M/S. Ruchi Soya Industries Ltd., vs Nerella Venkata Suresh,
2022 Latest Caselaw 9392 AP

      THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

                 SECOND APPEAL No.103 of 2012

JUDGMENT:

The defendant company in the suit for recovery of money

has suffered decrees against it in the lower Courts; preferred

this second appeal under Section 100 C.P.C. questioning the

correctness of the judgments of the Courts below. Respondents

in this appeal are the plaintiffs. O.S.No.149 of 2003 was a suit

filed by plaintiffs and after due trial, the suit was decreed in

favour of the plaintiffs by the learned Principal Senior Civil

Judge, Kakinada by judgment dated 30.09.2008. Aggrieved of it,

the defendant in the suit preferred A.S.No.225 of 2009. After

due hearing, the first appeal was dismissed by the learned IV

Additional District Judge, Kakinada by judgment dated

14.07.2011 and confirmed the trial Court's judgment.

Aggrieved of it, the defendant in the suit filed this second

appeal.

2. On 08.11.2013 a learned judge of this Court admitted this

second appeal on the following substantial questions of law:

1) Whether in claim for recovery of amount based on a document the burden shifts to defendant when the defendant questioned the enforceability by denying such document?

Dr. VRKS, J S.A.No.103 of 2012

2) Whether on filing of certified copies of documents due to non availability of originals, because of closure of defendant company, can courts below take adverse interference against defendant?

3. Learned counsel on both sides submitted their

arguments.

4. To appreciate the contentions, the litigation that unfurled

before the lower Courts is required to be noticed.

5. The claim in the suit is that a lorry bearing No.AP-5X-

8123 belonging to the plaintiffs was given on a monthly hire to

the defendant at the rate of Rs.24,500/- and the lease

commenced from the month December, 2000 and terminates by

the end of November, 2003. Defendant utilized the service till

the end of July, 2002 and thereafter informed the plaintiffs that

from 1st August, 2002 it did not want the vehicle anymore.

Thus, there is breach of contract. Without any prior notice and

without any justification, contract was terminated well before

the duration of lease agreed upon.

6. In the plaint, the claim is made under three distinct

heads. It is stated that for certain months defendant paid

Rs.23,500/- only instead of Rs.24,500/- and therefore, there

Dr. VRKS, J S.A.No.103 of 2012

remained balance of Rs.1,000. This amount along with accrued

interest is claimed at Rs.27,500/-. Then it is stated that for a

period of 16 months defendant failed to utilize the vehicle and

caused pecuniary loss at the rate of Rs.10,400/- per month.

That comes to Rs.1,66,400/-. Then for breach of contract

damages are claimed at the rate of Rs.10,000/-. Thus, a total

claim of Rs.2,10,465/- was demanded from the defendant along

with 24% interest per annum and for costs and such other

reliefs.

7. Defendant raised a contest and filed a written statement

and denied all the plaint mentioned averments. From para No.6

onwards it disclosed its defence. It is stated that between

parties there is no written contract and never the defendant

engaged the vehicle of the plaintiffs on a monthly hire charges.

Then it is stated that defendant used on hire the vehicle of the

plaintiffs on trip wise basis and as and when trips were taken

the payment was made and nothing was due. The name of the

defendant is M/s. Ruchi Soya Industries Limited. It is stated

that in March, 2002 because of business crisis the said industry

was wound up.

Dr. VRKS, J S.A.No.103 of 2012

8. Written statement further avers that subsequently

plaintiffs used to supply the vehicle to another company by

name Ruchi Infrastructure Limited and that company used to

engage this vehicle on trip basis and it used to pay hire charges.

Those transactions occurred between Match, 2002 and July,

2002. Because of several disputes, the Ruchi Infrastructure

Limited stopped engaging the vehicle of the plaintiffs. Plaint

mentioned notice was never received by the defendant since

defendant industry was already closed and it is because of that

it could not give a reply notice. At para No.8 it stated that it has

sufficient documentary evidence to prove its defence and to

prove that the claim of the plaintiffs is false. For these reasons,

it sought for dismissal of the suit.

9. Suit went for trial on the following issues:

"1. Whether the plaintiffs are entitled for the suit claim?

