Delhi District Court
M/S. Capital Business Systems Ltd vs M/S. Bhagwati Enterprises on 21 April, 2010
IN THE COURT OF SURESH KUMAR GUPTA,
ADDITIONAL DISTRICT JUDGE03 (EAST),
KARKARDOOMA COURT, DELHI
Suit No.1/08/90
In the matter of :
M/s. Capital Business Systems Ltd.,
Having its Registered Office at :
54/2, Punjabi Bagh,
New Delhi - 110 026. .....Plaintiff
Versus
1. M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
2. Arun Khanna, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
3. Varun Khanna, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
4. Mrs. Varun Khanna, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
5. Mrs. Rajni Mehta, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
Suit No.1/08/90 Page 1 of 41
6. Mr. Ravi Pratap Singh, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
7. Mr. Kapil Khanna, Partner,
M/s. Bhagwati Enterprises,
17, Hotel Continental Annexe,
Regal Building, Connaught Place,
New Delhi
8. Superintendent,
Osmania General Hospital,
Hyderabad - 500 146 (A.P.)
9. Centenary Celebrations Committee of
Afzal Gunj Hospital & Diamond Jubliee
Celebrations Committee (Service to be
effected through its Chairman), Osmania
General Hospital & Osmania Medical College,
Hyderabad (A.P.)
10. Mr. T. P. Gopinath
Chairman, Centenary Celebrations Committee
of Afzal Gunj Hospital & Diamond Jubliee
Celebrations Committee, Osmania General
Hospital & Osmania Medical College,
Hyderabad (A.P.)
11. Mr. R. V. Naidu
ViceChairman, Centenary Celebrations Committee
of Afzal Gunj Hospital & Diamond Jubliee
Celebrations Committee, Osmania General
Hospital & Osmania Medical College,
Hyderabad (A.P.)
12. Dr. L. N. Rao
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Suit No.1/08/90 Page 2 of 41
Osmania Medical College,
Hyderabad (A.P.)
13. Dr. K. S. Narayan Reddy,
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
14. Dr. S. N. Jain,
Secretary General
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
15. Dr. G. N. Rao
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
16. Dr. S. S. Reddy,
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
17. Dr. S. A. Mannan,
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
18. Dr. Mohd. Waliuddin,
Member / Office Bearer,
Organizing Committee,
Suit No.1/08/90 Page 3 of 41
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
19. Dr. G. Sadashivan,
Member / Office Bearer,
Organizing Committee,
Osmania General Hospital &
Osmania Medical College,
Hyderabad (A.P.)
20. State of Andhra Pradesh,
(Service to be effected through its
Chief Secretary) Andhra Pradesh
Secretariat Building, Government of
Andhra Pradesh, Hyderabad (A.P.)
21. Mr. K. Navin Chander,
Deputy Secretary (Finance),
Government of Andhra Pradesh,
Hyderabad (A.P.)
22. The Federal Bank Limited,
Having one of its branches at
Nehru Place, New Delhi .....Defendants
ID No. : 02402C0114912006
Date of Institution : 29.01.1990 (The date of filing is
inadvertently shown as 17.04.1990)
Date of arguments heard : 08.04.2010
Date of order : 21.04.2010
Suit No.1/08/90 Page 4 of 41
J U D G M E N T
1. The plaintiff has filed a suit for recovery of Rs.1987750/ against the defendants with the averments that plaintiff is a limited company incorporated under Companies Act 1956 with registered office at 54/2, Punjabi Bagh, New Delhi. The plaintiff is carrying on the business of printing inter alia security printing of bank drafts, cheques and lottery tickets. Mr. Ajay Khurana is Managing Director and Principal Officer of the company who is well conversant with the facts of the case. He is competent to sign and verify the plaint and file the suit.
2. Defendant No.1 is a partnership firm. Defendant No.2 to 6 are partners of defendant No.1. Defendant No.7 is authorized signatory of defendant No.1. Defendant No.8 is Superintendent of Osmania General Hospital owned by State of Andhra Pradesh. Defendant No.9 is a Committee constituted for the celebration of Osmania General Hospital and College. Defendant No.10 to 19 are the Office Bearers and members of the organizing committee of defendant No.9. Defendant No.20 is the State of Andhra Pradesh. Defendant No.21 was acting for and on behalf of defendant No.9 and in fact placed the order with the plaintiff company. Defendant No.22 is Federal Bank to which cheques drawn by defendant No.1 to 7 in the favour of plaintiff company were presented and returned back with memos not in accordance with the banking norms.
3. Defendant No.9, in pursuance of the permission granted by state of Andhra Pradesh to launch a lottery, through its members and office bearers launched Andhra Swasthya Laxmi Lottery in the year 1986 and placed an order with the Suit No.1/08/90 Page 5 of 41 plaintiff company for printing of instant lottery tickets for the same. The plaintiff was required to print one crore lottery tickets for the draw to be held on 05.01.87. Defendant No.1 to 19 agreed to pay 10 paisa for each ticket as cost of paper and printing. Negotiations and settlement with respect to order were done by defendant No.1 to 7 who were acting on behalf of defendants no.8 to 20. The payment was to be made by defendants No.1 to 7 directly to the plaintiff, but defendants No.8 to 20 undertook and obligated themselves that in case of any default of payment by defendant No.1 to 7 "our organizing committee will take responsibility of the same". Defendant No.21 also assured and promised to pay the plaintiff and ensured that entire payment would be his responsibility.
4. On 18.12.86 an order with the plaintiff was placed by defendant No.21 for and on behalf of defendant No.8 to 20. On 25.12.86 a confirmation letter was sent by plaintiff to defendant No.1 confirming the placement of order of printing of lottery tickets. The plaintiff also received a sum of Rs.2.50 lacs. The plaintiff printed the tickets as ordered and delivered the same through challan No.604 to 606, 608, 610 to 616 & 571. A confirmation letter was sent by plaintiff to defendant No.9 on 06.01.87.
