Delhi District Court
M/S Tradoon Agro Products Pvt Ltd vs R K Singh on 15 May, 2024
IN THE COURT OF SH. LOKESH KUMAR SHARMA
DISTRICT JUDGE (COMMERCIAL COURTS)-05,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI
In the matter of
CS (COMM) 404/21
CNR No. DLST01-009581-2021
M/S TRADOON AGRO PRODUCTS PVT LTD
Through its Director
Prem Raj Sagar,
Having its registered office at:
A-09, Kalyani Apartments,
Sector-6, Vasundhra,
Ghaziabad, UP- 201012 ..... Plaintiff
Versus
R K SINGH
Address - A-7/315,
Aya Nagar Phase -IV,
Near Mother Mary Public School
New Delhi-110047 ..... Defendant
Institution of the Suit : 04.12.2021
Arguments concluded on : 15.05.2024
Judgment pronounced on : 15.05.2024
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 1 of 29
JUDGEMENT
1. The present suit for recovery of Rs. 22,42,500/- (Rs. Twenty Two Lakhs Forty Two Thousand Five Hundred Only) along with pendent-elite and future interest at 18% per annum along with costs has been filed by the plaintiff.
2. Brief facts:- As per plaintiff who is claiming itself to be a company duly incorporated under the provisions of Companies Act, 1956, having its registered office at A-09, Kalyani Apartments, Sector-6, Vasundhara, Ghaziabad-201012, (UP), Sh. Prem Raj Sagar, was stated to be one of the directors of the plaintiff's company who was duly authorized vide Board Resolution dated 05.11.2020, to sign, verify and institute the present suit and to give oral as well as documentary statement on behalf of the Plaintiff's company being fully conversant with the facts of this case.
Plaintiff was stated to be interested in setting up a Rice Mill at Raipur, therefore he had approached the office of Agriculture & Processed Food Products Export Development Authority (APEDA) at 3rd Floor, NCUI Building, 3, Siri Fort Institutional Area, August Kranti Marg, New Delhi-110016, in October, 2018, where he met Sh. V.K. Vidyarthi, General Manager.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 2 of 29Since Plaintiff knew that APEDA could assist him in setting up the unit, so he met Sh. V.K. Vidyarthi.
It was stated that during the meeting when plaintiff expressed his requirement for setting up a rice Mill in Raipur, Mr. V.K. Vidyarthi had called the defendant and introduced him to the plaintiff and while praising his reliability, stated that he would get all the things done. Subsequently, in another meeting with defendant and Mr. Vidyarthi, in the latter's office, defendant assured of his expertise in arranging land, obtaining permissions from different Government departments, preparing DPR and securing subsidies for the plaintiff company. Defendant undertook all the responsibility to set up the entire unit within a time bound schedule. On the suggestion of defendant, a company namely Tradoon Agro Products Pvt Ltd was formed for the aforementioned purpose.
It was stated further that when Plaintiff had asked for fee, then defendant had proposed a profit sharing arrangement with 25% to Sh. Subodh Vidyarthi, brother of Mr. V.K. Vidyarthi, and 25% to Ms. Saloni Bharti Singh, daughter of defendant, and defendant had sent the KYC details of Saloni Bharti Singh. Not only this, but also Saloni Bharti Singh and Sh. Subodh Vidyarthi signed and submitted Form No. INC-9 (Declaration) to become Promoter. Thereafter, Smt. Saloni Bharti Singh became a Promoter CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 3 of 29 and it was decided that from the family of Shri Prem Raj Sagar, one Promoter would quit and Sh. Subodh Vidyarthi would replace him/her.
It was stated that in the meeting held in January, 2019 defendant had asked for Rs.15,00,000/- from the Plaintiff as it would be required to give cash payments to different persons of different authorities for getting the work done including his fee. Defendant also claimed to have provided similar services in Khagria, Bihar.
