Delhi District Court
M/S Tristar International & Anr vs M/S Kritika Engineering Consultancy on 19 March, 2012
: 1 :
IN THE COURT OF DR. NEERA BHARIHOKE : ADDITIONAL DISTRICT
JUDGE01 : SOUTH DISTRICT : SAKET COURTS : NEW DELHI
RCA No. 14/11
In the matter of :
M/s Tristar International & Anr. ........appellants
Vs.
M/s Kritika Engineering Consultancy ........Respondent
19.03.2012
ORDER :
Vide this order, I shall dispose off the appeal filed against impugned judgment and decree dated 15.04.11 whereby ld. trial court has passed a decree in favour of the respondent and against the appellants in a sum of Rs. 1,79,797/ along with interest in CS(OS) No. 273 of 2011.
THE BRIEF FACTS ARE :
2 That the respondent filed a suit for recovery of Rs.1,79,797 along with pendentelite and future interest against the appellant in the year 2003. That the respondent and the appellant entered into a partnership agreement dated 29.11.1999 for carrying out projects related to the waterproofing, structural rehabilitation, thermal insulation etc. The respondent submitted that the accounts related to the agreement dated 29.11.1999 were settled between the parties by 31.03.2000. The respondent further submitted that after the M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..1 of 14 : 2 : conclusion of the agreement dated 29.11.1999, a new agreement dated 27.09.2000 was entered by the parties. The respondent further submitted that the appellants have not cleared dues of Rs.1,24,427/ along with interest @ 18% is to be paid by the appellants to the respondent.
3 The appellants filed their WS and denied the submissions of the respondent. The appellants contended that the business relations between the parties were based on trust and goodfaith and the agreement dated 29.11.1999 was never entered into by the parties. The respondent used to raise invoices for the work done and the appellants cleared the bills of the respondent, as and when the same were placed upon the appellants. The respondent's entire dues were satisfied and there were no legally payable dues of the respondent on the part of the appellants 4 The appellants further contended that the agreement dated 27.09.2000, though entered into between the parties, never saw daylight. It was contended by the appellants that the understanding under the the agreement dated 27.09.2000 was valid only for a period of sixmonths and the respondent failed to undertake the work under the aforesaid agreement and therefore, nothing remained payable to the respondent.
5 The appellants have submitted that the respondent did not file M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..2 of 14 : 3 : documents along with the plaint and certain photocopies of the documents were filed only after the filing of the WS by the appellants. 6 On the basis of the pleadings of the parties, the Ld. Trial court framed the following issues :
i Whether the plaintiff is entitled to recover the suit amount from the defendant, as prayed for? OPP ii Whether the plaintiff is entitled to recover the interest, if yest, then at what rate and for which period? OPP iii Relief 7 That the proprietor of the respondent appeared, as the only witness of the respondent in the trial Court. Appellant has submitted that the affidavit of the evidence of the respondent's witness introduced certain facts, which were pleaded for the first time and, therefore, objected to by the counsel for the appellant as being evidence beyond pleadings.
8 The respondent in all produced 7 documents :
Exb.PW.1/1 :Certificate of institution of engineers in favour of the witness showing his professional qualification.
Exb.PW.1/2 :An example of the project accounting (produced for the first time) on the day of examination.
M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..3 of 14 : 4 : Exb.PW.1/3 :Agreement dated 29.11.1999 Exb.Pw.1/4 : Agreement dated 27.09.2000 Exb.PW.1/5 :Copy of the plaint Exb.PW.1/6 :Alleged computerized copy given to the plaintiff by Sameer Vasudeva.
Exb.PW.1/7 :Alleged copy of the statement of receipts of payments 9 The objections were also taken against Exb.PW.1/6 & 7, as they were unsigned typed copies of the alleged statement of account and the respondent failed to produce the originals of the same. The appellants could not lead evidence and the impugned judgment was passed without evidence of the appellants and on the sole basis of the respondent evidence. It is submitted that onus of proving both issues was on the respondent which was never shifted / discharged by the respondent and, therefore, the appellants were not required to lead evidence.
10 The appellants have submitted that the Ld. trial court by proceeding to act upon an erroneous interpretation of the facts and law decreed the suit of the plaintiff by way of impugned judgment. Hence, the present appeal M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..4 of 14 : 5 : GROUNDS OF APPEAL :
11 The ld. trial court erred in law and fact and failed to appreciate that averments in the affidavit of PW.1 in Paras No. 2, 3, 5, 7 & 9 were not the part of the plaint and were introduced for the first time and, therefore, the same are liable to be completely discarded.
12 The Ld. trial court erred in law and fact and failed to appreciate that the appellants were taken by surprise by introduction of new facts in the evidence of the respondent.
13 The Ld. trial court erred in law and fact in failing to appreciate that the extracts from accounts are not "account books" falling with section 34 of the Evidence Act and are inadmissible. Exb.PW.1/6 & 7 were merely unsigned alleged copies of the statement of accounts and cannot be accepted as the statement of accounts and cannot be made basis for inflicting the appellants with liability to pay.
