UNREPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 293/2002
T.K. MALHOTRA ..... Appellant
Through: Mr. Atul Nigam, Advocate.
versus
BHARAT BHUSHAN ARORA ..... Respondent
Through: Mr. Anoop Kumar Srivastava,
Advocate.
AND
+ RFA 436/2002
BHARAT BHUSHAN ARORA ..... Appellant
Through: Mr. Anoop Kumar Srivastava,
Advocate.
versus
T.K. MALHOTRA ..... Respondent
Through: Mr. Atul Nigam, Advocate.
% Date of Decision : July 29, 2011
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
RFA No.293/2002 and RFA No.436/2002 Page 1 of 33
JUDGMENT
: REVA KHETRAPAL, J.
1. By this common judgment, it is proposed to decide two appeals being RFA No. 293/2002 and RFA No. 436/2002, the former instituted by the defendant in Suit No. 552/93 (Old Suit No. 1273 of 1986) titled Sh. Bharat Bhushan Arora Vs. T.K. Malhotra, and the latter by the plaintiff in the said suit.
2. In the first appeal, the appellant seeks to assail the judgment and decree dated 24.01.2002 passed by the learned Additional District Judge in the aforesaid Suit being in the sum of ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) with pendente lite and future interest thereon at the rate of 6% per annum from the date of the institution of the suit till the date of realization. It is proposed to deal first with this appeal.
3. The case of the plaintiff, who is the respondent in the present appeal, as delineated in the plaint is that the plaintiff had supplied fabric to the defendant - appellant against various RFA No.293/2002 and RFA No.436/2002 Page 2 of 33 orders placed on various dates vide credit memos as well as challans. In this process, goods/fabric amounting to ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) was supplied to the appellant. Certain payments were made by the appellant on various dates which were duly reflected by the respondent in the statement of accounts. However, the appellant did not make the entire payment and as a result of this a sum of ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) became due from the appellant. A cheque of ` 28,071.75 (Rupees twenty eight thousand seventy one and paise seventy five only) bearing cheque No. 403207 drawn on State Bank of India, Kasturba Gandhi Marg, New Delhi was issued by the appellant to the respondent towards the payment of the aforesaid sum of money. The said cheque was dishonoured by the bankers of the appellant with the remark "Payment Stopped by the Drawer". Another cheque in the sum of ` 15,000/- (Rupees RFA No.293/2002 and RFA No.436/2002 Page 3 of 33 fifteen thousand only), issued by the appellant was also dishonoured by his bankers. The said cheques were returned by the respondent to the appellant, who issued a pay order for ` 15,000/- (Rupees fifteen thousand only) through his wife by letter dated 26.12.1981. Allegedly, the said pay order was also dishonoured. The respondent thereupon wrote a number of letters to the appellant demanding the payment of the amount due to him and finally on 15.03.1984 sent a legal notice. The said legal notice was duly received by the appellant but he failed to send any response or to make any payment. As such, the respondent on the last day of limitation, filed a suit for the recovery of ` 2,25,988.53 (Rupees two lakhs twenty five thousand nine hundred eighty eight and paise fifty three only) as an indigent person praying for a decree in the aforesaid sum of money alongwith pendente lite and future interest at the rate of 18% per annum.
