Delhi District Court
M/S Maxo Laboratories Pvt. Ltd vs M/S Nand Ram Sudershan Kumar on 25 April, 2015
IN THE COURT OF SH. GURVINDER PAL SINGH
ADDITIONAL DISTRICT JUDGE01 (CENTRAL)
TIS HAZARI COURTS, DELHI
C.S. No. 252/2004
Unique I. D. No. 02401C6053722004
M/s Maxo Laboratories Pvt. Ltd.,
115A, Kamla Nagar, Delhi,
through its Director
Sh. N.C. Aggarwal
......Plaintiff
Versus
M/s Nand Ram Sudershan Kumar,
through its Proprietor
Sh. Sudershan Kumar,
5100, Rui Mandi, Sadar Bazar,
Delhi110006.
.......Defendant
SUIT FOR RECOVERY OF RS.10,16,080/
Date of institution of suit : 25.08.2004
Date of reserving the judgment : 26.03.2015
Date of pronouncement of judgment : 25.04.2015
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M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 1 of 19
JUDGMENT
1. Plaintiff, a private limited company through its Director Sh. N.C. Aggarwal filed this suit for recovery of Rs.10,16,080/ with interest from defendant.
2. The factual matrix of the case of plaintiff is as follows. Time and again defendant approached plaintiff company through common contact Mr. Sunil Gupta for advancing a loan. Plaintiff advanced following loans with an agreed rate of interest @ 24% per annum : "A. Rs. 4 Lakh vide cheque no. 512542 dated 08.02.1999, drawn on Andhra Bank, R.K. Puram, New Delhi, which was cleared on 11.02.1999.
B. Rs. 3 Lakh vide cheque no. 512545 dated
17.02.1999, drawn on Andhra Bank, R.K.
Puram, New Delhi which was cleared on
20.02.1999.
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C. Rs. 2 Lakh vide cheque no. 975334 dated
16.09.1999, drawn on Andhra Bank, R.K.
Puram, New Delhi, which was cleared on
18.09.1999."
3. Plaintiff further averred that defendant made payment of Rs.4 Lakh vide two cheques for Rs. 2 Lakh each on 06.02.2001 and 26.08.2001. Later, defendant issued another cheque no. 589528 dated 15.09.2002 for Rs.50,000/ loan amount, which cheque was dishonoured on its presentation on various occasions. On dishonour of said cheque, plaintiff stated to have contacted defendant many times but on one or the other pretext defendant avoided and kept on lingering the matter and did not clear the outstanding liability towards plaintiff. Plaintiff also averred that defendant owed a sum of Rs.10,16,080/ to the plaintiff and despite requests and demands vide legal notice dated 20.05.2003 sent on 03.06.2003 and duly served upon defendant, neither defendant made the payment nor replied the notice. Resultant had been this suit.
