Madras High Court
Indian Tarpaulins Industries By ... vs G. Krishnamurthi & Parties And V. ... on 5 March, 2003
Author: M. Chockalingam
Bench: M. Chockalingam
JUDGMENT M. Chockalingam, J.
1. The plaintiff is the appellant herein.
2. This appeal is directed against the judgment and decree of the learned XIV Assistant City Civil Judge, Madras, under which the suit filed by the appellant herein for a money decree was dismissed.
3. The case of the appellant/plaintiff is as follows:
Goods worth Rs. 30,205/- were sold and delivered by the plaintiff to the defendants vide Invoice No. 1799 dated 28.10.1982 pursuant to the defendants' order No. 5492 dated 26.9.1982. The defendant agreed to the usual terms of sale and the interest to be charged at 18% per annum on the amounts outstanding. The defendant issued two cheques for Rs. 10,000/- and Rs. 20,205/- dated 18.12.1982 and 3.12.1982. Both the cheques were returned dishonoured. Despite several demands, the defendant failed and neglected to pay the amount. The lorry receipt was delivered in person to the defendant along with the letter dated 1.11.1982, and he has also made an endorsement on the reverse of the said letter. He is personally due and owing to the plaintiff Rs. 30,205/- towards principal and Rs. 2,718.30 towards interest. The second defendant is an agent, and it was his responsibility to see that the goods are sold through him and that the payment is made. The second defendant is liable to make the payment in his capacity as a guarantor. Hence, both the defendants are jointly and severally liable to pay the suit amount.
4. The second defendant was set exparte. The first defendant contested the suit by filing a written statement with the following averments:
The second defendant who was a representative of the plaintiff, supplied 20 tarpaulins in the first instance and received an advance of Rs. 10,000/-. The first defendant retained only 8 tarpaulins with him, while the second defendant took back 12 tarpaulins, as evidenced by his letter dated 10.12.1982. The cost of the 8 tarpaulins viz. Rs. 10,000/- has been paid by the first defendant. After the said supply, the second defendant influenced the first defendant to part with two cheques. Accordingly two cheques were issued. The second defendant also stated that the cheques would be duly returned to the first defendant. But, the cheques were not returned either by the second defendant or by the plaintiff. In the letter dated 24.12.1982 addressed by the second defendant to the plaintiff, a copy of which is marked to the first defendant, it is stated that the matter has been settled, and the second defendant took back only 8 tarpaulins, and the cheque would be returned by the plaintiff to the first defendant or a receipt will be passed, and full payment has been received. But, the first defendant has not heard of anything. The second defendant and the plaintiff colluded to defraud the first defendant. The first defendant is not due and owning to the plaintiff the sum of Rs. 30,205/- much less any other amount. With regard to interest, there was no agreement between the parties. Thus, the first defendant is not liable to pay any interest. The second defendant was authorised to collect the payment and settle the accounts with the dealers. Hence, the settlement effected by the second defendant is binding on the plaintiff, and the plaintiff is not entitled to claim any amount from the first defendant. There is no cause of action so far as the first defendant is concerned. No part of the cause of action arises within the jurisdiction of the City Civil Court, Madras, as the delivery was made at Kakinada. The payment was to be made at Kakinada. Hence, the plaintiff cannot institute a suit at Madras. Hence, the suit has to be dismissed with costs.
5. On the above pleadings, the trial Court framed as many as four issues and tried the suit. On the side of the plaintiff, P.W.1 was examined and Exs.A1 to A16 were marked. On the side of the defendants, D.W.1 was examined and Ex.D1 was marked. After considering the rival submissions and the oral and documentary evidence, the learned XIV Assistant City Civil Judge has rejected the contentions of the plaintiff's side and dismissed the suit. Aggrieved plaintiff has brought forth this appeal.
6. As seen above, the appellant/plaintiff laid the civil action for recovery of a sum of Rs. 32,923.30 with subsequent interest specifically alleging that the plaintiff pursuant to Ex.A1 purchase order placed by the first defendant through the second defendant on 26.9.1982 sold and delivered to the first defendant 25 tarpaulins worth Rs. 30,205/- as per the Invoice No. 1799 dated 28.10.1982 and marked as Ex.A3; that the two cheques issued by the first defendant for Rs. 10,000/- and Rs. 20,205/- on 18.12.1982 and 3.12.1982 respectively were dishonoured and marked as Exs.A4 and A7, and thus, the first defendant as the purchaser and the second defendant, who acted as the agent of the plaintiff and was responsible to see the proper payments from the purchasers, were liable to answer the suit claim. The first defendant contested the suit interalia stating that out of 20 tarpaulins supplied, he retained only 8 tarpaulins and returned the remaining 12 tarpaulins to the second defendant; that towards the sale price of 8 tarpaulins, the plaintiff has already received a cash of Rs. 10,000/-, but the cheques already issued were not returned, and thus, the case of the plaintiff that the 25 tarpaulins were sold and delivered to the first defendant was false. Apart from that, the first defendant raised a question as to the jurisdiction of the lower Court to try the suit stating that no part of cause of action for the suit arose within the territorial jurisdiction of the Court below. The second defendant remained exparte. Agreeing with the defence put forth by the contesting first defendant, the lower Court has dismissed the suit finding that the said Court had no jurisdiction to entertain the suit, and apart from that, the plaintiff has not proved its claim as made in the plaint.
