Delhi District Court
M/S Bonton Cables ( India) Pvt. Ltd vs Sh. Rahul Jain on 29 September, 2016
IN THE COURT OF SHRI A.K. AGRAWAL CIVIL JUDGE
01 ( WEST), TIS HAZARI COURTS, DELHI..
SCJ No. 611233/16
Date of Institution : 06.07.2011
Date of reservation of judgment : 15.09.2016
Date of pronouncement of Judgment : 29.09.2016
M/s Bonton Cables ( India) Pvt. Ltd.
Jagannath Duddadhar Complex
Opp. Maharaja Agrasen Hospital
New Rohtak Road, Punjabi Bagh
New Delhi26.
................Plaintiff
vs.
Sh. Rahul Jain
Prop. of M/s Roopsons
Roop Complex, Sirki Mandi, Jaipur House
Near Central Bank, Jaipur House Market
Agra 282010 ( U.P).
..............Defendant
SUIT FOR RECOVERY
Judgment
1.Brief facts of the present case are that the plaintiff is a private limited company and is engaged in the business of manufacturing and sale of PVC cables and other electrical items and has filed this suit through its AR Sh. Ranjit Kumar, who has been duly authorized by the plaintiff company through a Resolution passed by the Board of Directors in his favour.
2. It is stated that the defendant is running a proprietorship SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 firm under the name of M/s Roop Sons and is engaged in the business of sale and purchase of building material including electrical cables, wires, tiles etc. The defendant approached plaintiff for purchase of cables of various/different sizes and agreed to make the payment on account of goods purchased by him within time. Infact defendant had also applied for being a dealer of the plaintiff by furnishing a duly filled Dealer date sheet form thereby disclosing the address, status of the firm/ownership, name of the banker, nature of business, etc.
3. Further states that defendant had placed orders for the supply of electrical cables and accordingly, plaintiff had supplied the same as per agreed terms and conditions between the parties. Further not only the sales were made against bills/vouchers to the defendant but plaintiff had also been issuing due credit notes to the defendant as and when required.
4. It is further stated that defendant had failed to pay the outstanding payment towards purchases made by him, despite repeated requests, reminders and telephonic conversations. As per plaintiff, an amount of Rs.1,59,536.08/ stands outstanding against defendant since February, 2009 alongwith an amount of Rs. 86,151/ towards interest @ 24 % p.a. uptill May, 2011. Hence a legal notice dated 03.05.2011 had also been served upon defendant by the plaintiff but of no avail.
5. At last it is stated that the plaintiff is carrying on business from its registered head office at Delhi and the defendant had approached it for purchase of goods at Delhi and legal notice was issued from Delhi. Thus the court had territorial jurisdiction to try the present suit. Accordingly, the present suit was filed seeking recovery of the aforesaid amount with future interest @ 24% p.a. and costs of the suit.
6. Written statement has been filed on behalf of defendant wherein it is stated that he (defendant) is engaged in the business of sale of SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 sanitary goods in the city of Agra, U.P and personally works for gain in Agra and does not have any office or special agent in Delhi. Further avers that the plaintiff approached him in Agra for business dealing and on the representations made by plaintiff about their product, he had purchased some goods from plaintiff. Hence it is contended that the present suit was not maintainable as this court does not have territorial jurisdiction to try the same.
7. It is further contended that the plaintiff has deliberately concealed material facts by not producing the correct ledger and records of defendant. Further alleges that plaintiff has produced a fake ledger account of defendant in which only sale of goods is shown but payment made by him (defendant) against said purchases are not shown. Further contends that it is not possible to show the ledger account of any debtor/creditor for more than one year as the VAT returns are filled on quarterly, halfyearly or yearly basis only and this shows that the ledger account produced by plaintiff is fake and concocted one.