It was averred that the defendant had allured the plaintiff by giving a very rosy picture of Khagria and assured the plaintiff that he would make huge profits after establishing a Rice Mill there. Defendant dishonestly induced Sh. Prem Raj Sagar to transfer Rs.15,00,000/- from his personal account maintained with State Bank of India, I.O.C., Lodhi Road, New Delhi, through RTGS in his account on two different dates (Rs. 5,00,000/- on 11.02.2019 and Rs. 10,00,000/- on 14.02.2019). Sh. Prem Raj Sagar had transferred this amount on behalf of M/s Tradoon Agro Products (P) Ltd. for the work of the plaintiff.
It was stated that after showing a piece of land at Khagria, defendant started insisting the plaintiff to transfer Rs. 10,00,000/-. Hence, on the continuous insistence of defendant, CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 4 of 29 plaintiff had transferred the aforementioned amount from the account of Tradoon Agro Products Pvt. Ltd. to the account of M/s Pristine Mega Food Park Pvt. Ltd. on 03.06.2019, and after transfer of this amount, defendant started blackmailing the plaintiff on various pretexts.
It was averred that despite receiving Rs. 10,00,000/- from the plaintiff company, defendant had done nothing till June 2019, and when plaintiff contacted M/s Pristine Mega Food Park Pvt. Ltd. through mails as well as telephone, the same were replied by M/s Pristine Mega Food Park Pvt. Ltd. on 03.09.2020 via e- mail, in which they acknowledged the receipt of Rs. 10,00,000/- and stated that plaintiff's plot had been sold to M/s Sontsa Beverage & Foods Pvt. Ltd at the behest of defendant and after knowing this, Plaintiff had immediately contacted Mr. R.K. Singh. However, instead of solving the matter, defendant started harassing, pressurizing and blackmailing the plaintiff in various manners as he actually wanted that plaintiff would drop the idea of establishing Rice Mill and to forget about the funds spent by him. One of the techniques adopted by the defendant was revising the profit sharing as 60% to Saloni Barti Singh, 25% to Sh Subodh Vidyarthi and the rest 15% to the plaintiff. This condition was stated to be deliberately imposed on the plaintiff with the belief that plaintiff would definitely retreat and forget about his money.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 5 of 29It was stated that upon the receipt of legal notice, M/s Pristine Mega Food Park Pvt. Ltd. returned Rs.10,00,000/- to the plaintiff for the selected plot, which was admittedly sold by M/s Pristine Mega Food Park Pvt. Ltd.
It was stated that plaintiff had requested the defendant to return the amount of Rs.15,00,000/- as defendant had utterly failed in providing any kind of service but despite repeated requests and demands, defendant had not returned the amount.
It was stated that despite repeated requests defendant had failed to pay the outstanding amount of Rs.15,00,000/- along with interest @ 18% per annum due on him, the plaintiff had served a legal notice upon him on 22.09.2020, however, despite service of the said notice, defendant had neither made the payment nor replied the said notice.
3. It was averred that plaintiff had also applied for Pre- institution Mediation with SDLSA-South, however, despite issuance of two notices, neither the defendant had appeared nor any intimation was received from his side for the mediation, hence non-starter report was issued by SDLSA on 02.08.2021.
4. Cause of action was stated to have arisen firstly when the defendant had promised to provide the services to the plaintiff CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 6 of 29 for setting up a rice mill in Khagaria and it further arose when defendant had refused to return the amount of Rs. 5,00,000/- and Rs.10,00,000/- transferred by the Plaintiff on 11.02.2019 & 14.02.2019. The cause of action was stated to have arisen on each and every occasion, when the plaintiff had asked the defendant to return the sum of Rs.15,00,000/- and had further arisen on 22.09.2020, when the legal notice was served upon the defendant by the plaintiff and cause of action again arose when the plaintiff approached the SDLSA, Saket, New Delhi, for pre-litigation mediation and it further arose when the defendant was served with the notices from the South District Legal Service Authority. The cause of action further arose when the Non Starter Report dated 02.08.2021 was issued. The cause of action was stated to be still continuing as the defendant had failed to pay the amount due against him despite service of the legal notice.
5. Since the defendant had promised to provide the commercial services at Delhi and the plaintiff had also made the payments to the defendant in his bank account located in Delhi, hence this court was stated to have territorial jurisdiction to try and decide the present suit.
