Delhi District Court
M/S Escorts Limited vs M/S Kaveri Tractors on 26 May, 2023
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS NO. 58969 OF 2016
Date of institution:18.04.2012
Date of arguments: 26.05.2023
Date of judgment: 26.05.2023
M/s Escorts Limited
A company registered under the Companies Act, 1956
office at:
SCO 232, First floor
Sector-20, Panchkula-134 109, Haryana
through its Authorized Representative
Sh. Vidhu Upadhyay
office at:
18/4, Mathura Road
Faridabad, Haryana.
..........Plaintiff
VS.
1. M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
through its partners.
2. B.M Masood Ali Khan
Managing Partner
M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
also at:
CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.1
2220/A, 100 Feet Road,
Mandya, Karnataka
3. B.M Mushraff Ali Khan
Partner
M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
also at:
2220/A, 100 Feet Road,
Mandya, Karnataka
4. Ms. Ayesha Siddiqui
Partner M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
also at:
90/3, M.M. Residence
Model House Street
Basavangudi, Banglore
Karnataka
5. Ms. Anees Anjum
Partner M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
also at:
1878, 7th cross, Yathagadahalli Road,
V.V Puram, Mandya, Karnataka
6. Mujahid Ali Khan
Partner M/s Kaveri Tractors
Sugar Factory Circle
Guthal Road, Mandya,
Karnataka.
also at:
CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.2
1878, 7th cross, Yathagadahalli Road,
V.V Puram, Mandya, Karnataka
7. Mansoor Ali Khan,
S/o Late Dr. M.A. Khan,
General Manager of M/s. Kaveri Tractors,
Sugar Factory Circle,
Guthal Road
Mandya, Karnataka
Also At:
90/3, M.M Residence,
Model House Street, Basavangudi,
Near South End Circle, Bangalore
Karnataka-560004
...........Defendants
JUDGMENT
1. The plaintiff has filed the present suit against the defendants seeking recovery of sum of Rs. 37,99,166/- along with interest.
2. The case of the plaintiff as pleaded in the plaint is as follows. It is stated that the plaintiff is a company duly incorporated and registered under the Companies Act. It is stated that the plaintiff manufactures and sells "Escorts", "Farmtrac" and "Powertrac" tractors, accessories, spare parts and various other products through its network of dealers spread all over India. The defendant no.1 is a partnership firm carrying on its business in the name and style of M/s. Kaveri Tractors situated at Sugar Factory Circle, Guthal Road, Mandya, Karnataka. The defendants no. 2 to 6 are the partners of defendant no.1 firm. Defendant no. 7 is the General Manager of defendant no.1, who had been appointed in terms of the meeting of the firm held on 01.06.2002 to carry on the business, operate bank account, CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.3 borrow for the purposes of the business, sign agreement on behalf of firm. The defendant no.1 through defendants no.2 and 7 had approached the plaintiff company for being appointed as dealer of Escorts, Farmtrac and Powertrac Tractors, Accessories, Spare parts for Mandya District, Karnataka. Accordingly, the defendant no.1 had submitted an application dated 12.08.2002 in that respect. After receipt of the said application, the plaintiff had issued letter of intent bearing no. AMMD/50-01/SK dated 18.10.2002 expressing its willingness for appointment of defendant no.1 as general sales and service dealer for the aforesaid products subject to arranging necessary sale and service facilities as per action plan finalized with defendant by field team of the plaintiff. The plaintiff had allotted a Code number 118800 to the defendant. The defendants were further advised to complete the formalities for execution of formal dealership agreement. The defendant no.1 entered into Dealer Sale Agreement through its Managing Partner, the defendant no.2 on 12.07.2004 at New Delhi. The defendant no.1 was appointed as authorized dealer for sale and service of agri-machinery equipment like tractors, implements and its spare parts etc. It is stated that the defendant no.2 to 6 being the partners of the defendant no.1 firm and as such they have been impleaded as parties. It is stated that the defendant no.7 being the General Manager of defendant no.1, who had been appointed to carry on the business of defendant no.1 has also been impleaded as a party to the present suit. It is stated that the defendant no.2 to 7 are jointly and severally liable to make the payment of the goods supplied to defendant no.1.
CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.4
3. It is further stated in the plaint that pursuant to said agreement, the plaintiff had supplied Escorts Farmtrac and Powertrac tractors, accessories, spare parts to defendant no.1/firm from time to time and raised the various invoices against the said supply. The payments made by defendant no.1 have been duly credited in the statement of account maintained by plaintiff. The plaintiff is maintaining a running account depicting all the goods supplied to the defendant no.1/firm as well as the payment made by defendant no.1. The payment made by the defendants was first adjusted against outstanding bills at the time of payment. The plaintiff company being a limited company maintains regular books of account of every transaction with defendant no.1 firm. As per Dealer Sales Agreement dated 12.07.2004 the payment against the invoices raised towards supply of the goods was to be paid by defendants but the defendants failed to fulfill their commitment as per terms and conditions of the agreement. Further the defendants have sold the products of the company to ultimate consumers and have collected money in lieu thereof. The defendants instead of paying the sale consideration received by them by way of selling aforesaid goods to plaintiff company have misappropriated the money received from the customers with the criminal intention to cheat plaintiff company and hence committed criminal breach of trust. It is stated that the defendants failed to make the regular payment in respect of the goods received by them. As per running account maintained by plaintiff, the defendants were indebted to the balance sum of Rs.24,81,027.81 as on 08.12.2009. As per terms and conditions mutually agreed between the plaintiff and defendant no.1 firm, the defendants were liable to pay interest @ 24% per annum on the outstanding amounts/delayed payments. Ultimately, the plaintiff was compelled to issue a demand notice dated 29.12.2009. After much efforts CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.5 and persuasion, the defendant towards part payment of outstanding dues had issued a cheque dated 27.02.2012 bearing no.456847 drawn on Corporation Bank, Main Road, Mangala, District Mandya, Karnataka for a sum of Rs.25,76,535/-. The plaintiff presented the said cheque for payment but same was dishonoured. It is stated that it was clear that the defendants were deliberately avoiding their liability to make the payment of Rs.37,99,166/- alongwith interest. It is stated that the suit was within limitation as the last payment of Rs. 5,00,000/- was made on 17/03/2009. On the basis of the aforesaid pleadings, the plaintiff has filed the present suit for recovery of money.
