Delhi District Court
M/S Clark Green vs Ms.Divya Srivastava on 25 April, 2011
IN THE COURT OF SHRI. ASHISH AGGARWAL, CIVIL JUDGE1,
DWARKA COURTS, DELHI
CS No: 215/11
Unique case ID No. 02405C0384112009
M/s Clark Green
(A unit of Shringar Hotels (P) Ltd.)
GI, Pushpanjali Farms, Dwarka,
Link Road, Bijwasan, New Delhi - 61.
Through its Manager Sh. Tej Gautam,
who is duly authorized vide resolution
duly passed by Board of Directors in its
meetings. ... Plaintiff
Versus
1. Ms.Divya Srivastava
General Manager, Coordinator,
135, Mohammadpur, Bhikaji Cama Place,
New Delhi - 110066.
2. Sh. Sunil Bassi, Coordinator,
135, Mohammadpur, Bhikaji Cama Place.
New Delhi - 110066. ... Defendants
Date of Institution: 7.3.2009
Date on which judgment was reserved: 19.04.2011
Date of pronouncing judgment: 25.04.2011
SUIT FOR RECOVERY OF RS.1,61,280/
M/s Clark Green vs. Divya Srivastava & Anr. 1 of 26
CS215/11
J U D G M E N T
1. The suit shall be decided by this judgment. The plaintiff has stated in the plaint that the defendant had booked a conference hall in the hotel of the plaintiff. The event was scheduled to take place on 30th August, 2008. Booking was done through email dated 28.08.2008. In response, plaintiff had sent another email quoting the rates, which was duly accepted by defendants through another email. The event was held at the conference hall of the hotel of the plaintiff. The defendants were satisfied with the arrangements. The number of persons who had attended the event exceeded the arrangements, for which the plaintiff was required to make further arrangements on urgent basis. The bill of the event was handed over to the defendants. Defendants stated that they have forgotten the cheque book and that they would send the cheque on the next day. The defendants failed to send the cheque of Rs.1,53,600/ despite repeated requests of the plaintiff. Letter dated 23.09.2008 was written by plaintiff to the defendants demanding payment. Since payment was still not made, the plaintiff issued legal notice dated 04.11.2008. Yet the defendants failed to make the said payment. By virtue of the present suit, the plaintiff has prayed for recovery of a sum of Rs.1,61,280/ as the amount of bill and presuit interest. Plaintiff has also prayed for the pendente lite and future interest at the rate of 15% per annum and costs of the suit.
M/s Clark Green vs. Divya Srivastava & Anr. 2 of 26 CS215/11
2. After service of summons, defendants filed their written statements. Defendant no. 1 stated in her written statement that there was no privity of contract between her and the plaintiff. She stated that she was only an employee of M/s Coordinator. Defendant no. 1 further stated in her written statement that she had booked the conference hall in the hotel of the plaintiff on 28.08.2008 for a party scheduled to be held on 30.08.2008. She further stated that the rates of Rs. 800/ per head were not agreed upon. She also stated that she had booked the conference hall in consultation with defendant no. 2. She denied that she had delayed payment of the bill. She also stated that she was not present during the event. She further stated that payment of Rs. 1,11,500/ was made by the defendant no. 2 to the representative of the plaintiff on 03.09.2008 by cash. She also stated that this payment had been made after due verification of the identity of the representative of the plaintiff. She also stated that payment had been made in cash in her presence.
3. Defendant no. 2 filed his written statement. In his written statement, he stated that he had booked a conference hall in the hotel of the plaintiff on 28.08.2008 for a party scheduled for 30.08.2008. The defendant no. 2 denied that he had agreed with the rate of 800/ per head. He stated that rates were agreed upon between the parties verbally. He further stated that the agreed rate was Rs. 650/ per head. The defendant no. 2 further stated that payment of Rs. 1,11,500/ was made in cash to the authorized representative of the M/s Clark Green vs. Divya Srivastava & Anr. 3 of 26 CS215/11 plaintiff in the presence of a witness and after verifying the identity of the said representative. A receipt has been placed on the record in this behalf.
4. Replications to the written statements were filed on behalf of plaintiff. The plaintiff reiterated the correctness of the averments made in the plaint and denied the assertions of the defendants.
5. After completion of pleadings, the following issues were framed by the Ld. Predecessor of this Court by order dated 29.08.2009:
(a) Whether the plaintiff is entitled for a decree of recovery of Rs.
