Krishna Chaudhary vs Promila Bajaj
2008 Latest Caselaw 2173 Del

*                 IN THE HIGH COURT OF DELHI

                         Judgment reserved on : October 20, 2008
%                     Judgment delivered on : December 05, 2008


+                      RFA 786/2006


KRISHNA CHAUDHARY                             ..... Appellant
             Through:        Mr.S.K.Paul, Advocate

                       VERSUS

PROMILA BAJAJ                                 ...... Respondent
                  Through:   Ms.Jyotika Kalra, Advocate

CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE J.R. MIDHA


1. Whether reporters of local papers may be allowed
   to see the judgment?

2. To be referred to the Reporter or not?                 Yes

3. Whether judgment should be reported in Digest?         Yes


: PRADEEP NANDRAJOG, J.

1. Ms.Promila Bajaj, carrying on business as the sole

proprietor of M/s.Promila Leather Company is the protagonist.

Ms.Krishan Chaudhary, carrying on business as the sole

proprietor of M/s.H.K.International is the antagonist.

2. Promila Bajaj filed a suit against Krishna Chaudhary

seeking a decree in sum of Rs.5,92,906.20 and prayed that

pendente lite and future interest be granted to her @ 18% per

annum. As per the suit her firm had supplied goods to the

firm of Krishna Chaudhary between the month of August 1994

till the month of December 1995 and as per the statement of

account maintained by her, Rs.4,90,006.20 was payable in

respect of the outstanding bills as per the account closing

December 1995. Balance suit amount was stated to be the

pre-suit interest calculated @ 18% per annum on the sum of

Rs.4,90,006.20.

3. Krishna Chaudhary denied any business

transactions with Promila Bajaj and averred in the written

statement that Rajinder Bajaj, husband of Promila Bajaj, was

an agent of ITI Calcutta and that she had purchased goods

from ITI Calcutta through Rajinder Bajaj and had made certain

payments to him to liquidate the dues of ITI Calcutta. She

stated that she had returned certain goods to him but had not

received the credit adjustment thereof.

4. On the pleadings of the parties the basic issue

which arose for consideration was whether Promila Bajaj is

entitled to a decree as prayed for. This issue would obviously

embrace the issue whether the parties had business dealings.

Of course, if held entitled to money, issue of the rate of

interest payable on the outstanding amount also required to

be adjudicated.

5. We eschew reference to other issues framed which

arose out of technical defences and in respect whereof the

parties have not litigated in the appeal.

6. Promila Bajaj examined 4 witnesses, being her

husband Rajinder Bajaj who appeared as PW-1. She examined

one Hardev Singh, an officer from Punjab & Sind Bank, Guru

Harkishan Nagar as PW-2. J.R.Mehta, Manager, Indian Bank,

Defence Colony was examined as PW-3. Tajinder Singh, an

officer from Punjab & Sind Bank, Guru Harkishan Nagar was

examined as PW-4.

7. Krishna Chaudhary examined only one witness i.e.

herself.

8. Rajinder Bajaj proved Ex.PW-1/1 the power of

attorney executed by his wife in his favour to prosecute the

suit, which we note was filed under the signatures of Promila

Bajaj. 12 bills stated to have been raised upon

M/s.H.K.International were proved as Ex.PW-1/2 to Ex.PW-

1/13. The passbook issued by the banker of M/s.Promila

Leather Company i.e. Punjab & Sind Bank, Guru Harkishan

Nagar was proved as Ex.PW-1/14. The statement of account

of M/s.Promila Leather Company, for the financial year 1994-

95 was proved as Ex.PW-1/16 and that for the financial year

1995-96 was proved as Ex.PW-1/17. The balance sheet of

M/s.Promila Leather Company as on 31.3.2001 was proved as

Ex.PW-1/15. A notice dated 8.7.1996 stated to have been

sent to M/s.H.K.International by Regd. A.D. Post was proved as

Ex.PW-1/19 and another notice dated 28.2.1997 sent under

Regd. A.D. Post to M/s.H.K.International was proved as Ex.PW-

1/20. The envelopes containing the two notices which were

returned by the postal authorities were proved as Ex.PW-1/21

and Ex.PW-1/22.

