Bombay High Court
Tata Motors Limited Formerly ... vs M/S.Lakhia Brothers And Ors on 17 November, 2017
Bench: R.D. Dhanuka
906-s1459-87
vai
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUIT NO.1459 OF 1987
1). Tata Motors Limited, formerly known )
as Tata Engineering & Locomotive )
Company Limited, having its )
Registered office at Bombay House, )
24, Homi Mody Street, Fort, Bombay )
400 001 & Sales Headquarters at )
148, Mahatma Ghandi Road, Fort )
Bombay - 400 023. ) ...Plaintiff
....Versus....
1). M/s.Lakhia Brothers, a partnership )
carrying on business at Lal Darwaja, )
Ahmedabad. )
)
2A). Sriraj Rajnikant Lakhia )
)
2B). Kaumudiniben Rajnikant Lakhia )
)
2C). Maitreyee Shishir Ahattangadi )
)
Defendant Nos.2A to 2C all of )
Indian Inhabitants, residing at )
Amrakadam Bungalow, Ramdev )
Nagar,Satellite Ara, )
Ahmedabad - 380 015. )
)
3). Shri Snehal Natverlal Lakhia, )
Adult, Crrying on business at Lal )
Darwaja, Ahmedabad and residing )
at 57, Popatlal Hemchand Jain )
Nagar, Near Sanjivani Hospital, )
Paldi, Ahmedabad - 380 007. )
)
4). Shree Sheetal Natverlal Lakhia )
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906-s1459-87
as Karta of Sheetal Natverlal Lakhia )
HUF, Adult, carrying on business at )
and residing at 2, Prittam Nagar, )
Ellis Bridge, Ahmedabad. )
)
5). Shri Shriraj Rajnikant Lakhia, )
Adult, carrying on business at )
and residing at address as stated )
in No.2, above. )
)
6). Shri Sheetal Natverlal Lakhia )
as Trustee of Shri Snehal Natverlal )
Lakhia Family Trust, Adult, )
carrying on business at and )
residing at address shown as above )
)
7). Shri Rajnikant Natverlal Lakhia )
as Trustee of Shri Snehal Natverlal )
Lakhia Family Trust, Adult, )
carrying on business at & residing )
at address shown at 2 above )
)
8). Shri Snehal Natverlal Lakhia, as )
Trustee of Shri Rajnikant Natverlal )
Lakhia Family Trust, Adult, )
carrying on business at & residing )
at address shown at 3 above )
)
9). Smt.Indrabalaben Ramniklal Lakhia, )
Adult, carrying on business at )
and residing at Tulsibaug, Near )
Parimal Society, Ellis Bridge, )
Ahmedbad - 380 006. )
)
10). Shri Ashish Snehal Lakhia, )
Adult, carrying on business at and )
residing at address as shown )
at 3 above. ) ...Defendants
Mr.Karl Shroff with Mr.Avinash Joshi i/b Mulla & Mulla & C. B. & Co.
for the Plaintiff.
None for the Defendants.
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906-s1459-87
CORAM : R.D. DHANUKA, J.
DATE : 17TH NOVEMBER, 2017.
ORAL JUDGMENT :-
1. The plaintiff was formerly known as Tata Engineering &
Locomotive Company Limited. The name of the plaintiff was changed
to Tata Motors Limited with effect from 29th July, 2003. The defendant
no.1 is the partnership firm and the original defendant no.2 and
defendant nos.3 to 10 are and were at all material time partners of
the defendant no.1 firm. During the pendency of the suit, the
defendant no.2 expired. The defendant nos.2-A to 2-C are the legal
heirs and representatives of the original defendant no.2.
2. The plaintiff had appointed the defendant no.1 as its dealer
for fostering and promoting the sale of the Tata Diesel Vehicles,
spare parts etc. in various districts of Gujarat. The transaction
between the parties was on principal to principal basis. The plaintiff
and the defendant no.1 entered into Hire Purchase Agreement on 19th
February, 1985 under which the vehicles were supplied by the
plaintiff to the defendant no.1. The dealer was to recover from the
purchasers hire purchase installments and to pay over the same to
the plaintiff under clause 4 of the Hire Purchase Agreement. There
were about 61 transactions between the plaintiff and the Hirers
recommended by the defendant no.1 during the period between 1st
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January, 1983 to 2nd June, 1986.
