Bangalore District Court
) Sri Gopal S. Iyengar vs Sri B.L. Chidananda on 28 February, 2017
Form No.9
(Civil)
Title
Sheet for
Judgment Present :
in Suits
R.P. 91
Sri Kotrayya M. Hiremath, B.Sc., LL.B.(Spl).,
55th Addl. City Civil & Sessions Judge,
Bangalore.
Date: the 28th day of February 2017
O.S.No.4727/2006
PLAINTIFFS: 1) Sri Gopal S. Iyengar,
S/o. B.G.Sampath Iyengar,
Age: 62 years, r/at 9162,
Great Heron Circle, Cypress Point
Sub-Divison, Orlando, Florida,
USA 23836.
Represented by:
Power of Attorney Holder
Sri B.S. Venkatadri.
2) Sri B.S.Venkatadri,
S/o. B.G. Sampath Iyengar,
Age: 70 years, r/at No. 20,
2nd Main, Binny Layout, II Stage,
Bangalore-30.
[By Sri A.C.Yaduraya Gowda, Advocate]
- V/s-
DEFENDANT: Sri B.L. Chidananda,
Major in age,
[carrying on business in his own name and
under the trade names: a) Pragathi Farm;
b) Pragathi Irrigation and c) Agri Global]
No.19, "Arambha", Santhosh Vihar,
Stage I, Jakkur Road, Flying School,
Sahakaranagara post,
Bangalore-560 092.
[By Sri R.B.N, Advocate]
-2- O.S.No.4727/2006
Date of institution of the suit : 05-06-2006
Nature of the suit : For recovery of money
Date of commencement of : 21-08-2008
recording of the evidence
Date on which the Judgment : 28-02-2017
was pronounced.
: Year/s Month/s Day/s
Total duration
10 08 23
(Kotrayya M. Hiremath)
th
55 Addl. City Civil & Sessions Judge,
Bengaluru.
-*****-
JUDGMENT
The plaintiffs have filed this suit against the defendant for recovery of Rs.86,00,000/- together with interest @ 18% P.A. from the date of suit till date of decree and from date of decree till date of realization of the suit claim and for costs of the suit.
2. The case of plaintiffs, in brief, is that the plaintiff Nos.1 and 2, who are the brothers, had planned to own and develop an agricultural farm at the outskirts of Bangalore city; the defendant, being an Asst. Professor in the University of Agricultural Sciences at Hebbal, represented to the plaintiffs that he had acquired sufficient knowledge in developing agricultural farms around
-3- O.S.No.4727/2006 Bangalore city and is carrying on the farm development business in his own name and in the trade names viz., Pragathi Farm, Pragathi Irrigation and Agri-Global; the plaintiffs entrusted their farm development work to the defendant; they trusted the defendant in good faith; the defendant estimated that the cost of the entire project including the cost of the land to be purchased would be Rs.1.5 Crores; he agreed to complete the work and hand-over the fully developed farm by the end of July 2003; in this regard an oral agreement was reached between plaintiffs and defendant in the first week of January 2002; thereafter the defendant, with the consent of plaintiffs, finalized the sale transaction with the owners of the land bearing Sy.Nos.15, 16 and 17 of Chikkanahalli village, Jala Hobli in Bangalore North Taluk; after settling the price of the said land, a sum of Rs. 17,14,568/- was paid to the sellers as the sale consideration in the month of April 2002 by way of Bankers cheques; a sum of Rs.4,83,200/- was paid to defendant towards stamp duty, registration charges and miscellaneous expenses as per the accounts shown by defendant and that the purchasing of the land was completed.
2(a) The further case of plaintiffs is that the understanding between plaintiffs and defendant was that the defendant would be
-4- O.S.No.4727/2006 getting money for the proposed project from the 2nd plaintiff or from the 1st plaintiff directly through cheques issued by them as and when monies were required so that there may not be any delay in completing the project; the plaintiffs were disbursing monies as and when the defendant required money without ascertaining whether there was need for so much money at that point of time or that the money was actually utilized at all on the project or not; the details of the cheques issued by plaintiffs to the defendant on his name and on his trade names or mentioned in ANNEXURE-A; however by the passage of time the plaintiffs came to know that the defendant was not at all showing interest in developing the farm and that there was no any progress in the farm work; the defendant did not render true accounts of money spent by him; inspite of several E-mails, phone calls and personal requests made by plaintiffs, the defendant failed to render true accounts of the monies spent by him on the project; the copies of E-mail message transactions made by plaintiffs are mentioned in ANNEXURE-B; the defendant, having no true accounts with him, agreed to find-out the quantities of the civil works done by him as on 20-10-2003 through independent valuers and that in this regard a written agreement dated 20-10-2003 was entered into between the parties which is produced at ANNEXURE-C.
