Bangalore District Court
M/S.S.Gopal Kamath & Co vs Rachna Rubbers Pvt.Ltd on 20 August, 2015
IN THE COURT OF THE XIX ADDL. CITY CIVIL &
SESSIONS JUDGE AT BANGALORE CITY : (CCH.18)
Dated this 20th day of August, 2015.
Present
SMT.K.B.GEETHA, M.A., LL.B.,
XIX ADDL. CITY CIVIL & SESSIONS JUDGE,
BANGALORE CITY.
O.S.NO.8184/2012
PLAINTIFF : M/s.S.Gopal Kamath & Co.,
A Partnership Firm,
Registered under Indian Partnership Act
Having its office at
No.41/42, Behind VRL Depot,
Pattanakere, Mysore Road,
Bangalore-560 059.
Rep.by its Manager
Mr.K.S.George.
(By M/s.Lexplexus Advocates)
-VS-
DEFENDANTS : 1. Rachna Rubbers Pvt.Ltd.,
No.82, P1, KIADB Industrial Area,
Nanjangud-571302.
2. Mr.Siddalinga Swamy,
Chairman,
No.82, P1, KIADB Industrial Area,
Nanjangud-571302.
( D.1 & D.2 - By Sri.AKS, Advocate)
2 O.S.No.8184/2012
Date of Institution of the suit : 17/11/2012
Nature of the Suit : Recovery of money.
Date of commencement of recording
of evidence : 5/7/2014
Date on which the Judgment was
pronounced : 20/8/2015
Year/s Month/s Day/s
Total Duration : 02 09 03
JUDGMENT
The plaintiff has filed this suit for recovery of Rs.23,33,062/- along with interest at 16% p.a. from the date of suit till realization.
2. The case of plaintiff in nutshell is that the plaintiff is the partnership firm represented by its manager. The 1st defendant is a private limited company. The defendants requested for supply of rubber chemicals and allied products. Accordingly, the plaintiff supplied the rubber chemicals and allied products to the 1st defendant from time to time under various invoices. The defendants were 3 O.S.No.8184/2012 required to pay the value of the goods within 30 days from the date of such supply; in the event of non-payment within 30 days, they are liable to pay interest at 16% p.a. on the outstanding balance as per trade practice. Initially, the defendants used to clear the payment within 30 days from the date of purchase. There is due of Rs.14,62,038/- as on 21/10/2010 from 1st defendant company towards principal amount and Rs.3,87,740/- towards interest. There was good trading relationship between plaintiff and defendants. The plaintiff made several requests to defendants to clear the dues. But defendants postponed it on one pretext or the other. The plaintiff issued several letters dtd:8/6/2009, 2/7/2009, 15/3/2010, 21/10/2010, 15/7/2011 and 11/8/2011 to defendants, which were received by the defendants and under those letters, the plaintiff demanded the defendants to make payment. Regarding said partial payment, 1st defendant issued 2 cheques bearing Nos.885229 dtd:12/1/2009 and No.885229 dtd:16/1/2009 for Rs.1,92,400/- each. 4 O.S.No.8184/2012 However those cheques were dishonoured when presented for encashment with an endorsement 'insufficient funds'. The defendants have written letters dtd:30/10/2010 and 15/7/2011 wherein they prayed time for payment of outstanding dues. The 1st defendant company also expressed its difficulties in paying the amount and prayed for co-operation of the plaintiff. The 1st defendant acknowledged the liability in its letter dtd:30/10/2010 and 15/7/2011 and informed that it has filed Reference No.127/05 before BIFR. The plaintiff learnt that aggrieved by the order passed in the said Reference, the defendants have preferred an appeal in Appeal No.49/2011 before the Hon'ble Appellate Authorities and got the stay order. As on the date of filing the suit, the defendants are due in a sum of Rs.14,62,046/- towards the principal amount and a sum of Rs.8,63,516/- towards interest totally due a sum of Rs.23,33,062.08 Ps. Hence, the suit for appropriate reliefs.