1,61,280/ from the defendant? OPP.
(b) Whether the plaintiff is entitled for interest @ 15 percent per annum on the principal amount from the date of filing the suit till its realization? OPP.
(c) Relief.
6. The parties adduced evidence in support of their case. The plaintiff examined its Manager Mr. Tej Gautam as PW1. He tendered his affidavit Ex PW1/1 in evidence. He reiterated the averments made in the plaint In his affidavit. He also relied upon and identified the following documents:
(a) Copy of resolution dated 8.12.2008 as Ex. PW1/1;
(b) Copy of email correspondence as MarkA;
(c) Copy of the bill dated 30.08.2008 as Ex. PW1/4;
(d) Letter dated 23.09.2008 as Ex. PW1/5;
(e) Copy of notice dated 04.11.2008 as Ex. PW1/6;
M/s Clark Green vs. Divya Srivastava & Anr. 4 of 26
CS215/11
(f) Postal receipts and acknowledgment cards collectively as
Ex. PW1/7;
(g) Receipts of UPC as Ex. PW1/8.
PW1 was crossexamined on behalf of defendants and was then discharged. Plaintiff's evidence was closed.
7. The defendants also adduced evidence in their favour. The defendant no. 2 examined himself as DW1. He tendered his affidavit Ex DW1/A in evidence. In his affidavit DW1 reiterated the averments made in the written statement. He also relied upon and identified the following documents:
(a) Statement of calls made from mobile phone No. 9810021351 as Ex. PW1/D1;
(b) Receipt dated 03.09.2008 as Ex. PW1/D2.
8. Mr. Satish Kumar Mishra was examined as DW2. He tendered his evidence by way of examinationinchief. He deposed that on 03.09.2008, he had visited the office of the defendant no. 2 for sales call. One Mr. Sharma representing the plaintiff had come to the office. Some negotiations took place. After speaking to some person, defendant no. 2 paid Rs. 1,11,500/ to Mr. Sharma. A receipt was prepared. DW2 signed the receipt as a witness.
He identified the receipt as PW1/D1. The witness was crossexamined on behalf of plaintiff and was then discharged. Defendants' evidence was M/s Clark Green vs. Divya Srivastava & Anr. 5 of 26 CS215/11 closed.
9. Statement of ld. counsel for defendants was also recorded by the Court on 10.03.2011. Ld. counsel for defendants stated that negotiations with the plaintiff had been entered into by the defendant no. 1 on behalf of M/s Coordinators which is a proprietorship concern of the defendant no. 2.
10. Final arguments are heard. Record is perused.
11. The issuewise findings are as under:
ISSUE NO.1 "Whether the plaintiff is entitled for a decree of recovery of Rs. 1,61,280/ from the defendant? OPP".
12. The onus to prove this issue was upon the plaintiff. Plaintiff has sought recovery of Rs. 1,61,280/ from the defendants. The said sum has been claimed by the plaintiff on the ground that defendants had booked a conference hall in the hotel of the plaintiff. The event took place on 30.08.2008. According to the plaintiff, the agreed rate was Rs. 800/ per person, however on raising the bill, payment was not made by the defendants.
Liability of defendant no.1
13. The case of the plaintiff is that the defendants had booked the hall and therefore both of them are liable to make payment thereof. On the other hand, defendant no.1 has, in her written statement, stated that she had M/s Clark Green vs. Divya Srivastava & Anr. 6 of 26 CS215/11 booked the hall only on behalf of and as employee of M/s Coordinator. The defendant no. 2 has, in his written statement admitted that he had got the booking done and is the proprietor of M/s Coordinator.
14. The claim of the plaintiff is founded on a contract. It must be ascertained as to who were the parties to contract so as to fasten them with liability arising therefrom. Although negotiations were carried out by both the defendants, defendant no. 1 has repudiated her liability on the ground that she had entered into correspondence with plaintiff only on behalf of M/s Coordinator.
15. That negotiations had been carried out by the defendant no. 1 not in her individual capacity but on behalf of M/s Coordinator has not been disputed by the plaintiff or by the defendant no. 2. The bill on the basis of which payment has been demanded by the plaintiff is identified as Ex. PW1/4 and the said bill has been raised in the name of defendant no. 2.In the array of parties too, the plaintiff has shown defendant no.1 to be the General Manager of M/s Coordinator. The correspondence contained in the email exchanged between the parties MarkA also shows that the defendant no. 1 had entered into negotiations only on behalf of M/s Coordinator. The defendant no. 2 is admittedly the proprietor of M/s Coordinator. This is clearly borne out from the affidavit Ex. DW1/A of defendant no. 2.