8. Further contends that he had made a payment by cheque no. 037585 on 04.10.2007 for Rs. 10,000/ which was duly honoured but the plaintiff has not shown that entry anywhere in the ledger account. Similarly, credit note no. 285 for Rs.9,734/ and credit note no. 290 is also not shown by plaintiff in the ledger account. Further states that he had deposited an amount of Rs. 1,20,000/ in the bank account of plaintiff in four entries of Rs. 25,000/ on 19.09.2008, Rs. 45,000/ on 07.10.2008, Rs. 25,000/ on 21.10.2008 and Rs. 25,000/ on 20.11.2008. However even these cash entries are not reflected in ledger account of defendant which has been placed on record by plaintiff.
9. The defendant further states that he had returned goods worth Rs. 92,610/ in November, 2008 in the form of tax invoice but plaintiff SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 has shown this amount in the ledger as Rs. 82,885/ that means with a discrepancy of Rs. 9,725/. Also avers that plaintiff had sent a letter of "No Dues" to him on its letter head stating that there was no amount due and outstanding with respect of any sale/purchase. Thereafter a letter dated 22.10.2009 was sent by him to the plaintiff stating that the said 'No Dues Certificate' had been received. The said letter was duly received by plaintiff as is evident from postal receipts. Prayer is accordingly made for dismissal of present suit.
10. Replication was also filed by plaintiff wherein it is stated that the defendant has another firm by the name of 'M/s Bharat Cement Agency' operating from the same address from which he is running the business by the name of 'M/s Roop Sons' and whatever material he availed or purchased from plaintiff in respect of his other firm namely 'Bharat Cement Agency', the same was duly shown and entered in the ledger books of account maintained by plaintiff. Defendant had infact played fraud with plaintiff as well as with the court by showing payments made on behalf of M/s Bharat Cement Agency to the plaintiff, as the payments made towards the outstanding dues of M/s Roop Sons.
11. It is further contended that all the annexures filed by plaintiff have no relevancy except one Annexure regarding 'No dues Certificate' as the same was a forged and fabricated document and plaintiff had never issued any such document/certificate to the defendant either for his firm M/s Roop Sons or M/s Bharat Cement Agency. Rest of the contentions raised in written statement were denied.
12. Vide Order dated 19.05.2014, following issues were framed by the Ld. Predecessor of this court :
1. Whether the plaintiff is entitled to the decree of sum of Rs. 2,45,687/ as prayed for ? OPP.
SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15
2. Whether the plaintiff is entitled to interest, if any, at what rate and for what period ? OPP.
3. Whether this court has no territorial jurisdiction to try the present suit ? OPD
4. Relief.
13. In order to prove its case, the plaintiff company examined two witnesses namely, Sh. Bipin Chaudhary as PW1 and Sh. Prasant Kumar Maharana as PW2. In their testimonies, following documents were exhibited :
"Affidavit of PW1 is Ex. PW1/A wherein the averments of plaint have been reproduced, Board Resolution is Ex. PW 1/1, copy of ledger accounts from 01.4.2007 to 31.03.2009; 01.04.2009 to 31.03.2010 and 01.04.2010 to 28.05.2011 are Ex. PW 1/2 (colly), invoice no. 024 dated 24.11.2007 with consignment note bearing no. 06/11957 is Ex. PW 1/3 (colly), invoice no. 030 dated 30.11.2007 with consignment note bearing no. S06/11199 dated 01.12.2007 is Ex. PW 1/ 4 (colly), legal notice is Ex. PW 1/5, postal receipts are Ex.
PW 1/6, proof of delivery is Ex. PW 1/7, Dealership form is Mark A, accounts statement of Bharat Cement Agency is Ex. PW 1/9, Affidavit of PW 2 is Ex. PW 2/A, Copy of appointment letter is Ex. PW 2/1 and memorandum and articles of association is Ex. PW 2/2. During cross examination of PW2 the No Dues Certificate was marked as Mark B. "
Both the witnesses were crossexamined and thereafter PE was closed.