5 O.S.No.8184/2012
3. The defendants appeared through their counsel and field their written statement wherein they took contention that the suit is barred under Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred as SICA). The defendant company is declared as a sick company under said Act, restructuring process is being carried out. They denied all the remaining allegations made in the plaint regarding purchase of articles from the plaintiff company under several invoices and receipt of letters. Further, they contended that the suit is barred by limitation and this court has got no jurisdiction to try the suit as no part of transaction is taken place within the jurisdiction of this court. Hence, prayed for dismissal of the suit with costs.
4. From the above facts, following issues and additional issue are framed:-
ISSUES
1. Whether the plaintiff proves that he has supplied rubber chemicals and allied products under invoice on different dates totally to the tune of Rs.14,62,046/- to the defendant as shown in para 11 of the plaint?6 O.S.No.8184/2012
2. Whether the plaintiff further proves that the defendants are liable to pay 16% interest after 30 days of supplying of rubber chemicals and allied products till the date of filing the suit i.e., 27/9/2012 to the tune of Rs.8,63,516.80 and defendant is liable to pay total sum of Rs.23,33,062/-?
3. Whether the defendant proves that the defendant company is declared as Sick Company under Sick Industrial Companies (Special Provision) Act, 1985 and hence the suit is not maintainable?
4. Whether the defendant further proves that this court has no territorial jurisdiction to entertain and try the suit?
5. Whether the plaintiff is entitled for the suit claim amount?
6. What order or decree?
ADDITIONAL ISSUE NO.1
1. Whether the suit is barred by limitation?
5. On behalf of plaintiff, the manager of the plaintiff company is examined as PW-1 and got marked Ex.P.1 to Ex.P.46 and closed its side. On behalf of defendants, the 7 O.S.No.8184/2012 2nd defendant is examined as DW-1 and got marked Ex.D.1 and closed their side.
6. Judgment was passed in this suit on 16/1/2015 by dismissing the suit holding that the suit is not maintainable as per provisions of SICA and thus, other issues were not dealt with. Against, said judgment and decree, plaintiff has filed Misc.No.129/2015 under Order XXXXVII R.1 CPC for review of the judgment and accordingly, judgment was reviewed and said judgment and decree was set-aside. Afterwards, both counsels took notice of restoration and submitted their arguments on merits.
7. Findings of this court on the above issues are :-
Issue No.1: - In affirmative;
Issue No.2: - Partly in affirmative;
Issue No.3: - In negative;
Issue No.4: - In negative;
Issue No.5: - Party in affirmative;8 O.S.No.8184/2012
Addl.Issue No.1: - In negative; Issue No.6:- As per the final order for the following:-
REASONS ISSUE No.1
8. According to plaintiff, plaintiff firm supplied rubber chemicals and allied products to 1st defendant as and when it placed orders under various invoices. According to plaintiff, as on 21/10/2010, defendant No.1 was due a sum of Rs.14,62,038/- being the principal amount due under those invoices.
9. To substantiate the above contention of plaintiff, plaintiff firm has produced the invoices as per Ex.P.22 to Ex.P.35 and 3 delivery challans as per Ex.P.36 to Ex.P.38. On perusal of these documents, this court found that under invoices as per Ex.P.22 to Ex.P.35 from 13/1/2009 to 23/1/2009 on 3 dates, plaintiff supplied goods mentioned in those invoices to 1st defendant company and Ex.P.36 to Ex.P.38 delivery challans reveal that the goods were supplied to Defendant Company. Ex.P.36 to Ex.P.38 9 O.S.No.8184/2012 bears the seal of Defendant Company. Except denying these transactions in the written statement, there is no specific denial from defendant.