5. The defendants further placed an order of one crore tickets vide letter dated 05.01.87 for the next draw. The denomination of the each ticket was Rs.2/. A sum of Rs.10 lacs was to be paid for the cost and printing of second lot @ 10 paisa per ticket. On 09.01.87 the confirmation was sent by plaintiff to the Chairman of defendant No.9 and details of printing were approved by defendant No.1. Defendant No.1 to 7 informed the plaintiff vide letter dated 16.01.87 to Suit No.1/08/90 Page 6 of 41 stop the printing as they have decided to cancel the next draw of bumper lottery. The plaintiff informed the defendants that all the printing job and other allied process has been completed and he is holding the tickets at their cost and risk. The defendants didn't take the delivery of the second draw and as such the defendants are liable to pay a sum of Rs.20 lacs for both the orders. The defendants made the payment of Rs.5 lacs (including the payment of Rs.2.50 lacs received as an advance) by means of cheque No.435250 dated 01.01.87 of Rs.2.50 lacs, 005035 dated 05.01.87 of Rs.1 lac, draft No.014909 dated 23.01.87 of Rs.50000/ and draft No.015060 dated 06.02.87 of Rs.l lac. The plaintiff gave a concession of Rs.2 lacs by seeing the cause for launching the lottery and thus defendants have to pay a sum of Rs.13 lacs. The defendant No.1 to 7, while admitting the liability of the plaintiff, issued various cheques i.e. cheques No. 435281 dated 09.01.87 of Rs.8 lacs, 435282 dated 14.01.87 of Rs.3.50 lacs, 435313 dated 05.02.87 of Rs.1 lac, 435314 dated 07.02.87 of Rs.1 lac, 435315 dated 09.02.87 of Rs.1 lac, 435316 dated 12.02.87 of Rs.1 lac, 435317 dated 14.02.87 of Rs.1 lac, 435318 dated 16.02.87 of Rs.1 lac. The cheque dated 09.01.87 was received back with remarks "refer to drawer" and thereafter the defendants approached the plaintiff company to return the said cheque and in lieu thereof they would issue three cheques of Rs.1 lac each and accordingly cheque dated 09.01.87 was returned and defendant No.1 issued the cheques No.435319 to 21 dated 19.02.87, 21.02.87 & 23.02.87 of Rs.1 lac each. The defendants represented before the presentation of cheque dated 19.02.87 that they were not able to make arrangement for the encashment of cheque so Suit No.1/08/90 Page 7 of 41 the cheques be not presented till intimation is received from the defendants. These three cheques were not presented to defendant No.22. The cheques were drawn on Federal Bank i.e. defendant No.22. The cheques given prior to 19.02.87 were presented to defendant No.22 for encashment which were returned back dishonoured with the remarks "effects not clear" and present again though in fact there was never any sufficient balance in the account of defendants No.1 to 7 to encash the cheques. Defendant No.22 misrepresented the true picture in connivance with defendant No.1 to 7 and thereby deprived the plaintiff of its dues and therefore defendant No.22 is liable to make good the loss suffered by plaintiff atleast to the extent of cheques issued by defendant No.1 to 7 in the favour of the plaintiff. The State of Andhra Pradesh is also liable to meet the liability being owner of Osmania General Hospital. Moreover, by giving sanction to launch a lottery, the State Govt. represented to the plaintiff that defendants would be able to meet their liability inter alia for any printing job done by it. The printing order was placed by defendant No.21 as such he is also liable to make good the loss sustained by the plaintiff. Statutory notice u/s 80 CPC dated 11.01.89 was served upon the defendants but in vain. Hence, this suit.
6. The application to amend the written statement filed by defendant No.9 was allowed vide order dated 08.05.00. Defendant No.9 filed the amended written statement. Defendant No.9 contested and resisted the suit by filing separate written statement wherein preliminary objection to the effect that there is no contractual relationship for the liability of the suit amount between the Suit No.1/08/90 Page 8 of 41 defendant No.9 and plaintiff, limitation and maintainability are raised. On merits, it is averred that the contract is between the lottery committee and defendant No.1 to organize the lottery. There is no privity of contract between the plaintiff and defendants. Defendant No.8 to 20 never entered into an agreement or contract with the plaintiff for the printing of lottery tickets in the year 1986. Defendant No.8 to 20 never agreed to pay 10 paisa of each ticket as cost of paper and printing. Defendants never asked the plaintiff to print one crore lottery tickets for the draw dated 05.01.87. No contract was signed between the plaintiff and lottery committee represented by defendant No.8 to
20. The only contract was between lottery committee and defendant No.1 which makes it obligatory for the defendants to place order for printing specific number of lottery tickets and also to accord permission to defendant No.1 to lift a specified number of printed tickets. This was made a part of contract between defendant No1 and lottery committee to avoid misuse of tickets by defendant No.1 and printer. Such control over the printing the lifting of printed tickets is excerised through executive orders on behalf of lottery committee. Payment for the printed material is not obligatory duty of defendant No.8 to 20. The defendant No.1 is liable for any act of commission or omission. The plaintiff has to work out his rights and remedies against defendant No.1 as per agreement between defendant No.1 and defendant No.8 to 20.
7. Defendant No.9 doesn't admit that defendant No.21 assured and promised to the plaintiff that entire payment would be his responsibility. The letter dated 18.12.86 is only in the nature of executive order. The executive order has to be Suit No.1/08/90 Page 9 of 41 given to the plaintiff who was choosen as printer by defendant No.1. The order dated 18.12.86 is not a contract between defendant No.8 to 21 and plaintiff as defendant No.21 has no power to enter into a contract or agreement with the plaintiff. Letter dated 18.12.86 clearly states that it is to be rectified by an agreement between the plaintiff and the competent authority. Assuming without admitting, it is only the defendant No.1 who has to enter into a contract with the plaintiff. Defendant No.1 has contractual obligation with regard to the printing of lottery tickets and payments thereof. The plaintiff and his printing press were not known to defendants No.8 to 21.
8. Defendant No.21 is one of the members of lottery committee and is Joint Secretary, Deptt. of Finance, Govt. of Andhra Pradesh. Defendants No.8 to 20 requested defendant No.21 to contact the defendant No.1, an organizing agent, for the placement of an order of printing of lottery tickets in December, 86. Defendant No.21 was not empowered to place any order directly on the plaintiff to print lottery tickets. He was only empowered to contact defendant No.1 and inspect the printing press selected by defendant No1. and place an executive order for printing of lottery tickets through defendant No1. Defendant No.21 has no authority to enter into separate agreement and letter dated 18.12.86 placing an order for printing is only done through contractual obligation of the lottery committee for placing order of printing of lottery tickets. In the absence of separate contract between plaintiff and defendant No.8 to 21, the plaintiff cannot make members of committee liable to pay for defendant No.1. The plaintiff has committed breach of the contract with defendant No.1 as tickets Suit No.1/08/90 Page 10 of 41 were not printed in time and material supplied by defendant No.1 was utilized in December, 1986 itself for printing of HP Lotteries and this fact is proved by the presence of micro lottering meant for printing the tickets of Andhra Swasthya Laxmi Lottery on the printed tickets of Golden Instant Super Weekly lottery for HP for draws held on 16.01.87, 23.01.87 & 30.01.87. It is submitted that pending a definite agreement between plaintiff and first defendant, defendant No.21 inspected the printing press and issued executive order for printing of one crore tickets in the denomination of Rs.2/. The letter dated 18.12.86 has to be read with the original agreement between defendant No.1 and lottery committee because the agreement makes it mandatory for the lottery committee to place the order for the printing of first lot of lottery tickets by the plaintiff. The letter itself doesn't constitute an agreement between defendant No.21 and plaintiff because neither defendant No.21 nor any other member of the organizing committee has power to enter into an agreement with the plaintiff as per contract entered into in between defendant No1. and lottery committee and only defendant No.1 with the prior approval of lottery committee could enter into such a contract with the plaintiff. Hence, the letter dated 18.12.86 is an executive order which was written on behalf of lottery committee by defendant No.21. The letter doesn't make lottery committee liable for payment of dues of defendant No.21.
9. Defendant No1. to 7 informed the plaintiff on 16.01.87 to stop the printing of 2 crore tickets as defendant No.8 to 21 got proof that material supplied by defendant No1. is used for printing tickets of Golden Instant Super Weekly Suit No.1/08/90 Page 11 of 41 lottery for Himachal Pradesh for the draws dated 16.01.87, 23.01.87 & 30.01.87. The plaintiff has deliberately diverted the material supplied by defendant No.1 and thereby forfeited his right to claim any cost from the defendants. The plaintiff was asked to give proof of his claim that material meant for the lottery was intact. The plaintiff not only failed to produce the proof of keeping the material intact but misled the committee by a letter dated 13.05.87 by stating that a fire engulfed the factory in Delhi in the last week of April, 87. The plaintiff has not furnished the details. They have not made any payment to the plaintiff. Defendant No.1 might have paid the amount. The statement that concession of Rs.2 lacs was given cannot be verified from them. The plaintiff is not liable for any amount from defendant No.9.