-5- O.S.No.4727/2006 2(b) The further case of plaintiffs is that the agreement dated 20-10-2003 was to the effect that both parties have agreed to get the estimate of the work carried-out by defendant through the qualified Engineers; the said agreement also made it clear that both the parties will be bound by the report of evaluation and the verdict of the two appointed Engineers; those appointed Engineers gave their findings in a document which is in ANNEXURE-D; the said document is signed by defendant and valuers on 5-12-2003; as per the said valuation report the total cost of the land is valued at Rs.20,78,000/- and the total cost of construction made by defendant is valued at Rs.44,50,000/-; therefore the total cost of the project as on 20-10-2003 was Rs. 65,28,000/-; but the actual amount of money paid by plaintiffs to the defendant was Rs.1,53,47,178/-; the defendant has not accounted for total sum of Rs.88,19,718/-; when the plaintiffs approached the defendant with the valuers report, the defendant offered to repay the monies which he had not accounted for; the defendant admitted that he had misappropriated the said money to construct a house in his wife's name and to acquire some properties; to make the plaintiffs believe that he had come clean and was ready to repay monies due from him, the defendant issued four cheques of Rs.5,00,000/-
-6- O.S.No.4727/2006 each on 23-12-2003 towards part payment and that the copies of those four cheques issued by defendant are produced at ANNEXURE-E. 2(c) The further case of plaintiffs is that thereafter the defendant, instead of paying the remaining amount, got issued a notice dated 8-1-2004 to the plaintiffs making false allegations against plaintiffs; the notice dated 8-1-2004 given by defendant is produced at ANNEXURE-F; the plaintiffs gave a reply notice dated 18-2-2004 which is produced at ANNEXURE-G; there was no any response by the defendant to the said reply notice; then the plaintiffs got issued a notice dated 7-10-2004 through their advocate the copy of which is produced at ANNEXURE-H; by the said notice dated 7-10-2004, the plaintiffs demanded Rs.88,00,000/- with interest of Rs.11,88,000/- till the end of September 2004 from defendant; the defendant did not give any reply to the said notice and he did not even make the payment to plaintiffs; the 2nd plaintiff presented the four cheques given by defendant towards part payment on respective due dates to the bank, but they were dishonoured for the reason that the payment is stopped by the drawer; thereafter the 2nd plaintiff filed complaints against defendant and those cases are pending and
-7- O.S.No.4727/2006 that the office copies of notices given by plaintiffs to defendant in respect of four cheques are produced at ANNEXURE-J. 2(d) The further case of plaintiffs is that they are restricting their claim to Rs.86,00,000/-; they are claiming the future interest @ 18% p.a. with costs; the cause of action for this suit arose on 1-1-2002 on which date the defendant agreed to take up the project work and on the subsequent days; the value of the suit for the purpose of jurisdiction and court fee is stated in a separate valuation slip; because of these reasons the plaintiffs have prayed for a judgment and decree in their favour directing the defendant to pay a sum of Rs. 86,00,000/- only together with interest @ 18% p.a. from the date of suit till the date of decree and from the date of decree till the date of realization of the suit claim.
3. In pursuance of the suit summons, the defendant has appeared through his advocate and has filed his written statement.
3(a) The defendant, in his written statement, has contended that he is not engaged in farm development business as alleged in the plaint; only for the purpose of proper accounting at the instance of 1st plaintiff, the defendant had to develop the farm
-8- O.S.No.4727/2006 under the firm names Pragathi Farm, Pragathi Irrigation and Agri- Global; the defendant has carried on the responsibility that was entrusted to him honestly and punctually; the averment that defendant settled the price of the land and estimated the cost of the project to be Rs.1.50 Crores is denied as false; the estimation of the project cost was made by an architect viz., Laxmiprasad; there was no specific oral agreement regarding the development of the project and its completion within July 2003 as contended in the plaint; the defendant only recommended the purchase of the land in question and the negotiations with land owners and finalization of sale transaction were made by plaintiffs; the quantum of farm work and construction work exceeded the original schedule; due to increase in the volume of construction and back filling,..etc., the cost of project went higher than the original estimate; the farm house was originally estimated at Rs.55 lakhs, but when it was executed by the same architect its cost crossed Rs.2 Crores and that the project was taken over by the architect Laxmiprasad by misleading the 1st plaintiff.
3(b) The defendant has further contended that the averment that the price of the land was settled at Rs.17,14,568/- is false; the amount of Rs.17,14,568/- was the valuation amount
-9- O.S.No.4727/2006 made by the Sub-Registrar office for the purpose of stamp duty and registration fee; the actual cost of the land paid to the land owners is at the rate of Rs.6,00,000/- per acre; the total amount paid to the land owners was Rs.48.54 lakhs for 8 acres 3 guntas of land; the balance consideration amount of Rs.31.48 lakhs was paid in cash to the land owners by the defendant; there was a written agreement of sale between land owners and 2nd plaintiff to sell 8 acres and 4 guntas of land for a total consideration amount of Rs.48.54 lakhs at the rate of Rs.6,00,000/- per acre; this balance consideration amount paid by defendant is not taken into account by the plaintiffs; the 2nd plaintiff has released the money from his account to the defendant after verification of each work in a phase-wise manner; therefore the plaintiffs can never have a grievance that the project work done by defendant is not proportionate to the money paid by plaintiffs; the defendant has maintained his promise of being just and faithful to plaintiffs and that all monies released to defendant has been spent on the project work.
3(c) The defendant has further contended that it is true that the plaintiffs have made payments to defendant through cheques drawn in defendant's name and on Pragathi Farm, Pragathi
- 10 - O.S.No.4727/2006 Irrigation and Agree-Global, but the payments stated to have been made to defendant as reflected in ANNEXURE-A are not fully correct; the cash payment of Rs.2,00,000/- stated to have been paid to defendant on 3-12-2002 is false; the payment of Rs.17,14,568/- through DD was not paid to defendant, but it was paid by 2nd plaintiff directly to the land owners; the claim of plaintiffs that they have paid an amount of Rs.1,53,23,463/- to defendant has stated in ANNEXURE-A for project work is false; the actual payment made by plaintiffs to the defendant towards project work is Rs.1,34,08,895/- only; the defendant has sent detailed statement of accounts to the 1st plaintiff through E-Mail and has furnished a print copy of it to the 2nd plaintiff; the plaintiffs cannot take the original estimate as the basis when quantity and quality of each work was increased at their instance as per their need; the allegation that inspite of E-Mails and phone calls from plaintiffs, the defendant has failed to render two accounts of money spent on the project is false; the allegations made by 1st plaintiff in yahoo mails dated 7-6-2003 and 5-8-2003 are false and imaginary; the averment that the defendant was showing false and cocked-up accounts is false.