3. It is the case of the plaintiff that since no installments were
forthcoming from the Hirers, the plaintiff sent various reminders for
payments. Some of the letters were returned by the Postal Authorities
with a remark "Not Known". The plaintiff accordingly deputed their
representatives to several offices of the Regional / Assistant Regional
Transport Office on 9th March, 1987 to ascertain as to whether the
vehicles in question in fact is registered with them or not. The plaintiff
came to know that 63 Hire Purchase Proposals introduced by the
defendant no.1 were not genuine and the representations made by
the defendant no.1 were untrue and fraudulent. The defendant no.1
and its partners induced the plaintiff to purchase various vehicles
from the defendants and to pay a sum of Rs.1,19,87,977=59 based
on such fraudulent representation.
4. The plaintiff had sold to the defendant 193 vehicles during
the period between 23rd January, 1997 to 9th March, 1997.The plaintiff
drew Hundis of Citibank, Mumbai and American Express Bank
Limited, Mumbai of Rs.2,19,97,524=30 and Rs.1,97,97,771=87,
aggregating to Rs.4,17,95,296=17 for the price of 190 vehicles.
Those Hundis however, were not honoured upon presentation by the
plaintiff. The defendants vide their letter dated 18 th March, 1987
however, promised and undertook to pay Rs.1.65 crores which
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according to them was due and payable by them to the plaintiff
stating that the said liability had arisen as a result of certain hire
purchase transactions recommended and proposed by them and
agreed to hand over to the plaintiff the title deeds of the properties
belonging to them i.e. a building together with land at Lal Darwaja,
Ahmedabad and the land at Aslali in the State of Gujarat. The plaintiff
filed a suit on 1st June, 1987 in this Court inter-alia praying for a
decree against the defendants in the sum of Rs.5,97,53,036=69 and
for other reliefs.
5. The defendants filed a written statement on 4 th March,
1990 and also counter claim in this suit. The defendants prayed for a
decree against the plaintiff for various amounts set out in the counter
claim. The plaintiff filed a written statement to the counter claim on 6 th
July, 2006. During the pendency of the suit, the original defendant
no.2 expired. On 27th February, 2007, the defendant nos.2-B and 2-C
filed a separate written statement.
6. By an order dated 16th June, 2007, this Court framed 36
issues between the plaintiff and the defendant nos.1 and 3 to 10 and
three issues between the plaintiff and defendant nos.2-B and 2-C,
which are extracted as under and are answered :-
" 1. Whether this Hon'ble Court does not have
jurisdiction to entertain or try the present suit for the
reasons alleged in para 1 of the Written Statement ?
...In Negative
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2. Whether the Hire-purchase scheme
operated in the manner set out by the Plaintiffs in para
4 of the Plaint or as alleged by the Defendants in
paras 4 of the Written Statement ?
...As per order in Para No.13
3. Whether any of the proposals forwarded by
the Defendants under the Hire-purchase scheme were
fraudulent as claimed in paras 5 to 9 of the Plaint ?
...In Affirmative
4. Whether the Plaintiffs are entitled to
recover a sum of Rs.14,44,87,077=59 or any part
thereof from the Defendants for the loss caused to the
Plaintiffs as set out in paras 9 to 12 of the Plaint ?
...As per order in Para No.15
5. Whether the Defendants were coerced into
signing any documents by the officers of the Plaintiff
as alleged in paras 26 and 33 of the Written Statement
and whether the documents are voidable at the option
of the Defendants ? ...In Negative
6. Whether the Defendants are liable to pay to
the plaintiffs a sum of Rs.17,01,887/- or any part
thereof in connection with the Bill marketing Scheme
as claimed in para 14 of the Plaint ?