4. The aforesaid suit instituted by the respondent was contested by the appellant by filing a written statement. In the written RFA No.293/2002 and RFA No.436/2002 Page 4 of 33 statement filed by him, the appellant took the plea that the suit of the respondent was barred by limitation. It was further pleaded that the bills raised by the appellant were not correct, and that the fabric supplied by the respondent was defective and not according to the size, specification and design due to which the appellant had to suffer huge loss. It was also pleaded that time was the essence of the contract and it was clearly undertaken by the respondent that in case he failed to supply the goods by the stipulated date of delivery, he would compensate the appellant by paying 100% of the contract amount. The respondent did not intentionally adhere to the delivery schedule by shifting supply to other exporters, hence the appellant suffered huge loss and was unable to keep his export commitment with foreign buyers. Ultimately, the respondent agreed to pay compensation and a debit note was accordingly raised by the appellant. The suit had been filed by the respondent as a counter blast to the claim of the appellant in the said debit note. There was never any agreement regarding RFA No.293/2002 and RFA No.436/2002 Page 5 of 33 payment of interest. The suit was also not properly valued for the purpose of court fees and jurisdiction. Regarding the cheque issued by him, the appellant in his written statement took the plea that the cheque in question related to invoice No. 163 dated 16.11.1981, which was issued subject to the undertaking that the goods supplied by the respondent as per the relevant challans of the same date would be according to specifications and correct measurement. The respondent had cleverly played a fraud by submitting the bills alongwith the goods with short measurement, which fact came to the notice of the appellant on inspection and verification. The payment of the cheque in question had, therefore, to be stopped under the circumstances. Regarding the issue of pay order for ` 15,000/- (Rupees fifteen thousand only), it was pleaded that the respondent be put to strict proof by producing the copy of the pay order stated to have been dishonoured by the bankers. The appellant prayed for dismissal of the suit. RFA No.293/2002 and RFA No.436/2002 Page 6 of 33
5. In the replication filed by the respondent, the averments made in the written statement contrary to the plaint were denied and those made in the plaint were reiterated.
6. On the pleadings of the parties, the following issues were framed by the learned Additional District Judge on 16.11.1994:
"(1) Whether plaintiff is entitled to the decree as prayed? OPP (2) Whether the material supplied to the defendant by the plaintiff was defective and not as per specification? If so, to what effect? OPD (3) Whether the suit is time barred? OPD (4) Whether the plaint is not properly valued for the purpose of Court fee? OPD (5) Whether time was the essence of the contract?
(6) Relief."
7. It is proposed to advert first to issue No. 3 and issue No.4 as these issues pertain to legal objections taken by the appellant, and thereafter to issue No.5, issue No. 2 and issue No.1 in that order. ISSUE NO. 3 Whether the suit is time barred? OPD
8. As regards this issue, it is submitted by Sh. Atul Nigam, the learned counsel for the appellants, that the statement of RFA No.293/2002 and RFA No.436/2002 Page 7 of 33 accounts proved on record by the respondent (Exhibit PW1/D3) shows that the last transaction between the parties had taken place on 20.11.81. The suit was filed on 14.12.84, that is, beyond the period of three years from the date of the last transaction. Hence, on the face of it, the suit was barred by time. According to Mr. Nigam, the case of the plaintiff was covered under Article 14 of the Limitation Act, 1963 and as per Article 14, the limitation for filing a suit for recovery of the price of goods supplied was three years from the date of the delivery of the goods where no fixed period of credit was agreed upon. In the aforesaid context, Mr. Nigam relied upon the following judgments:-
(i) Atmaram Vinayak Kirtikar vs. Lalji Lakhamsi, AIR 1940 Bombay 158;
(ii) Raghunath Shaw vs. Kanai Lal Das & Ors., AIR 1962 Calcutta 97;
(iii) Attadi Venketi vs. M/s. Bharatam Ramulu and Sons, AIR 1984 Orissa 226; and RFA No.293/2002 and RFA No.436/2002 Page 8 of 33
(iv) Cherunni vs. Purushothama Iyer, AIR 1973 Kerala 174.
He contended that there was no fixed period of credit agreed upon in the present case and the present case having been filed after a period of more than three years from the date of delivery, the same was barred by limitation. He further contended that there was no mutual running and current account so as to cover the case of the respondent under Article 1 of the Limitation Act.
