Madras High Court
Robert A. Heflin vs Mrs. Revathi Ramachandran (Also In Her ... on 5 August, 2002
Author: M. Chockalingam
Bench: M. Chockalingam
JUDGMENT M. Chockalingam, J.
1. This suit has been filed for recovery of a sum of Rs.19,35,000/- equivalent to U.S.Dollars 75,000 or at such exchange rate as applicable on the date of decree together with interest at 24% per annum from the date of plaint till realisation and for costs.
2. The plaint averments are as follows:
The plaintiff knew the defendants since 1980 when they became indenting agent for India through their Company BOART & CO, for the plaintiff's former employer Valdiamont International, Ann Arbor, Michigan, United States of America. The defendants regularly purchased synthetic industrial diamond from the West German Office of Valdiamont International in Frankfurt/Main, West Germany, by making cash payment in order to take the synthetic industrial diamond purchased by them to India for sale in the Bombay Market and or also for the use of and benefit of their Companies in India viz. Boart & Co; Kanco Precision Tools Ltd.,; Schneidtechnic (India) Pvt. Ltd., and Tokai Kanco Exports Ltd. Since the West German Office of Valdiamont International was closed in 1986, the defendants continued to purchase diamond from Valdiamont's Head Office in Ann Arbor, Michigan, U.S.A. After Valdiamont International was closed in 1987, the defendants contacted the plaintiff to help them to get in touch with the suppliers of synthetic industrial diamond. The plaintiff agreed to the supply to the defendants Industrial Diamond. The agreement between the plaintiff and the defendants was that the plaintiff would supply synthetic industrial diamond, and the price for the same would be settled by the defendants from time to time in a mutual open account between the parties. From 13.3.87 till 4.5.89, a total quantity of 105,000 carats were supplied to the defendants in a total value of 210,000 U.S.Dollars, and the defendants paid a sum of 165,000 U.S.Dollars, leaving a balance of 45,000 U.S.Dollars. The delivery of the Synthetic Industrial Diamonds was made either to the defendants or one of their messengers in U.S.A. or West Germany on the basis of the instructions of the defendants. The statement of accounts between the parties would show the last credit of U.S.Dollars 12,500. From May 1989, the defendants stopped the purchase of synthetic industrial diamond from the plaintiff. The plaintiff came to know that the modus-operandi of the defendants is to keep switching from one supplier to another, after making the supplier's account sticky. There are instances of suppliers having sued the defendants and their organisations for recovery of the outstanding amount. Since the transaction between the parties is commercial and the plaintiff had already settled to his suppliers, the defendants have become liable to pay interest at 24% on the amounts due. The plaintiff caused a legal notice on the defendants on 19.3.91. Instead of settling the amounts, the defendants sent an untenable reply on 28.3.91. The defendants used to represent to the plaintiff that they are representing various business interests in India, and they were purchasing the Industrial Diamond for their use in India as well as for re-sale and held out to the plaintiff that the plaintiff can look to both the defendants jointly and severally for settlement of the accounts of the plaintiff. It was agreed between the parties that in the event of the account becoming sticky, the defendants would settle the principal amount together with interest at 24% per annum. Even after availing the maximum credit period, the defendants have not settled the amounts. Hence, this suit has been filed for the above said relief.
3. In the written statement filed by the defendants it is averred as follows:
The defendants do no owe the plaintiff the sum of Rs.19,35,000/- or any other sum. The synthetic industrial diamond could be imported on ordinary general licence issued by the Government of India. M/s.Valdiamont International USA had a synthetic industrial diamond division in which the plaintiff was employed as Production Manager. M/s.Valdiamont International opened a unit in West Germany. In the course of the trade, it contacted the second defendant and wanted to know whether he could act as its Indian representative, and the second defendant agreed to do so. In 1984, it had conducted a Seminar at Frankfurt, Germany, for which the second defendant was invited to attend. He accepted the invitation and proceeded to Frankfurt and attended the Seminar. One Mr.Klaus Lappe was the Regional Director of the said M/s.Valdiamont International West Germany. In the said seminar, the second defendant had occasion to meet both Klaus Lappe and the plaintiff. They became friends of the second defendant, and in due course, the first defendant also came to know the said persons. The diamond for which the orders were procured by the second defendant would be supplied directly by the said Company, and the second defendant would be paid the commission through banks only. The defendants did not contact the plaintiff to help them to get in touch with the suppliers of synthetic diamonds. There was no occasion for the plaintiff to agree to supply any diamonds. There was no dealing of purchase of diamond from the plaintiff by the defendants nor was any mutual open account existed between the parties. The alleged supply of 105000 carats of diamonds and the payment of U.S.Dollars 210000 are false. No synthetic industrial diamond was delivered either to the defendants or to any alleged messenger. The plaintiff has manufactured self serving documents and filed them along with the plaint. None of the documents, except the exchange of notices are true nor are they binding on the defendants. It is highly unbelievable that valuable synthetic industrial diamonds were delivered to the defendants or to the alleged messenger without even taking an acknowledgement for the receipt of the same. The Diamond Division of M/s.Valdiamont International Germany was closed down in 1987. Mr.Klaus Lappe was without employment. He offered to come down to India and make Polycrystaline Synthetic Cutting Tools for the benefit of the concerns of the defendants. Believing the said representation, the defendants agreed for the same. In view of the said offer of Klaus Lappe, the name of the company was changed to Schneidtechnik (India) Pvt. Ltd. He was not able to make the Polycrystaline Synthetic Cutting Tools. He offered to make diamond cutting tools for industrial purposes. On the suggestion of Klaus Lappe, the defendants invited the plaintiff to come down to India so as to provide technology for manufacturing synthetic diamond tools. He came to India at the cost of the defendants and stayed in India for a week, but could not provide the technology. Thereafter, there was no connection with him. Klause Lappe and the defendants had disputes. Klaus Lappe filed C.P.No.20/90 on the file of this Court for various reliefs. A settlement was entered into between Klaus Lappe and the defendants, by which the defendants took over the share holding of the said Klaus Lappe. Klaus Lappe, even though stayed in India, did not have any employment worth its name. He has a grouse against the defendants. In order to seek revenge on the defendants, Klaus Lappe must have set up the plaintiff to file the above suit on imaginary and false allegations. The plaintiff on account of his close relationship must be a willing tool in the hands of Klaus Lappe. There were no frantic telephone calls. The defendants had not switched on from supplier to supplier. Though the plaintiff may say that some suppliers have sued the defendants, no particulars have been given. The defendants are not liable to pay any amount, and thus, the question of paying interest at 24% per annum does not arise. No amount is due by the defendants to the plaintiff. The tone and tenor of the notices issued by the plaintiff show that the same were not issued in pursuance of any genuine claim, but with ulterior objects. The cause of action is non-existent and false. Hence, the suit may be dismissed with costs.