6. In the light of the aforesaid facts and circumstances, the plaintiff had prayed for passing of a decree of recovery of Rs 22,42,500/- along with pendent-elite and future interest @ 18% per CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 7 of 29 annum in favour of the plaintiff and against the defendant and Cost of the suit be also awarded in favour of the plaintiff and against the defendant.
7. Upon service of notice, the defendant also appeared to contest the case of plaintiff on its merits and filed his written statement on record, wherein he had taken a preliminary objection that plaintiff was guilty of concealment of material facts as well as for not approaching the court with clean hands. No cause of action was stated to have arisen in favour of the plaintiff and against the defendant.
8. On merits it was stated that a professional fee of Rs. 25,00,000/- was agreed by the plaintiff to be paid to the defendant. Defendant had also spent considerable amount on visits to Khagaria alongwith plaintiff and other professionals for preparation of detailed project report (DPR). Except for the paras which were either specifically admitted or essentially or purely constituted a matter of record, rest others were denied by him as wrong and incorrect.
9. To this written statement of the defendant, plaintiff had also filed its replication, wherein the preliminary objections taken by the defendant were denied by him and the contents of plaint were reiterated on merits.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 8 of 2910. On the pleadings of the parties, Ld. Predecessor vide his order dated 30.01.2023, was pleased to frame following issues:
1. Whether the plaintiff is entitled for recovery of the suit amount as prayed for? OPP
2. Whether plaintiff is entitled to the interest? If so, at what rate and for which period? OPP
3. Relief.
11. In order to prove its case by preponderance of probabilities, plaintiff had examined one witness namely Sh. Prem Raj Sagar, Director of the Plaintiff's company, who had placed on record, his affidavit Ex. PW1/A in his examination-in-chief, wherein he had reiterated the contents of plaint on solemn affirmation. Besides this, he had also placed on record the following documents:-
i) Certificate of incorporation of plaintiff comapny Ex.PW1/1.
ii) Memorandum of association of plaintiff
company Ex.PW1/2.
iii) Board of Resolution of Plaintiff company authorizing its A.R. Prem Raj Sagar to file and institute the present suit Ex.PW1/3.CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 9 of 29
iv) Form INC/9 signed by Solani Bharti Singh Ex.PW1/4.
v) Form INC/9 signed by Subodh Vidharthi Ex.PW1/5.
vi) Affidavit singed by Subodh Vidharthi
Ex.PW1/6.
vii) Affidavit of Solani Bharti Singh Ex.PW1/7.
viii) Copy of the SBI Passbok of the PW Ex.PW1/8.
ix) Email record exchanged between plaintiff and defendant and M/s. Pristine Mega Food Park Pvt. Ltd. (running into 17 pages) Ex. PW1/9.
x) Printout of whatsapp chat between the directors of the plaintiff and defendant (running into 4 pages) Ex. PW1/10.
xi) Copy of WhatsApp chat between director of plaintiff and Sh. V.K. Vidharathi (running into 2 pages) Ex. PW1/11.
xii) The legal notice dated 22.09.2020 Ex. PW-1/12.
xiii) Original postal receipt of dispatch of legal notice Ex. PW1/13.
xiv) Track report of India post showing the delivery of notice Ex. PW1/14.
xv) Certificate u/s 65 B Indian Evidence Act Ex.
PW-1/15.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 10 of 29xvi) Non starter report of the DLSA Ex. PW-1/16.
During his cross-examination conducted by Ld. Counsel for the defendant, PW1 had reaffirmed the contents of the plaint and had stated that he met with the defendant in November, 2018 through Mr. V.K. Vidharathi, for establishing Rice Mill, however he could not remember the exact date. He had denied the suggestion that the consultation fee of defendant for the aforesaid purpose was decided as Rs.25,00,000/- or that he had paid only Rs.15,00,000/- as consultation fee or that a sum of Rs. 10,00,000/- was still due towards defendant.
It was stated by Plaintiff that initially two sites were discussed one is Raipur and second one in Khagaria (Bihar). He had volunteered that he had expressed his interest in Raipur because the land price was cheaper there as compared to Khagaria.
