Shoes N. Shapes vs J.K. Traders
2006 Latest Caselaw 1782 Del

JUDGMENT

S.L. Bhayana, J.

1. This is an appeal directed against the order of the Additional District Judge, Delhi dated 24th October, 2005, whereby the learned Additional District Judge has decreed the suit of the plaintiff in the sum of Rs.9,48,879/- together with interest @ 18% per annum pendente lite and future from the date of filing till realisation along with cost of the suit.

2. The brief facts of the case of the plaintiff are that the plaintiff and the defendant entered into an agreement to the effect that the plaintiff would sell leather goods to the defendant against invoices and the defendant was to make payment against those goods sold to the defendant by the plaintiff. The plaintiff supplied goods to the defendant on various dates against which the defendant had been making payments regularly. But the defendant did not make payment against some of the invoices against which the goods were sold to the defendant. As a result of the default committed by the defendant, a sum of Rs.9,48,871.18 paise has become due in favor of the plaintiff and against the defendants. The plaintiff has also claimed interest @ 18% per annum on the suit amount from the date of filing till realisation. The plaintiff filed the suit under Order 37 of the Code of Civil Procedure before the learned trial court. The summons of the case were served upon the defendant and thereafter the defendant entered appearance. The defendant moved an application under Order 37 rule 3 (5) of the Code of Civil Procedure and they prayed for permission to defend the suit. The defendant/appellant submitted in the application that an agreement was entered into between the plaintiff and the defendant to sell the goods on behalf of the plaintiff in their showroom and in the said agreement, it was agreed that the defendant will provide space in their showroom for selling the leather goods of the plaintiff for which the plaintiff will pay a minimum amount of Rs.25,000/- per month or 30% commission on total sale whichever was higher and as per the record maintained by the defendant, nothing is due to be paid to the plaintiff by the defendant. The defendant further stated that as per agreement certain goods which were not sold at the showroom shall be returned to the plaintiff and for that reason, the plaintiff has filed a false suit against the defendant for recovery of the aforesaid amount. The defendant has relied upon annexures 'A' and 'B' and letter dated 09.09.2002, annexure 'C', wherein the terms and conditions had been conveyed to the plaintiff by the defendant and also the letter dated 05.09.2002 wherein the plaintiff has accepted the terms and conditions set out in the above letters by the defendant. After hearing the arguments of both the parties, the learned trial court dismissed the application for leave to defend the suit moved under Order 37 rule 3(5) of the Code of Civil Procedure by the defendant and decreed the suit of the plaintiff as aforesaid.

2. We have heard learned Counsel for the parties and perused the record carefully. Learned Counsel for the appellant/defendant have submitted that the appellant had entered into an agreement with the respondent/plaintiff to the effect that the appellant should provide space in their showroom while the plaintiff/respondent will provide leather goods, shoes, etc to be displayed at their showroom for sale and the plaintiff will pay 30% commission on total sale or a minimum of Rs.25,000/- per month to the appellant for providing the space to the respondent/plaintiff. The learned Counsel for the appellant has drawn our attention to annexure 'B', letter which is written by the appellant to M/s. Holyfield at Agra setting out the terms and conditions in which it is mentioned that they will provide space in their showroom for which the plaintiff will pay a minimum of Rs.25,000/- per month or 30% commission on total sale of the leather goods. This letter has been replied by Saksham International on 09.09.2002 addressed to the appellant wherein they have confirmed the terms and conditions set out by the appellant in the letter dated 05.09.2002 contained in annexure 'B'. Learned Counsel for the appellant has also drawn our attention to the statement of account/ledger account vide annexure 'D' showing the payment of commission @ 30% or a minimum of Rs.25,000/- per month to the appellant by the plaintiff against the voucher against which the goods were dispatched to the appellant for sale at their showroom. Learned Counsel for the appellant has also drawn our attention to annexure 'D' showing the details of payments made to the appellant @ 30% commission on the total sale by the plaintiff. Counsel for the appellant has also drawn our attention to annexure 'E' which is a gate pass showing the taking out of the goods from their showroom to M/s. J.K. Traders/Holyfield. There are several such documents wherein it is shown that the leather goods have been returned to M/s. J.K. Traders by the appellant. Our attention is also drawn to the letter dated 07.10.2004 which is annexure 'F'. This letter is alleged to have been written by M/s. J.K. Traders / Holyfield to the appellant wherein they have asked about the sale returns and also about the statement of accounts.

3. On the other hand, learned Counsel for the respondent argued that there was no such agreement entered into between the parties and whatever goods were supplied against the voucher by the plaintiff to the defendant were on the basis of an outright sale of those items against which the plaintiffs were under an obligation to make the payments. But against some of the invoices, the defendants have failed to make payments and, therefore, the plaintiff was compelled to file the suit before the learned trial court after serving legal notice on the defendant.

4. We have gone through the record. We have also gone through the various documents placed on record by both the parties. The defendants have placed reliance upon certain documents which show that there was some agreement entered into between the parties for sale of shoes by the plaintiff at the showroom of the defendants and in those letters, it is also mentioned that the plaintiff will pay an amount of Rs.25,000/- per month or commission of 30% on the total sale of the goods effected at the showroom. Evidence shall have to be led on the authenticity of all these documents and also the plea taken by the appellant in their application under Order 37 rule 3(5) of the Code of Civil Procedure. All these issues which have been raised by the appellant are friable issues and these cannot be decided merely on the basis of the invoices filed by both the parties. The appellants need to lead evidence to prove the documents relied upon by the appellant and also the various pleas raised by them before us.

5. We are of the considered view that without leading evidence, all these issues cannot be decided. The learned trial court has erred in holding that there was an outright sale of the shoes and other leather goods made by the plaintiffs to the defendants without appreciating the pleas raised by the appellants in their application moved under Order 37 rule 3(5) of the Code of Civil Procedure. We, however, hold that the impugned order cannot sustain in the eyes of law. The impugned order dated 24.10.2005 is, therefore, set aside. The appellants are granted leave to defend the suit under Order 37 rule 3(5) of the code of Civil Procedure. With these observations, the appeal is allowed. Trial court record be sent back immediately. The parties are direct to appear before the learned trial court on 27-11-2006. The parties are left to bear their own costs.