Karnataka High Court
M/S Darshak Marketing vs Hmt Watches Limited on 4 July, 2024
Author: Krishna S Dixit
Bench: Krishna S Dixit
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NC: 2024:KHC:25213-DB
RFA No. 461 of 2009
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
REGULAR FIRST APPEAL NO. 461 OF 2009 (MON)
BETWEEN:
1. M/S DARSHAK MARKETING,
A PARTNERSHIP FIRM,
HAVING ITS PLACE OF BUSINESS
AT:5-9-1115/A, GROUND FLOOR,
KANCHANJUNGA COMPLEX, GUNFOUNDRY,
HYDERABAD-500 001.
ANDHRA PRADESH,
RETPD. BY ITS PARTNER
SRI.SUTINDER SINGH.
2. MR.SUTINDER SINGH,
Digitally signed MAJOR,
by CHETAN B
C 3. MR.HUZUR SINGH,
Location: HIGH MAJOR,
COURT OF
KARNATAKA
4. MR.BALJIT KAUR,
MAJOR,
APPELLANTS No.2 TO 4 ARE
R/AT 5-9-22/2, ADARSH NAGAR,
HYDERABAD-500 463.
ANDHRA PRADESH.
...APPELLANTS
(BY SRI. H SRINIVAS RAO., ADVOCATE)
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NC: 2024:KHC:25213-DB
RFA No. 461 of 2009
AND:
1. HMT WATCHES LIMITED,
A COMPANY REGISTERED
UNDER THE COMPANIES ACT, 1956,
HAVING ITS REGD. OFFICE AT
"HMT BHAVAN", 59, BELLARY ROAD,
BANGALORE-560 032
& ITS WATCH MARKETING DIVISION
AT GROUND FLOOR,"HMT BHAVAN",
NO.59, BELLARY ROAD,
BANGALORE-560 032
REPTD. BY GENERAL MANAGER MARKETING (W)
2. SRI. BALVINDER SINGH,
AGED ABOUT 36 YEARS,
3. SMT.KOMAL SINGH,
AGED ABOUT 37 YEARS,
RESPONDENTS No.2 AND 3 BOTH
ARE R/AT NO.5-9-22/2,
ADARSH NAGAR, HYDERABAD-500 463.
...RESPONDENTS
(BY SRI. N JAGADISH BALIGA., ADVOCATE FOR R1;
R2 SERVED AND UNREPRESENTED
THIS RFA FILED U/S 96 OF CPC, AGAINST THE
JUDGMENT AND DECREE DATED 13.01.2009 PASSED IN
OS.NO.15470/2006 ON THE FILE OF THE IV ADDL. CITY CIVIL
& SESSIONS JUDGE, MAYO HALL UNIT, BANGALORE, PARTLY
DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS RFA COMING ON FOR FURTHER HEARING, THIS
DAY, KRISHNA S DIXIT.J., DELIVERED THE FOLLOWING:
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NC: 2024:KHC:25213-DB
RFA No. 461 of 2009
JUDGMENT
This appeal by the defendants seeks to call in question the judgment & decree dated 13.01.2009 entered by the learned IV Addl. City Civil & Sessions Judge, Mayo Hall unit, Bangalore, whereby, respondent-HMT's money suit in O.S.No.15470/2006, has been decreed for a sum of Rs.1,03,91,700/- with future interest at the rate of 6% per annum only on Rs.67.77 lakh from the date of suit.
2. BRIEF FACTS OF THE CASE:
(a) Appellants along with Respondent Nos.2 & 3 were the defendants in the subject money suit filed by the 1st respondent-HMT. The amount claimed was in a sum of Rs.2,72,64,208.91 with interest at the rate of 18% per annum. The Appellant Nos. 1 & 2 had filed their Written Statement resisting the suit.
(b) On the basis of pleadings of the parties and the documents accompanying them, the learned Trial Judge had framed the following eight principal issues:-4-
NC: 2024:KHC:25213-DB RFA No. 461 of 2009 "1. Does the plaintiff prove that the defendants had running account with it?
