Mr. Lalit Kumar Bagla vs Bindal Agro Chemicals Ltd. And ...
2007 Latest Caselaw 2226 Del

JUDGMENT

Sanjay Kishan Kaul, J.

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1. The battle of the 'Rolls Royce' - this title would truly epitomize this long drawn out battle for the last sixteen years between the parties. Mr. Lalit Kumar Bagla ('Bagla/Plaintiff' for short) sold a Blue Rolls Royce car bearing chasis No. ANH-24457 to M/s Bindal Agrochem Ltd ('Bindal/Defendant' for short). Bagla claims that the balance price is due while the Bindal and Oswals claim that the full price stands paid.

2. Bagla claims to be a reputed dealer in imported cars, in an era when imported cars were a great luxury and there were limited numbers of both sellers and purchasers. M/s Bindal Agrochem. Ltd is a public limited company while defendant No. 2/Mr.Abhey Oswal in CS(OS) No. 1477/1994 is the Managing Director of M/s Bindal Agrochem Ltd/defendant No. 1 in Page 3152 CS(OS) No. 1477/1994. Defendant No. 3 is the wife of defendant No. 2.

3. The controversy arose out of the initial transaction whereby it is alleged that on 27.09.1991 Mr. Abhey Oswal visited the premises of the Bagla and expressed his interest in buying a good imported Rolls Royce car. The plaintiff alleges that defendant No. 2 selected a 1986 model Rolls Royce car of Balmoral green colour. The car was initially imported in the name of one Mr. S.K. Anand. This appears to be so as at that time, the modus of importing such cars was when a person came on transfer of residence and had held the car as owner for a minimum period of one year. The possession is stated to have delivered to Mr. Abhey Oswal for an agreed sale consideration of Rs 1.31 crore. Bagla claims to have in his possession a blank cash receipt/form nos.29 and 30 duly signed by Mr.S.K.Anand, original owner, for purposes of further transfer of the car to some third person. Documents are stated to have been filled up by the plaintiff and handed over to defendant No. 2 and the sale price of Rs 1.31 crore was paid to the plaintiff by a cheque dated 27.09.1991 drawn on Citi Bank, New Delhi. The plaintiff also claims to have signed a covering letter in respect of delivery and confirmation of having sold and delivered the Rolls Royce and obtained confirmation from the defendants. It is alleged that insurance of the vehicle was completed on 30.09.1991 after physical verification of the engine and chasis by the United Insurance Company Ltd. In order to establish the proof of residence, telephone bill of defendant No. 1 dated 19.08.1991 was handed over to the plaintiff.

4. Defendants are alleged to have taken the car to Bombay and used the car for about one month. The defendants asked the plaintiff by letter dated 26.10.1991 to complete the process of registration and transfer of car. However, defendant No. 2 is alleged to have requested the plaintiff in the evening of 27.10.1991 to provide him with a better and a more attractive car manufactured by the same company i.e. Rolls Royce. The plaintiff happened to have in his possession and registered in his name 1988 model Rolls Royce car of metallic Blue bearing chasis No. 24457. The registration number of the car was DEU-1. Defendant No. 2 saw the car at Delhi on 27.10.1991 and wanted to acquire the same. Defendant No. 2 is thus stated to have requested the plaintiff for exchange of the Balmoral Green Rolls Royce with the latter model on payment of difference in price to the plaintiff. Request of defendant No. 2 is stated to have been acceded to by the plaintiff subject to the defendant nos. 1 & 2 being ready and willing to pay Rs 69 lakh more for the newer Blue Rolls Royce. This is stated to be on the basis that the price of 1988 model was Rs 2 crore. The plaintiff is alleged to have demanded the balance amount of Rs 69 lakh which the defendants agreed to pay and promised to send the same on or before 03.11.1991 to the plaintiff. Plaintiff and defendant No. 2 went to Bombay by evening flight of 27.10.1991. This visit is alleged to have been occasioned by the reason of the plaintiff having the requirement to take possession of the Rolls Royce car which had already been sold to defendant No. 1 on 27.09.1991. The plaintiff claims to have taken possession of the 1986 model in the late evening from the Chembur Factory of Sh.Abhey Oswal in Bombay. Thereafter the plaintiff flew back to Delhi.

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5. Plaintiff claims that in the morning of 28.10.1991 Mrs.Aruna Oswal, defendant No. 3, came to take delivery of the 1988 model Blue Rolls Royce car with chasis No. 24457, which was duly handed over. Plaintiff alleged that Mrs. Oswal assured the plaintiff that the balance money would be sent in due course on or before 03.11.1991. Plaintiff claims to have also handed over a letter dated 28.10.1991 requesting for the payment of balance amount by 03.11.1991 (Dhanteras Day), which was two days before Diwali. The documents pertaining to the 1986 model of Balmoral Green Rolls Royce car are stated to have been handed back to the plaintiff. The documents relating to the said car were also returned to the plaintiff including form Nos. 29 & 30. Signatures of defendants on Form 30 were duly cancelled. Transfer in respect of the Blue Rolls Royce car was to take place only on payment of balance price. Since the Blue Rolls Royce car was hypotheticated with the M/s ANZ Grindlays Bank, the defendants are stated to have requested for clearance of the same by the bank which was issued on 12.11.1991. Towards this object, Form 35 was executed by the plaintiff as also the NOC, which is stated to be in the possession of the plaintiff.

