Karnataka High Court
M/S. Horticontracts vs M/S. Agrihorticultural Consultants on 15 February, 2017
Equivalent citations: AIR 2018 (NOC) 113 (KAR.), 2017 (4) AKR 93 (2018) 1 KANT LJ 330, (2018) 1 KANT LJ 330
Author: S.Abdul Nazeer
Bench: S.Abdul Nazeer
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF FEBRUARY, 2017
PRESENT
THE HON'BLE MR.JUSTICE S.ABDUL NAZEER
AND
THE HON'BLE MRS JUSTICE K.S.MUDAGAL
RFA No.92/2016 C/W RFA NO.90/2016
C/W
RFA CROB NO.14/2016 IN RFA NO.90/2016
c/w
RFA CROB. 16/2016 IN RFA NO.92/2016 (MON)
RFA NO.92/2016
BETWEEN:
M/s Horticontracts,
Rep.by its Sole Proprietor,
Sri.P.Muralidharan,
Aged about 60 years,
S/o.G.Parthasarathy,
#237/36, 'GOPAL',
5th Main, Chamarajpet,
Bangalore-560 018. ....Appellant
(By Sri. Anantha Narayana.B.N. Adv.,)
And:
M/s. Agrihorticultural Consultants,
#19/10, Bawa Road,
Residency Apartments,
2nd floor, Alwarpet,
2
Chennai-600 018,
Rep. by its Propreitrix,
Smt.Lalitha Mukundan. ... Respondent
(By Sri.Rajadithya Sadasivan, Adv.,)
This RFA is filed under sec.96 of CPC., against the
Judgment and decree dt:28.09.2015 passed in OS
No.281/2011 on the file of the XLIV Addl.City Civil and
Sessions Judge, Bengalure (CCH-45), partly allowing the
suit for recovery of money.
RFA NO.90/2016
BETWEEN:
M/s.KSG Exotics,
Rep. by its Sole Proprietor,
Sri.P.Muralidharan,
Aged about 60 years,
S/o.G.Parthasarathy,
#237/36, 'GOPAL',
5th Main, Chamarajpet,
Bangalore-560 018. ....Appellant
(By Sri. Anantha Narayana.B.N. Adv.,)
And:
M/s.KSG Farm and Nursery,
#19/10, Bawa Road,
Residency Apartments,
2nd floor, Alwarpet,
Chennai-600 018,
Rep.by its Proprietor,
Sri .P.Mukundan. .. Respondent
(By Sri.Rajadithya Sadasivan, Adv.,)
This RFA is filed under sec.96 of CPC., against the
Judgment and decree dt:28.09.2015 passed in OS
No.213/2011 on the file of the XLIV Addl.City Civil and
3
Sessions Judge, Bengalure (CCH-45), partly allowing the
suit for recovery of money.
RFA CROB NO.14/2016 IN RFA NO.90/2016
BETWEEN:
M/s.KSG FARM AND NURSERY,
19/10, Bawa Road, Residency,
Apartments, 2nd Floor, Alwarpet,
Chennai-600018,Represented by its
proprietor, Sri.P.Mukundan. ....Cross Objector
(By Sri.Rajadithya Sadasivan, Adv.,)
And:
M/s.KSG Exotics,
Represented by its sole proprietor,
Sri.P.Murlidharan,
S/o Late G.Parthasarathy,
No.237/36, 'Gopal',5th Main
Chamrajpet, Bangalore-560 018. ... Respondent
(By Sri. Anantha Narayana.B.N. Adv.,)
This RFA Crob in RFA filed under order XLI Rule 22
of CPC., against the Judgment and decree dt:28.09.2015
passed in OS No.213/2011 on the file of the XLIV Addl.City
Civil and Sessions Judge, Bengaluru, partly allowing the
suit for recovery of money.
RFA CROB NO.16/2016 IN RFA NO.92/2016
BETWEEN:
M/s.Agrihorticultural,
Consultants, 19/10, Bawa Road,
Residency Apartments, 2nd floor,
Alwarpet, Chennai-600018,
Represented by its proprietor,
Smt.Lalitha Mukundan. ...Cross Objector
(By Sri.Rajadithya Sadasivan, Adv.,)
4
And:
M/s Horticontracts,
Represented by its sole proprietor,
Sri.P.Murlidharan,
S/o Late G.Parthasarathy,
No.237/36, 'Gopal',
5th main Chamrajpet,
Bangalore-560 018. .. Respondent
(By Sri. Anantha Narayana.B.N. Adv.,)
This RFA Crob in RFA filed under order XLI Rule
22 of CPC., against the Judgment and decree
dt:28.09.2015 passed in OS No.281/2011 on the file of
the XLIV Addl.City Civil and Sessions Judge,
Bengalure, (CCH 45), partly allowing the suit for
recovery of money.
