Delhi District Court
Gagandeep Singh Anand vs H.S. Oberoi Company Ors on 4 October, 2023
IN THE COURT OF SH. PARVEEN SINGH,
ADDL. DISTRICT JUDGE-11, CENTRAL DISTRICT,
TIS HAZARI COURT, DELHI.
CS DJ No. 615645/2016
Gagandeep Singh Anand,
s/o Sh. Harbhajan Singh Anand,
R/o 7, Forest Lane, Sainik Farm,
New Delhi. ...Plaintiff
Versus
1. H.S Oberoi & Company
Through its proprietor
Sh. H.S Oberoi
2. Sh. H.S. Oberoi,
3. Sh. Manveer Singh Oberoi,
S/o Sh. H.S Oberoi
All having office and residence at
10/8, Sarvpriya Vihar, New Delhi-110016.
4. Sh. Kirti Kumar Jayant Lal Dholakiya
S/o Sh. J.L Dholakiya,
R/o Kesod, Jawahar Nagar, District Junagarh,
Gujarat.
5. Union of India, (withdrawn on 14.02.2023)
Ministry of Finance,
Department of Revenue
(Through its Secretary)
6. Directorate of Revenue Intelligence, (withdrawn on 14.02.2023)
Mumbai Zonal Unit, 13, Sir Vithal Dass-
Tharkersey Marg, Opp. Patkar Hall,
New Marine Lines, Mumbai 400020. ...Defendants.
CS No. 615645/2016
No. 1 of 23
(Parveen Singh)
ADJ-11/Central/THC/Delhi/04.10.2023
Date of Filing : 27.05.2008.
Date of Arguments : 06.09.2023.
Date of Judgment : 04.10.2023.
SUIT FOR RECOVERY OF RS.16,23,000/- AND PERMANENT
INJUNCTION
JUDGMENT
1. The present is a suit filed by the plaintiff for recovery of Rs.16,23,000/- and permanent injunction.
2. Briefly stated the case of the plaintiff is, that in December 2004/ January 2005, plaintiff being desirous of purchasing imported car/jeep approached one Sanjay Bharti proprietor of M/s Bharti Motors. Sh. Sanjay Bharti informed him that an imported vehicle i.e. Toyota Prado Land Cruiser was available for sale with defendants no. 1, 2 and 3. On his instructions, a meeting was fixed with defendants no. 1, 2 and 3. On 11.03.2005, when the negotiations took place between the plaintiff and the defendants no. 1 to 3, it was represented and assured by the defendants no. 1 to 3 that the said vehicle was a 2002 Model and the same had been purchased by them from defendant no. 4 but they had not got the vehicle transferred in their name. It was further represented by defendants no. 1 to 3 that the vehicle in question was imported by defendant no. 4 in August / September 2002 from Dubai under Transfer of Residence Scheme under the Customs Rules and the embargo on its sale for two years from the date of import had already expired. It was also represented that the vehicle was in good mechanical condition, free from all encumbrances and all the documents of ownership and import to India were in order. It is further the CS No. 615645/2016 No. 2 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 case of plaintiff that after negotiations, the price of vehicle was settled at Rs.12 lacs. Out of Rs.12 lacs, Rs.10 lacs were paid to the defendants no. 1 to 3 vide bank demand draft bearing no. 524302 dated 11.03.2005 and the remaining Rs.2 lacs were paid in cash. After receiving the payment, defendants no. 1 to 3 had delivered to the plaintiff the vehicle in question alongwith signed blank sale letter of defendant no. 4 and other transfer documents. Defendants no. 1 to 3 had also handed over to the plaintiff the documents related to the import of vehicle (details of which have been given in para 4 of the plaint) to the plaintiff. On 17.05.2005, on the basis of sale letter and other transfer documents, the plaintiff got transferred and registered the vehicle in his name with registration no. HR 26R 5040. In August 2006, the officials of Directorate of Revenue Intelligence/ defendant no. 6 approached the plaintiff to investigate as to how the vehicle in question came in his possession. On 13.08.2007, defendant no. 6 confiscated the vehicle in question. It is further submitted that the plaintiff had received a show cause notice no. F-DRI/BZU/E/8/2007 dated 30.08.2007 from defendant no. 6. From the said notice, it was revealed that the vehicle in question imported by defendant no. 4 in September 2002 from Mumbai Port by misdeclaring the vehicle as an old vehicle of 1997 model and this was done to evade custom duty. The said show cause notice was also served upon the defendants no. 1 to 4. Defendant no. 4 in connivance with defendants no. 1 to 3 had imported the vehicle by misdeclaring the date of manufacture. It is further submitted that the plaintiff was a bonafide purchaser of the vehicle in question and