10. The Govt. of Andhra Pradesh granted permission vide GOR No.1818 dated 31.07.86 to Diamond Jubilee Celebration Committee of Osmania General Hospital to conduct a lottery (Annexure D9/1). The Superintendent of Osmania General Hospital vide letter dated 08.09.86 informed State of Andhra Pradesh about the constitution of lottery committee under the chairmanship of Collector, Hyderabad (Annexure D9/2). Defendant No.9, in pursuance of the said permission, entered into an written agreement with defendant no.1 on 15.08.86 which is annexure D9/3. Clause 4 of the agreement says that "The agent shall appoint its own staff at various places and organize the lottery in such manner as they deem fit and in accordance with the Government of India guidelines. The committee shall not have any responsibility or liability for any claim of the staff that may be employed or engaged, commission agents, sub Suit No.1/08/90 Page 12 of 41 agents etc". Defendant No.21, though not member of Diamond Jubilee Committee, was nominated by State of Andhra Pradesh to see that there was no violation of the guidelines of Govt. of India or the terms of the permission granted by State Govt. Defendant No.1 appears to have entered into an agreement with the plaintiff but no copy is supplied to defendant No.9. Neither there is no agreement between defendant No.9 and plaintiff not there is any tripartite agreement between plaintiff, defendant No.1 and defendant No.9 till date. No cheque was issued to plaintiff by defendant No.9. Defendant No.1 informed defendant No.9 vide letter dated 09.03.87 about the use of micro lottering of Andhra Swasthya Laxmi Lottery in Golden Instant Super Weekly lottery of H.P. and forwarded six lottery tickets. The same is annxure D9/4. Defendant No.1 was instructed vide letter dated 18.03.87 to launch criminal proceedings against the plaintiff which is annexure D9/5. Plaintiff vide letter dated 13.05.87 informed defendant No.9 that a fire took place in factory of Delhi vide annexure D9/6 but no detailed information was given.
11. Defendant No.21 filed the separate written statement wherein preliminary objections qua maintainability, limitation and privity of contract are taken. On merits, it is averred that he issued a letter dated 18.12.86 for placing an executive order pending execution for enforceable agreement. The directions were given in the letter that delivery of printed tickets should be completed by 03.01.87. The plaintiff had delivered tickets to the tune of Rs.3538 lacs on 04.01.87 and said tickets cannot be taken into account as they were delivered after the time fixed for the delivery. It is submitted that even if a valid contract Suit No.1/08/90 Page 13 of 41 had been concluded in pursuance of letter dated 18.12.86 the complete contract stands frustrated for non complying the schedule of delivery and consequently plaintiff could not have enforced the contract. The terms of the letter shows that plaintiff should assure that printing should be done in such a manner that the delivery starts from 26.12.86 and completed by 03.01.87. The payment shall be made by the first defendant and in case of default, the ninth defendant would take the responsibility. The letter is subject to condition that an agreement shall be entered into after fulfilling the condition of the contract. No agreement was concluded in pursuance to the letter dated 18.12.86. No right would accrue to the plaintiff to claim any amount under the letter as there was no valid or enforceable contract between the parties. It is submitted that even assuming without admitting that plaintiff had supplied 61.65 lacs tickets he would be eligible for Rs.616500/ out of which a sum of Rs.5 lacs has already been paid. The plaintiff didn't print the tickets at all. The plaintiff diverted the micro scopic lettering to Haryana State Lottery by committing breach of trust.
12. Defendant No.22 contested the suit and filed the written statement wherein preliminary objections qua verification of suit, misjoinder, cause of action and allegations are vexatious are taken. On merits, it is averred that Mr. Ajay Khurana is not the Managing Director and Principal Officer of the plaintiff company. It is wrong that Mr. Ajay Khurana is competent and duly authorized to sign, verify the plaint and institute the suit. It is wrong that plaintiff is Private Limited Company incorporated under Indian Companies Act. The cheques in question were returned in the standard reason memo format used by Suit No.1/08/90 Page 14 of 41 all the banks. The reasons mentioned therein are the common one denoted and utilized by all the banks. The memo conveyed the state of drawers account vis avis the cheques at the time of presentation and banks are not permitted to inform the true picture of account or its general operation. The plaintiff at no point of time sought advice or credit report from them. The plaintiff knew the financial difficulty of the account holder as plaintiff deferred presentation of the cheques based on the request of account holder. The bank is not involved in any of these delebration and there is no connivance with defendant No.1 to 7. The plaintiff presented the cheques knowing that they will be returned back. The cheques were dishonoured by giving the reasons. The cheque is either honoured or dishonoured depending upon the availability of funds in the account holder. The reason 'refer to drawer' conveys that the balance in the account is not sufficient to honour the cheque. The cheques were dishonoured correctly by the bank with the reason "effects not clear and present again"
which means that balance was not sufficient to honour the cheque and it expect some credit to the account and holder in due course can try for encashment by presenting the cheque once again. The plaintiff didn't present the cheque again for encashment after dishonour. The plaintiff himself admitted in the plaint that in fact there was never any sufficient balance in the account of defendant No.1 to 7 to encash the said cheques. It is wrong that the bank misrepresented the true picture to the plaintiff or connived with defendant No.1 to 7. The allegations are made with an ulterior motive. There is no privity of contract or agreement with the bank. No cause of action ever arose against the bank. The Suit No.1/08/90 Page 15 of 41 suit of the plaintiff be dismissed visavis answering defendant.
13. The plaintiff filed the replications to the written statements of defendant No.9 & 21 wherein averments of written statements were controverted and reiterated the stand taken in the plaint.
14. Defendant No.21 filed the written statement on 08.05.1990. Power of Attorney on his behalf was filed on 26.04.90 and thereafter he didn't put his appearance since 06.12.95. The defendants No.1 to 7, 12, 13, 15, 16, 18 & 19 were proceeded exparte vide order dated 12.01.94. The defendants No.8, 10, 11, 14, 17 & 20 were proceeded exparte on 11.07.94.
15. Following issues were framed for trial on 06.12.95 by Hon'ble High Court of Delhi which are like this :
1) Whether the plaint has been signed, verified and suit instituted by a duly authorized person ? OPP.
2) Whether the suit against defendants is not maintainable in the absence of privity of contract between the plaintiff and defendant 8 to 20 ? OPD.
3) Whether the cause of action of the plaintiff, if any, is only against defendant No.1 with whom alone he had a contract to print and supply the lottery tickets ? OPD.
4) Whether the plaintiff is in breach of the contract in having failed to print the tickets and having used the material for printing of lottery tickets of other States viz. Himachal Pradesh as set out in para 9 of the written statement of defendant No.9 ? OPD.
5) Whether the letter dated 18.12.1996 constitutes any agreement between Suit No.1/08/90 Page 16 of 41 the plaintiff and defendant No.21 ? If the answer is in the affirmative, effect thereof ?
6) Whether the suit is not bad for misjoinder of defendant No.22 ? OPP.
7) Whether the defendant No.22 dishonoured the cheques when there was credit balance in the account of defendant No.9 and returned the cheques with memos contrary to banking practice and norms ? OPP.
