Delhi District Court
M/S. Smc Comtrade Pvt. Ltd vs M/S Narnolli Bullion on 13 August, 2018
IN THE COURT OF SH. SANJEEV KUMARI, ADDITIONAL DISTRICT JUDGE12,
TIS HAZARI COURTS, DELHI
CS No. 16718/16
M/s. SMC Comtrade Pvt. Ltd.,
11/6 B, Shanti Chambers,
Pusa Road,
New Delhi110008. ........Plaintiff
Versus
1. M/s Narnolli Bullion,
(Through its proprietor)
Mr. Mukesh Soni,
1923, Sonthili Walon Ka Rasta,
Jaipur, Rajasthan.
2. Smt. Rajni Soni,
Narnoli Overseas,
1923, Sonthili Walon Ka Rasta,
Jaipur, Rajasthan
3. Sandeep Soni,
1923, Sonthili Walon Ka Rasta,
Jaipur, Rajasthan.
Also At:
S/o Keshrimal Soni,
House No.285, Nanak Puri Colony,
Chowdhriyon Ka Kuan,
Sardarsar, District Choor,
Sardarsar, Jaipur ....... Defendants.
Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 1 of 45
Date of institution : 04.11.2009
Date of reserving Judgment : 07.06.2018
Date of decision : 13.08.2018
SUIT FOR RECOVERY OF RS. 14,24,739/.
JUDGMENT
Vide this judgment, I shall decide the suit for recovery of Rs. 14,24,739/ filed by the plaintiff.
2. Brief facts as stated by the plaintiff are that plaintiff is a company duly incorporated under the Companies Act. Earlier the company was incorporated and doing business under the name and style of SMC Comex Pvt. Ltd. and thereafter incorporated as SMC Comtrade Pvt. Ltd. on 28.09.2006 and subsequently as SMC Comtrade Ltd. on 17.10.2006. Sh. Ram Kumar is the Principal Officer of the plaintiff company who has been authorized by the Board of Resolution dated 25.07.2006 to institute the present suit and do all necessary acts as required in the case.
It is further stated that defendant no.4 who was running jewelery business introduced the defendants no.1 to 3 to the plaintiff company. Defendants no.1 to 3 approached the plaintiff company in the month of April, 2006 for purchase of 1 Kg gold on consideration of Rs.9,21,462/ and assured that said amount was deposited in the plaintiff company's account as per the practice and business style of the commodities Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 2 of 45 market. The plaintiff company issued a delivery letter to M/s Brink Arya India (P) Ltd. on 25.04.2006 and instructed to hand over 1Kg gold to the defendants no.1 to 3. The plaintiff company also issued a letter dated 25.04.2006 to the defendants no.1 to 3 requested them to deposit the payment in the company account No. 0030340011174. The defendants no.1 to 3 received 1 Kg gold on 26.04.2006 from M/s. Brink Arya India (P) Ltd. and thereafter assured the plaintiff that they would deposit the consideration amount of Rs.9,21,462/ in the plaintiff company's account within 24 hours. The defendant no.3 also signed receipt of consignment document and collected the goods from M/s Brink Arya India (P) Ltd on 26.04.2006.
It is further stated that the defendants no.1 to 3 failed to deposit the consideration amount. Upon the failure of defendants no.1 to 3 to make the payment of the outstanding, the plaintiff lodged an FIR with the police against defendants no. 1 to 3 and only after the said complaint, the defendants no. 1 to 3 started making payment of the outstanding in installments and made payment of Rs. 20,000/, Rs. 6,000/ and Rs. 5,000/ and thereafter stopped making the payment. It is further stated that an amount of Rs. 14,24,739/, details of which given below is due towards the defendants Nos. 1 to 3.
3. Summons of the suit were issued to all the defendants. The defendants no. 1 to 3 contested the case by filing joint written statement whereas defendant no.4 was dropped by the plaintiff as evident from the order sheet dated 27.04.2010. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 3 of 45
4. In the joint written statement, defendants have taken preliminary objections that :
(i) The suit of the plaintiff is not maintainable as it does not disclose any cause of action against the defendants and thus liable to be dismissed under Order VII Rule 11 CPC.
(ii) The suit has not been instituted by a proper party since SMC Comtrade Pvt. Ltd. has no concern whatsoever to institute the present proceedings as the company vide certificate of incorporation dated 17.10.2006 has changed its name.
(iii) The suit is barred by limitation as the last transaction has taken place on 26.04.2006 and suit has been filed in October, 2009.
(iv) The suit is barred under the provisions of Order XXXII CPC as the plaintiff himself admitted that defendant no.3 was minor at the time of alleged transaction.
(v) The suit has not been instituted and verified by a proper person and Mr. Ram Kumar has no right to institute the present proceedings as no resolution has been passed by the plaintiff company for giving authority to Mr. Ram Kumar to file the present suit.
Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 4 of 45
(vi) This court has no territorial jurisdiction as entire alleged transactions has taken place in Jaipur.
On merits, defendants have denied the contents of the plaint. It is denied by the defendants that defendant no.4 introduced defendant no.1 to 3 to the plaintiff company for business relations or that defendant no.4 assured the plaintiff that defendants no.1 to 3 would make the payment of the goods they purchase from the plaintiff company or that defendants no.1 to 3 approached the plaintiff company in the month of April, 2006 for purchase of 1 Kg gold on consideration of Rs.9,21,462/ and assured that they will deposit the said amount in the bank account of plaintiff company. It is also denied that plaintiff company issued a delivery letter to M/s Brink Arya India (P) Ltd. on 25.04.2006 or that plaintiff company issued a letter dated 25.04.2006 to the defendants no.1 to 3 requesting them to deposit the payment in the plaintiff company's account. It is also denied that defendants no.1 to 3 received 1Kg gold on 26.04.2006 from M/s. Brink Arya India (P) Ltd. and thereafter they assured the plaintiff that they would deposit the agreed amount of Rs.9,21,462/ in the plaintiff company's account within 24 hours. It is denied by the defendants that defendant no.1 deposited the amount of Rs.31,000/ vide cheques no. 130179 dated 29.06.06, 130180 dated 03.07.2006 and 130181 dated 08.08.2006 for the aforesaid gold loan transaction but stated that defendant no.1 deposited the said amount on being asked by the plaintiff that the said amount of Rs.31,000/ was spent by the plaintiff company for the Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 5 of 45 preparation of relevant documents etc. with other companies and also towards the other expenses borne by the plaintiff company. The defendants have also denied that any cause of action arose in favour of the plaintiff on 25.04.2006 or thereafter and thus prayed for dismissal of the suit.
5. On the basis of the pleadings of the parties, my Ld. Predecessor, vide order 16.08.2010, has framed following issues:
1. Whether plaintiff company has no locus standi to file the suit? OPD
2. Whether suit is bad for nonjoinder and misjoinder of parties? OPD
3. Whether relief sought is time barred? OPD
4. Whether suit is bad for violation of order 32 CPC? OPD
5. Whether suit has not been instituted and verified by duly authorized person? OPD
6. Whether this court has no territorial jurisdiction to try this suit? OPD
7. Whether plaintiff company is entitle to decree against the defendant for a sum of Rs.14,24,739/ apart from cost and interest? OPP Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 6 of 45
8. Relief.
6. My Ld. Predecessor vide order dated 23.11.2016 has dismissed the suit on the ground that plaintiff has failed to lead any evidence. The plaintiff has challenged the said order before the Hon'ble High Court and the Hon'ble High Court vide judgment dated 14.03.2018 in RFA No. 219/17 & CM Appl.7308/2017 (stay) has set aside the said judgment and remand back the case to the Trial Court.