14. On the other hand, defendant only examined himself as DW SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15
1. In his testimony, following documents were exhibited :
" The affidavit of DW1 is Ex. DW 1/A, ledger account of plaintiff maintained by DW1 for financial year 200708 is Mark X, photocopy of cheque bearing no. 037585 dated 25.09.2007 for Rs. 10,000/ is Mark Y, Statement of bank account w.e.f 01.10.2007 to 31.10.2007 is Mark Z, Credit note no. 285 of Rs. 9,734 is Ex. DW 1/3, Credit note no. 257 is Ex. DW 1/4, the tax invoice no. 179 issued to the plaintiff is Ex. DW 1/5, the ledger account of plaintiff maintained by defendant for financial year 200809 is Mark X1, No Dues letter sent by plaintiff is Ex. DW 1/7, letter dated 22.10.2009 alongwith postal receipt are Ex. DW 1/8 and Ex. DW 1/9 respectively. During crossexamination of this witness, the origial Dealership Form was exhibited as Ex. DW1/P1. "
Defendant was also duly crossexamined and thereafter DE was closed.
15. Final arguments were addressed only on behalf of plaintiff. However both the parties also filed written arguments. Defendant has relied on judgments in M/s Dodha House vs S K Maingi Appeal (civil) 6248 of 1997 and Patel Roadways Ltd. Vs Prasad Trading Company 1992 AIR SC 1514 in support of his contentions.
16. I have now considered the arguments advanced before me as well as perused the evidence on record. My issuewise findings are as under :
ISSUE No. 33. Whether this court has no territorial jurisdiction to try the present suit ?
The onus to prove this issue was upon the defendant.
SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15
17. The contention of defendant is that he is carrying on his business of sale of sanitary goods in the city of Agra (U.P) and does not have any office or special agent in Delhi. Further contends that plaintiff approached him in Agra for business dealing. It is also contended that PW 1 has admitted in his crossexamination that goods were dispatched to defendant from Ghaziabad workshop of plaintiff company. Even dealership form Mark A was filled up in Agra as admitted by PW2 in his crossexamination. Moreover plaintiff company was having its branch office at Hyderabad, Cochi, Punjab, Kolkata and Mumbai but not in Delhi, hence for all the above reasons, there was no territorial jurisdiction with this court. On the other hand, plaintiff has contended that defendant approached it for business transactions in Delhi for being appointed as dealer. Legal notice for nonpayment was issued from Delhi and the bills issued by plaintiff categorically stipulates "All disputes are subject to Delhi jurisdiction". Moreover plaintiff company was carrying on its business from Delhi. Hence the suit was within the territorial jurisdiction of this court.
18. I have considered submission of both sides. As far as territorial jurisdiction is concerned, Section 20 of CPC is relevant. As per this section a suit has to be instituted in court within the local limits of whose jurisdiction, defendant or one of the defendants, resides or carries on business or personally works for gain or the cause of action wholly or in part arises. As far as the evidence on record is concerned, perusal of invoices Ex. PW 1/3 and Ex. PW1/4 shows that the said invoices have been issued from Ghaziabad (U.P) address of plaintiff. PW2 states that the dealership form Ex. DW1/P1 was filled in Agra in the presence of executives of plaintiff company. I am aware that PW1 on the other hand, has stated that dealership form was signed in Delhi but a perusal of said SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 form shows that it also bears the signature of Branch Manager of plaintiff, so if the said form was signed at the head office of plaintiff which is in Delhi, then there was no occasion for branch manager to sign it.
19. Further as PW1, the goods were dispatched from Ghaziabad workshop of plaintiff. Payments were made on behalf of M/s Roop & Sons by defendant from Agra, whether by way of cash deposit in bank account of plaintiff or through cheques. There is nothing on record to suggest that defendant ever visited plaintiff company in Delhi for entering into business relations. Further evenif plaintiff is carrying on its business from Delhi even then its the place of business of defendant which is material for the purposes of deciding territorial jurisdiction and not that of the plaintiff.