the defendants no. 1 to 4 on the basis of false and fabricated documents had sold the vehicle in question to the plaintiff. After receipt of notice, plaintiff CS No. 615645/2016 No. 3 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 approached defendants no. 1 to 3 and asked them to clear the demands as raised by the Custom Department because it was their duty to do so. However, the defendants failed to comply with the notice. It is further submitted that due to the fraud committed by defendant no. 1 to 3 in connivance with defendant no. 4, plaintiff had been deprived of the vehicle in question and the same had been confiscated by defendant no. 6. On 28.02.2008, a legal notice was sent to defendants no. 1 to 3 to pay a sum of Rs.20,03,500/- to the plaintiff but the defendants failed to comply with the notice. It is further submitted that defendant no. 6 had been threatening the plaintiff to sell the vehicle in auction. Hence, the present suit for recovery of Rs.16,23,500/- (Rs.12 lacs for loss on account of confiscation of vehicle, Rs.1,68,000/- towards interest @ 18% p.a, Rs.1,00,000/- towards the expenses incurred in contesting show cause notice, Rs.1.50 lacs towards damages on account of humiliation and Rs.5500/- towards notice charges) and for permanent injunction.
3. On being served with the summons, the defendants no. 1 to 3 filed their written statement.
4. On 03.07.2008, when the defendant no. 4 failed to appear, he was proceeded ex-parte. On 14.02.2023, suit against defendants no. 5 and 6 was dismissed as withdrawn.
5. In the written statement filed on behalf of defendants no. 1 to 3, it was submitted that the matter regarding the import of vehicle was pending before the Customs Authorities and thus, no cause of action had arisen against the defendants no. 1 to 3. It was further submitted that the present suit was liable to be dismissed on account of non joinder and mis joinder of necessary parties. In the plaint as well as in the reply to show CS No. 615645/2016 No. 4 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 cause notice, the plaintiff had stated that it was one Sanjay Bharti with whom the plaintiff had conducted a deal for purchasing the vehicle and the documents of the car were also obtained by the plaintiff from the said Sanjay Bharti. However, the said Sanjay Bharti had not been made a party to the suit. It was further submitted that as per the record of the case, payment of sale consideration of car was received by defendant no. 3 in individual capacity and thus, defendants no. 1 and 2 had wrongly been made parties. It was further submitted that the suit should be stayed u/s 10 CPC.
6. On merits, it was submitted that the deal was done through one broker namely Sh. Sanjay Bharti and all the documents were given to the broker. The plaintiff had received the vehicle and the documents from the broker and the defendants were not present at the time of sale and delivery of the vehicle. It was admitted that an amount of Rs.10 lacs by way of demand draft and Rs.2 lacs in cash were received by the defendants. It was further submitted that the answering defendants were also the bonafide purchaser and victims of alleged illegal/ irregular acts of defendant no. 4. The allegations regarding the documents submitted with the customs were forged and fabricated, could only be answered by the defendant no. 4. It was further submitted that at the time of sale of vehicle, the defendants no. 1 to 3 were not at all aware of the irregularities and illegalities being committed by defendant no. 4 and it had come to their notice only after initiation of inquiry by the DRI.
7. In the replication to the written statements of defendants, the contents of the written statement are denied and the contents of the plaint are reaffirmed. Thereafter, from the pleadings of the parties, vide order CS No. 615645/2016 No. 5 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 dated 18.02.2010, following issues were framed:-
1. Whether the suit of the plaintiff is pre-mature as averred in the preliminary objection no. 1 of the written statement of defendants no. 1 to 3? If so, to what effect? OPD 1 to 3.
2. Whether the plaintiff is entitled to recover any amount from any of the defendants no. 1 to 4? If so, what amount and from which of the defendants no. 1 to 4? OPP.