7. Thereafter the evidence was recorded by Local Commissioner. In order to prove his case, plaintiff has examined two witnesses i.e. Sh. Kamlesh Kumar Sharma as PW1, the Deputy Manage of M/s Brink's Arya Pvt. Ltd. (now Brink's India Pvt. Ltd.). In order to prove his case he has examined two witnesses. PW1 Sh. Kamlesh Kumar Sharma as PW1, the Deputy Manage of M/s Brink's Arya Pvt. Ltd. (now Brink's India Pvt. Ltd.) was a summoned witness. He has only produced following documents :
(i) Ex.PW1/A (Colly) is the letters dated 25.04.2006.
(ii) Ex.PW1/B is the delivery receipt No.4167 dated 26.04.2006.
(iii) Ex.PW1/C is the letter dated 09.01.2006.
(iv) Ex.PW1/D is the letter dated 25.01.2006.
(v) MarkPA is authority letter dated 31.01.2005.
(vi) Ex.PW1/E is seizure memo dated 22.12.2015
8. Sh. Puneet Kumar Goyal was examined as PW2 who led his evidence Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 7 of 45 by way of affidavit, Ex. PW2/A. PW2 has deposed that he is authorized representative of the plaintiff company. He deposed that plaintiff company was incorporated under the Companies Act having its registered office at 11/6B, Shanti Chambers, Pusa Road, New Delhi and he deposed that earlier the company was incorporated and doing business under the name and style of SMC Comex Pvt. Ltd. and thereafter incorporated as SMC Comtrade Pvt. Ltd. on 28.09.2006 and thereafter SMC Comtrade Pvt. Ltd. Converted into SMC Comtrade Ltd. on 17.10.2006 and engaged in the business of commodities broking services dealing in various commodities including silver, gold, copper, zinc etc. through MCX and NCDEX. He almost repeated the same contents in his examinationinchief which was stated by the plaintiff company in the plaint which I have already stated in para 2 and 3 above. Hence same are not repeated here for the sake of brevity. He has relied upon following documents:
(i) Ex.PW2/1 is the Certificate of Incorporation of the company.
(ii) Ex.PW2/2 is copy of Board Resolution dated 04.08.2015.
(iii) Ex.PW2/3 is the Authorization letter dated 18.08.2015.
(iv) Ex.PW2/4 is the invoice dated 26.04.2006.
(v) Ex.PW1/A (Colly) is the letters dated 25.04.2006.
(vi) Ex.PW1/B is the delivery receipt No.4167 dated 26.04.2006.
(vii) Ex.PW1/C is the letter dated 09.01.2006.
Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 8 of 45
(viii) Ex.PW1/D is the letter dated 25.01.2006.
(ix) MarkPX (Colly) is the Statement of Account of plaintiff company.
(x) MarkPX1 is copy of the unsigned Protest Petition.
9. On the other hand, defendants in order to prove their case, have examined two witnesses i.e. Sh.Mukesh Soni as DW1. DW2 has relied upon the documents already exhibited as Ex.DW1/1 and Ex. DW1/2. DW1 has almost deposed the same fact in his examination in chief as stated in the written statement by defendants. DW1 has also relied upon following documents:
(i) Ex.DW1/1 is the certified copy of judgment dated 13.03.2013 passed by the Ld. Trial Court.
(ii) Ex.DW1/2 is the certified copy of judgment dated 03.01.2018 passed by the Hon'ble High Court of Rajasthan, Jaipur Bench.
(iii) Ex.DW1/3 is the certified copy of orders dated 04.08.2015 passed by the Ld. Magistrate.
(iv) Ex.DW1/4 is the certified copy of orders dated 05.04.2018 passed by the Ld. Special Judge, Jaipur.
(v) Ex.DW1/5 is the certified copy of orders dated 05.09.2016 passed by Ld. CMM, Kolkata.
10. Sh. Sandeep Soni as DW2 has led his evidence by way of affidavit EX Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 9 of 45 DW2/A. In his evidence he deposed that he was not authorized by defendant no.1 and 2 to take delivery of the gold and he has not taken delivery of gold sent by plaintiff from the vault of Ms. Brink Arya.
11. Arguments were heard from Sh. Ravi Ranjan, Ld. counsel for the plaintiff and Sh. C.L. Dhawan, Ld. counsel for the defendants.
12. I have consider the arguments and gone through the records. My issue wise findings are as under :
13. ISSUE NO. 1.
Whether plaintiff company has no locus standi to file the suit? OPD.
The onus to prove this issue is upon the defendant. Ld. Counsel for the defendant has contended that suit has been filed by M/s. SMC Comtrade Pvt. Ltd. on 04.11.2009 whereas as per own admission of the plaintiff in para no.1 that the SMC Comtrade Pvt. Ltd. converted into SMC Comtrade Ltd. On 17.10.2006. Hence at the time of filing of the suit there was no company with the name of SMC Comtrade Pvt. Ltd. Hence plaintiff has no right to file the present suit.
14. On the other hand, Ld. Counsel for the plaintiff has contended that suit has been filed by SMC Comtrade Ltd. and not by SMC Comtrade Pvt. Ltd. as evident from the memo of parties in which he has removed the word 'private' by putting fluid in word 'private' but inadvertently on the amended memo of parties the word SMC Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 10 of 45 Comtrade Pvt. Ltd. was mentioned in place of SMC Comtrade Ltd. and this is bona fide mistake whereas both SMC Comtrade Pvt. Ltd. and SMC Comtrade Ltd. are one and same company and only name has been changed. In order to support his contention, he has relied upon the testimony of PW2 Sh. Puneet Kumar Goyal. On perusal of testimony of PW2, it is evident that he has deposed in para 2 of his affidavit Ex.PW2/A that the plaintiff company was incorporated and doing business under the name and style of SMC Comex Pvt. Ltd. and thereafter incorporated as SMC Comtrade Pvt. Ltd. on 28.09.2006 and then converted into SMC Comtrade Ltd. On 17.10.2006. He has proved the incorporation certificate of plaintiff company as Ex.PW2/1 (in affidavit as Ex.PW1/1). On perusal of the said certificate dated 17.10.2006 issued by Government of India, Ministry of External Affairs, it is evident that name of SMC Comtrade Pvt. Ltd. was changed to SMC Comtrade Ltd. I do not find force in the contention of Ld. Counsel for the defendant that suit was filed by SMC Comtrade Pvt. Ltd. and not by SMC Comtrade Ltd. as in the original memo of parties which was filed along with suit, the name of the concern is mentioned as SMC Comtrade Ltd. as fluid has been affixed at the word 'private' though inadvertently in the affidavit which has been filed along with plaint, no fluid has been put on the word 'private'. Hence the name has mentioned as SMC Comtrade Pvt. Ltd. This is merely a clerical mistake, hence on this ground that inadvertently fluid has not been put on the affidavit in the word 'private' by the plaintiffs as put on the memo of parties, it cannot be said that the case has been filed by the firm Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 11 of 45 SMC Comtrade Pvt. Ltd. and not by SMC Comtrade Ltd. Hence, I decide issue no.1 in favour of the plaintiff and against the defendants.