9. Mr. Anoop Kumar Srivastava, the learned counsel for the respondent - plaintiff on the other hand contended that the starting point of limitation would be the last cheque, which had admittedly been issued by the appellant in favour of the respondent on 16.12.1981, and which was Exhibit PW1/83. This cheque bearing No. 403207 drawn on the State Bank of India, Kasturba Gandhi Marg, New Delhi was in the sum of ` 28,071.75 (Rupees twenty eight thousand seventy one and paise seventy five only). Another cheque issued in the sum of RFA No.293/2002 and RFA No.436/2002 Page 9 of 33 ` 15,000/- (Rupees fifteen thousand only) by the appellant was also dishonoured and returned by the respondent to the appellant. Thereupon a pay order for ` 15,000/- (Rupees fifteen thousand only) was issued by the appellant through Mrs. Chandra, the wife of the appellant vide letter dated 26.12.1981 (Exhibit PW1/84), which is on the letter-head of the appellant. The said letter is an admitted document and reads as under:-
"The Manager, State Bank of India, K.G. Marg, New Delhi, the 26th Dec., 1981.
Dear Madam, To the debit our account, please issue a Pay Order/Bankers cheque in favour of Messrs. K.B. Export Fabrics, New Delhi for an amount of Rs. 15,000-00 (Rupees Fifteen thousand only). Thanking you, Yours faithfully, for Impex Chemicals and Agencies Pvt. Ltd., Sd/-
(Mrs) (Chandra)"RFA No.293/2002 and RFA No.436/2002 Page 10 of 33
10.Mr. Srivastava further contended that the pay order in the sum of ` 15,000/- (Rupees fifteen thousand only) issued by the bankers of the appellant pursuant to the aforesaid letter was also dishonoured. The respondent then demanded the amount from the appellant through various letters and finally through a legal notice dated 15.03.1984 (Exhibit PW1/85). No response to the said legal notice was received and accordingly the respondent was compelled to file the instant suit for the recovery of the amount due to him on 14.12.84.
11.In the present case, I find that the undisputed factual position is that the appellant had been receiving goods on credit from the respondent from time to time. The case of the respondent is that the goods worth ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only), which were supplied to the appellant have not been paid for by the appellant. In order to substantiate this, the plaintiff/ respondent has placed on record a statement of account Exhibit PW1/D3. This statement of account (Exhibit PW1/D3) shows RFA No.293/2002 and RFA No.436/2002 Page 11 of 33 that the last supply of goods was made by the respondent to the appellant on 20.11.81. Subsequently, on 8.12.81 under the head "By sales return" credit of ` 19,686.32 (Rupees nineteen thousand six hundred eighty-six and paise thirty two only) was given to the appellant. This is also borne out by document Exhibit PW1/87, which is a debit note dated 8.12.1981, in the sum of ` 19,686.32 (Rupees nineteen thousand six hundred eighty six and paise thirty two only), sent by the appellant to the respondent for defective fabric returned by him as well as excess fabric issued but not returned by him. This document, thus, tallies with the entry in the statement of account (Exhibit PW1/D3) dated December 8, 1981. The next entry in document Exhibit PW1/D3 is dated 30.12.1981 and shows cash payment of ` 1,000/- (Rupees one thousand only) to the appellant. This entry is followed by an entry dated 4.2.1982 whereby credit of ` 1006.50 (Rupees one thousand six and paise fifty only) has been given to the appellant on account of "Sales Return" against bill No. 82 dated 23.02.1981. There is RFA No.293/2002 and RFA No.436/2002 Page 12 of 33 yet another entry dated 4.2.1982 for goods returned on 19.02.1981 in the sum of ` 15,490.10 (which admittedly should be ` 15,410.90). Both the entries dated 4.2.1982 relate to document Exhibit PW1/88, which admittedly is a debit note issued by the appellant to the respondent communicating his decision to debit the account of the respondent as per challan Nos. 522, 521, 886 and 523 in the sum of ` 16, 417.40 less Bill No. 82 dated 23.02.1981 in the sum of ` 1006.50, totaling ` 15,410.90 (Rupees fifteen thousand four hundred ten and paise ninety only).