8) Whether the suit is barred by limitation ? OPD.
9) Whether the letter dated 18.12.1996 was merely an executive order issued by defendant No.21 pending execution of an enforceable contract between plaintiff and defendant No.1 ? OPD.
10) Whether the plaintiff adhered to the delivery schedules for printing and supply of tickets and supplied the same in accordance with it ? OPP.
11) To what amount is the plaintiff entitled and from which of the defendants ? OPP
12) To what amount of interest the plaintiff is entitled, at what rate and for what period ? OPP.
13) Relief.
16. An application U/o 14 rule 5 CPC filed by defendant No.9 was allowed on 20.11.01 and accordingly issue No.7 was modified to the extent that instead of "defendant No.9", it may be read as "defendant No.10".
17. Following additional issues were framed for trial on 07.05.02 Hon'ble High Court of Delhi which are like this :
1) Whether defendant No.21 had any authority from defendant No.9 to enter Suit No.1/08/90 Page 17 of 41 into any contract with the plaintiff for and on behalf of defendant No.9 ?
2) Whether there was any contract executed between the plaintiff and defendant No.9 ?
3) Whether the suit is bad for misjoinder of defendants No.8, 10 to 20 ?
4) Whether there is any cause of action against defendant No.8 to 20 ?
5) Whether defendants No.8 to 20 are liable to pay any amount to the plaintiff ?
6) Whether the plaintiff had printed two crore tickets of Andhra Swasthe Laxmi Lottery and delivered the same to defendant No.9 before 16.01.87 ?
7) Whether defendant No.9 had made any payment to the plaintiff as alleged ?
18. An application U/o 6 rule 17 CPC of the plaintiff was allowed on 07.10.04 by my Ld. Predecessor and there was amendment with respect to the fact that the name of the company was changed from M/s. Capital Business Systems Pvt. Ltd. to M/s. Capital Business Systems Ltd. and accordingly amended memo of parties was filed.
19. The plaintiff company, defendant No.9 and defendant No.22 examined one witness each besides adducing documentary evidence. I have heard Ld. counsel for the parties and perused the oral and documentary evidence coupled with the written submissions on the record. My issue wise findings are as under :
20. Findings on issue No.1 framed on 06.12.95 :
Whether the plaint has been signed, verified and suit instituted by a duly authorized person ? OPP.
Suit No.1/08/90 Page 18 of 41
The plaintiff company was initially known as M/s. Capital Business Pvt. Ltd. The suit was filed thorugh Mr. Ajay Khurana, MD of the plaintiff company who is competent to sign, verify the plaint and filed the suit. He was duly authorized by a resolution passed by the company to sign, verify and institute the suit. Ex.PW1/3 is the copy of resolution dated 28.12.89 passed by the plaintiff company whereby Mr. Ajay Khurana, Managing Director of the company was duly authorized to take legal action against the defendant and further to sign, verify the pleadings and institute the suit and to represent the company. The name of the plaintiff was changed from M/s. Capital Business Systems Pvt. Ltd. to M/s. Capital Business Systems Ltd. vide certificate of incorporation Ex.PW1/1 issued by Registrar of Companies. A fresh resolution Ex.PW1/2 was passed in the Board Meeting of the plaintiff company on 23.07.04 whereby Mr. Ajay Khurana, MD of the plaintiff company was authorized to sign, verify the plaint and institute the suit in the matter of M/s. Capital Business Systems Ltd. Vs. Bhagwati Entp. and further authorized to lead evidence and to sign the legal documents on behalf of the company. Mr. Ajay Khurana, while appearing as PW1, has proved all these documents.
21. Order 29 rule 1 CPC says that in suits by or against a corporation any pleading may be signed and verified by the Secretary or by any Director or other Principal Officer of the corporation who is able to depose the facts of the case. A company is a juristic entity and it can duly authorized any person to sign the plaint on its behalf and this would be regarded as sufficient compliance with the provision of order 6 rule 14 CPC. A person may be expressly Suit No.1/08/90 Page 19 of 41 authorized to sign the pleadings on behalf of the company by Board of Directors while passing the resolution to that effect. In the instant case, PW1 being Managing Director of plaintiff company, was duly authorized by passing a separate resolution to sign, verify the plaint and institute the suit and also to lead the evidence. I am of the view that plaint has been duly signed and verified and filed by the duly authorized person. The issue is decided accordingly.
22. Findings on issue No.5&9 (framed on 06.12.95) & issue No.1 framed on 07.05.02 :
1) Whether letter dated 18.12.86 is an executive order pending execution of enforceable contract between plaintiff and defendant No.21 ? If the answer is in affirmative, effects thereof ?
2) Whether letter dated 18.12.86 was merely an executive order issued by defendant No.21 pending execution of an enforceable contract between plaintiff and defendant No.21 ? OPD
3) Whether defendant No.21 had any authority from defendant No.9 to enter into such contract with the plaintiff for and on behalf of defendant No.9 ?
Ld. counsel for the plaintiff submitted that letter dated 18.12.86 Ex.PW1/4 issued by defendant No.21 was under authority from defendant No.9 which itself tantamounts to contract. He further submitted that the terms and condition incorporated in Ex.PW1/4 were duly fulfilled by the plaintiff so there was no question of execution of separate contract between plaintiff and defendant No.1. Ld. counsel for defendant No.9 contended that defendant No.21 had no authority of any kind from defendant no.9 to enter into a contract with the plaintiff as Suit No.1/08/90 Page 20 of 41 defendant No.9 was merely a nominee of defendant No.20 to see that there should not be any violation of the terms and condition of the permission granted to conduct the lottery. He further submitted that letter Ex.PW1/4 is merely an executive order and it cannot be called a contract by any means.
23. Heard and perused the record. The plaintiff and defendant No.9 has led oral evidence. PW1 in para 10 of his affidavit says that negotiations and settlement with respect to the order were done by defendant No.1 to 7 who were acting on behalf of defendant No.8 to 20. The defendant No.8 to 20 undertook to make the payment in case of default by defendant No.1 to 7 as assured by defendant No.21 vide his letter Ex.PW1/4 or Ex.PW1/D1. In the cross examination he stated that defendant No.8 to 20 didn't give in writing to make the payment if defendant No.1 to 7 failed to make the payment except the letter Ex.PW1/D1 or Ex.PW1/4.
24. Defendant No.9 has examined DW2 Dr. R M Sabu as a witness. His affidavit Ex.DW2/A shows that defendant No.21 was not vested with any authority or power from defendant No.8 to 20 to undertake payment on behalf of defendant No.8 to 20 to the plaintiff. Letter dated 18.12.86 Ex.PW1/D1 is not a contract. It is an unauthorized act and not in pursuance to authority from defendant No.8 to 20 who are not bound by the terms of Ex.PW1/D1. No concluded contract has taken place between plaintiff and defendant No.8 to 20 earlier than 18.12.86.
25. The question arises whether defendant No.1 had any authority from defendant No.9 and whether letter Ex.PW1/4 or Ex.PW1/D1 written by Suit No.1/08/90 Page 21 of 41 defendant No.21 is a contract between plaintiff and defendant No.9. Letter Ex.PW1/4 or Ex.PW1/D1 shows that the printing should start from 26.12.86 and final delivery should be completed by 03.10.87. The rate of 10 paisa as agreed between you and organizing agent would be paid directly by them and in case of any default in payment by them, our organizing committee will take the responsibility of the same. A formal agreement would be entered in due course after fulfilling the condition of the contract.
