Delhi District Court
Murtaza Ali vs Punjab Gaskets Industries And Anr on 15 January, 2024
IN THE COURT OF MS. HEMANI MALHOTRA, DISTRICT JUDGE
(COMMERCIAL COURT)-02, WEST, TIS HAZARI COURTS,
EXTENSION BLOCK, DELHI
CNR NO.DLWT01-007144-2018
CIV DJ NO.896/2018
MURTAZA ALI
PROPRIETOR OF M.S. PRINTERS
AT:- Z-20, OKHLA INDUSTRIAL AREA,
PHASE-II, NEW DELHI-110020
....PLAINTIFF
VERSUS
1. PUNJAB GASKETS INDUSTRIES
PP-28, FIRST FLOOR, STREET NO. 10,
ANAND PARBAT INDUSTRIAL AREA,
NEW DELHI-110005
2. GURSHARAN SINGH
A.R./PROP./PARTNER
PUNJAB GASKETS INDUSTRIES
PP-28, FIRST FLOOR, STREET NO. 10,
ANAND PARBAT INDUSTRIAL AREA,
NEW DELHI-110005
....DEFENDANTS
Date of institution : 06.08.2018
Date of receiving by this Court : 22.12.2021
Date of conclusion of arguments : 15.12.2023
Date of announcement of judgment : 15.01.2024
JUDGMENT
1. The present commercial suit is filed by the plaintiff against defendants seeking recovery of Rs. 34,65,852/- along with Civil DJ No.896/2018 Page 1 of 14 cost, pendente lite and future interest @ 15% per annum till realisation.
2. Brief facts pertaining to the present case as detailed in the plaint are that the plaintiff is the proprietor of M/s M.S. Printers and is running a business of sale of packaging material. Defendant No. 2, who claimed to be the proprietor of defendant No. 1 used to purchase products from plaintiff since long. The last purchase by defendant was made on 30.06.2015 for Rs. 70,919/- and the last payment of Rs. 1,25,000/- was made on 20.08.2015. As per the ledger account for the period 1.04.2010 to 31.03.2016, defendant was liable to pay Rs. 23,90,242.50 to the plaintiff. Since the defendant failed to clear its outstanding, the plaintiff was constrained to file the present suit for recovery of principal amount of Rs. 23,90,242.50 and interest amount of Rs. 10,75,609.12 calculated @ 15% per annum w.e.f. 01.09.2015 upto 31.08.2018.
3. After the institution of present suit, summons to the defendants were issued by the then Learned ADJ Court vide order dated 07.08.2018. On service of summons, defendants put their appearance through counsel on 06.09.2018 and filed written statement.
4. In the written statement filed by the defendants, it was averred that defendant No. 1 was a partnership firm and since, plaintiff failed to implead the second partner as a party in the present suit, suit was liable to be dismissed. It Civil DJ No.896/2018 Page 2 of 14 was also averred that the suit was barred by limitation as the suit was filed after a lapse of more than 3 years from the date of last transaction. It was further claimed that the defendants had already made payments against the said bills/tax invoices filed with the plaint and there were no outstanding dues. Rather, due to poor quality of goods supplied by the plaintiff, the defendants received complaints from its foreign customers, whereafter, the defendants had raised serious concerns with the plaintiff. Pursuant thereto, the plaintiff had agreed and had issued credit notes against the payments already received for the defective goods and the same were already reflected in the statement of account filed by the plaintiff. Since the goods supplied by plaintiff were of substandard quality, the goods were rejected by the customers of defendants vide various letters dated 29.07.2014, 02.11.2014 and 30.11.2014. Although, vide letters dated 12.08.2014 and 17.11.2014 to its customers, efforts were made by defendants to release payments but in vain. Due to defective supply of goods, the customers of defendants withheld payments and defendants communicated the losses, so incurred to the plaintiff. Vide letter dated 07.12.2015, defendants also requested the plaintiff to take back the defective goods but to no avail. It was also claimed that due to the conduct of plaintiff, the defendants suffered huge losses amounting to Rs. 38,61,558/-.