2. Does the plaintiff prove that the defendants were due in a sum of Rs.2,72,64,208.91 as on the date of the suit?
3. Does the plaintiff prove that the defendants acknowledged their inability?
4. Does the plaintiff prove that the agreement executed by the defendants is a continuing guarantee?
5. Do the defendants prove that the suit is barred by limitation?
6. Do the defendants prove that suit is not maintainable for the reasons given in para-3 of the written statement?
7. Do the defendants prove that the actual amount due by them to the plaintiff is only 8.98 lakhs?
8. Has the plaintiff valued the suit properly and paid adequate court fee?
9. Is the plaintiff entitled for decree as prayed for? If so what order or decree?"
(c) To prove their case, the plaintiff-HMT had got examined its officials namely Mr.B.Ashok Kumar as PW-1 & Mr.K.Ramdoss as PW-2. In their depositions 25 documents came to be produced & marked as per Ex.P-1 -5- NC: 2024:KHC:25213-DB RFA No. 461 of 2009 to 25. They inter alia comprised of Minutes of Board Meetings, Stockist Agreement, RDS Agreement, Deed of Guarantee, cheques, debit notes on interest, etc. From the side of defendants the partner of the 1st Appellant-firm Mr.Sutinder Singh was examined as DW-1 and in his depositions 13 documents came to be produced & marked as D-1 to D-13. They comprised of letter correspondence between the parties, cheques, statement of outstanding dues, cheque clearance records by the Drawee Banks, etc. Learned Trial Judge after considering pleadings of the parties and the evidentiary material placed on record has entered the subject judgment & decree that are put in challenge in this appeal, now at our hands.
3. Learned counsel appearing for the appellants vehemently submits that the bone of contention between the parties arises only in terms of Issue No.2 as to liability of his clients to make payment of the suit claim; the learned Trial Judge has answered the said issue partly in the affirmative and thereby partly decreed the suit only for -6- NC: 2024:KHC:25213-DB RFA No. 461 of 2009 a sum of Rs.1,03,91,700/-with future interest on a part of that; this is absolutely in disregard of admitted position; the accounts were settled in terms of Ex.D-3 for a sum of Rs.18.98 lakh; appellants letter dated 27.06.2005 at Ex.D- 4 for the grant of twelve installments was acceded to although the plaintiffs vide letter dated 08.07.2005 at Ex- D-5 restricted the number to two equal installments instead of twelve; in terms of that the Bank Draft for payment of Rs.5 lakh dated 15.07.2005 at Ex.D-6 given by the appellants was encashed by HMT. This was in addition to a likesum earlier paid in terms of settlement dated 25.09.2004; that being the position the impugned decree needs to be set at naught. Learned Panel Counsel appearing for the respondent-HMT fervently resists the appeal making submission in justification of the judgment & decree. He adds that the judgment is arguably wrong, per se is not sufficient for setting it aside; the appellants have to further show that the same is unsustainable. -7-
NC: 2024:KHC:25213-DB RFA No. 461 of 2009
4. Having heard the learned counsel for the parties and having perused the Appeal Papers, we are broadly in agreement with the submissions made on behalf of the appellants that important admissions in writing have been disregarded by the learned Trial Judge. The document at Ex.D-3 dated 25.09.2004 was confronted to PW-1 in cross examination; he did not fully deny it, but only said he was not aware of it; similarly PW-1 was confronted with another document Ex.D-4 dated 27.06.2005 which mentioned settlement dated 25.09.2004 (wrongly mentioned as 25.09.2005 that date was apparently yet to come); it mentioned the settlement amount of Rs.18.98 lakh; appellants had sought for twelve equal installments. The request of the appellants was conceded vide letter dated 08.07.2005 at Ex.D-5 which specifically mentions about the letter dated 27.06.2005 at Ex.D-4. Ex.D-5 was issued by none other than the Joint General Manager of HMT and not some First Division Clerk. In terms of this, the bank draft for a sum of Rs.5,00,000/- dated 15.07.2005 was given by the appellants and the same has -8- NC: 2024:KHC:25213-DB RFA No. 461 of 2009 been encashed by the HMT. All these documents namely Ex.D-3 to Ex.D-6 constitute one transaction spread over a time frame. Therefore, these documents could not have been disregarded by the learned trial Judge.