26. Section 2 of Contract Act says that (a) when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is set to make a proposal.
(b) when a person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
27. Section 3 of Contract Act says that communication of proposal, acceptance of proposal and revocation of proposal and acceptance, respectively, are deemed to be made by an act or omission of the party proposing, accepting or revoking, by which he intends to communicate such proposal, acceptance or revocation or which has the effect of communicating it.
28. The letter Ex.PW1/4 or Ex.PW1/D1 has to be seen in the backdrop of the above stated principles of contract. The letter is allegedly a proposal to the plaintiff from the defendant No.9 through defendant No.21. The plaintiff wrote a letter Ex.PW1/5 dated 25.12.86 to the defendant No.1. PW1 admitted in the cross examination that defendant No.9 did not write to the plaintiff that it will be acting through defendant No.1 to 7 for dealing with the plaintiff for the Suit No.1/08/90 Page 22 of 41 printing of tickets. There is no writing between defendant No.8 to 20 with the plaintiff acknowledging defendant No.1 as their agent. There was no communication of acceptance by the plaintiff either to the defendant No.9 or to defendant No.21. There was no communication by the plaintiff with defendant No.9 after the receipt of letter Ex.PW1/4 or Ex.PW1/D1. No explanation is forthcoming why the communication was not made with defendant No.9 or 21. The communication of acceptance is an essential ingredient of the contract which is missing in this case.
29. There is a condition in the letter Ex.PW1/4 or Ex.PW1/D1 that a formal agreement would be drawn after fulfilling the conditions of the agreement. The acceptance must be absolute and unqualified. There is no complete contract if the contract is subject to the execution of a formal agreement. No such agreement was drawn by the plaintiff with defendant No.9. No correspondence was ever made by the plaintiff with defendant No.9 to draw a formal agreement in pursuance to letter Ex.PW1/4 or Ex.PW1/D1. There is no whisper of word even in the plaint to this effect. No evidence has been led to this effect. The plaintiff has not even entered into a written agreement with the defendant No.1 or 9 either before or after the receipt of letter Ex.PW1/4 or PW1/D1. The plaintiff was supposed to enter into a written agreement with the defendant no.1 as negotiations and settlement were done with defendant No.1. The plaintiff has failed to explain why he didn't enter into a written agreement with defendant no.1 or even with defendant No.9.
30. The plaintiff has not led any evidence to the effect that defendant No.21 Suit No.1/08/90 Page 23 of 41 was authorized by defendant No.9 to write such a letter to the plaintiff. The contents of the letter shows that the agreement was already entered into in between plaintiff and defendant No.1 with respect to printing of tickets and this is also apparent from the testimony of PW1. Defendant No.21 is a Govt. Official who was allegedly nominated in the organizing committee of defendant No.9. The affidavit of DW2 Dr. R M Sabu shows that defendant No.21 was not vested with any authority or power from defendant No.8 to 20 to undertake payment of money on behalf of said defendant. The said letter is an unauthorized act and not in pursuance from authority from defendants No.8 to
20. This part of the statement was not challenged by the plaintiff during the cross examination of DW2 R. M Sabu meaning thereby that this part of statement stands accepted. It is apparent from the record that defendant No.21 was not having any authority from defendant No.9. He is simply a nominee of the Govt. to the committee of defendant No.9. He was not acting in pursuance to any authority in writing from defendant No.9. Defendant No.21 is not a contracting party. Until and unless defendant No.9 agrees to the terms and conditions of Ex.PW1/4 or Ex.PW1/D1, there could not be any contract at all. The defendant No.21 is not a promisor. There was no agreement between plaintiff and defendant no.9 to 21 as plaintiff allegedly printed the tickets for defendant No.1 i.e. M/s. Bhagwati Printers. Even the letter Ex.PW1/4 or Ex.PW1/D1 doesn't form the contract between plaintiff and defendant No.21. The letter Ex.PW1/4 or PW1/D1 written by defendant No.21 is merely an executive order to see that the tickets should be printed in time and handed over Suit No.1/08/90 Page 24 of 41 to the defendant No.1 so that draw be held in time. The letter was written by defendant No.21 pending the execution of an agreement between plaintiff and defendant No.1. The issues are decided accordingly.
31. Findings on issue No.2 framed on 07.05.02 :
Whether there was any contract executed between the plaintiff and defendant No.9 ?
Ld. counsel for the plaintiff submitted that there is a valid contract between plaintiff and defendant No.9 by virtue of the letter Ex.PW1/4 written by defendant No.21. He further submitted that letter was written by defendant No.21 on behalf of defendant No.9 and thereafter plaintiff executed the contract by printing the one crore lottery tickets and therefore there is valid contract between plaintiff and defendant No.9. Ld. counsel for defendant No.9, on the other hand, urged to the contrary.
32. Heard and perused the record. The chief examination of PW1 shows that negotiation and settlement with respect to the order were done by defendant No.1 to 7 who were acting on behalf of defendant No.8 to 20. In the cross examination he admitted that defendant No.9 didn't write to the plaintiff that it will be acting through defendant No.1 to 19 for dealing with the plaintiff for the printing of lottery tickets. He cannot show any authority from defendant No.8 to 19 in favour of defendant No.21 except letter Ex.PW1/4. He cannot point out any document from defendant No.9 in relation to suit transaction and the liability except for permission for holding the lottery. DW2 Dr. R M Sabu in his affidavit deposed that defendant No.9 had employed the services of Suit No.1/08/90 Page 25 of 41 defendant No.1 for organizing the printing and circulation of lottery and agreement Ex.D9W/1 was executed according to which the entire liability for printing and payment was to be borne by defendant No.1. Defendant No.1 had told defendant No.9 that the copy of the said agreement has been sent to the plaintiff and plaintiff knew from the very beginning regarding the agreement between defendant No.1 & 9. Defendant No.9 has nothing to do with the engaging of plaintiff for doing any job nor undertaken to discharge any liability in respect of printing of lottery tickets. There was no contractual relationship of defendant No.8 to 21 with the plaintiff. Defendant No.21 was not vested with any power or authority from defendant No.8 to 20 to undertake the payment of money on behalf of defendant No.9. Letter Ex.PW1/D1 dated 18.12.86 is not a contract and even otherwise it is not a concluded agreement. The letter is an unauthorized act in pursuance of any authority from defendant No.8 to 20. In the cross examination he stated that plaintiff was not a party to the agreement dated 15.08.86. Defendant No.1 approached them for the job after coming to know that they are looking for an agent to organize the lottery as they have got the permission from Govt. of Andhra Pradesh.
33. The entire evidence on the file shows that there was an agreement dated 15.08.86 Ex.D9W/1 between defendant No.1 and defendant No.9 vide which defendant No.1 was appointed as an agent who shall appoint his own staff and to organize the lottery. The committee shall not have any responsibility or liability for any claim of the staff employed by the agent and further the committee shall not arrange for the printing and numbering of tickets. The Suit No.1/08/90 Page 26 of 41 expenses for the printing and other matters shall be borne by the agent. The affidavit of DW2 shows that defendant No.1 had informed defendant No.9 that a copy of the agreement has been sent to the plaintiff and plaintiff knew the terms of the agreement from the very beginning. There is no cross examination on this point. Further, PW1 categorically admitted in the cross examination that there was no writing from defendant No.9 to the plaintiff that they will be acting through defendant No.1 to 7 with the plaintiff. No undertaking was given by defendant No.8 to 20 for payment in case of default by defendant No.1. The entire evidence shows on the file shows that there was no written agreement between defendant No.9 and plaintiff. The entire negotiations were between plaintiff and defendant No.1. Plaintiff cannot make letter Ex.PW1/4 as a base to conclude that there was a contract between plaintiff and defendant No.9 as said letter was written by defendant No.21 without any authority from defendant No.9 same done not fall within the ambit of word 'contract'. I am of the view that there was no contract between plaintiff and defendant No.9.