15. ISSUE NO. 2
Whether suit is bad for nonjoinder and misjoinder of parties? OPD.
The onus to prove this issue was upon the defendants. The defendant in the written statement has mentioned that the suit is liable to be dismissed on account of non joinder and mis joinder of parties but besides this, nothing has been mentioned as to who was the necessary party left by plaintiff and who was the party should not be a party in the suit. Neither in the evidence led by defendants in their testimony, they have deposed in this regard nor any suggestion has been given to the plaintiff's witness in this regard to prove that the suit is bad for non joinder and mis joinder of necessary parties. Issue is decided accordingly against the defendants and in favour of the plaintiff.
16. ISSUE NO. 3
Whether relief sought is time barred? OPD.
It is contended by counsel for the plaintiff counsel that admittedly as per own case of the plaintiff, the defendant approached the plaintiff company in April, 2006 on 25.04.2006 and purchased 1 Kg gold from plaintiff company and which was Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 12 of 45 delivered on 26.4.2006 through M/s. Brinks Arya (P) Ltd. and made payment of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ totaling Rs. 31,000/ to the plaintiff which was kept in suspended account and reflected in the defendant no.2 accounts on 31,03.2007 hence limitation period is to be counted from 31.03.2007 hence suit is with in limitation as article 1 of schedule of Limitation Act and not article 113 will apply. 16. In order proved the same he relied upon the running account statement of defendant company mark PX maintain by plaintiff who has deposed that defendant no.1 to 3 made payment of Rs. 31.000/ .
17. On the other hand Ld. Counsel for defendant has contended that payment of Rs. 31,000/ was made by the defendant No. 1 vide cheque Nos. 130179 dated 29.6.2006; Cheque No. 130180 dated 3.7.2006 and Cheque No. 130181 dated 8.8.2006 and not on 31.3.2007 for the purpose of maintaining relation with the plaintiff and not as part payment towards purchase of Gold and he further contended that even otherwise since last payment of Rs. On 08.08.2006 hence limitation is to be counted from 08.08.2006 and not from 31.03.2007. He further contended that in the plaint, no date has been mentioned deliberately when the said cheques were encashed and concealed material facts and fabricated account statement to create the evidence that suit is with in limitation. He also argued that the statement of account filed by the plaintiff company, Mark PX relied by plaintiff to proved that part payment of Rs.31,000/ was received on 31.3.2007 is false and fabricated and that is why in the said statement, Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 13 of 45 no date of cheque is mentioned. Further, deliberately the plaintiff had not placed on record bank's statement of account showing that the afoaresaid cheques were encashed into the bank account of the plaintiff.
18. In order to proved the same the defendant has relied upon the testimony of DW1 Mukesh Soni. In his evidence led through affidavit, Ex. DW1/A, he has deposed that defendant No. 1 wanted to make relation and only on submissions of the plaintiff, the defendant No. 1 paid a sum of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ to the plaintiff vide aforesaid cheques for preparation of relevant documents in order to develop relations with other companies and he or any other defendant has never acknowledged the liability as alleged by the plaintiff company. In his cross examination, no suggestion has been given to him that Rs. 31,000/ was not paid through cheque in the manner as deposed by the DW1 hence, the said fact remains unrebutted. Further, no suggestion has been given to the DW1 that any payment of Rs. 31,000/ was made by defendant No. 1 or any other defendants on 31.7.2007.
19. I have consider the submission and gone through the evidence of respective parties. The limitation period is to be start from the date of last payment of gold allegedly sold by the plaintiff to the defendants. Plaintiff neither in the plaint nor PW2 Puneet Goel in its evidence affidavit has mentioned when the payments of Rs. 31,000/ was made by the defendants to the plaintiff and through which mode. Plaintiff has taken the vague plea that part payment of Rs. 20,000/, 6000/ and Rs. 5000/ was Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 14 of 45 made by defendant Nos. 1 to 3 and thereafter stopped making payment. Verbatim same facts has been mentioned by the star witness of Plaintiff in his evidence affidavit. on 31.3.2007. Hence plaintiff have failed to proved when the defendants made last payment.
20. On the other hand defendants through the testimony of DW1 Mukesh Soni has proved that payment of Rs. 31,000/ was made by the defendant No. 1 vide cheque Nos. 130179 dated 29.6.2006; Cheque No. 130180 dated 3.7.2006 and Cheque No. 130181 dated 8.8.2006 and not on 31.3.2007. Said facts has not been denied by the plaintiff as no suggestion has been given to DW1 that payment of Rs. 31,000/ was not made in the manner as deposed by DW1, hence, there is no ground to disbelieve the testimony of DW1 that the DW1 has made the last payment of Rs. 5000/ on 8.8.2006 to the plaintiff company. Even if it is presumed that the said amount of Rs. 31,000/ was paid towards part payment of the gold, though denied by the defendants the period of limitation will start from the date when the last payment was made i.e. 8.8.2006 and not from 31.03.2007 when the plaintiff company reflected the same in the account of defendant no.2 on 31.03.2007 hence, the suit is file after three year from the date of last payment made by defendants The present suit has been filed on 4.11.2009. As per article 113 of Schedule of Limitation Act the limitation for recovery of money is three year therefore same is barred by limitation.
21. I do not find force in the contention of the counsel for the plaintiff that Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 15 of 45 earlier the said payment was made by M/s. Narnoli Bullion, defendant No. 1 to the plaintiff and was remain in suspense account and it was claimed unidentified and claimed in the account of defendant No. 1, Narnoli Bullion only on 31.3.2007 and on request of Mukesh Soni, the payment is to be considered to be made by the defendant to the plaintiff on 31.3.2007 as there is no pleading. Rather pleading is contrary that the defendants no.1 to 3 made the payment. Further, even in its evidence and even no such suggestion has been given to the defence witness that payment was made by Narnoli Bullion i.e. the third party and same was transferred into the account of Narnoli Overseas on 31.3.2007 on the request of Sh. Mukesh Soni, proprietor of defendant No.
1. Hence, the said contention of the plaintiff's counsel is beyond pleadings as well as the plaintiff also failed to prove the said contention through testimony of plaintiffs witnesses hence, I reject the same.
22. Now, the next contention of the counsel for the plaintiff that as per Article I of Schedule to the Limitation Act, the period of limitation is to be computed from the date of close of year in which last item is admittedly proved or entered into the account. He contended that the plaintiff is a company which was maintaining a running account of defendants and transactions are tallied only after expiry of the current year. Hence, the period of limitation is to be count from 31.3.2007 and not from the date when the actual payment was made. Therefore, suit is within limitation. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 16 of 45
23. I am not agree with the said contention. Article I of Schedule to the Limitation Act is only applicable in cases when there is a mutual account by both the parties. Article I is reproduced as under : Description of suit Period of limitation Time from which period begins to run
1. For the balance due on a Three years The close of the year in mutual, open and current which the last item account, where there have admitted or proved is been reciprocal demands entered in the account;
between the parties. such year to be computed
as in the account.