As per this witness, he was introduced to defendant by one Sh. V. K Vidyarthi, when defendant had told him about sharing of fifty percent of the profits by his daughter Saloni Bharti Singh and Subodh Vidyarthi brother of V. K Vidyarthi. The company was also stated to have been formed by the plaintiff at the instance of the defendant with 25 per cent share holding in the name of daughter of defendant and 25 per cent in favour of Subodh Vidyarthi.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 11 of 29Witness had admitted that raw material was costlier in Raipur than Khagaria. He had not checked if the MSP in Raipur, Chattisgarh was higher than in Bihar and he had believed the claim of defendant that Paddy was costlier in Chattisgarh.
During his further cross-examination conducted by ld. Counsel of defendant on 02.08.2023, PW1 had stated that on 28.03.2019, he along with his son and someone from defendant's side, possibly the defendant himself had gone to Khagaria Bihar, to inspect the site. He had denied the suggestion that during the visit of site there were six persons namely Mr. V.K. Vidharthi, Mr. Islam, Mr. Mohd., Defendant, plaintiff and his son. They had travelled by Air from Delhi to Patna, where defendant had arranged a vehicle to take them from Patna to Khagaria and travel as well as boarding and lodging expenses were borne by defendant. He had denied the suggestion that defendant had arranged the meeting with the official of Milltech at that time, however, he had volunteered that the official of the Milltech had come on his own in the guest house of M/s. Pristine. He had admitted that defendant had to help them in running the business after the erection of the rice mill.
It was stated further that they had met the official of M/s. Pristine in Delhi prior to visiting Khagaria and they met Mr. Amit Pandey DGM of M/s. Pristine at Delhi about 2-3 times and in CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 12 of 29 meetings, other officers of M/s. Pristine were also stated to be present and it was decided that the land would be available @ 1.08 Cr. per acre with the plot size of 3 acres valuing at Rs. 3.24 Cr, however, nothing was finalized for lease of the said plot.
Draft agreement was also stated to have been arranged by M/s Prestine from NABARD in favour of the Plaintiff. However, no lease agreement was ever executed or signed by either of the parties. The estimated cost of setting up of the rice mill was about Rs. 10 crores, in which plaintiff had to invest Rs. 1 crore and 35 per cent was stated to be the subsidy and rest of the amount was to be arranged from the bank by the defendant which included the cost of land as well.
Since the parties were holding 50 per cent stakes each (plaintiff on the one side and Subodh Vidharathi and Saloni Bharti Singh on the other side), hence business was to run jointly. He was stated to be having no experience of running the rice mill. However, it was denied by him that since he had no experience, hence defendant had to manage the entire business of the rice mill. At the time of incorporation of Plaintiff company, it had four promoters namely PW1 himself, his son, his wife and Ms Saloni Bharti Singh and it was initially agreed that two promoters from each side and Subodh Vidharathi were to be made promoters. Since the documents of Subodh Vidharathi were not in order, CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 13 of 29 hence, it was decided that PW1's wife would resign from the promoters/shareholding and Subodh Vidharathi would be inducted in her place. However, no minutes of such meeting were recorded. Since his son and wife were holding majority share, so it was decided that PW1 and his son shall be the directors with signing authorities with the bank. Even an auditor was also appointed by the Board of Directors, however, he could not remember his name. He had specifically stated that he had never backed out from setting up of Rice Mill.
The following suggestions were denied by him as wrong that because of his alleged back out, the defendant had suffered the loss of reputation and integrity in the market or that all the expenses were incurred by the defendant for setting up of Rice Mill without giving any liability to the Director. It was further denied by him that the consultation fee of defendant was determined as Rs.25,00,000/- but he was paid only Rs. 15,00,000/- and remaining amount of Rs.10,00,000/- was still due towards the defendant or that he was deposing falsely.
12. Thereafter Plaintiff's evidence was closed.
13. In rebuttal defendant himself appeared in the witness box as DW1 and filed in evidence, his examination-in-chief by way of affidavit Ex. DW1/A, wherein he had reiterated the CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 14 of 29 contents of his written statement on solemn affirmation. He had also placed on record the following documents:-
i) Letter dated 21.08.2019 addressed to M/s.
