Mysore Sales International ... vs Expo Asia Exhibitions Limited And ...
2006 Latest Caselaw 1504 Del

JUDGMENT

Reva Khetrapal, J.

1. The present suit for recovery of Rs. 22,25,500/- is instituted by the plaintiff, a duly incorporated company against the defendants No. 1 to 4 through Shri A.M.Rao who is stated to be the Secretary of the plaintiff company and hence authorized to institute the present suit against the defendants.

2. The facts as set out in the plaint are as follows:

(i) Defendant No. 3, Sh. Pawan Arora, representing himself to be the Executive Director of defendants No. 1 & 2 approached the plaintiff company that the defendants No. 1 & 2 are going to arrange an exhibition in the name of ASIA AT YOUR DOOR STEP, 1992 at National Exhibition Centre, Birmingham (U.K.) to be held from 20th to 23rd August, 1992. The plaintiff booked a space measuring 150 sq.mtrs. in the said exhibition to be known as 'Karnataka Pavilion' at a total cost of Rs. 15,42,750/-, payable by 15th July, 1992. An agreement to that effect was signed by the plaintiff and defendant No. 3, for and on behalf of defendants No. 1 & 2 as its Executive Director, on 8th July, 1992.

(ii) On the same day, i.e., on 8th July 1992, the plaintiff delivered a cheque bearing No. 000607 for a sum of Rs. 15,42,750/-(Rupees fifteen lakh fourty two thousand seven hundred fifty only) drawn in the name of Expo Asia Exhibitions Ltd. which was received on behalf of defendants No. 1 & 2 by one Shri B.M.Mishra and was duly encashed through the bankers of defendants No. 1 & 2. The said amount was credited to the account of M/s.Expo Asia Exhibitions Ltd., New Delhi with Punjab and Sindh Bank, Jangpura Extension, and was cleared on 15th July, 1992 by the bankers of the plaintiff.

(iii) On 17th August, 1992, the plaintiff received a letter written by defendant No. 2 M/s Expo Asia Exhibitions Limited, L-25A, Connaught Circus, New Delhi and signed on its behalf and by Shri Pukhraj Singh, defendant No. 4, wherein it was admitted that the plaintiff had booked an exhibition space in ASIA AT YOUR DOOR STEP to be held from 20-23rd August, 1992 at N.E.C. Birmingham (U.K.). The plaintiff was however, informed that "due to certain commercial and other unavoidable reasons, we have been compelled to postpone the Exhibition till March, 1993 and the exact date shall be communicated to you well in advance. While we hope you shall bear with us, we also hope that you shall please participate in our above exhibition when it is conducted in March 1993."

(iv) On receipt of the aforesaid letter, the plaintiff wrote a letter dated 21st August, 1992 to Shri Pukh Raj Singh, defendant No. 4, at the address of defendant No. 2 M/s.Expo Asia Exhibitions Limited, in which the plaintiff called upon the defendants to refund the aforesaid sum of Rs. 15,42,750/-(Rupees Fifteen lakh forty two thousand seven hundred fifty only). The defendants failed to refund the said sum of money to the plaintiff company.

(v) On 22nd March, 1993, the defendant No. 3, Shri Pawan Arora on behalf of defendant No. 2 wrote a letter requesting the plaintiff company that they may be permitted to refund the amount in easy Installments spread over a long period of time. The defendant No. 3 on behalf of the defendant No. 2 further made a request to the plaintiff to accede to the aforesaid request for payment of the amount by Installments.

(vi) On 6th May, 1993, the defendant No. 3 again wrote to the plaintiff that they had suffered enormous financial losses due to cancellation of the Exhibition by the principal promoters in U.K. and requested the plaintiff to grant a period of 18 months from May 1993 to enable the defendants to pay the entire amount by Installments. It was also promised in the said letter that the first Installment would be remitted soon.