3. Whether the plaintiff is entitled to any interest on any amount? If so, at what rate? OPP.
4. Whether the plaintiff is entitled to the relief of injunction against the defendants no. 5 and 6? OPP.
5. Relief.
8. Thereafter, vide order dated 28.01.2014, following additional issues were framed:-
1. Whether the defendant no. 1 and 2 are not the necessary parties? OPD 1 to 3
2. Whether the suit is barred under Section 155 of Customs Act? OPD 5 & 6
3. Whether the present suit is not maintainable in the present form? OPD 1 to 3.
9. Thereafter, the parties led their respective evidence. The plaintiff examined himself as PW1, Sh. Pan Singh Bisht as PW2 and Sh. Jarrar Rizvi as PW3. On the other hand, defendants examined defendant H.S Oberoi as DW1.
CS No. 615645/2016 No. 6 of 23(Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023
10. I have heard learned counsels for the parties and carefully perused the record as well as gone through the written submissions filed on behalf of the parties.
11. My issue wise findings are as under:-
Additional ISSUE NO. 11. Whether the defendant no. 1 and 2 are not the necessary parties? OPD1 to 3
12. The onus to prove this issue was upon the defendants no. 1 to
3.
13. No specific argument has been advanced on behalf of the defendants no. 1 to 3 on this point. However, indirectly it has been submitted that the entire responsibility was of defendant no.4, who was the importer of the car. It is submitted that on the representation Shammi Motors, defendants no. 1 to 3 had agreed to purchase the car in question and in the meantime, they were approached by one Sanjay Bharti who requested them that he had a purchaser and if they were willing to sell the car, the deal could be finalized. On the basis of the said assurance, vehicle was transferred directly through the said documents signed by Sh. K.J Dholakia in the name of the plaintiff and those documents were already with the dealer namely Sh. Sanjay Bharti. It is further submitted that the plaintiff at the time of purchase of the car had scrutinized and checked all the documents of the car including the documents of import as well as the passport of Mr. Kirti Kumar Jayanti Lal Dholakiya and after being satisfied, the plaintiff had taken the car. Not only that, the plaintiff had himself executed the documents i.e. Ex.PW1/1 delivery receipt, Ex.PW1/2 Form 30, Ex.PW1/3 letter to the registering authority which was duly signed by CS No. 615645/2016 No. 7 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 the plaintiff. The delivery receipt Ex.PW1/1, duly signed by plaintiff, clearly mentioned that the plaintiff had found the vehicle in perfect running condition, that the documents were correct and had been seen and thoroughly checked and further, at the bottom of the document, it was mentioned that the delivery had been received against full and final payment which had been signed by Sh. K.J Dholakiya. It is therefore contended, that the plaintiff had clearly admitted that he had verified all the documents including those showing deposit of custom duty etc. It is further submitted that the plaintiff, during his cross examination, also could not produce any document to show that defendants no. 1 to 3 were the importers of the car and as defendants no. 1 to 3 had not imported the said car, no liability could be fastened as claimed by the plaintiff upon defendants no. 1 to 3 as they had given the car to the plaintiff in the same condition as it was received from Shammi Motors. It is also submitted that defendant no. 2 had never met the plaintiff and defendants no. 1 to 3 had also received documents from Shammi Motors and had given those documents to the plaintiff through Sanjay Bharti.
14. On the other hand, it is submitted on behalf of plaintiff that defendant no. 1 is a firm in which the defendants no. 2 and 3 are partners. The total consideration for the vehicle was fixed at Rs.12 lacs out of which Rs.10 lacs was paid through a bank draft in the name of defendant no. 1 and Rs.2 lacs was paid in cash to the defendant no. 3. Therefore, defendants no. 1 to 3 are the necessary parties to the present suit and the relief can only be claimed against them because defendant no. 4 admittedly had already sold this car to defendants no. 1 to 3and thus, it is the defendants no. 1 to 3, who had sold this car to the plaintiff. It is further submitted that in fact defendant CS No. 615645/2016 No. 8 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 no. 4 was only a face and the vehicle in question was originally imported by defendants no. 1 to 3 by using defendant no. 4. They had been in collusion with defendant no. 4 and in this regard, two witnesses had been examined by the plaintiff. The first witness was PW2 Pan Singh Bisht, Account Assistant from Lakozy Motors who had produced the record of the service of this vehicle. This witness deposed that the vehicle in question which was bearing registration no. AF 0085357 was serviced on behalf of M/s H.S Oberoi vide cash invoice memos dated 12.09.2002, 06.11.2002, 10.05.2003 and 19.08.2003 and these memos were collectively exhibited as Ex.PW2/1. This reflects that the vehicle which was imported in September 2002 was in the possession of defendant no. 1, which is a partnership concern from the very beginning of its import. This clearly establishes the collusion between the defendants no. 1 to 3 and defendant no. 4 and belies the contention of defendants no. 1 to 3 that they were bonfide purchaser of the vehicle and defendant no. 4 was liable for the irregularities and illegalities in the import of the vehicle. The collusiveness of defendants no. 1 to 3 and defendant no. 4 is further established by the testimony of PW3, who is Manager (Legal) from ICICI Bank, Jhandewalan Extn. New Delhi and had produced the summoned record in respect of the car loan advanced against hypothecation of the car in question, the documents of which were collectively exhibited as Ex.PW3/1. He deposed that the said car loan was taken by H.S Oberoi jointly with defendant no. 4. During his own cross examination, HS Oberoi, who appeared as DW1 admitted that the vehicle in question was purchased by him after obtaining car loan from ICICI Bank and he was co-applicant with defendant no. 4 for the said loan.