14 The Ld. trial court erred in law and fact in failing to appreciate that from the Exb.PW.1/6 & 7, the alleged extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page numbering.
M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..5 of 14 : 6 : 15 The Ld. trial court erred in law and fact in failing to appreciate that the private extract of accounts, such as Exb.PW.1/6 & 7, can only be secondary evidence and unless a proper foundation is laid for adducing such secondary evidence U/s 65 or other provisions of the Evidence Act, the privately handwritten copies of alleged accounts books cannot be themselves be treated as secondary evidence.
16 The Ld. trial court erred in law and fact in failing to appreciate section 34 of Evidence Act.
17 A bare perusal of the section reveals that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business 18 The Ld. trial court erred in law and fact in failing to appreciate that the plaintiff failed to shift the onus of issue and, therefore, failed to prove his claim.
19 The ld. trial court erred in law and fact in failing to appreciate that the contentions and obligations of the respondent in the plaint were not self explanatory from the point of the common man's prudence and claim of the plaintiff was not inferential with reasonable certainty. M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..6 of 14 : 7 : 20 Respondent has filed a detailed reply and has denied all the averments made by the appellants. Respondent has submitted that no new facts were brought for the first time and ld. trial court had allowed Exb.PW.1/1, PW.1/2 as it was relevant to the issue and Exb.PW.1/3, PW.1/4 were annexed with legal notice and were part of the plaint and Exb.PW.1/6 and PW.1/7 were part of the legal notice annexed with the plaint. Respondent has further submitted that all the records and accounts are in possession of appellants as per the terms of Paras No. 2& 3 of the agreement dated 29.11.1999 and respondent had retained only copies of the invoices as he was not required to maintain any separate account. Respondent has further submitted that all invoices were submitted to the appellants for maintaining of proper accounts of the business dealings as per the agreement and Exb.PW.1/6 & PW.1/7 were kept by the respondent as original was submitted to appellants. Exb.PW.1/6 & PW.1/7 are the extracts from the account but are the statements of details of profit, expenses and the share of dues entitled to the respondent. Respondent has further submitted that these statements were given by Mr. Vijay Vasudeva, the father of the appellants who was appointed as Managing Director of the appellants firm by the appellants and section 34 of Evidence Act are not relevant as the account for joint business was held and maintained by the appellants himself as per paras No.2 & 3 of agreement dated 29.11.1999 and the terms of agreement of 27.09.2000. The respondent has prayed for dismissal of the present appeal. M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..7 of 14 : 8 : 21 Detailed arguments were advanced by ld. counsels.
22 In the course of arguments, ld. counsel for appellants argued that appellants is not challenging the contents of affidavit of evidence in Paras No. 2 to 5.
23 Arguments heard. Record perused.
24 The appellants has misled this court by submitting that the impugned judgment is exparte judgment. The appellants was never proceeded exparte and had been appearing till the last stage of final arguments. Since no arguments were advanced by either of the counsels and both the counsels stopped appearing despite being given several opportunities, the matter was fixed for orders with liberty to counsels for parties to make their submissions on any date prior to date fixed.
25 In paras No.6 & 7 of the affidavit of evidence, the respondent has given details w.r.t the work undertaken by him under the agreement executed between the parties and the problems which he faced in carrying out the joint works. In my considered opinion, the depositions made in Paras No. 6 & 7 are explanatory in nature and are relevant u/s 7, 8 & 9 of Indian Evidence Act and do not amount to introduction of any new facts which may surprise the appellants or M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..8 of 14 : 9 : cause any prejudice to it.
26 In Para No.11 of affidavit of evidence, the respondent has submitted that the account for works undertaken by parties upto 31.03.2000 have been settled amongst them and the account for projects undertaken from 01.04.2000 to 16.08.2000 were not settled between the parties and the respondent asked the appellants No.2 to finalize the accounts for projects undertaken upto 16.08.2000 as per the MOU. In the meantime, Sh. Vijay Vasudeva, father of appellants No. 2 joined appellants No.1 as M.D and gave the respondent computerized copy of his dues and the same were discussed with appellants No.2 and certain errors were pointed out by the respondent. The computerized copy was marked as Exb.PW.1/6 and respondent was also given a copy of statement of past payments made to him on various accounts as most of the payments were made to him by cheques. A statement of receipt of payment has been marked as Exb.PW.1/7. However, the accounts of the respondent were not finally settled for the said period and were not paid to him. At last, respondent gave legal notices dated 14.10.2002 and 24.02.2003 to the appellantss No.1 & 2. Copies of notices have been marked as Exb.PW.1/8 & 9.
27 A perusal of plaint reveals that in Paras No.5, 6, 7 & 10 of plaint, the facts w.r.t account for works undertaken by parties upto 31.03.2000 have been settled amongst them and the account for projects undertaken from M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..9 of 14 : 10 : 01.04.2000 to 16.08.2000 were not settled between the parties and the respondent asked the appellants No.2 to finalize the accounts for projects undertaken upto 16.08.2000 as per the MOU and averments w.r.t giving of legal notice dated 14.10.2002 and 24.02.2003 have been mentioned. Further, in Para No.6 of replication, the facts in detail have been given w.r.t statement of account and the correction of the same and the computer print out of the same have been specifically mentioned. Thus, Para No. 11 did not introduce any new facts in the affidavit of evidence.