- 11 - O.S.No.4727/2006 3(d) The defendant has further contended that when he was away from Bangalore during the months of July and August 2003, as he had been to USA for three weeks, the 1st plaintiff had come to Bangalore and during that period the architect Laxmiprasad instigated the 1st plaintiff to take up further project work, but it was not brought to the notice of defendant before taking over the further project work; from August 2003 the plaintiffs and the architect Laxmiprasad took over the further project work on their own and went ahead with casting of the roof etc.; it was not known to the defendant and it was done hurriedly by plaintiffs and Laxmiprasad in order to make it difficult to evaluate the work done by the defendant; the plaintiffs were making false allegations of misappropriation against defendant, therefore the defendant readily agreed for appointment of independent valuers to value the work done by defendant; the market values are not taken as the basis while evaluating the work done; in the valuation report several items which are not physically visible at the site, but carried-out by defendant are left-out; the valuation report is incomplete and inconclusive; the cost of the project calculated by plaintiffs in para No.13 as Rs.65,28,000/- is erroneous; all the items of the project work including land purchase were not included; under the heading of land cost only
- 12 - O.S.No.4727/2006 an amount of Rs.20,78,000/- is shown, while the actual cost of land is Rs.48.54 lakhs; the cost of construction is put as low as Rs.44,50,000/- without applying lawful, just and proper rates; as per the accounts maintained by defendant, the cost of project is Rs.1,38,85,334/-; the plaintiffs have erroneously shown an amount of Rs.1,53,47,178/- as the amount paid by them to defendant; the plaintiffs have included the amount of Rs.17,12,000/- which they have directly paid to the land owners by demand draft; the plaintiffs have shown Rs.2,00,000/- as cash payment made to defendant, but the said amount was never paid to defendant; the defendant paid Rs.5,00,000/- to one Smt. Drowpadi as per the instruction given to him by 1st plaintiff; the actual amount paid by plaintiffs to the defendant towards project work is only Rs.1,34,08,895/- but not to Rs.1,53,47,178/-; the defendant has furnished the accounts for the said amount of Rs.1,34,08,895/-; the defendant is not bound by the valuation made by the valuers because the valuation report does not contain all the items of project work and the rates applied are incorrect.
3(e) The defendant has further contended that the plaintiffs with the aid of Laxmiprasad threatened the defendant by putting
- 13 - O.S.No.4727/2006 him in fear of death and obtained four cheques each for Rs.5,00,000/- from defendant in the name of 2nd plaintiff; the averments that the defendant offered to repay the monies in installments by admitting the misappropriation by him are all denied as false; the above mentioned 4 cheques were forcibly taken from defendant; because of this reason the defendant rightly issued "stop payment instructions" to his bankers to prevent the misuse of those cheques by plaintiffs; as already noticed above, the defendant paid Rs.5,00,000/- to one Smt. Drowpadi as per the instruction given to him by 1st plaintiff; the claim made by plaintiffs in the reply notice dated 18-2-2004 are false claims; the defendant has maintained optimum integrity, transparency and honesty in carrying out the project work and in maintaining the accounts spent in that regard; the averment that plaintiffs are entitled to recover an amount of Rs.88,00,000/- from defendant is false; on the other hand, the 1st plaintiff himself is due to defendant an amount of Rs.9,04,389/-; there is no cause of action for the suit; the cause of action mentioned in the plaint is false and imaginary; the suit is barred by limitation; the plaintiffs are not entitled for any relief in the present suit; so far there is no finalization of accounts between plaintiffs and defendant; such being the position, the plaintiffs ought to have
- 14 - O.S.No.4727/2006 filed a suit for accounts to ascertain as to who is due to whom and that because of these reasons the suit is liable to be dismissed. Accordingly the defendant has prayed for dismissal of the suit in the interest of justice.
4. On the basis of the above pleadings, the following issues have been framed:
1) Whether the plaintiffs prove that the defendant is liable to the plaintiffs a sum of Rs.86,00,000/-?
2) Whether the defendant proves that he has accounted for a sum of Rs.1,34,08,895/- which he has received from the plaintiffs towards the project work?
3) Whether the defendant proves that the suit is barred by limitation?
4) What decree or order?
5. The plaintiffs, in order to substantiate their case, have adduced the oral evidence of plaintiff No.2 as PW1 and got marked the documents at Exs.P.1 to P.76 and closed their side.
The defendant adduced the oral evidence of himself and of two witnesses as DWs. 1 to 3 and got marked the documents at Exs.D-1 to D359 and closed his side.
6. I have heard the arguments of both side counsels.
- 15 - O.S.No.4727/2006
7. My findings on the above mentioned issues are as under:
Issue No.1: Partly in the Affirmative,
as per the final order
Issue No.2: In the Negative,
Issue No.3: In the Negative,
Issue No.4: As per final order for the following:
REASONS
Issue No.1 and 2 :-
8. These issues, being inter-connected to each other, are taken together for common consideration to avoid repetition of facts and the appreciation of evidence.
9. As already noticed above the case of plaintiffs, in nut shell, is that an oral agreement was reached between plaintiffs and defendant during the 1st week of January 2002; the purchasing of land was completed in the month of April 2002; the plaintiffs continued to give money to the defendant by way of cheques in the name of defendant and also in his trade names as per the details mentioned in Annexure-A; the project work was started by defendant, but after some days the defendant did not show any interest in the project work; there was no progress in the project work; as a result of it on 20-10-2003 both the parties
- 16 - O.S.No.4727/2006 entered into a written agreement as per Annexure-C to appoint independent valuers (engineers) to find-out the quantities of work done by defendant and to give report; both parties agreed to be bound by the report of evaluation; those engineers gave their findings and report as per Annexure-D on 5-12-2003; as per the engineers' report the total cost of the land is Rs.20,78,000/-, the total cost of project work carried-out by defendant is Rs.44,50,000/- and therefore, as on 20-10-2003 the total cost of project work including the cost of the land is Rs.65,28,000/-; as on 20-10-2003, the actual amount of money paid by plaintiffs to defendant was Rs.1,53,47,178/- and therefore, an amount of Rs.88,19,718/- is the unaccounted money remaining with the defendant.