5. No replication to the written statement was filed by the plaintiff.
Civil DJ No.896/2018 Page 3 of 146. On the basis of the pleadings, the learned ADJ framed the following issues vide order dated 26.11.2018:
ISSUES:
1. Whether the plaintiff is entitled for the recovery of Rs. 34,65,852? OPP
2. Whether the plaintiff is entitled for interest, if yes, at what rate and for what period? OPP
3. Relief.
7. After framing the issues, the matter was posted for plaintiff's evidence. However, after the examination-in- chief of PW1, on an application filed by defendant under Section 15(2) read with Section 6 of The Commercial Courts Act and Section 151 CPC, the present suit was transferred to the Learned Predecessor of this Court on
22.l2.2021.
8. I have heard the arguments addressed by Sh. Abhishek Sharma, learned counsel for plaintiff and Sh. Suraj Kumar Jaiswal, learned counsel for defendants. I have also perused the entire court record and the written submissions filed on behalf of the parties with utmost care.
9. At the outset, it was urged by Learned Counsel for defendants that suit was liable to be dismissed for non- joinder of necessary parties. The argument of Learned Counsel for defendants deserves outright rejection as Order 30 of CPC deals with suits by or against firms and persons carrying on business in names other than their Civil DJ No.896/2018 Page 4 of 14 own. Order 30 Rule 1(1) CPC provides that any two or more persons claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm, if any, of which such persons were partners at the time of accruing of cause of action. Order 30 Rule 1 (2) CPC provides that where persons sue or are sued as partners in the name of their firm under Sub Rule (1), it shall, in the case of any pleading or other document required by or under this Court to be signed, verified or certified by the plaintiff or the defendant, be sufficient if such pleading or other document is signed, verified or certified by any of such persons. In a case cited as BHARAT SARVODAYA MILLS COMPANY LTD VS. MOHATTA BROTHERS reported as AIR 1969 GUJ. 178, Honble High Court of Gujarat relied upon the decisions of Hon'ble Supreme Court and observed as under:
"In Purushottam & Co. v. Manilal & Sons, AIR 1961 SC 325, at p. 328 their Lordships of the Supreme Court considered the definition of the term 'firm' in Section 4 of the Act, and observed that it was clear from the provisions of the Act that the word 'firm' or the 'firm name' was merely a compendious description of all the partners collectively. It followed, therefore, that where a suit was filed in the name of a firm it was still a suit by all the partners of the firm unless it was proved that all the partners had not authorised the suit. A firm is not a legal entity in the sense of a company and when a suit is filed in the name of the firm it is in reality a suit by all the partners of the firm. At p. 329 also their Lordships observed that the provisions of Rule 2 show that although the suit was filed in the name of the firm a disclosure had to be made, on demand in writing or on behalf of any defendant, of names and places of residence of all the persons constituting the firm, on whose behalf the suit was instituted. The provisions of Rule 2 would indicate that although the suit was filed in the name of the firm it was nonetheless a suit by all the partners of the firm because if a disclosure of the names of the partners was asked for by any defendant, on such disclosure, the suit must proceed as if the partners had been named as plaintiffs in the suit, Civil DJ No.896/2018 Page 5 of 14 even though the proceedings would nevertheless be continued in the name of the firm. It was, therefore, clear that the provisions of Order 30. Rules 1 and 2 were enabling provisions to permit several persons who were doing business as partners to sue or be sued in the name of the firm. Their Lordships observed that Rule 2 would not have been in the form it was if the suit instituted in the name of the firm was not regarded as, in fact a suit by the partners of the firm. Their Lordships again considered the question in Mandalse Devi v. M. Ramnarain Private Ltd., AIR 1965 SC 1718 at p. 1720. Their Lordships observed that for the sake of convenience Order 30 of the Code permits a firm to sue or be sued in the firm name "as if it were a corporate body". Their Lordships, however, observed that the legal fiction must not be carried too far. For some purposes the law has extended a limited personality to a firm--See Bhagwati Morarji Gokuldas v. Alembic Works Co. Ltd., AIR 1948 PC 100 -- but the firm is not a legal entity. See AIR 1961 SC 325 at p. 339. Lindley on Partnership, 12th Edition pp. 27-28. The persons who are individually called partners are collectively called a firm, and the name under which their business is carried on is called the firm name. See Section 4 of the Indian Partnership Act, 1932. Order 30, Rule 1 of the Code enables two or more persons claiming or being liable as partners and carrying on business in India to sue or be sued in the name of the firm of which they were partners at the time of the accrual of the cause of action. Rule 1 shows that individual partners sue or are sued in their collective firm name. Rule 2 provides that on disclosure of the names of partners of the plaintiff firm, the suit proceeds as if they are named as plaintiffs in the plaint. Rule 6 provides that the persons sued in the firm name must appear individually in their own names. A suit by or in the name of a firm is thus really a suit by or in the name of all its partners. See Rodriquez v. Speyer Brothers, 1919 AC 59 and AIR 1961 SC 325 at pages 328. 329, 330. So also a suit against the firm is really a suit against all the partners of the firm. Their Lordships quoted a passage of Lindley L. J. in Western National Bank of City of New York V. Perez, Trisanna and Co., 1891-1 QB 304 at p. 314 as under :-- "
"When a firm's name is used, it is only a convenient method of denoting those persons who compose the firm at the time, when that name is used, and a plaintiff who sues partners in the name of their firm in truth sues them individually, just as much as if he had set out all their names."