10. To substantiate the contention of plaintiff, plaintiff has also produced the cheques issued by Defendant Company as per Ex.P.14 and Ex.P.17 for a sum of Rs.1,93,400/- each and bank endorsements as per Ex.P.15 and Ex.P.16, 18 and 19 that those cheques were dishonoured with endorsement as 'funds insufficient'. Plaintiff has also produced ledger account extract of Defendant Company and it is marked as Ex.P.40. It reveals that there were series of transactions even earlier to the suit transaction between plaintiff and defendant No.1 and the outstanding balance was Rs.14,62,038/- as on 31/3/2009. The amount mentioned in invoices as per Ex.P.22 to Ex.P.35 was not paid. However, the last payment was on 26/3/2009 amounting to Rs.1,83,102/-. 10 O.S.No.8184/2012
11. There was series of letters correspondence between plaintiff and defendant for recovery of the amount. The plaintiff has produced the office copies of letters dtd:8/6/2009, 2/7/2009, 15/3/2010, 21/10/2010, 25/7/2011 and 11/8/2011 as per Ex.P.3 to Ex.P.5, Ex.P.7, Ex.P.10 to Ex.P.12. All these letters are written by plaintiff to defendants requesting for repayment of the outstanding dues. Ex.P.5 is accompanied with the account extract for not paying the amount due under invoices/bills in question. Ex.P.3 & Ex.P.5 bears seal and signature of 1st defendant company for having received originals of Ex.P.3 and Ex.P.5. D.W.1 also admitted in the cross-examination that those documents bear his signature. Ex.P.7 is accompanied by postal acknowledgment as per Ex.P.8 and Ex.P.9 for having served the original of Ex.P.7 to defendants. The defendants have given reply to Ex.P.7 & Ex.P.10 as per Ex.P.20 and Ex.P.21 respectively. On perusal of all the above said documents, it is crystal clear 11 O.S.No.8184/2012 that there is no specific denial of receipt of goods from plaintiff by defendant.
12. In Ex.P.20, it is clearly stated that defendants are not able to pay the outstanding dues because of unforeseen circumstances and lack of orders and they also stated that they would clear the amount within two months because they are going to get huge outstanding dues from KSRTC. In Ex.P.21 they have stated that they are waiting for court decision under BIFR and the payment will be examined and repaid once the court settles their case. Hence, in Ex.P.20 and Ex.P.21 there is no denial of outstanding dues to plaintiff.
13. PW-1 in the cross-examination has deposed that in Ex.P.20 and Ex.P.21 defendant has not admitted of any dues to the plaintiff company. However, his above evidence is contrary to Ex.P.20 and Ex.P.21. Hence, his above said oral evidence which is contrary to documentary evidence cannot be looked into.
12 O.S.No.8184/2012
14. The only suggestions to PW-1 is that defendant has cleared all the dues to plaintiff and it is not shown in plaintiff's statement and he manipulated the books of accounts. However, these suggestions are denied by P.W.1. PW-1 is the GPA holder of plaintiff firm and said GPA is marked as Ex.P.2. Ex.P.1 is the Form No.'A' issued by Registrar of Firms showing the names of partners of plaintiff firm.
15. In Ex.P.7, it is stated clearly that principal amount due as Rs.15,62,038/- and this is not disputed by defendants while giving reply as per Ex.P.20. In the evidence also DW-1 admits that Ex.P.20 and Ex.P.21 are the letters written by him to the plaintiff company. He also admits that Ex.P.14 and Ex.P.17 bears his signature i.e., cheques. He has deposed that he does not remember whether he paid the amount after Ex.P.14 and Ex.P.17 were dishonoured. But he can verify the documents and he will produce them. However, he has not made any efforts to produce such documents. He also deposed that 13 O.S.No.8184/2012 he does not remember whether he paid the amount or not even 2 months after writing letter as per Ex.P.20. He also admitted that he received notices as per Ex.P.41 and Ex.P.44.
16. While cross-examining PW-1, no specific suggestions are made regarding the invoices or delivery challans. Those documents were not denied by defendants. Even in writing letters as per Ex.P.20 & 21, defendants have not denied the quantum of outstanding dues. Hence, this court holds that plaintiff has proved that defendants are due an amount of Rs.14,62,038/- to plaintiff company towards supply of goods by plaintiff to defendants under invoices as per Ex.P.22 to Ex.P.35 and delivery challans as per Ex.P.36 to Ex.P.38. Hence, he has proved issue No.1. Accordingly, issue No.1 is answered in affirmative.
ISSUE No.2
17. Plaintiff claims interest at 16% p.a. from the defendant stating that in the Trade Usage & Customs 14 O.S.No.8184/2012 defendants are liable to pay interest for delayed payments at 16% p.a. In this regard learned counsel for defendant vehemently argued that in the initial letters written by plaintiff, plaintiff has not at all claimed interest. Plaintiff further contended that defendants agreed to pay the price of goods within 30 days from the date of supply. In this regard, PW-1 in the cross-examination has deposed that there is no agreement between him and defendants in paying the dues within 30 days, but he contended that as per Trade Practice, defendant has to pay dues within 30 days.