These Regular First Appeals and Regular First
Appeal Cross Objections having been heard and
reserved for orders on 16th January 2017 at the
Principal Bench, Bengaluru, coming on for
pronouncement this day, K.S.MUDAGAL J., delivered
the following:
JUDGMENT
Since common question of law and facts are involved in all these cases, they are clubbed together, heard and disposed of by this common judgment.
2. The above appeals and cross objections arise out of common judgment and decrees dated 5 28.09.2015 in O.S.No.213, 214 and 281/2011 passed by the IV Additional City Civil and Sessions Judge, Bengaluru. By impugned judgment, the trial Court allowed applications of the plaintiff under Order 12 Rule 6 of CPC and decreed all the three suits for the amount mentioned as below:
O.S. No.213/2011- Rs.21,59,213/- O.S. No.214/2011- Rs.6,97,862/- O.S. No.281/2011- Rs.29,69,497/- Further, the trial court rejected the claim of the plaintiff for interest at 18% p.a.
3. Sri.P.Muralidharan s/o G Parthasarthy is the common defendant in all the above three suits.
M/s KSG Farm and Nursery represented by Sri P.Mukundan is the plaintiff in O.S.No.213/2011. M/s Agrihorticultural Consultants represented by 6 its Proprietrix Smt.Lalitha Mukundan is the common plaintiff in O.S.Nos.214 and 281/2011.
4. Against the above said common order, the defendant in O.S.No.213/2011 has filed RFA No.90/2016 and defendant in O.S.No.281/2011 has filed RFA No.92/2016. Against the rejection of the claim for interest, the plaintiff has filed RFA Crob No.14/2016 in RFA No.90/2016 and RFA Crob.16/2016 in RFA No.92/2016. For the purpose of convenience, the parties will be referred to hereafter with their ranks before the trial Court.
5. The brief facts of the above case are as follows:
In O.S.No.213/2011, the plaintiff sought decree for recovery of Rs.19,80,931/- from the defendant alleging that the defendant owe that amount towards the seeds, saplings and plant materials supplied to it from 2005 to 2010 on 7 credit basis. In O.S.No.281/2011, the plaintiff sought decree for recovery of Rs.29,69,497/- against the defendant alleging that the defendant owes the said amount towards the agricultural input services by way of supervision, labour and supply of saplings and plants, other marketing services rendered between 2006 and 2010 on credit basis. The plaintiff further prayed the interest @ 18% p.a. on the suit claim from the date of the suit till its realization. The plaintiffs contended that the defendants have admitted their liability in the income tax returns submitted by them to the income tax authorities for the respective assessment years. The defendants contested all the three suits. The trial Court framed the issues.
6. In the midst of evidence of PW1, plaintiff filed application under Order 12 Rule 6 CPC in all the three cases seeking decree on admission on 8 the ground that in the written statement in each case, there is no specific denial of the suit transactions and the suit claim and that the defendants have admitted their liability in their income tax returns filed during the respective years. The defendants contested the said applications denying the claim made in the applications and claiming that the matter requires to be adjudicated on full pledged trial. The Trial Court after hearing both the parties by the impugned judgments upheld the contention of the plaintiffs and decreed the suits and rejected the claim of the plaintiffs for interest.