4. In the replication filed by the plaintiff, it is alleged that in order to escape from their liability, the defendants have invented that they know the plaintiff and Mr.Klaus Lappe only after 1984; that the question of taking the Bio-Data of the messenger who pays cash in the inception and who acts as per the instructions of the defendants for collecting the material is totally irrelevant; that whenever there is a transaction, there is no need for taking a receipt of the supply as the entire transaction is done on trust; that the practice prevailing in the Synthetic Industrial Diamond Industry is derived from the Gem Diamond Industry where each and every deal, big or small, is done under trust; that the transactions in the instant case are supported by relevant documents; that the notice sent by the plaintiff on 24.10.91 was not replied to by the defendants; that the motivation for the plaintiff to come over to Madras at the request of the defendants has been clarified by Mr.Klaus Lappe; that the statements of Mr.Klaus Lappe are very relevant; that because of the business dealings the plaintiff had with the defendants, the plaintiff came over to India on their invitation; and that the suit may be decreed.
5. In the additional written statement filed by the first defendant, it is averred that the transactions stated by the plaintiff is opposed to and forbidden by law and is of such nature that it would defeat the provisions of Foreign Exchange Laws and against Public Policy, and the same cannot be enforced; that both the object as well as the consideration are opposed to law and cannot be enforced; that the contentions raised in the reply statement are denied as incorrect, misleading and false; that the plaintiff is trying to improve his case by putting up a distorted version and entirely different version in the reply statement; that while amending the plaint and bringing on record the legal representatives of the second defendant had unauthorisedly omitted the second defendant from the array of parties; that the plaintiff should not be permitted to proceed further without a proper array of parties in the suit, and hence, the suit is liable to be dismissed.
6. On the above pleadings, the following issues were framed:
1. Whether the defendants received the supplies of Industrial diamonds of 105,000 Carats between 13.3.1987 and 4.5.1989 at US$ 210,000/- from the plaintiff?
2. Whether the defendants have made payment in the sum of US$ 165,000/- leaving a balance of US$ 45,000/- in the account between the plaintiff and the defendants?
3. Whether defendants had made the last payment in the account between the plaintiff and the defendant in a sum of US$ 12,500/- on 4.5.1989?
4. Whether the defendants are liable to pay interest at 24% per annum on the sum of US$ 30,000/- being the interest payable on the principal sum of US$ 45,000/-?
5. Whether the defendants are liable to pay the interest at 24% per annum on the amount of US$ 75,000/- being the suit claim from the date of plaint till the date of realisation?
6. Whether the plaintiff is entitled for any other reliefs?
7. On the basis of the additional written statement, the following additional issue was framed:
"Whether the suit transaction is barred by the provisions of Foreign Exchange Laws and against Public Policy?"
8. ISSUES 1 TO 6 AND ADDITIONAL ISSUE:
The plaintiffs have filed this suit for a money decree for a sum of Rs.19,35,000/- equivalent to 75,000 U.S. Dollars or at such exchange rate as applicable on the date of the decree together with subsequent interest at the rate of 24% per annum, alleging that the defendants are liable to pay the same being the balance of consideration towards the cost of 105,000 carats of synthetic industrial diamonds supplied by the plaintiff to the defendants. The defendants have contested the suit by stating that they did not purchase the said synthetic industrial diamonds from the plaintiff; that there was no supply by the plaintiff nor was there any purchase by the defendants, and hence they are not liable to meet the suit claim; and that apart, the suit is not maintainable in view of the provisions of the Foreign Exchange Laws.
