Karnataka High Court
Sri Gopal Gowda vs Sri Manjunath D Patil on 20 August, 2019
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF AUGUST, 2019
BEFORE
THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY
R.F.A.No.415 OF 2014
BETWEEN:
Sri. Gopal Gowda,
S/o. Gangegowda,
Aged about 50 years,
No.315, 2nd 'F' Main,
11th Block, Nagarabhavi 2nd Stage,
Papareddy Palya,
Bangalore-560 072.
Proprietor M/s.Neo. Systems
...Appellant
(By Sri.H.V.Manjunatha, for
Sri. Manju and Manju Associates)
AND:
Sri. Manjunath D.Patil
S/o. Sri. D.S.Patil,
Aged about 51 years,
Proprietor M/s Front Page,
Having its office at
No.32/25, II Main Road,
Industrial Town, Rajajinagar,
Bangalore-560 044.
...Respondent
(By Sri. T.V.Vijay Raghavan, Advocate)
***
R.F.A.No.415/2014
2
This Regular First Appeal is filed under Section 96 of
the Code of Civil Procedure, 1908, against the judgment
and decree dated:16-12-2013 passed in O.S.No.321/2007
on the file of the XXX Additional City Civil Judge, Bangalore
City, partly decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing this
day, the Court delivered the following:
JUDGMENT
The suit filed by the present respondent as a plaintiff in the Court of the XXX Additional City Civil Judge, Bangalore City (hereinafter for brevity referred to as "Trial Court") in O.S.No.321/2007 against the present appellant arraigning him as a defendant for recovery of a sum of `1,75,106/- with future interest at the rate of `12% per annum on the suit claim amount from the date of suit till complete realisation from the defendant, came to be partly decreed by the judgment and decree of the Trial Court dated 16-12-2013, wherein the Trial Court held that, the plaintiff is entitled to recover a sum of `1,31,724/- R.F.A.No.415/2014 3 with future interest at the rate of `12% per annum from the date of suit till complete realisation from the defendant. It is against the said judgment and decree the defendant in the Trial Court has preferred this appeal.
2. The summary of the case of the plaintiff in the Trial Court was that, plaintiff is a proprietary concern having engaged in the business of printing and publishing. The defendant had approached it for printing and supply of various promotional items. As per the request of the defendant, the plaintiff had supplied printing promotional items which were delivered under five different invoices, the value of which in total amounted to `2,26,524/-. Out of that amount, the defendant had paid a sum of `84,800/- as per the account maintained by the plaintiff. The defendant was still found due of a sum of R.F.A.No.415/2014 4 `1,41,724/-. Towards payment of the said amount, the defendant had in total issued ten cheques, among which, four cheques were dishonoured when presented for realisation and the remaining six cheques were not presented for realisation. A legal notice was sent to the defendant calling upon him to pay the amount. However, it invoked no response. The plaintiff also instituted an action under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I. Act"). Since the defendant had not chosen to repay the due, the plaintiff was constrained to institute the suit.
3. In response to the suit summons served upon him, the defendant appeared through his counsel and filed his Written Statement, wherein he denied all the plaint averments including the alleged transaction between the parties. He also denied that the suit was R.F.A.No.415/2014 5 barred by limitation and that the invoices raised were all false. He denied the alleged liability towards the plaintiff in any sum.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
"1] Whether the plaintiff proves the liability of the defendant to pay a sum of `1,41,724/- towards costs of printing and supply of various promotional items to the defendant as contended?
2] Whether the plaintiff is entitled to a decree for a sum of `1,75,106/- together with future interest at the rate of 12% p.a. as prayed for?
3] What order or decree?"
In order to prove his case, the plaintiff got himself examined as PW-1 and got marked documents from Exs.P-1 to P-32. The defendant got himself R.F.A.No.415/2014 6 examined as DW-1 and got produced and marked documents from Exhibits D-1 to -D3.
5. After hearing both side, the Trial Court by its impugned judgment and decree dated 16-12-2013 answered issue Nos.1 and 2 'partly in the affirmative' and decreed the suit of the plaintiff in part as aforementioned. It is against the said judgment and decree, the defendant in the Court below has preferred this appeal.