6. The plaintiff claims that the defendants instead of honouring their commitment started avoiding payment. Thus, the plaintiff was left with no option but to lodge a complaint with the Government of India on 27.11.1991 The defendants are stated to have changed their stand some time later alleging that they were the purchaser of the 1988 Blue Rolls Royce for a consideration of Rs 1.31 crore. Defendant also filed a suit against the plaintiff being CS(OS)no.4046/1991 for declaration and permanent injunction. Defendant No. 1 wanted the declaration to the effect that he was the owner of the Blue Rolls Royce and sought a restraint against the plaintiff from taking possession of the car. A further prayer was made seeking transfer of the vehicle by the Bagla in favor of Bindal.

7. It is in view of the aforesaid allegation that the suit has been filed for recovery of Rs 69 lakh besides interest at the rate of 24 per cent per annum from 28.10.1991 till date of realization being CS(OS) No. 1477/1994. The amount inclusive of interest till the date of filing of the suit is Rs.1,13,85,000/-.

8. The defendants contested the suit and filed a joint written statement. The defendants claim that they have paid the full consideration in respect of the Blue Rolls Royce car vide Pay Order No. 074035 dated 27.09.1991 drawn on the Bank of America, New Delhi in favor of the Bagla. The defendants claim that the ownership of the 1988 Rolls Royce Model had been initially transferred to the defendant company, but later on it was agreed between the parties that another model namely 1988 model Blue Rolls Royce car would be exchanged with the existing 1986 model Balmoral Green car. It is alleged that there is not even a whisper of any further amount to be paid. The defendants have specifically denied the letter dated 28.10.1991.

9. It has already been noticed above that CS(OS) No. 789 of 1996 (earlier registered as CS(OS) No. 4046 of 1991 ) was filed by defendant No. 1 and Page 3154 both the suits, CS(OS) No. 789 of 1996 and CS(OS) No. 1477/1994, were directed to be taken up together in pursuance to the same being consolidated.

10. In order to appreciate the controversy, it would be necessary to refer to this earlier suit.

11. The plaint filed by the Bindal proceeds on the basis that the transaction was only only for a Blue Rolls Royce car. Bagla is stated not to have taken steps for getting the vehicle transferred though Bindal also got the car insured. Since Bagla was unduly delaying the transfer of the car, the suit was filed with the said allegation. It is in the written statement filed by the Bagla in the said suit that the factum of the earlier transaction relating to Balmoral Green Rolls Royce car was disclosed and the averments made in the written statement are on the lines of the averments set out in CS(OS)1477/1994.

12. Interim orders had been passed in CS(OS) No. 4046/1991 directing status quo as to possession. In CS(OS) No. 1477/1994, Bagla prayed for interim orders and ultimately that application came to be decided by the Order dated 19.01.1995. In terms of the said interim orders, Bindal and Abhey Oswal were to retain the possession and not to use the Blue Rolls Royce car subject to the condition that they would deposit in the Court or pay Bagla an amount of Rs 34.5 (fifty per cent of the principal suit amount), furnish a written undertaking on affidavit that during the pendency of the suit the defendants shall not alienate, transfer encumber or part with possession of the car during the pendency of the suit, undertake in writing on affidavit that any liability arising by use of the car would be of the Bindal and Oswal and if the liability may fall upon the plaintiff, the defendants shall indemnify the plaintiff, undertake in writing on affidavit that in the event of the suit being decreed they shall pay the plaintiff within a period of one month from the date of decree the balance principal amount and interest calculated at the rate of 18 per cent from such date as may be appointed, consistent with the decree of the court. Bagla was directed to file an undertaking that in the event of suit being dismissed, he shall be liable to refund the aforesaid amount of Rs.34.5 lakh with interest at the rate of 18 per cent per annum from the date of his receiving the amount till the date of refund.

13. This Order was assailed by the Bindal and Oswal before the Division Bench in FAO (OS) No. 50/95 which was disposed of by the consent of the counsel for the parties with the directions that instead of paying the amount of Rs.34.5 lakh, a bank guarantee would be furnished to the satisfaction of the Registrar of this Court and would be kept alive till the disposal of the suits. Such a bank guarantee has since been furnished and has been kept alive.

14. In view of the consolidation of the suits, in pursuance to the Order dated 19.01.1995, the following issues were framed:

i) Whether the plaintiff Mr. Lalit Kumar Bagla sold the one Rolls Royce metallic Blue Car bearing chasis No. ANH 24457, 1988 model to the defendant M/s Bindal Agro Chemicals Limited on 28.10.1991? OPP

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ii) Whether in the absence of any written statement agreement between the parties for payment of extra 69 lakhs, the suit of the plaintiff Lalit Kumar Bagla deserves to be dismissed? OPP

iii) Whether the plaintiff Lalit Kumar Bagla has received full consideration for sale of one Rolls Royce metallic Blue Car? OPP

iv) Whether the Balmoral Green Rolls Royce Car 1986 Model was exchanged for a metallic Blue Rolls Royce Car of 1988 model and the defendant M/s Bindal Agro Chemicals had agreed to pay a sum of Rs 69 lakh as difference in price between the two Rolls Royce Cars?

v) Whether the suit has been filed falsely and vexatiously against defendant Nos. 2 & 3 by the plaintiff Lalit Kumar Bagla? OPP

vi) Whether the defendants have paid the full consideration for the Rolls Royce Blue metallic Car Model 1988 i.e. Rs.1.31 crore and no extra amount of Rs.69 lakh was ever agreed to be paid for the exchange of the Balmoral Green Car with Blue metallic Rolls Royce Car?

vii) Whether signature of Mr. Anil Bhalla has been forged on the letter dated 28.10.1991 by the plaintiff Lalit Kumar Bagla? OPP

viii) Whether the defendant Lalit Kumar Bagla in suit No. 789 of 1996 in the facts and circumstances of the case is illegally withholding the certificate of registration, certificate of insurance, original purchase invoice, customs clearance receipts and other relevant documents of the metallic Blue Rolls Royce Car bearing chasis No. ANH-24457, 1988 Model even after receiving the full consideration for the aforesaid car? OPP

ix) Relief.

