Delhi District Court
Office At Nsic Bhawan vs M/S. Essma Plastic Industries on 2 January, 2016
1
In the Court of Ms. Namrita Aggarwal
CCJ Cum Additional Rent Controller1 (Central)
Tis Hazari Courts, Delhi.
Suit No. : 36/14
Unique I.D. No. 02401C0256302010
In the matter of :
The National Small Industries Corporation Ltd.
(A Govt. of India Undertaking) having its Regd.
Office at NSIC Bhawan, Okhla Industrial Estate,
Okhla, New Delhi 110020. Plaintiff
Versus
1.M/s. Essma Plastic Industries, 10269, Street No.4, Bhagwan Chowk, Janta Nagar, Ludhiana. (Punjab)
2. Shri Naresh Kumar s/o late Sh. Dev Raj Partner M/s. Essma Plastic Industries 10269, Street No.4, Bhagwan Chowk, Janta Nagar, Page No. 1 of 19 CS No. 36/14/99 2 Ludhiana. (Punjab)
3. Smt. Bimla Devi w/o late Sh. Dev Raj Partner M/s. Essma Plastic Industries 10269, Street No.4, Bhagwan Chowk, Janta Nagar, Ludhiana. (Punjab) Defendants SUIT FOR RECOVERY OF RS. 1,44,292.18/ AND POSSESSION OF MACHINERY AND IN THE ALTERNATE FOR A DECREE OF RS. 42,566.75/ FOR THE RESIDUAL VALUE OF THE MACHINE TOGETHER WITH PENDENTELITE AND FUTURE INTEREST Date of Institution: 24.12.1999 Final arguments heard: 30.09.2015 Date of Judgment: 02.01.2016 Decision: Suit Dismissed :JUDGEMENT:
1. This is a suit for recovery of sum of Rs.1,44,292.18 and for possession of the machinery in question or in alternate for decree of sum of Rs.42,566.75 as residual value of the said machines.
Page No. 2 of 19 CS No. 36/14/99 3
2. Facts as averred in the plaint are that the plaintiff is a duly incorporated company having its registered office at "NSIC BHAWAN" at Okhla Industrial Estate, New Delhi and various Regional / Branch Offices including one at Guru G.T. Road, Govind Singh Tower, Dholewal Chowk, Ludhiana (Punjab). Present suit has been filed on behalf of the plaintiff company by one Sh. Ziauddin being principal Officer of the plaintiff company and well conversant with the facts of the case. He was duly authorized to sign, verify and institute the present suit by way of a General Attorney executed by the plaintiff company. It is stated that plaintiff is a Govt. company engaged in promotion and development of small scale industries and provides plan, machinery, tools etc. to th enterprenours in private sector on hire purchase basis.
3. The case of the plaintiff is that defendant No. 1 is a partnership firm, of which defendants No. 2 & 3 are partners, which is carrying on business of manufacturing and sale of polythene Page No. 3 of 19 CS No. 36/14/99 4 bags in Ludhiana. Defendant No. 1 firm through defendants No.2 & 3 had approached plaintiff company in the year 1987 for supply of HM Film Extruder plant complete with electrical motors, wind rest and electrical accessories from M/s. B. S. Industries at Ludhiana. Plaintiff company duly considered the application of defendants and agreed to supply the above said machinery vide its letter dated 03.02.1987. Accordingly, a hire purchase agreement was entered into between plaintiff company and defendant No. 1 firm through defendants No.2 & 3, under which it was agreed that plaintiff company would supply the above said HM Film Extruder plant complete with electrical motors, wind rest and electrical accessories as described in scheduleI by the hire purchase agreement upon the terms and conditions mentioned in that agreement dated 24.03.1987. Under the above said hirepurchase agreement, a sum of Rs.19,960 was paid by the defendants as earnest money, out of which sum of Rs.18,962/ was on credit basis and balance sum of Rs.998/ was appropriated towards the payment of consideration for option to purchase. Hirepurchase amount was calculated to be Rs. 1,65,277/ along with a sum of Rs. 4,990/ payable towards Page No. 4 of 19 CS No. 36/14/99 5 insurance charges. Defendants were required under the agreement to pay 13 half yearly hire installments at the plaintiff's Head Office or at its Branch Office at Ludhiana. The first hirepurchase installment was of Rs.17,901/ payable on or before 01.04.1988 and nd 2 installment of Rs.11,117/ was payable on or before 01.10.1988 and subsequent hire installment of Rs.11,117/ each were payable on first day of each April and October of every calendar year.