24. In Bharat Singh Corporation Vs. Taneja Skins Co. Pvt. Ltd., RFA (OS) No. 13/02 passed on 21.12.2011, the Hon'ble High Court has held that Article I of Schedule to the Limitation Act only applies in cases of mutual dealing between the parties i.e. where both the parties are agreeing mutual obligations to each other. The relevant portion of the said Judgment is reproduced as below : "11. In order to find an answer to the question: Whether Article 1 of the Schedule to the Limitation Act 1963 applies to the present case, it is first required to be seen: Whether the account between the parties was a mutual account as envisaged in Article 1 of the Schedule to the Limitation Act, 1963, it not being in dispute that the account was current and open.
12. In the decision reported as AIR 1965 SC 1711 Kesharichand Jaisukhlal v The Shillong Banking Corporation the Supreme Court Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 17 of 45 defined the scope of the expression „mutual‟ occurring in Article 85 of the Schedule to the Indian Limitation Act, 1908 (precursor to Article 1 of the Schedule to the Limitation Act, 1963) in the following terms: "The next point in issue is whether the proceedings are governed by Art. 85 of the Indian Limitation Act, 1908, and if so, whether the suit is bared by limitation. The argument before us proceeded on the footing that an application under s. 45(D) of the Banking Companies Act is governed by the Indian Limitation Act, and we must decide this case on that footing. But we express no opinion one way or the other on the question of the applicability of the Indian Limitation Act to an application under s. 45(D). Now, Art. 85 of the Indian Limitation Act, 1908 provides that the period of limitation for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties is three years from the close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account. It is not disputed that the account between the parties was at all times an open and current one. The dispute is whether it was mutual during the relevant period.
11. Now in the leading case of Hirada Basappa v. Gadigi Muddappa [[1871] VI Madras High Court Reports. 142, 144]. Holloway, Acting C.J. observed : "To be mutual there must be transactions on each side creating independent obligations on the other, and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations." Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 18 of 45
12. These observations were followed and applied in Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah I. L.R[1931] 58 Cal. 642 and Monotosh K. Chatterjee v. Central Calcutta Bank Ltd. [1953] 91 C.L.J. 16, and the first mentioned Calcutta case was approved by this Court in Hindustan Forest Company v Lal Chand [1960]1SCR563 . Holloway, Acting C.J. laid down the test of mutuality on a construction of s. 8 of Act XIV of 1859, though that section did not contain the words "where there have been reciprocal demands, between the parties". The addition of those words in the corresponding Art. 87 of Act IX of 1871, Art. 85 of Act XV of 1877 and Art. 85 of the Act of 1908 adopts and emphasises the test of mutuality laid down in the Madras case.
13. In the instant case, there were mu utual dealings between the parties. The respondent Bank gave loans on overdrafts, and the appellant made deposits. The loans by the respondent created obligations on the appellant to repay them. The respondent was under
independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts deposited for collection. There were thus transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The deposits made by the appellant were not merely complete or partial discharges of its obligations to the respondent. There were shifting balances; on many occasions the balance was in favour of the appellant and on many other occasions, the balance was in favour of the respondent. There were reciprocal demands between the parties, and the account was mutual. This mutual account was fairly active up to June 25, 1947. It is not shown that the account ceased to be mutual Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 19 of 45 thereafter. The parties contemplated the possibility of mutual dealings in future. The mutual account continued until December 29, 1950 when the last entry in the account was made. It is conceded on behalf of the appellant that if the account was mutual and continued to be so until December 29, 1950, the suit is not barred by limitation, having regard to s. 45(O) of the Banking Companies Act. The Courts below, therefore, rightly answered issue No. 1 in the negative." (Emphasis Supplied)
13. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either express or implied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obligations, independent of each other. A „demand‟ in relation to a matter of account means a „claim for money‟ arising out of a „contractual business relationship‟ between the parties. Where the dealings between the parties disclose a „single‟ contractual relationship, there will be demands only in favor of one party. For instance, where the relationship between utual dealings between the parties. The respondent Bank gave loans on overdrafts, and the appellant made deposits. The loans by the respondent created obligations on the appellant to repay them. The respondent was under
independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts deposited for collection. There were thus transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The deposits made by the appellant were not merely complete or partial discharges of its obligations to the respondent. There Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 20 of 45 were shifting balances; on many occasions the balance was in favour of the appellant and on many other occasions, the balance was in favour of the respondent. There were reciprocal demands between the parties, and the account was mutual. This mutual account was fairly active up to June 25, 1947. It is not shown that the account ceased to be mutual thereafter. The parties contemplated the possibility of mutual dealings in future. The mutual account continued until December 29, 1950 when the last entry in the account was made. It is conceded on behalf of the appellant that if the account was mutual and continued to be so until December 29, 1950, the suit is not barred by limitation, having regard to s. 45(O) of the Banking Companies Act. The Courts below, therefore, rightly answered issue No. 1 in the negative." (Emphasis Supplied)
13. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either express or implied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obligations, independent of each other. A '"demand‟ in relation to a matter of account means a "claim for money‟ arising out of a "contractual business relationship‟ between the parties. Where the dealings between the parties disclose a "single‟ contractual relationship, there will be demands only in favor of one party. For instance, where the relationship between "A‟ and "B‟ is that of lender and borrower respectively, "A‟ will have a "demand‟ against "B‟ in respect of every item of loan advanced. But "B‟ can have no demand against "A‟. Where the dealings between the parties disclose "two‟ Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 21 of 45 contractual relationships, there will arise demands in favor of each side against the other. For instance, where "A‟ advances money to "B‟ from time to time as loan, and "B‟ engages "A‟ as his agent for the sale of goods sent by „B‟, there are two contractual relationships between the parties: one, that of lender and borrower and the other, that of principal and agent. „A‟ as creditor may have several demands against „B‟ who as principal may have, independently, several demands against „A‟.
The real test, therefore, to see whether there have been reciprocal demands in any particular case is to see: Whether there is a „dual contractual relationship‟ between the parties.
14. Where „A‟ sells goods to „B‟ from time to time and „B‟ makes payments towards the price from time to time, there is only a „single‟ contractual relationship, namely that of buyer and seller, between the parties. „A‟ has demands against „B‟ for items sold, but „B‟ can have no „demands‟ against „A‟. Such case is not one of reciprocal demands and thus Article 85 of the Schedule to the Indian Limitation Act, 1908 corresponding to Article 1 of the Schedule to the Limitation Act, 1963 will not apply to suits on such accounts. We are fortified in our view by the following observations made by the Supreme Court in the decision reported as AIR 1 959 SC 1349 Hindustan Forest Company v Lal Chand: "The learned Judge of the High Court who learned the suit held that art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High Court. The learned Judges of the appellate bench of Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 22 of 45 the High Court held that art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon allowed the appeal and passed a decree in favour of the sellers. The buyer has now come up in appeal to this Court. 5. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as art. 85 of the Indian Limitation Act except as to the period of limitation, is set out below :
.....
6. If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947.
The only question argued at the bar is whether the account between the parties was mutual.