(vii) In response thereto, the plaintiff company, by its registered Acknowledgement Due letter dated 16th June, 1993, called upon the defendant No. 2 to liquidate the amount due to it in six monthly Installments starting from June, 1993. The said letter was duly served upon defendant No. 2, but despite service of the same defendant No. 2 did not pay any amount whatsoever. Thereafter, the plaintiff wrote a number of letters to the defendants, but the defendants failed to acknowledge the said letters and did not pay the amount due to the plaintiff company.

(viii) Eventually, the plaintiff served notices dated 22nd January, 1994 and 26th March, 1994 upon the defendants No. 1 & 2, calling upon the defendants No. 1 & 2 to pay Rs. 15,42,750/- along with interest @ 25% per annum. The defendants having failed to pay the aforesaid sum of money to the plaintiff, the present suit was filed by it on 20th January, 1995, claiming that the plaintiff was entitled to the refund of Rs. 15,42,750/- together with interest @ 18% per annum from 15th July, 1992 till filing of the present suit amounting to Rs. 6,82,750/-, that is, in all Rs. 22,25,500 (Rs.Twenty two lakh twenty five thousand five hundred only). Interest pendente lite and future interest at the rate of 18% per annum from the date of filing of suit till realization of the same is also claimed by the plaintiff company from the defendants.

3. Summons of the institution of the suit were served on the defendants No. 1 to 4. Defendants No. 1 & 4 did not enter appearance despite service upon them by way of publication in 'The Times of India' (Delhi Edition) and 'The Asian Age' (Overseas Edition). Hence they were proceeded ex-parte. Subsequently, defendant No. 2, who did not file written statement and failed to appear, was also proceeded ex-parte. Thus, defendant No. 3 alone contested the present suit by filing a written statement.

4. In the written statement filed by him, defendant No. 3 submitted that the suit qua him was not maintainable and could not be proceeded with, and that the liability if any was that of the defendant No. 1 company . He, however, did not deny that Defendant No. 1 was to arrange the exhibition in question, and for the booking of the space thereof it had opened various offices in various parts of the world, including India. One such office, defendant No. 3 submitted, was opened at the address of defendant No. 2. He (defendant No. 3) was engaged for the purpose of booking the space on behalf of defendants No. 1 & 2 as per instructions given. Defendant No. 3 also admitted that the plaintiff had issued a cheque in the sum of Rs. 15,42,750/- in favor of the defendant company and the proceeds thereof were collected by the defendant company. As regards letters dated 22nd March, 1993 and 6th May, 1993 written by him, he pleaded that the same had been written under instructions received from defendant No. 1 company. He had only acted for and on behalf of defendant No. 1 company and, the plaintiff company after looking to the prospects of the exhibition had booked the space. It was the sole decision of the plaintiff to book the space in the exhibition. He could not be blamed for the same. He had not persuaded the plaintiff to part with the amount as alleged by the plaintiff nor played any other role except that of an appointee Executive Director. The proceeds of the cheque had been collected by the defendant company and he had nothing to do with the said payment. He always acted as agent of defendant No. 1. He left the company in June 1993 and had been improperly imp leaded as a party to the present suit.

5. On the above pleadings, the following issues were framed for consideration:

  1. Whether the plaint is signed and verified by a    duly authorized person? OPP
 

 2. Whether the suit is bad for mis-joinder of parties? OPD
 

 3. Whether this Court has no jurisdiction to try the   suit? OPD 
 

 4. Whether the defendant No. 3 was the booking    agent and whether he is liable to pay the money   received from the plaintiff ? OPD
 

 5. Whether the suit is bad for want of notice to    defendant No. 3? OPD
 

 6. Whether the plaintiff is entitled to the suit amount   along  with interest from the defendants? OPD
 

 7. Relief, if any.
 

6. Shri Tarun Chaturvedi, Assistant Manager (Sales) with the plaintiff company at its Delhi Branch, was examined as PW-1 to prove the case of the plaintiff. In order to rebut the evidence of the plaintiff and to substantiate his own defense, defendant No. 3 examined himself as DW-1 and, tendered in evidence the affidavit of one Shri Vijay Gupta, Chartered Accountant, as DW-2.