4. As per agreement, the machine in question stated to have been delivered to defendants vide delivery note No.75 dated 02.03.1987 through the supplier chosen by the defendants only. It is stated that as per the hirepurchase agreement under clause VI defendants were liable to pay interest @ 18% p.a. on the amount of any installment, which was not paid on due date. It was also agreed as per clause II (v) of agreement that the de jure possession of machinery and equipments will remain with plaintiff company and the plaintiff will be entitled to work on it. Similarly, as per clause 2(v)
(a) and (b) of above said agreement, plaintiff company was entitled to terminate the hire purchase agreement upon breach of its terms Page No. 5 of 19 CS No. 36/14/99 6 and conditions by the defendants. It is alleged that except some small payments made by the defendants, defendants failed to pay the installments on due dates and after much follow up and letters dated 14.01.1995 and 28.11.1995 defendants stated to have acknowledged the outstanding amount and made the commitment for its payment but failed to do so. Defendants vide letter dated 16.05.1997 promised to pay the outstanding amount by 06.06.1997. It is stated that since despite acknowledging the outstanding amount defendants remained irregular in payment of amount and failed to pay the total amount despite service of legal notice dated 09.07.1999. It is stated that as on 31.10.1998 a sum of Rs.1,20,271/ was outstanding, the details of which is mentioned in para 14 of the plaint. It is alleged that apart from above said amount, the defendants were also liable to pay the interest. Hence, the plaintiff has filed the present suit for recovery of total sum of Rs. 1,44,292.18/ with the prayer for pendentelite & future interest @ 18%. Plaintiff company has also prayed for possession of the machine HM Film Extruder plant complete with electrical motors etc. supplied to the defendants or in alternate sought decree of sum Page No. 6 of 19 CS No. 36/14/99 7 of Rs.42,566.75/.
5. Written statement was filed on behalf of defendant No.2 taking the objection therein that suit has not been filed by duly authorized person and is based on vague facts. Moreover, the claim of the plaintiff company is barred by limitation. It is also pleaded that defendant No.3 had died on 19.12.1990 i.e. much prior to the institution of the suit. Thus suit against dead person (defendant No.3) is not maintainable. It is also pleaded that the suit is not maintainable within the territorial jurisdiction of Delhi. Moreover, defendant No. l firm has already been dissolved upon the death of defendant No. 3. Thus no partnership firm is in existence and present suit has been filed against a nonexistent firm and is not maintainable. It is stated that plaintiff cannot take benefit of his own wrong as plaintiff company was duly made aware of non existence of firm on the death of defendant No.3 and was also asked to take away the machinery but plaintiff company did not pay any heed to it.
Page No. 7 of 19 CS No. 36/14/99 8
6. While denying the case of the plaintiff simplicitor, it is pleaded that defendants have never acknowledged any alleged amount.
7. Plaintiff company filed the replication controverting therein all the pleadings in the written statement. It is specifically stated that the person who instituted the suit on behalf of the plaintiff company was duly authorized and suit is very much within limitation and is also maintainable within the territorial limitation of Delhi Courts where agreement dated 24.03.1987 was concluded. Moreover, some payments were also received at Delhi.
8. Upon completion of pleadings, the following issues were settled on 24.05.2005: i Whether the plaintiff is entitled to a decree for sum of Rs.
1,44,292.18/ as prayed for ? OPP ii Whether the plaintiff is entitled for pendentelite & future interest ? If so, at what rate ? OPP iii Whether the plaintiff is entitled for decree of possession of machine, i.e., HM Film Extruder plant along with electrical motors as prayed for ? OPP iv Whether the suit has not been filed by the properly authorized person ? If so, to what effect ? OPD v Whether the suit is barred by limitation ? OPD Page No. 8 of 19 CS No. 36/14/99 9 vi Whether the court does not have the territorial jurisdiction to entertain the matter ? OPD vii Whether the firm M/s. Essma Plastic Industries has dissolved prior to the institution of the suit ? If so, to what effect ? OPD viii Relief.
9. On behalf of the plaintiff, three witnesses have been examined. PW1 is Rachna Pandey (Development Officer), PW2 is K. G. S. Murthy and PW3 is Rajesh Kumar (Deputy Manager (Accounts) ). On behalf of the defendants no witness was examined.
10. I have gone through the record and I have also gone through the written arguments filed on behalf of the plaintiff as well as on behalf of the defendants. My findings on each issue are following.
11. Vide order dated 14.07.2014, the present suit was remanded back for decision of all the issues after the Ld. Appellate Court held that the matter is within limitation and this court has jurisdiction to Page No. 9 of 19 CS No. 36/14/99 10 decide the present matter.
ISSUE NO. 4.