20. Further mere issuance of legal notice regarding nonpayment of dues, from Delhi will not confer jurisdiction on Delhi courts. It is correct that it is mentioned on invoices Ex. PW1/3 and Ex. PW1/4 that all the disputes are subject to Delhi jurisdiction. Though the law is well settled that such terms and conditions of excluding juridiction of other courts in case cause of action arises at many places, are valid in law, however at the same time, by way of agreement, parties cannot confer jurisdiction upon a court which initially does not have jurisdiction to decide the same.
21. In case titled as Arinits Sales Pvt. Ltd. vs Rockwell Plastic Pvt. Ltd. and Ors. IA Nos.1726/07, 1727/07 and CS (OS) No. 1196/2006 decided on 20.12.2007 by Hon'ble Delhi High Court, the facts were almost similar to the present case. In the said case, plaintiff sought to invoke jurisdiction of Delhi on the basis that it was mentioned on invoices "subject to Delhi Jurisdiction" and that the cheques were returned dishonoured from the bank of plaintiff which was situated in Delhi. While ordering for return of plaint due to lack of territorial jurisdiction, it was held as follows : SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 "There is no dispute that where cause of action has arisen at different places, the parties can confer jurisdiction on a particular Court where a part of cause of action has arisen, for redressal of their disputes. In a suit on contract where two Courts have jurisdiction, choice of forum is with the plaintiff. Parties cannot confer jurisdiction even by consent on a Court where no part of cause of action has arisen and has no inherent jurisdiction to entertain a suit."
The above judgment was upheld by Hon'ble Division bench of Delhi High Court in Arinits Sales Pvt. Ltd. vs Rockwell Plastic Pvt. Ltd. and Ors. 149 (2008) DLT 123. Reliance can also be placed on Gujarat Insecticides Ltd. vs Jainsons Minerals and Anr. 140 (2007) DLT 465 ; Patel Roadways Ltd. Vs Prasad Trading Company 1992 AIR SC 1514 and many other judgments.
Coming back to the facts of the present case, if it had been the case that both Delhi and U.P. courts had jurisdiction to decide the suit, under such circumstances, parties could have agreed to confer jurisdiction on one of such courts either of Delhi or U.P., to the exclusion of the other court. However since entire cause of action has arisen in U.P. and no cause of action has arisen within the territorial jurisdiction of Delhi, the parties herein and specifically the plaintiff, cannot confer jurisdiction on Delhi Court even by consent of the defendant.
From the above discussion it is apparent that jurisdiction does not lie in Delhi court as far as the facts of this case are concerned, hence this issue is decided in favour of defendant and against the plaintiff.
22. ISSUE No. 1 and 2.
1. Whether the plaintiff is entitled to the decree SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 of sum of Rs. 2,45,687/ as prayed for ?
2. Whether the plaintiff is entitled to interest, if any, at what rate and for what period ?
Both these issues are taken together as findings on both these issues are bases on common facts and evidences. The onus to prove both these issues are upon plaintiff.
23. As far as allegations of plaintiff are concerned, this suit has been filed against defendant in his capacity of being the proprietor of M/s Roop & Sons to whom the plaintiff company had supplied certain goods. A proprietorship firm is not a separate legal entity, is an established law and hence it can only be sued through its proprietor who is also personally liable for towards the creditors for the financial liabilities of the firm.
24. As far as the contention of defendant being proprietor of M/s Roop & Sons is concerned, this fact was not denied by defendant in his written statement or in his Affidavit Ex. DW1/A. However in his cross examination, defendant as DW1 has stated that he was not the proprietor of M/s Roop & Sons and infact his grandmother Ms. Maya Devi Jain was its proprietor. He further explained that he had filed WS in the capacity of proprietor as the court summons were sent in his name. Though on court query, he admitted that he had not mentioned in the written statement that his grandmother was proprietor and the suit was filed in the name of wrong person. In his crossexamination, he further stated that he was looking after the work of M/s Roop & Sons on the basis of Power of Attorney but no Power of Attorney was filed on record.