15. The plaintiff stepped into the witness box as PW1 while Sh. Anil Bhalla appeared in the witness box as DW1. Both the Oswal and Bindal did not step into the witness box. Sh. Sudesh Sharma, Deputy Manager, United India Insurance Company was examined as DW2.

16. In order to appreciate the issues, it would be appropriate to first discuss the nature of evidence led by the parties. As stated above, Bagla stepped into the witness box as PW-1 to prove his case and affirmed to what was stated in the plaint. In the cross-examination he has stated that he used to purchase the cars outright or at times pay money on account and pay the balance final amount on the sale of the car. Such cars were then resold to the intending buyers. If the full amount had been paid, the car used to be in the name of Bagla or when the part amount is paid, the documents used to be kept duly signed by the seller in blank to be filled in at the time of final sale to the buyer. No written contract was stated to be entered into in respect of such transactions. On a specific query being posed Bagla stated that the price of Rolls Royce car was fixed depending upon the year of manufacture of the particular car, the year of import, the specific model of the car, etc. The witness has deposed that at the time of transaction of the Balmoral green Rolls Royce, Mr. Abhay Oswal asked one of the executives to sign on the reverse of Form-30, which was signed by the purchaser of the car. However, Forms 29 & 30 were kept by Bagla as it was claimed that Mr. Oswal wanted digit No. 13 affixed as the registration number on his car, which Page 3156 would have taken about a month. However, No. 13 could not be arranged and Forms 29 & 30 are stated to have been initially returned to Mr. Abhay Oswal. It is during this one month of time that Mr. Abhay Oswal is stated to have changed his mind and selected the blue colour Rolls Royce of 1988 model, imported in 1989 having registration number as DEU-1. The witness admitted that Mr. Abhay Oswal had got the green Balmoral Rolls Royce insured as he wanted a comprehensive insurance and the premium was directly paid by Bindal/Oswal. The witness has specifically averred that Mr. Abhay Oswal visited him at his Safdarjung Enclave office and had finalised the Exchange Deed of the Rolls Royce and agreed to pay Rs.69.00 lakh on or before Dhanteras. As security for the balance of Rs.69.00 lakh, the forms with Mr. Abhay Oswal for the green colour Rolls Royce were returned back and the duplicate keys of the blue Rolls Royce along with original certificate of registration were retained by Bagla.

17. Insofar as the insurance is concerned, the witness has stated that he did not remember the amount at which the blue colour Rolls Royce was insured and stated that it was a pool insurance of all cars lying in the stock of the dealer. On being asked to state as to what was the price of the blue colour Rolls Royce at the time of exchange, the witness stated that it would be Rs.2.00 crore and claimed that the same was on the basis that there was an increase in price by about 30 per cent for each year. It was further stated that the silver spur model in any case is more expensive, which was the model for the blue colour Rolls Royce. The witness claimed the same on the basis of a world car catalogue though he had admitted that he had not placed any such catalogue on record. The witness, however, affirmed that the price he was quoting was in any case the agreed price.

18. The witness has also stated on cross-examination that since he received full payment of the earlier Balmoral green colour Rolls Royce there was no occasion for him to give a two years later model without payment of any balance amount for the exchange of the car. In this behalf reference was made to the letter dated 28.10.1991 (Exhibit J) and it was claimed that Shri Anil Bhalla and Ms. Oswal had received the letter from Bagla. This letter, incidentally is the only document which evidences the balance amount payable and is disputed by the Bindal/Oswal. The cancelled documents in respect of the earlier car are stated to be as per Exhibit DW-1/A.

19. Shri Anil Bhalla appeared as DW-1. The said witness once again in the affidavit of examination-in-chief affirmed to what was stated in the plaint. On a specific question being posed in the cross-examination, the witness stated that he was deposing only on behalf of Bindal and not on behalf of Oswal. The witness was shown Exhibit A being the cash receipt dated 27.9.1991 and after taking time to verify the original, confirmed the same as also his signature on the document. The said witness was also shown a letter dated 26.10.1991 (Exhibit I) and after seeing the letter admitted that he has signed the same. Thereafter the letter dated 28.10.1991 (Exhibit J) was shown but the witness stated that his signatures were forged and he stood by the same even after reading the letter.

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20. The witness was shown Exhibit D (Form No. 29) and admitted that the signatures of Mr. Abhay Oswal appeared at places marked as A, B & C. At point D, there was a reference to Mr. S.K. Anand. The witness denied being aware of the year of manufacture of blue colour Rolls Royce though he admitted that it was in the possession of Bindal. The witness stated the reason for exchange of car as a representation by Bagla that his son was not willing to sell the car and thus in exchange of the Balmoral green colour car he would give a blue colour Rolls Royce. The witness, however, admitted to the fact that there was initial purchase of a Balmoral green colour car of 1986 model, which was exchanged with the blue colour silver spur Rolls Royce of 1988 model. On being asked whether his statement that Balmoral green colour car was never purchased was incorrect the witness admitted that the Balmoral green colour Rolls Royce was sold by Bagla to Bindal and after some days it was exchanged. The witness denied ever meeting Bagla's son where an intention of retaining the Balmoral green colour Rolls Royce could have been expressed.

21. The witness was shown the plaint in CS (OS) No. 789/1996, which was signed and verified by Shri T.N. Sahwney. The same was the position with the replication. The witness stated that it was actually Mr. Trilochan Singh Sahwney and an incorrect name has been shown both in the plaint and the replication.