4. Defendants on appearance after service filed written statement containing preliminary objections viz. (i) suit barred by law of CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 3 of 19 limitation; (ii) suit is without consideration and no amount is due from defendant by the plaintiff; (iii) suit is an afterthought, bogus and sham simply to harass the defendant on the controversial issue of claim of enhanced rate of interest of plaintiff for late return of money by defendant to plaintiff; and (iv) plaint was lacking cause of action. Defendant stated that as dasti loan was taken from plaintiff by defendant, it was returned immediately. Defendant averred that Rs. 4 Lakh were returned back in two installments of Rs.2 Lakh each, wherein first installment was paid on 06.02.2001 and the second installment was paid on 26.08.2001 against the cheque of plaintiff for Rs. 4 Lakh dated 08.02.1999, in respect of transactionA. Also, the payment made by defendant in respect of transactionA is acknowledged by the plaintiff in para4 of the plaint. The transactionA of para2 of the plaint was closed on 06.02.2001 and 26.08.2001. It was also averred by the defendant that while the payment in respect of transactionB for Rs.3 Lakh was returned back by the defendant on 15.12.2000, it was acknowledged by plaintiff in para3 of the plaint. The transactionB was closed as satisfied upon payment made by defendant on 15.12.2000. The defendant submitted that transactionC for payment of Rs.2 Lakh is disputed as not claimable by the plaintiff CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 4 of 19 being returned back by the defendant in cash. The defendant averred that this transaction was also closed on 26.08.2001. As per defendant, all the loan transactions "A, B & C" were for short duration, money against each of them was returned back promptly. It is also case of defendant that when these transactions came to an end on 26.08.2001, plaintiff wanted interest from defendant; the interest part was settled and it was agreed that plaintiff shall be satisfied if amount of Rs.50,000/ is paid towards interest in respect of all the three transactions "A, B & C", for which reason defendant agreed and made payment of Rs.50,000/ towards interest amount in respect of all above elicited transactions "A, B & C"
towards "Bilmukta" / "Bilchukta" account for interest. As per defendant aforesaid cheque of Rs.50,000/ was duly honoured and defendant did not receive any notice of dishonour of cheque of Rs.50,000/ from the plaintiff. The defendant also did not receive any notice of demand of any kind and remained under the impression that accounts were duly closed forever. The defendant had not executed any document for loan or interest in favour of the plaintiff. There is no amount due to the plaintiff from the defendant. For getting the loan from the plaintiff company, defendant paid 10% advance commission to Mr. Sunil Gupta, who had CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 5 of 19 arranged for the loans. Defendant has prayed for dismissal of the suit submitting it to be vexatious.
5. Plaintiff filed replication to the written statements of the defendant to controvert the contentions of the written statement and to reiterate the averments of the plaint.
6. From the pleadings of the parties, following issues were framed by my Ld. Predecessor vide order dated 30.11.2005 :
1)Whether the suit of plaintiff is/is not filed within the limitation? OP Parties
2)Whether the plaintiff is entitled to any amount from the defendant? If so to what extent? OP Parties
3)Whether the plaintiff is entitled to any interest? If so, at what rate and from when?
OP Parties
4)Relief.
7. In evidence plaintiff has examined Sh. N.C. Aggarwal, CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 6 of 19 Director of plaintiff as PW1 vide affidavit Ex PW1/X and Sh. Sunil Gupta, common friend of Director of plaintiff and defendant as PW2 vide affidavit Ex PW2/X. PW1 relied upon documents i.e. (i) the copy of resolution exhibited as Ex PW1/1; (ii) the dishonoured cheque of Rs. 50,000/ dated 15.09.2002 exhibited as Ex PW1/2; (iii) cheque return memo dated 09.10.2002 of State Bank of India is exhibited as Ex PW1/3;
(iv) cheque return memo dated 10.10.2002 of Andhra Bank is exhibited as Ex PW1/4; (v) copy of legal notice dated 20.05.2003 is exhibited as Ex PW1/5; (vi) postal receipt is exhibited as Ex PW1/6; (vii) UPC is exhibited as Ex PW1/7; and AD card is exhibited as Ex PW1/8. Both the PWs were crossexamined.
8. Sh. Sudershan Kumar, Proprietor of defendant concern has been examined as DW1 vide affidavit Ex DW1/X. DW1 was cross examined.
9. I have heard arguments addressed by Sh. Sandeep Jindal, Ld. counsel for plaintiff; Sh. Subhash Chand, Ld. counsel for defendant and have given thoughts to the rival contentions put forth, pleadings of the CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 7 of 19 parties, evidence, written arguments of parties, relied precedents and have also examined the record of the case.