25. However it can be seen that a significant portion of cross examination of defendant was devoted by plaintiff's counsel in proving that defendant was not proprietor of M/s Roop & Sons and he even SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 managed to prove it in the end by eliciting admissions from defendant and also by giving various suggestions to him to that effect.
26. To elaborate it further, it can be seen that during cross examination of defendant, a suggestion was put to him and duly admitted by him that it was correct that he had not filed any document in the capacity of proprietor of M/s Roop Sons with any statutory authority like income tax, sales tax etc. Defendant further admitted that he had not filed any document showing any authorization in his favour to operate the bank account of M/s Roop Sons. He further admitted that there was no authorization letter filed by him in the present matter whereby he is authorized to depose on behalf of Smt. Maya Devi, the proprietor of M/s Roop Sons. Defendant also admitted that the documents filed by him in court do not bear signatures of the proprietor of M/s Roop Sons. It is pertinent to mention that all the admissions were made by defendant on suggestions given by plaintiff's counsel, hence these facts have to be treated as admitted facts and consequently it will be read against the plaintiff. Infact a suggestion was also given to defendant by plaintiff's counsel at the end of crossexamination that he had fraudulently posed himself to be the proprietor of M/s Roop Sons and entered into business transactions from the plaintiff firm. Instead of giving a suggestion that defendant was falsely denying that he was not the proprietor of M/s Roop & Sons, suggestions have been given that he had cheated plaintiff by showing himself to be the proprietor.
27. Hence from crossexamination of defendant, it is quite apparent that defendant is not the proprietor M/s Roop & Sons which fact has been proved by the counsel for plaintiff by way of crossexamination. To re iterate, a proprietorship firm is not a legal entity in the eyes of law and hence it can neither sue in its own name nor be sued by any other person.
SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 Infact it is the proprietor of the firm which has to be sued in case of any transactions or dispute with or against a proprietorship firm.
28. The admitted facts are that the goods have been supplied to M/s Roop & Sons doing its business through its proprietor, the invoices has been raised against the firm, the statement of Account is being maintained by plaintiff in the name of firm where the sales, sales return and the payments were recorded. Infact there is nothing on record to suggest that defendant had personally received the goods of plaintiff and he cannot be saddled with personal liability towards the outstanding dues of M/s Roop & Sons.
29. Under such circumstances, plaintiff ought to have filed the suit against Smt. Maya Devi, the actual proprietor of M/s Roop & Sons but it has only been filed against defendant, i.e. against a wrong person. Further any admissions of alleged liability made by defendant with respect to M/s Roop & Sons, cannot even be considered in evidence as admittedly there is no authorization letter filed by him whereby he had been authorized to depose on behalf of Smt. Maya Devi, proprietor of M/s Roop & Sons nor any Power of Attorney has been filed in his favour.
30. Even on merits, the suit of plaintiff is not maintainable. In order to prove the liability of defendant, plaintiff has filed invoices Ex. PW 1/3 and Ex. PW 1/ 4 as proof of sale of goods. It has further filed copy of ledger account Ex. PW 1/ 2 to prove the outstanding dues from the defendant. At the outset it is worth mentioning that document Ex. PW 1/ 2 though it has been inadvertently exhibited during testimony of PW1, cannot be read in evidence being inadmissible in law since it is a computer generated document and filed without a certificate U/s 65 B of Indian Evidence Act. Infact for the same reason, the ledger account of plaintiff which was being maintained by defendant as well as his statement of bank SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 account was also not permitted to be exhibited in evidence of defendant. So plaintiff cannot be permitted to rely on the said document Ex. PW1/2.