The decree passed in the suit, though in form against the firm, is in effect a decree against all the partners. After Civil DJ No.896/2018 Page 6 of 14 laying down this legal position, their Lordships applied that ratio to the facts of that case. In that case the firm of Jagatsons International Corporation was sued. As the suit was brought against that firm, their Lordships held that the Maharaja of Sirmur and all other partners were sued as if the plaint had set out their names, and the decree passed in the suit was in reality a decree against all the partners of the firm including the Maharaja of Sirmur................................................................................... .............................................................................................. .............................................................................................. .......... From this subsequent decision by their Lordships of the Supreme Court it appears to be a settled position that such suits by or against a firm under Order 30 are in reality suits by partners or against the partners at the "time when the cause of action accrued.
(emphasis supplied)
10. In the instant case, plaintiff impleaded the partnership firm as defendant No.1 which implied that plaintiff was suing the partners of the firm individually. Therefore, in view of the ratio cited above, it is crystal clear that the suit of the plaintiff cannot be dismissed for non-joinder of second partner of defendant no.2.
11. The Learned Counsel for defendants also sought dismissal of present suit on the ground that the present suit was barred by limitation. He urged that last transaction between the plaintiff and defendant was admittedly on 30.06.2015, whereas, the present suit was instituted on 06.08.2018 i.e. beyond the limitation period of three years. He further submitted that as claimed by the plaintiff, no payment was made by defendants on 20.08.2015. In support of his arguments, learned counsel for defendants placed on record Statement of Account w.e.f. 01.08.2015 to 31.08.2015 of Account No. 904114000098 held by Civil DJ No.896/2018 Page 7 of 14 defendant No.1 in Canara Bank, Sadar Bazar Branch. Learned counsel for defendants also drew the attention of this court to the entries dated 20.08.2015 of the said Statement of Account which did not reflect any entry showing payment of Rs. 1,25,000/- to plaintiff company.
12. The arguments of learned counsel for defendants was repelled by learned counsel for plaintiff by submitting Statement of Account of plaintiff's firm held in HDFC Bank, Okhla Phase-I Branch, as per which, the plaintiff received a payment of Rs. 1,25,000/- through NEFT on 20.08.2015 vide Transaction Reference No. P15082056414923. The learned counsel for plaintiff also placed on record certified copy of letter dated 03.01.2024 issued by HDFC Bank showing the details of payments dated 20.08.2015 whereby it was confirmed by the HDFC Bank that the Sender was Punjab Gaskets Industries and the amount was received from account No. 170100500 held in Syndicate Bank, Sadar Bazar Branch.
13. It is relevant to note that the information given by the learned counsel for defendants was w.r.t. account No. 90411000098 held by defendant No.1 at the then Syndicate Bank (now Canara Bank), Sadar Bazar Branch which is an OD Account and not wr.t. transfers made from account No. 170100500 of Syndicate Bank, Sadar Bazar Branch. The said fact was also verified by Manager, Canara Bank (erstwhile Syndicate Bank), Sadar Bazar Branch who retrieved Statement of its Ledger Account No. 170100500 for the date 20.08.2015. In view of the Civil DJ No.896/2018 Page 8 of 14 aforesaid documents which are of sterling quality and are unimpeachable, there is not an iota of doubt that the last payment was made by the defendant on 20.08.2015. Consequently, it is held that the present suit was instituted well within the period of limitation and therefore, is not barred by limitation.