Whether the suit has been filed by the properly authorized person? If so, to what effect ? OPD
12. The onus to prove this issue was upon the defendants. As per the pleadings, plaintiff is a Govt. company under the provisions of Companies Act and Sh. Ziauddin, signatory of the plaint is stated to be the principal officer and GPA holder of the plaintiff company, competent and authorized to sign and file the present suit. In the present case, the Board of Director of the plaintiff company did not confer any power to institute the present suit on the signatory of the suit, i.e., Sh. Ziauddin nor the pleadings in the plaint claim existence of conferring any such power upon the signatory. That Sh. Ziauddin himself stated was to be Deputy General Manager in the plaint as well as in the verification but has not placed on record any document to substantiate the same. Further, in order to prove the GPA executed in favour of Sh. Ziauddin who is signatory of the Page No. 10 of 19 CS No. 36/14/99 11 plaintiff company, PW1 entered in to the witness box who had nothing to do with the said GPA. The name of PW1 does not find any mention in the said GPA Ex. PW1/1. The said GPA Ex. PW1/1 has been signed by Sh. M. Ahmed, General Manager and not by the Board of Director and it has been filed in favour of Sh. Ziauddin. However, neither Sh. M. Ahmad nor Sh. Ziauddin entered into the witness box in order to prove the said document and PW1 failed to mention as to by which authority and in which capacity she has entered into the witness box in order to pursue the present suit. No authority letter has been filed by PW1 wherein he has been authorized to pursue the present suit on behalf of the plaintiff company and therefore the evidence tendered by PW1 cannot be relied upon. In Rajgarhia Paper Mills Ltd. Vs. General Manager, Indian Security Press 2000(56) DRJ (Suppl) 764, it has been held by Hon'ble Delhi High Court that "no steps were taken by the plaintiff company to produce the minute books or the Memorandum and Articles of association of the plaintiff company and thus the plaintiff failed to prove that plaint was signed and verified properly or was instituted by a duly Page No. 11 of 19 CS No. 36/14/99 12 authorized person on behalf of the plaintiff". In the present case as well, no Minutes of Meeting was produced by the plaintiff company in order to prove that Sh. M. Ahmed was authorized by the Board of Directors to appoint Sh. Ziauddin as GPA holder of the plaintiff company. Even no Article of Association or Memorandum of Association of the plaintiff company has been produced in order to prove that Sh. Ziaudddin and Sh. M. Ahmed were authorized in course of their official duties to execute any GPA or to institute present suit on behalf of the plaintiff company. Para No. 2 of the plaint contains mere bald allegations that Sh. Ziauddin is one of the principal officer of the plaintiff company but this para finds no mention of the capacity of Sh. Ziauddin in which he contended himself as one of the principal officer. No document also has been filed in order to prove the official capacity of Sh. Ziauddin in instituting the and presenting the present suit. Moreover the plaintif in their evidence did not prefer to examine Sh. Ziauddin or the person who alleged to have executed the alleged GPA and later produced Ms. Rachna Pandey as PW1 in order to prove document Ex. PW1/1 to which she has no concern and she was not present Page No. 12 of 19 CS No. 36/14/99 13 when the said document was executed. Thus, the alleged GPA, undisputedly is neither prepared nor signed on the basis of any decision / resolution of the Board of Directors. Even otherwise, the same is not supported by the copy of Minute Book or the Article and Memorandum of Association of the plaintiff company. Further, Sh. M. Ahmed is not shown to be possessing any legal and valid power to constitute GPA on behalf of the plaintiff company. It is further alleged that the GPA is allegedly attested instrument by some notary public but no document has been produced to prove this fact. The said GPA does not contain any entry or serial number required to be given by the Notary Public in the Notarial register and thus, the said GPA does not have any evidential value. Thus, the present suit is instituted by an unauthorized person and therefore this issue is decided in favour of the defendants and against the plaintiff.
ISSUE NO. 7.
Whether the firm M/s. Essma Plastic Industries has dissolved prior to the institution of the suit ? If so, to Page No. 13 of 19 CS No. 36/14/99 14 what effect? OPD.
13. The onus to prove this issue was upon the defendants. The plaintiff in their evidence have relied upon the partnership deed dated 25.10.1984 of M/s. Essma Plastic Industries by virtue of which the partnership consisted of Bimla Devi and Naresh Kumar. Admittedly Bimla Devi died on 19.12.1990. The present suit was filed in December 1999. Thus, as per the version of the plaintiff company there were only two partners in the M/s Essma Plastic Industries / defendants out of which one died in 1990 and therefore it cannot be said that there was any partnership firm existing on the date of filing of the suit to which legal representatives of deceased partner could be taken in. Thus, the suit has been filed against a nonexistent firm and against a dead person Smt. Bimla Devi and thus, not maintainable against a nonexisting firm and hence, it is proved that the no firm was in existence on the date of filing of the suit. The plaintiff did not even agree to amend the plaint after having acquired knowledge about the death of Smt. Bimla Devi or the nonexistence of the firm. Thus, this issue is also decided in Page No. 14 of 19 CS No. 36/14/99 15 favour of the defendants and against the plaintiff. ISSUE NO. 1.