2. To what relief?"

10. 1st plaintiff gave evidence as PW.1 and got examined

another witness as PW.2. An officer from defendant company

testified as DW.1. Coming to documents, Exs.A.1 to A.3 for

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plaintiffs and Exs.B.1 to B.5 for defendants and Ex.C.1 were

marked.

11. Learned trial Court considered the evidence of both sides

and observed that Ex.A.1 is on the letter head of the defendant

company and is signed by both parties and that letter contains

the clauses showing that the lorry of the plaintiffs was taken on

hire by the defendant and the transaction is one of the lease of

vehicle on monthly rental/hire charges basis and per month

defendant agreed to pay Rs.24,500/- to the plaintiffs. It is

based on these, the learned trial Court recorded a finding that it

was a written contract of hire of vehicle on a monthly basis that

was there between parties. It therefore negatived the

contentions of the defendant about non-existence of a written

lease and about hiring the vehicle only on trip wise basis.

12. Considering the evidence of PW.1, the trial Court observed

that from the agreed amount there was overdue from the

defendant. The contentions of the defendant about full

discharge of the amount was considered in the light of Ex.B.

Series documents. It observed that Exs.B.2 to B.4 are only

ledger accounts and they did not bear the signatures of

Dr. VRKS, J S.A.No.103 of 2012

plaintiffs admitting the contents therein and that the defendant

failed to produce vouchers indicating discharge of its liability.

Considering the evidence of DW.1 that the vouchers are

available at its head office in Indoor and considering the fact

that they were not produced, the learned trial Court drew

adverse inference against the defendant holding that had they

been produced they would have disclosed facts against the

contentions of the defendant. It discarded Ex.B.5 vouchers by

assigning certain reasons. It also observed that without specific

pleas taken up in the written statement the defendant was

making several new contentions such as reduced payments

because of deductions of TDS etc. Stating that on all such

contentions defendant failed to produce any evidence, it

nagatived all those contentions.

13. Be it noted that the entire judgment of the trial Court

contains discussion only with reference to certain payments

that were overdue and one could not see any arguments and

discussion about damages that are claimed and about loss of

income because of breach of contract etc. Finally, it agreed with

the case of the plaintiffs and decreed the whole claim and

directed the defendant to pay it with 6% interest per annum

Dr. VRKS, J S.A.No.103 of 2012

from the date of suit till the date of realization. Costs were also

awarded to the plaintiffs.

14. When the matter came up before the first appellate Court,

it framed the following points for its consideration:

"(1) Whether there was privity of contract between the parties and if so, whether plaintiffs are entitled for recovery of suit amount?

(2) To what relief?"

15. After making a reference to the entire evidence on record

and after considering the documents also, the learned first

appellate Court agreed with the findings of the trial Court and it

further stated that in terms of Section 34 of the Indian Evidence

Act it was for the defendant to sustain its defence and mere

ledgers do not attach liability unless they are supported by

corresponding vouchers and other books of accounts. Learned

first appellate Court and in fact the learned trial Court also

recorded a clear finding that the fact of utilization of plaintiffs'

vehicle by the defendant remained undisputed and the only

conflict was whether it was on a monthly hire basis or it was

only on the basis of payment per trip as and when engaged.

Learned first appellate Court also approved the findings of the

Dr. VRKS, J S.A.No.103 of 2012

trial Court which were based on Ex.A.1 terming that it was a

written contract and that proved the case of the plaintiffs and

the opposite version taken up by the defendant was not proved.

16. As one could notice, before the first appellate Court also

there was no debate and discussion on the other two heads of

money claimed by the plaintiffs. Finally, the first appellate Court

concurred with the trial Court's judgment and dismissed the

appeal with costs.

17. Before this Court also the appellant has not raised the

legal efficacy and as to the existence or otherwise of evidence

concerning Rs.1,66,400/- claimed by the plaintiffs towards loss

of income and Rs.10,000/- claimed by the plaintiffs towards

damages for mental agony. Therefore, this Court need not say

anything with reference to those two heads of claim. Then

essentially what remained is the overdue amount which finally

became Rs.34,065/-.

18. Learned counsel for appellant contends that though

Ex.A.1 was proved to be a contract between parties, the burden

to establish money was due from the defendant was on the

Dr. VRKS, J S.A.No.103 of 2012

plaintiffs but the lower Courts wrongly placed the burden on the

defendant. As against it, learned counsel for respondents

submits that the contentions of the appellant before the Courts

below was about absence of written contract between parties

and by production of Ex.A.1 this respondents/plaintiffs

established before the Courts below that the contract between

parties was in the form of writing and there was no fault on part

of Courts below in placing burden of proof.