7. The learned Counsel appearing for the appellant would submit that the lower Court has not properly considered the entire evidence both oral and documentary; that it is pertinent to note that the order placed by the first defendant under Ex.A1 was only in the nature of an offer, and the same was accepted only at Madras; that the goods were despatched from Madras; that it is pertinent to note that the first defendant has received the way bill as acknowledged in Ex.A2 on the reverse side and admitted the same in evidence, and as such the payment of freight having been made by the first defendant, the plaintiff was only acting as an agent of the first defendant in having undertook to book the goods with the transport company for onward transport to and delivery at Kakinada, and consequently, the goods stood appropriated towards contract at Madras; that it was agreed between the parties that the payment should be made at Madras, and thus, for all these reasons, the part of cause of action admitted arose at Madras; that in a case where the goods were sold and delivered, one of the factors to be proved is delivery; that in the instant case, when the first defendant had admitted the receipt of way bill as per endorsement made on the reverse of Ex.A2, it can be well inferred that the first defendant has taken delivery of the goods; that it has to be noted that the acknowledgement of delivery of such a document would amount to the acknowledgement of delivery of goods, and thus, the plaintiff has discharged the burden of delivery of goods; that the inference was inevitable that the first defendant had taken delivery of 25 tarpaulins as invoiced under Ex.A3; that having received the lorry receipt, the first defendant cannot avoid its liability to pay the same; that it is pertinent to point out that the first defendant had issued two cheques for Rs. 30,205/- equivalent to the value of the 25 tarpaulins, and as such, the inference was inevitable that the first defendant has received, checked and accepted the goods and then only made the payment; that the cheques were dishonoured not for other reason but for the reason of want of funds; that the second defendant was an employee only for the purpose of booking order and he was not either a selling agent or a buying agent; that Ex.B1 was a cooked up document prepared for the case; that the first defendant must satisfy the Court about the right of rejections and thereafter about the actual rejections and return; that the gap between the delivery and the date of dishonour of cheques would admittedly lead to the inference of acceptance; that in Ex.A3 invoice, it is mentioned that all payments should be made by crossed, ordered A/c Payee cheque/DD/MO only, and hence, the judgment and decree of the lower Court have to be set aside and the suit be decreed with costs.
8. There was no representation for the respondents' side.
9. Admittedly, on 26.9.1982 an order as found under Ex.A1 was placed by the first defendant, which was carrying on business at Kakinada, through the second defendant, who was the representative of the plaintiff at Kakinada, for the supply of 25 tarpaulin pieces through a common carrier viz. M.G. Brothers, Kakinada. The value of the total consignment after making the deductions as per Ex.A1 order, was Rs. 30,180/-. While the plaintiff has specifically come forward with the case stating that 25 tarpaulins were sold and delivered as found under Ex.A3 invoice, the first defendant came out with a plea that only 20 tarpaulins were supplied and out of the said 20 tarpaulins, 8 tarpaulins were retained by them, and the remaining 12 tarpaulins were taken back by the second defendant. This part of the defence seems to be patently false in the face of the available documentary evidence. The contents of Ex.A1 purchase order are not disputed by the defendants. As stated above, Ex.A1 order was for 25 tarpaulins. It is true that Ex.A1 document did not contain the signature of the first defendant. Taking advantage of the same, the first defendant has come out with a defence stating that only 20 tarpaulins were supplied to them. But, this contention is falsified by an acknowledgement made by the first defendant on the reverse of Ex.A2 document. It is pertinent to note that the second defendant as the representative of the plaintiff has also signed the document under Ex.A2. This would clearly demonstrate that the plaintiff has supplied 25 tarpaulins as set out in the plaint. In the face of the acknowledgement of delivery under Ex.A2, which clearly refers to Ex.A1 order, the version of the first defendant that only 20 tarpaulins were supplied cannot be accepted.
10. The next contention of the first defendant that they retained 8 tarpaulins and returned the remaining 12 tarpaulins to the second defendant has also to be rejected as false. The first defendant has not placed any material for the return of the said 12 tarpaulins to the second defendant, nor was there any agreement between the parties for the return of any part of the goods to the second defendant agent. It remains to be stated that it was not the case of the plaintiff that the goods supplied were defective or damaged, and hence, they were returned. In the absence of any material, it would be very difficult to accept the case of the first defendant that they returned 12 tarpaulins to the second defendant. The further case of the first defendant that they paid Rs. 10,000/- towards the sale price of the 8 tarpaulins is another tissue of falsehood. Though the first defendant has averred in the written statement that for 8 tarpaulins, the plaintiff had already received a cash of Rs. 10,000/-, they have not produced any documentary evidence to prove the same. After delivery of the 25 tarpaulins, as contended by the plaintiff's side, the first defendant has issued a cheque for Rs. 10,000/- on 18.12.1982 and another cheque for Rs. 20,205/- on 3.12.1982. At this juncture, it has to be pointed out that if there was no delivery of 25 tarpaulins, there was no necessity for the first defendant to issue those two cheques totalling to Rs. 30,205/-, which represented the value of the consignment viz. 25 tarpaulins under Ex.A3 invoice. It is an admitted position that the said two cheques issued by the first defendant were dishonoured. Both the dishonoured cheques along with the memo were marked as Exs.A4 to A9 respectively. This part of the documentary evidence would clearly indicate that the first defendant, which was liable to pay the value of the 25 tarpaulins viz. Rs. 30,205/-, has issued the two cheques and after those cheques were dishonoured, has come forward with the false defence as narrated above.