7. On perusal of the evidence on record, both oral and documentary, and on hearing Mr. A.P.Aggarwal,learned counsel on behalf of the plaintiff and Mr.Rajiv Garg, learned Counsel on behalf of defendant No. 3, my findings on the above issues are as given hereinunder:

8. Issue No. 1: Whether the plaint is signed and verified by a duly authorized person? OPP

PW-1 Shri Tarun Chaturvedi, Assistant Manager (Sales) with the plaintiff company, stated on oath that Shri A.M.Rao is the Company Secretary of the plaintiff company and that the plaint is signed and verified by him. He identified the signatures of Shri A.M.Rao on the plaint and, further testified that Ex.PW-1/1 was the Special Power of Attorney in his favor authorizing him to sign and verify the plaint and file the present suit in the court. The Special Power of Attorney Ex.PW-1/1, he deposed, was executed by Shri V.Madhu Managing Director of the plaintiff company, in pursuance of an authorization in that respect by a Board Resolution dated 22nd February, 1985. Certified copy of the Board Resolution was placed on record by him as Ex.PW-1/2 and the original Minutes Book produced in court.

9. The above statement made on oath by PW-1 was not challenged by the defendant No. 3 in cross-examination and hence I have no hesitation in holding that the plaint is signed and verified by a duly authorized person on behalf of the plaintiff company. Issue No. 1 is accordingly decided in favor of the plaintiff and against the defendants.

10. Issue No. 2:Whether the suit is bad for mis-joinder of parties? OPD

Issue No. 2 pertains to the objection of the defendant No. 3 that the suit is bad for mis-joinder of parties and is closely inter-linked and inter-connected with issues No. 4 & 5 viz., whether the defendant No. 3 was the booking agent and hence liable to pay the money received from the plaintiff company? (Issue No. 4) and whether the suit is bad for want of notice to defendant No. 3? (Issue No. 5). Accordingly, it is proposed to deal with issues No. 2, 4 and 5 simultaneously.

11. Counsel for the plaintiff in the course of arguments contended, and I think rightly so, that the onus of proving the first part of issue No. 4 as to whether defendant No. 3 was the booking agent should have been placed upon defendant No. 3 himself, the same being his defense, and the plaintiff should have been called upon to discharge the onus of proving only the second part of issue No. 4, i.e., whether defendant No. 3 is liable to pay the money received from the plaintiff company. Issue No. 4 is accordingly split up and reframed to read as follows:

4. Whether the defendant No. 3 was the booking agent of the defendant No. 1 company? OPD

4A. If the answer to the above issue is in the affirmative, whether defendant No. 3 is liable to pay the money received from the plaintiff? OPP

12. Adverting to the evidence adduced on issues No. 2, 4 and 5, in his affidavit by way of evidence, DW-1 Shri Pawan Arora asserted that the suit, as framed, was not maintainable as he was neither a necessary nor a proper party to the same. The plaintiff knew that he was only an employee of defendant No. 1. The defendant No. 1 was to arrange the exhibition and, for the booking of the space thereof, it had opened various offices in various parts of the world, including India. One such office had been opened, named as M/s.Expo Asia Exhibition Ltd., L-25A, Connaught Circus, New Delhi, and he (defendant No. 3) was engaged for the purpose of booking the space on behalf of defendant No. 1 along with other staff as per instructions given.

13. DW-1 Mr.Pawan Arora further stated on oath that he had not acted in his individual capacity to persuade the plaintiff to book the space and to part with the amount as alleged. In fact, he only acted for and on behalf of defendant No. 1 company and the plaintiff, after looking to the prospects of the exhibition, booked the space. It was the sole decision of the plaintiff to book the space in the exhibition. He could not be blamed for this. Further he stated that the plaintiff had issued the cheque in favor of defendant No. 1 company and, therefore, the liability, if any, was of defendant No. 1. The proceeds of the cheque were collected by the company and he being an employee had nothing to do with the said payment. He had written letters dated 2nd March, 1993 and 6th March, 1993 to the plaintiff under instructions received from defendant No. 1 company (Ex.PW-1/12 and PW-1/13 respectively) as also Ex.as DW-1/2.