5. The vehement contention of the learned Sr. Panel Counsel appearing for the HMT that the letter at Ex.D-6 was issued by an incompetent authority and therefore does not have legal status, is bit difficult to countenance, in the absence of such a contention being demonstrated by producing the rules of procedure and job chart of the said Joint General Manager (SR). This very designation of the officer shows his stature. Added to this, when we specifically asked, the learned Panel Counsel in all fairness answered that there is no material on record to show that any disciplinary action was taken against the said officer for unauthorisedly issuing the letter dated 15.07.2005 at Ex.D-6 whereby, appellants' claim in letter dated 27.06.2005 at Ex.D-4 was accepted and they were given permission to make payment in two equal -9- NC: 2024:KHC:25213-DB RFA No. 461 of 2009 installments instead of the twelve as claimed. What all transaction happens within the Board of the HMT is a matter of Indoor Management and the outsiders like the appellants will not have any access to the same. That is how the doctrine of Indoor Management comes to the aid & rescue of the outsiders like the appellants herein. This aspect of the matter has not been considered by the learned trial Judge though there was enough material placed on record. Thus, the impugned judgment & decree are not only wrong but highly prejudicial to the interest of the appellants. Therefore, they are unsustainable.
6. All the above being said, the appellants cannot justifiably contend that absolutely no amount is payable by them. It is true that even in terms of settlement dated 25.09.2004 vide Ex.D-3, they were liable to make a payment of Rs.18,98,000/- and only a part payment of this was made i.e., Rs.10,00,000/-. Be that as it may. The appellants in terms of the interim order dated 23.07.2009 have deposited a sum of Rs.18,00,000/- plus another sum
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009 of Rs.15,00,000/-; thus, totally the same amounts to Rs.33,00,000/-. We are told by the learned counsel appearing for the appellants that a Coordinate Bench of this Court had permitted withdrawal of Rs.18,00,000/- and accordingly, this amount was withdrawn by the respondent-HMT along with interest of Rs.2,09,211/- [i.e., in all Rs.20,09,211/-] on 15.05.2010. The remaining amount is still lying with the Registry in the interest earning deposit.
7. A Coordinate Bench of this Court vide order dated 9.11.2022 had suggested to the parties to sit under the shadow of a tree for exploring the possibility of amicable settlement. The said order reads as under:
"Respondent-HMT Watches Ltd., has supplied watches to the appellants and claimed Rs.2.7 Crores. Shri Badri Vishal, learned advocate for the appellants submits that settlement was arrived between the parties whereunder appellants were liable to pay Rs.18 Lakhs. Shri N.Jagadish Baliga, learned advocate for the respondents submits that there was no settlement. It is not in dispute that respondent-HMT Watches Ltd., has supplied watches to the appellants. Shri Badri submits that some money has been returned to respondent-HMT Watches Ltd. Parties shall reconcile accounts and explore possibility of
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009 settlement. By consent of learned advocates on both sides, call on 17.11.2022."
8. Learned Panel Counsel appearing for the HMT is very stubborn in saying that his client is not agreeable for any more settlement talks and that court be pleased to pass the order on merits of the case. We were at one point of the hearing, inclined to remand this matter for fresh consideration at the hands of the learned trial Judge. However, we did not venture that since suit is of the year 2006 and appeal is of the year 2009. Already, eighteen years have lapsed. The total amount deposited by the appellants pursuant to interim order of the Coordinate Bench is Rs.33,00,000/-. One happy thing is that in terms of Settlement of Accounts vide Ex.D-3, the appellants have paid Rs.5,00,000/- earlier and another likesum vide Demand Draft dated 15.07.2005 vide Ex.D-6. As observed above, the HMT has withdrawn a sum of Rs.20,02,911/- from the Registry of this Court more than a decade ago. HMT will also get remainder of the amount in deposit along with interest.