18. In the letter written by plaintiff as per Ex.P.3 dtd:8/6/2009 and letter dtd:2/7/2009 as per Ex.P.4, plaintiff claims only the principal amount from defendants and he has not whispered anything about the interest in these 2 letters. However, plaintiff claims interest at 16% p.a. in letter dtd:15/3/2010, 21/10/2010 and 15/7/2011 as per Ex.P.5, Ex.P.7 and Ex.P.10. In Ex.P.5, plaintiff stated that defendants assured to make payment, but not done 15 O.S.No.8184/2012 so and further contended that all the bills are over-due over a year and it is highly impossible for plaintiff to accept the further delay and plaintiff has to pay interest at 16% p.a. for delayed payment and they are suffering loss because of non-making payment by defendants within time and contended that interest amount is RS.2,33,926/-. Thus, it is clear that in the initial days, plaintiff has not insisted for payment of interest, but because of delay from defendants, plaintiff is claiming interest from defendants. As per Trade Usage and Practice, in a commercial transaction, though there is no agreement between parties, if the payment is not made within the reasonable time, then plaintiff is entitled for interest. In the instant case, as plaintiff demanded interest only in the letter dtd:15/3/2010 for the first time, plaintiff is entitled to claim interest at 16% p.a. from 15/3/2010 and not from the date on which the defendants became over due.
19. As stated above, the principal amount is Rs.14,62,038/-, plaintiff is entitled for interest on this 16 O.S.No.8184/2012 amount from 15/3/2010 till the date of filing of the suit i.e., up to 17/11/2012. Accordingly, issue No.2 is answered partly in affirmative.
ISSUE No.3
20. As already stated above, as per the orders passed in Misc.No.129/205, this court by giving detailed reasons, holds that as suit is not barred under SICA.
21. It is an admitted fact that defendant was declared as sick industry by BIFR and proceedings are pending before BIFR and this fact is further substantiated by defendants by producing Ex.D.1 certified copy of order dtd:19/9/2013 passed by BIFR. Hence, learned counsel for defendants vehemently argued that the suit is hit by provisions of SICA.
22. Learned counsel for plaintiff vehemently argued that the present suit is hit by said provisions. In this regard, he relied on the citation reported in (2012) 4 SCC 148 in "Raheja Universal Limited v/s NRC 17 O.S.No.8184/2012 Limited & others", wherein, their Lordships held as follows:-
"80. It is difficult to state with precision the principle that would uniformly apply to all the proceedings/suits falling under Section 22(1) of SICA 1985. Firstly, it will depend upon the facts and circumstances of a given case, it must satisfy the ingredients of Section 22(1) and fall under any of the various classes of proceedings stated there under. Secondly, these proceedings should have the impact of interfering with the formulation, consideration, finalization or implementation of the scheme".
23. In the recent ruling of Hon'ble Supreme Court, it is held that the proceedings before BIFR are a bar to entertain the suit under SICA, provided that the proceedings should have impact of interfering with the formulation, consideration, finalization or implementation of the scheme.
24. In this regard, learned counsel for defendant relied on the citation reported in (2015) 1 SCC 166 in "KSL and Industries Ltd., v/s Arihant Threads Limited and others" wherein, their Lordships held as under:- 18 O.S.No.8184/2012
"- Held, both SICA and RDDB Act are special laws with different purposes - Normally later enactment with non obstante clause prevails over former enactment, however express intendment of Parliament in non obstante clause of RDDB Act {S.34(2)} does not permit such course - S.34(2)acts in nature of exception to overriding effect of RDDB Act and states that later RDDB Act shall be in addition to, and not in derogation of other laws and intention is not to annul or detract from provisions of other laws - Effect of S.34(2) of RDDB Act, held, thus is to preserve powers of authorities under SICA and save its proceedings from being overridden by later RDDB Act - Hence, provisions of SICA, in particular S.22 of SICA, shall prevail over provisions for recovery of debts in RDDB Act."
"Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) is enacted against the backdrop of the existing multitude of remedies which creditors may avail of against an indebted company and its properties bringing them to attachments, auction-sale etc., making it difficult for the authorities entrusted with its reconstruction under SICA to evolve a scheme for reconstruction.