34. Findings on issue No.3&4 framed on 07.05.02 & issue No.2 framed on 06.12.95 :
1) Whether the suit is bad for misjoinder of defendants No.8, 10 to 20 ?
2) Whether there is any cause of action against defendant No.8 to 20 ?
3) Whether the suit against defendants is not maintainable in the absence of privity of contract between the plaintiff and defendant 8 to 20 ? OPD.
The plaintiff in his plaint has averred that defendant No.8 is Superintendent of Osmania General Hospital which is owned by Govt. of Andhra Pradesh. Suit No.1/08/90 Page 27 of 41 Defendant No.10 to 19 are office bearers of defendant No.9. Defendant No.20 is State of Andhra Pradesh.
35. Defendant No.20 had granted permission to Osmania General Hospital to launch a lottery. Defendant No.9 through its members and office bearers launch Andhra Swasthya Laxmi Lottery in the year 1986 and placed an order with the plaintiff for printing of lottery tickets. The statutory notice U/s 80 CPC Ex.PW1/33 was given to defendant No.20.
36. The negotiations and settlement with respect to the placement of first order to print one crore lottery tickets was already done by the plaintiff with defendant No.1. There was nothing in writing that defendant No.9 ever acknowledged that defendant No.1 is their agent. There was no correspondence between plaintiff and defendant No.9 and 20 to the effect that defendant No.9 & 20 shall be liable for any fault in payment on the part of defendant No.1. There is nothing on the record that defendant No.9 ever authorized any person to place any order on their behalf. The defendant No.20 cannot be made a party merely on the score that permission was granted by the State Govt. to launch Andhra Swasthya Laxmi Lottery to defendant No.8. There was no privity of contract between plaintiff and defendant No.8 to 20 visavis first order. The alleged payment by way of cheques was made by defendant no.1 through its authorized signatory i.e. defendant No.7. To my mind, no cause of action ever arose in favour of the plaintiff against defendants No.8 to 20 visavis first order and suit is bad for misjoinder visavis first order.
37. The second order for the printing of one crore lottery tickets was placed by Suit No.1/08/90 Page 28 of 41 defendant no.9 i.e. Centenary Celebrations Committee of Osmania General Hospital with the plaintiff vide letter Ex.PW1/18. The placement of said order is not in dispute. Defendant No.8 is Osmania General Hospital which is owned by defendant No.20. The payment of the one crore lottery tickets for second draw was not allegedly done to the plaintiff. A notice U/s 80 CPC Ex.PW1/33 was issued to the defendant No.20 but in vain. To my mind, there was a contract between plaintiff and defendant No.8 to 20 visavis placement of second order dated 05.01.87 Ex.PW1/18. There is cause of action against defendant No.8 to 20 visavis second order and there is no misjoinder to this effect. The suit against them is maintainable with respect to second draw. The issue is decided accordingly.
38. Findings on issue No.3 framed on 06.12.95 :
Whether the cause of action of the plaintiff, if any, is only against defendant No.1 with whom alone he had a contract to print and supply the lottery tickets ? OPD.
I have perused the oral as well as documentary evidence on record. It is apparent from the testimony of PW1 Sh. Ajay Khurana that negotiations and settlement with respect to the order were done by defendant No.1 to 7 who were acting on behalf of defendant No.8 to 20. The payment was made by defendant No.1 to 7 directly to the plaintiff. The challans Ex.PW1/6 to 1/17 were issued in the name of defendant No.1. The delivery of tickets was given to defendant No.1. In the cross examination he admitted that defendant No.1 to 7 had given them the cheques.
Suit No.1/08/90 Page 29 of 41
39. The testimony of PW1 shows that negotiations had already taken place with defendant No.1 with respect to the first order vide which plaintiff had printed one crore lottery tickets for the draw dated 05.01.87. The contract visavis printing of one crore lottery tickets was only with defendant No.1 as there is no evidence on record to show that defendant No.9 ever placed any order with the plaintiff for the printing of lottery tickets for the draw dated 05.01.87.
40. The order with respect to the second draw was placed with the plaintiff by defendant No.9 for Osmania General Hospital vide letter dated 05.01.87 Ex.PW1/18. The plaintiff accepted the offer vide letter dated 09.01.87 Ex.PW1/19 issued to defendant No.9. The plaintiff had allegedly printed the tickets on the strength of this letter but the draw was cancelled as a result plaintiff was directed to stop the printing vide letter dated 16.01.87 Ex.PW1/20 from defendant No.1. The payment with respect to the printing of lottery tickets for second draw was not allegedly made by the defendants which resulted into issuance of notice Ex.PW1/33 U/s 80 CPC to defendant No.20. There is cause of action against defendant No.8 to 20 with respect to the printing of tickets for the second draw. Hence, this issue is decided accordingly.
41. Findings on issue No.8 framed on 06.12.95 :
Whether the suit is barred by limitation ? OPD.
The onus to prove this issue is on the defendants. No evidence is led by the defendant to show that how the suit is barred by limitation. The defendant No.1 issued the last cheque Ex.PW1/32 bearing No.435321 dated 23.02.07 of Rs.1 lac in favour the plaintiff. This was allegedly the part payment with respect to the Suit No.1/08/90 Page 30 of 41 dues. The suit was filed on 29.01.1990. The suit is within the period of limitation. The issue is decided accordingly.
42. Findings on issue No.7 framed on 06.12.95 :
Whether the defendant No.22 dishonoured the cheques when there was credit balance in the account of defendant No.9 and returned the cheques with memos contrary to banking practice and norms ? OPP.
The onus to prove this issue is on the plaintiff. PW1 in his affidavit stated that the cheques No. 435281 dated 09.01.87 of Rs.8 lacs, 435282 dated 14.01.87 of Rs.3.50 lacs, 435313 dated 05.02.87 of Rs.1 lac, 435314 dated 07.02.87 of Rs.1 lac, 435315 dated 09.02.87 of Rs.1 lac, 435316 dated 12.02.87 of Rs.1 lac, 435317 dated 14.02.87 of Rs.1 lac, 435318 dated 16.02.87 of Rs.1 lac were drawn on Federal Bank Ltd. The cheques were presented for encashment with the defendant No.22 which were dishonoured and returned back with the remarks "effects not clear present again" though in fact there was never any sufficient balance in the account of defendant No.1 to 7 to encash the cheques. The bank, contrary to the all settled banking norms, misrepresented the true picture to the plaintiff and connived with defendant No.1 to 7 in depriving the plaintiff of its dues. In the crossexamination he stated that there was no privity of contract between plaintiff and defendant No.22 with respect to the transaction of the lottery tickets. He doesn't remember whether any employee of the plaintiff visited the bank or not. He doesn't have any evidence to show that defendant No.22 had ever dishonoured the cheques of defendant No.1 despite having sufficient balance in the account. He has no personal knowledge about the allegations levelled against the bank as Suit No.1/08/90 Page 31 of 41 these facts were told to him by the employee of the company. He cannot say whether the plaintiff had again presented the cheque for encashment.