12. For the sake of ready reference, the statement of account Exhibit PW1/D3 is reproduced hereunder:
"K.B. Export Fabrics STOCKISTS OF ALL EXPORT FABRICS VARIETIES Statement of Account upto B-1/82, Lajpat Nagar-I, 31.3.82 with M/s. IMPEX Opp. Burmah Sheil INTERCRAFT Petrol Pump, New Delhi-110024 Tel.P.P.: 615335 1st April 1981 Balance upto 31.3.81 55,520.10 April 22nd ‟81 By cheque 10,000.00 April 30th ‟81 To sales Bill No.126 550.00 RFA No.293/2002 and RFA No.436/2002 Page 13 of 33 July 11th ‟81 -do- No.134 720.00 th July 14 ‟81 By cheque 720.00 July 28th ‟81 -do- 15,000.00 Aug. 19th ‟81 To sales Bill No.137 16,000.00 Aug. 19th ‟81 -do- No.138 17,483.25 st Aug. 31 ‟81 -do- No.140 41,517.80 Sep. 4th ‟81 -do- No.141 8,900.95 Sep. 12th ‟81 -do- No.142 12,141.75 Sep. 19th ‟81 -do- No.143 5,982.50 Sep. 22nd ‟81 -do- No.144 11,576.75 Sep. 23rd ‟81 -do- No.146 8,817.15 Sep. 26th ‟81 -do- No.148 16,370.15 Sep. 26th ‟81 -do- No.149 15,667.95 Oct. 1st ‟81 By cash 1,000.00 Oct. 7th ‟81 By cash 1,000.00 Oct. 14th ‟81 To sales Bill No.153 6,688.20 Oct. 15th ‟81 By cash 500.00 Oct. 21st ‟81 -do- 500.00 Oct. 22nd ‟81 By Draft 70,000.00 Oct. 23rd ‟81 To sales Bill No.154 9,137.00 Oct. 23rd ‟81 -do- No.156 11,043.20 Oct. 29th ‟81 -do- No.158 4,514.90 Nov. 16th ‟81 -do- No.163 28,071.75 Nov. 16th ‟81 -do- No.164 2,508.05 Nov. 20th ‟81 -do- No.165 1,000.00 Dec. 8th ‟81 By sales return 19,686.32 Dec. 30th ‟81 By cash 1,000.00 Feb. 4th 1982 By sales return against Bill No.82 of dated 23.2.81 1,006.50 th Feb. 4 „82 By goods return on 19.2.81 15,490.10 2,74,211.45 1,35,902.92 BALANCE Rs.1,38,308.53"
RFA No.293/2002 and RFA No.436/2002 Page 14 of 33
13.On the basis of the aforesaid statement of account, the learned trial court concluded that a running account was being maintained by the plaintiff/respondent in respect of the goods supplied to the defendant/appellant and that the appellant had been making cash payments also from time to time apart from issuance of cheque dated 16.12.1981. The learned trial Judge thus held that considered from whatever angle, it stands proved that the case of the plaintiff was within limitation.
14.It may be noted at this juncture that the learned Trial Court then proceeded to observe as follows:-
"The parties were having mutual running account is clear from the fact that the goods supplied on 19.2.81 and 23.2.81 were returned almost after a period of one year on 4.2.82 by the defendant to the plaintiff of which due credit has been given to the defendant in the statement of account. Hence the suit of the plaintiff is within limitation."
15. On a review petition filed by the appellant seeking review of the judgment dated 24.01.2002, which was dismissed by the learned Trial Court by its order dated 17.04.2002, the learned trial court, however, observed that there was only one error RFA No.293/2002 and RFA No.436/2002 Page 15 of 33 which had crept into the judgment, inasmuch as although on page 7 of the judgment, the date of return of goods had been rightly mentioned as 19.2.81 and 23.2.81, on the next page (page 8 of the judgment), the date of sending of debit note 4.2.82 should have been mentioned. Instead, it had been stated that the goods had been returned after a period of more than one year on 4.2.82.