6. The Lower Court records were called for and the same are placed before this Court.
7. Heard the arguments of the learned counsel for appellant, learned counsel for respondent and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.
R.F.A.No.415/20147
8. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
9. In the light of the materials placed and the arguments addressed by the parties, the following points arise for my consideration in this appeal:-
[i] Whether the finding of the Trial Court holding that the plaintiff is entitled to recover a sum of `1,31,724/- together with interest there upon from the defendant is an erroneous finding?
[ii] whether the suit is barred by
limitation?
[iii] Whether the judgment and decree under appeal deserves any interference at the hands of this Court?
The plaintiff as PW-1 in his Examination-in-chief in the form of Affidavit evidence has reiterated the R.F.A.No.415/2014 8 contentions taken up by him in his plaint. He has stated that at the request of the defendant, he had executed and delivered to the defendant various promotional items and supplied the printing materials under five different invoices with their number, date and amount as follows:-
Sl.No. Invoice No. Date Amount (`)
1 90 29-10-2003 1,70,500-00
2 101 20-11-2003 13,080-00
3 36 19-06-2004 23,500-00
4 57 07-07-2004 11,800-00
5 243 19-02-2005 7,644-00
Total 2,26,524-00
Despite the supply of printing and promotional items under those invoices, the defendant did not pay the entire amount shown under the aforesaid invoices. However, after giving deduction towards the amount paid by him, still he was found due in a sum of `1,41,724/-.
R.F.A.No.415/20149
PW-1 further stated that the defendant towards the repayment of the due amount had also issued four cheques, which when presented for realisation were returned with shara "Exceeds Arrangements". The witness has given the cheque numbers, date and the amount.
PW-1 has further stated that apart from the four cheques mentioned above, the defendant had also issued six post-dated cheques which were also for a sum of `10,000/- each. However, those six cheques were not presented by him for realisation since the earlier cheques were dishonoured.
PW-1 has also stated that he had issued a notice as required under Section 138 of the N.I. Act to the defendant after dishonour of the first four cheques calling upon him to pay the cheques' amount. Since the defendant failed to pay the amount, he instituted R.F.A.No.415/2014 10 a proceeding under Section 138 of the N.I. Act, against him.
The witness has further stated that, even after issuance of legal notice and demanding repayment of the amount, since the defendant failed to clear his dues amounting to a sum of `1,41,724/-, he was constrained to institute the suit against the defendant.
The plaintiff has stated that the principal amount being `1,41,724/-, he is entitled for interest of a sum of `17,000/- at the rate of `12% per annum from 19-02-2005 and towards the notice charges, a sum of `1,500/-, thus in total he has claimed a sum of `1,60,224/-.
PW-1 got produced and marked five invoices from Exs.P-1 to P-5, four Certified Copies of the alleged dishonoured cheques from Exs.P-6 to P-9, four Certified Copies of the Banker's endorsement from R.F.A.No.415/2014 11 Exs.P-10 to P-13, a copy of the legal notice at Ex.P-14, a Certified Copy of the 'Registered Post Acknowledgement Due' cover said to have been sent by him with the legal notice to the defendant at Ex.P-15, a Certified Copy of the postal receipt at Ex.P-16, a Certified Copy of the complaint filed by him against the defendant under Section 138 of the N.I. Act at Ex.P-17, Certified Copies of Balance Sheets at Ex.P-18 and Exs.P-20 to P-26, a Certified Copy of the Ledger Account Extract at Ex.P-19, six original cheques from Exs.P-27 to P-32. Among these Exhibits, Exs.P-6 to P-16 and Exhibits P-18 to P-26 were marked subject to production of their originals.
The witness was subjected to a detailed cross- examination wherein he adhered to his original version.