7. The question what is a mutual account, has been considered by the courts frequently and the test to determine it is well settled. The case of the Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah I.L.R (1930) Cal. 649, may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by art. 85 of the Indian Limitation Act. Rankin, C.J., laid down at p. 668 the test to be applied for deciding the question in these words :
"There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 23 of 45 Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of setoff to reduce the defendant's liability."
8. The observation of Rankin, C.J., has never been dissented from in our courts and we think it lays down the law correctly. The learned Judges of the appellate bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the account between the parties was mutual for the following reasons :
"The point then reduces itself to the fact that the defendant company had advanced a certain amounts of money to the plaintiffs for the supply of grains. This excludes the question of monthly payments being made to the plaintiffs. The plaintiffs having received a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000 the defendant company became debtors to the plaintiff and later on when again the plaintiff's supplies exceeded the amount paid to them, the defendants again became the debtors. This would show that there were reciprocity of Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 24 of 45 dealings and transactions on each side creating independent obligations on the other."
9. The reasoning is clearly erroneous. On the facts stated by the learned Judges there was no reciprocity of dealings; there were no independent obligations. What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due. Such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. The learned Judges do not appear to have taken a contrary view of the result of these payments.
10. The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. This apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties. This view is unfounded. The sum of Rs. 13,000 had been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and ay for them. It did not itself create any obligation on the sellers in favour of the buyer; it was not intended to be and did not amount to an independent Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 25 of 45 transaction detached from the rest of the contract. The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages but such liability would then have arisen from the contract and not from the fact of the advances having been made. Apart from such failure, the buyer could not recover the monies paid in advance. No question has, however been raised as to any default on the part of the sellers to deliver goods.
This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit." (Emphasis Supplied)
15. In view of the above discussion, since the dealings between the parties disclose a single contractual relationship i.e. of buyer and seller between them, the account between them cannot be termed as a „mutual‟ account. As a necessary corollary, Article 1 of the Schedule to the Limitation Act, 1963 has no application in the present case.
16. Having held that Article 1 of the Schedule to the Limitation Act, 1963 does not apply in the present case, the further question which arises for consideration is, which Article in the Schedule to the Limitation Act, 1963 applies in the present case."
25. Now applying the ratio of aforesaid Judgment in present case it is evident it was one way transaction that the plaintiff had sold the gold to the defendants Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 26 of 45 and in place of same, the defendants have to make the payment of purchased goods. It is not the case of plaintiff that defendant has to supply anything. Hence I held that there was no mutual account between plaintiff and defendant. Hence, Article I of Schedule to the Limitation Act will not apply and Article 113 of the Limitation Act would be applicable i.e. in which limitation is for three years. hence, in these circumstances, period of limitation commence when the last payment of Rs. 5000/ made by the defendant No. 1 to the plaintiff vide cheque dated 8.8.2016. Hence, three years have expired on 7.8.2009 and the present suit has been filed on 4.11.2009 i.e. filed after three years.
26. IN view of the above, I held that the present suit is barred by limitation. Issue No. 3 is decided accordingly in favour of the defendants and against the plaintiff.
27. ISSUE NO. 4.
Whether suit is bad for violation of order 32 CPC? OPD.
The onus to prove this issue was placed upon the defendants. It is contended by Ld. Counsel for the defendant that since defendant no. 3 was minor at the time of alleged delivery of goods to him, therefore no proceedings can be initiated against him without appointment of guardian as per Order 32 CPC and since proceedings has not been initiated through his guardian, therefore suit is bad and liable to be dismissed. No replication was filed by the plaintiff denying the said facts. In his evidence, defendant no.1 Sh. Mukesh Soni has again reiterated that defendant no.3 was minor at relevant time hence he cannot authorized the defendant no. 3 to take Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 27 of 45 delivery of the goods of gold. No suggestion has been given to Defendant no.1/DW1 that defendant no.3 was not minor at the time of taking of delivery of the goods in the year 2006. Rather from the Judgment dated 05.04.2018 titled as M/s SMC Comtrade Ltd. Vs. State of Rajasthan in Criminal case no.11/2016 passed by Special Judge Jaipur Bomb Blast Case, Jaipur, DW1/4, it is evident that the police has filed the case against defendant no.3 Sandeep Soni in the Juvenile Justice Board, Jaipur which clearly proves that defendant no.3 was minor at the time of transactions of delivery of gold by the plaintiff company to defendant no.3. This fact has not been denied by the plaintiff. As per Order 32 CPC, to file a case against a person through his next friend / guardian, he must be minor on the day of institution of the suit and not on the day of the transaction about which the suit is filed. The relevant provisions of Order 32 Rule 1 & 2 CPC are reproduced as under : "1. Minor to sue by next friend. Every suit by a minor shall be instituted in his name by a person who in such suit shall be called the next friend of the minor.
2. Whether suit is instituted without next friend, plaint to be taken off the file. (1) Where a suit is instituted by or on behalf of a minor without a next friend, the defendant may apply to have the plaint taken off the file, with costs to be paid by the pleader or other person by whom it was presented.
(2) Notice of such application shall be given to such person, and the Court, after hearing his objections (if any) may make such order in Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 28 of 45 the matter as it thinks fit.
2A. Security to be furnished by next friend when so ordered. (1) Where a suit has been instituted on behalf of the minor by his next friend, the Court may, at any stage of the suit, either of its own motion or on the application of any defendant and for reasons to be recorded, order the next friend to give security for the payment of all costs incurred or likely to be incurred by the defendant.
(2) Where such a suit is instituted by an indigent person, the security shall include the Courtfees payable to the Government".
28. Further from Order 32 Rule 12 CPC prescribes that when the minor attained majority, he may elect to proceed with the suit while applying for discharging his next friend. Hence according to this provision if a minor attained age of majority its guardian is to be discharge. Hence in my view if at the time of filing the case defendant has already attained the age of majority there was no requirement under law to file the case through the guardian.
29. From the affidavit having date of attestation as 18.01.2010 file by the defendant no.3 with written statement it is evident that at that time defendant no.3 was 21 and ½ years of age. Hence he was above 18 years as suit was file on 03.11.09. Hence in view of order 32 rule 12 CPC I am not agree with the contention of the counsel for the defendants that present suit was required to be file against defendant No. 3 through guardian as he was minor on the day of alleged transaction of sale/ Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 29 of 45 delivery of gold on 25.04.2006. Therefore, there was no need to file the suit through guardian qua defendant No. 3. Hence, suit is not liable to be dismissed on the ground that suit was not filed through guardian because the defendant No. 3 was minor. Issue No. 4 is decided accordingly against the defendants and in favour of the plaintiff.
30. ISSUE NO. 5
Whether suit has not been instituted and verified by duly authorized person? OPD.
The onus to prove this issue was upon the defendants. The defendants in the written statement have taken the preliminary objection that the suit of the plaintiff has not been instituted and verified by a proper person and Sh. Ram Kumar, son of Sh. Gupta, has no right to institute the present proceedings as no right has been passed by the plaintiff company giving authority to Sh. Ram Kumar to file the present suit. From perusal of plaint filed by the plaintiff, it is evident that the plaintiff has deposed that Sh. Ram Kumar was the Principal Officer of the plaintiff company and he has been authorized by board of resolution dated 25.7.2006 to sign, verify and institute the present suit stating that any person of the Principal Officer of the company to act on its behalf to do the needful which requires in the present suit.