7. Having heard both the parties extensively, the points that arise for consideration of this Court are:
"Whether the impugned judgment and decree are sustainable in law?"9
8. The learned counsel for the appellants in his arguments assails the judgments on the following grounds:
(i) that in the written statement there is no admission;
(ii) the auditor of the plaintiffs and the defendants was common and the income tax returns referred to in the plaint are the out come of the collusion between the said two to defraud the defendants;
(iii) when the genuineness of those documents was disputed, unless the said documents are proved summoning the originals, they cannot be called as admission;
(iv) Order XII Rule 6 CPC cannot be invoked unless the plaintiff calls upon the defendant to admit the documents invoking Order XII Rule 1 & 2 and compliance of Order XII Rule 3 to 5 and 8 CPC;10
(v) the defendants had taken the plea that the suits are time barred and the said issue is the mixed question of law and facts, deciding the issue without recording the evidence and trial are wholly unsustainable;
(vi) When there is no specific denial, the proviso to Order VIII Rule 5 CPC requires the Court to seek the proof of the plaintiffs case. To support his arguments, he relied upon the following judgments:
(1) Mr.RAJA A MENDA vs RANI
RASAMANI REAL ESTATE & ORS. (ILR
2007 Kar.2627)
(2) KARNATAKA SMALL INDUSTRIES
MARKETING CORPORATION LIMITED
VS PADMA TEXTILES (ILR 2007
KAR.2844)
(3) CREF FINANCE LIMITED vs SHANTHI HOMES PVT. LTD. COMPANY, BANGALORE & ORS. (AIR 2006 Kar.54) (4) BALRAJ TANEJA vs SUNIL MADAN (AIR 1999 SC 3381) (5) M/S JEEVAN DIESELS AND ELECTRICALS LIMITED AIR 2010 SC 1890) 11
9. Supporting the decree of the suit under Order XII Rule 6, Sri. Rajadhitya Sadashivan, the learned counsel for the plaintiffs taking the Court through the pleadings of the parties, argued that though lengthy written statements are filed in all the three suits, there is no specific denial of the transactions between the plaintiffs and the defendants, the submission of the income tax returns or the liability of the defendants. He argued that Order XII Rule 6 does not only contemplate the admission in pleading but the admissions of the parties otherwise also and whenever the admissions are found, it is the duty of the Courts to pass the judgment and decree as the word 'shall' is employed in Order XII Rule 6(2) CPC. To support his arguments, he relied upon the following judgments:
(1) Sihor Nagar Palika Bureau -vs-
Bhabhlubhai Virabhai and Co.(2005(3) ALD125(SC) 12 (2) Badat and Co. -vs- East India Trading Co.( AIR 1964 SC 538) (3) Nagindas Ramdas -Vs- Dalpatram Ichharam alias Brijram and Ors.
(AIR1974 SC 471) (4) Hegde and Golay Limited -vs-
State Bank of India (ILR 1987 KARNATAKA 2673) (5) Alok Shanker Pandey -vs- Union of India (UOI) and Ors. (AIR 2007 SC 1198) (6) Abbai Maligai Partnership Firm and Anr. -vs- K. Santhakumaran and Ors.(MANU/SC/1141/1998) (7) State of Maharashtra and another
-vs- Prabhakar Bhikaji Ingle (MANU/SC/0804/1996 (8) Razia Begum -vs- Sahebzadi Anwar Begum and Ors.
(MANU/SC/0003/1958) Reg: The need of complying Order XII Rules 1 to 5 and 8 before invoking Order XII Rule 6 and the stage for invoking the same:
10. To ascertain the scope of Order XII Rule 6(i), the said Rule is extracted below:
"Where admissions of fact have been made either in pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of 13 its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions."
11. The above Rule makes it clear that the Court can invoke order XII Rule 6 at any stage of the suit. The mere fact that the evidence has commenced is not a bar for the Court to invoke Order XII Rule 6.
12. So far as the question whether the compliance of Order XII Rules 1 to 5, 7 and 8, the Apex Court in KARAM KAPAHI & ORS. Vs LALCHAND PUBLIC CHARITABLE TRUST & ANR. (AIR 2010 SC 2077) at paragraph 49 has held that, "Order XII Rule 6 is wider inasmuch as the provision of Order XII Rule 1 is limited to admission by pleading or otherwise in writing but in Order XII Rule 6 the expression, 'or otherwise' is much wider in view of the words used therein: 14
"admission of fact..... either in the pleading or otherwise, whether orally or in writing". The Apex Court referring to the Judgment CHARANJIT LAL MEHRA & ORS. Vs KAMAL SAROJ MAHAJAN's (AIR 2005 SC 2765) has held that admissions in answer to interrogatories are also covered under Order XII Rule 6. Further, referring to UTTAM SINGH DUGGAL & CO. LTD. Vs UNITED BANK OF INDIA & ORS (AIR 2000 SC 2740) held that Court should not unduly narrow down the application of Order XII Rule 6 CPC as the object is to enable a party to obtain speedy judgments. Having regard to that there is no merit in the contention that while invoking Order XII Rule 6, the Court has to fall back only on the admissions as contemplated under Order XII Rule 1 to 5, 7 and 8 of the Civil Procedure Code.
13. Then the question is whether in these cases there is admission on the part of the 15 defendants or there is no specific denial in the pleadings warranting a judgment under Order XII Rule 6 C.P.C.