Pristine Mega Food Park Private Ltd by NABARD Ex. DW1/1.
ii) Sub-Lease Agreement between M/s. Pristine Mega Food Park Private Ltd and Plaintiff company Ex. DW1/2.
iii) Quotation dated 10.05.2019 for rice mill machinery Ex. DW1/3.
iv) Quotation dated 19.04.2019 for rice mill machinery Ex. DW1/4.
v) Quotation dated 14.06.2019 Ex. DW1/5.
vi) Turnkey Offer made by Milltec Machinery Limited Ex. DW1/6.
vii) Quotation dated 10.05.2019 for colour sorter Ex. DW1/7.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 15 of 29This witness was examined-in-chief on 25.10.2023, when he was also partially cross-examined by Ld. Counsel for the Plaintiff, in which he had deposed that he was a business consultant having his own business of medicines in Delhi at Aya Nagar, which was stated to be a wholesale pharmacy business. Since, he was stated to be doing consultancy business in exports, hence Dr. V K. Vidyarthi, who was also working in APEDA, was stated to be known to him for a long period. He had never procured any contract through Dr. V K. Vidyarthi. He could not also tell the no. of persons, who were introduced to him by said V K. Vidyarthi. No document was stated to have been placed on record by him to show that he was into consultancy business. The First Meeting with the Directors of the Plaintiff company was stated to have taken place in the office of Dr. V.K. Vidyarthi. He himself had never setup any rice mill prior to meeting the plaintiff. It was not within his knowledge that the said Dr. V.K. Vidyarthi was in a transferable job or not. He was stated to have held 5-6 meetings with the Directors of plaintiff in the office of Dr. V.K. Vidyarthi in 2019 but could not recall the exact dates and months of such meetings. No written contract was stated to have been executed between the plaintiff and DW1 regarding his engagement as a consultant. He could not even tell the exact date and month of incorporation of plaintiff company which was stated to have been founded in 2019.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 16 of 29He himself had never written any letter to the plaintiff regarding reducing the terms of contract into writing regarding his engagement as a consultant nor any such letter was ever written to him by the plaintiff. He had denied the suggestion that no verbal assurance was ever given to him by the Plaintiff to engage him as a consultant or that he was never engaged as a consultant by the plaintiff. It was admitted by him that no document Ex. DW1/1 to DW1/7 bear the signatures or stamp of sender or the witness himself and had volunteered that since the said documents were sent through email, hence they did not require any signatures of the sender.
Saloni Bharti Singh was stated to be his daughter, whereas Subhodh Vidyarthi was stated to be the brother of Dr. V.K. Vidyarthi. It was also admitted by him that Ex. PW1/4 and Ex. PW1/7 both were bearing the signatures of his daughter at points A and B thereof. He had also further admitted that Memorandum of Association Ex. PW1/2 was also showing the name of his daughter as a promoter since 08.12.2018. However, his daughter was stated to be studying at the relevant point of time, when her name was included in the Plaintiff's company as a promoter.
The email Ex. DW1/P1 sent by him to Gaurav Sagar on 14.11.2018 was actually the email received by him from his daughter on 04.10.2018 and was forwarded to Gaurav Sagar by CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 17 of 29 him. It was further volunteered by him that though initially he was engaged by the Plaintiff company as a Consultant but later on he was requested to manage and run the entire business of the plaintiff company against which 25% of shareholding was offered to him through his daughter. He had admitted the receipt of amount of Rs.15,00,000/- from the account of Prem Raj Sagar in his account. No written contract was stated to be in existence regarding payment of Rs.25,00,000/- to him by the plaintiff as consultancy fee as mentioned in para 13 of his affidavit, which was stated to be only a verbal assurance as volunteered by him.
In his further cross-examination conducted by Ld. Counsel for plaintiff on 02.11.2023, he was stated to have not mentioned the land price for setting up of rice mill either at Raipur or Khagria or even in Jangipur. Even the paddy price for setting up of rice mill at either of those places was also not mentioned by him including the prevailing price of paddy at the relevant point of time.