10. Ld. Counsel for plaintiff argued that from the testimonies of PW1 and PW2, the version of the plaint stands confirmed and even DW1 in his crossexamination admitted of having taken the loan of Rs.4 Lakh, Rs.3 Lakh and Rs.2 Lakh from the plaintiff in year 1999 as dasti loan. Since, defendant neither paid the outstanding sums nor replied the notice dated 20.05.2003, sent on 03.06.2003 and duly served upon defendant, plaintiff has prayed through counsel for decree of the sum claimed with interest. Plaintiff counsel relied upon the case of Atul Anand Vs. Nanak Food Industries & Ors., 132 (2006) DLT 481, wherein in the case of summary suit it was held that Punjab Registration of Money Lenders Act, 1939 does not prohibit casual advancing of loan by person to third person and only embodies necessity of licence for money lending for person in business of money lending.
11. Ld.Counsel for defendant argued that plaintiff had no licence for money lending and keeping in view the bar contained in Section 3 of CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 8 of 19 The Punjab Registration of Money Lender's Act, 1938, the suit merited dismissal. It was also argued that the plaintiff filed suit against proprietorship firm, which is not a legal entity and the suit by or against the said firm in its name is not maintainable and is liable to be dismissed.
Also was argued that neither suit was signed nor filed by a competent or authorized person as during the course of the evidence it was brought on record that plaintiff has not proved any document for PW1 to be Director in the plaintiff company. Also was argued that the suit was hopelessly barred by limitation since the alleged three loans advanced were separate and distinct transactions of loan and the transactions of loans were oral and there was no interest agreement between parties. It was argued that the loan amounts were duly repaid and nothing remained outstanding and payable by defendant to plaintiff. The counsel for defendant has relied upon cases (1) Shop named Kaloji Talusappa Ganga Vathi Vs. Khyanagouda & Ors., AIR 1970 SC 1420; (2) Daljit Kumar & Anr. Vs. Popal Dass, AIR 1981 Punjab & Haryana 211; (3) Gyanananda Sen Vs. Ranjit Kumar Das & Anr., AIR 2003 Orissa 166; (4) Jaswanti Devi & Ors. Vs. Sunil Mehra, AIR 2004 Himachal Pradesh 15; (5) Niranjan CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 9 of 19 Singh Vs. Mohinder Singh, RSA No. 2551 of 1987 (O&M), High Court of Punjab & Haryana at Chandigarh, decided on 03.03.2010; (6) Smt. Fula Devi Vs. Mangtu Maharaj & Ors., AIR 1969 Patna 294 (V 56 C
75) Full Bench; (7) Basudeo Singh Vs. Munshi Purushottam Prasad, AIR 1989 Patna 56;(8) State Bank of Travancore Vs M/s Kingston Computers (I) P. Ltd., CA No. 2014 of 2011, decided by Supreme Court of India on 22.02.2011; (9) M/s Miraj Mareting Corporation Vs. M/s Vishaka Engineering & Anr., 115 (2004) DLT 471 (DB); (10) Sudhir Saran Vs Gopi Krishan Verma & Ors., 115 (2004) DLT 476; and (11) Svapn Constructions Vs. IDPL Employees Cooperative Group Housing Society Ltd. & Ors., 127 (2006) DLT 80 and has prayed for dismissal of the suit.
12. My issue wise findings are as under : Findings on Issues No(1) & (2)
1)Whether the suit of plaintiff is/is not filed within the limitation? OP Parties CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 10 of 19
2)Whether the plaintiff is entitled to any amount from the defendant? If so to what extent? OP Parties Following relevant facts are admitted amongst parties, as borne out from pleadings of the parties: (1) Plaintiff company having advanced three loans to defendant "A. Rs. 4 Lakh vide cheque no. 512542 dated 08.02.1999, drawn on Andhra Bank, R.K. Puram, New Delhi, which was cleared on 11.02.1999.
B. Rs. 3 Lakh vide cheque no. 512545 dated
17.02.1999, drawn on Andhra Bank, R.K.
Puram, New Delhi which was called on
20.02.1999.
C. Rs. 2 Lakh vide cheque no. 975334 dated
16.09.1999, drawn on Andhra Bank, R.K.
Puram, New Delhi, which was cleared on
18.09.1999."