43. Defendant No.22 examined N. Unnikrishnan as DW1 and filed his affidavit Ex.DW1/A wherein he has corroborated the version of written statement. In the cross examination he stated that Ex.DW22/A is the certified copy of Power of Attorney vide which he is authorized by the bank to depose in the court. The meaning of the remarks "effects not clear present again" means that he is expecting some amount in the account at a later date and if the holder of the cheque wishes he can present again for encashment. When the account holder deposits the cheque for clearance, it is likely that it may be clear after sometime. There was no phrase in "insufficient funds" at that time i.e. in the year 1987.
Q. At that particular time the cheque which was in question, which was returned for "effect not clear, please present again", at the time there is not a likelihood that there is a chance for receiving the payment by the bank in the account of defendant no.1, and it was only done with the conspiracy between defendant no.1 and defendant no.22 that the said cheque was not returned for "not arranged for".
Ans. I was not working in the branch at that time, that is why I am not able to answer the same.
Q. Why the cheque No.435282, 435313 to 435318 were returned unpaid to the drawee with the remarks "refer to drawer" and these were not returned unpaid with the remarks "effect not clear, please present again"?
Ans. These cheques were returned with the remarks "refer to drawer" Suit No.1/08/90 Page 32 of 41
based on the fact that the drawee may take up the matter with the drawer and present these cheques at a later date mutually agreed between the drawer and the drawee.
44. He is not able to comment why the cheques were returned with the remarks 'refer to drawer' and "effects not clear present again" as he was not working in the branch at that time. The suggestion is denied that bank was in collusion with defendant No.1.
45. I have perused the record of the case. The cheques in question were presented by the plaintiff to defendant No.22 for encashment which were received back dishonoured with the remarks "effects not clear present again" and referred to drawer. The cheque Ex.PW1/24 bearing No.435313 dated 05.02.87 of Rs.1 lac was returned back with the remarks "present again" and cheque No.435281 dated 09.01.87 of Rs.3 lacs, which was returned back by the plaintiff to the defendant No.1, was returned back with the remarks "effects not clear and present again". The cheques No.435282, 314 to 318 were returned back with the remarks "refer to drawer". DW1 explained in the cross examination that words "effects not clear present again" means that bauk is expecting some amount in the account at a later date and if the holder of the cheque wishes he can present the cheque again for encashment. The cross examination of PW1 shows that he cannot say whether they had presented the cheques again for encashment. He doesn't have any evidence to show that defendant No.22 had dishonoured the cheques of defendant No.1 despite having sufficient balance. The chief examination as well as para 17 of the plaint shows that in fact there was never any sufficient balance in the account of defendant No.1 to 7 to encash the cheques. The explanation given by DW1 with respect to "effects not clear present again" is Suit No.1/08/90 Page 33 of 41 not controverted by the plaintiff by showing any other meaning to the above said words. It was for the plaintiff to show that these words denote some other meaning. Moreover, the plaintiff never presented the cheques again for encashment for the reason best known to him. The plaintiff should have presented the cheque on the next working day for encashment but he didn't adopt such a proceedure for the reasons best known to him. Moreover, his own version in the plaint shows that there was never any sufficient balance in the account of defendant No.1 to 7 to encash the cheques. It is clear that the balance in the account of defendant No.1 was not enough in order to encash the cheques and there is nothing on the record that the cheques were returned back in connivance with defendant No.1 to 7 despite having sufficient balance in the account. The cheques were dishonoured as per banking norms. The plaintiff has failed to prove the issue in question and same is decided against him.
46. Findings on issue No.6 framed on 06.12.95 :
Whether the suit is not bad for misjoinder of defendant No.22 ? OPP. The suit is not bad for misjoinder of defendant No.22 as averments made in the plaint show that defendant No.22, contrary to all settled norms, misrepresented the true picture to the plaintiff and returned back the cheques despite funds. The defendant No.22 allegedly connived with defendant No.1 to 7 and deprived the plaintiff of its dues and as such bank is liable to make the payment to the plaintiff with respect to the cheques issued by defendant No.1 to 7 in its favour. There are specific averments against defendant No.22. It cannot be said any stretch of imagination that there is any misjoinder of defendant no.22 so issue decided in Suit No.1/08/90 Page 34 of 41 favour of the plaintiff.
47. Findings on issue No.4 framed on 06.12.95 :
Whether the plaintiff is in breach of the contract in having failed to print the tickets and having used the material for printing of lottery tickets of other States viz. Himachal Pradesh as set out in para 9 of the written statement of defendant No.9 ? OPD.
The onus to prove this issue is on defendant No.9. The amended written statement of defendant No.9 shows that plaintiff has used the micro lottering meant for the Andhra Swasthya Laxmi Lottery for the printing of the tickets of golden instant super weekly lottery for HP for the draws held on 16.01.87, 23.01.87 & 30.01.87. The defendant No.9 has placed original micro lottering on the record. DW2 Dr. R M Sabu has not uttered a single word in his affidavit regarding the alleged use of micro lettering for printing the lotteries for Himachal Pradesh which was only to be used for Andhra Pradesh Lottery. No question or suggestion is put to PW1 in the cross examination that he used the micro lettering given for the purpose of AP Lottery for printing of HP Lottery. There is no evidence on the record form defendant No.9 regarding misuse of micro lettering by the plaintiff so issue is decided against the defendant No.9.
48. Findings on issue No.6 framed on 07.05.02 and issue No.10 framed on 06.12.95 :
1) Whether the plaintiff had printed two crore tickets of Andhra Swasthe Laxmi Lottery and delivered the same to defendant No.9 before 16.01.87 ? Suit No.1/08/90 Page 35 of 41
2) Whether the plaintiff adhered to the delivery schedules for printing and supply of tickets and supplied the same in accordance with it ? OPP.
PW1 in his affidavit stated that plaintiff printed one crore lottery tickets for the draw dated 05.01.87 and delivered the same vide delivery challans Ex.PW1/6 to 1/17 dated 30.12.86 to 04.01.87 and accordingly certificate mark A dated 06.01.87 was issued to defendant No.9 regarding the printing and delivery of one crore lottery tickets to defendant no.1. In the cross examination he stated that time was specified in Ex.PW1/4 or Ex.PW1/D1. He doesn't remember whether all the tickets were delivered by 03.01.87 or not. The suggestion is denied that no delivery of any lottery ticket was made to any defendant after 03.01.87. DW2 Dr. R. M. Sabu in his affidavit states that plaintiff was directed to supply the tickets by 03.01.87 to defendant No.1. The plaintiff has wrongly stated that no body was prepared to accept the supply of tickets on 03.01.87. In the cross examination he stated that the first order was completed within the given time. The date of first draw was 05.01.87.
49. The delivery challans Ex.PW1/16 to 1/17 show that one crore lottery tickets stand delivered to defendant No.1 including the delivery of 27 lacs tickets on 04.01.87. The tickets delivered on 04.01.87 were duly received as there is nothing on the record that those tickets were allegedly sent back by the defendant No.1 or the numbers in those tickets were not included in the draw held on 05.01.87. DW2 has admitted in the cross examination that first order was completed within time meaning thereby that tickets were received within the time. All this shows that plaintiff had printed one crore lottery tickets for Suit No.1/08/90 Page 36 of 41 the draw held on 05.01.87.