16. The correspondence entered into with the plaintiff, as admitted by the plaintiff, indubitably establishes that the booking had been carried out by M/s Clark Green vs. Divya Srivastava & Anr. 7 of 26 CS215/11 defendant no.1 on behalf of defendant no.2 and as agent of defendant no.2. Since the fact that defendant no.1 was acting only on behalf of defendant no. 2 has been duly communicated to the plaintiff, it is not open to the plaintiff to treat the defendant no.1 as the principal and to saddle defendant no.1 with contractual liabilities. The defendant no. 1 has not stood guarantor for the liabilities of defendant no. 2. In keeping with section 226 of the Contract Act, 1872, the defendant no. 1 cannot be held liable for the contractual payments, if any, due from the defendant no. 2. Hence, the plaintiff is not entitled to the recovery of any sum of money from defendant no. 1. Contentions of defendant no.2
17. It is not in dispute between the parties that an agreement was entered into between the plaintiff and the defendant no.2 for booking a conference hall in the hotel of the plaintiff and for making necessary arrangements. It is not in dispute that hall was booked and the event was held under arrangements made by the defendants. It is not in dispute that defendant no. 2 was liable to make payment of the charges raised by the plaintiff for the event. The contentions of the defendant no.2 are primarily twofold and give rise to the following questions for determination:
1) What were the per head charges agreed to between the parties for the event? ;
2) Whether payment was made by the defendant no.2 to the plaintiff?
M/s Clark Green vs. Divya Srivastava & Anr. 8 of 26 CS215/11 Charges per head for the conference
18. The plaintiff has claimed a sum of Rs.1,61,280/. This demand comprises of Rs.1,53,600/ as the amount of bill raised for the conference and interest thereon at the rate of 15% per annum amounting to Rs.7680/.
The sum of Rs.1,53,600/ claimed by the plaintiff is based on the bill Ex. PW1/4. The bill shows the demand of Rs.1,28,000/ on account of the arrangements made for the event and Rs.25,600/ as taxes thereon. The demand of Rs.1,28,000/ has been raised on the basis of having served 160 persons at the rate of Rs.800/ per head. PW1 Sh. Tej Gautam, Manager of the plaintiff has stated in his affidavit Ex. P1 that the rate of Rs. 800/ per head besides taxes was duly agreed upon and accepted by the defendants.
19. The defendants have not denied that 160 persons had attended the event and had been served by the plaintiff. The defendants have however denied agreeing to the rate of Rs.800/ per head. The said charges therefore require determination.
20. The plaintiff has stated that Rs.800/ was the rate agreed upon by the correspondence exchanged between the parties by email. The same statement has been reiterated by PW1 in his affidavit Ex.P1. The witness has identified the email correspondence as Mark A. The email correspondence Mark A shows that on 28.8.2008, the authorized representative of plaintiff Sh. Tej Gautam quoted the rate of Rs.800/ besides taxes. Neither party could place on record any subsequent written M/s Clark Green vs. Divya Srivastava & Anr. 9 of 26 CS215/11 correspondence. It may therefore be assumed that there was no further communication between the parties and the event was held on 30.8.2008. The rates quoted by the plaintiff in writing were not declined or refused to be accepted by the defendant in writing before holding of the event. The holding of the event without further written correspondence implies acceptance of the said rates. An offer can be accepted either expressly or impliedly as per the fundamental tenets of the law of contract embodied in section 3 read with sections 8 and 9 of the Contract Act, 1872. It is not necessary that there must be a written acceptance of the terms of the offer and the very fact that the event was convened by the defendants after being informed of the rates amounts to acceptance of the said rates. The plea of defendants that there was a subsequent oral communication and understanding between the parties about lower rates is not convincing and does not outweigh the credibility of the written correspondence. The rates, having been quoted in writing, should having been declined or modified in writing. Further, the person with whom the oral communication, as pleaded by the plaintiff, was entered into namely Sh. Tej Gautam PW1 has expressly denied this and has, to the contrary, asserted that the agreed rate was Rs. 800/ per head. Nothing could be elicited in the crossexamination of PW1 Sh. Tej Gautam which could impeach his credibility or discredit his testimony in this regard. The witness has, in crossexamination unambiguously stated that after he had quoted the rate of Rs. 800/ per head, M/s Clark Green vs. Divya Srivastava & Anr. 10 of 26 CS215/11 there was no other email from the defendant. He has denied the suggestion that mails were not exchanged since the matter was to be negotiated. From the above, it is manifestly clear that the agreed rate was Rs.800/ per person.