19. On considering these rival submissions and on perusal of

the record, it should be stated that plaintiffs set their claim

based on Ex.A.1 written contract. Defendant raised a

contention that there was no written contract. Referring to

cross-examination of DW.1, learned trial Court observed that

documentation in the form of Ex.A.1 between defendant and

plaintiffs was proved. To arrive at such conclusion, Courts

below utilized the evidence of PWs.1 and 2 and the evidence of

DW.1. The Courts below recorded that from the pleadings and

evidence on both sides the fact that the vehicle of the plaintiffs

was utilized by the defendant from December, 2000 till the end

of July, 2002 was proved. In the context of terms of Ex.A.1,

Dr. VRKS, J S.A.No.103 of 2012

which indicated hire on monthly basis, it accepted the evidence

of PW.1 and found the amount due. Since it was the defendant,

who used the vehicle owes the liability to pay. Since it claims to

have paid, holds the burden to prove that it paid and discharged

its liabilities. In saying so, Courts below properly cast the onus

of proof on the defendant to prove its plea of discharge.

Therefore, there is nothing incorrect in the approach of the

Courts below. There is no merit in the contention raised by the

appellant. Point No.1 is answered against the appellant.

20. Learned counsel for appellant contends that the original

documents were not available and their certified copies alone

were filed and it was because the defendant company was

closed but the trial Court wrongly drew adverse inference

against the defendant. As against it, learned counsel for

respondents submits that the alleged winding up is not

established by any document and therefore, this contention has

no merit.

21. On considering these rival submissions, it has to be

stated that the Courts below recorded a finding that M/s. Ruchi

Soya Industries Limited and M/s. Ruchi Infrastructure Limited

Dr. VRKS, J S.A.No.103 of 2012

are not different and there was mere change of name and

nothing else. This finding was recorded based on the

admissions made by DW.1 during his cross-examination. The

lower Courts then referred to admission of DW.1 that all the

necessary vouchers were with its Head office. Thus, the

vouchers, which would show the pleaded discharge of liability

on part of defendant, were very much available with the Head

office of the defendant. It is up to the defendant to produce

them and show them to the Court. Defendant did not do it.

The decision of the Courts below refer pointedly to that aspect of

the matter and it was in that context adverse inference was

drawn for non-production of the documents, which were very

much available with the defendant. That approach of the

Courts below is in compliance with illustration (g) of Section 114

of the Indian Evidence Act, 1872. Be it noted that the ledgers

that were produced were not the originals and they were mere

copies and the Courts below simply stated that they were only

copies and no adverse inference was drawn on the ground that

the original ledgers were not produced. In fact what was sought

by the Courts below was that to accept the contentions of

defendant based on these ledger entries there should have been

Dr. VRKS, J S.A.No.103 of 2012

an acknowledgment from the plaintiffs approving the

correctness of the ledger entries. Since the evidence disclosed

no such approval from the plaintiffs, the Courts below went on

to state that to attach liability ledger extracts are not enough

and one should furnish the vouchers. About non production of

vouchers the first appellate Court recorded Section 34 of the

Indian Evidence Act and its legal effect and finally negatived the

contentions of the defendant. Thus, discharge being one of the

contentions raised by the defendant since the same was not

established by the defendant, trial Court and the first appellate

Court decided the case against the defendant. Appellant failed

to show any principle of law to indicate any error in the

approach adopted by both the Courts below. Therefore, there is

no merit in this contention.

22. Learned counsel for appellant and learned counsel for

respondents admit that by virtue of order dated 05.10.2012 of

this Court this appellant had already deposited half of the

decretal amount with costs.

23. In the result, this Second appeal is dismissed with costs.

The remaining balance amount, after giving due credit to what

Dr. VRKS, J S.A.No.103 of 2012

was already deposited, shall be paid by the appellant to the

respondents/plaintiffs.

As a sequel, miscellaneous applications pending, if any,

shall stand closed.

_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 07.12.2022 Ivd

Dr. VRKS, J S.A.No.103 of 2012

THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

SECOND APPEAL No.103 of 2012

Date: 07.12.2022

Ivd