22. The witness has denied knowledge about the fact whether Mr. Abhay Oswal was present when the possession of Balmoral green colour Rolls Royce was given to Bindal. The witness was confronted with the replication in CS (OS) No. 789/1996 where it was stated that the Balmoral green colour Rolls Royce was never purchased and stated that the said car was purchased though it was exchanged with the blue colour Rolls Royce. The witness denied knowledge about the factum of the plea of the son of the Bagla requiring the Balmoral green colour Rolls Royce being made in CS (OS) No. 789/1996.

23. The witness was specifically asked if Mr. Abhay Oswal and his wife were integrally connected with the transaction by and in between Bagla and Bindal and responded to the same that the same was correct.

24. The important aspect of the cross-examination of the said witness is that Mr. Bhalla was shown a document containing the signature at Mark A without showing the entire document and was asked whether the signature was of Mr. Bhalla. Mr. Bhalla denied the signature. On the complete document being shown the same turned out to be the cash receipt dated 27.9.1991 on which Mr. Bhalla admitted his signature. Mr. Bhalla then admitted his signature. This happened immediately after the witness had denied the letter dated 28.10.1991 (Exhibit J). The said letter was again put to the witness who persisted and denied the same.

25. Mr. Sudesh Sharma has appeared as DW-2 being the Deputy Manager of United India Insurance Company Limited and stated that the Rolls Royce car was insured for a value of Rs.1.31 crore. The car was bearing chasis No. NH 24457. The witness, however, denied having personally dealt with the policy or having any other personal knowledge. It was stated that the Page 3158 original documents were not kept with the insurance company and the proposal form and the office copies of the policies which were kept with the insurance company were destroyed being a very old record. This was stated to be in pursuance to an office order of the regional office of the insurance company. The photocopies which the witness had brought were stated to be provided by Bindal.

26. The aforesaid is the sum and substance of the evidence led by the parties. On a careful consideration of the pleadings and the evidence led the findings on the issues are being recorded hereinafter:

Issue No. 1:

Whether the plaintiff Mr. Lalit Kumar Bagla sold the one Rolls Royce metallic Blue Car bearing chasis No. ANH 24457, 1988 model to the defendant M/s Bindal Agro Chemicals Limited on 28.10.1991? OPP

27. In the suit originally filed being CS (OS) No. 789/1996, the factum of the sale of the green Balmoral Rolls Royce was not mentioned and when that case was set up in defense by Bagla, the same was sought to be denied in the replication. However, in the pleadings in CS (OS) No. 1477/1994 and the testimony of Exhibit D-1 leaves no doubt that the admitted position is that there was a sale of the Balmoral green colour Rolls Royce earlier which was exchanged for the metallic blue colour Rolls Royce subsequently. It, thus, cannot be doubted that the blue Rolls Royce was sold by Bagla. The question, however, remains whether the consideration of Rs.1.31 crore paid for the Balmoral green colour Rolls Royce was to remain the consideration of the blue colour Rolls Royce or whether anything extra had to be paid for the blue colour Rolls Royce and if so, the extent of the extra amount.

Issue No. 7:

Whether signature of Mr. Anil Bhalla has been forged on the letter dated 28.10.1991 by the plaintiff Lalit Kumar Bagla? OPP

28. Mr. Anil Bhalla has appeared in the witness box as DW-1. He has denied his signatures on the letter dated 28.10.1991. This is the only written document. The letter reads as under:

28th October 1991

M/s. Bindal Agro Chem Limited, 7th Floor, Antriksh Bhawan, 22, Kasturba Gandhi Marg, New Delhi-110001.

Dear Sirs, With reference to the discussion the undersigned had with your Mr. Abhay Oswal, I write to confirm having delivered to you one Rolls Royce Silver Spur Car bearing Chasis No. NH24457 and Engine No. 64470L4101/9 at a settled price of Rs.2,00,00,000/- (Rupees two crores only).

You had earlier on 27.9.1991, given a Pay Order No. 074035 in favor of Citi Bank, A/c Lalit Kumar Bagla, for Rs.1,31,00,000/- Page 3159 (Rupees one crore thirty one lacs only) which has now been credited to your account towards an a/c part payment for the above said Car.

It is agreed between us that either you will, in your name, get the permission from the concerned authorities that Mr. Lalit Kumar Bagla can retain his Registration Mark DEU-1 and a fresh Registration Mark be allotted to the above Car, failing which I will obtain an NOC to RTO, New Bombay, giving your Guest House Address, that the above Car has been shifted from Delhi to New Bombay and obtain new Maharashtra No. Thereafter, I will again apply for an NOC to New Bombay RTO that the Car is being sent back to Delhi and, hence, NOC be issued to the Delhi RTO, I will register the Car again in Delhi with Regn. Mark DEM-13 which you have selected of your choice and which now belongs to one of my Proprietorship Companies and No. DEM-13 will also be retained in my name in the same procedure like above and on arrival of the above Rolls Royce Car in Delhi, new Registration will be made in Delhi and DEM-13 allotted to the above Rolls Royce Car.

This whole procedure will take about 4-8 weeks.

As agreed between us, kindly send the balance amount of Rs.69.00 lacs (Rupees sixty nine lacs only) by Pay Order like before as promised by you by Dhanteras i.e. 3.11.1991, in full and final settlement of the above Rolls Royce Car now delivered to you.

Along with the above balance payment of Rs.69.00 lacs as above, kindly send the Receipt and other relevant documents given to you for the old green Rolls Royce Car to enable me to hand over the necessary relevant documents of the above Car after receiving the balance payment of Rs.69.00 lacs as above.