...Does not arise
7. Whether the Defendants are liable to pay
the plaintiffs a sum of Rs.11,08,850/- or any part
thereof towards spare parts supplied by the Plaintiffs
as claimed in para 15 of the Plaint ?
...Does not arise
8. Whether the Defendants have returned to
the Plaintiffs goods worth Rs.13,30,000/- as alleged in
para 28 of the Written Statement ?
...Does not arise
9. Whether the Defendants are liable to the
plaintiffs a sum of Rs.4,24,55,221=90 or any part
thereof in respect of sale of vehicles mentioned in
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paras 16 to 24 of the Plaint ? ...Does not arise
10. What interest are the plaintiffs entitled to ?
...18% p.a.
11. What decree are the plaintiffs entitled to ?
...As per order
COUNTER CLAIM
12. Whether the Counter-claim ought to be
dismissed as Defendants have failed and neglected to
give inspection of documents as set out in para 4 of
the reply to Counter claim ? ...In Negative
13. Whether the Counter claims or any part
thereof are barred by the law of limitation as set out in
para 32 of the Reply to Counter-claim ? ...In Negative
14. Whether the Counter-claim is false,
frivolous, vexatious and vague ? ...In Negative
15. Whether the Defendants are entitled to any
Compensation as claimed in paras 42,47,54 of the
Counter-claim and if so at what rate/ amount ?
...In Negative
16. Whether 3000 vehicles were sold by other
dealers in the territory allotted to the 1st Defendants
as claimed in para 42 of Counter claim ?
...In Negative
17. Whether the Defendants are entitled to any
compensation by way of dealers margin in respect of
vehicles sold by the Plaintiffs in their territory as
alleged in para 43 of Counter claim and if so, at what
rate ? ...In Negative
18. Whether 300 vehicles were sold by the
Plaintiffs in the Defendant in 1's territory between
15/03/1997 to 17/07/1997 ? ...In Negative
19. Whether the Plaintiffs debited/deducted any
amounts from the Defendant's accounts as alleged in
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paras 44,46, 49 of Counter-claim and if so, whether
the same was wrongful as illegal ? ...In Negative
20. Whether the Defendants carried out any
repairs to chassis supplied to GSRTC or Cabins of
vehicles supplied to ONGC ? ...In Negative
21. Whether the Plaintiffs officers had agreed
to pay reimburse/pay any sums to the Defendants as
claimed in paras 45,48, 51,52,56, 58,66 of the
Counter-claim ? ...In Negative
22. Whether the Plaintiffs requested the
Defendants is to give any discount to GSRTC as
alleged in paras 48 of the Counter claim and if so,
whether the Defendants were promised
reimbursement thereof ? ...In Negative
23. Whether the Defendants have not been
paid by the Plaintiffs a sum of Rs.86,906=90 in
respect of the vehicles claimed to be serviced/repaired
during the warranty period as claimed in para 50 of the
Counter claim ? ...In Negative
24. Whether the plaintiffs removed any of the
Defendants belongings as alleged in para 51 of the
Counter-claim and if so to what extent ?
...In Negative
25. Whether the Plaintiffs have used any of the
godowns of the Defendants as claimed in para 52 of
the Counter claim and if so whether the Defendants
are entitled to any compensation for the same ?
...In Negative
26. Whether the Defendants have issued any
credit notes as alleged in para 53 of Counterclaim and
if so whether the Defendants were entitled to credit
which the Plaintiffs have failed to give ?
...In Negative
27. Whether the Plaintiffs are liable to pay any
commission to the Defendants as alleged in paras
55,62 and 64 of the Counter-claim ? ...In Negative
906-s1459-87
28. Whether any spare parts of obsolete
models were sold to the Defendants as alleged in para
56 of the Counter-claim ? ...In Negative
29. Whether the GSRTC deducted any amount
as alleged in para 57 of the Counter claim and if so
whether the Plaintiffs are liable to reimburse the
same? ...In Negative
30. Whether the Defendant No.1 procured any
orders for sale of excavators/cranes as alleged in para
58 of the Plaint ? ...In Negative
31. Whether the Defendants rendered any
services as alleged in paras 59 and 60 of the Counter
claim and whether they are entitled to a
reimbursement in respect thereof ? ...In Negative
32. Whether the Defendants had paid any
Hundi charges / advance interest in respect of
vehicles not delivered as alleged in para 61 of Counter
claim ? ...In Negative
33. Whether the plaintiffs supplied vehicles
without tools and accessories and the Defendants are
entitled to any reimbursement in respect thereof as
alleged in para 65 of the Counter claim ?
