Delhi District Court
M/S Pink Inc vs M/S Kapoor Sehgal & Fabrics on 11 July, 2012
1
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE (CENTRAL) 1 TIS HAZARI
COURTS, DELHI.
Civil Suit No.: 191/2006
Unique I. D. no. 02401C0608632006
1. M/s Pink Inc.
(A Partnership firm now dissolved)
Though its Partner Ms. Pinki Sethi
having its present office at
KD179, Main Road, Pitam Pura,
Delhi110 034
2. Ms. Pinki Sethi
KD179, Main Road, Pitam Pura,
Delhi110 034
through her Attorney
....Plaintiffs
Versus
1. M/s Kapoor Sehgal & Fabrics
4420, ganesh Bazar, Cloth Market,
Delhi110 006 (Partnership firm)
2. Mr. Kunj Behari Lal
S/o Sh. Bhagwan Dass Kapoor,
27D., Kamla Nagar, Delhi.
3. Mr. Umesh Kapoor,
Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 1 of 19
2
S/o Sh. Kunj Behari Lal,
27D, Kamla Nagar, Delhi
4. Mr. Yogesh Kapoor,
S/o Sh. Kunj Behari Lal,
27D, Kamla Nagar, Delhi
5. Mr. Vinay sheel
S/o Sh. Kunj Behari Lal,
27D, Kamla Nagar, Delhi
6. M/s Choudhry Sidhu Ram Sehgal Pvt. Ltd.
4420, Ganesh Bazar, Cloth Market,
Delhi110 006
....Defendants
Date of institution of the suit : 17.07.2006
Reserved for judgment on : 03.07.2012
Date of pronouncement of judgment : 11.07.2012
Suit for Recovery
JUDGMENT:
The present for suit has been filed by plaintiffs for recovery of Rs.3,60,000/.
2 Brief facts, as narrated in the plaint, constituting the cause of action of the plaintiffs, are: Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 2 of 19 3
(i). Plaintiff no. 1 was a partnership firm which has been dissolved vide registered dissolution deed dated 02.03.2006 wherein it has been expressly agreed among the partners in clause 4 & 5 of the dissolved firm that all the payments and actionable claims and other proceeds will be enforced by the first party therein, to the dissolution deed and being is plaintiff no. 2 herein.
(ii). The erstwhile partnership firm was engaged in carrying on the business of trading, manufacturing and doing export of clothes, textiles, garments and represented hereby through Authorized representative/attorney who has been delegated the powers through the partner of the dissolved firm and is attorney and accordingly the said Mr. Suresh Kumar, is authorized to represent the firm and the partner through which the present suit is being instituted.
(iii). The defendant no. 1 is a registered partnership firm, and the defendant no.2 to 5 are the partners, as per the FormA, Defendant no. 6, a proforma party, is a company incorporated under Indian Companies Act, 1956, in which the original Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 3 of 19 4 contract was made and is the sister concern of defendant no.1 and also in which defendant no. 3 is the director.
(iv). As per the Section 18 of Partnership Act, which lays down that partners are the agent of the firm for the purpose of the business of the firm and also for each other. Thus any act done on behalf of the firm makes all the partners equally liable jointly and severally to all of the partners are equally liable and are agent of each other accordingly are liable for the acts and deeds of each other jointly and severally and are also for all damages, recovery debts and other claims against the firm.
(v). The plaintiffs and defendants were known to each other, being in the same trade, and as aforesaid the plaintiff no.1 was wound up and in the course of the same the plaintiff(s) had to sell its assets to pay its liabilities and for completing the winding up process, accordingly a deal was agreed among M/s Choudhary Sidhu Ram Sehgal Pvt. Ltd., defendant no. 6 herein, of which defendant no. 3 is also the director, and through a notice dated 01.07.2005 which the promisor company through its director have sent to the plaintiffs which proves the Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 4 of 19 5 agreement and accordingly to purchase whole and all lot, but not specific items. A list of all the items were prepared during the course of said deal and the said list is annexed.
(vi). After issuing a cheque for Rs.4,00,000/ from the account of original party to the agreement i.e. defendant no. 6 of whom the defendant no. 3 is the director and also a partner of defendant no. 1, opted for to carry out the said agreement in the name of defendant no.1 being the sister concern and common ownership among each other on the same conditions as agreed while issuing the cheque of defendant no. 6, to which the plaintiffs and defendants, jointly never objected and ratified by their own deeds and acts and agreed to take over the contract as before and same did the defendants the same being agreed facts and admitted facts as per the contents of reply dated 11.07.2005 which has been sent by the counsel of the defendants.