Thanking you,

Yours faithfully,

Sd/-

(Lalit Kumar Bagla) Endorsement:

Sd/-

(Anil Bhalla)

29. The aforesaid is the only written document where a reference has been made in respect of the extra payment of Rs.69.00 lakh claimed by Bagla. There was no reply to the said letter and as stated above Mr. Anil Bhalla denies having ever received the said letter and thus there was no occasion to respond to the same.

30. The aspect to be considered is whether the oral testimony of Mr. Anil Bhalla of denial of signature had withstood the cross-examination on this aspect.

31. The most important aspect is to see the probity of the testimony of Mr. Anil Bhalla. In this behalf the cross-examination recorded on 8.3.2007 is material when on being asked about the letter dated 28.10.1991, Mr. Bhalla denied the same. Mr. Bhalla was immediately shown another document with only his signature exposed. Mr. Bhalla, Page 3160 possibly assuming that the same may also be a disputed document, denied his signature. When the full document was shown, the same turned out to be a receipt dated 27.9.1991, which was an admitted document. Mr. Bhalla was again asked whether he was still insisting on denial of the letter dated 28.10.1991 and he persisted with the same.

32. In my considered view, a reading of the testimony of Mr. Bhalla leaves much to be desired. The witness has probated and reprobated on more than one occasion to suit the convenience of the case of the defendant. He wrongly denied his signature on an admitted document when the same was shown in succession to the disputed letter dated 28.10.1991. This itself shows that the witness is not deposing truthfully.

33. There is no doubt that none of the parties have led the evidence of any hand writing expert and if the signature of Mr. Bhalla are seen, at least with a naked eye, there appears to be no difference between the said signature and the signature on the document.

34. In view of the aforesaid, I am of the view that Mr. Bhalla has deposed falsely insofar as his denial of the signature on the document dated 28.10.1991 is concerned and he did receive the said letter, which mentions the aspect of payment of Rs.69.00 lakh for the blue colour Rolls Royce.

Issue Nos. 2, 3, 4 & 6:

Whether in the absence of any written statement agreement between the parties for payment of extra 69 lakhs, the suit of the plaintiff Lalit Kumar Bagla deserves to be dismissed? OPP

Whether the plaintiff Lalit Kumar Bagla has received full consideration for sale of one Rolls Royce metallic Blue Car? OPP

Whether the Balmoral Green Rolls Royce Car 1986 Model was exchanged for a metallic Blue Rolls Royce Car of 1988 model and the defendant M/s Bindal Agro Chemicals had agreed to pay a sum of Rs 69 lakh as difference in price between the two Rolls Royce Cars?

Whether the defendants have paid the full consideration for the Rolls Royce Blue metallic Car Model 1988 i.e. Rs.1.31 crore and no extra amount of Rs.69 lakh was ever agreed to be paid for the exchange of the Balmoral Green Balmoral Car with Blue Metallic Rolls Royce Car?

35. The aforesaid issues have to be examined together for the reason that the material to be considered to arrive at a finding is common. Not only that, the crucial strain running through the aforesaid issues arises from the ability of the plaintiff to establish that there was an agreement between the parties to pay an extra amount for the blue colour metallic Rolls Royce as compared to the Balmoral green colour Rolls Royce.

36. There is undisputedly no written agreement between the parties. In fact, there is no agreement ever for purchase of green colour Balmoral Rolls Royce. At the relevant stage, the parties had trusted each other and taking into consideration the nature of the deal, such transactions would not be uncommon. In such a situation the oral testimonies of the parties become material.

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37. The evidence on record undisputedly shows that the blue colour metallic Rolls Royce car model was of the year 1988 while the green colour Balmoral Rolls Royce car was of the year 1986. It is also not in dispute that the Balmoral green colour Rolls Royce was earlier sold to Bindal and even the delivery was taken. It is only after about a month that the said Rolls Royce car was exchanged for a blue colour metallic Rolls Royce car. If the probity of conduct of the parties is examined as also the testimonies on record there appears to be no reason why Bagla would agree to sell a model, which is two years new without receiving any extra consideration. Bagla had already received full payment for the Balmoral green colour Rolls Royce. There could thus be no object or incentive to exchange it without any extra price.

38. I find it difficult to accept the plea of the learned Counsel for the Bindal/Oswal that the basic agreement was only for sale of a Rolls Royce car and it is immaterial as to which model was being sold since it is a premier car and a high value is charged for just a status aspect of owning a Rolls Royce car. There is bound to be a variation in the price of the Rolls Royce car or for that matter any car between a model of one year as compared to a model of earlier or later year.

39. The respective stand of the parties has to be scrutinised insofar as the reason for such exchange is concerned. It is the case of the Bagla that the Oswal was desirous of taking a newer model and since the model was available the exchange took place for an extra consideration. On the other hand, the stand of the defendants is that the son of Bagla wanted the green colour Balmoral Rolls Royce car back and that is why the cars were exchanged. Bagla is a dealer in imported cars. He would be interested in the sale of the vehicles in his possession. It can hardly be expected that having sold a Rolls Royce car with full knowledge and having received the total consideration for the sale the son of Bagla would demand that the Balmoral green colour Rolls Royce should be returned and any other Rolls Royce sold to the purchaser. The reasoning is very difficult to accept on the possibility of the reason for the transaction. The plea put forth by Bagla seems to be credible that having used the green colour Balmoral Rolls Royce for some time, the Oswal decided that they wanted even a newer model. After all it was only a question of status of having a Rolls Royce car or a better model of a Rolls Royce car.