10. Further, the case of plaintiffs is that on 23-12-2003 the defendant admitted that he has misappropriated the said unaccounted money for constructing his own house in the name of his wife and for acquiring some other properties and he agreed to return the said amount to plaintiffs; on the same day the defendant issued four cheques of Rs.5,00,000/- each to plaintiffs (Annexure-E) towards repayment of the said unaccounted money; but those cheques are dishonoured for the reason that "the
- 17 - O.S.No.4727/2006 payment was stopped by the drawer" and that now the plaintiffs are restricting their claim only to Rs.86,00,000/- with costs and future interest @ 18% p.a. instead of Rs.88,19,718/-.
11. As already noticed above, the defence set up by defendant in brief, is that the cost of construction exceeded the original estimate due to increase in the volume of construction, back filling, ..etc.; the cost of the land was fixed at Rs.6,00,000/- per acre; the total value of the land made by the Sub-Registrar's Office was Rs.17,14,568/- only, but the actual total cost of the land is Rs.48,54,000/-; the difference between the two values is Rs.31,48,000/- and it is paid by the defendant; the defendant has maintained his promise of being just and faithful to plaintiffs and he has spent all the money on the project work; it is not true to say that on 3-12-2002 the plaintiffs have paid the cash amount of Rs.2,00,000/- to defendant; the actual total amount of money given by plaintiffs is Rs.1,34,08,895/- but not Rs.1,53,23,463/- as contended by plaintiffs; from August 2003, the plaintiffs and the architect Sri Laxmiprasad themselves took over the further project work and they went ahead with casting of the roof,.. etc. without the knowledge of the defendant, because of which reason it became difficult to evaluate the work done by defendant; the
- 18 - O.S.No.4727/2006 defendant readily agreed for appointment of independent valuers to value the work done by defendant, but those Engineers have not taken the market values as the basis while evaluating the work done and that the several items, which were not physically visible at the sight, are not taken into account by the Engineers and therefore, the valuation report given by them is incomplete and inconclusive.
12. Further, the case of defendant is that the cost of the project work, which is Rs.65,28,000/- as per the valuation report, is erroneous; as per the accounts maintained by defendant the cost of project work is Rs.1,38,85,334/-; the actual amount paid by plaintiffs is Rs.1,34,08,895/- but not Rs.1,53,47,178/- as contended by plaintiffs; it is not true to say that the defendant has admitted that he has misappropriated the money paid by plaintiffs; it is not true to say that the defendant had agreed to repay the so called unaccounted money to plaintiffs in installments; the plaintiffs and Sri Laxmiprasad obtained four cheques of Rs.5,00,000/- each from defendant by threatening the defendant; as per the say of 1st plaintiff the defendant has also paid an amount of Rs.5,00,000/- to one Smt. Droupadi; the plaintiffs are not entitled to recover an amount of Rs.88,00,000/-
- 19 - O.S.No.4727/2006 as claimed by them and that the plaintiffs themselves have to pay an amount of Rs.9,04,389/- to the defendant.
13. It means that the calculation according to plaintiffs and the calculation according to defendant are as under:-
Sl. Plaintiffs Defendant
No. Particulars (In Rupees) (In Rupees)
1 Cost of the land 20,78,000/- 48,54,000/-
2 Work done by defendant 44,50,000/-
3 Work done + Land value 65,28,000/- 1,38,85,334/-
4 Total amount paid by 1,53,47,178/- 1,34,08,895/-
plaintiffs
(+) 88,19,178/- (-)4,76,439/-
The unaccounted money, according to plaintiffs, is Rs.88,19,178/- and the plaintiffs have restricted their claim to Rs.86,00,000/- plus interest. On the other hand, the case of defendant is that he has spent more than the actual amount paid by plaintiffs and that the plaintiffs themselves are liable to pay him Rs.9,04,389/-.
14. The PW1 Sri B.S. Venkatadri, being the plaintiff No.2, has stated in his oral evidence that the plaintiffs have not agreed to pay the 6% amount to defendant towards his remuneration; it is true that there was no any written agreement about the project work and about its completion within a particular time limit; it is
- 20 - O.S.No.4727/2006 true that the defendant has constructed the compound wall to the total extent of area measuring 8 acres 4 guntas and that there was no any oral agreement to construct the said compound wall; it is true that the Sub-Registrar's value for entire 8 acres 4 guntas land was Rs.17,14,568/-, the stamp duty was Rs.2,31,500/-, the registration charges was Rs.34,530/- and the miscellaneous expenses was Rs.1,00,000/-; it is true that these stamp duty, registration charge and miscellaneous expenses were not included in Rs.17,14,568/-; it is true that the amount of Rs.17,14,568/- is paid by plaintiffs and the registration work was attended by defendant; it is not true to say that the defendant has paid the excess amount of Rs.31,48,000/- to the vendor of the land at the time of sale deed; it is true that the plaintiffs are now claiming the said amount of Rs.31,48,000/- from defendant and that it is not true that the defendant has done the project work to the extent of the amount of money paid to him.
15. The PW1 has further stated in his oral evidence that it is true that in addition to the project work in question, the defendant has also done the alteration work of ground floor and the construction work of the 1st floor of his house situated at Binni Layout; he has paid an amount of Rs.8,50,000/- separately to the
- 21 - O.S.No.4727/2006 defendant for the said alteration and construction work; it is not true to say that the total cost of the said work was Rs.14,92,000/- and that it is not true to say that he (the plaintiff No.2) is still due an amount of Rs.4,42,427/- to defendant towards the said alteration and construction work.