16.Be that as it may, there is no denying the fact that the statement of account Exhibit PW1/D3 shows that the cash payment of ` 1,000/- (Rupees one thousand only) was made on 30.12.81. There is also no denying the fact that cheque No. 403207 in the sum of ` 28,071.75 (Rupees twenty eight thousand seventy one and paise seventy five only) was issued by the appellant to the respondent in part payment of the goods supplied by the respondent to the appellant on 16.12.81. Though subsequently this cheque was dishonoured, the issuance of the cheque on 16.12.81 by virtue of the provisions of Section 19 of the RFA No.293/2002 and RFA No.436/2002 Page 16 of 33 Limitation Act, 1963, in my view, certainly brings the suit filed on 14.12.84 within the period of limitation.
17. The relevant part of Section 19 of the Limitation Act, 1963 reads as under:-
"WHERE payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorized in this behalf, a fresh period of limitation shall be computed from the time when the payment was made."
18. I am fortified in coming to the aforesaid conclusion from the decision rendered by a learned Single Judge of this Court [Hon‟ble Mr. Justice R.C. Lahoti (as His Lordship then was)] in the case of Rajesh Kumari Vs. Prem Chand Jain, 1997 III AD(Delhi) 609. It was held in the said case that a payment by cheque satisfies the requirement of Section 19 of the Limitation Act, inasmuch as the acknowledgement of payment appears in the handwriting of or in a writing signed by the person making the payment in the form of a cheque. Significantly in the said case, as in the present case, the cheque issued was subsequently RFA No.293/2002 and RFA No.436/2002 Page 17 of 33 dishonoured. It was nevertheless held by the Court to be an effective payment for the purpose of Section 19 of the Limitation Act. The following apposite observations were made:-
"In the case at hand, the cheque was accepted as a payment by the plaintiff. He had no reason to believe or apprehend that the cheque will be dishonoured when presented for payment. The payment by cheque having been accepted and the plaintiff having earned the advantage of extension in period of limitation, that advantage cannot be wiped out or undone by the tortuous act of the defendant withholding the payment of the cheque."
19. In the instant case, keeping in view the fact that the appellant had admittedly issued a cheque bearing No.403207 dated 16.12.81, the present suit must be held to be covered by Section 19 of the Limitation Act, 1963 as it was filed within three years of the date of the issue of the said cheque. The institution of the suit is, therefore, held to be within limitation. In this view of the matter, the contention of the learned counsel for the appellant with regard to Article 14 being the relevant Article of the Limitation Act in the instant case, even assuming the same RFA No.293/2002 and RFA No.436/2002 Page 18 of 33 to be correct, need not be gone into. Resultantly, it is held that this issue has been rightly decided by the learned trial court in favour of the respondent - plaintiff albeit for different reasons. ISSUE NO. 4 Whether the plaint is not properly valued for the purpose of Court fee? OPD.
20. The onus of proving that the suit of the respondent was not valued properly for the purpose of court fees and jurisdiction was upon the appellant. The learned Trial Court has held, and I think rightly so, that the appellant has miserably failed to discharge the said onus. Since no arguments were addressed in respect of this issue, I do not propose to dwell any longer on the same. It is accordingly affirmed that the suit of the plaintiff is properly valued for the purpose of court fees and jurisdiction. ISSUE NO.5 Whether time was the essence of the contract?
21. Adverting first to the pleadings relating to this issue, the appellant in the written statement filed by him had taken the plea that the time was the essence of the contract and it was RFA No.293/2002 and RFA No.436/2002 Page 19 of 33 clearly undertaken by the respondent that in case he failed to supply the goods within the stipulated delivery period, he would compensate the appellant by paying 100% of the contract amount. The respondent did not intentionally adhere to the delivery schedule resulting in huge losses to the appellant. The respondent ultimately agreed to pay compensation for the said losses incurred by the appellant and a debit note was accordingly raised by the appellant. The suit was filed by the respondent as a counter blast to the claim of the defendant.