...In Negative
34. Whether the Plaintiffs deducted a sum of
Rs.2,00,000/- being amount payable to Western
Motors as alleged in para 66 of the Counter claim ?
...In Negative
35. Whether the Defendants are entitled to any
amount claimed in paras 42 to 66 of the Counter claim
and if so to what extent ? ...In Negative
36. What interest, if any, are the Defendants
entitled to ? ...In Negative
The following issues are framed between plaintiff and
defendant Nos. 2(B) and (C) :-
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37. Whether the suit has abated against
Defendants 2A, 2B and 2C ? ..Does not survive
38. Whether the suit is barred by the law of
limitation against Defendants 2A, 2B and 2C ?
...Does not survive
39. Whether the Plaintiffs are entitled to any
orders against Defendants 2A,2B and 2C ? "
...Does not survive
7. By an order dated 3rd March, 2014, this Court recorded the
statement made by the learned counsel for the plaintiff that the
plaintiff did not want to press the claim in the suit against the
defendant nos.2-A to 2-C, who are the legal heirs and representatives
of the original defendant no.2. This Court issued various directions
from time to time for filing affidavit of documents along with
compilation of documents, for inspection of documents, affidavit in
lieu of examination in chief, for marking of documents etc. Some of
the defendants have also filed the counter claim, except defendant
nos.2-A to 2-C.
8. This Court accordingly passed an order that the suit be
placed on board for ex-parte decree by an order dated 24th March,
2014. The plaintiff thereafter filed affidavit in lieu of examination in
chief dated 12th December, 2014 and further affidavit in lieu of
examination in chief on 17th October, 2016. The plaintiff also placed
reliance on 64 documents running into 1440 pages. No statement of
906-s1459-87
admission and denial came to be filed by any of the defendants. The
plaintiff examined Mr.Sunil Digambar Pundlik (PW 1) as a witness on
25th September, 2017 before this Court. None appeared for the
defendants. This Court received in evidence and marked Exhibit P-
1/2 (Collectively) to Exhibit Exhibit P-1/65 (Collectively) respectively
and closed the examination in chief. Since none appeared for the
defendant to cross-examine the witness of the plaintiff, the evidence
of the plaintiff was closed, as "no cross" by the defendants. The
Plaintiff closed its evidence.
9. This Court thereafter directed the defendants to file their
list of witnesses, affidavit in lief of examination in chief of the first
witness together with compilation of documents and to serve a copy
thereof upon the plaintiff on or before 3rd November, 2017. The matter
was placed on board for directions on 10th November, 2017. The
order dated 25th September, 2017 was corrected by an order dated
13th October, 2017. It was directed that in paragraph 1, sub-
paragraph 2, the figure "64" be read as "63" and in sub-paragraph 4,
the words "P-1/65 (Colly.) " be read as "P-1/64 (Colly.)". On 10th
November, 2017, since the defendants had not complied with the
directions issued by this Court on 25th September, 2017, this Court
closed the evidence of the defendants and placed the suit on board
on 16th November, 2017.
906-s1459-87
10. Mr.Shroff, learned counsel appearing for the plaintiff
invited my attention to various averments made in the plaint and also
the documents annexed to the plaint and other documents and also
to the written statement and counter claim filed by the defendants. He
submits that the defendants have committed fraud upon the plaintiff.
Various vehicles were in fact hypothecated to different Institutions
and Banks in respect of which the defendants had sought to create
hypothecation in favour of the plaintiff. The defendants have admitted
the liability in the sum of Rs.1.75 crores in the letter annexed at page
53 of the plaint and to the extent of Rs.1.65 crores in a writing at page
109 of the plaint.