31. Further there is difference in the name of the firm in whose name the invoices has been issued since the name of consignee is mentioned as M/s Roop & Sons on the invoices Ex. PW1/3 and Ex. PW1/4 whereas the suit has been filed against defendant in his capacity of being proprietor of M/s Roop Sons. Infact defendant also states in his cross examination that both M/s Roop Sons and M/s Roop & Sons are different firms and even the dealership form Ex. DW1/P1 bears the name of M/s Roop Sons and not M/s Roop & Sons. This ambiguity in the name of firm has not been explained by plaintiff however the supply of goods to the firm has not been denied.
32. For the sake of arguments, evenif the above facts are deemed to be admitted, it can also be seen that defendant contended that he had made payment of Rs. 1,20,000/ to the plaintiff by depositing cash in its bank account, he also made reference about payment made through cheque for Rs. 10,000/ which is Mark Y, and that of raising credit notes Ex. DW 1/3 and Ex. DW1/4 and tax invoice Ex. DW 1/5 against the plaintiff. The plaintiff acknowledges the above payments and the documents but contends that those documents and payments are not relevant for this case since it was payment made on behalf of M/s Bharat Cement Agency, which is allegedly another firm of defendant being run at the same address as that of M/s Roop Sons and was also having business dealings with defendant. The plaintiff has however failed to prove that M/s Bharat Cement Agency was another proprietorship firm of defendant as no such evidence has been filed. Infact during Crossexamination, PW1 admitted that have not filed any document to prove that defendant was proprietor of M/s Bharat Cement Agency.
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33. Though from the evasive replies given by defendant in cross examination, it does appear that M/s Bharat Cement Agency was running its business from the same address as that of M/s Roop Sons and may be using the same telephone number but it could not be proved that defendant was its proprietor or also looking after its business. As per defendant, he had no concern with M/s Bharat Cement Agency so plaintiff ought to have produced any such document proving that defendant was either proprietor or care taker of M/s Bharat Cement Agency.
34. Since the plaintiff had appropriated and credited the cash payments of Rs. 1,20,000/ and above credit notes and tax invoice in the account of M/s Bharat Cement Agency, it was for the plaintiff to prove on whose instructions and authority, it was credited in the account of M/s Bharat Cement Agency. Infact even the statement of account of M/s Bharat Cement Agency Ex. PW1/9 which has been filed by plaintiff, cannot be read in evidence for the same reason that it is a computer generated document and filed without a certificate u/s 65B of Evidence Act.
35. I am aware that from bare perusal of defendant's cross examination, it does transpire that in reply to questions put to him by plaintiff's counsel, defendant has resorted to falsehood and concealment of facts on many occasions. However simply because the defendant has resorted to falsehood, a conclusion cannot be drawn that the plaintiffs case is duly proved. The plaintiff's case must stand on its own legs and it cannot take any advantage of inconsistent and false pleas of defendant especially when the onus is on plaintiff to prove certain facts.
36. The plaintiff also denied issuance of "No Dues" Certificate Ex. DW1/7 to the plaintiff by alleging that its a forged document and it did not bear the stamp of plaintiff company or the signatures of any of its SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15 authorized signatory. It is settled law that in cases of allegations of forgery and fraud, the onus to prove the same is on the person who alleges the same and not on the opposite party. The plaintiff has not been able to discharge the above onus and its mere oral denial, is not sufficient to discredit the said document. The company should have produced the letter pad being used by it during the relevant period alongwith its seal and could have also produced the specimen signatures of its authorized signatory during the said period but nothing of that sort has been done.
37. Accordingly, both these issues are decided in favour of defendant and against the plaintiff.
Relief.
In view of the above mentioned observations and findings, the suit of the plaintiff stands dismissed. No order as to costs.
Decree Sheet be prepared accordingly.
File be consigned to record room after due compliance.
Announced in the open court ( A.K. Agrawal) today on 29.09.2016 Civil Judge 01 ( West)/Delhi SCJ No. 611233/16 Bontaon Cables vs Rahul Jain 15/15