15. I have considered the rival submissions.
CS No. 615645/2016 No. 9 of 23(Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023
16. Even from the pleadings of the parties, the fact which stands established is, that it was defendants no. 1 to 3 who had sold the vehicle in question to the plaintiff and had received consideration thereof.
17. The claim of the defendants no. 1 to 3 is, that they were bonafide purchasers and in alternative the claim is, that vehicle was directly transferred from defendant no. 4 to plaintiff and therefore, they are not liable for any defect in title or documentation of the vehicle and resultantly for the loss caused to the plaintiff.
18. I cannot agree with this contention of the defendants for the simple reason that the defendants themselves have admitted that they were having blank signed transfer documents from Sh. K.J Dholakiya and after receiving the payment, they had handed those documents to the plaintiff and on the basis of those documents, plaintiff got the vehicle transferred in his name.
19. Admittedly, the plaintiff never had any dealings with defendant no. 4 and therefore, the only persons liable to the plaintiff would be defendants no. 1 to 3. Defendant no. 2 is the proprietor of defendant no. 1 and while appearing as DW1, he had admitted that he had received draft of Rs.10 lacs. Defendant no. 3 had received Rs.2 lacs in cash and thus, defendant no. 2 and 3 are necessary parties. With regard to impleadment of Sanjay Bharti, I find that admittedly he was merely a broker and thus, for the decision of the present lis, he can neither be said to be a necessary nor a proper party.
20. Whether the plaintiff is entitled to any amount as claimed shall be decided later on, however, as far as the question of defendants no. 1 and 2 not being the necessary parties is concerned, I find that the defendants CS No. 615645/2016 No. 10 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 have failed to prove this issue. Issue is accordingly decided against the defendants.
Additional ISSUE NO. 2 and Original ISSUE NO. 42. Whether the suit is barred under Section 155 of Customs Act? OPD 5&6
4. Whether the plaintiff is entitled to the relief of injunction against the defendants no. 5 and 6? OPP.
21. These issues were framed at the instance of defendants no. 5 and 6. However the plaintiff has already withdrawn his suit against the defendants no. 5 and 6 vide statement dated 14.02.2023. Hence, these issue have lost their significance and are not being decided.
Additional ISSUE NO. 33. Whether the present suit is not maintainable in the present form? OPD 1 to 3.
22. The onus to prove this issue was upon the defendants no. 1 to
3. However, no arguments have been advanced that why the suit is not maintainable in present form and what is the defect in the form of the suit and no evidence has been led on this point. Hence, this issue is decided against the defendants.
Original ISSUE NO. 11. Whether the suit of the plaintiff is pre-mature as averred in the preliminary objection no. 1 of the written statement of defendants no. 1 to 3? If so, to what effect? OPD 1 to 3.