Whether the plaintiff is entitled to a decree for sum of Rs. 1,44,292.18/ as prayed for ? OPP
14. The onus and burden to prove this issue was upon the plaintiff. In order to discharge his onus, the plaintiff has filed affidavit and has produced PW3 Sh. Rajesh Kumar who has proved the document Ex. PW3/1 in order to show that Rs. 1,20,271/ was due and payable as on 31.10.1998 against the defendants. He stated that Ex. PW3/1 is the statement of the alleged due amount of Rs. 84,302/ as balance out of the total 13 installments and Rs. 35,631/ of further interest on delayed payment. The said document Ex. PW3/1 has been signed by Branch Manager Sh. Sudhir Soni of Ludhiana Branch. PW3 admitted in his cross examination that Sh. Sudhir Soni is still in service of the plaintiff company and is working at the Delhi office but the plaintiff did not take any step to produce that witness in the Page No. 15 of 19 CS No. 36/14/99 16 witness box in order to prove the document prepared by him. PW3 even could not recognize the signatures of other two persons on the said document Ex. PW3/1. PW3 was nowhere present in the picture nor had signed the document Ex. PW3/1 and thus, the document Ex. PW3/1 is not proved as per the provision of Indian Evidence Act. Further, PW3 stated that the statement of account of the defendants was maintained by the plaintiff company at the Branch office Ludhiana. However, no statement of account or ledger has been filed on record by the plaintiff company. Section 34 of Indian Evidence Act clearly provides that "Entries in Books of Account, including those maintained in an electronic form, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statement shall not alone be sufficient evidence to charge any person with liability." In the present case, plaintiff miserably failed to produce the entries which are regularly kept in the course of business, i.e., statement of account of the defendants company admittedly maintained at the branch office Ludhiana though they were required to do so in order to Page No. 16 of 19 CS No. 36/14/99 17 prove the liability of the defendants. The only document relied upon by the plaintiff company in order to prove the liability of the defendants is Ex. PW3/1, which has not been proved as per the provision of Indian Evidence Act and does not even contain the date of preparation of the alleged document. The affidavit of PW3 does not claim that Ex. PW3/1 are the entries in the books of account regularly kept in the course of business. Further no date of receipt of amount of Rs. 97,980/ has been shown in Ex. PW3/1. Further, as per document relied upon by the plaintiff Ex. PW2/22 st there was a timely payment of the 1 installment by defendants on 02.04.1988 which had entitled the defendants rebate of Rs. 1,696/ as per calculation sheet Ex. PW2/3. This fact of entitlement and grant of rebate is evident from the note dated 02.04.1988 given on Ex. PW2/22. Thus, this timely payment of first installment contradict the claim of the plaintiff in para 12 of the affidavit of PW2 wherein he had stated that the default of making payment of installment was there on behalf of the defendants from the very beginning. The plaintiff has miserably failed to file any document in order to show the true account books of their statement in order to depict the Page No. 17 of 19 CS No. 36/14/99 18 installmentwise due amount and installmentwise received amount with grant of benefit of rebate in case of timely payment. Thus, the plaintiff have failed to produce books regularly kept in the course of business despite having the account books at Ludhiana Branch and the officers employed therewith. Thus, to prove Ex. PW3/1 they failed to produce any evidence in order to prove liability of the defendants and thus, this issue is decided in favour of the defendants and against the plaintiff.
ISSUE NO. 2 & 3.
ii Whether the plaintiff is entitled for pendentelite & future interest ? If so, at what rate ? OPP iii Whether the plaintiff is entitled for decree of possession of machine, i.e., HM Film Extruder plant along with electrical motors as prayed for ? OPP
15. Since issue No. 1 is decided against the plaintiff, therefore the issue No. 2 & 3 on the same ground are also decided against the plaintiff and in favour of the defendants.
Page No. 18 of 19 CS No. 36/14/99
19
RELIEF
16. In view of issuewise findings given above, suit of the plaintiff is dismissed with no order as to costs. Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Announced in open Court (Namrita Aggarwal)
on 02 Day of January, 2015 CCJ cum ARC1 (Central)
nd
[This order contains 19 pages.] Tis Hazari Courts, Delhi.
Page No. 19 of 19 CS No. 36/14/99