21. Ld. Counsel for defendants has placed reliance on the admission of PW1 Sh. Tej Gautam that the plaintiff has flexible rates and may give discounts to the customers. Relying on the said statement, Ld. Counsel for defendants has argued that the rate was fixed at Rs. 650/ per head. This contention of the defendants does not hold merit. The plaintiff may be giving discounts to its customers and may be having flexible rates. That, by itself, does not entitle the defendant as a matter of right to seek a discount. The discount being given to the customer has to be duly agreed upon so as to be binding on the plaintiff. In the present case, the plaintiff has clearly stated that the rate agreed upon was Rs.800/ per head. A discount on the said rate cannot be forced upon the plaintiff. It can also not be assumed that merely because the rates were flexible, a discount would have been given to the defendants. The defendants have failed to convincingly prove that discount was indeed given to them by the plaintiff. The contention of the defendants is not tenable and is rejected.
22. Another fact which strengthens the version of the plaintiff regarding the agreed rate is that the legal notice dated 4.11.2008 Ex. PW1/6 raised the demand at the rate of Rs.800/ per person and was not responded to by the M/s Clark Green vs. Divya Srivastava & Anr. 11 of 26 CS215/11 defendants.
23. The legal notice is deemed to have been served upon the defendants. The legal notice dated 04.11.2008 Ex. PW1/6 was sent by registered post and UPC. The receipts of registered post and UPC and the AD cards have been identified as Ex. PW1/7 to Ex. PW1/8. The AD cards have been received back with acknowledgment. The defendants have not been able to demonstrate that the acknowledgment on the AD cards are not theirs or of their employees. The genuineness of the receipts has not been questioned by the defendants. The receipts indicate that the notice was duly dispatched to the defendants at their correct address. It is also not the case of the defendants that they were not functioning from the said address when the legal notice was dispatched. On the contrary, DW1 has admitted in his crossexamination that the legal demand notice was sent at the correct address. He has stated, "it is correct that the address mentioned in the notice dated 4.11.2008 is correct." From the testimony of PW1, duly corroborated by the legal notice and postal receipts and testimony of DW1, it is clear that the notice had been sent at the correct address. The defendant has failed to disclose any reason which could have prevented the service of notice upon it. Under Section 114 of Evidence Act, the existence of facts which are likely to have happened in the ordinary course of human conduct and business may be presumed. Particular reference may be made to illustration (f) of Section
114. By common course of business, the legal notice would have been M/s Clark Green vs. Divya Srivastava & Anr. 12 of 26 CS215/11 received by the defendant. Under Section 27 of the General Clauses Act, 1897 also, the service of legal notice upon the defendant may be presumed. Reference in this behalf may also be made to the cases of Madan Lal Sethi Vs. Amar Singh Bhalla, 1980 (2) AIRCJ 543 and C.C. Alavi Haji Vs. Palapetty Muhammed & Anr., 2007 (2) DCR 321 SC.
Despite having received the legal notice, the defendants chose not to reply thereto. Had the defendants agreed upon at some other rate, they would have replied to the notice and denied the rate at which the bill was raised by the plaintiff. Having failed to reply to the notice, it may be presumed that the defendants accepted the correctness of the assertions contained therein including the rate of Rs. 800/ per head.
24. It is difficult to accept the version of the defendants that they did not agree to the rates quoted by the plaintiff and that by subsequent telephonic conversation between Mr. Tej Gautam and the defendant no.2, the rate of Rs.650/ per head inclusive of all charges was agreed upon. No written document was prepared to show that Rs.650/ per head would be the agreed rate. Had that been the rate, there would have been a written document recording the said agreement. It is difficult to believe that after having received a written quotation, the defendants would proceed with the event without agreeing in writing to a variant rate.
From the above, its stands proved that the agreed rate was Rs.800/ per person and the plaintiff is entitled to raise its demand on that basis.