4. The summons could not be served upon the defendants by ordinary mode and the defendants were directed to be served through substituted mode of service by way of publication in newspapers. The publication was made in the newspapers and the defendants were accordingly taken to have been duly served, however, since none appeared on behalf of the defendants, vide order dated 26/02/2015, the defendants were proceeded ex parte.
5. The plaintiff's evidence was recorded ex parte. In support of its case, the plaintiff has examined Mr. Gopal Prasad as PW-1 who has tendered his affidavit in evidence as Ex.PW1/A and additional affidavit in evidence as Ex.PW1/B. PW-1 has deposed along the lines of the plaint. The plaintiff has relied upon following documents:
i) Board Resolution dated 29.01.2020 Ex.PW1/1.
ii) Authorization letter dated 20.07.2020 Ex.PW1/2.
iii) Copy of partnership deed dated 1.06.2002 as Mark A.
iv) Copy of application dated 12.08.2002 as Mark B.
CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.6
v) Copy of dealer sale agreement dated 12.07.2004 as MarkC.
vi) Copy of statement of account from 01.01.2008 to 29.12.2009 as Mark D.
vii) Copy of demand notice dated 29.12.2009 Mark E.
viii) Copy of cheque bearing no.456847 dated 27.02.2012 and copy of return memo dated 15.03.2012 Mark F (colly).
ix) Affidavit u/s 65(B) of Indian Evidence Act EX.PW1/10.
6. The averments made in the plaint by the plaintiff are unrebutted and uncontroverted. The defendants have not come forward with any defence. The evidence led by the plaintiff, both oral as well as documentary, is unchallenged. PW-1 has deposed along the lines of the plaint and his testimony is unchallenged. The plaintiff has shown that there was partnership agreement dated 01/06/2002 Mark-A between the defendants nos. 2 to 6. The plaintiff has shown that the defendants nos. 2 to 6 had made application Mark-B for dealership form. The dealership form has been made in the name of the defendant no.1 as partnership firm and the defendants nos. 2 to 6 have been shown as partners. The plaintiff has been able to show that there was a dealership agreement dated 12/07/2004 Mark-C. As per the ex parte evidence led by the plaintiff, the plaintiff was supplying the goods to the defendant and was raising bills. There was a balance sum of Rs. 24,81,027.81 which was due and outstanding as on 08/12/2009 as per the statement of account Mark-C. The plaintiff has also shown that it had sent legal notice dated 29/12/2009 to the defendants nos. 1 to 6 for payment of the aforesaid outstanding amount of Rs. 24,81,027.81 and also put to notice that interest would be charged @ 24% p.a. The plaintiff has also shown that the defendant firm had issued cheque dated CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.7 27/02/2012 Mark-F for sum of Rs. 25,76,535/- in the name of the plaintiff but that the same was dishonoured. As per the statement of account Mark- C, an amount of Rs.5,00,000/- was last paid by the defendant to the plaintiff on 17.03.2009. The suit has been filed on 16.03.2012 and as such the suit is within the limitation. There is no defence from the side of the defendants. Considering the ex parte evidence led by the plaintiff, on a balance of probabilities, the plaintiff has been able to prove its case as set out in the plaint. The plaintiff has been able to show that it was entitled to the sum of Rs. 24,81,027.81 towards principal from the defendants nos. 1 to 6. As per clause 14 (d) of the Dealership Agreement Mark C, it is provided that interest @ 1.5% per mensem would be charged for delay of payment. I would consider it reasonable to award interest @ 12% per annum from the date of legal notice i.e. 29/12/2009 till the date of filing of the suit. It would be reasonable to grant the plaintiff interest @ 9% p.a. from the date of filing of the suit till the actual realization. In so far as the defendant no.7 is concerned, he has been shown to be only the manager of the defendants nos.1 to 6 and as such only an agent. There is nothing to show that the defendant no.7 would be personally liable. As such, the decree for recovery of money would be against the defendants nos.1 to 6 only.
7. Accordingly, decree is passed in favour of the plaintiff and against the defendants nos. 1 to 6 only for sum of Rs. 24,81,027.81 along with interest @ 12% p.a. from 29/12/2009 till the date of filing of the suit and interest @ 9% p.a. from the date of filing of the suit till the actual realization.
CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.8 Costs are decreed in favour of the plaintiff and against the defendants nos. 1 to 6. The pleader's fee is calculated as Rs.15,000/-.
Let the decree-sheet be drawn up accordingly.
Judgment pronounced in open Court.
File be consigned to record room.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/26.05.2023 CS NO.58969/16 ESCORTS LTD. VS KAVERI TRACTORS AND ORS. page no.9