40. Bagla has stepped into the witness box as PW-1 and has affirmed his stand. On behalf of defendant No. 1, Bindal, Mr. Anil Bhalla appeared, who deposed on the basis of the record. The witness admitted that the Oswals were integral to the transaction. This is so since the Oswals really wanted the Rolls Royce car for themselves - albeit at the cost of a public limited company. It is, however, not for this Court to go into the justification of probity of the Oswals purchasing such a car as the cost to the company. Oswals especially Mr. Abhay Oswal was an integral part of the deal in choosing which Rolls Royce car he wanted to retain. There may have been some contributions on the part of his wife. Neither of the Oswals deemed it appropriate to step into the witness box to prove their stand. In this behalf Page 3162 reference may be made to the judgment of the Supreme Court in Iswar Bhai C. Patel @ Bachu Bhai Patel v. Harihar Behera and Anr. , relied upon by Bagla. The judgment has dealt with the consequences of a party not entering into the witness box and not presenting itself for cross-examination. It was held that an adverse presumption has to be drawn against such a party on the basis of principle contained in illustration (g) of Section 114 of the Evidence Act, 1872, which reads as under:

114. Court may presume existence of certain facts - The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.

Illustration

The Court may presume -

(g) That evidence which could be and is not produced would, if produced be unfavorable to the person who withholds it;

41. The Supreme Court referred to a number of judgments of various Courts in this behalf in paragraphs 16 to 25 and it would be useful to reproduce the same as under:

16. As early as in 1927, the Privy Council in Sardar Gurbakhsh Singh v. Gurdial Singh and Anr. , took note of a practice prevalent in those days of not examining the parties as a witness in the case and leaving it to the other party to call that party so that the other party may be treated as the witness of the first party. Their Lordships of the Privy Council observed as under:

Notice has frequently been taken by this Board of this style of procedure. It sometimes takes the form of a manoeuvre under which counsel does not call his own client, who is an essential witness, but endeavors to force the other party to call him, and so suffer the discomfiture of having him treated as his, the other party's, own witness.

This is thought to be clever, but it is a bad and degrading practice. Lord Atkinson dealt with the subject in Lal Kunwar v. Chiranji Lal (1), calling it "a vicious practice, unworthy of a high-toned or reputable system of advocacy.

They further observed as under:

But in any view her non-appearance as a witness, she being present in Court, would be the strongest possible circumstance going to discredit the truth of her case.

17. Their Lordships also took note of the High Court finding which was to the following effect:

It is true that she has not gone into the witness box, but she made a full statement before Chaudhri Kesar Ram, and it does Page 3163 not seem likely that her evidence before the Subordinate Judge would have added materially to what she had said in the statement.

They observed:

Their lordships disapprove of such reasoning. The true object to be achieved by a Court of justice can only be furthered with propriety by the testimony of the party who personally knowing the whole circumstances of the case can dispel the suspicions attaching to it. The story can then be subjected in all its particulars to cross-examination.

18. This decision has since been relied upon practically by all the High Courts. The Lahore High Court in Kirpa Singh v. Ajaipal Singh and Ors. AIR 1930 Lahore 1, observed as under:

It is significant that while the plaintiffs put the defendant in the witness-box they themselves had not the courage to go into the witness-box. Plaintiffs were the best persons to give evidence as to the "interest" possessed by them in the institution and their failure to go into the witness-box must in the circumstances go strongly against them.

19. This decision was also relied upon by the Bombay High Court in Martand Pandharinath Chaudhari v. Radhabai Krishnarao Deshmukh AIR 1931 Bombay 97, which observed as under:

It is the bounden duty of a party personally knowing the facts and circumstances, to given evidence on his own behalf and to submit to cross-examination and his non-appearance as a witness would be the strongest possible circumstance which will go to discredit the truth of his case.

20. The Lahore High Court in two other cases in 1934, namely, Bishan Das v. Gurbakhsh Singh and Anr. AIR 1934 Lahore 63 (2) and Puran Das Chela v. Kartar Singh and Ors. AIR 1934 Lahore 398 took the same view.

21. A Division Bench of the Patna High Court in Devji Shivji v. Karsandas Ramji and Anr. AIR 1954 Patna 280, relying upon the decision of the Privy Council in Sardar Gurbakhsh Singh v. Gurdial Singh and Anr. (supra) and the Madhya Pradesh High Court in Gulla Kharagjit Carpenter v. Narsingh Nandkishore Rawat have also taken the same view. The Madhya Pradesh High Court also relied upon the following observation of the Calcutta High Court in Pranballav Saha and Anr. v. Sm. Tulsibala Dassi and Anr. :

The very fact that the defendant neither came to the box herself nor called any witness to contradict evidence given on oath against her shows that these facts cannot be denied. What was prima facie against her became conclusive proof by her failure to deny.

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22. The Allahabad High Court in Arjun Singh v. Virender Nath and Anr. , held that:

the explanation of any admission or conduct on the part of a party must, if the party is alive and capable of giving evidence, come from him and the court would not imagine an explanation which a party himself has not chosen to give.

It was further observed that:

If such a party abstains from entering the witness box it must give rise to an inference adverse against him.

24. A Division Bench of the Punjab & Haryana High Court also in Bhagwan Dass v. Bhishan Chand and Ors. , drew a presumption under Section 114 of the Evidence Act that if a party does not enter into the witness box, an adverse presumption has to be drawn against that party.

25. Applying the principles stated above to the instant case, it would be found that in the instant case also the appellant had abstained from the witness box and had not made any statement on oath in support of his pleading set out in the written statement. An adverse inference has, therefore, to be drawn against him. Since it was specifically stated by respondent No. 2 in his statement on oath that it was at the instance of the appellant that he had issued the cheque on the account of respondent No. 1 in the Central Bank of India Ltd., Sambalpur Branch, and the appellant, admittedly, had encashed that cheque, an inference has to be drawn against the appellant that what he stated in the written statement was not correct. In these circumstances, the High Court was fully justified in decreeing the suit of respondent No. 1 in its entirety and passing a decree against the appellant also.

