Kerala High Court
Khanna vs A. Tosh And Sons India Ltd. on 1 November, 2001
JUDGMENT S. Sankarasubban, J.
1. This appeal is filed by the defendant in O.S. No. 90 of 1993 on the file of the Additional Subordinate Judge's Court, Kochi. The suit was filed by the respondent for realisation of Rs. 30,23,715.18 from the defendant with interest at 25%. The averments in the plaint are as follows:
2. Plaintiff is Public Limited Company, registered under the India Companies Act, having its registered office at Calcutta. One of its Branches is at Wellington Island. The defendant is also a partnership Firm having its registered office at New Delhi.
3. The defendant entered into a contract on 28.8.1991 with M/s. Sojuzplodoimport of Moscow for the supply of 5,00,000 Kgs. of Net of South India C.T.C. Teas in 250gms. Net each carton packed by the respondent/plaintiff at Kochi. The defendant has assigned the right in favour of the plaintiff by letter dated 21.9.1991. Towards consideration, the plaintiff had agreed to pay a commission of 5% of the FOB value of the said contract after successful completion of the contract. According to the plaintiff, in paragraph 4 of the plaint, the details of the three bills are given. The plaintiff sent a telex message to the defendant on 28.11.1991. The plaintiff also requested the defendant to send letter of credit for the amounts so as to forward the documents for clearing the goods.
4. A reply was given by the defendant directing the plaintiff to sent certain documents. On that basis, the plaintiff sent certain documents, which were required for clearing the goods. The plaintiff sent three invoices and the other documents pertaining to the above transaction to the defendant. Subsequently, the defendant paid Rs. 79,14,798.69 in full settlement of the first two bills. In relation to the third bill for an amount of RS. 1,93,89,900.18, the defendant had paid only an amount of RS. 1,30,00,000.18. The plaintiff sent another letter and thereafter, the defendant paid Rs. 10,00,000/- on 12.5.1992. The suit is filed for the balance amount of Rs. 30,23,715.18.
5. A written statement was filed by the defendant. In the written statement, it is contended that the plaintiff has not given credit to 5% commission of the FOB value of the contract nor have they made mention of the amount which was payable by them to the defendant for execution of the contract by undertaking several visits to Moscow and staying in Hotels there. It was further contended that all the incentives were taken by the plaintiff, which had been agreed to be divided equally between the plaintiff and the defendant. Paragraph 3 of the written statement admits the contract between the defendant and M/s. Sojuzplodoimport of Moscow. It is also admitted that in consideration of defendant's assigning the said contract in favour of the plaintiff, the plaintiff had agreed to pay a commission of 5%. Paragraph 7 of the written statement gives the details of the bills. It is stated that an amount of Rs. 22,89,900/- can be claimed from the defendant. It is further stated that the plaintiff had been informed the above position and they were fully satisfied that nothing was due to them from the defendant. The defendant was prepared to give the details of the expenditure. In view of the above contention, the defendant submitted that an amount of Rs. 30,23,715.18 was due to the plaintiff from the defendant.
6. On the basis of the above pleading, the court below framed five issues. The court found that it had jurisdiction to try the suit. Regarding the contention of the defendant that 5% commission should be adjusted, the court below took the view that since no court fee has been paid, the amount cannot be adjusted. So far as the expenses is concerned, there was no evidence to show that expenses were incurred. Another contention raised before the court below was that since the contract has been assigned in favour of the plaintiff, the plaintiff has to sue the buyer in Moscow for the balance amount. The court below held that S. 62 of the Contract Act on which reliance was placed by the defendant does not apply. The Court below further held that there was no evidence with regard to this fact also.
7. Learned counsel for the appellant submitted that the claim cannot be enforced against the appellant. Further, he also said that the plaintiff is only entitled to the balance amount after adjusting the 5% commission. Learned counsel for the respondent submitted that since no court fee has been paid, the 5% commission cannot be given in the suit.