9. Arguing for the plaintiff, the learned Counsel would submit that in order to prove the suit claim the plaintiff has examined PWs 1 to 4 and marked Exs.P1 to P31; that it is pertinent to note that no suggestion was made during the cross examination of PW1 about the concocted reason for technical assistance at Germany during DW1's visit on 10.4.1988; that it is pertinent to note that DW1 has admitted that she was in Germany along with the plaintiff and PW2 on 10.4.88 for some other purpose; that there is no mention about this in the written statement; that PW1 being a businessman will not come all the way from USA to Frankfurt to help DW1 in her business without any remuneration; that PW1 being an American businessman, he would not travel to Germany without business, and if at all he comes over even for providing technical assistance, DW1 ought to have compensated him for such technical assistance; that it has to be noted that no evidence of that sort is produced by the defendants; that the evidence of PW2 1 to 3 would establish the dealings between the plaintiff and the defendants; that it is pertinent to note that no question in the cross examination was put to PW2 questioning the transactions; that the evidence of PW1 regarding the transactions is cogent, and thus the evidence of PWs 1 to 3 holds the ground; that PWs 2 and 3 have corroborated the evidence of PW1 as to the business transactions on 10.4.1988 and delivery of diamond to DW1 at Offenbach; that it is the evidence of DW1 that she was present at Offenbach and had stayed at Hotel Graf during the relevant time; that it remains to be stated that PWs 1 to 3 testify about the transactions on 10.4.88; that DW1 testifies that PWs 1 to 3 met at Offenbach on 10.4.88 for a different purpose; that DW1 denies the purpose, but admits the meeting; that weighing the evidence on a scale, the probabilities of the transactions on 10.4.88 as testified by PWs 1 to 3 are in favour of the plaintiff, and hence, the evidence of DW1 has to be depreciated and disbelieved; that it is pertinent to note that PWs 1 and 2 were one of the select persons in the Industrial Diamond business; that the defendants at all relevant times very well knew the competence of the plaintiff in the industrial diamond trade; that a man with such repute will not risk his name and reputation by filing a false, frivolous, vexatious, and speculative suit in order to facilitate PW2 to wreck his vengeance as against the defendants 1 and 2 in a foreign country like India for the recovery of the amount due from them without sufficient cause or ground merely at the instigation of PW2 Mr.Klaus Lappe; that the relationship between Lappe and the defendants 1 and 2 were strained only in the middle of February 1990, but the suit transactions were during May 1989; that the testimony of PW2 with reference to the transactions between the plaintiff and the defendants relate to the period prior to February 1990; that the debits and credits in the account disclosed by the plaintiff would show the balance and the mode of payment, and thus, there is no necessity for the plaintiff to indulge in adventurous litigation; that the plaintiff after incurring such heavy financial burden of pursuing the case at the Madras High Court cannot be burdened with the unsavory stamp of "being a willing tool at the hands of Mr.Klaus Lappe". Added further the learned counsel that the context of Klaus Lappe addressing the Exs.P16 and P16A would not have arisen but for the defendants making wild allegations against Klaus Lappe in the written statement; that since 3/4th of the written statement only contains the matters pertaining to Klaus Lappe, the plaintiff had to necessarily refer the same to Mr.Klaus Lappe who sent his comments under Ex.P16 and also furnished the copies of the affidavits of PWs 3 and 4, which were given by them voluntarily during 1991; that it has to be noted that if Klaus Lappe had not been drawn into the picture, there would have arisen no necessity for the plaintiff to refer the matter to him; that it is pertinent to note that the presence of PW2 at Frankfurt on 10.4.88 when the plaintiff and the first defendant had their business dealings is explained by DW1; that in her evidence she stated that she had asked Mr.Klaus Lappe to go to Germany; that since the plaintiff supplied industrial diamond to the defendants for their other companies, the presence of PW2 in Germany is important at that point of time; that the relationship between PW2 and the defendants had not been strained at that time; that it is significant to note that the joint venture agreement between PW2 and the defendants in Scneidtechnik has not been produced to sustain their stand; that though the notice to produce the passports was issued to the defendants' counsel under Exs.P19 on 21.3.96, no reply was sent by the defendants' counsel; that the non production of the passports would lead to irresistible inference that because the endorsement in the passport would have synchronized with the dates of visits cited in Ex.P9 statement of account, the defendants have purposely and wantonly withheld the same from the eyes of this court, and hence, an adverse inference has to be drawn about the same, and the dates mentioned in Ex.P9 would stand proved because of the non production of the passports; that though DW1 has stated in her evidence that the industrial diamond can be brought into India only with a licence, no document or shred of evidence like copies of the licence or purchase orders or invoices of any other supplier was filed by DW1 to establish such a practice; that it is also pertinent to note that no single document is produced even though DW1 claims to be the Managing Director of four big companies having several crores of turnover in their industrial diamond business; that the documents referred to in Exs.P19 and P27 notices were available with the defendants at all relevant times which they have failed to produce and they were marked through DW1; that the transaction between the plaintiff and the defendants is also evidenced by Ex.P29; that Ex.P28 and Ex.P31 also corroborate the transactions; that Ex.P28 and P31 also confirm the liability of the defendants in the account of the plaintiff; that especially in the nature of the defendants denying the transactions in totality, the production of secondary evidence is necessitated in view of the defendants not acting upon the first and second notice to produce which is provided for under the provisions of the Indian Evidence Act; that the defendants were fully informed of the nature of the documents in the first and second notice to produce; that Ex.P26 would reveal that the defendants 1 and 2 had carried currency for effecting cash purchase which has been in existence; that since the defendants sought to discredit the affidavits of PWs 3 and 4, application for examining them on commission at Germany was moved and they resisted the application; that the intention of the plaintiff in seeking to examine these witnesses was to remove the apprehension of the defendants that their affidavits were obtained by Klaus Lappe; that this court in OSA 65 of 1997 permitted the said witnesses to be examined on Commission at Germany, and PWs 3 and 4 were examined, and thus, the cloud which the defendants try to cast upon the affidavits is cleared by their independent testimony; that sale of gems or diamonds in USA or in Germany is not prohibited by law; that the person who carries the goods to India on such purchase is bound by the law of the country; that the plaintiff is not seeking to enforce any illegal or contracts forbidden by law or prohibited by law; that the statement filed by the plaintiff under Ex.P9 would indicate the supplies and the payments and the due by the defendants; that Exs.P30 and P31 would establish beyond doubt that supplies have been admitted; that there is no need or necessity for the defendants 1 and 2 in their fax messages to communicate the plaintiff regarding their inability to pay and seek for further time; that considering the evidence oral and documentary, it can be safely concluded that there had been valid and lawful transactions, and the defendants are not entitled to resist the lawful claim of the plaintiff; and for all the reasons, the suit has to be decreed. In support of his contentions, the learned counsel relied on the following decisions: 1) ; 2) ; 3) ; 4) ; and .