14. As rightly pointed out by the counsel for the plaintiffs, though the plaintiffs specifically pleaded about the defendants filing income tax returns, which contained a statement that they owe the suit sum to the plaintiffs, the defendants in their written statement did not deny that such income tax returns are filed and the balance sheets in such returns showed the suit claim in the liability column.
15. There is no dispute that after the plaintiffs filing the applications under Order XII Rule 6 CPC the defendants filed applications in all the three suits to amend the written statements to deny the income tax returns, etc. and to plead fraud, etc. Those applications came to be rejected. 16 Challenging the said order of rejection, the defendants approached this Court in W.P.Nos.39235-37/2013 (GM-CPC). This Court dismissed the said Writ Petitions on 11.03.2014 on hearing on the merits holding that there is no specific denial of the plaint averments in the written statement and by way of amendment, the defendants are trying to take away the deemed admissions. The relevant portion of the said order reads as follows:
"Para 7.... As could be seen from the written statement there is no specific denial at all by the defendant to the averments made in the plaint. In this context the plaintiff may be justified in arguing that the facts which are not specifically denied are deemed to have been admitted...... In other words, the defendant wants to take away deemed admissions made by him in the written statement. It is not open for a party to withdraw the averments made by him for amending the pleadings. It goes without 17 saying and it needs to be observed that the admission and the pleading has got higher value than the admission made in the evidence...."
16. The defendants challenged the above said order of W.P.Nos.39235-37/2013 (GM-CPC) before the Apex Court by filing SLP(CA) Nos.17984-17986/2014, which came to be dismissed on 30.07.2014. Thus, the observation of this Court in the said order that there is no specific denial in the written statement and there is deemed admission in the pleading has attained finality.
17. The Hon'ble Apex Court in its Judgment in Y.B.Patil and Ors. Vs Y.L.Patil (AIR 1977 SC 392), has held that principles of resjudicata can be invoked not only in separate subsequent proceedings; they also get attracted in subsequent stage of the same 18 proceedings. It is further held that once an order made in the course of proceedings becomes final, it would be binding at the subsequent stage of that proceeding.
18. Therefore, the finding that there is no specific denial of the plaint averments and therefore, they are deemed to have been admitted operate as res judicata against the defendants. It is not open to the defendants to reagitate the same.
19. Reg. the plaintiffs ought to have called upon to prove the admissions/income tax returns :
The plaintiffs in the plaint in their respective suits contended that from 2005 till 2010, the defendants availed goods/services on credit basis and towards that they owed the suit claim and the defendants have admitted the said 19 liability in the income tax returns submitted by them. As can be seen from the pleadings, there is no specific denial of those aspects in the written statement. As already pointed out, the finding that there is no specific denial of the plaint averments in the written statement has become final.
20. Section 58 of the Evidence Act deals with the proof of the admitted facts which reads as follows:
"Sec.58 Facts admitted need not be proved:
No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings".20
21. The above said provision shows that what is required to be proved is a fact admitted and not a fact which by rule of pleading deemed to have been admitted by the pleadings of the other side. Therefore, the question of proving the fact, which is deemed to have admitted by rule of pleading i.e., Order VIII Rule 5 CPC does not arise unless the Court invoking the proviso to Section 58 of the Indian Evidence Act or Order VIII Rule 5 CPC calls upon the plaintiffs to prove.
22. The deemed admission of the defendants in their written statement includes the admission of the plea in the plaint regarding submission of the income tax returns. Therefore, there is no merit in the contention that the Court ought to have called upon the plaintiff to prove the deemed admissions made in the written statement.
21
23. It is also to be noted that there were in all three suits viz., O.S.Nos.213,214 and 281/2011. Out of them,KSG Exotics represented by P.Muralidharan is the defendant in O.S.Nos.213 & 214/2011 and M/s Horticontracts represented by P.Muralidharan is the defendant in O.S.No.281/2011. By the common judgment in all the above said suits the impugned money recovery decrees are passed in all the cases. M/s KSG Exotics challenges only the judgment in O.S.No.213/2011 in RFA 90/2016. The claim and decree in O.S.No.214/2011 is for Rs.6,97,862/- whereas the decree in the other two suits is for heavy amount. It appears only for that reason the judgments in the other two suits are challenged in these cases. Thus, the common finding in the other suit regarding the deemed admission is still operating against the defendant M/s KSG Exotics.