R.F.A.No.415/201412
10. DW-1 in his Examination-in-chief in the form of Affidavit evidence has given a go-by to his contention taken up in his Written Statement. On the other hand, he has admitted that he was running a firm in the name and style of "M/s. Neo Systems" and used to give job work to the plaintiff - firm for printing and supply of various promotional items. He has also stated that he has paid the entire amount to the plaintiff which is claimed by the plaintiff under the alleged invoices. However, he stated that issuance of cheques by him to the plaintiff was only as security. Though he admitted that the plaintiff has instituted a proceedings against him under Section 138 of the N.I. Act, he contended that he was not served with any notice prior to filing of the suit. He denied the alleged liability towards the plaintiff.
R.F.A.No.415/201413
In his support, he got produced and marked a Bank statement at Ex.D-1, Certified Copies of two judgments in C.C.No.7781/2006 and C.C.No.7782/ 2006, both in the Court of the XVIII ACMM and XX ASCJ, Bangalore City, and both dated 18-10-2011 at Exs.D-2 and D-3 respectively.
The witness was subjected to a detailed cross- examination from the plaintiff's side.
11. In the light of the above, it was the first argument of the learned counsel for the defendant/appellant that the suit of the plaintiff is based on invoices which are admittedly on different dates. As such, separate cause of action has arisen with respect to each of the invoices. Therefore, each of the invoices has to be separately proved by the plaintiff, which plaintiff has failed to do. R.F.A.No.415/2014 14
Learned counsel further submitted that the defendant as DW-1 has admitted only Exs.P-2, P-3 and P-4, as such, the plaintiff has utterly failed to establish the transaction under Exs.P-1 and P-4.
Drawing the attention of the Court to Ex.D-1, the Account statement, the learned counsel for defendant/appellant also attempted to show that the two entries shown in the Bank Account at Ex.D-1 corresponds to two invoices, one for a sum of `13,080/- and another for a sum of `11,800/-, as such, towards the remaining invoice amounts liability only i.e. Exs.P-3 and P-5, the plaintiff may be entitled to claim from the defendant, however, subject to the proof of those invoices.
12. Per contra, the learned counsel for the respondent/plaintiff in his argument submitted that, even though the defendant had totally denied the R.F.A.No.415/2014 15 plaint averments in his Written Statement, he has admitted the essentials of the plaint averments in the evidence as DW-1. He has not only admitted the business transaction between them, but also has admitted the supply of goods under the invoices to him. As such, the question of the plaintiff proving the supply of goods under each of the invoices separately does not arise.
13. The plaintiff's contention is regarding supply of materials to the defendant under five different invoices under Exs.P-1 to P-5. Admittedly, all those five invoices bear different dates commencing from 29-10-2003 and ending on 19-02-2005. Therefore, it is for the plaintiff to show that there was business transaction through Exs.P-1 to P-5 wherein he has supplied goods to the defendant as shown in the invoices. In that regard, except the invoices at Exs.P- R.F.A.No.415/2014 16 1 to P-5, the plaintiff has not produced any other material to show the supply of goods to the defendant.
14. However, the evidence of defendant as DW-1 plays an important role in appreciating the case of the plaintiff. The defendant as DW-1 who initially had denied every averment made in the plaint has in his Examination-in-chief as DW-1 admitted about he owning and running a firm under the name and style "M/s. Neo Systems" and also has categorically stated that he used to give job work to the plaintiff - firm for printing and supply of various promotional items. The witness by himself making such a statement has admitted that there was business transaction between himself and the plaintiff in which process, he had utilised the services of the R.F.A.No.415/2014 17 plaintiff in printing and supply of various promotional items.
The said statement of the defendant as DW-1 will not stop there itself and it further continues in his evidence in Examination-in-chief, where at para-3, the witness has stated as below:-
"I further state that I have paid entire amount to the plaintiff which is claiming by plaintiff under the alleged invoices..."
By making such a statement, the witness has shown that there was supply of materials by the plaintiff to him and that invoices were raised, in which connection, it is for the said reason, the witness has stated that the entire amount under the invoices has been paid to the plaintiff by him, otherwise, the witness would have and required to specifically contend that no such supply to him under any one or R.F.A.No.415/2014 18 more of those invoices was made. Since the witness has not done it, an inference can be drawn that, DW-1 has not contested those invoices seriously.