Plainly, the purpose of laying down that no proceedings for execution and distraint or the like or a suit for recovery shall lie, is to protect the properties of the sick industrial company and the company itself from being proceeded against by its 19 O.S.No.8184/2012 creditors who may wish to seek the winding up of the company or levy execution or distress against its properties. It protects the company from all such proceedings. But as it is apparent, the immunity under Section 22 of SICA is not absolute. Such proceeding which a creditor may wish to institute, may be institute or continued with the consent of the Board or the appellate authority under SICA."
25. However, RDDB is not a consideration before this court in this suit.
26. Defendant's counsel further relied on the citation reported in (2015) 1 SCC 298 in "Ghanshyam Sarda v/s Shiv Shankar Trading Company & others"
wherein, their Lordships held as under;-
"-Held, once a company is registered as sick company under SICA, jurisdiction of civil court in respect of matters specified in S.22 stands completely excluded - It is only upon the satisfaction of BIFR that a sick company is no longer sick, that such company could be said to have ceased to be amenable to supervisory control of BIFR - BIFR correctly assumed jurisdiction over affairs of company concerned and furthermore, power to decide whether BIFR has since then lost 20 O.S.No.8184/2012 jurisdiction or not, is also in exclusive domain or BIFR - BIFR alone is empowered to determine whether net worth has become positive as a result of which it would cease to have such jurisdiction - Any inquiry into such issue regarding net worth by anyone outside SICA including civil court, would be against the express intent of SICA and would lead to incongruous and undesired results - Suit therefore not competent and maintainable - Further orders passed
- Costs of Rs.5 lakhs imposed on original plaintiff for non-disclosure of civil court of either factum that we had sought consent from BIFR or that BIFR was in seisin of the matter - Civil Procedure Code, 1908 - S.35 - Costs."
"C. Corporate Laws - Sick Industrial Companies (Special Provisions) Act, 1985
- S.22 - Bar under - Period for which applicable - Words "industrial company"
used in S.22(1) - Significance - Clarified, bar under S.22 is applicable to the entirety of the period beginning from the inquiry under S.16 till the implementation of sanctioned scheme for revival or until BIFR adjudges that net worth of company has otherwise become positive - During the entirety of that period of SICA grants protection to the company and leaves it to the discretion of BIFR whether to permit filing and maintaining of suit or other proceedings."
21 O.S.No.8184/2012
27. In the said ruling, their Lordships held that SICA is a self-contained code and has conferred upon BIFR complete supervisory control over a sick industrial company to adopt such methodology as provided in Ch.III for detecting, reviving or winding up such sick company and BIFR alone is empowered to determine this fact and further, BIFR alone has the power to decide whether the Company is still sick industry or it come out from its jurisdiction or not. Thus, even in the said ruling also, it is held that S.22 completely excludes the jurisdiction of civil court in respect of matters specified in said section.
28. In the above said citation, their Lordships have followed the principles relied in "Raheja Universal Limited v/s NRC Limited & others", relied by the plaintiff's counsel as stated supra. Thus, the principles laid down in "Raheja's" case were upheld in the subsequent decisions of Hon'ble Supreme Court.
29. The full bench constituting 3 Judges rendered judgment in Raheja's case relied by plaintiff's counsel, 22 O.S.No.8184/2012 whereas, Division Bench of Hon'ble Supreme Court rendered judgment in the 2nd of the above said citation relied by defendant's counsel. The first of the above said citation relied by defendant's counsel is rendered by the full bench constituting 3 Judges of Hon'ble Supreme Court of India; but there was no reference about this Raheja's case in said case. Further the facts and circumstances in the first of the above said citation relied by defendant's counsel is entirely different in the present case. Thus, the judgment of Hon'ble Supreme Court of India of Larger Bench prevails over the judgment of Supreme Court of Division Bench.
30. Viewed from both angles i.e., Principles relied in Raheja's case followed in subsequent rulings and subsequent ruling is given by Division Bench; whereas Raheja's case was decided by Full Bench, hence, this court holds that the principle laid down in Raheja's case is to be followed.