16. The PW1 has further stated in his oral evidence that the total amount of money paid by plaintiffs to defendant towards the project work is Rs.1,32,00,000/-; it is not true to say that one architect Sri Laxmiprasad instigated the 1st plaintiff to take back the further project work from defendant and to entrust it to him; the plaintiffs have not issued any termination notice to terminate the services of defendant; it is not true to say that it is not possible to estimate the actual work done by defendant for the reason that the roof of cellar floor was put up hurriedly without intimation to the defendant; it is true that two engineers were appointed for the purpose of assessing the project work, one among them was Sri K. Anjeyya appointed on behalf of plaintiffs and another was Sri P.H. Ramesh appointed on behalf of defendant; it is true that as per the Ex.P33 agreement the works like compound wall, layout formation, soil filling, bore-well, gate and grills, servant quarters etc., were to be valued by the
- 22 - O.S.No.4727/2006 engineers; it is true that the defendant did purchase one tractor with trailer for the project work and that the valuation report does not include the cost of said tractor & trailer; it is true that the valuers have not shown the cost of drip irrigation and plantation in their report; the cost of drip irrigation and plantation is paid separately by the plaintiffs themselves; it is not true to say that several works done by defendant have not been included in the Ex.P34 valuation report; it is not true to say that the amount of Rs.65,28,000/-, which is the cost of the project work according to Ex.P34 report, does not include the costs of all the items of the project work done by defendant and it is not true to say that the valuation report is incomplete; the total amount of money paid by plaintiffs to defendant is Rs.1,53,00,000/- and it is not true to say that the amount paid by plaintiffs is only Rs.1,34,08,895/- and that it is true to say that the defendant made request to include the actual amounts spent by him.
17. The PW1 has further stated in his oral evidence that it is not true to say that in the meeting dated 23-12-2002 the plaintiffs claimed only Rs.25,00,000/- from defendant; it is not true to say that the plaintiffs and Laxmiprasad obtained four cheques of Rs.5,00,000/- each from defendant by force by
- 23 - O.S.No.4727/2006 threatening him; he does not know whether the 1st plaintiff requested the defendant to pay Rs.5,00,000/- to one Smt. Droupadi and that the defendant has paid the said amount to Smt. Droupadi; it is not true to say that the defendant has paid the said amount to Smt. Droupadi from out of the amount received by him for project work; it is true that the Tahsildar of Bangalore North Taluka had filed a criminal complaint as per Ex.D5 against him alleging that he has encroached 1 acre 16 guntas of land before Chikkajala police station; it is not true to say that as per the account maintained by defendant in respect of the amount spent by defendant for the project work, the plaintiffs have to pay a sum of Rs.9,04,389/- to defendant; it is not true to say that the defendant has carried-out the project work promptly and honestly with true accounts; it is not true to say that the defendant has not utilized the money given by plaintiffs for construction of his own house and that he has no documents to show that the defendant has utilized the money given by plaintiffs for construction of his own house.
18. On the other hand, the DW1 Sri B.L. Chidananda, being the defendant, has stated in his oral evidence that it is not true to say that the bills produced by him are the concocted bills
- 24 - O.S.No.4727/2006 and they pertain to the construction of his own house; it is true that in the replay notice given by him to plaintiff No.1 he has mentioned that the remuneration to be paid to him by plaintiffs is 4.5% of the total valuation; it is not true to say that he has not given the accounts of the actual work done by him; it is true that two engineers were appointed to value the work done by him as per the agreement Ex.P33; it is true that the Ex.P33 is the agreement entered into between him and plaintiff No.2's GPA holder and it bears his signature; it is true that the said two engineers were to estimate the value of work done by him; it is true that the names of those two engineers are Sri K. Anjaiah appointed by plaintiffs and Sri P.R.Ramesh appointed by him; it is true that it was agreed that each item of work done by him is to be estimated by most scientific method; it is true that the civil works done by him are mentioned in agreement Ex.P33; it is true that he has not done any work after the agreement Ex.P33; it is true that the Ex.P34 is the valuation report submitted by engineers in respect of the civil works done by him and that he has signed on each page of it; it is true that both the engineers have put their signature on Ex.P34; it is not true to say that he has not furnished the accounts on the date of Ex.P34; it is true that when the plaintiff No.1 asked him to give the accounts and
- 25 - O.S.No.4727/2006 the documents, he told the plaintiff No.1 that they are given to the chartered accountant and that it is not true to say that he has intentionally avoided to give accounts by giving them to the chartered accountant.
19. The DW1 has further stated in his oral evidence that the total amount received by him from plaintiffs is Rs.1,53,47,178/- and the total estimated value of the civil works done by him is Rs.44,50,000/-; it is not true to say that an amount of Rs.86,50,000/- is due from him to plaintiffs; it is not true to say that on the meeting dated 23-12-2003 he has admitted the due amount of Rs.86,50,000/- and it is not true to say that he has agreed to repay the same in installments; it is not true to say that he issued four post-dated cheques each of Rs.5,00,000/- towards repayment of the above mentioned due amount; he volunteers that those four cheques were obtained from him by force and by threat; it is true that in the said meeting dated 23-12-2003, himself, plaintiff Nos.1 and 2, the GPA holder of plaintiff No.2 Sri Laxmiprasad and Prof. Seetharam Iyengar were present; it is not true to say that he told in the said meeting that he has utilized the amount of plaintiffs for the construction of his own house; it is true that he has not done any work in the
- 26 - O.S.No.4727/2006 project of plaintiffs after 28-7-2003 and that he has not purchased any products for project work after the said date; it is not true to say that the bills produced by him are the bills showing purchase of materials for the construction of his own house; it is true that except the Ex.D1 agreement there is no other document or paper to show that the value of the land was fixed at Rs.6,00,000/- per acre; it is not true to say that the Ex.D1 agreement does not refer to any correspondence with plaintiffs and that it is a created agreement; it is not true to say that he has not told about the alleged fact that the price of land was fixed at Rs.6,00,000/- per acre when four cheques were given by him and that it is not true to say that he has taken the signature of 2nd plaintiff on Ex.D1 agreement at the time of registration of sale deed along with the required Forms.