10. Countering to the above contentions of the plaintiff's side, the learned Senior Counsel for the defendants Mr.Hari Krishnan with vigour and vehemence would argue that it is significant to note that apart from the oral evidence of the Plaintiff as PW1, there is no document evidencing either the alleged delivery of synthetic diamond or the alleged payments by the defendants on various dates mentioned by the plaintiff; that the plaintiff has not produced a single document containing acknowledgement of receipt of the synthetic diamond by the defendants or their alleged messengers, and thus, the plaintiff has to establish that he had delivered synthetic diamonds to the defendants as pleaded by him; that a careful analysis of the pleadings and the oral evidence of the plaintiff would reveal that he has been improving his case from time to time and that the same is very evident that it was Klaus Lappe who is behind the scene and conducting the case; that the plaintiff has categorically admitted that he does not know DW1 Mrs.Revathi personally; that he had deposed that only Mr.Raju contacted him and not Revathi; that the plaintiff though stated about the mutual and open account, has not said anything about any running account or closing of account; that the same would establish that there was no agreement between the parties; that it is relevant to note that in none of the notices issued by the plaintiff, no agreement of mutual and open account and credit of 180 days has been set out; that the plea of custom is also unsustainable, since no such plea was put forward in the notice of demand; that the plea of custom is vaguely suggested in the plaint; that no evidence of custom prevalent in the synthetic diamond trade was let in; that even the plaintiff has not spoken anything about the prevailing custom; that at any rate the evidence of Klaus Lappe also cannot establish any custom; that in accordance with the decision and as per S. 13 of the Evidence Act 1861, any person relying on a custom will have to plead custom and establish the same; that in the instant case the plaintiff has failed to do so; that there is no pleading or acceptable evidence of any custom; that regarding the delivery of synthetic diamonds, no name of any messenger has been mentioned either in the pleading or in the evidence; that the plaintiff has not even alleged that he got confirmed from D2 that diamond worth $ 20000 was delivered and only $ 12500 paid; that with regard to deliveries in person to D2, both were alleged to have been done at USA and nothing at Frankfurt; that the plaintiff in his evidence is not definite about his receipt of $ 12500; that according to the plaintiff, he did not receive any cash from D1 on 10.4.88; that according to PWs 2 and 3, D1 paid cash to the plaintiff and PW2 asserts that D1 paid $ 15000 to the plaintiff; that the plaintiff relies upon the evidence of PWs 2 and 3 for delivery of synthetic diamonds to the defendants, but no such version was put forward in any of the notices under Exs.D10, P12 and P13 nor in the plaint or in the written statement; that PW4 in her evidence never spoke of any delivery to D1 by the plaintiff; that the evidence of PW3 cannot be relied upon at all; that what are all spoken by PW3 about several deliveries by the plaintiff to D2 in her presence is not even the case of the plaintiff; that the plaintiff never alleged that synthetic diamonds were delivered to D2 at Frankfurt; that both PWs 3 and 4 have admitted that they have given their affidavits at the instance of PW2 Klaus Lappe; that it is the evidence of PW1 that he was residing permanently at USA and he was never posted in Germany; that he deposed that he demanded the amount when he came to India in May 1989, but no such version was mentioned in the plaint; that he admits that he had not sent a single notice or letter of demand in writing till he sent Ex.D10 dated 19.3.91, after a lapse of nearly two years; and on this ground, his case should be disbelieved. Added further, the learned senior counsel that Exs.P1 to P9 are not admissible in evidence, since they were not pleaded; that the plaintiff has deposed that these documents are only for his records; that so far as the notices under Exs.P19 and P20 are concerned, they were issued after the examination in chief of D1 was completed; that the documents asked for thereunder are vague and irrelevant; that a suitable reply was given under Ex.P21; that so far as the fax messages are concerned, the plaintiff acted unfairly; that he had not disclosed the same in his pleadings; that the decision reported in 100 LW 895 says that the plaintiff should succeed on his own merit; that instead of trying to succeed on his own merits, he is trying to pick up loopholes in the defendants case if possible; that the same cannot be allowed; that the plaintiff is bound to produce all his evidence in his possession as per the ruling in ; that it is pertinent to note that the contents of those documents are not proved; that the plaintiff has not whispered about the receipt of any fax messages; that PW2 filed number of interim applications in C.P.No.20/90 filed by him against the defendants 1 and 2; that since PW2 did not comply with the orders of this court, the said applications were dismissed; that PW4 admits that she gave the affidavit to PW2 as he was having problems with D2; that PW4 is the secretary of PW2 when he was in Valdiamant, Germany; that final orders were passed in CP No.20/90 as found under Ex.D7; that in respect of issues 2 and 3, the plaintiff has miserably failed in establishing any payment from the defendants; that the suit is also barred by limitation; that there is no account between the parties; that no account books have been produced by the plaintiff; that since the agreement and the transactions are denied, there is no need to pay any interest; that the plaintiff has not let in any evidence to show any agreement for the claim of interest; that even if the plea of the plaintiff is accepted, the plaintiff cannot seek to enforce a contract of the kind that he seeks to enforce in India as per Indian Laws; that the same is barred by law and prohibited by the provisions of S. 23 of the Contract Act, 1872; that the transactions are ex facie unlawful and are void; that the transactions pleaded are opposed to the Foreign Exchange Laws, Customs Laws, Import restrictions and opposed to public policy; that the plaintiff cannot seek to enforce a right from any such contract in a court of law, and hence, in view of the above reasons, the suit is liable to be dismissed with costs.