8. After hearing the parties, we cannot accept the contention of the learned counsel for the appellant that the plaintiff cannot institute the suit against the defendant. In the written statement, the defendant has not taken the contention that the defendant is not liable to be pay the amount. On the other hand, what the defendant done is that after adjusting the amount due as commission and other expenses, no amount is due from the defendant. Hence, we cannot accept the argument of the learned counsel for the appellant that the goods cannot be realised from the defendant. So far as the contention regarding the expenses is concerned, there is no proof. But regarding the 5% commission, we are of the view that the finding of the court below is not correct.
9. The defendant has stated in the written statement that the defendant has adjusted the amount due to it as commission and only the balance amount is due to the defendant. Of course, the defendant also stated that if the expenses were also adjusted, nothing will be due to the plaintiff. Since we have already held that there is no proof regarding the expenses, the only question is whether the 5% commission can be adjusted. The court below took the view that it is only a set off. A reading of the pleadings in the written statement shows that the defendant does not claim for set off. In paragraph 7 of the written statement, it is stated that the plaintiff had been apprised of the above position over telephone and they were fully satisfied that nothing was due to them from the defendant rather something was due to the defendant from the plaintiff. The defendant will give and were ever ready and willing to give to the plaintiff the details of the expenditure incurred by them for successful execution of the contract. It is not understood what has prompted the plaintiff to file the present false and vexatious suit against the defendant especially concealing the material clauses of the contract and not taking into account the amounts due to the defendant towards commission and for visits of the defendant of Moscow.
10. The court below relied on the decision in Cheria Elias v. Surendra Chit Fund 1989 (1) KLT 449, in order to reject the claim of the defendant. In Subramoniam v. Subramonian & Ors. 1977 KLT 293. Chandrasekhara Menon, J. held that if a plea could be taken as a plea of adjustment, no court fee is payable. On the other hand, if it is case of a set off or a counter claim, court fee would be payable. A set off is a statutory defence to a plaintiff's action. The counter claim is substantially a cross action. Whether on the particular facts of a case the claim of the defendant is to be treated as a plea of adjustment or as a set off or a counter claim, is first to be determined and judged by reference to the pleadings in the case and then also by reference to the nature and character of the plea. A plea of adjustment or payment or in a suit for accounts a pleading that money would be due to the defendant and praying that only a decree for the balance could be had, require no court fee. Where there has ben payment, the party against whom the claim is brought pleads payment or accord and satisfaction which, in effect, alleges that the claim no longer exist. The plea of set off on the other hand, in effect, admits the existence of the claim and sets up a cross-claim. the learned Judge referred to various decisions in the above case. The decision in Cheria Elias v. Surendra Chit Fund - 1989 (1) KLT 449 is a case wherein a suit where the plaintiff claim certain amount from the defendant, the latter cannot successfully advance a plea of set off or counter claim if that plea is barred by limitation.
11. After reading the pleading in the case, we are satisfied that it is a case of adjustment and not the case of set off and hence, the court fee is not payable. Hence the 5% commission has to be deducted from the plaint amount. The principal amount claimed in the plaint is Rs. 22,89,900/-. It is admitted that the 5% commission will come to Rs. 13,65,239/-. The last payment was made by the defendant on 9.3.1993. So on 9.3.1993, the balance amount was Rs. 9,24,666/-. The suit was filed on 12.3.1993. So, on the date of the suit, the amount due to the plaintiff will be Rs. 9,24,666/-. the court below granted interest at 18%. We are of the view that, the interest awarded is correct. Hence, we modify the judgment and decree as follows: The suit is decreed for an amount of Rs. 9,24,666/- with interest thereon at 18% per annum from the date of suit, till date of realisation. It is submitted that an amount of Rs. 5,00,000/- was paid during the pendency of the appeal. The amount shall be adjusted while recovering the balance amount. The appellant and the respondent are to suffer their respective costs throughout.
12. Appeal is disposed of as above.