23 O.S.No.8184/2012
31. In this Raheja's ruling, as already stated above, it is specifically held that to apply bar under S.22 of SICA, 2 ingredients must be fulfilled i.e., firstly, it must fall under any of the various clauses of proceedings stated there under i.e., an enquiry under S.16 or any scheme referred under S.17 should be pending before BIFR and secondly, the suit should have the impact of interfering with the formulation, consideration, finalization or implementation of the scheme. Then only, bar under Section 22(1) of SICA applies.
32. In the instant case, while passing orders in W.P.No.7196/2014, at para No.3, their Lordships of Hon'ble High Court have clearly held that the proceedings before this court in this case will not have any impact of interfering with the formulation, consideration, finalization or implementation of the scheme.
33. At the initial stage, plaintiff has filed the suit under Order XXXVI Rule 1 CPC in O.S.No.8184/2012 as summary suit and after service of summons, defendant requested 24 O.S.No.8184/2012 the leave of the court to file his defence and at that time, my learned predecessor has directed him to deposit Rs.7,00,000/- and permitted him to contest the suit. However, defendant has not deposited the said amount. Hence, plaintiff's counsel has filed memo to decree the suit at once. But my learned predecessor rejected said memo stating that it may be difficult for defendant to deposit said amount, because, defendant is before BIFR for claiming the benefits under SICA and said order of rejection of memo was challenged before Hon'ble High Court of Karnataka in W.P.No.7196/2014. Said order was upheld by Hon'ble High Court of Karnataka and at that time, in para 3 of the WP Order, Hon'ble High Court opined that the proceedings before this court will not have any impact of interfering with the formulation, consideration, finalization or implementation of the scheme before BIFR. Under these circumstances, as stated in Raheja case, if there is no such impact, then there will not be any bar under SICA to entertain the suit 25 O.S.No.8184/2012 of present nature. More over, as stated above, Hon'ble High Court of Karnataka has already given its opinion based on Raheja's ruling only that impact of interfering with the formulation, consideration, finalization or implementation of the scheme before BIFR is not affected by continuing the suit. Hence, this court holds that the suit is not barred under SICA and defendant fails to prove that suit is not maintainable. Accordingly, issue No.3 is answered in negative.
ISSUE No.4
34. The defendants took contention in the written statement that this court has got no territorial jurisdiction to try the suit. He contended hat no part of transaction took place within the jurisdiction of this court.
35. Cause title of the plaint reveals that 1st defendant company is situated at Nanjangud and 2nd defendant is its Chairman. Hence, defendant Nos.1 and 2 are not residing within the jurisdiction of this court.
26 O.S.No.8184/2012
36. Under S.20 CPC, the suit can be initiated where defendants resides or where whole or part of cause of action arises. According to invoices produced by plaintiff, the goods were delivered from plaintiff's office situated at Bangalore. Hence, part of cause of action arose within the jurisdiction of Bangalore. There is no specific cross- examination to PW-1 on this point. Further DW-1 has not stated anything on this point in his affidavit evidence Hence, this court holds that this court has got territorial jurisdiction to try the suit. Accordingly, this issue is answered in negative.
ADDITIONAL ISSUE No.1
37. The defendants took contention in the written statement that the suit is barred by limitation. As per the plaint allegations, the amount due from 2009 and thus suit is not filed within the prescribed time. While discussing issue No.1, this court discussed the invoices, outstanding dues and other facts. At that time, this court holds that the invoices produced by plaintiff are dated 13/1/2009, 27 O.S.No.8184/2012 20/1/2009 and 23/1/2009 and thus the goods were dispatched in January 2009. Account extract reveals that the last payment made by defendants is on 26/3/2009.
38. As per Article 14 of the Limitation Act, the period prescribed for filing suit is 3 years from the date of delivery of goods for the price of goods sold and delivered where no fixed period of credit is agreed upon. If any fixed period is fixed, then also period of limitation is 3 years when the period of credit expires. In the instant case, though plaintiff deposed that there is no agreement between parties for repayment, he further deposed that as per Trade Practice and Customs, 30 days time will be given. Hence, the period of limitation begins to run from February 2009. Furthermore, defendant has issued 2 cheques as per Ex.P.14 and Ex.P.17 dtd: 12/1/2009 and 16/1/2009. However, both the cheques were dishonoured during June 2009 as per bank endorsement. Hence as per Article 40 of the Limitation act, from the date of refusal to accept, the period of limitation begins to run and the 28 O.S.No.8184/2012 period is 3 years. In the instant case, suit is filed by plaintiff on 17/11/2012. Hence, apparently 3 years after these dates, the suit is filed.