14. Reliance was placed in his affidavit by way of evidence by DW-1 Mr.Pawan Arora on his letter of appointment, Ex.DW-1/1, to urge that he had no say in the defendant company and was only an employee. In paragraph-6 of his affidavit, he stated on oath that he had not received his own dues from the defendant No. 1 company which owed money to him as well. He further stated that he left the defendant No. 1 company in June, 1993 as per the terms & conditions of his appointment letter Ex.DW-1/1. He had always acted as an agent/employee of defendant No. 1 company and the plaintiff only entertained him as such. Hence there was no liability owed by him to the plaintiff nor the plaintiff had ever raised any demand against him nor any notice was issued to him.

15. Defendant No. 1, Mr.Pawan Arora was cross-examined at length by learned Counsel for the petitioner, but nothing emerged from his cross-examination to discredit him in any manner. In the course of his cross-examination, he categorically denied that defendant No. 2 was incorporated independently in India, and asserted that he had received the cheque on behalf of M/s.Expo Asia Exhibition Ltd., London (U.K) in the name of the company itself. He re-affirmed that the cheque amount was encashed in the account of the company and stated that he had been asked to spent the same on advertisement bills, which were raised in India for incurring the expenses of the full-fledged office functioning in India, which included telephone and electricity bills, salaries of employees, etc. He had been authorized on behalf of defendant company to open an account in the name of the company and the amount was realized through that account. He categorically denied the suggestion put to him that appointment letter (Ex.DW-1/1) had been fabricated by him and stated that Mr.Dimpy Sachdev, Director of the defendant company had given him his appointment letter. A suggestion was put to him that he had made mis-representation to the plaintiff company for misappropriating the money, but the same was categorically denied by him.

16. Apart from examining himself as DW-1, defendant No. 3, Mr.Pawan Arora produced in the witness box as his witness Mr.Vijay Gupta, Chartered Accountant, who filed his affidavit by way of evidence.

17. In his affidavit by way of evidence, DW-2 Mr.Vijay Gupta stated that he had been engaged by M/s.Expo Asia Exhibition Ltd. to look after their accounts, and, accordingly he had been maintaining the accounts of the said company for the period 1.4.1992 to 31.3.1993 through his firm. He further stated on oath that he had copies of the said accounts in his records. Only two suggestions were put to this witness in his cross-examination. The first suggestion was that he was never engaged by the defendants No. 1 & 2 to maintain their accounts and the second was that he was deposing falsely at the behest of defendant No. 3, Mr.Pawan Arora. Both these suggestions were categorically denied by this witness.

18. Adverting next to the evidence of the plaintiff on the aforesaid issues, the solitary witness examined by the plaintiff was PW-1, Mr.Tarun Chaturvedi. In his affidavit by way of evidence, he reiterated the averments made in the plaint. Relevant extracts of his affidavit pertaining to the issues being dealt with are reproduced hereinunder:

Defendant No. 3 Shri Pawan Arora had approached us, representing himself as Executive Director of M/s.Expo Asia Exhibition Ltd., Defendant No. 1....

...The plaintiff company in pursuance of agreement Ex.PW-1/3 paid the amount mentioned herein by way of cheque in favor of defendant....

...on behalf of defendant No. 1 a fax message dated 17th August, 1992 from defendant No. 4 was received that the exhibition had been postponed....

... In addition to the fax message, a letter on behalf of defendant No. 1 was also received from defendant No. 4 that the exhibition had been postponed....

...Defendant No. 1, however, did not refund the amount....

...There was a series of correspondence between the plaintiff company and defendant No. 1 company in respect of refund of the amount....

