Delhi District Court
M/S. Ramakrishna Electro Components ... vs M/S. Avon Meters Pvt. Ltd on 3 October, 2012
IN THE COURT OF SH. SANJAY BANSAL: SENIOR CIVIL
JUDGECUMRENT CONTROLLER (NORTH) DELHI.
Suit No. 174/08
M/s. Ramakrishna Electro Components Pvt. Ltd.
Regd. Office at 351, Mini Tower,
Aggarwal Cyber Plaza, Netaji Subhash Place,
Pitampura, Delhi - 110034
.............Plaintiff
Vs.
1. M/s. Avon Meters Pvt. Ltd.,
D15, Focal Point,
Dera Bassi - 140507, Punjab
Through its directors/principal officers
2. Shri Nikhil Goel,
Managing Director,
M/s. Avon Meters Pvt. Ltd.,
D15, Focal Point,
Dera Bassi - 140507, Punjab.
............Defendants
Date of Institution : 08.10.2008
Judgment Reserved on : 29.09.2012
Date of Judgment : 03.10.2012
Suit No. 174/08 Page 1 of 10
J U D G M E N T
1. The plaintiff is a private limited company incorporated under the Companies Act, 1956. The suit has been filed through one Sh. Harish Kumar, Director of the plaintiff company. The plaintiff company has filed the suit for recovery of Rs.2,66,747/ alongwith interest and costs against the defendant company. The claim of the plaintiff company is based on the allegations that it is dealing in various ranges of electronic components and parts of different brands and companies. The defendant no.1 which is also a company and defendant no.2 who is its Managing Director used to purchase electronic components of different brands and specifications from plaintiff company on credit basis. A running account was being maintained in the name of defendant no.1 company. As per the statement of account, an amount of Rs.2,24,177/ was standing due and payable by defendants. The plaintiff company is claiming the amount due alongwith Rs. 42,570/ as interest @ 24% p.a. w.e.f. 26.9.2007.
2. The defendant no.1 has filed written statement. Defendants have taken various objections. It is stated that suit is barred by limitation. It is also an objection from the side of defendant that this court has no territorial jurisdiction to entertain and try the present suit. It is pleaded that alleged dispute pertains to single bill dt. 3.6.2003 for Rs. 1,55,735/. It is alleged that goods against the said bill were never received by the defendants. It is Suit No. 174/08 Page 2 of 10 further alleged that it was agreed between the parties that goods were to be supplied by the plaintiff on door delivery basis and no freight would be charged. Therefore, whenever defendants had to pay freight charges, they were issuing debit notes to plaintiff. Defendants thus claim that plaintiff cannot recover Rs.60,000/ which were freight charges. Defendants denied that any running account was maintained. Rather it is stated that after 47 transactions, representative of plaintiff or transporter used to collect payments. Defendants denied their liability to pay any amount.
3. Plaintiff filed replication denying the allegations of defendants and reiterating its stand.
4. On the basis of the pleadings of the parties following issues were framed on 19.5.2010 :
1.Whether the suit of the plaintiff do not disclose any cause of action? OPD
2.Whether the suit of the plaintiff is barred by law of Limitation? OPD
3.Whether this court has no territorial jurisdiction to entertain and try the instant suit? OPD
4.Whether the plaintiff is entitled to recover the amount claimed in the suit against the defendant ? OPP
5.Whether the plaintiff is entitled to any interest on such amount, if so at what rate and for what period? OPP
6.Relief.
5. Plaintiff has examined one Harish Kumar as PW1. Defendants have Suit No. 174/08 Page 3 of 10 examined one Anil Gupta as DW1 and Satish Rana as DW2.
6. I have heard Sh. Anuj Narula, Ld. Counsel for plaintiff and Sh. Praveen Uppal, Ld. Counsel for defendants. I have perused the record.
7. My issuewise findings are as under:
ISSUE NO.3
8. This issue is taken up first. Defendants object to territorial jurisdiction of this court. The plaintiff company has its registered office at Pitampura, Delhi. Defendant company is based at Punjab. Orders were placed upon plaintiff company at Delhi. This is a suit for recovery of balance amount of goods allegedly supplied by plaintiff. In my view part of cause of action has certainly arisen at Delhi. As such this court has territorial jurisdiction to entertain and try the present suit. This issue is decided in favour of plaintiff. ISSUE NO. 1, 2, 4 & 5
9. All these issues are taken up together as all the issues are based on common facts. PW1 is Director of the plaintiff. He has deposed on the lines of allegations as made in the plaint. Ex.PW1/1 is copy of incorporation certificate of plaintiff company; Ex.PW1/2 copy of memorandum and articles of association of plaintiff company; Ex.PW1/3 is certified copy of Form No.32, Ex.PW1/4 is copy of board resolution; Ex.PW1/5 are bills/invoices; Ex.PW1/6 is legal notice dt. 2.4.08; Ex.PW7 and 8 are postal records.
Suit No. 174/08 Page 4 of 10
10. DW1 has deposed on the lines of defence. Ex.DW1/1 is copy of resolution of the board of defendant no.1 company; Ex.DW1/2 is copy of statement of account; and Ex.DW1/3 is balance sheet.
11. DW2 has tried to corroborate DW1.
12. Ld. Counsel for the plaintiff argued that plaintiff is entitled to recover the suit amount. He submitted that defendants had been purchasing goods from time to time and entries were duly made in the accounts. On the other hand, Ld. Counsel for defendants argued that there was no running account between the parties. Ld. Counsel has strongly objected to mode of proof of the account books. He submits that the same have not been proved in accordance with Evidence Act. He submits that plaintiff has not even filed audited accounts.