(2) Defendant made payments of (i) Rs.3 Lakh to plaintiff
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company vide cheque credited on 15.12.2000; (ii) Rs.4 Lakh vide two cheques for Rs.2 Lakh each on 06.02.2001 and 26.08.2001; and issuance of cheque no. 589528 dated 15.09.2002, drawn on State Bank of India, Sadar Bazar, Delhi for Rs.50,000/ by defendant in favour of plaintiff.
13. It is borne out of the crossexamination of PW1 that (i) no written request for loan was made by the defendant to plaintiff; (ii) no loan agreement was executed between the parties to the suit; (iii) no terms of interest were settled between the parties to the suit; (iv) there was no entry in books of account of plaintiff that loans in question were advanced to defendant at interest of 24% per annum; (v) in the account books of plaintiff company there was no mention of receipt of Rs.3 Lakhs from defendant towards interest vide cheque credited on 15.12.2000;
(vi) no statement of account of defendant as debtor in books of plaintiff company was filed nor proved nor such account books having such statement of account of defendant were shown; (vii) no notice of dishonour of cheque of Rs.50,000/ was issued by plaintiff company to defendant; (viii) all transactions of giving and taking money between parties were done through Mr. Sunil Gupta (PW2); (ix) though plaintiff CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 12 of 19 company was manufacturing Ayurvedic and Unani medicines and defendant was dealing in herbs but no business transaction of herbs took place between the parties.
14. PW1 claimed to have advanced afore elicited loan sums to defendant on behalf of plaintiff company through PW2 Mr. Sunil Gupta. But it is own version of PW1 that he was not knowing where office of defendant no.1 was situated. PW1 also admitted that no resolution was passed by the board of plaintiff company at the time of advancing any of the three loans to defendant through Mr. Sunil Gupta. It was bounden duty of the plaintiff company, being bound by the provisions of the Companies Act, to pass requisite resolution for advancing loans to defendant, which could have incorporated the terms of advancing of such loans, including the time period of such loan, rate of interest, guarantor, if any and further conditions, if any agreed amongst parties. PW1 claims of typographical error being there in respect of year 2000 in respect of advancement of loanC in September, stating it was wrongly mentioned as September 1999 in para3 'C' of his affidavit. In para2 of the plaint loanC was stated to be advanced to defendant vide cheque no. CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 13 of 19 975334 dated 16.09.1999, cleared on 18.09.1999 and for want of amendment in plaint in that regard, plaintiff company cannot be permitted to contend contrary to the pleadings. It is not the case of the parties that loan of Rs.2 Lakh was given to defendant by the plaintiff in September 2000. No new case can be reconstructed by the plaintiff witness PW1 contrary to pleadings.
15. It is own admission of PW1 in the crossexamination that in the income tax return of the plaintiff company there was no entry to show payment of Rs.3 Lakh by defendant to have been treated as interest earnings of the plaintiff company. Also, PW1 admitted that no term of interest was settled nor loan agreement was executed. PW2 in the course of his crossexamination admitted that he had not seen any statement of account of either of the parties, was unable to show what was the total due payable by defendant to plaintiff as on 06.02.2001 and 26.08.2001. PW2 admitted of having not kept any statement of account of the parties pertaining to the transactions between the parties and also of the fact that he had not calculated any interest. PW2 also admitted in the cross examination to have appeared to depose at the instance of the plaintiff. CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 14 of 19