...Yet another letter dated 18th January, 1993 addressed to defendants No. 1 & 2 inviting attention of defendant No. 3 was written for refund of the amount along with interest. This letter is Ex.PW-1/10....

...A letter dated 22nd March, 1993 was received for and on behalf of defendants No. 1 & 2 under the signatures of defendant No. 3 for giving some more time to pay the amount. This letter is Ex.PW-1/12....

...A notice dated 22nd January, 1994 was sent to defendants No. 1 & 2. This notice is Ex.PW-1/19....

19. The whole drift of the above deposition of PW-1 Mr.Tarun Chaturvedi, sole witness examined by the plaintiff, it was contended by counsel for defendant No. 3, was that defendant No. 3 was only an agent of defendant No. 1 company, an appointee Executive Director, and no cause of action had arisen against the defendant No. 3. Thus, PW-1 categorically asserted that no legal notice had been issued to defendant No. 3 for refund of the amount and as a matter of fact legal notice (Ex.PW-1/10) had been issued to the company alone. PW-1 in his cross-examination also clearly stated that demands for recovery of money had been made not only from defendant No. 3 (Mr.Pawan Arora) but "from other officers as well, namely, Shri Banerjee and Pukhraj Singh". Not only this, Mr.Pukhraj Singh was admitted by the witness to be one of the directors of the defendant company. The witness further admitted that he had visited the premises of the defendant company a number of times and that the defendant company was maintaining "quite a good office". He stated that he (PW-1) had not been approached by defendant No. 3 for booking of the space, but it was their Branch Manager Mr.J.B.Murti, who had been approached for participation in the exhibition by Mr.Pawan Arora, defendant No. 3.

20. Significantly, Shri J.B.Murti, who had been approached by defendant No. 3 for booking of the space, has not appeared in the witness box to state on oath that defendant No. 3 had persuaded him to book the space, not on behalf of defendant No. 1 company, but on his own behalf. Significantly also, the suit though filed by Mr.A.M.Rao, Company Secretary of the plaintiff company, the said Mr.A.M.Rao has also not been examined by the plaintiff.

21. Then again, agreement in question which is dated 8th July, 1992 was signed for and on behalf of the plaintiff company by the then Chairman-cum-Managing Director, Mr.J.Alexender. Mr.J.Alexender has not been produced in the witness box to state on oath that the agreement was signed by defendant No. 3 in his individual capacity and not for and on behalf of defendant company, nor, as a matter of fact, PW-1 Mr.Tarun Chaturvedi stated that defendant No. 3 had not signed the agreement for and on behalf of defendant No. 1

22. On a query put to him, PW-1 Mr.Tarun Chaturvedi candidly admitted that he did not play any part in the decision making process and that the decision of participation in the exhibition was that of the management. He (PW-1) has been examined in his capacity as Assistant Manager (Sales), but, as is clear from his cross-examination, he had no idea of the date, time or month in which the space was booked nor he had any personal knowledge about the transaction. Those who had personal knowledge viz. Mr.J.Alexender, who signed the agreement, Mr.J.B.Murti, who allegedly had been approached by defendant No. 3 for booking of the space, Shri Pukhraj Singh (defendant No. 4), who had received the cheque for and on behalf of the defendant company, Mr.A.M.Rao, Company Secretary of the plaintiff company, who had signed and verified the plaint, were not produced in the witness box.

23. On a conspectus of the above evidence on record, I am of the view that it clearly emerges there from that defendant No. 3 was a mere employee of the defendant company, who had been appointed to book the space for the exhibition to be held by the defendant company in U.K. He was a booking agent simplicitor, glorified as "Executive Director". An employee of the company who neither received the cheque drawn in favor of the defendant company nor had anything to do with the proceeds thereof, which were credited to the account of the defendant company. I am fortified in coming to this conclusion from document Ex.PW-1/1, which is a special power of attorney, executed by Mr. V. Madhu, Managing Director of the plaintiff company in favor of Mr. A.M. Rao, Company Secretary of the plaintiff company, who signed and verified the plaint. The said document ex facie show that the intent of the plaintiff company was to institute the suit against the defendant company alone, but it having surfaced that the defendant company had gone into liquidation, the words " and others" after the words the defendant company were inserted in the special power of attorney, in four different places, in ink, in a desperate bid to recover money from the other defendants, including defendant No. 3.