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009
9. A very happy thing happened at the fag end of the hearing of this case. The learned counsel appearing for the appellants being a tall member of the Bar came forward with a Memo dated 4.7.2024 which reads as under:
"The Appellants most respectfully submit that, pursuant to the order dated 23.07.2009 passed by this Hon'ble Court, they have deposited a sum of Rs. 18,00,000/- (Rupees Eighteen Lakhs only) and Rs. 15,00,000/- (Rupees Fifteen Lakhs only) before this Hon'ble Court totalling to a sum of Rs. 33,00,000/- (Rupees Thirty Three Lakhs only). It is submitted that, the Respondent No. 1 has withdrawn the sum of Rs. 18,00,000/- (Rupees Eighteen Lakhs only) along with interest on 15.05.2010 totalling amounting to Rs. 20,09,211/-. The balance deposit of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) has remained in Fixed Deposit before this Hon'ble Court accruing interest.
It is submitted that, over and above the sums mentioned herein-above, the Appellants are willing to pay a sum of Rs. 20,00,000/- (Rupees Twenty Lakhs only) to the Respondent No. 1 towards full and final settlement within a period of 3 months.
WHEREFORE, the memo may be taken on record in the interest of Justice & Equity."
He impressed us that should the appeal be allowed even partly, the HMT shall be liable to refund excess amount drawn from him. Going by the simple arithmetics and
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009 keeping in mind the settlement, what he says is true. He also told us that even the CBI enquiry directed in the matter did not yield anything positive to the HMT and negatived to the appellants. He wisely caveated his offer that the HMT should not be permitted to draw the milk from the Memo and take the money offered therein unless it agrees to put a decent burial to the ongoing lis. This in our considered view is absolutely fair. Learned Sr. Panel Counsel appearing for the appellants expressed his constraints at this stage since he lacked instructions from the corporate client which has to do its business only in accordance with law. Be that as it may.
In the above circumstances, we pass the following:
ORDER [i] This Appeal succeeds in part; the impugned judgment & decree are modified to the effect that the defendants/appellants are liable to pay only a sum of Rs.18,98,000/- (Rupees Eighteen Lakh and Ninety Eight Thousand) only, is liable to be paid by the appellants in terms of settlement dated 25.09.2004 vide Ex.D-3 minus
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009 the amount already remitted by them in terms thereof. This is subject to the following.
[ii] In terms of modified order now passed as above in the immediately preceding paragraph, the appellants shall not be liable to make any payment nor the respondent-HMT shall be liable to refund any amount to the appellants, by way of adjustment or otherwise.
[iii] All and whatever amount deposited by the appellants in the Registry along with interest accruing thereon shall be payable and released to the respondent- HMT, of course minus the amount already withdrawn by it. The Registry shall take all steps to release the said amount to the bank account of the respondent-HMT immediately.
[iv] The appellants shall remit an additional sum of Rs.20,00,000/- (Rupees Twenty Lakhs only) to the Registry within an outer limit of three months and send intimation to respondent-HMT with instruction to withdraw the same by way of final settlement of the lis once & for all, if the respondent-HMT files the affidavit as indicated in the succeeding paragraph. Failure to remit despite such affidavit being filed would result into the revival of impugned judgment & decree as they were before.
[v] The respondent-HMT is entitled to withdraw the above sum of Rs.20,00,000/- to be deposited by the
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NC: 2024:KHC:25213-DB RFA No. 461 of 2009 appellants after it's filing an affidavit within two months from today to the effect that the lis is settled once & for all with no liberty whatsoever to continue the same by way of Review, SLP or otherwise, failing which the obligation on the part of the appellants to make the additional payment of this amount, stands automatically dislodged.
[vi] Registry to compute & refund the proportionate court fees paid on the Appeal Memo to the appellants, forthwith.
Costs made easy throughout.
Sd/-
JUDGE Sd/-
JUDGE cbc List No.: 1 Sl No.: 1