Delhi High Court
Chandigarh Clinical Laboratories vs Dr. Lals Path Labs P. Ltd. on 4 October, 2018
Equivalent citations: AIRONLINE 2018 DEL 2355
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 4th October, 2018.
+ RFA 817/2005 & CM No.16289/2005 (for stay)
CHANDIGARH CLINICAL LABORATORIES ..... Appellant
Through: Mr. Irfan Ahmed, Adv.
Versus
DR. LAL'S PATH LABS P. LTD. ..... Respondent
Through: Mr. Abhishek Swaroop, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This First Appeal under Section 96 of the Code of Civil Procedure,
1908 (CPC) impugns the judgment and decree [dated 13th July, 2005 in Suit
No.213/2004 of the Court of Additional District Judge (ADJ), Delhi]
allowing the suit filed by the respondent / plaintiff for recovery of
Rs.5,51,979.26 paise with pendente lite and future interest at the rate of 18%
per annum jointly and severally from the appellant / defendant and its
Director Mr. Ravi Khanna, in the sum of Rs.4,83,500/- with pendente lite
and future interest at the rate of 9% per annum against the appellant /
defendant and not against its Director Mr. Ravi Khanna.
2. The appeal came up first before this Court on 21st November, 2005
when, while issuing notice thereof, the operation of the impugned judgment
and decree was stayed subject to the appellant / defendant depositing the
decretal amount in this Court. Vide order dated 22nd March, 2006, the
respondent / plaintiff was permitted to withdraw the decretal amount
deposited by the appellant / defendant subject to furnishing surety bond and
RFA 817/2005 Page 1 of 12
the trial court record was requisitioned. On 7th August, 2006, the appeal was
admitted for hearing. The respondent / plaintiff / decree-holder has
withdrawn the decretal amount by furnishing a surety bond in the form of an
FDR qua which intimation was ordered to be given to the Centurion Bank of
Punjab Ltd. and by furnishing an undertaking not to encash the said FDR. On
23rd November, 2009, the appeal was dismissed in default. However, vide
subsequent order dated 30th November, 2009, the appeal was restored to its
original position. The counsel for the appellant / defendant / judgment-
debtor and the counsel for the respondent / plaintiff / decree-holder have
been heard and the requisitioned record perused.
3. The respondent / plaintiff / decree-holder instituted the suit, from
which this appeal arises, pleading that (i) on request of the appellant /
defendant, the respondent / plaintiff, engaged in conducting pathological
examinations, agreed to open a sample collection centre at the premises of
the appellant / defendant at Chandigarh; (ii) the appellant / defendant used to
collect the samples for pathological examinations at Chandigarh and forward
the same to the respondent / plaintiff at Delhi and the respondent / plaintiff at
Delhi used to conduct the pathological examination and forward the reports
to the appellant / defendant at Chandigarh for onward delivery to the
patients; (iii) the respondent / plaintiff used to charge a discounted rate to the
appellant / defendant; (iv) the respondent / plaintiff, from time to time issued
invoices to the appellant / defendant; (v) though the appellant / defendant
initially was regular in remitting payments of the said invoices but started
delaying the payments inspite of repeated requests and reminders of the
respondent / plaintiff; (vi) though the appellant / defendant in part discharge
of its liability to the respondent / plaintiff issued cheque dated 10 th April,
RFA 817/2005 Page 2 of 12
2002 in the sum of Rs.10,000/- to the respondent / plaintiff but the said
cheque was dishonoured on presentation; (vii) as per the statement of
account maintained by the respondent / plaintiff in the normal course of
business on the basis of invoices raised on the appellant / defendant from
time to time, a sum of Rs.4,15,022/- was due from the appellant / defendant
as on 31st August, 2003; and, (viii) the appellant / defendant is also liable to
pay interest thereon at the rate of 18% per annum.
4. The appellant / defendant along with its Director, who was then also a
defendant, contested the suit by filing a written statement, pleading on merits
that (a) the dealings commenced in the year 1995 between the respondent /
plaintiff and the Chandigarh Clinical Laboratories Pvt. Ltd.; (b) as on 1 st
April, 1999, an amount of Rs.48,714.50 paise was due from the Chandigarh
Clinical Laboratories Pvt. Ltd. to the respondent / plaintiff; (c) the appellant /
defendant took over the said amount from Chandigarh Clinical Laboratories
Pvt. Ltd. on taking over the assets and liabilities of Chandigarh Clinical
Laboratories Pvt. Ltd.; (d) during the course of business, the respondent /
plaintiff raised many bills, on Chandigarh Clinical Laboratories Pvt. Ltd. and
the appellant / defendant, for which no samples for pathological examination
were ever sent to the respondent / plaintiff; (e) on 6 th August, 2002, accounts
were reconciled between the appellant / defendant and the respondent /
plaintiff and it was found that bills / invoices in the amount of Rs.2,20,165/-
had been raised by the respondent / plaintiff in excess; (f) a debit note dated
6th August, 2002 was sent by the appellant / defendant to the respondent /
plaintiff which was accepted by the respondent / plaintiff; (g) again between
October, 2002 and June, 2003, some wrong claims were found to have been
made by the respondent / plaintiff and on re-conciliation, it was found that
RFA 817/2005 Page 3 of 12
the respondent / plaintiff owed Rs.1,389.50 paise to the appellant / defendant
and which amount was written off by the appellant / defendant.