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24. In Karnataka Small Industries Corporation Marketing Limited and Balraj Taneja's case referred to supra, the defendants had not filed the written statement and the suits were decreed only on the ground that due to non- filing of the written statement the plaint averments are treated to have been admitted. In CREF Finance Limited's case referred to supra, there was total denial of the documents relied upon by the plaintiff and therefore, it was held that those documents partake the character of disputed documents and the admission under Order XII Rule 6 should stand independently without being any interlink support with those documents, otherwise under Section 18 of the Evidence Act an opportunity is to be given to the defendants to explain the admission.
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25. But, in the cases on hand, there is a concluded finding that there is deemed admission of the plaint averments, which includes the statement that the defendants have filed income tax returns admitting the liability. Despite the defendants filing lengthy written statements did not dispute that such income tax returns are filed and the liability payable to the plaintiffs as claimed in the suits is reflected in them.
26. In M/s Jeevan Diesels and Electricals Limited's case referred to supra, it is held that, whether or not there is clear, unambiguous admission by one party of the other party of the case is essentially a question of fact and the decision of this question depends upon the facts of each case and that cannot be decided on the basis of a judicial precedent. It is further held that in that case parties have confined their case of admission to their pleadings only and the Court 24 found that there was no clear admission of the case of the plaintiffs.
27. In the judgment in the case in M/s Raja Mendor referred to supra, it was held that unless there is a clear admission and if the admission sought to be drawn is based on inference, it cannot be construed as absolute admission in terms of Order XII Rule 6 CPC.
Order VIII Rule 5 CPC states that every allegation of fact in the plaint if not denied specifically or by necessary implication, are stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against the person under disability.
28. In these cases, there is a concluded finding that there is deemed admission of the case of the plaintiffs on the part of the defendants. Therefore, having regard to the language of Order 25 VIII Rule 5 and the concluded finding regarding the deemed admission, the above said judgments relied on by the defendants counsel are not applicable. In Bharat & Co.'s vs EAST INDIA TRADING COMPANY (AIR 1964 SC 38), it is held that if denial of fact in the written statement is not specific but evasive the said fact shall be taken to be admitted and in such event, the admission itself being the proof no other proof is necessary. It is further held that in construing such pleadings the proviso can be invoked only in exceptional circumstances to prevent obvious injustice to a party or to relieve him from the results of accidental slip or omission but not to help a party who designedly made vague denials and thereafter, sought to rely upon them.
29. When the defendants by filing interim applications sought to amend their written statements on such plea filing the same is 26 negatived. Having regard to these facts and the aforesaid judgment, there is no merit in the contention that the trial Court ought to have called upon the plaintiffs to prove such deemed admissions.
30. Reg. Bar of limitation:
The learned counsel for the defendants contends that the suit transactions are said to have commenced from 2005-06 and the suits are filed in the year 2011, therefore, they are barred by time. He further contended that the trial Court's finding that since there is acknowledgement of the liability in the income tax returns, there is revival of debt is erroneous under Section 18 of the Limitation Act is unsustainable since the said income tax returns are not proved. As held already the concluded finding of deemed admission of the plaint averments for want of specific denial as required under Order VII 27 Rules 3 and 4 results into the admission of the averments of submission of the income tax returns also. Though, the defendants tried to contend before this Court that they are fraudulent and outcome of the collusion, etc., the particulars of the said fraud or collusion are not pleaded in the written statement as required under Order VI Rule 4 CPC.
31. Once if it is held that there is admission of the averment of filing of such income tax returns, automatically Section 18 of the Limitation Act comes into play. Having regard to the contentions that the limitation issue in the cases is a mixed question of law and facts and to decide that the trial Court ought to have recorded the evidence and therefore, the impugned judgment and decree are liable to be set-aside deserve no merit.
28
32. So far as the Cross Objections, as rightly pointed out by the trial Court in the absence of a contract to pay the interest the Courts cannot grant the interest as claimed by the plaintiffs. In the plaint in these cases, it is not pleaded that there was a contract for payment of interest on the dues @ 18% p.a. It is only claimed that the suit transaction are commercial in nature, they attract 18% interest on the bills. The plaintiffs without choosing to adduce any evidence in proof of floor bank interest rate on the commercial loans, claimed 18% interest. Further, the relationship between the persons, who represent the plaintiff and defendant firms is not disputed. Even, the grant of future interest under Section 34 CPC is discretionary relief. Having regard to all the aforesaid facts, the trial Court has exercised the discretion to reject the interest. The 29 said finding does not suffer any perversity or legal infirmity.
33. Therefore, looked at from any angle, the impugned judgments and decrees do not call for any interference. Therefore, the above appeals and the cross objections are dismissed. No order as to costs.
Sd/-
JUDGE Sd/-
JUDGE Brn