15. In the cross-examination of PW-1, nothing material favourable to the defendant was elicited. On the other hand, it was elicited that there was business relationship between the parties which was strained since about five to six years. Those correspondences of business relationship between the parties have once again come out in the cross-exanimation of PW-1. However, in the cross examination of DW-1, the defendant has specifically stated as below:-
"ªÁ¢AiÀÄgÀÄ £À£U À É vÉÆÃj¹zÀ ¤±Á£É ¦-1 jAzÀ ¦-5 E£ïªÁAiÀiïì£Á jÃw ¦æAnAUï ªÉÄnÃjAiÀįï£Àß ¸Àg§ À gÁdÄ ªÀiÁrzÁÝgAÉ zÀgÉ ¸Àj."R.F.A.No.415/2014
19
The English translation of the same would come as:
"It is true to suggest that the plaintiff has supplied to me the printing materials as shown in the invoices marked at Exs.P1 to P5."
16. Thus the defendant has clearly and specifically admitted regarding the supply of printing materials as shown in Exs.P-1 to P-5 to him. Even though in his subsequent sentences in the very same cross-examination the witness has stated that, Ex.P-1
-invoice does not bear his signature, but his admission regarding the supply of the materials and all the five invoices as observed above, would not give any special value to the aspect that Ex.P-1 did not bear his signature. On the other hand, the very same witness has further stated in his very same cross-examination that, he has received the articles supplied under R.F.A.No.415/2014 20 invoices at Exs.P-2 to P-5 and that he has paid the amount towards the same. The said acknowledgement of the receipt of materials under Exs.P-2 to P-5 remains undisputed. However, his admission that he has received the materials/articles under all the five invoices makes the way of the plaintiff clear in proving his contention that the materials shown in Exs.P-1 to P-5 were supplied to the defendant at his request. Therefore, the very first argument of the learned counsel for the defendant/appellant that, the plaintiff has failed to prove each of the transaction under each of the invoices is not proved, is not acceptable.
17. The learned counsel for the defendant/ appellant also canvassed an argument that when the Account statement of the defendant at Ex.D-1 is verified, there are three entries therein which corresponds to three transactions under three R.F.A.No.415/2014 21 different invoices which the plaintiff is claiming in this suit. In that regard, learned counsel drew the attention of this Court to three entries in which the first one is dated 28-07-2004 for a sum of `13,000/-, second one is dated 26-08-2004 for a sum of `11,800/- and the third one is dated 12-10-2004 for a sum of `7,000/-. Though the first two entries for a sum of `13,000/- and `11,800/- may tally with the amount in the invoices at invoice No.101 for a sum of `13,080/- and invoice No.57 for a sum of `11,800/-, but the third entry dated 12-10-2004 for a sum of `7,000/- does not have a corresponding invoice in the suit. Though learned counsel for the defendant/ appellant contended that the invoice No.243 for `7,644/- which is at Ex.P-5 is the corresponding invoice for the said amount, but the same is not acceptable for the reason that admittedly, the entry R.F.A.No.415/2014 22 dated 12-10-2004 shows a different name as "Lotus" whereas the plaintiff's establishment is "M/s. Front Page". Though the learned counsel for the defendant/ appellant tried to convince the Court that the documents at Exs.P-6 to P-9 which are the Certified Copies of the cheques showing the cancelled name of "M/s. Lotus Printers Private Limited" and attempted to submit that the erstwhile name of "M/s. Front Page"
was "M/s. Lotus Printers Private Limited". But, in the absence of any pleading or evidence in that regard, the Court cannot proceed with assumptions and surmises only because an argument on the said line was forwarded to the Court. As such, if at all the argument of the learned counsel for the defendant/ appellant is accepted on this point, it would only go to show that the defendant as DW-1 has got an account to show that two payments of a sum of R.F.A.No.415/2014 23 `13,000/- and `11,800/- were made by him to the plaintiff. The total sum of those two payments would come to a sum of `24,800/-. If out of the total amount of the five invoices which is at `2,26,524/-, a sum of `24,800/- is deducted, the outstanding liability would come to a sum of `2,01,724/-. However, the plaintiff in his plaint as well in his evidence has stated that he has received a sum of `84,800/- from the defendant towards the total value of five invoices. Thus, what the plaintiff has stated that he has received a partial consideration, is very much higher than what the defendant is contending that some amount was paid to the plaintiff. Thus, it is after giving deduction to the said higher amount of `84,800/-, the plaintiff has confined his suit claim only to a sum of `1,41,724/-. As such also, the contention of the defendant/appellant that, R.F.A.No.415/2014 24 the plaintiff would not be able to prove the outstanding due from the defendant, is not acceptable.