5. On the pleadings of the parties, the following issues were framed in
the suit on 14th December, 2004:
"1. Whether the plaint is signed and verified by a competent persons? OPP.
2. Whether this court has no jurisdiction to try and entertain the present suit as
alleged in the preliminary objection No.2 in WS? OPP.
3. Whether various bills to the tune of Rs.2,20,165/- were raised by the plaintiff
without any costs and some invoices were raised by plaintiff twice as alleged in para
No.8 in the WS? If so to what effect? OPD.
4. To what principal amount, if any, is the plaintiff entitled from the defendant?
OPP.
5. Whether the plaintiff is entitled to any interest, if so at what rate, for which
period and to what amount? OPP.
6. Relief."
6. The Suit Court, on the basis of evidence led has held that (i) the
respondent / plaintiff had proved as Ex.PW1/1 the extract of the Board
Resolution, authorizing institution of suit and signing and verification of the
plaint; (ii) the contention of the appellant / defendant that the Board
Resolution had not been proved in accordance with law could not be
accepted as the appellant / defendant, at the time of proving of Ex.PW1/1
and admission of the extract of the Board Resolution into evidence did not
raise any objection and did not challenge the same; (iii) in the matter of
authority to institute a suit a technical view could not be taken; (iv) though
the appellant / defendant was based in Chandigarh but admittedly the
appellant / defendant used to send samples for pathological examinations,
RFA 817/2005 Page 4 of 12
collected at Chandigarh, to the respondent / plaintiff at Delhi and the
respondent / plaintiff used to send the reports of pathological examinations
from Delhi to Chandigarh; (v) cause of action for the suit thus accrued also
at Delhi; (vi) the respondent / plaintiff, besides proving its statement of
account, had also proved the invoices running into 500 pages, on the basis of
which the said statement of account had been prepared; (vii) the said
invoices as well as the statement of PW-1 corroborated the entries in the
books of account; (viii) though the contention of the appellant / defendant
was that the respondent / plaintiff had not produced the requisition slips sent
by the appellant / defendant along with the samples to be examined / tested
by the respondent / plaintiff but the witness of the respondent / plaintiff had
explained that the respondent / plaintiff was not in possession of these
requisition slips as they had been destroyed after 10 days of receipt; the
witness had further explained that the respondent / plaintiff used to generate
a large number of such requisition slips in a day and the same if preserved
required a large amount of storage space; the witness yet further explained
that after the invoice had been prepared on the basis of requisition slips and
after the report of the test carried out had been forwarded to the appellant /
defendant, the requisition slips were destroyed; reliance in this regard is
placed on Kaka Ram Sohan Lal Vs. Firm Thakar Das Mathra Das AIR
1962 Punjab 27; (ix) the entries in the books of account of the respondent /
plaintiff had thus been corroborated with other evidence in the form of
invoices; (x) no adverse inference was thus required to be drawn against the
respondent / plaintiff for not producing the requisition slips; the respondent /
plaintiff had been able to prove outstanding of Rs.4,15,022/- from the
appellant / defendant; (xi) the books of accounts and copies of income tax
RFA 817/2005 Page 5 of 12
returns proved by the appellant / defendant were not worthy of credit; (xii)
the appellant / defendant, in the reply to the legal notice preceding the suit,
had not stated that there was any double invoicing on the part of the
respondent / plaintiff or that any wrong invoice had been issued; (xiii)
though the witness of the appellant / defendant admitted that the respondent /
plaintiff used to send two copies of the invoice, one for the record of the
appellant / defendant and the other for the clients whose samples were
forwarded for pathological examination but the appellant / defendant had not
produced the invoices so received by it from the respondent / plaintiff; (xiv)
the witness of the appellant / defendant also admitted that the appellant /
defendant at no point of time sent any communication to the respondent /
plaintiff regarding wrong billing / invoicing or double billing / invoicing;
(xv) the witness of the appellant / defendant in cross-examination, admitted
that at least one of the entries which the defendant was claiming to be faulty,
was correct; (xvi) however the Director of the appellant / defendant could
not be made personally liable for the dues of the appellant / defendant; (xvii)
the respondent / plaintiff had also not proved any agreement for payment of
interest at the rate of 18% per annum and in the circumstances interest at the
rate of 9% per annum was justified; and, (xviii) the respondent / plaintiff was
thus entitled to a sum of Rs.68,478/- only towards the rate of 9% per annum
for the period prior to the institution of the suit. Hence, the decree for
Rs.4,83,500/-.