11. The plaintiff, a citizen of United States of America has come forward with this civil action for recovery of a sum of Rs.19,35,000/- which is equivalent to 75,000 U.S. Dollars with the specific pleading that from 13.3.1987 till 4.5.1989, a total quantity of 105,000 carats of synthetic industrial diamonds was supplied to the first and second defendants personally and also through messengers. The value of the same was 210,000 US Dollars, and excepting the payment of 165,000 US Dollars paid by the defendants 1 and 2, they are liable to pay 45,000 US Dollars which is equivalent to Rs.19,35,000/-. The defendants have flatly denied the agreement, supply of synthetic industrial diamonds, part payment and the balance of consideration alleged by the plaintiff. In order to prove his claim, the plaintiff has examined himself as P.W.1, one Klaus Lappe as P.W.2 and has also examined P.W.3 Ms. Maria Kranjec and P.W.4 Ms. Anita Werne at Offenbach am Main, Germany on commission issued by the Division Bench of this court in O.S.A.No.65/97. The plaintiff has marked Exs.P1 to P31. Contraverting the case of the plaintiff, the first defendant has examined herself as D.W.1 and has marked Exs.D1 to D10.
12. The plaintiff Mr. Robert Heflin, a Ceramic Engineer, was working in a world reputed diamond company by name 'Valdiamant International' having its headquarters in U.S.A. and branches in different countries. P.W.2 Klaus Lappe was employed in Vladiamant International in its Head office at Ann Arbor Michigan. The first defendant is the wife of the second defendant. Even before their marriage in the year 1979, her husband, the second defendant, was doing diamond tool manufacturing. The second defendant died on 13.12.1998 during the pendency of the suit. On his death, his legal representatives have been added as defendants as per the orders in Application Nos.2748 & 2749/99. Boart & Co. a proprietrix concern was started in the year 1979, of which the first defendant was the proprietrix. Kanco Precision Tools Limited was earlier a proprietrix concern named Kanndiaman & Co, which was earlier manufacturing diamond tools. Kanpax Private Company was later changed to Schneidtechnic (India) Limited. The said companies were started in the year 1982. Tokai Kanco Exports ltd, which was manufacturing polishing tools for granite industries was started in the year 1987-88. All the above three companies viz. Kanco Precision Tools Limited, Schneidtechnic (India) Limited and Tokai Kanco Exports Limited were family holdings, in which the first defendant was a shareholder. The second defendant has made business tours to foreign countries including U.S.A. and Germany, and during his visits in Germany, he used to stay at Hotel Graf, Offenbach am Main, where P.W.3 Ms.Maria Kranjec was working as a Receptionist. P.W.4 Anita Werne was employed in Valdiamant International at Frankfurt. D.W.1, the second defendant visited Germany in 1987, and stayed in the said Hotel. Valdiamant International opened its West Germany Office in or about 1979 and closed the same in 1985. After the closure of the said concern, P.W.2 Klaus Lappe came down to India and joined the second defendant in his venture in 1985 and became a Technical Director in the Schneidtechnic (India) Limited and became a shareholder of the said company also. In May 1985, Robert Heflin visited India and stayed a week, during which he visited the factory of the defendants, and he left for his native country. Since the joint venture incurred loss, the relationship between Klaus Lappe and the defendants became strained. Klaus Lappe filed a company petition in C.P.No.20 of 1990. He also filed various interim applications in that petition, and the orders passed therein by this court were marked as Exs.D1 to D3 and D6 & D7. The said proceedings between Klaus Lappe and the defendants was compromised. Since Klaus Lappe did not comply with the orders of this court as found under Exs.D3 and D6, this court passed a final order under Ex.D7, directing him to return the original documents within two weeks. Ex.D8 is the letter of Klaus Lappe's Counsel returning the documents on 4.2.1992. The plaintiff issued a pre suit notice under Ex.P10 dated 26.3.1991. The defendants send a reply under Ex.P11 dated 28.3.1991. A rejoinder issued by the plaintiff through his counsel under Ex.P12 dated 6.4.1991 resulted in a further reply by the defendants' counsel under Ex.P13 dated 24.10.1991.
13. According to the plaintiff, on an agreement between the plaintiff and the defendants 1 and 2, the plaintiff supplied the synthetic industrial diamonds, and the price for the same was to be settled from time to time in a mutual open account between the parties, and pursuant to the said agreement, the plaintiff supplied 105,000 carats of synthetic industrial diamond from 13.3.87 till 4.5.89 for a total value of 210,000 US Dollars, and the defendants have paid 165,000 US Dollars, while the balance, despite demands, was not made, and hence the plaintiff has come forward with the instant suit. It is contended by the plaintiff's side that the dealings between the plaintiff and the defendants is well evidenced by the testimony of PWs 1 to 3; that PWs 2 and 3 are eyewitnesses to the dealings between the parties; that the evidence of PW2 would clearly corroborate the evidence of PW1; that their evidence is cogent indicating the transaction as true; that apart from the oral evidence, Exs.P1 to P8 invoices and Ex.P9 statement of accounts would reveal the truth of the transactions; and that in the face of the evidence of PWs 1 to 3, the transaction that took place between the plaintiff and the first defendant on 10.4.1988 at Frankfurt cannot be disputed by the defendants. At the outset, it has to be stated that the plaintiff has to specifically aver and prove the alleged agreement, and all material facts relating to the supply viz. place, date, quantity and the person to whom the same was delivered. Nowhere, the plaintiff has stated when and where the alleged agreement was reached between the parties. What are all stated in the plaint regarding the supply of synthetic industrial diamonds is as follows:
"The plaintiff states that from 13.3.1987 till 4.5.1989 a total quantity of 105,000 carats was supplied to the defendants in a total value of U.S. Dollars 210,000. As against these supplies, the defendants have paid a sum of U.S. Dollars 165,000 leaving a balance of U.S. Dollars 45,000."