18. The next point of argument of the learned counsel for the defendant/appellant was that, the present suit filed by the plaintiff is based upon the cheques, but not on any running account for the suit claim, as such, the Trial Court has committed an error in decreeing the suit which it ought not to have done. In that regard, when the plaint averments are seen, nowhere the plaintiff has stated that the suit was based on the cheques alone which are said to have been issued by the defendant to him.
On the other hand, his contention is that the goods are supplied to the defendant under five different invoices which in total amounts to `2,26,524/-, however, towards dischargal of the R.F.A.No.415/2014 25 liability, the defendant had issued four + six = ten cheques, each for a sum of `10,000/- among which four cheques when presented for realisation came to be dishonoured. Even though the plaintiff has not presented the remaining six cheques for realisation, but, as PW-1 in his cross-examination itself has given the reason for not presenting the remaining six cheques stating that since earlier four cheques were continuously dishonoured, he did not present the remaining six cheques for realisation.
Secondly, a reading of the plaint averments itself would go to show that the suit is based upon the total outstanding due by the defendant towards the plaintiff which has come out of business transactions which they had between them. The said aspect is further clear in the evidence of PW-1 where also he has stated that in order to show that, as on the date of R.F.A.No.415/2014 26 the institution of the suit, the defendant was due to him the suit claim, he has produced copies of the Ledger Extracts. That means, the plaintiff has relied upon the Ledger Account Extract and it is based upon the outstanding amount that was due in the Ledger Account extract, he has calculated the dues payable to him by the defendant. The said Ledger Account extract is produced and marked at Ex.P-19. The said document shows that the Closing Balance in the Account of "M/s. Neo Systems" owned by the defendant was a sum of `1,31,724/-. The said document was not specifically and categorically denied from the defendant's side.
That apart, PW-1 in his cross-examination dated 30-08-2011, in response to a question put to him from the defendant's side, answered stating that, since there is a running account between himself and R.F.A.No.415/2014 27 the defendant, they keep on adjusting the credits to the loan balance, as such, it cannot be stated as to whether any amount has come towards any specific invoice. The said answer which has not been denied by the defendant subsequently, would go to prove two aspects. First, the credit received by the plaintiff from the defendant cannot be earmarked as a payment to any specific invoice. In such a case, the analogy drawn by the learned counsel for the defendant/appellant by drawing the attention of the Court to Ex.D-1 and two entries of the payments shown therein which is an entry dated 28-07-2004 for a sum of `13,800/- and another entry dated 26-08-2004 for a sum of `11,800/- is not correct and that, it cannot be straightaway marked as against the two invoices, i.e. invoice No.101 dated 20-11-2003 and invoice No.57 dated 07-07-2004.
R.F.A.No.415/201428
The second aspect which the said answer proves is that, the plaintiff had a running account with respect to the defendant with him. It is by virtue of the said running account the outstanding liability has been deduced at `1,31,724/-. As such, the argument of the learned counsel for the defendant/appellant that, it was not a running account and the suit is purely based on mere dishonour of the four cheques, cannot be accepted.