14. My findings on issue Nos. 1 and 2 are as follows:
Issue Nos. 1 and 2:
1. Whether the plaintiff is entitled for the recovery of Rs. 34,65,852? OPP
2. Whether the plaintiff is entitled for interest, if yes, at what rate and for what period? OPP To prove its case, plaintiff examined Sh. Murtaza Ali, partner of plaintiff firm as PW1 who tendered his evidence by way of affidavit as Exhibit PW1/1 wherein he reiterated the contents of plaint and relied upon the following relevant documents:
1. Ledger Account for the period from 01.04.2010 to 31.03.2016 (Ex.PW1/A);
2. Carbon copies of invoices (Ex. PW1/B colly.).
15. To rebut the claim of plaintiff, defendants examined AR/ Manager of defendants i.e Ravi Saxena as DW1. In his evidence by way of affidavit (Ex.DW1/1), Ravi Saxena/ DW1 relied upon the following documents:
1. Special Power of Attorney dated 13.11.2018 (Ex.DW1/A);
2. True Copy of partnership deed (Ex.DW1/B);
3. Copy of letters dated 12.08.2014 and 17.11.2014 (Mark A and Mark B colly.);Civil DJ No.896/2018 Page 9 of 14
4. Copy of letter dated 07.12.2015 (Mark PW1/D1).
16. The case of the plaintiff is primarily based upon the ledger account (Ex.PW1/A) for the period 01.04.2010 to 31.03.2016 and invoices (Ex.PW1/B) which pertain to the business transactions between the plaintiff and defendants. It is an undisputed fact that plaintiff and defendants were in a business relationship since long and the plaintiff was supplying packaging material to the defendants against invoices including invoices (Ex. PW1/B). The perusal of the Written Statement reflects that the defendants did not dispute that the packaging material was supplied to the defendants vide invoices (Ex. PW1/B) which are dated 03.04.2014, 08.04.2014, 19.04.2014, 20.05.2014, 12.06.2014, 15.06.2014, 10.07.2014, 24.07.2014, 31.07.2014, 07.09.2014, 16.09.2014, 27.09.2014, 08.11.2014, 22.11.2014, 01.12.2014, 10.12.2014, 10.01.2015, 28.02.2015, 27.04.2015 and 30.06.2015. The only defence which was raised by defendants was that due to the sub-standard defective packaging material supplied by plaintiff, the defendants suffered a loss of Rs. 38,61,558/-. It was claimed that the foreign customers of defendants refused to make payments to defendants as the goods exported by defendants which were packaged in the material supplied by plaintiff got rusted. Pursuant thereto, the defendants had vide letter dated 07.12.2015 which was admittedly received by the plaintiff, had informed the plaintiff qua the defective packaging material and had requested to take back the same. The plaintiff, however, turned a blind eye and did not take back the defective Civil DJ No.896/2018 Page 10 of 14 goods. Suit of the plaintiff was also defended on the ground that the defendants had already made payments qua the invoices (Ex. PW1/B) and that the Ledger Account (Ex. PW1/A) of the plaintiff was incorrect.
17. It was simultaneously claimed by the defendants that since the defendants had received complaints from its foreign customers and they had raised serious concern with the plaintiff, the plaintiff had issued credit notes against the payments already received against the supply of defective goods.
18. In the nutshell, the case of the defendants is that the defendants had already made payments against the invoices (Ex. PW1/B) and no amount was due and payable to the plaintiff. Rather, it was the defendants who had sustained a loss of Rs. 38,61,558/-.
19. The plaintiff in order to establish that the payments against invoices (Ex. PW1/B) was due and payable, placed on record the print out of its Ledger Account (Ex. PW1/A). Since, the entries in the Ledger Account (Ex. PW1/A) were strongly refuted by the learned counsel for defendants, therefore, in order to prove the entries in Ledger Account (Ex. PW1/A), it was imperative that the plaintiff proved the print out of Ledger Account in accordance with law or in the alternative, place on record the complete bank statement from the time, the parties had business relationship (since 11.05.2010).