23. The onus to prove this issue was upon the defendants no. 1 to
3. CS No. 615645/2016 No. 11 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023
24. It has been submitted on behalf of defendants no. 1 to 3 that admittedly the proceedings were going on before the Director, Revenue Intelligence and therefore, there was no question of claiming any amount in the present suit and the suit filed by the plaintiff was not maintainable. It is further submitted that the proceedings were already pending before Director, Revenue Intelligence w.e.f. 10.08.2007 i.e. much prior to the filing of the present suit and thus, the suit was not maintainable and plaintiff cannot be permitted to go forum hunting as apart from other reliefs, plaintiff had claimed before Director, Revenue Intelligence for return of the seized car. Plaintiff had also appeared before Custom, Excise and Service Tax Appellate Tribunal and prayed for other reliefs including the return of car and therefore, the suit for recovery of money from the defendants was not maintainable as on the one hand, the plaintiff had sought relief of return of car and on the other hand, plaintiff had sought recovery of money by filing the present suit. The plaintiff cannot be allowed to claim similar relief in two forums. The plaintiff had never disclosed in the plaint that he had sought direction to return the car to the plaintiff before the Customs Authority.
25. On the other hand, it is contended on behalf of the plaintiff that the defendants have failed to disclose how the proceedings pending before the Customs Authority would prejudice or impact the outcome of the present suit. It is further contended that the proceedings before the Customs Authority only pertain to the recovery of deficient custom duty whereas the present suit is for damages on account of breach of contract by defendants no. 1 to 4. Therefore, the controversies involved in the proceedings before the Custom Authorities and in the present suit are totally different and CS No. 615645/2016 No. 12 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 independent and have no bearing or impact on each other. It is further contended that defendants no. 1 to 4 did not choose to challenge the order of DRI levying the deficient customs duty, interest and penalty on them before the customs authorities. It was only the plaintiff who challenged the order of DRI before the Custom Commissioner and then before the Appellate Tribunal and finally before Hon'ble High Court of Mumbai and succeeded in getting overturned the order of the DRI imposing deficient customs duty, interest and penalty.
26. I have considered the rival submissions. I find that it is correct that plaintiff had replied the show cause notice before Director, Revenue Intelligence. Admittedly the order was passed for payment of deficient customs duty and penalty was also imposed. Plaintiff had challenged the said order before the Appellate Tribunal for setting aside the said order and also prayed for return of the car.
27. However, the present suit is based upon a completely different cause of action and i.e. the sale of defective car. The vehicle was sold to the plaintiff by defendants no. 1 to 3 and as there were irregularities in the import documents, vehicle was confiscated. Plaintiff therefore was well within his rights to simultaneously claim damages as well as the refund of amount paid for the car from the defendants and in order to safeguard his interest, file legal representation before DRI.
28. It is a matter of record that the said representation before DRI and subsequent appeals including the appeal before Hon'ble High Court of Bombay were filed by the plaintiff seeking a relief that he was not liable to pay penalty as imposed by the revenue authorities on account of car being a smuggled car. Therefore, it is evident that the proceedings before DRI and CS No. 615645/2016 No. 13 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 subsequent proceedings in appeal were only initiated by the plaintiff in order to save himself from the penalty imposed by revenue authorities and the same can in no manner impede the right of the plaintiff to seek compensation/ damages from the sellers. Issue is accordingly decided against the defendants no. 1 to 3.
ISSUE NO. 2 and ISSUE NO. 32. Whether the plaintiff is entitled to recover any amount from any of the defendants no. 1 to 4? If so, what amount and from which of the defendants no. 1 to 4? OPP.
3. Whether the plaintiff is entitled to any interest on any amount? If so, at what rate? OPP.
29. It has been contended by ld. Counsel for plaintiff that the testimony of the witnesses has established that the vehicle in question was imported by defendants no. 1 to 3 in collusion with defendant no. 4. He has further contended that right from the date of importing the vehicle in September 2002, defendants no. 1 to 3 had been using the vehicle and getting it serviced. This fact has been proved by PW2 Pan Singh Bisht who is Account Assistant from Lakozy Motors Pvt. Ltd. This witness has proved the cash invoices dated 12.09.2002 in the name of defendant no. 1 for the service of vehicle after its import. The witness had clearly deposed that the service of the vehicle was done in the name of M/s H.S Oberoi & Co., who is defendant no. 1 vide cash memos dated 12.09.2002, 06.11.2002, 18.11.2002, 10.05.2003, 05.07.20036 and 19.08.2003 which are collectively Ex.PW2/1. He has contended that this belies the defence of the defendant stated in WS and the testimony of DW1 H.S Oberoi that he had purchased the vehicle in August-September 2003 from defendant no. 4. he CS No. 615645/2016 No. 14 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 has further contended that the fact that real importers of vehicle were defendants no. 1 to 3 is established from the testimony of PW3 Jarrar Rizvi, Manager from ICICI Bank who had produced the loan record in respect of the vehicle in question and the said documents were Ex.PW3/1 (colly). These documents clearly reflect that the loan on the vehicle was taken from ICICI Bank jointly by defendants no. 1 to 3 and defendant no. 4 and the said loan was cleared after selling the vehicle to the plaintiff. Not only this, DW1 in his affidavit of evidence and cross examination had admitted that vehicle was purchased by him after obtaining loan from ICICI Bank and he was co-applicant with Kriti Kumar Jayanti Lal Dholkia, who is defendant no. 4 and that the loan was granted on his strength. This clearly establishes that there was a breach of contract on the part of defendants no. 1 to 4 as they had misrepresented to the plaintiff regarding the model and that the vehicle was free from all encumbrances. It is further contended that the false representations given while importing the vehicle led to the vehicle being confiscated and caused huge loss to the plaintiff and thus, defendants no. 1 to 4 are liable to pay the amount claimed in the suit.