M/s Clark Green vs. Divya Srivastava & Anr. 13 of 26 CS215/11
Whether payment was made by the defendant no.2 to the plaintiff
25. The plaintiff has, in the plaint, stated that payment for the event was not made by the defendant no.2. This is reiterated by PW1 Tej Gautam in his affidavit Ex.P1. As against this, the defendant no.2 has pleaded in his written statement that payment was made to the representative of the plaintiff on 3.9.2008. This is emphasized by defendant no.2 in his affidavit Ex. DW1/A.
26. The onus to prove that the said payment was made is on the defendant no.2 since it is he who asserts this fact. This proposition is found on the provisions of section 101 of the Evidence Act, 1872. On making of payment, it is the payer who receives the acknowledgment and must therefore prove it. To discharge this onus, the defendant No.2 has examined himself as DW1 and the witness to the payment DW2 Satish Kumar Mishra. The defendant No.2 has also placed on record the receipt which was allegedly issued by the representative of the plaintiff in acknowledgment of having received the payment. This receipt has been identified as Ex. PW1/D2.
27. The defendant no.2 has stated in his affidavit Ex. DW1/A that the plaintiff had requested the defendant to make payment in cash. The defendant requested the plaintiff to depute an authorized person to collect payment. On 3.9.2008, the plaintiff sent person by the name of Sh. V. Sharma/ Sh. V.K. Sharma. Such person reached office of the defendant M/s Clark Green vs. Divya Srivastava & Anr. 14 of 26 CS215/11 no.2. The defendant no. 2 verified his identity and authorization from the plaintiff over telephone. The defendant no. 2 made payment of Rs.1,11,500/ in cash to the said Sharma in the presence of Satish Kumar, COO, Wood Castle. A receipt dated 3.12.2008 was issued by Sh. Sharma in this regard.
28. DW1 was crossexamined on behalf of plaintiff. DW1 has stated in his affidavit Ex.DW1/A, "the plaintiff requested the deponent for making the payment in cash......" (para 5). In his crossexamination he denied this and stated "it is wrong to suggest that the plaintiff requested for making the payment in cash". The aforesaid two statements are contradictory and the said inconsistency impinges the credibility of the witness.
29. The version of the defendant no. 2 is that he had made payment to the representative of the plaintiff on 3.9.2008. The plaintiff, on the other hand, has placed on record and identified a letter of demand dated 23.9.2008 and a legal demand notice dated 4.11.2008 which was issued to the defendants. As demonstrated above, the plaintiff has succeeded in proving the service of the legal demand notice dated 4.11.2008 upon the defendants.
The circumstance of issuance of demand letters by the plaintiff negates the plea of the defendants. Firstly, it is unlikely that after receiving payment, the plaintiff itself would have repeatedly issued demand letters. Even if it is presumed that the plaintiff harboured mala fide intentions to extract money from the defendants as pleaded by the defendants, the plaintiff would then have directly instituted a suit for recovery instead of M/s Clark Green vs. Divya Srivastava & Anr. 15 of 26 CS215/11 repeatedly sending letters of demand exhibiting such intentions and thereby cautioning the defendants. Issuing the said demand letters afforded opportunity to the defendants to protest against the demand and to point out that they had already made payment against the said demand. If the plaintiff was acting with malice, it would not have issued the demand letters granting opportunity to the defendants to prepare their defence. This recourse also defies prudence since the plaintiff could not have expected the defendants to make payment against the same bill for the second time merely because the plaintiff has raised the demand. The course adopted by the plaintiff is inconsistent with the hypothesis put forth by the defendants. Secondly, when the plaintiff issued demand notice, the defendants could have replied thereto stating that payment has already been made. This is the natural reaction expected of the defendants on being served with the demand notice, had payment already been made by them. Having failed to reply to the legal notice, it appears that the defendant no. 2 had nothing to state in response thereto and defendant no. 2 is deemed to have admitted the correctness of the contents of the notice. Reference may be made to the case of Kalu Ram v. Sita Ram, 1980 Rajdhani Law Reporter (Note) 44 in which the Hon'ble High Court drew adverse inference on account of the failure of the litigant to reply to the legal notice served upon him.