22. The respondent/plaintiff in the replication filed by it categorically denied that time was the essence of the contract and that it was clearly undertaken by him that in case he failed to supply the goods within the stipulated delivery period, he would compensate the appellant by paying 100% of the contract amount. According to the respondent, no such term as stated by the appellant was agreed to between the parties, except in one order bearing reference No.II/EH/LPV/81 dated RFA No.293/2002 and RFA No.436/2002 Page 20 of 33 27.07.1981 wherein this factor of time was specifically mentioned, and it was made clear in the said order itself that the said term was only agreeable for that order and would not apply for previous or future orders so placed by the appellant on the respondent.
23. In the course of evidence, the respondent/plaintiff, Bharat Bhushan Arora, who appeared in the witness box as PW1, categorically affirmed in his cross-examination that there was only one written contract between the parties viz., Order bearing reference No. II/EH/LPV/81, which had no concern with the present suit. The said written contract had been completed and he had received the payment under the said contract. No other written contract was entered into between the parties and the dealings between the parties were verbal. He used to supply the goods against challans and the appellant used to make the payment on account. Thus, time was not the essence of any of the orders placed by the appellant, except Order No.II/EH/LPV/81 dated 27.07.1981.
RFA No.293/2002 and RFA No.436/2002 Page 21 of 33
24.The appellant, T.K. Malhotra, who appeared in the witness box as RW-1, in his examination-in-chief stated that the respondent used to supply goods to him as per orders and most of the time the goods supplied by the respondent were found to be either short in measurement or defective. He further testified that on 27.07.1981, he had placed a written order on the respondent giving details of his requirement regarding the size of the cloth and the respondent was requested to supply the goods within the specified time because he (the appellant) had received an export order. He further testified that the respondent accepted the said order and undertook to supply the goods under the said order within the said period. The respondent also undertook to pay the penalty of 100%, in case the goods were not supplied within the specified period. The original Order dated 27.07.1981 signed by both the parties was proved by the appellant as Exhibit DW1/1.
25.DW1 Sh. T.K. Malhotra further testified that the respondent did not supply the goods in time. He tendered goods under the RFA No.293/2002 and RFA No.436/2002 Page 22 of 33 said Order which were not according to specifications and the goods were also tendered after the expiry of specified time. He did not accept the goods and raised a debit note for a sum of ` 90,000/- (Rupees ninety thousand only), copy whereof was Exhibit P1/D1. He, however, unequivocally admitted that the plaintiff had filed the present suit in respect of supplies made by him in the past and not with regard to Order Exhibit DW1/1.
26. In view of the aforesaid categorical admission of the appellant, the inevitable conclusion is that the appellant had been receiving fabric from the respondent from time to time against various challans and all the orders, with the exception of Order Exhibit DW1/1 (also Exhibited as PW1/D1) with which we are not concerned in the present suit, were placed verbally with no stipulation of payment or penalty. In other words, time was the essence of the contract only qua Order Exhibit PW1/D1. The present claim of the respondent/plaintiff does not pertain to any supply made under Exhibit PW1/D1 and regarding the remaining supplies, it stands proved on record from documents RFA No.293/2002 and RFA No.436/2002 Page 23 of 33 Exhibit PW1/1 to Exhibit PW1/80 that the appellant had always been receiving the goods by writing on the challan „Subject to verification‟ and whenever any defect was found, the appellant used to return the goods and the respondent used to give credit of the same to the appellant. Thus, merely because time was the essence of the contract in Order Exhibit PW1/D1, it does not stand proved that the time was the essence of the contract in respect of the earlier supplies also.
27.Accordingly, it is held that issue No.5 has been correctly decided by the learned trial court by holding that Order Exhibit PW-1/D1 does not prove that the time was the essence of the contract throughout between the parties. Rather, it proves that time was the essence of the contract only for this particular order alone, which is not the subject-matter of the Suit between the parties.