Similarly, he had also never informed the plaintiff in writing either about the price of land or paddy prevailing at relevant time at the aforesaid three places. The witness himself along with PW1 Prem Raj Sagar, his son Gaurav Sagar and their CA was stated to have visited the Pristine Mega Food Park, however, he could not remember the date, month and year of such CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 18 of 29 visit. Also he could not remember the date of payment of Rs.10 lakhs by the Plaintiff to M/s Pristine Mega Food Park.
Similarly, he could not even remember the number of plot, in respect of which said payment was made. To a specific question put to him regarding non-mentioning of plot number at running page no. 42 of his document Ex. DW1/2, he had stated that the said property was not the plotted property and the demarcated area was allotted as per the requirements of the parties. It was though admitted by him that all necessary approvals from NABARD were to be taken by Pristine Mega Food Park Pvt Limited. He had not filed any documents showing expenses incurred by him as stated in para no.6 of his affidavit. He had no knowledge if document Ex. DW1/2 was written in a standard pattern of M/s Pristine Mega Food Park Pvt Ltd or not. He had never asked the plaintiff to give him any written authorization to deal with the different departments of government and other authorities.
As per this witness, the deal between M/s Pristine Mega Food Park Pvt Limited and the plaintiff was finalized. It was though admitted by him that M/s Pristine Mega Food Park Pvt Limited had sold the said plot to M/s Sontsa Beverage but it was done so, not at his instance or asking. It was further clarified by him that since the said company had already procured permission CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 19 of 29 from NABARD for selling the plot, whereas he himself was insisting for refund of Rs.10 lakhs paid by the Plaintiff. Hence, it was sold by the said company to a third party, who was introduced to M/s Pristine Mega Food Park Pvt Ltd by him only. He could not remember the date, month and year, when the amount of Rs. 10 lakhs was refunded by said M/s Pristine Mega Food Park Pvt Ltd to plaintiff company nor he was familiar with email id of said M/s Pristine Mega Food Park Pvt Limited and after consulting the judicial record, he had replied again that the email id of M/s Pristine Mega Food Park Pvt Ltd was [email protected] and plaintiff's ID to be [email protected] and [email protected]. Though he was familiar with the address of the M/s Pristine Mega Food Park Pvt. Ltd. but he could not remember the same at the time of his cross-examination and after consulting the judicial record, the said address was stated to be 3rd Floor Wing-B, Commercial Plaza, Hotel Radisson, Mahipalpur, NH-8, New Delhi-110037.
He had admitted the legal notice dated 15.06.2021 Ex. DW1/P2 and the address of said M/s Pristine Mega Food Park Pvt Ltd. appearing thereon. He had however no knowledge, if the amount of Rs. 10 lakhs was refunded by the said company to plaintiff after receipt of email and legal notice as well as date, month and year of such refund. It was also admitted by him that CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 20 of 29 the dates on which emails Ex. DW1/3 and DW1/4 were received by him, the land was not chosen or finalized by the Plaintiff. However he could not remember, if had forwarded the emails Ex. DW1/3 to DW1/7 to the Plaintiff or not. No proportion of shareholding was stated to have been settled between the parties despite a proposal having been made by him in that regard of 35% shareholding to the person financing the plaintiff company, and 25% shares for himself for marketing and about rest of the shareholding, he had shown his lack of awareness.
