/-. Hence, plaintiff - company is entitled to interest at the / 46 / O.S.No.5758/2017 rate of 18% p.a. on Rs.9,59,392/- from the date of suit till the date of realization.
27. As discussed supra, plaintiff has proved that defendant is in due of Rs.9,59,392/-. Hence, plaintiff is entitled to said amount along with interest at the rate of 18% p.a. from the date of suit till the date of realisation. Accordingly, I answer Issue No.1 in the affirmative, Issue No.2 in the negative and Issue No.3 partly in the affirmative.
28. Issue No.4 : - In view of my findings on Issues No.1 to 3, I proceed to pass the following:
ORDER Suit of the plaintiff - company is hereby partly decreed with costs.
The defendant is hereby directed to pay to the plaintiff - company a sum of Rs.9,59,392/- (Rupees Nine Lakh Fifty Nine / 47 / O.S.No.5758/2017 Thousand Three Hundred And Ninety Two only) along with interest at the rate of 18% p.a. from the date of suit till the date of realization.
The defendant shall pay above said amount to the plaintiff - company within two months from the date of this order.
Draw decree accordingly.
(Dictated to the Judgment Writer, typed directly on computer, script corrected, signed and then pronounced by me in the open court, this the 10th day of February, 2022.) (KHADARSAB), XXXIX Additional City Civil & Sessions Judge, Bangalore City.
*** ANNEXURE
1. List of witnesses examined for plaintiff:
P.W.1 : Mahesh Venkat.
2. List of documents exhibited for plaintiff :
Ex.P1 Authorization letter dated 5/9/2018 Ex.P2 Value stores buy and sell dealer / 48 / O.S.No.5758/2017 agreement dated 11/2/2014 Ex.P2(a) Signatures of defendant on page No.1 to 23 Ex.P3 Cheque No.313980 dated 28/5/2014 for Rs.3,12,957.95 Ex.P3(a) Signature of defendant Ex.P4 Endorsement given by HDFC Bank Bangalore-25 dated 25/8/2014 Ex.P5 Cheque No.313981 dated 19/6/2014 for Rs.1,14,551/-
Ex.P5(a) Signature of defendant Ex.P6 Endorsement given by HDFC Bank Bangalore-25 dated 25/8/2014 Ex.P7 Cheque No.313990 dated 20/6/2014 for Rs.10 lakhs.
Ex.P7(a) Signature of defendant Ex.P8 Endorsement given by HDFC Bank Bangalore-25 dated 25/8/2014 Ex.P9 Notice issued by the defendant dated 25/8/2014 Ex.P10 Office copy of legal notice issued to the defendant dated 12/9/2014 Ex.P11 Postal acknowledgement Ex.P12 Invoice dated 21/3/14 Ex.P13 Invoice dated 24/3/14 Ex.P14 Invoice dated 24/3/14 Ex.P15 Invoice dated 24/3/14 Ex.P16 Invoice dated 25/3/14 Ex.P17 Invoice dated 25/3/14 / 49 / O.S.No.5758/2017 Ex.P18 Invoice dated 25/3/14 Ex.P19 Invoice dated 25/3/14 Ex.P20 Invoice dated 26/3/14 Ex.P21 Invoice dated 26/3/14 Ex.P22 Invoice dated 27/3/14 Ex.P23 Invoice dated 27/3/14 Ex.P24 Invoice dated 27/3/14 Ex.P25 Invoice dated 28/3/2014 Ex.P26 Invoice dated 28/3/2014 Ex.P27 Invoice dated 28/3/2014 Ex.P28 Invoice dated 28/3/2014 Ex.P29 Invoice dated 3/4/14 Ex.P30 Invoice dated 8/4/19 Ex.P31 Invoice dated 9/4/14 Ex.P32 Invoice dated 9/4/14 Ex.P33 Invoice dated 9/4/14 Ex.P34 Invoice dated 11/4/14 Ex.P35 Invoice dated 11/4/14 Ex.P36 Invoice dated 24/4/14 Ex.P37 Invoice dated 6/5/14 Ex.P38 Invoice dated 9/5/14 Ex.P39 Invoice dated 9/5/14 Ex.P40 Invoice dated 6/8/14 Ex.P. 2(b) Signature of Sanketh ins Ex.P.2. Ex.P.41 Goods Return credit note dt 3.5.14 Ex.P.42 Goods Return credit note dt 23.5.14 Ex.P.43 Goods return credit note dt 25.6.2014 Ex.P.44 Goods Return credit note dt 19.8.16 Ex.P.45 List of credit note adjustment against / 50 / O.S.No.5758/2017 invoices
3. List of witness examined for defendant :
D.W.1 : M.R.Raghuram
4. List of documents exhibited for defendant :-
Ex.D.1 : Letter dated 20.3.2014 submitted to plaintiff Ex.D.2 : E-mail dated 12.5.2014 sent to the representative of plaintiff Ex.D.3 : E-mail dated 13.5.2014 sent to the representative of plaintiff Ex.D.4 : Postal receipt dated 22.5.2014. Ex.D.5 : Copy of letter dated 23.8.2014 submitted to the Manager, Karnataka Bank, Mattikere Branch.
(KHADARSAB), XXXIX Addl City Civil & Sessions Judge, Bangalore City.
***
/ 51 / O.S.No.5758/2017
10/02/2022
Judgment pronounced in the open Court (Vide separate Judgment) ORDER Suit of the plaintiff - company is hereby partly decreed with costs.
The defendant is hereby directed to pay to the plaintiff - company a sum of Rs.9,59,392/- (Rupees Nine Lakh Fifty Nine Thousand Three Hundred And Ninety Two only) along with interest at the rate of 18% p.a. from the date of suit till the date of realization.
The defendant shall pay above said amount to the plaintiff - company within two months from the date of this order.
Draw decree accordingly.
(KHADARSAB)
XXXIX A.C.C & S. Judge,
/ 52 / O.S.No.5758/2017
Bangalore City.