ISSUE NO.2 Whether the material supplied to the defendant by the plaintiff was defective and not as per specification? If so, to what effect? OPD RFA No.293/2002 and RFA No.436/2002 Page 24 of 33 28 This leaves me with the question whether the material supplied to the appellant by the respondent was defective and not as per specifications and if so what is the effect thereof. 29 In the above context, the appellant himself in his cross- examination has admitted the bills sent by the respondent (Exhibit PW1/1 to Exhibit PW1/31) and stated that as and when goods were received in his office, his staff used to mention that the goods were received „Subject to verification‟ of length, quality of the fabric and that this was also mentioned in the challans Exhibit PW1/38 to Exhibit PW1/42. He stated that whenever the goods were found defective, the respondent was asked to take them back. He admitted that debit notes Exhibit PW-1/87 and PW-1/88 were issued by his firm for the goods returned to the respondent and further admitted that the said debit notes issued by his firm had been duly shown in the statement of account of the respondent and that he had received the statement of account sent by the respondent alongwith notice dated 15.3.84.
RFA No.293/2002 and RFA No.436/2002 Page 25 of 33 30 Thus, it stands proved from the evidence on record that the appellant was receiving goods from the respondent „Subject to verification‟ and if found defective, the goods were returned by the appellant to the respondent for which debit notes were issued, which have been duly reflected in the statement of account Exhibit PW1/D3. The appellant has failed to prove on record that any goods returned by him as defective were not shown by the respondent in the statement of account of the respondent (Exhibit PW1/D3) or that his debit notes in respect of the returned goods were not credited by the respondent in his account. The necessary conclusion, therefore, is that in the absence of any evidence led by the appellant to this effect, it must be held that the material for which the present suit has been filed was as per specification and not defective. 31 The findings of the learned Trial Court in respect of this issue are also affirmed.
ISSUE NO.1 Whether plaintiff is entitled to the decree as prayed? OPP RFA No.293/2002 and RFA No.436/2002 Page 26 of 33 32 As regards this issue, it has clearly emerged on record that fabric was being supplied by the respondent to the appellant vide invoices and challans, carbon copies of which are from Exhibit PW1/1 to Exhibit PW1/80. The aforesaid documents were signed by the appellant and the originals of these were received by the respondent. It also stands proved on record that the respondent was maintaining a running account of the appellant, which is proved on record by documents Exhibit PW1/D3, as per which a sum of ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) was due from the appellant towards principal. The case of the respondent that the appellant had issued two cheques towards this payment and both the cheques were dishonoured stands proved by documents Exhibit PW1/83 and Exhibit PW1/84, which are a copy of the dishonoured cheque and the letter for issuance of pay order for ` 15,000/- (Rupees fifteen thousand only) which have been duly proved in evidence. It also stands established on record that the RFA No.293/2002 and RFA No.436/2002 Page 27 of 33 respondent had served the appellant with a demand notice dated 15.03.1984 by registered post, copy of which is Exhibit PW1/85 and postal receipt whereof is Exhibit PW1/86. The case of the respondent that the appellant used to return the defective goods or the excess goods supplied by him through debit notes is also proved on record through the debit notes Exhibit PW1/87 and Exhibit PW1/88, which are duly reflected in the statement of account maintained by the respondent. 33 All the aforesaid facts could not be dispelled by the appellant and emerged unscathed after the recording of the evidence. As a matter of fact the appellant unequivocally admitted that the respondent had filed the present suit in respect of supplies made by him in the past and not regarding the written Order Exhibit DW1/1, and that such supplies had been made against challans sent by the respondent prior to Order Exhibit DW1/1. He, however, stated that challan Nos. 137, 138, 140 and 142 pertained to Order Exhibit DW1/1 and the statement of account filed by the respondent was to that extent not correct. In cross- RFA No.293/2002 and RFA No.436/2002 Page 28 of 33 examination, however, he admitted that he was maintaining accounts and his account books carried all the entries pertaining to dealings between him and the respondent. He, however, deposed that all the account books of his said firm and other related documents had been destroyed after ten years of the closure of the firm including the documents relating to this case. On a specific query put to him in cross-examination, he admitted that he had not filed the documents relating to this case when the case was pending. He admitted copies of the bills Exhibit PW1/1 to PW1/31, challans Exhibit PW1/38 to PW1/42, debit notes Exhibit PW1/87 and PW1/88 and the fact that these debit notes were reflected in the respondent‟s statement of accounts. He admitted that he had issued cheque Exhibit PW1/83, but subsequently stopped payment by the bankers, and that letter Exhibit PW1/84 had been written by his wife requesting the Bank to issue a pay order in the sum of ` 15,000/- (Rupees fifteen thousand only) to the respondent. He also admitted that he had received the statement of accounts RFA No.293/2002 and RFA No.436/2002 Page 29 of 33 signed by the respondent along with notice dated 15.03.1984, but again added that statement of accounts was received with letter dated 11.02.1984.