24. In the course of hearing, Mr. Rajiv Garg, learned Counsel for defendant No. 3 raised a two-fold contention. First, that the defendant No. 3 was an employee and for the acts of an employee, in law, it is the principal who is liable; second, that even assuming defendant No. 3 to be the executive director of the defendant company, though strongly denying the same, a company is an entity distinct from its directors and shareholders and in absence of an instrument fastening liability, liability cannot be fastened even on directors of a company, unless malfeasance and misfeasance is established on the part of the said directors. In this context, reference was made by Mr. Rajiv Garg to the several decisions rendered by the Apex Court and this Court.

25. In Smt. Niranjan Kaur v. New Delhi Hotels Ltd. Ors. reported in AIR 1988 Delhi, this Court in paragraph-32 of its judgment defined a servant as follows:

32. A servant may be defined as any person employed by another to do work for him on the terms that he, the servant is to be subject to the control and directions of his employer in respect of the manner in which his work is to be done.

26. Reference was also made by this Court in the aforesaid decision to a judgment of the House of Lords in Lloyds v. Grace, Smith and Co., 1912 AC 716, wherein, the House of Lords, distinguishing Barwick v. English Joint Stock Bank (1967) 2 Ex.259, held that so long as the servant is acting within the scope of employment entrusted to him, his employer is liable for all frauds committed by that servant, whether for the benefit of the employer or for his own profit. Thus, even in case of fraud, as held by the House of Lords, it is the employer who is vicariously liable for the fraud committed by his employee, so long as the employee is acting within the scope of employment. The instant, however, is not a case where fraud or cheating on the part of the employee (defendant No. 3) is either alleged or proved.

27. Next, reliance was placed on a judgment of a Single Judge of this Court reported in Ajit Singh v. Ramesh Vohra 2006 (86) DRJ 374. In the said case, an application was filed under Order VII Rule 11(a) read with Order VI Rule-2 of CPC by defendant No. 2 praying for rejection of the plaint, alleging that on the pleadings of the plaintiff, no cause of action had been shown against defendant No. 2. While allowing the application of defendant No. 2 and rejecting the plaint qua defendant No. 2, the learned single Judge in paragraph-12 observed as follows:

...Plaintiff was, therefore, obliged to concisely state what was the agreement, if at all, between him and defendant No. 2. In the absence thereof, a stray line in para 7 of the plaint that it was also agreed between the parties cannot be read as a liability pleaded by the plaintiff qua defendant No. 2.

28. Regarding the second limb of Mr. Garg's argument viz., that the directors of the company cannot be fastened with ordinary contractual liability of the company, reference was made to judgments of this Court in Space Enterprises V. Sri Enterprises Ltd. and Steel Authority of India Ltd. v. Century Tubes Ltd. and Ors. . Both the aforesaid decisions were rendered in suits filed under Order xxxvII of the Code of Civil Procedure. In Space Enterprises (supra), this Court, while decreeing the suit against the defendant No. 1 company, rejected the plaint qua defendant No. 2 (director of the company) on the ground that there was no contract between the plaintiff and defendant No. 2 and, therefore, no cause of action arose against defendant No. 2. It was observed that the company is distinct from its directors and shareholders. Neither the shareholders nor directors can treat the company's assets as their own. Directors of a company are liable for misappropriation of company's funds and other misfeasance, but not for ordinary contractual liability of the company. The doctrine of lifting of the corporate veil, though could be applied in cases of tax evasion or circumventing of tax obligation, or to cases of perpetuating fraud or trading with the enemy, in the absence of such case, it would be totally improper and inappropriate to hold that the director has lost the privilege of limited liability, and has become directly liable to the creditor of the company.