14. Speaking about the supply, the plaintiff as P.W.1 has deposed that from 1987 till 1989, he supplied 105,000 carats; that invoice No.1 was for 10000 carats of industrial diamond of saw grade diamond, at 2 dollars per carat; that similarly for the balance quantity and the value the supplies were made as per the other invoices under Exs.P1 to P8; that the total value of the supply was 210,000 U.S. Dollars; that he has received 165,000 U.S. Dollars; that still 45,000 Dollars plus interest is due; that the suit claim viz. 75,000 Dollars would include interest also; and that Ex.P9 is the statement of account. The court is of the view that no evidentiary value could be attached to Exs.P1 to P9 for more reasons than one. The plaintiff has not averred about these invoices nor has he pleaded that originals of Exs.P1 to P9 were sent to the defendants. On the contrary, PW1 has stated that they were only for his records. A perusal of Exs.P1 to P8 invoices and Ex.P9 statement of account would show that they were for 8 transactions out of which the delivery was made to the first defendant on one occasion, to the second defendant twice and to the messengers on five occasions. Evidently, none of the invoices contained the signatures of the defendants 1 and 2 or the messengers to whom the alleged delivery was made.
15. It is pertinent to note that the plaintiff has not produced even a single document, acknowledging the receipt of the synthetic industrial diamond. According to the plaintiff, the delivery was made on five occasions to the messengers. The invoices do not even contain the name of the messengers. Nowhere in the pre suit notice, plaint or the reply statement, the plaintiff has stated anything about the invoices or any particulars contained in the invoices. It remains to be stated that even at the earliest, when a notice was issued making a demand, the defendants have issued a reply flatly denying the agreement, delivery and purchase of the synthetic industrial diamonds from the plaintiff. The plaintiff as PW1 has deposed that there was no need for him to know the names of the messengers when delivery was taken on payment of amount. On Exs.P1 and P2 invoices, it is found that cash was paid. While under Ex.P1 invoice it is found that the diamond was handed over to Mr.Ramachandran, it is found under Ex.P2 invoice that the diamond was handed over to the messenger. In Ex.P4 invoice dated 10.4.88, it is found that the diamond was handed over to R.Revathy with a note stating "R.Revathy had 20000 cash US but needed other purchase. Promised payment end of month". Under the ordinary course of events, a seller is not expected to record about the matters that were not relevant to be noted in an invoice. But the plaintiff has noted the same. It remains to be stated that the relevant invoices do not contain either the names of the messengers or their signatures, acknowledging the receipt of delivery, which would cast a doubt whether such a delivery was made at all. P.W.1 has admitted that he did not know the first defendant personally, but it was only the second defendant who contacted him and not the first defendant. This part of the evidence would falsify the alleged agreement between the plaintiff on the one part and the defendants 1 and 2 on the other. According to Ex.P9 statement of account, the plaintiff has delivered on 4.5.1989 10000 carats of synthetic industrial diamonds worth 20000 U.S. Dollars to an unknown messenger, and it was paid only 12500 US Dollars, leaving the balance of 7500 Dollars payable. It is highly improbable that such a delivery was made, without getting the acknowledgement of the messenger whose name is not mentioned in the invoice. According to the plaintiff's case, the synthetic industrial diamonds were supplied from March 1987 to May 1989. It is an admitted position that the plaintiff has not made any communication demanding the alleged balance of 45,000 Dollars till he issued Ex.P10 notice on 26.3.1991. At this juncture, it has to be pointed out that according to PW1, he visited India only on the request of the plaintiff and on the assurance of the arrangement for his air ticket, and though he stayed for a week, the defendants neither paid the balance nor made any arrangement for his air ticket, but he returned. If this version of the plaintiff is true, no doubt, he would have issued a notice calling upon the balance immediately on reaching his native land, but he has not done so. This would be a strong circumstance casting a doubt on the plaintiff's case. According to the plaintiff, he made only one delivery to the first defendant on 10.4.1988 at Frankfurt for the payment already received by him, and thus, from his evidence, it would be clear that no payment was made by the first defendant on 10.4.88. PWs 2 and 3 would depose that the first defendant paid 15000 US Dollars to the plaintiff that day. It could be well seen from the evidence of the plaintiff that he was a permanent resident of U.S.A., and he was never posted in Germany. No material is placed before the court to prove that on the dates of the alleged transactions, he was present in Germany. In the absence of any evidence to indicate any part payment, it cannot be held that the plaintiff has proved the part payments of 165,000 US Dollars towards the part of the sale consideration.
16. Calling Exs.P28, P30 and P31 as strong pieces of evidence for the plaintiff, the learned counsel would submit that the documents though marked at the time of the cross examination, cannot be brushed aside for the simple reason that they were marked during the cross examination of the first defendant; that as per the provisions of the Indian Evidence Act the documents can also be marked during the cross examination of a witness; that in the nature of the defendants relied on the transaction in totality, the production of the secondary evidence was necessitated by circumstances, and in view of the defendants not acting upon the first and the second notice to produce the documents, and it was not as if the defendants were taken by surprise and they were fully informed of the nature of the transactions in the first and second notice to produce. The court may hasten to comment upon this contention, since these documents cannot in any way advance or strengthen the case of the plaintiff. The first defendant has admitted that these fax messages contain their fax number, but the plaintiff has not proved the contents found in the said documents. It cannot be disputed that these documents, if true, should have been in the custody of the plaintiff from the very beginning. But the plaintiff has not even disclosed the same either in his pleadings or the affidavit of documents or in his evidence even, but has attempted to mark the same through D.W.1 at the time of the cross examination. Thus, the non production of those documents earlier in time and not marking the same through P.W.1 have been deliberately done in order to take away the opportunity to the defendants' side to cross examine the plaintiff's witnesses on the contents of the documents. It is pertinent to note that the first defendant has not admitted the contents of the documents. Under such circumstances, it has to be stated that the contents of the fax messages under Exs.P28 and P30 remain unproved. Apart from the above, Ex.P31 fax message dated 8.5.89 reads:
"How are you? Hope you had a nice flight back home. I had come to the airport with some money but Klaus and You had already gone through customs. I was delayed because of the Muslim festival procession and I had a big problem with the traffic. I got held up there and could not reach in time to see you. Sorry for that and believe me it was not intentional or planned as you might have thought."