30. DW2 Satish Kumar Mishra has stated in his examinationinchief tendered on 13.1.2011 that on 3.9.2008 one Sh. Sharma had come to the M/s Clark Green vs. Divya Srivastava & Anr. 16 of 26 CS215/11 office of defendant no.2 from the office of the plaintiff. After negotiating with Mr. Sharma about the sum payable, the defendant no. 2 paid Rs.1,11,500/ to Mr. Sharma in the presence of the witness. This statement is in conflict with the statement of DW1 made in his affidavit according to which negotiations about the sum payable had already concluded before the arrival of Mr. Sharma and it is thereafter that DW1/defendant no.2 requested the plaintiff to send an authorized person. According to DW1, when Mr. Sharma arrived, payment was made to him after verifying his identity. From the affidavit of DW1 (defendant no.2) it appears that negotiations regarding the amount payable were not carried out at that stage. This inconsistency between the testimony of DW1 and DW2 casts doubt on their correctness. It is also improbable that defendant no.2 would ask a visitor with whom he has business dealings to be a witness to the payment. That the said visitor would agree to witness the transfer of funds and to attest the receipt prepared in this behalf is also unusual.
31. Ld. Counsel for defendants has relied upon the statement of calls Ex. PW1/D1 made from the mobile phone of the defendant to show that the defendant had been in contact with the representative of the plaintiff.
The contention does not buttress the defence. The mobile phone bill Ex. PW1/D1 can at best demonstrate that the Manager of the plaintiff and defendant no.2 had spoken to each other on telephone on 3.9.2008. However, whether at that time the defendant no.2 had sought to verify the identity of M/s Clark Green vs. Divya Srivastava & Anr. 17 of 26 CS215/11 Sh. Sharma from the plaintiff or not cannot be ascertained from the said bill.
It is possible that the said conversation may have been concerning the payment due from defendant no.2. That, however, does not imply that by the said conversation, it was agreed that the plaintiff would send its representative to the defendant no.2 to collect payment or that the defendant no. 2 had verified the identity and authorization of Sh. Sharma from the manager of the plaintiff. The said statement of calls merely shows that the plaintiff's manager and the defendant no.2 were in contact on 3.9.2008. Nothing more can be inferred from the statement of calls.
32. According to the defendant no. 2, the receipt Ex. PW1/D2 was signed by Sh. V. Sharma/V. K. Sharma. The receipt is of dubious veracity. The manager of the plaintiff PW1 Sh. Tej Gautam has, in his crossexamination, denied the suggestion that any person by the name of Sh. V. Sharma/V.K. Sharma is working in the company of the plaintiff. The defendant no. 2 has made no attempt to disprove this assertion. It is relevant to note that the defendant no.2 did not ask PW1 to produce the rolls of the employees of the plaintiff or any other record indicating the names of the employees of the plaintiff. It appears that the defendant no.2 has accepted the statement of PW1 that there is no employee by the name of Sh. Sharma in the office of plaintiff. Since no such person was employed with the plaintiff, the plea of the defendant no.2 that he had made payment to such person appears to be false and concocted.
M/s Clark Green vs. Divya Srivastava & Anr. 18 of 26 CS215/11
33. PW1 has unambiguously denied the suggestion that payment was received by the plaintiff bank. Since it has been demonstrated that there is no person by the name of Sh. Sharma employed with the plaintiff, the receipt Ex. PW1/D1 purported to be executed by Sh. Sharma appears to be fabricated.
34. It is difficult to believe that the defendant no.2 would settle the accounts and make payment of a whopping sum of Rs.1,11,500/ in cash and not by way of cheque. That the said payment in cash would be made not directly in the office of the plaintiff but to a representative of the plaintiff in the office of the defendant is also difficult to comprehend. That this payment would be made without obtaining proper receipt on the letter head of the plaintiff company is again not credible. No prudent person would make payment of such huge sum in cash without obtaining proper receipt in lieu thereof.