It was though denied by him that he had pressurized the plaintiff to reduce his profit sharing to the extent of 15% and had asked for 60% profit sharing for his own daughter and 25% to Subhodh Vidyarthi. It was further denied by him that due to aforesaid insistence, which was not acceptable to the plaintiff, the project of setting up of the rice mill had failed. Further he had denied the suggestions that plaintiff had never agreed to pay him a sum of Rs.25 lakhs as consultancy fees or that he had taken Rs.15 lakhs from the plaintiff through Prem Raj Sagar on the pretext of giving cash payments to different authorities for setting up of rice mill. It was however admitted by him that he had not given any break up of the said amount received by him towards expenses. He had also denied the suggestion that he along with Vidyarthi had duped the plaintiff and usurped the sum of Rs.15 lakhs. He had categorically stated that no investments were made by his daughter CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 21 of 29 however, he was not aware of any investment was made by Subhodh Vidyarthi or not. It was denied by him that Prem Raj Sagar and his son had gone to Patna at their own expenses through flight on 28.03.2019, however, he had not filed any documents to show such expenses. Other formal suggestions were also denied by him as wrong and incorrect including the suggestion that he was black mailing the plaintiff to increase the share in profit sharing in favour of his daughter etc. DW-2 is Sh. V.K Vidyarthi stated to be working as General manager with APEDA, who had also placed on record, his examination in chief by way of affidavit Ex. DW2/A, wherein he had stated that the parties to the suit were known to him and it was he, who had introduced Prem Raj Sagar and his son to the defendant and the defendant was asked to assist them in setting up of rice mill. After negotiations, the said persons had agreed to pay a sum of Rs. 25 lakhs to the defendant as his professional charges for guiding and assisting them in setting up of rice mill. It was also stated by him that defendant herein had arranged several meetings with the said persons and had spent huge amount for the said purpose and a sum of Rs. 10 lakhs was still due to be paid to the defendant towards balance of his profession charges by the plaintiff.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 22 of 29In his cross-examination conducted by Ld. Counsel for plaintiff on 03.02.2024, his organization was stated to be falling under Ministry of Commerce and Industry, which mandated for export promotion and for facilitation for Agri food products. No specific list of approved consultants was kept in their office. However they used to keep giving references to the concerned persons. Defendant was stated to be known to him for last about 10-15 years, who was doing business of consultancy agri food services. He could not remember the list of referred persons to defendant by him, nor he had any details about number of persons, who had actually engaged the services of defendant. He had no knowledge about stakes of his brother Subodh Vidyarthi in other companies, however, he was aware that his brother had stakes in the plaintiff company but again he had shown his ignorance about the percentage of such stakes and as per his knowledge, his brother was asked by Sh. Prem Raj Sagar to do hand holding for the company but it was not within his knowledge as to whether his brother had also made any investments in the plaintiff company or not. He had categorically refused to authenticate the signatures of his brother as appearing on Ex. PW1/5 and Ex. PW1/6. He had admitted about having whatsapp chats, phone calls and conversation with the plaintiff's representatives but could not authenticate whatsapp chats Ex. PW1/11 as he had not brought his spectacles.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 23 of 29Though Plaintiff company was stated to have paid earnest money to M/s Pristine Mega Food Park and had entered into some agreement with it, however, he was not having any knowledge about the details of said transaction or any of the subsequent events. His brother was stated to be having 25 per cent profit sharing in the plaintiff's company as informed to him. He had no knowledge, if M/s Pristine Mega Food Park had sold the plot in respect of which plaintiff had to paid earnest money of Rs. 10,00,000/- to some other person at the instance of defendant.
Similarly, it was also not within his knowledge as to whether daughter of defendant had any profit sharing stakes in the plaintiff's company or not. He had no knowledge if his brother and daughter of defendant were having 25 per cent stakes each in the plaintiff's company.
It was though denied by him that defendant had started pressurizing the plaintiff for increasing the profit sharing of his daughter to 60 per cent which was not accepted by plaintiff. Though he could not remember the exact date and month, but it was in year 2018 that he had introduced the plaintiff to the defendant and several meetings were stated to have taken place in his office. Though the amount of Rs. 15 lakhs was not given to defendant in his presence, but it was within his knowledge. Though the could not tell the exact date and month of giving of CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 24 of 29 said amount of 15 lakhs but it was stated to be in the year 2018 itself. He did not know the number of visits paid by Directors of plaintiff and defendant to Khagaria.
The amount of Rs. 15 lakhs was stated to have been given by plaintiff to defendant for commissioning of the project, but it was not within his knowledge as to whether plaintiff had actually purchased any land for the said project or not. Similarly, he did not know if defendant had finally purchased any piece of land for the plaintiff in Khagaria or not. He had no documentary evidence to show if any discussion had taken place between the parties regarding purchasing of the machinery or not.
It was also denied by him that due to non corporation of defendant and this witness himself and due to indulgence of defendant in black mailing activities, the rice mill could not be set up by the plaintiff or that defendant had usurped an amount of Rs. 15 lakhs belonging to the plaintiff. Defendant was stated to have rendered his services to many people for setting up of rice mills, but he had no list of such persons. Lastly, it was denied by him that he was deposing falsely at the instance of defendant.