50. The order for the second draw was placed with plaintiff by defendant No.9 vide letter dated 05.01.87 Ex.PW1/18. The receipt of letter was confirmed by the plaintiff on 09.01.87 vide letter Ex.PW1/19. Letter dated 16.01.87 Ex.PW1/20 is from defendant No.1 to the plaintiff to the effect that it is decided to cancel the next draw of Janta Bumper and therefore stop the printing of lottery tickets. Letter dated 29.01.87 Ex.PW1/21 is from plaintiff to the defendant No.1 in response to letter Ex.PW1/20 that printing job and other allied work have already been completed and they are holding the sheets on their behalf and requested to remit the payment by giving concession of Rs.2 lacs.
51. PW1 in his affidavit stated that all the printing job and other allied process had already been completing and they are holding the cost and risk of defendants. The tickets for the second draw were printed. PW1 stated in the cross examination that letter Ex.PW1/19 was sent by post. DW2 stated in his affidavit that plaintiff didn't carry out the printing of tickets related to letter Ex.PW1/18 and said order was cancelled vide letter Ex.PW1/20. The plaintiff was required to furnish the proof of alleged printing of the tickets relating to order dated 05.01.87 Ex.PW1/18. The plaintiff kept silent for a long time and vide letter dated 13.05.87 Ex.PW1/D3 raised a false explanation that fire in the printing place had taken place which destroyed the proof and record of printing of tickets. The plaintiff didn't send the details as per letter Ex.PW1/D3. The plaintiff didn't communicate with defendant No.1 or defendant No.9 after the Suit No.1/08/90 Page 37 of 41 letter Ex.PW1/D3. In the cross examination he stated that the order was cancelled by defendant No.1 on the instructions of Chairman of the Committee. PW1 in the cross examination admitted that they didn't place any certificate from the Fire Brigade in respect of fire as reflected in Ex.PW1/D3. The suggestion is denied that no fire broke out in the factory and Ex.PW1/D3 is a fabricated document.
52. The question arises whether plaintiff had already printed the lottery tickets prior to the cancellation of the order vide letter Ex.PW1/20 or not. The onus was on the plaintiff to show that tickets were already printed by him. The letter dated 29.01.87 Ex.PW1/21 issued by the plaintiff to defendant No.1 shows that printing work had been done. It nowhere reflects the ticket numbers of the second draw. Ex.PW1/D3 is the letter dated 13.05.87 from the plaintiff to defendant No.9 wherein plaintiff alleged that a fire broke out in their factory at Delhi in last week of April, 1987. A detailed letter giving full information for perusal and necessary action will be submitted by next week and requested to call a tripartite meeting. The plaintiff has not disclosed the date when the fire allegedly broke out in the factory. No FIR is placed on record. No Fire Brigade report is placed on record. No inventory is placed on the record. The details were not submitted to defendant No.9. There is nothing on the record except a bald statement with respect to the printing of lottery ticket visavis second draw. The evidence on record is not enough to show that plaintiff had printed the lottery tickets for the second draw. The issue is decided accordingly.
53. Findings on issue No.7 framed on 07.05.02 :
Suit No.1/08/90 Page 38 of 41
Whether defendant No.9 had made any payment to the plaintiff as alleged ? PW1 in his affidavit states that defendant made the payment on account by way of cheques No.435250, 005035, draft No.014909 and 015060. Defendant No.1 to 7 admitted the liability of the defendants towards the plaintiff and issued various cheques. Defendant no.1 to 3 issued the cheques Ex.PW1/23 to 1/32. In the cross examination he admitted that defendant No.1 to 7 has given them the cheques which are placed on the record. The suggestion is denied that entire payment was to be made by defendant No.1 to 7. DW2 denied the suggestion in the cross examination that plaintiff approached the defendant for payment number of times.
54. The evidence on the record shows that no payment at any point of time was made by defendant No.9 to the plaintiff. There is no evidence on record that defendant no.1 made the payment at the behest of defendant No.9. PW1 himself has admitted that defendant No.1 to 7 has made the payment. All the cheques in question bear the signature of Authorized Signatory of defendant No.1. There is nothing on the record that any payment was made by defendant No.9 to the plaintiff. The issue is finally decided against the plaintiff.
55. Findings on issue No.11 & 12 framed on 06.12.95 & issue No.5 framed on 07.05.02 :
1) To what amount is the plaintiff entitled and from which of the defendants ? OPP
2) To what amount of interest the plaintiff is entitled, at what rate and for what period ? OPP.
Suit No.1/08/90 Page 39 of 41
3) Whether defendants No.8 to 20 are liable to pay any amount to the plaintiff ?
I have heard Ld. counsel for the parties and perused the testimony of PW1, DW2 Dr. R. M. Sabu coupled with documentary evidence on the record. The evidence on the record nowhere suggest that there was a contract between plaintiff and defendant No.8 to 20 with respect to the first order. There was a contract between plaintiff and defendant No.1 with respect to first order. Defendant No.2 to 6 are partners of defendant No.1 and defendant No.7 is an anauthorized signatory of defendant No.1. The testimony of PW1 shows that all the negotiations and settlements were done by the plaintiff with defendant No.1 to 7 who were acting for defendant No.8 to 20. The testimony of PW1 shows that defendant No.1 to 7 have admitted their liability towards the plaintiff and issued the cheques in question which were dishonoured. The letter written by defendant No.21 doesn't fall within the ambit of word "contract" and is not termed as a contract as per my discussion in other issues. The printing done by the plaintiff for one crore of lottery tickets for the draw dated 05.01.87 was at the behest of defendant No.1. The plaintiff has already received a sum of Rs.5 lacs from defendant No.1 to 7. To my mind, plaintiff is entitled for the recovery of amount from defendants No.1 to 7 that to for a sum of Rs.5 lacs with interest @ 8% p.a. from 06.01.87 till its realization.
56. The plaintiff has failed to prove that tickets for the second draw were printed prior to the cancellation of order by defendant no.9. This has been discussed in detail by me in other issues as such plaintiff is not entitled for the Suit No.1/08/90 Page 40 of 41 recovery of any amount with respect to second draw from the defendants.
57. Relief : In view of my findings on the issues discussed above, the suit of the plaintiff for recovery is dismissed against defendant No.8 to 22. The suit of the plaintiff for recovery is decreed against defendant No.1 to 7, who are jointly and severely liable, for a sum of Rs.5 lacs with interest @ 8% p.a. from 06.01.87 till its realization. The suit is decreed with cost. Decree sheet be prepared. File on completion be consigned to record room. Announced in the open Court on 21.04.2010 (Suresh Kumar Gupta) Additional District Judge03 (East), Karkardooma Court, Delhi / 21.04.2010 Suit No.1/08/90 Page 41 of 41 Suit No.1/08/90 21.04.10 Pr : None for the parties.
The suit of the plaintiff for recovery is dismissed against defendant No.8 to 22. The suit of the plaintiff for recovery is decreed against defendant No.1 to 7. The suit is decreed with cost. Decree sheet be prepared. File on completion be consigned to record room.
(Suresh Kumar Gupta) ADJ/KKD(East)03 Delhi / 21.04.10 Suit No.1/08/90 Page 42 of 41