35. Ordinarily payment made through cheque, demand draft or otherwise through the banking channel is duly recorded by unquestionable documents showing transfer of funds and therefore can be easily proved in the event of denial by the receiving party. However, when payment is made in cash, there is always a risk of the other party denying the payment and the subsequent difficulty in proving the same. For this reason, either payment is made through the banking process or else the payer insists on issuance of proper M/s Clark Green vs. Divya Srivastava & Anr. 19 of 26 CS215/11 receipt to record the said transfer of funds. This caution is particularly observed in commercial transactions. In the present case, the deal between the plaintiff and the defendant no.2 was entered into in the course of business. Such dealings are expected to be properly documented. It is not expected from a reasonable person to make payment in cash without proper receipt on the letter head of the receiving entity. The plaintiff, being a hotel, is expected to issue proper, formal receipts for acknowledging payment made to them. It is strange that the defendant no.2 chose to settle for an informal acknowledgment made on a plain sheet of paper instead of an official document bearing the seal of the company. Even if it is assumed that on 3.9.2008, when payment was made, a formal receipt could not be issued on the letter head of the company since payment was made in the office of defendant no.2, the defendant no. 2 would have ordinarily asked for the said receipt to be subsequently delivered to him after the money has finally reached the hands of the plaintiff. On not being issued such receipt, the defendant no.2 would have contacted the plaintiff and would have insisted on such a document. On being denied such document, the defendant no.2 would have sent a written letter or a notice demanding such receipt. However, nothing of this nature had occurred and has either been pleaded or proved by defendant no.2. It is also queer that upon being informed that payment has not reached the plaintiff or that payment was taken by an unauthorized person and that no Mr. Sharma was employed with the plaintiff, the M/s Clark Green vs. Divya Srivastava & Anr. 20 of 26 CS215/11 defendant would have at least registered a police complaint for inpersonation, cheating or misappropriation of funds. None of this has been done by the defendant. The conduct of the defendant no. 2 does not support the plea taken in his defence.
36. Since defendant has raised the defence that he had made payment to an authorized person to discharge his liability, the onus to prove that Sh. Sharma has been authorized by the plaintiff to receive payment is upon the defendant no.2, which he has failed to discharge. By mere making payment to a third person, if at all, who is not an employee or representative of the plaintiff, the defendant cannot absolve himself of his liability. The least that was expected of the defendant, had payment been made, was to retain copy of the identity card or at least a visiting card of the said Sh. Sharma to whom the defendant blindly entrusted the money in cash. In that event, the defendants could have produced the said Mr. Sharma as a witness to prove that payment was duly made to him. None of this having been done, it is difficult to assume that payment was made by the defendant no.2 to the said Sh. Sharma.
37. Defendant no. 1 has stated in her written statement that payment against the bill for the event was made by defendant no. 2 to the representative of the plaintiff in her presence. Since the payment has been disputed by the plaintiff, it is required to be proved by the defendants. The defendant no. 1 was a material witness since, according to her, payment was M/s Clark Green vs. Divya Srivastava & Anr. 21 of 26 CS215/11 made in her presence. Yet, for reasons best known to the defendants, the defendant no. 1 has not examined herself as a defence witness. She has chosen not to testify to support her contention of the said payment having been made. The omission to enter the witness box has not been explained or justified. Withholding a material witness attracts adverse inference in terms of Section 114 of the Evidence Act, 1872. This is an additional circumstance which creates doubt on the version of the defendants that payment was made by them to the representative of the plaintiff.
Omission to produce tax returns and balance sheet
38. Ld. Counsel for defendants has argued that the manager of the plaintiff Tej Gautam PW1 failed to produce Income Tax Return records and balancesheet of the plaintiff company. It is argued that the failure to produce the said record implies that the plaintiff had received payment from the defendants against the bill in question.
I do not find force in this contention for the following reasons:
a) The defendants have not questioned PW1 as to the reason for his failure to produce the said documents. Hence, it is not open to the defendants to speculate on this matter and to draw adverse inferences. It is important to note that PW1 is not a Director or a controller of the plaintiff.
He is a mere employee and authorized representative for the purpose of prosecuting the suit. He cannot be expected to be in control or possession of financial documents so as to draw adverse inferences on account of his M/s Clark Green vs. Divya Srivastava & Anr. 22 of 26 CS215/11 omission to produce them.
b) Even if PW1 had not produced the said documents, it was open to the defendants to summon the said documents either from the office of the plaintiff or from the Income Tax Department in order to contradict the testimony of PW1. The documents could have been summoned during crossexamination of PW1 or during defence evidence. None of this was done by the defendants. The defendants cannot therefore find fault with the witness for his omission to produce the said record.
c) Even if it is assumed that the documents, on being brought, would have shown that the sum claimed by the plaintiff had not been reflected to be due and outstanding in the said records, that does not bolster the defence of the defendants. The question for determination is not whether the sum claimed by the plaintiff is reflected in the balance sheet of the plaintiff, but whether the said sum is due and payable by the defendants. If the plaintiff has not maintained proper accounts of the sum due to it, it may be held liable for the said default under the law of Income Tax. That would however not furnish cogent ground to deprive the plaintiff of its contractual dues.
d) The suggestion that the documents do not show the claimed sum as due from the defendants and that is why the documents were produced by PW1 has been denied by PW1. The said denial has not been contradicted by the defendants.