42. In my considered view, the present case is identical on the fact inasmuch as the Oswals have not taken the trouble of stepping into the witness box and have abstained from the same. Thus they have not made any statement on oath in support of the pleadings as set out in the written statement. The stand of Bagla was clear that they were the principal motivators for the transaction on behalf of the Bindal and even the witness of Bindal, DW-1 has deposed to the Oswals being an integral part of the transaction. Thus Oswals have failed to establish their case as set out in the written statement.

43. I am thus of the considered view that the conclusion to be drawn is that the exchange of the two Rolls Royce cars was for some extra consideration and thus Bagla has not received the full consideration for the sale of the blue colour Rolls Royce car.

44. It is not necessary or mandatory that there has to be a written agreement in this behalf as oral agreements are not uncommon and more so in this trade. Not only that even the agreement for the sale of Balmoral green colour Rolls Royce and the payment in pursuance to the said transaction was oral.

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45. The question, however, remains as to if something more had to be paid for the metallic blue colour Rolls Royce car, what is that more? Learned senior counsel for the defendants did seek to contend that even if it be assumed that something more had to be paid, it was for the plaintiff to establish the quantum which he has failed to do.

46. In respect of the aforesaid, there is only one document sought to be relied upon by the plaintiff/Bagla other than the oral testimonies of the parties. The document in question is the letter dated 28.10.1991 (Exhibit J), which was alleged to have been received by Mr. Anil Bhalla, who denied having signed the same in acknolwedgement of receipt and thus stated that there was no question of responding to the same as undisputedly there was no rebuttal of the letter. In this behalf the probity of the testimony of Mr. Anil Bhalla has to be examined, who was shown a document containing his signature at Mark 'A' without showing the entire document and denied the same as his signature. This occurred immediately after the witness had denied having signed the letter dated 28.10.1991 in acknowledgement of receipt of the same. On the complete document being shown, the same turned out to be a cash receipt dated 27.9.1991 on which Mr. Bhalla had admitted his signature and thus on being asked, naturally admitted his signature on the said document. On being again shown the letter dated 28.10.1991, Mr. Bhalla denied that he had signed the letter in token of the receipt.

47. The aforesaid shows that Mr. Bhalla had come with the pre-conceived mind to deny the letter dated 28.10.1991 but was trapped in the cross-examination by the learned Counsel for Bagla. In his anxiety to deny his signature, Mr. Bhalla also denied his undisputed signature. This itself throws doubt on the probity of the testimony of Mr. Bhalla in this behalf.

48. A perusal and comparison of the signature of Mr. Bhalla on the letter dated 28.10.1991, which is his undisputed signature do not show any variation at least to the naked eye. The parties have not led the evidence of hand writing expert.

49. I am thus of the considered view, that Mr. Bhalla has falsely denied having acknowledging the letter dated 28.10.1991. The said letter having been received on behalf of Bindal, the absence of response to the same itself shows that the plaintiff has set forth the correct transaction of payment of the extra amount of Rs.69.00 lakh. This has been the consistent stand of the plaintiff/Bagla, which he withstood in cross-examination.

50. Another important aspect that Bagla had stepped into the witness box while the Oswals who were the persons integral to the transaction failed to do so. Mr. Bhalla in his testimony stated that he was deposing only on behalf of Bindal.

51. I am thus of the considered view that weighing the oral testimony on record would show that credence has to be given to what has been stated by the plaintiff while the witness of defendant No. 1 has been deposing incorrectly. The other two defendants being the Oswals failed to step into the witness box.

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52. Thus the material on record is sufficient to come to the conclusion that there was an agreement to pay further sum of Rs.69.00 lakh to Bagla by the defendants which they have failed to pay.

Issue No. 5:

Whether the suit has been filed falsely and vexatiously against defendant Nos. 2 & 3 by the plaintiff Lalit Kumar Bagla? OPP

53. It is not in dispute that the payment for the Balmoral green colour Rolls Royce car was made by Bindal. The documentations were also in the name of Bindal. The same was the position with the blue colour Rolls Royce, which was sought to be exchanged of which the documents were retained by Bagla.

54. It is in view thereof the question arises whether the claim against defendants 2 & 3 is vexatious. I am unable to accept the plea that the suit is false and vexatious against defendants 2 & 3 for the reason that the plaintiff has categorically stated that though the car was purchased in the name of Bindal it is the Oswals, who were taking all the necessary action and the car was purchased in the name of the company for their benefit. There is really no rebuttal to this stand of the plaintiff affirmed in the evidence other than a general denial by Mr. Anil Bhalla, DW-1.

55. Mr. Anil Bhalla appeared as witness only for defendant No. 1 and he categorically stated so. The witness also categorically stated that defendants 2 & 3 were integral part of the transaction. Defendants 2 & 3 did not enter the witness box. I fail to appreciate how in such a situation can it be said that the suit filed against defendants 2 & 3 is vexatious. The question, however, remains whether the liability can be fastened on the said defendants 2 & 3.

56. Insofar as defendant No. 3 is concerned other than expressing her interest in a car or being involved with the delivery process there is no direct evidence on record to fasten liability on her. However, the same cannot be said for defendant No. 2, who is the Managing Director of defendant No. 1, M/s. Bindal Agro Chemicals Ltd. He was directly responsible for the transaction. The car was for his benefit. The car was only purchased in the name of the company. The plaintiff has categorically stated that it was on the assurances of Mr. Abhay Oswal that the earlier car was delivered on the payment received from Bindal as per his instructions and even the exchange took place at his behest.