Civil DJ No.896/2018 Page 11 of 1420. It is noteworthy that plaintiff neither filed any certificate u/s 65B of the Indian Evidence Act nor complied with the provision of Order XI Rule 6 CPC to prove Ledger Account (Ex. PW1/A). It is no more res integra that certificate under Section 65B of the Indian Evidence Act is mandatory to prove any electronic record. In judgment titled as STATE OF KARNATAKA VS. T. NASEER @ NASIR @ THANDIANTAVIDA NASEER decided on 06.11.2023 in SPECIAL LEAVE PETITION (CRL.) NO. 6548 OF 2022 , the Hon'ble Supreme Court discussed both the landmark judgments (ANWAR P.V. VS. P.K. BASHEER & ORS., reported as 2014 (10) SCC 473 and ARJUN PANDITRAO KHOTKAR VS. KAILASH KUSHANRAO GORANTYAL AND ORS. decided on 14.07.2020 reported as 2020(3) SCC 216) of the Apex Court in this regard. The relevant text is reproduced hereunder:
"8. This Court in Anwar's case (supra) has opined that a certificate under Section 65B of the Act is not required if electronic record is used as a primary evidence. Relevant paragraph thereof is quoted herein below:
"24. The situation would have been different had the appellant adduced primary evidence, by making available in evidence, the CDs used for announcement and songs. Had those CDs used for objectionable songs or announcements been duly got seized through the police or Election Commission and had the same been used as primary evidence, the High Court could have played the same in court to see whether the allegations were true. That is not the situation in this case. The speeches, songs and announcements were recorded using other instruments and by feeding them into a computer, CDs were made therefrom which were produced in court, without due certification. Those CDs cannot be admitted in evidence since the mandatory requirements of Section 65-B of the Evidence Act are not satisfied. It is clarified that notwithstanding what we have stated herein in the preceding paragraphs on the secondary evidence of electronic Civil DJ No.896/2018 Page 12 of 14 record with reference to Sections 59, 65-A and 65-B of the Evidence Act, if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act, the same is admissible in evidence, without compliance with the conditions in Section 65-B of the Evidence Act." (Emphasis added)
9. The aforesaid issue was subsequently considered by this Court in Arjun Panditrao Khotkar's case (supra). It was opined that there is a difference between the original information contained in a computer itself and the copies made therefrom. The former is primary evidence and the latter is secondary one. The certificate under Section 65-B of the Act is unnecessary when the original document (i.e., primary evidence) itself is produced. Relevant paragraph '33' thereof is extracted below:
"33. The non obstante clause in sub-section (1) makes it clear that when it comes to information contained in an electronic record, admissibility and proof thereof must follow the drill of Section 65-B, which is a special provision in this behalf -- Sections62 to 65 being irrelevant for this purpose. However, Section 65-B(1) clearly differentiates between the "original" document -- which would be the original"electronic record" contained in the "computer" in which the original information is first stored -- and the computer output containing such information, which then maybe treated as evidence of the contents of the "original" document. All this necessarily shows that Section 65-B differentiates between the original information contained in the "computer" itself and copies made therefrom -- the former being primary evidence, and the latter being secondary evidence." (Emphasis added)"
21. Since, it is not in dispute that no certificate u/s 65B of Indian Evidence Act was filed by the plaintiff, applying the ratio of the judgment (Supra) to the facts of the instant case, it is crystal clear that Ledger Account (Ex.PW1/B) is not admissible in evidence. Therefore, in my considered opinion, the plaintiff failed to prove that he is entitled to recover Rs.34,65,852/- from the defendants. In view of aforesaid discussion, issue Nos. 1 and 2 are Civil DJ No.896/2018 Page 13 of 14 decided against the plaintiff. Suit is dismissed accordingly. No order to cost.
Decree sheet be drawn accordingly.
File be consigned to record room.
ANNOUNCED IN THE OPEN COURT ON 15TH JANUARY, 2024 (HEMANI MALHOTRA) DISTRICT JUDGE (COMMERCIAL COURT)-02 WEST/TIS HAZARI COURTS, DELHI $ Civil DJ No.896/2018 Page 14 of 14