(vii). After assignment of the agreement in the name of defendant no. 1, it seems the intentions of the defendants became malicious and to give colour to the conspiracy, defendant no. 3, issued a cheque pertaining to the defendant no. Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 5 of 19 6 1, signed by defendant no. 3 in capacity of partner bearing no. 877643 drawn on Dena Bank from current account no. 10009 dated 23.05.2005 which when presented for being honoured was dishonoured by the drawee bank of the defendants with a remarks "PAYMENT STOOPED BY DRAWER", which clearly indicates that the defendants have knowingly and deliberately have returned the cheques after lifting the material for the consideration of cheque which is supported and admitted by the defendants by signing the receipts of goods and other vouchers along with the value declared.
(viii). The plaintiff have initiated criminal proceedings for fixing the criminal liability U/s 138 of the Negotiable Instruments Acts, which is pending adjudication before the ld. Metropolitan Magistrate Mr. B. R. Bansal, Tis Hazari Courts, Delhi.
(ix). The plaintiffs have served a notice prior to filing the present suit which has not been responded by the defendants in a proper way by not discharging the liability they owe towards the plaintiffs and rather has made lame excuses which are not Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 6 of 19 7 tenable in law and has made all circumstances to delay the matter and have not paid any part amount in response to the payments they owe.
(x). Despite service of the legal notice, the defendant deliberately has avoided to discharge their legitimate liability towards the plaintiff, forcing the plaintiff to file the present suit for recovery. Even during the pendency of the aforesaid criminal complaint the defendant was asked so many times by the plaintiff but the defendant failed to pay the amount and rather preferred to contest the said complaint.
(xi). In the present suit the plaintiff claims Rs.3,60,000/ which includes Rs.3,00,000/ as principal and Rs.60,000/ being the interest accrued till the date of filing @18%.
3. The defendants contested the suit by filing a written statement and pressed the following objections and facts into service to refute the claim of the plaintiffs.
(i). The plaintiff has not approached this Hon'ble Court with clean hand, apart from concealing and suppressing the material facts, hence, the present suit is liable to be dismissed. Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 7 of 19 8
(ii). The defendants had propounded that the plaintiffs have misused the cheque of Rs.3,00,000/. In fact, neither any goods were delivered nor supplied to the answering defendants, hence, the present suit has been filed on the bases of post dated cheques which were issued by the plaintiffs on this condition that the same would be realized when the good would be supplied. The plaintiffs have not mentioned any challan number or bill number which clearly shows that no goods were supplied by the plaintiffs to the defendants and by misrepresenting the facts the plaintiffs want to take advantage of the said cheque.
(iii). The plaintiffs have no cause of action against the answering defendants for filing of the present suit. The plaintiff has no right to recover any amount from the defendants. The defendants also owe no responsibility for payment of any amount. The suit of the plaintiff is not maintainable against the defendants.
(iv). The plaintiff has failed to show any receiving of goods. In terms of the agreement a final list dated 29.04.2005 of items/goods which were agreed to be sold by the plaintiffs to Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 8 of 19 9 the defendants was prepared and handed over to the defendants. It is submitted that the list was prepared, the items were mentioned which were to be sold by the plaintiffs to defendants and handed over to be defendants and it was mutually settled that the defendants would pay approximately 45% of the total value of the list so prepared. The said list was given by the plaintiffs to defendants and the defendants agreed for the same. The said approx. 45% of the value of the list comes to Rs. 3,00,000/ in lumpsum. The plaintiffs agreed to sell the aforesaid goods/items as the plaintiff were in urgent need to money. Accordingly, the plaintiffs requested the defendants that it will take sometime to remove the machine etc. but plaintiffs persuaded that they were in immediate need of money and requested the defendants to pay the amount in advance. Accordingly, the defendants has given a post dated cheque no. 877643 dated 23.05.2005 for Rs.3,00,000/ drawn on Dena Bank, Okhla Industrial Estate, Okhla, New Delhi to the plaintiffs with an understanding that the said cheque shall be presented for encashment only after the goods as agreed as per Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 9 of 19 10 list are supplied by the plaintiffs to the defendants. But plaintiffs have not supplied the goods as agreed as per list and intentionally and deliberately failed to supply the goods/items as agreed despite of repeated requests and demands of the defendants and as prolonging the matter on one pretext or the other. The plaintiffs have no right to present the said chque for encashment unless and until they supply the goods to the defendants as agreed as per list and as such the said cheque is without any consideration and has no validity in the eyes of law, hence, the present suit is liable to be dismissed.