30. Per contra, ld. Counsel for defendants has contended that admittedly the proceedings were going on before the Director, Revenue Intelligence and therefore, there was no question of claiming any amount in the present suit and the suit filed by the plaintiff was not maintainable.
31. I have considered the rival submissions and gone through the record very carefully.
32. The first question regarding the defence of the defendants which needs to be decided is, whether defendants no. 1 to 3 were bonafide purchaser as claimed by them?
CS No. 615645/2016 No. 15 of 23(Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023
33. Defendants examined H.S Oberoi as DW1 and he deposed that he wanted to purchase a car from the dealer i.e. Sh. Sanjay Bharti who represented him that one vehicle being Toyota Poral (sic) was available with him as one Kriti Kumar Jayanti Lal Dholkia had imported the said car. Believing the said representation, he agreed to purchase this car. In the meantime, Sh. Sanjay Bharti approached him and represented that he had got a purchaser and if he wanted to sell the said car, the deal could be finalized. On the basis of this assurance, the vehicle wad transferred directly through Sh. Kriti Kumar Jayanti Lal Dholkia in the name of plaintiff as the documents of the car were already with the dealer Sh. Sanjay Bharti. However, at the time of purchase of the car, the details of the car such as the Chassis number and engine number were not known to him and even otherwise also, it was not possible for a common man to know the model of the vehicle. The said car was taken by the plaintiff and the documents thereof were transferred directly from the dealer. He further deposed that plaintiff at the time of purchase of car had scrutinized and checked all the documents of the said car including the documents of import and after satisfying himself, plaintiff had taken the car. He further deposed that on coming to know that some loan was in existence in respect of the said car, he also cleared the loan and sold the car through Mr. Sanjay Bharti for a total sum of Rs.12 lacs. A sum of Rs.10 lacs was paid in the name of defendant no. 3 and Rs.2 lacs was paid in cash and thereafter, possession of the car was taken by the plaintiff.
34. During his cross examination, he deposed that he had purchased the vehicle from M/s Shammi Motors somewhere in September 2003 and that the vehicle in question was purchased by him from one Sh.
CS No. 615645/2016 No. 16 of 23(Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 Dholakia, whose name was K.J Dholakia but he did not remember his complete name. He further deposed that he had never seen KJ Dholakia.
35. When he was confronted with para 7 of his examination in chief where he stated that he had purchased the vehicle from Sanjay Bharti with the fact that in the cross examination he had stated that the vehicle in question was purchased by him from M/s Shammi Motors and asked to explain which of these two statements was correct; he answered that in para 7 of his examination in chief, it had been wrongly mentioned that the vehicle was purchased by him from Sanjay Bharti and in fact the vehicle was purchased b him through M/s Shammi Motors. He admitted that he had signed his affidavit after reading the same and volunteered, that there was a mistake in para 7 of the affidavit.
36. If this cross examination of DW1 is seen, his entire testimony with regard to how he purchased the vehicle and how he transferred the vehicle comes under a dark shadow of doubt and if I may say so, appears to be completely false.
37. The defendant has claimed that Sh. Sanjay Bharti is the person who had not only sold the vehicle to him but had also arranged the sale of vehicle to the plaintiff. However, during his cross examination, he deposed that his statement in para 7 was false and there was a mistake in para 7 of his affidavit and thus the entire testimony of DW1 on this account goes.