11. It is not in dispute that there was no statement of
admission and denial filed by the defendants though various
opportunities were granted to the defendants in respect of the
documents referred to and relied upon by the plaintiff. All those
documents were proved by the witness examined by the plaintiff.
There is no cross-examination of the said witness by the defendants
inspite of opportunity granted by this Court. The deposition of the
plaintiff made in the affidavit in lieu of examination in chief is thus
proved being not controverted by the defendants. Similarly since the
defendants did not enter the witness box to prove the allegations
made by the defendants in the written statement and the counter
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claim filed before this Court, the same are not proved by leading any
oral evidence. The documents referred to and relied upon by the
defendants in the written statement are also not proved. I shall now
deal with the issues framed by this Court.
12. Issue No.1 : Though the defendants had raised the plea of
jurisdiction in the written statement, various documents placed on
record and marked as exhibits clearly shows that the same were
received by the plaintiff in Mumbai and/or were executed at Mumbai.
The said issue is accordingly answered in Negative. This Court has
jurisdiction to entertain, try and dispose of the present suit.
13. Issue No.2 : A perusal of the evidence on record clearly
indicates that the plaintiff has proved that the hire purchase scheme
was operated in the manner set out by the plaintiff in para 4 of the
plaint whereas the defendants have failed to prove that the same
operated as alleged in paragraph 4 of the written statement. The
issue is answered accordingly.
14. Issue No.3 : A perusal of the record clearly indicates that
the plaintiff has proved the modus operandi of the defendants in
carrying out hire purchase transactions which were ex-facie
fraudulent. The deposition made by the plaintiff is not controverted by
the defendants. The issue issue is answered in the Affirmative.
15. Issue No.4 : Since the defendants have acknowledged the
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liability of of Rs.1.65 crores as on 18 th March, 1987. In my view, the
plaintiff has made out a case for a decree in the sum of Rs.1.65
crores as on 18th March, 1987 with interest thereon. The issue is
answered according.
16. Issue No.5 : The plaintiff has deposed in affidavit in lieu of
examination in chief in respect of acknowledgement of Rs.1.65 crores
by the defendants. The witness examined by the plaintiff has not
been cross-examined by the defendants. The defendants did not lead
any evidence to prove the alleged coercion and thus those
allegations of coercion are not proved. Issue no.5 is accordingly
answered in Negative.
17. Insofar as issue Nos.6 to 8 are concerned, these issues
do not arise for consideration since the plaintiff has expressly given
up those issues in paragraph 10 of the affidavit in lieu of examination
in chief dated 12th December, 2014. The issues are not answered as
the same do not arise.
18. Issue No.9 : In view of the fact that the plaintiff has
already recovered the amount as set out in paragraph 10 of the
affidavit in lieu of examination in chief dated 12th December, 2014, the
said issue does not arise for consideration.
19. Issue No.10 : I am inclined to grant interest at the rate of
18% p.a. from the date of suit till payment and/or realization in prayer
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clause (a) of the plaint on the amount of Rs.1.65 crores.
20. Issue No.11 : The plaintiff is entitled to a decree in the
sum of Rs.1.65 crores with interest from the date of filing of the suit till
payment and/or realization.
21. Issue Nos.12 to 36 : Since the onus to prove these issues
was on the defendants who did not enter the witness box, the
defendants have failed to discharge the onus to prove. The issues
are accordingly answered in Negative.
22. Issue Nos.37 to 39 : Since the plaintiff has not pressed
any reliefs against the defendant nos.2-A to 2-C, these issues do not
survive.
23. I therefore, pass the following order :-
a). The Suit No.1459 of 1987 is decreed in terms of prayer
clause (a) however restricted to an amount of Rs.1.65 crores from the
date of filing of the suit together with interest at the rate of 18% p.a.
from the date of the suit till payment and costs against all the
defendants excluding defendant nos.2-A to 2-C.
b). Counter claim is dismissed.
c). Drawn up decree is expedited.
(R.D. DHANUKA, J.)