M/s Clark Green vs. Divya Srivastava & Anr. 23 of 26 CS215/11
From the aforesaid, by the testimony of PW1 and the documents on record, the plaintiff has succeeded in proving by preponderance of probability that it is entitled to recover a sum of Rs.1,53,600/ from the defendant no. 2.
Prelitigation interest
39. In addition to the sum of Rs.1,53,600/, presuit interest of Rs.7,680/ is claimed by the plaintiff at the rate of 15% per annum on the said sum. The bill raised by the plaintiff has been identified as Ex. PW1/4. The bill does not state that for delayed payment, interest would be levied at the rate of 15% per annum. This rate of interest was also not agreed upon in the emails exchanged by the parties which have been identified as Mark A. The letter of demand dated 23.9.2008 Ex. PW1/5 issued by the plaintiff also does not state that in the event of delay in payment, interest at the rate of 15% per annum would be demanded. PW1 Tej Gautam, Manager of plaintiff has admitted in his crossexamination that there is no written policy of the company for charging interest on outstanding dues. Hence, for the period when the defendants were not made aware of the charge of interest, they cannot be fastened with the liability to pay the same.
40. The plaintiff has informed the defendants that for delayed payment interest at the rate of 15 % per annum would be demanded, for the first time, by legal demand notice dated 4.11.2008 Ex. PW1/6. This legal notice was sent by registered post and UPC. As demonstrated above, the legal notice M/s Clark Green vs. Divya Srivastava & Anr. 24 of 26 CS215/11 was served upon the defendants. The acknowledgment on the AD card shows that the legal demand was served upon the defendant on 17.11.2008. Since the plaintiff had clarified in the notice that interest @ 15% per annum would be levied in the event of failure of the defendants to pay the bill amount within seven days from the date of receipt of notice, the plaintiff is entitled to claim interest on the principal sum with effect from 24.11.2008 till the date of the institution of the suit i.e. 7.3.2009. Since the rate of interest of 15% per annum has been specified in the notice and despite service of notice, the defendant no. 2 failed to tender payment, it is deemed fit to award prelitigation interest at the said rate.
41. The plaintiff is entitled to recover from defendant no. 2 a sum of Rs. 1,53,600/ with interest thereon at the rate of 15% per annum from 24.11.2008 to 7.3.2009, the aggregate amounting to Rs.1,60,320/. The plaintiff is not entitled to recover any sum of money from defendant no. 1.
The issue is decided partially in favour of the plaintiff and against defendant no. 2.
ISSUE NO. 2.
"Whether the plaintiff is entitled for interest @ 15 percent per annum on the principal amount from the date of filing the suit till its realization? OPP"
42. The onus to prove this issue is upon the plaintiff. The plaintiff has prayed for pendente lite and future interest @ 15% per annum. However, M/s Clark Green vs. Divya Srivastava & Anr. 25 of 26 CS215/11 considering the totality of circumstances and prevailing bank rates, it is deemed fit to grant pendente lite interest @ 6% per annum and future interest @ 6 % per annum. The issue is decided in favour of the plaintiff and against the defendant no. 2.
ISSUE NO. 3 - RELIEF
43. In the aforesaid facts and circumstances, the suit of the plaintiff is decreed in favour of plaintiff and against defendant no. 2 in the sum of Rs.1,60,320/ alongwith pendente lite interest @ 6 % per annum from the date of institution of the suit till the date of decree and future interest @ 6% per annum from the date of decree till the date of realization. The plaintiff is also entitled to recovery of costs of the suit from defendant no. 2. The suit is dismissed as against defendant no. 1. Decree sheet shall be prepared accordingly.
File be consigned to Record Room.
Announced in the open Court (Ashish Aggarwal)
on 25.04.2011 CJ1, Dwarka Courts,
Delhi.
M/s Clark Green vs. Divya Srivastava & Anr. 26 of 26
CS215/11