31. The onus is upon the plaintiff to prove the board resolution by which Sh. Ram Kumar was authorized by the plaintiff company. PW2 does not even say in his Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 30 of 45 evidence that Sh. Ram Kumar was authorized by any board resolution to institute the suit. Plaintiff company has not proved the board resolution dated 25.7.2006 by which allegedly Sh. Ram Kumar was authorized to institute the suit. Proving of board resolution is necessary to prove that Sh. Ram Kumar has authority to institute the suit. In this regard, I rely upon M/s. Nibro Ltd. Vs. National Insurance Company Ltd., AIR 1991 Delhi 25. Hence, I held that the plaintiff company has failed to prove that Sh. Ram Kumar was authorized by the company to file the present suit. Accordingly, issue No. 5 is decided in favour of the defendants and against the plaintiff.
32. ISSUE NO. 6. :
Whether this court has no territorial jurisdiction to try this suit? OPD. The onus to prove this issue was upon the defendants. The Ld. Counsel for the plaintiff has contended that the plaintiff's registered office is at Delhi and all the communications of transaction held at Delhi and plaintiff company issued letters from Delhi and defendant made part payment from Delhi and therefore, the court at Delhi has jurisdiction to adjudicate the matter.
33. In order to prove the case that this court has jurisdiction Plaintiff has examined Sh. Puneet Kumar Goel as PW2 who has deposed in his testimony led through affidavit, Ex. PW2/A that plaintiff company is having the registered office at 11/6B, Shanti Chamber, Pusa Road, New Delhi and further he had deposed that defendant Nos. 1 to 3 have approached the plaintiff company in the month of April, Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 31 of 45 2006 and purchased 1 Kg gold from the plaintiff company on the consideration of Rs. 9,21,462/ and assured that they will make the payment to the plaintiff company as per practice and business trends of commodity market. The plaintiff company issued a delivery letter to M/s. Brinks Arya on 25.4.2006 and instructed to hand over 1 Kg gold to defendant Nos. 1 to 3 and also issued a letter dated 25.4.2006 to defendant Nos. 1 to 3 requesting them to pay the payment in the bank account No. 0030340011174. Defendant Nos. 1 to 3 received the gold from the plaintiff company on 26.4.2006 through M/s. Brinks Arya (P) Ltd. and thereafter assured the plaintiff that they will deposit Rs. 98,21,462/ with the plaintiff company in 24 hours and defendant No. 3 signed the receipt of consignment documents and collected 1 Kg gold from plaintiff company through M/s. Brinks Arya (P) Ltd. on 26.4.2006. Further, it is deposed by him that when the defendants failed to make the payment, plaintiff company lodged FIR with the police and only after that defendant Nos. 1 to 3 started making payments of outstanding balance and made three installments of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ totaling to Rs. 31,000/. no order was placed in writing and the defendant Nos. 1 and 2 placed the said order upon plaintiff company on telephone. He admitted that he did not do any business with defendant No. 3 or any such business deal was done by the plaintiff company in his presence. He also admitted that neither order was placed in his presence nor any delivery of goods in terms of said order was made in his presence.
Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 32 of 45
34. On the other hand Ld. Counsel for defendants have contended that that all the defendants are residing at Jaipur and the alleged transaction had also taken place in Jaipur the entire correspondence as alleged by the plaintiff has taken place at Jaipur, the alleged delivery of gold has been made at Jaipur, the FIR was lodged by plaintiff at Jaipur and the bank of defendant No. 1 from which defendant no1 made part payment is also situated at Jaipur. Hence, entire transaction as alleged in the suit has taken place at Jaipur and as such, this court has no territorial jurisdiction to entertain the present suit. In order to proved the same he has relied upon testimony of DW1 Mukesh Soni, appearing on behalf of defendant No. 1. DW1 in his evidence led through affidavit Ex. DW1/A has deposed that he is the proprietor of defendant No. 1. The defendants have not placed any order for purchase of gold before the plaintiff hence, no question of delivery of goods arise. However, he has deposed that defendant Nos. 2 and 3 has never approached the plaintiff company in the month of April 2006 for purchase of 1 Kg gold and defendant Nos. 1 and 2 have never allowed the defendant No. 3 to participate in the business proceedings being carried out by defendant Nos. 1 and 2. Thus, the defendant No. 1 has categorically denied of placing of any order with the plaintiff and taking the delivery of goods. In his cross examination, he has stated that defendant No. 1 was dealing in the business of gold and he used to purchase the gold in the year 200506 from Indusind Bank and some of the dealers from whom he has purchased gold are Lala Jewellers etc. He also stated that group from which gold Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 33 of 45 used to be procure are group 4, M/s. Brinks Arya (P) Ltd. and some other whose names he do not remember and the same was procured after producing voucher and he procured the gold in the year 200506 regularly but he did not remember as to how many times the same was procured. He further deposed that he, his brother in law (wife's brother) used to procure the gold. He has three brother in laws His wife has authorized Sandeep Soni to procure the gold.
35. As per Section 20 of CPC a suit can be file where either defendants resides or where cause of action arise. Admittedly defendant resides at Jaipur hence to have jurisdiction of this court it is to be seen whether any cause of action arise in Delhi or not. PW2 has categorically deposed that the plaintiff company sold 1 Kg gold vide invoice dated 26.4.2006, Ex. PW2/4 (mentioned as Ex. PW1/8 in affidavit). He admitted that neither order was placed in his presence nor any delivery of goods in terms of said order was made in his presence. Thus, from the testimony of PW2, it is evident that no transaction was placed between the plaintiff company and defendant in his presence and whatever he has deposed, he has deposed on the basis of documents including FIR lodged by the plaintiff against the defendants. Hence, in the circumstances, the documentary evidence became very important to prove whether any cause of action has arose within the jurisdiction of this court or not.
The relevant documents which the plaintiff has relied upon are Ex. PW2/4 which is invoice, Ex. PW1/A, Ex. PW1/B, Ex. PW1/C, Ex. PW1/D and Mark PX. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 34 of 45 On perusal of Ex. PW1/A, which is the collection of letters dated 25.4.2006 to Vimal Mishra regarding 1 Kg gold to Sandeep Soni (defendant No. 3), a letter dated 25.4.2006 to Sandeep Soni to deposit Rs. 9,26,000/ after taking delivery of 1 Kg gold. From both these letters, it is evident that the same has been written by Director to the company from the office of the plaintiff company at Subhash Mark, Darya Ganj, Delhi. Hence, it has proved that the order or delivery of goods has been issued from plaintiff's company office situated at Delhi.