20. The DW1 has further stated in his oral evidence that the vendor Sri Krishnamurthy is no more; it is true that the date of Ex.D1 agreement was altered to 11-4-2002; he does not remember the date on which the excess consideration amount was paid to vendor; he has not taken any other receipt except Ex. D1 for having paid the excess consideration amount; it is not true to say that the bills, receipts and vouchers produced by him
- 27 - O.S.No.4727/2006 were not in his hands on 28-7-2003 to 20-10-2003 when the valuers were appointed; it is not true to say that those bills, receipts and vouchers pertain to the construction work of my own house and my other project works; it is not true to say that the two engineers have taken into account the earth filling work done by him; it is not true to say that he is stating for the first time that he has done the earth filling work; it is not true to say that the earth filling work done by him is already taken into account by the two engineers; it is not true to say that the two engineers have taken into account all the work done by him; it is true that the two engineers have included his remuneration amount at 4.5% of the total amount of Rs.44,50,000/-; it is true that the said remuneration at 4.5% includes his remuneration and supervision charges of the work; it is true that the valuation of the civil works was arrived at Rs.41,69,811-75/- by two engineers; it is not true to say that he got evaluated the horticulture work; it is not true to say that the total horticulture crops and irrigation system was valued at Rs.2,58,135/-; it is not true to say that at his instance the valuation was rounded to Rs.44,50,000/-; it is true that inspite of receipt of E-mail Ex.P68 dated 3-8-2003, he has not handed over the bills and receipts to plaintiffs and he volunteers that those bills and receipts were with the chartered accountant.
- 28 - O.S.No.4727/2006
21. The DW1 has further stated in his oral evidence that it is not true to say that the Exs.D31, 34, 36 to 38, 41, 47, 48, 52, 83, 89, 97, 99, 127 to 132, 134 to 136, 148 to 150, 155 to 158, 169, 218 and 224 does not pertain to the work of plaintiffs; it is not true to say that the Exs.D42 to 46, 49, 50, 53, 84, 85, 86, 95, 101 to 103, 105, 109 to 117, 120, 121 to 126, 137 to 145, 149, 159 to 161, 163 to 168, 170 to 173, 175 to 198, 200 to 204, 212, 213 do not pertain to the work of plaintiffs and they are not required for the plaintiffs project work; it is not true to say that all the above bills pertain to the purchase of materials for his house; he purchased power-tiller with trailer and tractor with trailer and cultivator for plaintiffs work in his name and subsequently it was transferred to plaintiff No.1's name; it is not true to say that the said tractors purchased in his name were used for plaintiff's work and it is not true to say that he collected high charges for the work done; it is not true to say that he has not paid more than Rs.2,00,000/- per acre; it is not true to say that he has carried- out the work worth Rs.44,50,000/- and that it is not true to say that he is liable to pay Rs.71,00,000/- to the plaintiffs.
22. The DW2 Sri Mehaboob, being the meson and labour contractor, has stated in his oral evidence that he has constructed
- 29 - O.S.No.4727/2006 the house of 2nd plaintiff at Binni Layout and also has worked in the plaintiffs' project through-out till the defendant left the project; he has done the civil works in the plaintiffs project worth more than Rs.36,00,000/-; the 2nd plaintiff used to come to the project site regularly along with his sister and his wife and that the defendant used to make payment to him in their presence; during the period from July to August 2003 the 2nd plaintiff handed over the project work to one architect Sri Laxmiprasad; the 2nd plaintiff asked him to continue his work in the project; the 2nd plaintiff assured the defendant that he will make the payment of balance amount of Rs.3,60,000/- to defendant, but till today the plaintiffs have not paid the said amount; during the negotiations to purchase the land he was very much present and that the price of the land was fixed at Rs.6,00,000/- per acre and that he (DW2) has completed the civil works of the project promptly to the satisfaction of the plaintiffs, but the plaintiffs have not yet cleared his labour charges of Rs.2,00,000/-. But in the cross-examination by the plaintiffs side advocate, this DW2 has admitted that he does not know the transactions between the plaintiffs and defendant; he does not know the correspondence between plaintiffs and defendant; he does not know what amount was paid by plaintiffs to defendant and mode of operation; he did show the
- 30 - O.S.No.4727/2006 work done to two engineers who came for valuation of the work done; he does not know the amount spent by defendant for project work; he was not present when the land was purchased for the 1st time in the year 2002 and that he has not affixed his signature when the land was purchased in the year 2002 as a witness. Therefore, this court is of the opinion that this DW2 is not a believable witness. The learned advocate for plaintiffs has rightly suggested to DW2 that he is deposing falsely at the instance of defendant.
23. The DW3 Sri P.S. Ramesh, being the Asst. Professor in Civil Engineering department in B.N.M.I.T at Bangalore, has stated in his oral evidence that the defendant requested him to make independent estimation of the civil works carried-out by defendant in the plaintiff's project work; he was appointed as the valuer on behalf of the defendant and one Mr. Anjineya was appointed as another valuer on behalf of plaintiffs; during the period from October to December 1st week they have jointly assessed quantities of civil works carried-out by defendant; Sri Anjeneya started insisting to fix the S.R. Rates (schedule rates prescribed by PWD); he insisted to fix the rates as per the marked value and that he made several requests to Sri Anjeneya, but Sri Anjeneya
- 31 - O.S.No.4727/2006 did not agree to fix the marked rates. But in the cross- examination by the plaintiffs' side advocate, this DW3 has stated that during the inspection they have evaluated all the works that were shown to them by defendant. He has stated that the Ex.P34 is the evaluation report prepared by himself and Sri Anjeneya. He has stated that both of them have put their signature on Ex.P34. This DW3 has further stated that except Ex.P34 they have not prepared any other document in writing. He has specifically stated that there is a recital in Ex.P33 and Ex.P34 that the parties to the agreement are bound by the evaluation report Ex.P34. He has stated that the S.R. rates and the market rates were noted by him at the time of preparing the evaluation report. But he has further stated that he did not hand over the said notes to Sri Anjeneya or to the defendant. He has admitted that he did not prepare any detailed notes specifying the areas were there would be a large variation between S.R rates and market rates nor did he made any dissent note to that effect. Therefore, this court is of the opinion that the evidence given by this DW3 does not come to the help of defendant.