38. There is no evidence of the defendant that he had purchased the car from M/s Shammi Motors. Even the existence of such entity has not been established on record. No documents had been filed to reflect that M/s Shammi Motors was the intermediary between defendants no. 1 to 3 and defendant no. 4 for the purchase of the vehicle in question or to show that CS No. 615645/2016 No. 17 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 any such entity exists.
39. On the contrary, the testimonies of PW2 and PW3 establish a close association between defendants no. 1 to 3 and defendant no. 4.
40. PW2 Pan Singh Bisht had proved the cash invoices for the service of the vehicle in question. These memos are six in numbers and are dated 12.09.2002, 06.11.2002, 18.11.2002, 10.05.2003, 05.07.2003 and 19.08.2003. All these memos are in the name of defendant no. 1.
41. The first invoice for the service of the vehicle in question is of September 2002. It is an admitted case of the parties that the vehicle in question was imported on 02.09.2002. So had the defendants no. 1 to 3 purchased his vehicle in September 2003 as claimed by DW1 in his cross examination, there could not have been any occasion for the defendants no. 1 to 3 to have this vehicle serviced in September 2002, twice in November 2002, and then in May, July and August 2003. Therefore, this clearly reflects that immediately after the import of vehicle in question, vehicle came into the possession of defendant no. 1 and through it to defendants no. 2 and 3, who are its partners and thus, DW1 has lied through its teeth when he deposed that he had purchased this vehicle in September 2003 from M/s Shammi Motors or when he stated that he was approached by Sanjay Bharti for selling this vehicle or that Sh. Sanjay Bharti was having all documents of vehicle in question and had handed them over to the plaintiff.
42. DW1 has been further found lying during his cross examination and his examination in chief. The entire examination in chief of DW1 appears to be suggesting that he did not know defendant no. 4. There is a very clear statement in his cross examination when he stated that he had never seen Sh. K.J Dholakia. However, from the documents proved CS No. 615645/2016 No. 18 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 by PW3, which are the loan documents against the vehicle in question, it is very much clear that defendant no. 1 in August 2003 had taken a loan upon this vehicle jointly with defendant no. 4 Sh. K.J Dholakia. Thus, DW1 lied when he stated during his cross examination that he had never met Sh. K.J Dholakia and further lied in his examination in chief when he stated that on coming to know that some loan was in existence in respect of the said car with ICICI Bank, he cleared the loan because there could have been no question of this defendant coming to know about the loan of which he himself was a co-applicant.
43. Therefore, the circumstances which emerge are, that the moment the vehicle was imported in September 2002, it came in possession of the defendants who had got it serviced regularly since then till the time it was sold to the plaintiff and this fact is proved by the documents Ex.PW2/1 (colly); that the defendant no. 1 had jointly applied with defendant no. 4 for a loan from whom defendants no. 1 to 3 claimed to have purchased the vehicle without even meeting him, and this loan was paid after the vehicle was sold to the plaintiff. These circumstances raise a very high probability that defendants no. 1 to 3 were working in close association and in tandem with defendant no. 4. Had it not been so, they would not have been in possession of the vehicle immediately after its import and defendant no. 2 would not have taken a joint loan with defendant no. 4 against this vehicle.
44. I accordingly find that defendants no. 1 to 3 have failed to prove that they were bonafide purchaser. This leads to necessary conclusion that they were not the bonafide sellers and thus, they cannot be absolved of the liability of material defect in the title of the vehicle. The vehicle was imported by providing wrong particulars and thus was found to CS No. 615645/2016 No. 19 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 be smuggled. Admittedly the vehicle was confiscated by DRI and penalty was imposed upon the plaintiff which was successfully challenged by the plaintiff and the vehicle till date remains confiscated with DRI. Thus, I find that the plaintiff, who has been sold this vehicle by defendants no. 1 to 4 in collusion with each other, is entitled to receive back the consideration amount.