28 A perusal of Exb.PW.1/6 & PW.1/7 reveals that the same are not private extract of account but are the statements of details of profits, expenses and the share of dues to which the respondent is entitled. Thus, in my considered opinion, the provision of section 34 of Indian Evidence Act do not hit or apply to these documents. The appellants had submitted in his WS that all dues to which the respondent is entitled have been paid. However, the appellants did not produce the account books in support of its submissions. The appellants counsel did not lead any evidence despite being given several opportunities by Ld. trial court and specifically submitted that they do not want to lead any evidence before Ld. Trial Court on 29.08.2007.
29 Respondent had filed an application under order 11 Rule 12 & 14 of CPC against the appellants for discovery and production of documents which M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..10 of 14 : 11 : included in its schedule the originals of the documents which have been marked as Exb.PW.1/6 & 7. The application was strongly opposed by the appellants and they had submitted that those documents are not required by the appellants and are not required for determination of real dispute between the parties. Although the application of the respondent was dismissed, yet, it is pertinent to mention that the reason given by the appellants for nonproduction of the same was that the company had been wound up on 31.03.2003 and as such any documents pertaining to the said company are not available with the appellants. The appellants have mislead the ld. trial court in its reply and there is a specific finding in the impugned judgment that the appellants no.1 was never a company but infact a proprietorship concern and, therefore, the question of its winding up does not arise and the appellants were required to produce bills, ledger or books of account to show that the payments have been made to the respondent and in view of nonproduction of the originals by the appellants, coupled with making false statement of winding up of appellants company, ld. trial court passed its order on the basis of Exb.PW.1/6 & 7. The original onus of proving the entitlement to the suit amount was on the respondent. The respondent discharged its onus by proving agreement dated 29.11.1999 executed between respondent and appellants no.1 and the new agreement dated 27.09.2000 wherein the respondent was required only to provide technical consultancy. The appellants did not deny the execution of the said documents as is evident from Para No.4 of WS of appellants. The appellants only submitted that the M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..11 of 14 : 12 : agreement did not materialise in Para No.3 of WS. However, in Para No.4 of plaint, the respondent has submitted that the works jointly undertaken upto 31.03.2000 by the parties in terms of the aforesaid agreement dated 29.11.1999 were amicably settled by the parties. To this para, appellantss have submitted that the contents of para No.4 needs no reply. Thus, it establishes that the agreement dated 29.11.1999 as well as agreement dated 27.09.2000 was also proved and the agreements were also acted upon.
30 In the agreement executed on 27.09.2000, it has been specifically provided in Clause 7 that billing and procuring of orders will be in the name of Tristar International. Clause 3 provides that actual bills and expenses incurred for the cost of material obtained from supplier and cost of labour will be produced and profits will be shared 50% each as per clause 4. A perusal of these clauses reveals that the original invoices and billing and documents were to be retained by the appellantss alone and respondent had to submit all the actual bills and expenses to the appellants. The respondent in his crossexamination has also submitted that "There is no document on record pertaining to the clients referred in Ext.PW1/6 as the same are lying with defendant No.1 as per agreement." and respondent has further stated in his crossexamination "All the original documents were submitted with defendant no.1 as per clauses 2, 3 & 7 of the memorandum of understanding which is Ext.PW1/3. No photocopy was retained by me." Thus, ld. trial court rightly allowed the marking of Exb.PW.1/6 & 7 M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..12 of 14 : 13 : although the same was secondary evidence due to nonproduction of primary evidence by the appellants which was in their possession as was held in the matter of Dalip Singh Vs. Dhani Ram Narain Dass & Others, AIR 1976 Bombay 38. It was held in that matter as "Where a notice is given to a party to produce document in original in his possession when the evidence satisfactory established that the party was in possession of document in the event of failure of such party to produce the original, the party giving such notice is entitled to lead secondary evidence under Section 85 of the Evidence Act. In such circumstances, a presumption arises under section 89 of the Evidence Act about the execution of the document in respect of which such secondary evidence has been led."
31 Thus by proving the agreement, these clauses also stand proved and respondent proved that he did not have original statement of accounts or bills or invoices with him and the onus shifted to the appellants to disprove the same. The appellants although submitted that they have made upto date payment of all the dues to the respondent, did not produce any document to prove their averments. Rather the appellants did not lead any evidence at all. Thus, the case of the respondent stood proved.
32 In view of the observations made herein, I find no infirmity in the impugned judgment and decree dated 15.04.2011 and is accordingly upheld and M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..13 of 14 : 14 : the appeal is dismissed with cost of Rs.20,000/ to be paid by the appellants to the respondent. No order as to costs.
33 File be consigned to Record Room after necessary compliance. Dictated and announced in the open court on 19.03.2012 (Dr. Neera Bharihoke) ADJI(South) Saket Courts 19.03.2012 M/s Tristar International & Anr. Vs. M/s Kritika Engineering Consultancy Contd....P..14 of 14