34 So far as statement of accounts Exhibit PW1/D3 is concerned, the contention of the learned counsel for the appellant is that the debit note Exhibit P1/D1 dated 10.11.81 is not reflected in the same, which is sufficient to show that the statement of accounts Exhibit PW1/D3 is not correct. The aforesaid contention has been rightly rejected by the learned Trial Court in view of the fact that there is no dispute between the parties that Order Exhibit DW1/1 dated 27.07.1981 to which this debit note pertains was an independent transaction between the parties. Not only this, both parties had mutually agreed that this transaction would have no link with other supplies made by the respondent to the appellant.
35 Even otherwise, in my view, adverse inference is liable to be drawn against the appellant for the failure on the part of the appellant to produce the account books. No justification is RFA No.293/2002 and RFA No.436/2002 Page 30 of 33 forthcoming on the record for destruction of the account books, more so, when the appellant knew about the present litigation and it was for him to have filed the relevant records before the court. Thus, I hold that from the evidence on record, it stands proved that the appellant is liable to pay a sum of ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) as per the statement of accounts, Exhibit PW1/D3 for the goods supplied to the appellant.
R.F.A. NO. 436/2002 36 Adverting to the claim of the appellant (respondent in RFA No.293/2002) for interest at the rate of 18%, which has been rejected by the learned Trial Court and in respect of which the appellant has filed the afore-mentioned appeal, I am inclined to agree with the learned Trial Court that the appellant is not entitled to any amount towards interest. Indisputably, in all the bills, there is a clause that interest will be charged for overdue days at the rate of 18% per annum, but below this condition RFA No.293/2002 and RFA No.436/2002 Page 31 of 33 there is a space for „Party‟s Signature‟ and it is not in dispute that the respondent (appellant in RFA No.293/2002) had not signed any of the bills at the said place. In these circumstances, it cannot be said that the respondent agreed to pay interest at the rate of 18% per annum for overdue days.
37 I am fortified in coming to the aforesaid conclusion from the fact that in none of the bills any date or time had been specified for making the payment and thus, it cannot be said from which date the overdue days are to be calculated. As a matter of fact, there is no date of delivery mentioned at all in the bills in question. Further, nowhere in the statement of accounts filed by the appellant himself, there is any entry of charging the appellant with interest after a particular period. Thus, the claim of the appellant for ` 87,680/- (Rupees eighty seven thousand six hundred eighty only) towards interest must be held to have been rightly rejected by the learned trial court. RFA No.293/2002 and RFA No.436/2002 Page 32 of 33 CONCLUSION 38 In view of the aforesaid, the judgment and the decree dated 24.01.2002 passed by the learned Additional District Judge in Suit No.552/93 (Old Suit No.1273/1986) titled Sh. Bharat Bhushan Arora Vs. T.K. Malhotra for the sum of ` 1,38,308.53 (Rupees one lakh thirty eight thousand three hundred eight and paise fifty three only) with pendente lite and future interest at the rate of 6% per annum is affirmed. 39 Both the appeals are dismissed as without being merit.
REVA KHETRAPAL (JUDGE) July 29, 2011 sk RFA No.293/2002 and RFA No.436/2002 Page 33 of 33