24. The case of plaintiffs is that the defendant is liable to pay them a sum of Rs.86,00,000/-. According to the issue No.1,
- 32 - O.S.No.4727/2006 the burden of proving this point is on the plaintiffs. The calculation made by plaintiffs is already narrated in para No. 13 above. According to the plaintiffs the actual amount due to them from defendant is Rs.88,19,178/-, but they have restricted their claim to Rs.86,00,000/- in this suit. The calculation made by defendant is also narrated in the para No.13 above. The case of defendant is that the cost of the project work carried-out by him (including the cost of the land) is Rs.1,38,85,334/- and the actual amount paid to him by plaintiffs is Rs.1,34,08,895/-. According to the issue No.2 the burden of proving these figures is on the defendant. According to the defendant the cost of land was fixed at the rate of Rs.6,00,000/- per acre. But the defendant (DW1) himself has admitted in his oral evidence that except the Ex.D1 agreement there is no other document or paper to show that the value of the land was Rs.6,00,000/- per acre. The defendant has further admitted that he has not taken any other receipt except Ex.D1 to show that he has paid the excess consideration amount to the land owner. According to the plaintiffs the signature of 2nd plaintiff on Ex.D1 agreement was taken in advance by defendant at the time of registration of sale deed along with other required Forms and that the Ex.D1 is not a genuine document. The defendant has admitted in his oral evidence that the vendor of the land viz., Sri
- 33 - O.S.No.4727/2006 Krishnamurthy is no more. He has also admitted that the date of Ex.D1 agreement was altered as 11-4-2002.
25. The defendant has produced several bills to discharge his burden under issue No.2. But the learned advocate for plaintiffs have rightly suggested that the Exs.D31, 34, 36 to 38, 41, 47, 48, 52, 83, 89, 97, 99, 127 to 132, 134 to 136, 148 to 150, 155 to 158, 169, 218 and 224 and the Exs.D42 to 46, 49, 50, 53, 84, 85, 86, 95, 101 to 103, 105, 109 to 117, 120, 121 to 126, 137 to 145, 149, 159 to 161, 163 to 168, 170 to 173, 175 to 198, 200 to 204, 212, 213 do not pertain to the project work of plaintiffs and that they are not required for the plaintiffs project work. According to the plaintiffs the above mentioned bills pertain to the purchase of materials for defendant's own house. The case of defendant is that he purchased the tractor and trailer for the project work. In this regard the defendant himself has admitted in his oral evidence that he purchased the power tiller with trailer and the tractor with trailer and cultivator in his own name and subsequently he transferred them to plaintiff No.1's name. Further, the case of plaintiffs is that the tractor and tiller were purchased by defendant himself and that he has collected high charges from plaintiffs for having used them in the plaintiffs'
- 34 - O.S.No.4727/2006 project work. Therefore, this court is of the opinion that the defendant has failed to prove that he has accounted for a sum of Rs.1,34,08,895/- as required under issue No.2.
26. The case of plaintiffs is fully supported by the Ex.P34 valuation report given by the independent valuers. In this regard the defendant (DW1) has stated in his oral evidence that it is true that two engineers were appointed to value the work done by him as per the agreement Ex.P33; it is true that the Ex.P33 is the agreement entered into between him and plaintiff No.2's GPA holder and it bears his signature; it is true that the said two engineers were to estimate the value of the work done by him; it is true that the names of those two engineers are Sri K. Anjaiah appointed by plaintiffs and Sri P.R.Ramesh appointed by him; it is true that it was agreed that each item of work done by him is to be estimated by most scientific method; it is true that the civil works done by him are mentioned in agreement Ex.P33; it is true that he has not done any work after coming into existence of the agreement Ex.P33; it is true that the Ex.P34 is the valuation report submitted by engineers in respect of the civil works done by him and that he has signed on each page of it; it is true that both the engineers have put their signatures on Ex.P34 and that it
- 35 - O.S.No.4727/2006 is not true to say that he has not furnished the accounts on the date of Ex.P34. The plaintiffs have rightly contended that as per the Ex.P34 valuation report the total cost of the land is valued at Rs.20,78,000/- and the total cost of construction made by defendant is valued at Rs.44,50,000/-. The case of plaintiffs is that the total amount paid by them to defendant is Rs.1,53,23,463/-. The Exs.P1 to 25 the copies of cheques issued by plaintiffs to defendant and other documents produced by plaintiffs support the case of plaintiffs.
27. As already noticed above, according to the plaintiffs, the actual amount due to them from defendant is Rs.88,19,178/-, but as per the plaint averments they have restricted their claim to Rs.86,00,000/- in this suit. Further, at the end of the cross- examination of defendant (DW1), the learned advocate for plaintiffs has made a suggestion to defendant that the defendant is liable to pay Rs.71,00,000/- (Rupees seventy-one lakhs only) to the plaintiffs. Therefore, this court is of the opinion that in view of the above mentioned suggestion made by the learned advocate for plaintiffs, the plaintiffs cannot claim more than Rs.71,00,000/- (Rupees seventy-one lakhs only). Hence for these reasons the
- 36 - O.S.No.4727/2006 issue No.1 is answered accordingly as "partly in the affirmative"
and the issue No.2 is answered in the "Negative".