7. The emphasis of the counsel for the appellant / defendant before me
also has been qua the requisition slips aforesaid. It is argued that the
requisition slips, admittedly forwarded by the appellant / defendant to the
respondent / plaintiff, were the best proof of the volume of work done by the
RFA 817/2005 Page 6 of 12
respondent / plaintiff for the appellant / defendant. It is contended that the
respondent / plaintiff failed to produce the same and on this ground only
should have been non-suited.
8. I have enquired from the counsel for the appellant / defendant,
whether the appellant / defendant issued any notice to the respondent /
plaintiff, immediately after the framing of the issues or before the
commencement of the evidence of the respondent / plaintiff, to produce the
said requisition slips.
9. The answer is in the negative.
10. For a litigant to be entitled to urge that adverse inference should be
drawn against the opposite party, it is incumbent upon the litigant to give
notice to the opposite party to produce the document and to in evidence
establish that such evidence exists and has relevance to the lis. Merely by
putting a question in the cross-examination of the opposite party that the
document exists, a surprise in the form of adverse inference cannot be sprung
on the opposite party.
11. In the present case, the witness of the respondent / plaintiff when
asked about the requisition slips, has given cogent reasons for non-
production thereof and which has been rightly accepted by the Suit Court.
12. In fact, I have enquired from the counsel for the appellant / defendant,
whether the appellant / defendant has produced its own copies of the
requisition slips.
13. The counsel for the appellant / defendant states that no such copies
were maintained.
RFA 817/2005 Page 7 of 12
14. I have further enquired from the counsel for the appellant / defendant,
whether not the blank requisition slips were maintained in the form of a
booklet and whether there were any counterfoils of the said booklet.
15. The counsel for the appellant / defendant states that nothing in this
regard has come on record.
16. The explanation given by the witness of the respondent / plaintiff qua
the requisition slip is a reasonable one and no error of fact or law can be said
to have been committed by the Suit Court Judge in accepting the said
explanation.
17. As far as the money claim is concerned, the argument of the counsel
for the appellant / defendant is that certificate under Section 65B of the
Indian Evidence Act, 1872 has not been filed by the respondent / plaintiff.
18. Though the appellant / defendant has similarly produced its accounts
but the appellant / defendant also has not provided the said certificate.
Section 65B was incorporated in the Evidence Act with effect from 17 th
October, 2000. The evidence in the suit was recorded in or about the year
2004-05. It appears that neither counsel at that time was aware of the
requirement for proving information contained in electronic record through a
certificate as aforesaid. Though the onus to prove the money claim was on
the respondent / plaintiff but considering the nature of the defence of the
appellant / defendant and on which issue no.3 was framed as aforesaid, all
that can be said is that the onus was equally on both the parties. Both the
parties are in the same boat and once it is so, I am of the opinion that no
benefit can be drawn by the appellant / defendant in the facts and
circumstances of the case. It cannot be lost sight of that the appellant /
RFA 817/2005 Page 8 of 12
defendant was disputing Rs.2,20,165/- out of the claim of Rs.4,15,022/- by
contending that on reconciliation, a debit note was sent to the
respondent/plaintiff with respect to the said amount. However, the appellant
/ defendant has failed to prove that there was any reconciliation or that any
such debit note was sent. The plea of the appellant / defendant was that the
representatives of the respondent / plaintiff had visited Chandigarh on 6 th
August, 2002 when the debit note was also prepared; however, the debit note
was not personally delivered to the respondent / plaintiff and no
acknowledgment of receipt of the same by the respondent / plaintiff thereon
obtained. Only a courier receipt in proof of dispatch thereof has been proved
and which does not inspire confidence. No statement of reconciliation was
jointly prepared or signed. It is highly unlikely that if the appellant /
defendant had noticed any overbilling on the part of the respondent /
plaintiff, the appellant / defendant, upon the respondent / plaintiff agreeing to
the same and reconciliation having been carried out, not insisting for a
signature of the representatives of the respondent / plaintiff on the reconciled
statement of account. It is also highly unlikely that the alleged reconciliation
would not be preceded by even a single communication in writing. The Suit
Court Judge has thus rightly rejected the said defence of the appellant /
defendant and decided issue no.3 against the appellant / defendant.