9. At this stage we may note that we have perused

the Trial Court Record but have failed to locate Ex.PW-1/21

and Ex.PW-1/22. The witness stated that the cheques which

were received from the sole proprietary firm of Krishna

Chaudhary were duly reflected in the statement of account

maintained by M/s. Promila Leather Company and were also

reflected in the passbook Ex.PW-1/14.

10. It would be relevant to note that during cross

examination PW-1 stated that whenever bills were raised and

goods were delivered some or the other employee of

M/s.H.K.International used to sign on the office copy of the bill

in token of acceptance of the bill. He deposed that the bill

Ex.PW-1/3 bears the signature of one Mr. Bhatia; that the bills

Ex.PW-1/4 and Ex.PW-1/5 bears the signature of one Mr.

Sunny and that the bills Ex.PW-1/6 to Ex.PW-1/8 bears the

signature of Mr. Singh. It would also be relevant to note that

PW-1 was not cross examined with respect to the cheques

shown in the passbook as being credited or returned and

issued by the firm M/s. H.K.International. No suggestion was

put to him that these cheques do not pertain to the sole

proprietary firm of Krishna Chaudhary.

11. PW-2 produced the bank record pertaining to the

account of M/s.Promila Leather Company maintained by the

bank. He also produced the cheque return register

maintained by the bank. The statement of account was

proved as Ex.PW-2/1 and the cheque return register for the

period 31.8.1994 to 16.5.1995 was proved as Ex.PW-2/2. He

affirmed that Ex.PW-1/14 was the passbook issued by the

bank to M/s.Promila Leather Company being Ex.PW-1/14.

12. Relevant would it be to note that PW-2 was

partially examined on 1.10.2004. Thereafter he was never

summoned and hence his examination-in-chief has remained

inconclusive. Obviously, PW-2 was not subjected to any cross

examination.

13. It has also to be noted that the statement of

account produced by PW-2 maintained by the bank pertained

to current account No.79 in the name of M/s.Promila Leather

Company; the same account qua which identical entries stand

recorded in Ex.PW-1/14 being the passbook issued by the

bank to M/s.Promila Leather Company.

14. PW-4 also produced the statement of account,

being current account No.79, maintained by the bank in the

name of M/s. Promila Leather Company and proved the same

as Ex.PW-4/1. The cheque return register was proved by him

as Ex.PW-4/2. Even he affirmed that the passbook, Ex.PW-

1/14 was issued by the bank.

15. Relevant would it be to note that further

examination of PW-2 was deferred as complete record

pertaining to the cheque return register and the statement of

account of M/s.Promila Leather Company was not produced by

him and that PW-4 did the needful.

16. PW-3, J.R.Mehta produced the bank record

pertaining to current account No.570 in the name of M/s.

H.K.International and proved the same as Ex.PW-3/1 to Ex.PW-

3/7.

17. It may be noted that on cross examination, the

witness said that he could not tell whether M/s.

H.K.International is a partnership firm or a proprietary firm nor

did he know the names of the account holder.

18. We presume that by the later statement the

witness intended to say that he did not know who were the

partners of the firm, if M/s. H.K.International was a partnership

firm, or did not know the name of the proprietor thereof if the

firm was a sole-proprietary firm. No other meaning can be

assigned to his said statement because obviously the account

was in the name of M/s. H.K.International and hence it does

not make any sense for him to say that he did not know the

name of the account holder.

19. Krishna Chaudhary stepped into the witness box to

establish her defence and in her examination-in-chief simply

reiterated what she had stated in the written statement. She

proved no documents. Her cross examination is relevant and

hence is being noted in toto:-

"XXX by Sh. Anil Khosla Advocate for plaintiff.