29. In Steel Authority of India Limited (supra), while granting unconditional leave to defend the suit under Order xxxvII Rule 3(5) of the Code of Civil Procedure to defendant No. 3, a learned Single Judge of this Court, after noticing that defendants No. 2 & 3, Managing Director and Director respectively of defendant No. 1, had held negotiations for and on behalf of defendant No. 1 and issued 22 post-dated cheques totalling to Rs. 2,7,95,253/-, held that merely because defendant No. 3 was a director of defendant No. 1 would not make him liable for any amount due from defendant No. 1 to the plaintiff, more so, as the defendant No. 3 had not stood as a guarantor. It was further held that even the allegation that defendant No. 3 had signed some of the cheques drawn on the account of defendant No. 1 would not make him liable for any civil action for recovery of amounts due from defendant No. 1 to the plaintiff.

30. Reference was also made by Mr. Garg to the decisions , Steel Authority of India Ltd. v. Colet Steels Pvt.Ltd. and Ors. (1997) 7 Supreme Court Cases 181, Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Ors. 2003 III AD(Delhi) 750 Jyoti Tent House v. National Society for Eq.Opp. for Handicap in India; Om Wadhwa v. Jyoti Tent House and Usha Dongre v. Jyoti Tent House and 115(2004) Delhi Law Times 440 Radhika Narang and Ors. v. Karun Raj Narang and Ors. Reliance on the said judgments, in my view, is wholly misplaced as the same are not relevant to the matter in issue.

31. In view of the aforesaid discussion, the inevitable result is that no liability can be fastened upon defendant No. 3, who, as is abundantly clear from the evidence, had booked space for and on behalf of defendant No. 1 company. Issues No. 2 & 4 are accordingly decided in favor of defendant No. 3 and against the plaintiff. This being the position, issue No. 4A, onus of which was placed on the plaintiff, is decided against the plaintiff. Issue No. 5 does not survive for consideration.

32. Issue No. 3: Whether this Court has no jurisdiction to try the suit? OPD

This issue was not pressed at the time of hearing and no arguments on the same were addressed. However, keeping in view the fact that the agreement between the plaintiff and the defendant No. 1 was entered into at Delhi and payment of the cheque amount was received at Delhi, there can be no manner of doubt that this Court has territorial jurisdiction to entertain the suit.

33. Issue No. 6: Whether the plaintiff is entitled to the suit amount along with interest from the defendants? OPD

The plaintiff by adducing the evidence of PW-1 Mr. Tarun Chaturvedi and proving on records the documents Ex. PW-1/1 to PW-1/19, has proved beyond an iota of doubt that a sum of Rs. 15,42,750/- was advanced by the plaintiff to the defendants No. 1 for the purpose of booking the space for exhibition to be held by defendant No. 1 at London, U.K. and that on account of cancellation of the exhibition, the plaintiff became entitled to refund of the aforesaid amount along with interest thereon. No evidence in rebuttal was led by the defendants No. 1,2 & 4, who, as stated hereinabove, did not care to contest the suit. In view of the fact that liability of directors is limited one and the plaint contains no averment that defendant No. 4 had given any personal guarantee, no liability can be fastened on defendant No. 4 as director of defendant No. 1 company. Clearly, therefore, defendants No. 1 is liable for refunding the aforesaid amount to the plaintiff.

34. Consequently, a decree for the recovery of a sum of Rs. 22,25,500/- (Rs. 15,42,750/- plus Rs. 6,82,750/-) with interest pendente lite and future @ 10% per annum from the date of institution of the suit till the date of realization, to be calculated on the principal sum of Rs. 15,42,750/-, in favor of the plaintiff and against the defendant No. 1, is passed. Costs shall also be borne by defendant No. 1.

35. Suit stands disposed of accordingly.