19. I may in this regard also notice that the invoices raised of
Rs.2,20,165/- claimed to have been overbilled were not billed overnight. If
it was so, it is inexplicable as to why the appellant / defendant, in April,
2002, would forward a cheque for Rs.10,000/- to the respondent / plaintiff
which was returned dishonoured.
RFA 817/2005 Page 9 of 12
20. Else, the respondent / plaintiff is found to have proved outstanding of
Rs.4,15,022/- from the appellant / defendant and proved the statement of
account and the invoices raised from time to time.
21. Though the counsel for the appellant / defendant before me has not
argued that the plaint was not signed and verified by duly authorized person
and the Courts at Delhi had no jurisdiction, I may however record that the
reasoning given in the Suit Court judgment for deciding issues no.1 and 2 in
favour of the respondent / plaintiff is in accordance with law. I may in this
regard record that on the issue of authority to sue, the suit in any case could
not have been defeated. It has been held in Haldiram (India) Pvt. Ltd. VS.
Haldiram Bhujiawala 2009 (109) DRJ 647, Canara Bank Vs. K.L.
Rajgarhia 2009 SCC OnLine Del 310 and Union of India Vs. Shanti
Gurung 2014 SCC OnLine Del 989 that even if the Court finds any such
deficiency, opportunity has to be given to the concerned party to rectify the
same. In any case, what has transpired during the pendency of this appeal
i.e. of the money having been released to the respondent / plaintiff, by
cheque drawn by this Court in the name of the respondent / plaintiff and the
respondent / plaintiff furnishing security for restitution also would show that
the monies claimed in the suit have gone to the coffers of the respondent /
plaintiff only and not in the pocket of anyone else. Similarly, qua territorial
jurisdiction also, considering the nature of the contractual relationship
between the parties, it cannot be said that the Courts at Delhi, where
admittedly part of the contract was being performed, did not have
jurisdiction to entertain the suit. Courts at Delhi would also have jurisdiction
on the principle of debtor must seek the creditor.
RFA 817/2005 Page 10 of 12
22. At this stage, the counsel for the appellant / defendant states (i) that it
was not the case of the appellant / defendant that before the first
reconciliation nothing was due from the appellant / defendant to the
respondent / plaintiff; thus the cheque for Rs.10,000/- was sent in discharge
of liability; (ii) that the witness examined by the respondent / plaintiff was
not competent to prove the case of the respondent / plaintiff under Section 34
of the Evidence Act; he came in employment of the respondent / plaintiff
subsequent to the transactions subject matter of the suit and has deposed on
contractual terms on the basis of hearsay.
23. I have considered the aforesaid arguments. The cheque for
Rs.10,000/- was sent about three and a half months priors to 6 th August,
2002. I have asked the counsel for the appellant / defendant as to what was
the amount due according to the appellant / defendant to the respondent /
plaintiff as on that date.
24. The counsel for the appellant / defendant states that since the account
was a running account, it is difficult to say how much money was due from
one party to another on 10th April, 2002 when the cheque was sent.
25. Without the appellant / defendant showing the status of the account as
on 10th April, 2002, the sending of the cheque remains a factor belying the
plea of reconciliation dated 6th August, 2002 claimed by the appellant /
defendant.
26. As far as the objection with respect to Section 34 of the Evidence Act
is concerned, the witness of the respondent / plaintiff, though not in the
employment of the respondent / plaintiff at the time of transaction subject
matter of the suit, has deposed that the said statement of account was
RFA 817/2005 Page 11 of 12
maintained in the regular course of business. The same satisfies the
requirement of Section 34 of the Evidence Act.
27. No merit is thus found in this appeal.
28. Dismissed with costs of Rs.20,000/- on the respondent / plaintiff.
29. The security furnished by the respondent / plaintiff is discharged and
the FDR if any deposited by the respondent / plaintiff in this Court be also
returned to the respondent / plaintiff duly discharged. A certificate be also
issued to the respondent / plaintiff for onward submission to the bank which
had issued the FDR, confirming that the FDR is free from the security
furnished.
30. At this stage, the counsel for the appellant / defendant states that since
decretal amount has already been paid, cost be waived.
31. The counsel for the respondent / plaintiff fairly gives no objection to
the same.
32. Allowed. The costs imposed on the appellant / defendant is waived.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
OCTOBER 04, 2018 'gsr' RFA 817/2005 Page 12 of 12