(v). The defendants smelt the malafide intention of the plaintiffs on 16.05.2005 when the defendants approached the plaintiffs for receiving of goods, however, it was found that some goods as like fabrics, garments & computers have been removed and immediately wrote a letter dated 20.05.2005 under Regd. AD as well as Speed Post even much prior to the due date of the cheque whereby informed the plaintiffs that since the plaintiff have failed to supply the goods and as such, the said cheque should not be presented for encashment and, as such, the Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 10 of 19 11 plaintiff have no right to present the said cheque for encashment or act upon the said cheque in any manner. The defendants requested the plaintiff to return the said cheque, however, the plaintiffs have not returned the said cheque with malafide intention and misuse the said cheque though the plaintiff has no right to act upon the said cheque as they have failed to supply the goods as agreed as per list and as such has said cheque is without any consideration, however, taking the benefit of the said cheque, the plaintiff has filed a fase and bogus complaint under Section 138 of the Negotiable Instrument Act 1882 and said complaint case is pending for adjudication before the Hon'ble Court of Sh. Pritam Singh, MM, Delhi. It is submitted that the defendants received copy of complaint & documents in which he received even forged documents bearing forged signature of the defendants, hence, the defendant has lodged a complaint dated 17.10.2006 to the SHO Subzi Mandi, Delhi against the plaintiffs and the said complaint is still under investigation.
(vi). The plaintiffs have claimed his recovery on basis of false, Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 11 of 19 12 frivolous and fabricated documents which were never written and signed by answering defendants. The documents filed by the plaintiffs are even contradictory in itself.
(vii). The plaintiff has failed to file his account statement in respect of dues towards defendants, hence, in absence of any legally recoverable debts, the present suit is liable to be dismissed. The plaintiff can not show even a single document to show that defendant nos. 1 and 5 had received the goods as mentioned by plaintiff. No proper bill or invoice has been filed by plaintiff in the record and further not showed whether any tax was paid or filed his income tax return of statement of account in this regard which shows that the suit is false and frivolous.
(ix). The defendants have sent a letter dated 20.05.2005 whereby it has been stated by defendants that as per agreed list plaintiff has not supplied the goods and some goods has been sold to other party, hence, it was breach of contract on part of plaintiffs as plaintiffs failed to give the physical possession of inventory, hence defendant is going to make stop payment of Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 12 of 19 13 alleged cheque but plaintiff did not bother to send any reply of letter dated 20.05.2005, accordingly defendants gave instruction to his banker for stop payment of alleged cheque well before the date of presentation of said cheque.
(x). The defendants have sent a notice dated 01.07.2005 through his advocate but plaintiff did not bother to send reply of aforesaid notice which clearly shows the intention of plaintiff.
(xi). The plaintiff never sent the goods to M/s Kapoor & Sehgal Fabrics. The challan no.806 dated 15.05.2005 filed in criminal complaint under Section 138 of NI Act is showing amount of Rs.3,35,205/ though in para no.11 of the plaint, plaintiff is stating that Rs.3,00,000/ is a principal amount, thus, both are contradictory figure and it further shows that plaintiff has manipulated the documents.
(xii). Due to failure on part of the plaintiffs, defendant suffered loss in his business which is amount to Rs.60,000/, hence, defendant no.1 has filed a civil suit for damage of Rs.60,000/ titled as M/s Kapoor & Sehgal Fabrics versus M/s Pink Inc & Otheres which is pending before the court of Sh. Sidharth Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 13 of 19 14 Mathur, Civil Judge, Delhi and plaintiff has duly received the summons. Despite receiving the summons of the said suit. The plaintiff concealed the material facts, it shows that the plaintiff has malafide intention.
(xiii). The plaintiff has malafide intention and he is in habit of playing fraud. The plaintiff had entered into the transaction with defendant no. 6 i.e. M/s Chaudhary Sidhu Ram Sehgal (P) Ltd and received a cheque for Rs.4,00,000/ in advance however, supplied the goods of lesser value and still, plaintiff has not returned the balance amount and now in the present case again plaintiff played fraud with the applicants/defendants no. 1 to 5 by not delivering the goods despite of receiving the advance cheque for Rs.3,00,000/.