14. Thereafter DE was also closed.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 25 of 2915. I have heard Sh. Neeraj Tyagi and Sh. Indernath Jha, Ld. Counsels representing their respective parties and perused the material available on record.
16. In the light of aforesaid material and evidence as appearing on record, my issue wise findings are as under:
Issue no. 1: Whether the plaintiff is entitled for recovery of the suit amount as prayed for? OPP The onus to prove this issue was upon the plaintiff, however, from the evidence as discussed in detail in the preceding paras, it becomes an established fact on record that plaintiff wanted to set up a rice mill either at Chhatisgarh or in Bihar for which the defendant was got introduced to him by DW-2 V.K Vidyarthi and even receipt of Rs. 15 lakhs has been specifically admitted by the defendant from the plaintiff. Though defendant had claimed it to be his profession fee towards his engagement as a project consultant for his consultancy services which was stated to have been agreed to be paid to the tune of Rs. 25 lacs. However, the fact that despite lapse of such long time since then, the defendant had not initiated any legal action for recovery of his outstanding professional fee is sufficient enough to draw a conclusion that this claim made by the defendant is nothing but an after thought and a cooked up story.
From the cross examination of DW-1, it is further established that defendant himself had been dealing in the CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 26 of 29 wholesale business of pharmacy and did not possess any special qualification or experience in dealing with Agri products, which would have made him an expert or a consultant to render professional consultancy services to his clients. Further he could not establish on record, the number of such rice mills which were got set up by him for different people at any place and any point of time whatsoever.
Though plaintiff had also admitted the suggestion of the defendant during his cross-examination that all the expenses of his travel to Patna and thereafter further to Khagaria as well as boarding and lodging were borne by the defendant, however, defendant on the other hand has failed to show on record as to how many times he had borne such expenses as he had claimed to have arranged several visits of the plaintiff at the site and bearing entire expenses on each occasion. Merely a single visit of the plaintiff through Prem Raj Sagar and his son Gaurav Sagar along with defendant to Khagaria, by no stretch of imagination would have involved an expenditure of Rs. 15,00,000/-.
Even if the argument of the defendant is taken as a gospel truth per se, then also, I have no hesitation in holding that since the project for which defendant was allegedly hired as a consultant ,itself remained incomplete, hence, the defendant should have refunded the amount so received by him to the plaintiff after CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 27 of 29 deducting necessary charges towards expenses actually incurred by him under various heads after providing the details thereof to the plaintiff. However, admittedly defendant had failed to do so.
Therefore, I have no hesitation in holding that plaintiff has successfully discharged the onus of this issue and has proved his entitlement to the recovery of suit amount. Issue is accordingly answered in affirmative and decided in favour of the plaintiff and against the defendant.
Issue no. 2.Whether plaintiff is entitled to the interest? If so, at what rate and for which period? OPP Onus to prove this issue was also upon the plaintiff and in view of my aforesaid findings given to issue no. 1 above, this issue is also answered in affirmative and decided in favour of the plaintiff and against the defendant and it is hereby held that plaintiff shall be entitled to interest at the rate of 8 per cent per annum as against 18 per cent per annum as claimed by him which admittedly appears to be on a much higher side from the date of the institution of the present suit till its actual realization.
Issue no 3: Relief
17. In view of my findings given to issues no. 1 and 2 above, suit of the plaintiff is decreed with costs. Decree sheet be drawn accordingly.
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 28 of 2918. File be consigned to record room after completion of necessary legal formalities in this regard.
ANNOUNCED IN THE OPEN COURT
DATED: 15.05.2024 Digitally signed
LOKESH by LOKESH
KUMAR
KUMAR SHARMA
SHARMA Date: 2024.05.15
17:08:32 +0530
(Lokesh Kumar Sharma)
District Judge (Commercial Court)-05
South/Saket/New Delhi
CS (COMM)404/21 M/S Tradoon Agro Products Pvt Ltd Vs. R K Singh Page 29 of 29