11. The first defendant has also come forward with a further false plea that the value of the tarpaulins retained by him was paid in cash, and the remaining tarpaulins were returned to the second defendant, which is contrary to the agreement entered into between the parties and as found under Ex.A3 invoice. Ex.A3 invoice reads thus:
"All payment should be made by crossed ordered A/c. payee cheque/DD/MO only."
Apart from the above, on 1.11.1982, the first defendant has executed a letter as found under Ex.A2 agreeing to pay Rs. 5,000/- by way of a Demand Draft and the rest of the amount in two fortnight instalments. It is pertinent to note that under Ex.A2 letter, the invoice No. 1799 dated 28.10.1982 for Rs. 30,205/- is referred to, and on the reverse of the same, the first defendant has acknowledged the delivery of the entire consignment. Though the first defendant was authorised to hand over a demand draft for Rs. 5,000/- to the representative of the first defendant viz. the second defendant, the first defendant has not placed any proof for the said payment of Rs. 5,000/- by way of Demand Draft. No documentary evidence is also adduced to prove the balance payment also. Thus, the first defendant though took the delivery of 25 tarpaulins as found under Ex.A1 order and Ex.A3 invoice, has come forward with all possible false pleas. From the available evidence, it would be abundantly clear that the first defendant who took delivery of 25 tarpaulins as evidenced by their acknowledgement under Ex.A2, was liable to pay its price viz. Rs. 30,205/- as found under Ex.A3 invoice.
12. So far as the second defendant is concerned, he also becomes liable to answer the claim of the plaintiff, since he has acted as an agent of the plaintiff at Kakinada for the purposes of booking, and he was also under an obligation to see that the purchasers to whom the goods were sold through him, should make payments. It is also pertinent to point out that the second defendant has signed in Ex.A1 purchase order and has also acknowledged the receipt of the goods along with the first defendant under Ex.A2 letter. Despite service of summons, he has neither appeared nor filed written statement contesting the claim of the plaintiff. But, the available materials would clearly indicate that he was also responsible to answer the suit claim along with the first defendant, and hence, both the defendants are jointly and severally responsible to meet the claim of the plaintiff.
13. The lower Court on an erroneous view has found that the said Court had no jurisdiction to entertain the suit. It is true that the plaintiff is carrying on its business at Madras, and the first defendant buyer was carrying on its business at Kakinada. It is also true that the first defendant offered to purchase the 25 tarpaulins as found under Ex.A1 order at Kakinada, but the said order was accepted by the plaintiff at Madras. Apart from that the said consignment was placed in the hands of the common carrier M.G. Brothers, Kakinada, as found under Ex.A1. Ex.A3 invoice reads thus:
"Our responsibility ceases as soon as the goods entrusted to the carriers/Railways in good condition."
It is not in dispute that the said consignment was entrusted to the common carrier M.G. Brothers as agreed between the parties under Ex.A1. Section 39(1) of the Sale of Goods Act, 1930 reads as follows:
"39. Delivery to carrier or wharfinger (1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer."
A reading of the said provision would make it abundantly clear that when the seller is authorised to deliver the goods to a carrier, whether named by the buyer or not, for the purposes of transmission to the buyer, a prima facie delivery of the goods to the buyer has to be deemed. In the instant case, the name of the common carrier for transmission of the goods to the buyer was clearly set out under Ex.A1 purchase order, and pursuant thereto, the plaintiff has entrusted the goods to the common carrier at Madras. It has to be noted that the place of purchase is Madras, where the goods were delivered to the common carrier. Under such circumstances, it is needless to state that a part of the cause of action has arisen at Madras, which would enable the plaintiff to institute the suit in the City of Madras. Thus, the suit filed by the plaintiff was well within the territorial jurisdiction of the Civil Court at Madras. For the foregoing reasons, the judgment and decree of the lower Court have got to be necessarily set aside.
14. In the result, this appeal suit is allowed, setting aside the judgment and decree of the lower Court. Suit in O.S. No. 3429 of 1983 is decreed for a sum of Rs. 32,923.30 with subsequent interest at 12% per annum on Rs. 30,205/- from the date of plaint till the date of realisation. Time for payment is two months. Costs throughout is ordered.