36. Ex. PW2/4 is the invoice letter regarding sale of 1 Kg gold to the defendant No. 1. This invoice prove that 1 Kg gold has been sold by the plaintiff from its registered office at Delhi though delivery of goods has been given from Jaipur as proved from Ex. PW1/B, Ex. PW1/C and Ex. PW1/D. No suggestion has been given to the PW2 to disprove the said documents that said document is forged and fabricated document hence, there is no ground to dispute the said documents. Thus, from the invoice Ex. PW2/4, it is proved that order for gold was placed at Delhi office of the plaintiff company though same may have been placed from Jaipur and necessary instructions were issued by the plaintiff vide letters dated 25.4.2006 to M/s. Brinks Arya (P) Ltd. to hand over the goods to the defendant No. 3 from Delhi office of the plaintiff. Above all it is admitted by the defendant no.2 in his testimony that it pays Rs. 31,000/ through three different cheques to the plaintiff company. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 35 of 45 Admittedly said cheques has been encashed in the bank account of plaintiff company. This proved that part of cause of action has arose at Delhi therefore, this court has jurisdiction to entertain the present suit. Issue No. 6 is decided against the defendants. 37. ISSUE NO. 7 Whether plaintiff company is entitle to decree against the defendant for a sum of Rs. 14,24,739/ apart from cost and interest? OPP.
The onus to prove this issue was upon the plaintiff. In order to prove this issue, the plaintiff has examined PW2 Sh. Puneet Kumar Goel, PW1 Sh. Kailash Kumar Sharma. As stated above star witness is PW2 . In his testimony, he has deposed on almost same facts as stated by the plaintiff in the plaint. He has deposed that in the month of April, 2006 defendant Nos. 1 to 3 approached the plaintiff company for purchase of 1 Kg gold from the plaintiff company on the consideration of Rs. 9,21,462/ and assured that they will deposit the amount with the plaintiff company account and they assured that they will collect the said gold from M/s. Brinks Arya (P) Ltd. and make the payment to the plaintiff company thereafter.
38. In order to prove his case, PW2 has relied upon the documents i.e. invoice dated 26.4.2006, Ex. PW2/4; receipt dated 26.4.2006, Ex. PW1/B which is mentioned in the affidavit as Ex. PW1/6; statement of account of plaintiff company, Mark PX which is mentioned in the affidavit as Ex. PW1/8; letter dated 9.1.2006, Ex. PW1/C which is mentioned in the affidavit as Ex. PW1/9; letter dated 25.1.2006, Ex. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 36 of 45 PW1/D which is mentioned in the affidavit as Ex. PW1/10; copy of unsigned petition, Mark PX which is mentioned in the affidavit as Ex. PW1/11. In his cross examination, he admitted that he is not the signatory to the execution of documents nor he is witness to the said documents. He stated that no order was placed in writing. The defendant Nos. 1 and 2 has placed the said order upon the plaintiff company on telephone and he admitted that no such telephone was received by him or that the same was received by anybody else in his presence. He admitted that no business dealing with defendant Nos. 1 to 3 happened in his presence. He also admitted that he never dealt in business dealings with defendant Nos. 1 and 2 on behalf of plaintiff company nor met with defendant No. 3. He also admitted that neither the order was placed in his presence nor any delivery of gold in terms of the said order was made in his presence.
39. PW1 Sh. Kamlesh Sharma is the Deputy Manager of M/s. Brinks Arya (P) Ltd. of Jaipur branch. He has proved the copy of letter dated 25.4.2006 as Ex. PW1/A, copy of receipt dated 26.4.2006, Ex. PW1/B; statement of account of plaintiff company, Mark PX; letter dated 9.1.2006, Ex. PW1/C; letter dated 25.1.2006, Ex. PW1/D and copy of unsigned petition, Mark PX. In his cross examination, he admitted that he has no personal knowledge of the case and has deposed simply on the basis of documents. He admitted that the delivery of gold has not taken in his presence nor the receipt Ex. PW1/B and letters Ex. PW1/C and Ex. PW1/D are prepared in his presence.
40. It is contended by the counsel for the plaintiff that from the invoice Ex. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 37 of 45 PW2/4, it is proved that 1 Kg gold was sold to the defendant No. 1 company which was collected by the defendant No. 3 and from M/s. Brinks Arya (P) Ltd. vide delivery receipt Ex. PW1/B and since admittedly the defendants have not make the payment therefore, the plaintiff is entitled to the decree of suit amount with interest.
41. On the other hand, the defendants have examined two witnesses i.e. Sh. Mukesh Soni, proprietor of defendant No. 1 as DW1 and defendant No. 3 as DW2 himself. In his evidence led by way of affidavit, Ex. DW1/A, DW1 Mukesh Soni has deposed that the defendants have never placed any order for purchase of gold before the plaintiff company and as such delivery of gold by the plaintiff company to the defendants through defendant No. 2 does not arise. Defendant No. 3 was never authorized by the other defendants to collect the gold on their behalf. Even otherwise, defendant No. 3 being minor could not be authorized to take delivery on their behalf. In his cross examination he admitted that he and his wife were aware that in the year 2006, defendant No. 3 Sandeep Soni was minor.
42. The defendants have also examined defendant No. 3, Sandeep Soni as DW2, who in his evidence led by way of affidavit has deposed that the defendants have never placed any order for purchase of gold before the plaintiff company and as such delivery of gold by the plaintiff to the defendants through defendant No. 2 does not arise. The defendant No. 3 was never authorized by the other defendants to collect the gold on their behalf. Even otherwise, defendant No. 3 being minor could not be Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 38 of 45 authorized to take delivery on their behalf. It is further deposed that DW4 has never introduced him or other defendants with the plaintiff and the plaintiff has made false statements in this regard. Defendant No. 3 was a minor and has nothing to do with any affair of the business being run by the defendant Nos. 1 and 2. It is further deposed that defendant Nos. 2 and 3 have nothing to pay to the plaintiff company towards the transaction. It is also deposed that plaintiff has lodged false and frivolous FIR No. 114/06 under Section 420 against the defendant No. 3. Matter was duly investigated by the police and the police take defendant No. 3 on trial but JJB acquitted defendant No.
3. Against the said order, a revision petition bearing No. 491/13 was filed by the plaintiff before the Hon'ble High Court of Rajasthan titled as SMC Comtrade Vs. State & Ors. but the same was also dismissed vide order dated 3.1.2018. He also deposed that defendant No. 1 wanted to make relations with the plaintiff and therefore, paid a sum of Rs. 20,000/, Rs. 60,000/ and Rs. 5000/ to the plaintiff vide cheques for preparation of relevant documents in order to relate with their company and defendant Nos. 2 and 3 have never acknowledged the liability as alleged by the plaintiff company and plaintiff company has cooked up a false story.
43. He also relied upon the documents i.e. copy of Judgment dated 13.3.2013 as Ex. DW1/1; copy of order dated 18.8.2015 as Ex. DW1/3; copy of order dated 5.4.2018 as Ex. DW1/4; and copy of order dated 05.09. 2016 passed on protest petition file by plaintiff on closure report of case FIR no.481/15 at PS Hare Street as Ex. Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 39 of 45 DW1/5. In his cross examination, he deposed that he is the proprietor of M/s. Narnoli Bullion and his wife Rajni Soni is the proprietor of M/s. Narnoli Overseas. M/s. Narnoli Overseas was formed in the year 2004. He never maintained any labourer / work with the maintained account with respect to his firm.