It is admitted by both sides that the plaintiff who visited India in May 1989, stayed a week, and as per Ex.P31 fax message, he should have stayed in India during the first week of May 1989. According to the statement of accounts under Ex.P9, the plaintiff gave a delivery of 10000 carats of synthetic industrial diamonds to a messenger on 4.5.1989 at Frankfurt. The contents of the fax message under Ex.P31 as stated above would falsify any delivery made by the plaintiff to a messenger on 4.5.89 at Frankfurt. Equally the statement contained in Ex.P9 that the plaintiff was present at Frankfurt to deliver synthetic industrial diamonds to a messenger on 4.5.89 would falsify the fax message found under Ex.P31. More significant it is to note that the plaintiff has not even uttered a word in respect of the alleged fax messages in his evidence. In view of all the above, it would be futile on the part of the plaintiff to contend that the fax messages under Exs.P28, and P30 would confirm the liability of the defendants in the account of the plaintiff. Under the circumstances, the court is able to see force in the contention of the defendants' side that the documents have been manipulated to support the unfounded claim of the plaintiff.
17. Drawing the attention of the court to the evidence of P.W.3 Maria Kranjec, a receptionist in Hotel Graf, Offenbach am Main, Germany and P.W.4 Anita Werne, recorded by the Advocate Commissioner at Hotel Graf, Offenbach am Main, Germany, the learned counsel for the plaintiff would contend that their evidence would directly point to the transactions between the parties; that there arose a necessity to the plaintiff for examining PWs 3 and 4 on Commission at Germany in order to remove the apprehension of the defendants that the affidavits of PWs 3 and 4 were obtained by PW2; that the report of the Advocate Commissioner who examined PWs 3 and 4 on their demeanour of the witnesses has stated that it was natural and answers were spontaneous, and they conducted themselves in a dignified manner; and hence, their evidence is trustworthy and acceptable. The Court may hasten to say that the evidence of PW4 does not require any consideration, in view of the fact that she has not stated in what way she is concerned with or connected to the alleged transactions between the plaintiff and the defendants 1 and 2. So far as the evidence of PW3 is concerned, she has fairly admitted that she has given the affidavit only at the instance of PW2 Klaus Lappe. She has spoken about the purchase of diamonds by the second defendant from Valdiamant International and packing of those consignments. She has not made mention about Mr.Klaus Lappe in the affidavit. PW3 has further deposed that she had not any contacts with Mr.Heflin, and Mr.Lappe asked for the affidavit. Regarding the payment to the notary, she has answered that she did not pay the same, and she did not know by whom it was paid. This would suggest that the payment to the notary should have been paid only by P.W.2 Klaus Lappe. According to PW3, the original of Ex.P16A was with the counsel before whom the affidavit was made, and a copy was given to Mr.Lappe.
18. According to PW2 Mr.Klaus Lappe, the first defendant came to visit Germany on 10.4.88; that he picked up her in the airport and took her to the Hotel Graf, Offenbach am Main, where the plaintiff was waiting for her; that just on reaching the Hotel, the first defendant opened her suitcase and digged out to the plaintiff 15000 US Dollars and asked PW3 to help her searching for another 5000 US Dollars, and then she told that 15000 US Dollars were for the plaintiff to purchase the diamond and the other 5000 US Dollars she would need for other purchases. PW3 has also deposed that the first defendant opened her suitcase in the reception; that she was searching for something, and she had found the major part of the money and was searching for some more; that the first defendant was excited and in another five minutes she took out from amongst the clothes wrapped in an Indian newspaper the amount, and then excitement subsided and their anxiety also subsided; and that she went into the breakfast room with money. Relying on the evidence of P.Ws.2 and 3 as above, the learned counsel for the plaintiff would submit that it is a strong piece of evidence, which would directly indicate the purchase and delivery of diamonds, apart from the payments made by the defendants directly towards the suit transactions. This contention has got to be necessarily rejected, in view of Ex.P9 statement of accounts, relied on by the plaintiff. According to PWs 2 and 3, on 10.4.88, when the first defendant was in Hotel Graf, she parted with 15000 US Dollars to the plaintiff. The fact that Ex.P9 statement does not contain any entry for any payment on 10.4.88 would no doubt falsify the evidence of PWs 2 and 3 in that regard. 19. Admittedly, PW2 Klaus Lappe, after leaving the service from Valdiamant International, came to India and had a joint venture with the defendants since 1984-85. The loss in the said business resulted in the strained relationship between the parties. It is quite evident from Exs.D1 to D3 and D6 & D7 that Klaus Lappe filed Company Petition in C.P.No.20 of 1990 and also number of company applications thereunder. As could be well seen from Ex.D2 order, the court has not only dismissed the applications filed by PW2, but has allowed the applications filed by the defendants 1 and 2. PW2 has obtained an interim order of suspension in C.A.No.337 of 1990 in C.P.No.20 of 1990 as found under Ex.D3 for a period of two weeks to file an appeal and has also given an undertaking that in case he was unable to file an appeal and obtain order of stay, he would return the documents to the company, the first respondent therein. PW2 neither obtained stay nor returned the documents, which resulted in a demand again made on PW2. Documents were returned by the counsel for PW2 along with a letter dated 4.2.92, as found under Ex.D8. Needless to say that the proceedings before the court widened the gap between the parties and increased the degree of strain considerably. It is pertinent to note at this juncture that the instant suit was filed on 2.4.1992, and PW2 on receipt of the written statement has offered his comments as found under Ex.P16 letter dated 10.3.93. A perusal of Ex.P16 coupled with the reply statement filed by the plaintiff would clearly reveal that PW2 has sent his remarks to the plaintiff facilitating him to file a reply statement. It remains to be stated that the plaintiff has received another letter under Ex.P16A enclosing copies of affidavits of PWs 3 and 4.