My affidavit was prepared by my counsel under my instructions. I do no remember as to where and when same was prepared. I do not remember whether the affidavit was got attested before me or not. I do not remember as to where the affidavit was got attested. I am the proprietor of the firm M/s HK International since its inception. I know the plaintiff's attorney. It is correct that the account of my firm is duly maintained. I cannot say that whether the firm is registered with sales tax dept. or the sale tax is submitted or not. Vol. My husband was looking after the work of the firm. It is incorrect that any good was purchased by the firm from the plaintiff. It is incorrect that any goods were supplied to my firm by the plaintiff vide bills Ex.PW-1/2 to 1/3. I do not know the account number of my firm. I do not remember that my firm has any account in Indian Bank, Defence Colony Branch. It is wrong to suggest that I am

intentionally not disclosing the account number of the bank. It is wrong to suggest that the account number of my firm in Defence Colony branch at Indian Bank was 570. I do not know that some cheques were issued on behalf of my firm in favour of plaintiff towards outstanding payment due against the plaintiff during the period between 1994 to 1995. I do not know about the issue of the cheque from the account of our firm in favour of plaintiff as my husband was looking after the affairs. I have no knowledge about the cheque of Rs.50248/- in favour of the plaintiff issued from account of my firm. Similar is my reply in respect of another cheque of Rs.74475/-. I also do not know that a cheque of Rs.77000/- was returned from the bank which was issued in favour of plaintiff during the year 1984 vide cheque no.411452. I do not know as to whether the accounts were maintained by my firm or not. My son used to look after the work of firm along with my husband. My husband died in 7.10.1999. It is wrong to suggest that I have intentionally and deliberately not filed the accounts book on record because there was mentioning of dealings taken place between my firm and the plaintiff. It is wrong to suggest that an amount of Rs.490006.20P was due against the firm M/s HK International/def till Dec.95. I do not remember whether any notice was sent to me by the plaintiff in the year 1996 and 1997. It is correct that my son Deepak Chaudary was doing the entire work of the firm during the lifetime of my husband with him. It is wrong to suggest that I am deposing falsely."

20. The statement of account of M/s.Promila Leather

Company maintained by the Punjab & Sind Bank pertaining to

current account No.79, Ex.PW-4/1, the statement of account

maintained by Promila Bajaj, Ex.PW-1/16 and Ex.PW-1/17 as

also the statement of account of M/s.H.K.International being

CA No.570 maintained by the Indian Bank, Ex.PW-3/1 to

Ex.PW-3/7, revealed two very relevant entries pertaining to

two cheques issued from the account of M/s.H.K.International

maintained by Indian Bank, in sum of Rs.50,428/- on

2.11.1994, and a cheque issued on 8.9.1994 in sum of

Rs.75,475/- from the said account, which were duly credited in

the account of M/s.Promila Leather Company.

21. Decreeing the suit and granting interest @ 12% per

annum on the sum of Rs.4,90,006.20 with effect from

1.1.1996 till realization, two principal reasons have been given

by the learned Trial Judge. Firstly that Krishna Chaudhary did

not produce her account books pertaining to the alleged

transactions with ITI Calcutta and failed to establish that the

cheques which she had issued were handed over to the

husband of Promila Bajaj and the beneficiary of the cheuqes

was ITI Calcutta. For non-production of the account books an

adverse inference has been drawn against Krishna Chaudhary.

The other reason, which appears to be a more weighty reason,

is that the two cheques in sum of Rs.50,428/- and Rs.75,475/-

shown credited in the account of M/s.Promila Leather

Company and debited in the account of M/s. H.K.International,

the debit and credit entries being recorded in the respective

statement of accounts maintained by the banker of M/s.

Promila Leather Company and the banker of M/s.

H.K.International, were conclusive evidence of business

transactions between the two firms. With reference to the

cheque return register of Punjab & Sind Bank, the learned

Trial Judge has noted that certain cheques issued from the

account of M/s.H.K.International maintained with Indian Bank

were returned dishonoured and that the cheques were drawn

in the name of M/s. Promila Leather Company. The conclusion

drawn is that the defence stood falsified from the said

documentary evidence.