44. With respect to the question whether Ex. PW1/C bears signatures in circle X, he answered that he can answer the question only after the original is shown to him. In response to this question when on seeing Ex. PW1/B, he could say that Sandeep Soni is receiving consignment of gold but answered that he will answer this question only if original is shown to him. He denied the suggestion that Ex. PW1/B, Ex. PW1/C and Ex. PW1/D are prepared by him. In response to the question where he had been any payment to the SMC, he answered that after registration of FIR, SMC called to him and told him that some employee have played mischief and they were making allegation against him with respect to delivery of 1 KG gold to him and his firm therefore at their request he made payment of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ from his firm account of M/s. Narnoli Bullion. He further deposed that he did not ask for refund of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ given to SMC. In response to question whether he brought register for year 20052006 for procurement and sale purchase of bullion of M/s. Narnoli Overseas, he stated that he has not brought the stock register as he could not get it being old register. With respect to the question where in the year 2006, which month he has authorized Sandeep Soni to collect the gold procured by him, he Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 40 of 45 answered that he did not remember the month in which Sandeep Soni was authorized however, the year is 2006. In response to question whether Sandeep Soni used to advance receipt of M/s. Brinks Arya (P) Ltd. in token of receipt of gold after procuring gold, he answered that Sandeep Soni used to advance receipt. He admitted that he and his wife were aware that in the year 2006, Sandeep Soni was minor.
45. The defendants had also examined Sandeep Soni as DW2 who in his evidence led by way of affidavit, Ex. DW2/A has deposed that he has not received any gold from the plaintiff or through any other agency. He further deposed that the plaintiff has filed a false case. In his cross examination, in response to the question whether Ex. PW1/C bears his signatures, he denied the suggestion that Ex. PW1/C bears his signatures at point Y. In response to question whether Ex. PW1/C bears his signatures at point X2, he stated that he cannot tell whose signatures are at point X2. He also answered similar with respect to the signatures at point X on Ex. PW1/D and points X and Y on Ex. PW1/B. He admitted that he used to procure gold from one or two voults besides M/s. Brinks Arya (P) Ltd. on behalf of Rajni Soni in the year 200506. In response to the question whether he used to procure gold from M/s. Brinks Arya (P) Ltd. from M/s. Narnoli Bullion and M/s. Narnoli Overseas, he stated that he did not recollect.
46. Ld. Counsel for defendants have contended that from the testimony of DW1 and DW2, it is evident that the defendants have not given any order for the gold to Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 41 of 45 the plaintiff company. Hence, no question for purchase of 1 Kg gold by defendant Nos. 1 and 2 and delivery of said gold by the defendant No. 3 arise. He further contended that the plaintiff company has been cheated by some of the employee of the plaintiff company but the burden has been shifted upon the defendants without any basis. The defendants are not liable to pay any amount to the plaintiff company and the suit is liable to be dismissed.
47. I have considered the submissions and have gone through the record. In the plaint it is mentioned that defendant Nos. 1, 2, 3 and 4 (defendant No. 4 later on deleted) had approached to the plaintiff company for purchase of gold. Whereas PW2 has deposed in his examination in chief that defendant Nos. 1, 2 and 3 had approached to the plaintiff company for purchase of gold. Neither in the plaint nor PW2 in his examination in chief has disclosed as to where they have approached and by which mode they have approached to the plaintiff for purchase of gold. The plaintiff company has relied upon the invoice Ex. PW2/4 to prove regarding selling of gold by the plaintiff company to the defendant Nos. 1 to 4 but said invoice is in the name of Narnoli Overseas which is the defendant No. 2. Hence, defendant Nos. 1 and 3 cannot be made liable for the purchase of gold which was sold by the plaintiff company in the name of defendant No. 2. Further in the cross examination of PW2 Puneet Goel has deposed that that the order was placed on telephone which means definitely defendant Nos. 1 to 3 cannot order gold simultaneously on the telephone. It has not been Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 42 of 45 specified by the PW2 in his testimony who out of the defendants made telephone call to order the gold. It appear that since invoice was issued in the name of defendant no.2 firm. Hence, order has been placed by defendant No. 2 or on behalf of defendant No. 2. Mainly part payment was made by defendant no.1 and delivery was taken by defendant no.3 therefore they cannot be made liable for purchase of gold.
48. Since none has appeared in the witness box on behalf of defendant No. 2 to deny that no gold has been purchased by defendant No. 2 therefore, there is no ground to disbelieve the invoice Ex. PW2/4 which proved that 1 Kg gold was sold to defendant no.2 firm. Since DW1 has admitted the making of payment of Rs. 20,000/, Rs. 6000/ and Rs. 5000/ it cannot be ruled out that said payment was made by defendant no.1 on behalf of defendant no.2 firm as proprietor of defendant no1 and 2 are spouse. Moreover, the defendants have taken false defence in the written statement as well as in the testimony of DW2 that they have never authorized defendant No. 3 to take delivery of gold on their behalf as he was minor. in the year 2006 and had noting to do with the affairs of the business being run by defendant Nos. 1 and 2 and it is falsely stated in the written statement that Ms. Rajni Soni has never authorized Sh. Sandeep Soni on her behalf to collect gold but in the cross examination, DW2 Sandeep Soni has accepted that he used to collect gold on behalf of defendant Nos. 1 and 2 from the voults including M/s. Brinks Arya (P) Ltd. hence, the defendant Nos. 1 and 2 have not approached to the court with clean hands. Further, DW1 and Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 43 of 45 DW2 both have given evasive reply that they cannot identify their signatures on Ex. PW1/ A, Ex. PW1/B, Ex. PW1/C and Ex. PW1/D which are the letters in respect of delivery of goods to the defendant No. 3 by saying that documents are photocopy and DW2 stated that he did not recollect. Undoubtedly Ex. PW1/ A, Ex. PW1/B, Ex. PW1/C and Ex. PW1/D are photocopy but PW1 has given explanation that original of the same are with the Calcutta police therefore there is no ground to reject the same. These documents established that DW3 has taken delivery of 1 KG gold on behalf of defendant no. 2 from the vault of Ms. Brink Arya.
49. In these circumstances, the preponderance of probability is in favour of plaintiff that the plaintiff company has sold 1 Kg gold to the defendant No. 2 which was collected by defendant No. 3 on behalf of defendant No. 2. Hence, defendant No. 2 is liable to pay for purchase price of the same i.e. Rs. 9,21,462/. The plaintiff has also claimed the interest @ 18% per annum but in my view, since there was no contract between the parties for payment of interest, therefore, plaintiff is only entitled to the interest @ 8% per annum on the aforesaid amount. Issue No. 7 is decided accordingly in favour of plaintiff and against the defendants.
50. RELIEF.
Though in view of my findings on issue No. 7, plaintiff is entitled to recovery of the amount of Rs. 9,21,462/ along with interest @ 8% per annum but in view of my findings on issue Nos. 3 and 5, I held that no relief can be granted to the Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 44 of 45 plaintiff as suit is barred by limitation and suit is not filed by authorized person. Hence, plaintiff is not entitled to any relief. I dismiss the present suit with costs. Decree sheet be prepared accordingly. File be consigned to record room after necessary compliance.
Announced in the open court (Sanjeev KumarI)
on 13.08.2018 Additional District Judge12, Central
Tis Hazari Courts, Delhi
13.08.2018
Digitally signed
by SANJEEV
SANJEEV KUMAR
KUMAR Date:
2018.08.13
15:52:52 +0000
Suit No. 16718/16 M/s. SMC Comtrade Ltd. Vs. M/s. Narnoli Bullion & Ors. Page No. 45 of 45