13. Developing this argument, Ld. Counsel for defendants has referred to judgments reported as AIR 2000 SC 426 titled "Ishwar Dass Jain (dead) through LRs Vs. Sohan Lal (dead) by LRs; 159(2009) DLT 489 titled Bharat Aluminium Company ltd. Vs. Maharastra Alumminium Corporation; 2009 II AD (Delhi) 30 titled "Harish Mansukhani Vs. Ashok Jain"; and AIR 1965 Patna 179 titled "Brahmdeo Narain Singh Vs. Members of the Notified Area Committee". He argued that the plaintiff company was required to prove the books of accounts. He stressed Suit No. 174/08 Page 5 of 10 that the extracts from the books of accounts cannot be called books of accounts. He submitted that the original accounts books were required to be produced to prove the extracts. He also submitted that delivery of the goods has not been proved.
14. Ld. Counsel for the plaintiff referred to Sec.60/61 of the Indian Contract Act and submitted that suit is not barred by limitation. He submited that the plaintiff company had applied the payments towards the previous debts and thus suit is not barred.
15. Sec. 60/61 of the Indian Contract Act provides as under :
"Sec. 60. Application of payment where debt to be discharged is not indicated. Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by the law in force for the time being as to limitation of suits.
Sec. 61. Application of payment where neither party appropriates.Where neither party makes any appropriation the payment shall be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for time being as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionately."
16. There is no dispute that creditor has right of appropriation but that right is available when there exists a debt and further where a mutual account is maintained by the parties.
17. Perusal of the judgments cited by Ld. Counsel for the defendants leave Suit No. 174/08 Page 6 of 10 no room for any doubt that the plaintiff has utterly failed to prove its case. The statement of accounts (Ex.PW1/5 colly) relied upon by plaintiff cannot be said to have been proved as per law. Firstly, the original accounts books have not been produced and, secondly, they are computer printouts and those have not been proved as per Sec.65B of the Evidence Act. Sec. 65B of the Evidence Act provides that an electronic record has to be proved in a particular way. The plaintiff has failed to prove the said electronic record in the way mentioned in Sec.65B of Evidence Act. There is no certificate given by plaintiff as required by this section.
18. The plaintiff company has further failed to prove delivery of the goods. There is no document whatsoever that the goods against a particular bill were actually delivered. Merely by issuing bills and making corresponding entry in the accounts books does not serve any purpose. The case of Harish Mansukhani (supra) squarely applies to the present case. Ld. Counsel for plaintiff submitted that defendant company had issued C forms and which include the amount of the bill dt. 3.6.2003 against which it is alleged that goods were not delivered. This contention is without merits. It is pertinent to note that the said C forms though lying on record have not been proved by the plaintiff. So much so that the plaintiff witness/PW1 has not even referred to them in his examinationinchief. Those documents are of no help to the plaintiff.
Suit No. 174/08 Page 7 of 10
19. The suit has been filed on 8.10.2008. The amount claimed by the plaintiff is the amount due in the accounts books from 26.9.2007. As per defendant the plaintiff is claiming amount for one bill of Rs.1,55,735/ dt. 3.6.2003. Defendants thus submit that suit is barred by limitation. Ld. Counsel for defendants argued that there was no running account between the parties and therefore plaintiff cannot file the suit pleading that amount was due since 26.9.2007. Ld. Counsel has referred to crossexamination of PW1 wherein PW1 has clearly admitted that since 2006 they were dealing with the defendant company on bill to bill basis payment. This leads to the conclusion that there was no running account between the parties. The payment used to be made on bill to bill basis. As such plaintiff was required to file all the bills regarding which payment remained due. The limitation period will also be calculated according to the dates of the bills. However, as bills are not on record as plaintiff has not filed the same, adverse inference has to be drawn against plaintiff. It must be held that the dispute relates to bill dt. 3.6.2003 and as such the present suit filed on 8.10.2008 is clearly barred by limitation.
20. Ld. Counsel for defendant also submitted that the suit has not been properly instituted. Though there was no issue framed regarding due institution of the suit, yet due institution of the suit is always in question and has to be looked into. Therefore, I have heard Ld. Counsels on this aspect as Suit No. 174/08 Page 8 of 10 well. Ld. Counsel for defendant submitted that on Ex.PW1/4 there is no date mentioned. Ld. Counsel for plaintiff has clarified that Ex.PW1/4 is extract of the minutes of meeting of the board of directors of the plaintiff company. The said meeting was held on 21.3.2008. He submits the date of the meeting is clearly mentioned on Ex.PW1/4. There was no need to mention date on the letterhead of plaintiff company as only extracts of the minutes of the meeting were printed on the letterhead. In my view, nonmentioning of the date on the righthand top corner of the letterhead is of no significance. The date of the meeting was the only significant fact which was required to be mentioned. This date of the meeting is clearly mentioned on Ex.PW1/4. However, this does not mean that the resolution has been proved by the plaintiff company. The plaintiff company has not produced the original minutes of the meeting of the board of directors. Thus Ex.PW1/4 has not been proved according to law. It was held in 42 (1990) DLT 446 titled "Escorts Ltd. Vs. Sai Autos & Ors" that original minutes of the meeting are also required to be produced.
21. In view of the above discussion it is held that suit is barred by limitation. Suit is also not properly instituted. The plaintiff has no cause of action against defendant. Plaintiff is not entitled to recover any amount or any interest. All the issues are decided in favour of defendants and against the plaintiff.
Suit No. 174/08 Page 9 of 10 ISSUE No.6 RELIEF
22. Resultantly, suit of the plaintiff is hereby dismissed. However, no order as to costs. Decree sheet be prepared accordingly.
23. File be consigned to Record Room.
Announced in open court (SANJAY BANSAL)
on 03.10.2012 SCJ/RC/(North)/Delhi
Suit No. 174/08 Page 10 of 10