Issue No.3:-
28. The cause of action for filing the suit arose on 1-1- 2002 on which date the defendant agreed to take up the plaintiffs project work. Later, on 20-10-2003 the parties agreed to have the independent valuers to evaluate the work done by defendant. The evaluation report is dated 5-12-2003. On 23-12-2003 the defendant issued four cheques for a total sum of Rs.20,00,000/- in favour of plaintiffs towards part repayment. Those four cheques were bounced. The date on which the last cheque was bounced was 5-12-2004. From this date the plaintiffs will have the period of limitation of 3 years (i.e., up to 5-12-2007) for filing this suit. But the present suit is filed on 5-6-2006. Therefore, the suit of plaintiffs is not barred by limitation. Hence the issue No.3 is answered in the "negative".
Issue No.4:-
29. The plaintiffs have claimed the interest on the principal claim amount @ 18 % p.a. from the date of suit till the date of decree and from the date of decree till the date of realization of the suit claim. The suit transaction is for commercial purpose. But the rate of interest claimed by plaintiffs is very high.
- 37 - O.S.No.4727/2006 In the absence of any contractual rate of interest, the section 34 of CPC permits only the "further interest" from the date of suit. This court is of the opinion that the interest rate of 12% p.a. is the reasonable rate even in commercial transactions. Therefore this court is of the opinion that the plaintiffs are entitled to claim the "further interest" @ 12% p.a. on the decreetal amount from the date of suit till the realization of the decreetal amount. Therefore, for this reason and in view of the findings already given on Issue Nos.1 and 2 above, I proceed to pass the following:
ORDER The suit of plaintiffs is partly decreed with costs for Rs.71,00,000/- (Rupees seventy-one lakhs only) against defendant.
2) The defendant shall pay the further interest @ 12% p.a. on the decreetal amount of Rs.71,00,000/- (Rupees seventy-one lakhs only) from the date of suit till the realization of the entire decreetal amount.
3) Draw decree accordingly.
[Dictated to the Judgment Writer directly on computer, Script corrected, signed and then pronounced by me, in the Open Court on this the 28th day of February 2017].
(Kotrayya M. Hiremath) th 55 Addl. City Civil & Sessions Judge, Bengaluru.
- 38 - O.S.No.4727/2006
ANNEXURES
List of Witnesses examined for plaintiffs;
PW1 B.S.Venkatadri
List of documents marked for plaintiffs;
Ex.P1 to P25 True copy of cheques issued to Defendant
Ex.P26 to Ex.P32 Copies of E Mail sent by 1st plaintiff to defendant Ex.P33 Certified copy of Agreement dated 20-10-
2003
Ex.P34 Certified copy of the agreement to evaluate
and estimate of working sheet part
Ex.P34(a) Copy of Agreement to evaluate and
estimate work dated 20-10-2003
Ex.P35 to P55 Print out Digital photos (Marked subject to
proof)
Ex.P56 Certified copy of the Judgement in C.C.
No.9979/04, C.C.10967/04 and C.C.
19564/05
Ex.P57 Certified copy of Judgment passed by FTC-
II in Crl.A.438/07. Crl.A.439/07 and
Crl.A.440/07
Ex.P58 Certified copy of the order passed by
Hon'ble High Court of Karnataka dated
11.8.09 in Crl.R.P. No.1058/08 c/w
Crl.R.P.1059/08
Ex.P59 Certified copy of Deposition (Cross Examination)
of DW1 in CC No.9979/04, CC No.10976/04
and C.C.No.19564/04
Ex.P60 to P74 15 e-mails between plaintiff no.1 and
defendant
Ex.P75 Copy of Particulars of Expenditure in
respect of house of 2nd plaintiff given by
defendant
Ex.P76 Original sale deed dated 21-10-2003 (which
is taken back with endorsement in order
sheet)
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List of Witnesses Examined for defendants:
DW-1 B.L,Chidananda
DW-2 Mehboob
DW-3 P.S.Ramesh
List of documents exhibited for defendants:
Ex.D1 & D1(a) Xerox copy of agreement to sell and signature of witness Ex.D2 & Ex.D2(a) Annexure A amount paid to Chidanand and the relevant portion Ex.D3 & Ex.D3(a) Affidavit and the signature of witness Ex.D4 & Ex.D4(a) Income Tax clearance certificate and the signature of witness.
Ex.D5 True copy of a Criminal complaint filed by Tahsildar North Taluk for encroached 1 acre 16 gts. of land.
Ex.D6 Sketch of the land of Sy. No.14 of
Chikkanahalli
Ex.D7 Statement of detailed expenditure
Ex.D8 Land documentation and purchase details
Ex.D9 Measurements and rates (valuation by
both Engineers)
Ex.D10 List of expenditure given on 23-12-2003
Ex.D11 to Ex.D29 Copies of E-mail.
Ex.D30 to D-80 Bills of Concrete Webs and Generator
purchase and plantation etc.
Ex.D81 to D120 Pipes purchased bills, drip irrigation
equipments, pumpsets, water bill and
sand purchased bills.
Ex.D121 to D210 Vehicle maintenance bills, power tillers
bills etc.
Ex.D211 to Ex.D319 Hardware bills, steel purchase bills,
cement purchased bills, kitchen
equipments purchased bills etc.
Ex.D320 to D355 Mobile purchase bills and telephone bills
Ex.D356 & D356(a) Copy of the DW-1's bank account in Corp.
Bank and the three relevant entries dated
13-8-2002.
Ex.D357 Statement of current account extract of
Corp. Bank containing 19 pages
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Ex.D358 Three Pass books
Ex.D359 Statement of Accounts Extract of Lord Krishna Bank (Kotrayya M. Hiremath) 55th Addl. City Civil & Sessions Judge, Bengaluru.