57. Normally when a corporate entity enters into a transaction there is no reason to fasten the liability on any Director unless there are good grounds made out for the same. In the present case Mr. Abhay Oswal seems to have acted not only as a Managing Director of defendant No. 1 but also in his direct personal interest whereby a huge sum of Rs.1.31 crore (it may not look so huge now!) was invested only for purchase of a Rolls Royce car for the ego satisfaction and to show the status of Mr. Oswal. The expenses for this was no doubt incurred by defendant No. 1 company. Mr. Oswal did not step into the witness box.

58. I am thus of the considered view that it is a fit case where keeping in mind the nature of transaction the corporate veil must be pierced in respect Page 3167 of the transaction and the liability jointly and severally be fastened on defendant No. 2, Mr. Abhay Oswal.

Issue No. 8:

Whether the defendant Lalit Kumar Bagla in suit No. 789 of 1996 in the facts and circumstances of the case is illegally withholding the certificate of registration, certificate of insurance, original purchase invoice, customs clearance receipts and other relevant documents of the metallic Blue Rolls Royce Car bearing chasis No. ANH-24457, 1988 Model even after receiving the full consideration for the aforesaid car? OPP

59. The findings arrived at on the aforesaid issues show that Bagla was not paid the full value for the blue colour Rolls Royce car. Till such full payment was made, he was naturally entitled to withhold the documents in respect of the car, which he continues to hold till today. If full consideration had been received by Bagla there would have been no occasion for withholding the documents but the findings are to the contrary. The only conclusion, thus, is that Bagla was entitled to retain the documents as the full consideration was not paid for the blue colour Rolls Royce.

Issue No. 9: Relief.

60. In order to structure the relief which ought to be granted in the present suit, a reference has to be made to the order passed at the stage of disposal of the interim application as also to the disposal of the appeal filed against the said order. The defendants continued to enjoy the car though the documents remained with Bagla. Status quo as to possession had been directed. The order dated 19.1.1995 directed that the possession would continue to be enjoyed by the defendants on the condition of the defendants depositing in Court or paying to Bagla an amount of Rs.34.5 lakh. A direction was further issued that the defendants would furnish a written undertaking that during the pendency of the suit they shall not alienate, transfer, encumber or part with possession of the car. Defendants were also directed to give an undertaking that any liability arising by use of the car shall be of the defendants and if the liability may fall upon the plaintiff/Bagla, they shall indemnify the plaintiff/Bagla. An important aspect is the direction to file an affidavit in the event of the suit being decreed, the defendants shall pay to the plaintiff within a period of one month the balance principal amount and interest calculated @ 18 per cent per annum from such date as may be appointed, consistently with the decree of the Court. Simultaneously Bagla was directed to file an undertaking that in the event of his suit being dismissed he shall be liable to refund the above said amount of Rs.34.5 lakh with interest @ 18 per cent per annum from the date of his receiving the amount till date of refund.

61. The aforesaid order was assailed by Bindal and Oswal in FAO (OS) No. 50/1995, which was disposed of with the consent of the counsels for the parties that instead of paying the amount of Rs.34.00 lakh, bank guarantee would be furnished to the satisfaction of this Court and would be kept alive till the disposal of the suit. Thus the only modification was of substitution of the direction that instead of depositing or payment of the amount to Page 3168 furnishing the bank guarantee. The bank guarantee stands furnished and is alive. It may, however, be noticed that originally the bank guarantee was apparently furnished in FAO (OS) No. 50/1995, which was accepted on 11.2.1998. The bank guarantee was valid till 9.7.1998 and in terms of the said order it was made obligatory on the part of the defendants to get the same renewed periodically. Subsequently the bank guarantee was brought on record in CS (OS) No. 1477/1994 and as per the last extension dated 28.12.2006 is valid till 28.12.2007.

62. The aforesaid shows that the parties agreed to compensate each other with the interest @ 18 per cent per annum. No doubt the rates of interest prevalent would be lower now but that is the understanding as per the order passed on 19.1.1995 read with the order of the Division Bench. The defendants have to make payment within one month from the date of the decree along with the interest calculated @ 18 per cent per annum. This is the cost of this luxury litigation arising from the conflict of egos.

63. As far as the question of date from which the interest would be payable is concerned, it has to be taken into consideration the possession of the metallic blue colour Rolls Royce was taken on 28.10.1991. The plaintiff is claiming interest @ 24 per cent per annum from that date till date of decree and even paid court fee on the interest amount till date of decree. The interest is, thus, liable to be paid from 28.10.1991.

64. A decree is passed in CS (OS) No. 1477/1994 in favor of the plaintiff/Lalit Kumar Bagla and against defendants 1 & 2 jointly and severally in the sum of Rs.69.00 lakh together with interest @ 18 per cent per annum from 28.10.1991 till date of payment. CS (OS) No. 789/1996 is dismissed. The plaintiff/Lalit Kumar Bagla shall also be entitled to costs in both the suits.

65. Decree sheet be drawn up accordingly.

66. In case defendants 1 & 2 fail to make the payment of the decretal amount within one (1) month from the date of the decree as per the undertaking specified in paragraph 19(1)(iv) of the Order dated 19.01.1995, the Registry would encash the bank guarantee and remit the amount to the plaintiff/Bagla leaving it open to the plaintiff/Bagla to recover the balance amount through execution proceedings. On payment of decretal amount, Bagla is directed to transfer the car with duplicate keys to Bindal.