45. Apart from this amount, plaintiff has also claimed further amount on account of actual loss. He deposed that on 13.08.2007, vehicle was confiscated by the revenue authorities from his possession. He was issued a show cause notice no. F-DRI/BZU/E/8/2007 dated 30.08.2007 u/s 28 (1) and 128 of Customs Act seeking show cause why the aggregate custom duty of Rs.8,86,846/- short levied and short paid by wilful mis declaration by defendants no. 1 to 4 should not be demanded and recovered from him. He further deposed that after the receipt of show cause notice, he approached defendants no. 1 to 3 and asked them to clear the demand raised by custom department as he had purchased the vehicle on their assurance that the vehicle was free from all encumbrances, but they refused to do so. Thus, he was made to contest the notice Ex.PW1/12 before the Commissioner of Customs (Import) who passed an order dated 24.12.2008. Against the said order, he had filed an appeal before the Custom Excise and Service Tax Appellate Tribunal, Mumbai which was pending on the date of his examination in chief. Copy of the said appeal was Ex.PW1/13. He further deposed that he had paid a sum of Rs.66,000/- to his advocate for contesting the show cause notice before the Commissioner of Customs (Import), Mumbai and for filing appeal before Custom, Excise and Service Tax Appellate Tribunal, Mumbai vide cheque no. 760140 drawn on CS No. 615645/2016 No. 20 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 Centurion Bank of Punjab and cheque no. 66853 drawn on Standard Chartered Bank and these payments are reflected in his statement of account issued by the banks, which are Ex.PW1/16 and Ex.PW1/17. He further deposed that the balance sum of Rs.33,000/- was also paid to the said law firm and E-mail sent by the law firm was Ex.PW1/18. However, at the time of tendering of his examination in chief, as all these documents were photocopies, statements of accounts were marked as Mark H and I and the E-mail was marked as mark X.
46. I accordingly find that the documents reflecting the payment made have not been proved as per law. The statement of account should have been proved either by calling a witness from the concerned bank or by filing the statement of account duly certified by the bank as per the provisions of Banker's Book of Evidence Act.
47. Similarly, the E-mail should have been accompanied by a certificate u/s 65B of Evidence Act and thus, the said E-mail also cannot be read in evidence and it has to be held that plaintiff has failed to prove these payments.
48. Plaintiff has also claimed and deposed that he was entitled to recover damages to the tune of Rs.1.50 lacs from defendants no. 1 to 4, who were entirely responsible for the above said monetary loss as well as mental stress and agony suffered by him.
49. It is correct that when the vehicle in question was confiscated, plaintiff must have suffered some mental stress. However, how he has quantified this damage to the tune of Rs.1.50 lacs has not been specified and at the same time, this damage is also sought for monetary loss and thus, is not separable from the damage claimed for mental agony and stress.
CS No. 615645/2016 No. 21 of 23(Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 Thus, this damage cannot be granted.
50. In view of the above findings, I find that by preponderance of probabilities, plaintiff has succeeded in proving that the defendants no. 1 to 4 in collusion with each other had imported the vehicle in question, that the vehicle in question was imported by providing wrong particulars and thus, being considered as a smuggled vehicle, it was confiscated by DRI and that the vehicle in question is still in custody of DRI.
51. Plaintiff has further succeeded in proving that the defendants had caused monetary loss to him to the tune of the price of the vehicle.
52. I accordingly find that the plaintiff is entitled to recover the price of the vehicle, as paid by plaintiff to defendants no. 1 to 3, from defendants no. 1 to 4 and thus, plaintiff is entitled to recover Rs.12 lacs from the defendants.
53. Plaintiff has also claimed interest @ 18% per annum. However, how the plaintiff has claimed this rate of interest has not been specified and therefore, the court cannot award interest at such a high rate. However, as the plaintiff has suffered loss because of the conduct of the defendants and the defendants failed to make good of the loss, the defendants are liable to pay interest. I accordingly award interest @ 7% per annum, which is prevailing bank rate of interest of FDRs, from 13.08.2007 till the date of realization. Both these issues are accordingly decided. RELIEF
54. In view of my above findings, the suit of the plaintiff is decreed.
55. Accordingly a decree of Rs.12,00,000/- alongwith interest @ CS No. 615645/2016 No. 22 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023 7% per annum w.e.f from 13.08.2007 till the date of realization is passed in favour of the plaintiff. Costs of the suit are also awarded to the plaintiff. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court (PARVEEN SINGH) on 04.10.2023. ADJ-11, Central District, (This judgment contains 23 pages and Tis Hazari Court, Delhi each page bears my signature.) CS No. 615645/2016 No. 23 of 23 (Parveen Singh) ADJ-11/Central/THC/Delhi/04.10.2023