19. Similarly, the argument of the learned counsel for the defendant/appellant that, issuance of alleged legal notice by the plaintiff to the defendant was not with respect to the entire suit claim but it was confined only to four cheques in total amounting to `40,000/-, would also not improvise his case, in any manner, for the simple reason that, admittedly, the said legal notice at Ex.P-14 was a notice issued under R.F.A.No.415/2014 29 Section 138 of the N.I. Act which was with respect to dishonour of four cheques issued by the defendant each for a sum of `10,000/-. However, it cannot be denied that, in the very same legal notice at Ex.P-14, the plaintiff has clearly mentioned the details of all the five invoices in total amounting to `2,26,524/- and stated that towards those invoices, the defendant is still to make an outstanding payment of a sum of `1,41,724/- to the plaintiff. Thus in the said notice, the plaintiff has clearly and specifically stated the outstanding liability from the defendant to the plaintiff which is nothing but the principal amount in the suit claim as claimed by the plaintiff.
20. The last leg of argument of the learned counsel for the defendant/appellant was that, the suit was barred by limitation. However, the Trial Court R.F.A.No.415/2014 30 wrongfully has held that the suit is within the period of limitation.
In that regard, learned counsel for the defendant/appellant once again drew the attention of this Court to the invoices at Exs.P-1 and P-2 and submitted that since both those invoices are of the year 2003 and the present suit has been instituted only in the year 2007, which is beyond a period of three years, the suit was barred by limitation.
21. Learned counsel for the respondent/plaintiff in his argument submitted that the very fact that the plaintiff had a running account of the defendant with him and the payments were adjusted to the outstanding liability and further the issuance of the cheques by the defendant subsequent to the outstanding liability under the five invoices which has R.F.A.No.415/2014 31 resulted in extension of the limitation period, would clearly prove that the suit was well within limitation.
22. The Trial Court in the above finding though has discussed the question of limitation, however, it has observed that in view of the fact that the defendant had issued ten cheques as per Exs.P-6 to P-9 and Exs.P-27 to P-32 subsequent to the invoices, the same has given cause of action to the plaintiff and as such, the suit was within the period of limitation.
23. The defendant has contended that the alleged cheques were issued not towards the payment of the outstanding liability but were issued only as a security. However except taking such a defence in his evidence, admittedly, the defendant has not taken such a plea in his Written Statement. Therefore, for the first time, the defendant has come up with such a plea in his evidence. Even if it is R.F.A.No.415/2014 32 considered, still, it can be noticed that except taking such a plea, nothing is produced by the defendant to show that under what circumstance those cheques were issued as a security. No cogent evidence is placed to believe that those cheques were issued as a security.
24. That apart, instead of considering those cheques as a tool for considering the period of limitation, still, in view of my above finding that the plaintiff has established that the suit was based on a running account in which he got produced a Ledger Account Extract and has specifically stated in his evidence that, he was maintaining a running account of the defendant wherein the credits received by him were all appropriated clearly goes to show that, the plaintiff was maintaining a running account with respect to defendant and the outstanding liability R.F.A.No.415/2014 33 which is shown at `1,31,724/- has given him a cause of action to institute the suit against the defendant. Since the suit has been instituted within the period of limitation from the said date of cause of action which has accrued to him in the year 2005, as could be seen in Ex.P-19, I do not find any error in the finding of the Trial Court in holding that the suit was within limitation. As such, the said argument of the learned counsel for the defendant/appellant that the suit was barred by limitation, is also not accepted.
25. Barring the above, the defendant/appellant has not raised any other contention worth considering. On the other hand, since the Trial Court, after appreciation of the materials placed before it, has rightly come to a conclusion decreeing the suit of the plaintiff in part, confining it to a sum of `1,31,724/- only and has awarded a reasonable future interest at R.F.A.No.415/2014 34 the rate of `12% per annum, I do not find any reason to interfere in it.
Accordingly, I proceed to pass the following:-
ORDER [i] The appeal is dismissed;
[ii] The judgment and decree dated 16-12-2013 passed in O.S.No.321/2007 on the file of the XXX Additional City Civil Judge, Bangalore City, is hereby confirmed; [iii] In view of dismissal of the appeal, the amount deposited by the defendant/ appellant, if any, in the registry subsequent to the order dated 05-11-2015 passed by this Court together with interest accrued there upon, be released to the plaintiff/ respondent, after the period of appeal and R.F.A.No.415/2014 35 in case no appeal is preferred by the defendant.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/-
JUDGE BMV*