(xiv). The present suit has not been properly valued and further has not been filed a duplicate copy of plaint and further plaintiff is rely on certain documents which are not originally produced or attached along with present suit; the suit has not been filed with detailed affidavit or affidavit in support of plaint, hence the present suit may be dismissed with heavy cost. Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 14 of 19 15
4. The defendant denied the averments of plaint on which the plaintiff has propounded his cause of action in the above terms
5. On the available pleadings the following issues were framed vide minutes of proceedings dated 12.09.2008:
1. Whether the plaintiffs had no right to present the cheque no. 877643 dated 23.05.2005 for rupees three lacs for encashment, as stated in para no.3 of the Preliminary Objection in the WS. If so, its effect? OPD
2. Whether the plaintiff is entitled for the suit amount? OPP
3. Whether the plaintiff is entitled for interest. If so, then at what rate and for what period? OPP
4. Relief.
6. No evidence has been led by any of the parties though opportunities have been were afforded.
7. I have heard Ms. Rashmi Jain, ld. counsel for the plaintiff and Shri Sandeep Jindal, ld. counsel for the defendant.
8. Ld. Counsel has copiously read from the pleadings and cited the Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 15 of 19 16 documents.
9. Ld. Counsel for the plaintiff has argued that the plaintiff's case is liable to be decreed on the basis of material on record. Per contra, ld. counsel for the defendant has argued that when no evidence has been led by the plaintiff, its suit must necessary fail.
10. I have considered the submission and the material on record. My issue wise findings are as under: Issue no. 1. Whether the plaintiffs had no right to present the cheque no. 877643 dated 23.05.2005 for rupees three lacs for encashment, as stated in para no.3 of the Preliminary Objection in the WS. If so, its effect?
11. The onus of this issue has been on the defendant. As no evidence has been led by the defendant, the onus has not shifted and as such the onus is not discharged by the defendant. Hence the finding on this issue has been returned against the plaintiff. Issue no. 2. Whether the plaintiff is entitled for the suit amount?
& Issue no. 3. Whether the plaintiff is entitled for interest. If so, then at what rate and for what period?
Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 16 of 19 17
12. The onus of these issues has been on the plaintiff.
13. The plaintiff has led no evidence, hence the onus is not discharged. Therefore, the finding on these issues is returned against the plaintiff.
14. Now the question arises as to who would fail if no evidence is led by either side.
15. The litmus test has been provided in section 101 of the Evidence Act, 1872 which is as under: "101. Burden of proof --Whoever desires any Court to give judgment as to any legal right or lia bility dependent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person."
16. It is the plaintiff who is seeking a judgment in his favour. Thus the burden as well as the initial onus of proof had been on the Plain tiffs as they wanted the Court to render a judgment in their favour and cloth them with a legal right of recovery.
Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 17 of 19 18
17. The law is well settled that the burden of proof is always con stant/fixed and never shifts, whereas onus keeps on shifting in the course of the trial.
18. The burden of proof is the basic liability to prove a certain fact notwithstanding that there is no contest to the case. Only a conclusive presumption raised by the law can relieve a party of the burden of proof. However the onus is not constant and keeps on shifting in the course of trial proceedings. Onus is in fact a right to begin or open the evidence. Once a party discharges the initial onus, it shifts upon the adversary.
19. In this case the plaintiff, who had the initial onus and burden of proof, has not stepped into the witness box and led no evidence to prove the liability against the defendants. As such the initial onus is not discharged by the defendants and consequently the onus of proof has not shifted to the plaintiff.
20. The law does not require a party to prove the negative of the is sue. As a logical corollary, the plaintiffs have failed to discharge the burden of proof.
21. Thus the suit of the plaintiffs must fail for want of evidence. Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 18 of 19 19
22. The suit is therefore dismissed.
23. Parties to bear their own costs.
24. Decree sheet be drawn accordingly.
25. File be consigned to the Record Room.
Announced in the Open Court On this 11th July, 2012 Man Mohan Sharma ADJ (Central)1, Delhi Pink Inc. Vs. Kapoor Sehgal C.S. 191/06 Page 19 of 19