16. Plaintiff company is engaged in manufacturing of Ayurvedic and Unani medicines. Plaintiff's counsel also argued that the Memorandum and Articles of Association of the plaintiff company inter alia had the object to invest any money of the company not immediately required for the purpose of company in such manner and on such terms, as may be deemed fit and to lend money to such parties and on such terms, with or without security as the company may determine. It is admitted case of plaintiff company that it was not having any licence for money lending. Plaintiff company has not proved on record any final accounts of relevant years, which could prove that plaintiff company did not immediately require for the purpose of the company, the sums which were advanced as loans to defendant. No resolution was passed by board of directors of plaintiff company embodying (i) any of the loans to be advanced to defendant and (ii) terms of advancement of loans including the time period, rate of interest, with or without security, so on and so forth. PW1 did not even knew the address of defendant. Plaintiff company did not have any business transactions with defendant prior to or later to advancement of loans in question or their alleged return as per defendant. Sums of money advanced as loans were not friendly loans. CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 15 of 19 None of directors of plaintiff company were on friendly terms with defendant nor were even acquaintances of defendant. In the filed suit, plaintiff company alleges having advanced the loans on interest and the middle man being PW2. Transactions of loans advanced by plaintiff company to defendant were accordingly not casual advancing of loan, so law laid in case of Atul Anand (supra) is not applicable in this case. The transactions of loans inter se parties to the suit, in the fact of the matter, are none else than transactions in money lending. In terms of Section 3 of The Punjab Registration of Money Lender's Act, 1938, as adopted in NCT of Delhi, the suit by money lender is barred unless money lender is registered and holding a valid license in prescribed form. Reliance placed upon the law laid in the cases of (1) Shop named Kaloji Talusappa Ganga Vathi (supra); (2) Daljit Kumar & Anr. (supra); (3) Gyanananda Sen (supra); (4) Jaswanti Devi & Ors. (supra); (5) Niranjan Singh (supra) and (6) Smt. Fula Devi (supra).
17. Plaintiff company has not placed on record any certified copy of statement of any mutual, open and current account of defendant CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 16 of 19 in books of plaintiff company as a debtor nor proved the same. Parties to the suit were not having any business transactions inter se each other, excepting for the alleged three loan transactions and return of their amounts. The alleged three transactions of loan of Rs.4 Lakh, Rs. 3 Lakh and Rs. 2 Lakh, respectively were separate and distinct having no nexus and connection with each other. There is no acknowledgment by defendant in favour of plaintiff company for any debt payable by defendant to plaintiff within period of limitation of any sum of loan advanced in any of the three loan transactions "A, B & C" in question. Suit was filed on 25.08.2004 and well beyond period of three years of advancement of any of the three loans in question, more particularly, loanB of Rs.3 Lakh, advanced on 20.02.1999 and loanC of Rs.2 Lakh, advanced vide cheque dated 16.09.1999 and cleared on 18.09.1999. In respect of any sum of aforesaid loans advanced, the claim of the plaintiff being beyond period of limitation of three years is time barred.
18. Resolution Ex PW1/1 in favour of PW1 is signed by PW1 himself. No document has been proved by plaintiff that PW1 was Director of plaintiff. Even, copies of Memorandum and Articles of CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 17 of 19 Association of plaintiff company on record do not find mention of name of PW1 as Director. Plaintiff company has failed to prove that PW1 was competent to file the suit.
19. In view of foregoing discussions, plaintiff company is held not entitled for recovery of sum claimed from defendant. In above terms, the Issues no.1 and 2 are accordingly decided in favour of defendant and against the plaintiff.
Findings on Issue No(3) Whether the plaintiff is entitled to any interest? If so, at what rate and from when?
OP Parties
20. In view of findings on issues no.1 and 2 above, plaintiff is not entitled for any interest whatsoever. Issue no.3 is decided in favour of defendant and against the plaintiff.
CS252/2004 M/s Maxo Laboratories Pvt. Ltd. Vs. M/s Nand Ram Sudershan Kumar Page 18 of 19 RELIEF
21. In view of findings of Issues no. 1 to 3, the suit of the plaintiff is dismissed. No order as to costs.
22. Decree sheet be prepared accordingly and file be consigned to record room.
Announced in open Court on 25th Day of April, 2015. (GURVINDER PAL SINGH) Addl. Distt. Judge(Central)01, (AD) Tis Hazari Courts, Delhi.
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