20. Significant it is to note that nowhere in the pre suit notices, plaint and reply statement, the plaintiff has whispered about the presence of PWs 2, 3 or 4 at the time of any one of the alleged transactions. No material is placed before the court that the plaintiff was present in India at the time of issue of notices, which were caused to be issued through the Counsel to the defendants. It has to be added that the plaintiff has not verified the plaint in India, but in his native land. P.W.2 Klaus Lappe was present in court hall during the trial. The contention of the plaintiff's side that PW1 a business man in industrial diamonds, who held high posts in the top marketing in industrial diamonds and worked in Valdiamant International will not come forward to India to file a false, frivolous, vexatious and speculative suit to facilitate P.W.2 Klaus Lappe to wreck his vengeance against the defendants 1 and 2 cannot be countenanced. It is quite evident from the testimony of PWs 1 and 2 that they have been close to each other for a long time, and PW2 had not only strained relationship with the defendants, but also grouse against them. Many are the circumstances, indicating the fact that the suit was filed by the plaintiff only at the instance of PW2. Except a short visit for a week, the plaintiff has not come to India either to issue the notice or file the suit. It is an admitted position that PW2 who came to India, after the closing of the branch of Valdiamant International at Germany has all along been residing at Madras. PW4 has well admitted that Mr.Klaus Lappe was the bass of Valdiamant International in Offenbach and also her bass, and both of them were working together in the said concern. PW3 has well admitted that she knows Lappe for a long time. The affidavit of PWs 3 and 4 and Lappe's remarks to the written statement as found under Ex.P16 would clearly adumbrate how for he is interested in the present litigation. PW2 seems to be more interested and enthusiastic by giving exaggerated versions, which were not even spoken to by the plaintiff. According to the plaintiff out of the eight transactions in question, on two occasions delivery was made to the second defendant only at U.S.A., and not at Hotel Graf, Offenbach am Main, Germany. Contrarily PW3 has deposed that she knew about the dealings between the plaintiff and the second defendant, which were concluded in their Hotel; and that first time, she has seen a lot of diamonds handled in their breakfast room. No doubt, this part of the evidence of PW3 would indicate the falsity of the same. All the above would go to show that only at the instance and instigation of PW2 Klaus Lappe, the plaintiff has filed the instant suit.
21. According to the averments in the plaint, under the agreement between the parties, following the supply, the price for the same would be paid by the defendants from time to time in a mutual open account between the parties. In his evidence, the plaintiff has stated that the mutual and open account would mean that the transaction was on credit basis, and the defendants can pay cash later. It is pertinent to note that this agreement based on mutual and open account has not been stated anywhere in the pre suit notice or the rejoinder issued by the plaintiff. According to PW2 Lappe, if a diamond dealer in gems business has certain right of demand, he negotiates with the buyer, and once they have an agreement about the price, the deal is settled by just handshake, and there are no papers for that, and the dealer is absolutely sure that he would get his money. Except the interested testimony of PW2 Klaus Lappe, no evidence of the alleged custom worth acceptance is adduced by the plaintiff. Without any hesitation, it can be stated that in the face of the vague pleadings and in the absence of acceptable evidence, the custom pleaded by the plaintiff cannot be accepted.
22. Much comment was made by the plaintiff's side on the non production of the documents shown under Exs.P19 and P20 notices. It remains to be stated that a perusal of both the notices would indicate that all the documents listed therein were asked to be produced for inspection by the plaintiff's side, and there is no specific request for the production of the same before the court. After careful scrutiny of the evidence adduced by the plaintiff, the court may hasten to say that the plaintiff has not proved either the agreement, or the delivery of diamonds, or the part payment. What are all available in the case is the interested testimony of PW1, the testimony of PW2 - an outcome of the grouse, the exaggerated and false testimony of PW3 and the testimony of PW4 unconnected to the transactions in question. The documents relied on by the plaintiff do not reflect or suggest the privity of contract between the parties, delivery or part payment. Having failed to prove his case by adducing evidence both oral and documentary, the plaintiff cannot be permitted to say that had the defendants produced the documents listed under Exs.P19 and P20, they would prove the plaintiff's case. The court is of the view that it is not a fit case to draw an adverse inference for the non production of the documents listed under Exs.P19 and P20, since the plaintiff has to succeed on the merits of his own case and cannot be permitted to take advantage of the defects and loopholes in the defence. In a given case, when the evidence adduced by the plaintiff both oral and documentary would improbablise and also expose the hollowness of his case, no question of permitting the plaintiff to say that an adverse inference has got to be drawn on the non production of the documents by the defendants; and that a decree has got to be passed on that basis would arise. Hence, the contention of the plaintiff's side on the non production of the documents by the defendants has no substance and has to be brushed aside. Therefore, it has to be held that the plaintiff is not entitled to the relief as asked for. All the issues are answered accordingly.
23. The contention of the defendants' side that the transactions, even if true, is opposed to and forbidden by law and is of such nature that would defeat the provisions of Foreign Exchange Laws and against public policy, and hence, the same cannot be enforced, and the consideration was also opposed to law and cannot be enforced, cannot be countenanced. It is pertinent to note that the first defendant in her written statement and also in her evidence has stated that the synthetic industrial diamond can be brought into India only with a licence. The first defendant as DW1 has well admitted that she has got import licence for her synthetic industrial diamond business. It remains to be stated that the defendants were carrying on the business pursuant to the said import licence. It is not the case of the plaintiff that the defendants transported the synthetic industrial diamonds not in accordance with law. The additional issue is answered accordingly.
24. In the result, this suit is dismissed, leaving the parties to bear their own costs.