39. The plaintiff contended that defendants acknowledges the debt in Ex.P.20 and Ex.P.21 and hence, fresh limitation begins to run from the date of writing those letters. Hence, the suit is well within limitation.
40. On perusal of Ex.P.20 and Ex.P.21, this court found that in Ex.P.20, defendant clearly stated as follows:-
" October 30,2010.
Dear Sir, Sub: Overdrive Outstanding Ref: Your letter dated 21.10.2010.
With reference to the above subject, we received letter dated: 23.10.10, we extremely greatful to you all the years you are co-operated us, unforeseen we can't able to pay your outstanding dues because unforeseen circumstances and lack of order. As you aware that our company is under Sick Industrial companies (Special Provisions) Act, 1985 referred to BIFR, since 2005 Ref.No.127/2005, Dated: 05.01.2007, Bench III, Ministry of Finance, New Delhi. Copy 29 O.S.No.8184/2012 enclosed to your reference. We would like to bring to your kind notice we had receive huge outstanding amount from KSRTC may be settled in 2 months by the time we can able to pay your outstanding dues till then give your co-operation. This is for your kind information and do the needful."
41. Thus, under Ex.P.20, defendants referred to Ex.P.7 letter dtd:21/10/2010. In Ex.P.7, plaintiff clearly mentioned the outstanding due amount, interest amount and all other facts. Thus, coupled reading of Ex.P.7 and Ex.P.20 clearly reveals that defendants acknowledge the outstanding dues to plaintiff under Ex.P.20.
42. Ex.P.21 is undated and it is reply to the letter dtd:15/7/2011 i.e., reply to Ex.P.10. Hence, it ought to have been written only after 15/7/2011. Ex.P.21 reads as follows:-
"Subject: Reply to the letter dated July 15th 2011.
Dear Sir, Our company is sick under B.I.F.R court, and we are waiting for court's decision as it is pending. The payments will be examined and re-payed once the court settles our case, if not 30 O.S.No.8184/2012 you can approach the B.I.F.R.court for the payments.
As per the act the creditors can only claim the principle amount and nevertheless the interest.
This is for your kind information."
43. Even in this letter also, defendants clearly stated that the payments will be examined and repaid once the court settles their case. In Ex.P.10, it is clearly mentioned the amount due to plaintiff and interest will be calculated at 16% p.a. Hence, coupled reading of Ex.P.10 and Ex.P.21 establishes that the defendants acknowledges the debt.
44. Section 18 of the Limitation Act deals with acknowledgment of debt and its effects. According to it, if before the expiry of prescribed period to file the suit, the defendant acknowledges his liability in respect of said dues, then it amounts to acknowledgment of debt.
Explanation(a) & (b) of this Section is relevant. It reads as follows:-
31 O.S.No.8184/2012
S.18 - Effect of acknowledgment in writing:-
(1) ............................
(2) ..............................
Explanation for the purposes of this Section-
(a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;
(b) the word "signed' means signed either personally or by an agent duly authorized in this behalf; and
(c) ........................................ "
45. The explanation (a) to Section 18 reveals that the acknowledgment need not be specific and it need not mention the exact nature of the right. In this regard, learned counsel for plaintiff relied on the citation reported in AIR 1961 SC 1236(1) in "Shapoor Fredoom 32 O.S.No.8184/2012 Mazda v/s Durga Prasad Chamaria and others"
wherein, their Lordships held as under:-
"(A) Limitation Act (9 of 1908), S.19 -
Scope - Essentials of acknowledgment -
Must admit jural relationship of debtor and creditor - Admission may be implied -
Surrounding circumstances may be considered to construe document"
46. Learned counsel for plaintiff further relied on the citation reported in (2000) 9 Supreme Court Cases 722 in "State of Kerala v/s T.M.Chacko" wherein, their Lordships held as under:-
"10. It may be noted that for treating a writing signed by the party as an acknowledgment, the person acknowledging must be conscious of his liability and the commitment should be made towards that liability. It need not be specific but if necessary facts which constitute the liability are admitted an acknowledgement may be inferred from such an admission."
47. The first of the above said citations came into existence before amendment to Limitation Act. Before this amendment, S.19 of Limitation Act was dealing with this 33 O.S.No.8184/2012 acknowledgment of debt in writing. Hence the above said principles are applicable to this case also.
48. In the above two citations, their Lordships clearly held that mere acknowledgment of the liability in respect of the right in question is sufficient, it need not be specific and need not be accompanied by the terms to pay either expressly or even by the implication. In the instant case, in Ex.P.20, defendant expressed its intention to pay the amount. The statement of acknowledgment must relate to the present subsisting liability. In Ex.P.20, defendant made reference to Ex.P.7. Hence, the principles noted in the above said citation coupled with Ex.P.7, Ex.P.20, Ex.P.10 and Ex.P.21 clearly establish that defendant acknowledges its debt. Hence, fresh period of limitation begins to run from the date of writing Ex.P.20 and Ex.P.21. Hence, definitely, suit filed during 2012 is not barred by limitation. Accordingly, this issue is answered in negative.
34 O.S.No.8184/2012
ISSUE No.5
49. In view of finding on issue Nos.1 to 4, this court holds that the plaintiff is entitled for principal amount of RS.14,62,038/- with interest at 16% p.a. from 15/3/2010 till realization. Accordingly, this issue is answered in affirmative.
ISSUE No.6
50. In view of my findings on issue Nos.1 to 5 and additional issue No.1, this court proceeds to pass the following:-
ORDER Suit is decreed with costs for a sum of Rs.14,62,038/- with current and future interest at 16% p.a. from 15/3/2010 till realization.
(Dictated to the Judgment Writer, transcribed and computerized by her, corrected and then pronounced by me in the open Court on this the 20th day of August, 2015).
(K.B.GEETHA) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.35 O.S.No.8184/2012
ANNEXURE I. List of witnesses examined on behalf of :
(a) Plaintiff's side :
P.W.1 - K.S.George
b) Defendants' side :
D.W.1 - Siddalingaswamy II. List of documents exhibited on behalf of :
(a) Plaintiff's side :
Ex.P.1 Form No.A i.e., Register of Firms Ex.P.2 GPA Ex.P.3 Letter dtd: 8/6/2009 written by plaintiff to defendant with acknowledgment of defendant with seal Ex.P.3(a) Acknowledgement Ex.P.4 Another letter dtd: 2/7/2009 along with statement of account Ex.P.5 Another letter dtd: 15/3/2010 which contains the acknowledgment of defendant with seal Ex.P.5(a) Acknowledgment Ex.P.6 Postal acknowledgment Ex.P.7 Another letter dtd: 21/10/2010 Ex.P.8 & Ex.P.9 2 postal acknowledgments Ex.P.10 One more registered letter dtd:
16/7/2011 Ex.P.11 Another letter dtd: 15/7/2011 Ex.P.12 Another letter dtd: 11/8/2011 Ex.P.13 Postal acknowledgment Ex.P.14 Cheque dtd:12/1/2009 Ex.P.15 & 2 bank memos for having Ex.P.16 dishonoured the cheques 36 O.S.No.8184/2012 Ex.P.17 Cheque dtd: 16/1/2009 Ex.P.18 Bank memos for having Ex.P.19 dishonoured the cheques Ex.P.20 Letter dtd: 30/10/2010 written by defendant to the plaintiff Ex.P.21 Another letter written by defendant to the plaintiff Ex.p.22 to 14 Invoices Ex.P.35 Ex.P.36 to 3 delivery challans Ex.P.38 Ex.P.39 Interest statement as on 27/9/2011 Ex.P.40 Statement of account of defendant Ex.P.40(a) Defendant Company seal Ex.P.41 Copy of legal notice dtd: 27/9/2012 Ex.P.42 Postal receipt Ex.P.43 Postal acknowledgment Ex.P.44 Another legal notice dtd:
27/9/2012
Ex.P.45 Postal receipt
Ex.P.46 Postal acknowledgement
(b) Defendants' side :
Ex.D.1 Certified copy of the order passed
in Case No.127/2005 by the Board
for Industrial and Financial
Reconstruction, Bench-3.
(K.B.GEETHA)
XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.
GVU/-