22. Learned counsel for the appellant urged that the

claim of Promila Bajaj is false, evidenced by the fact that the

statement of account produced by Promila Bajaj evidenced

that by 1st August, 1994, Rs.90,930/- was due and payable but

a cheque in sum of Rs.70,470/- was received. Counsel urged

that it was unexplainable as to why a cheque in a lesser

amount was received by Promila Bajaj. Counsel further urged

that the cheque in question was obviously presented for the

first time on 18.7.1994 and was returned dishonoured on

19.7.1994 as evidenced from the cheque return register.

Inference sought to be drawn was that the cheque was indeed

towards advance payment. Counsel urged that a pay order in

sum of Rs.1,00,000/- was admittedly received by Promila Bajaj

on 27.8.1994 and credited in the account maintained by her

firm pertaining to M/s.H.K.International. Counsel wondered

why not for Rs.90,930/-, the amount outstanding as on

1.8.1994. Pertaining to the cheque in sum of Rs.75,475/-

which stands duly credited in the account of M/s.Promila

Leather Company and debited in the account of

M/s.H.K.International, counsel urged that the statement of

account Ex.PW-1/16 and Ex.PW-1/17 revealed that in the

month of September 1994 goods worth Rs.75,475/- were

supplied evidenced by the bill, Ex.PW-1/4 and the bill Ex.PW-

1/5; the total thereof is Rs.75,475/-. Counsel urged that it was

obvious that the cheque in question was towards payment of

the said two bills. Counsel urged that if the earlier bills i.e. the

bill Ex.PW-1/2 and Ex.PW-1/3 were totalled along with the

amount shown payable under the bills Ex.PW-1/4 and Ex.PW-

1/5, total amount payable comes to Rs.1,75,475/-. Counsel

urged that it becomes clear that the payment of Rs.1,00,000/-

by means of the pay order and Rs.75,475/- by means of a

cheque total amount payable under the said four bills stood

squared up.

23. Similarly pertaining to a cheque issued by Krishna

Chaudhary in sum of Rs.1,38,216/- on 15.9.1994 counsel

urged: why was the cheque for a specific figure and not a

round figure. Similarly, same issue was predicated qua

cheque in sum of Rs.74,285.76, a cheque in sum of

Rs.1,26,352/-, a cheque in sum of Rs.75,000/-, a cheque in

sum of Rs.77,000/-, a cheque in sum of Rs.1,55,000/- and

another cheque in sum of Rs.40,000/-, all of which were

returned dishonoured.

24. In sum and substance, contention of learned

counsel for Krishna Chaudhary was that Promila Bajaj did not

explain the said cheques.

25. The argument of learned counsel for Krishna

Chaudhary has to be noted and rejected for the simple

reason, any argument which is speculative in nature cannot

form the foundation of a submission. We have gone through

the testimony of the witnesses of Promila Bajaj and in

particular her attorney Rajinder Bajaj. Krishna Chaudhary

never subjected any witness and in particular Rajinder Bajaj to

any cross examination pertaining to why said cheques were

received by Promila Bajaj. Had she done so the witnesses

would have responded to the questions. It is settled law that

if an adverse inference has been drawn with respect to the

evidence of a witness, in cross examination, the witness

concerned has to be questioned on a matter of fact. May be,

satisfactory answers are given. If not, only then would the

Court be justified in drawing an adverse inference against the

witness or his testimony.

26. Obviously, in view of the defence taken by Krishna

Chaudhary of a total denial of any dealing, consistent with the

said defence (which is proved to be obviously false), she

chose not to cross examine any of the witness of Promila Bajaj

with respect to the cheques issued from the account of

M/s.H.K.International, which were duly honoured as also the

cheques which were returned dishonoured. Thus, learned

counsel for the appellant cannot succeed on the strength of

the arguments as noted above.

27. It would not be out of place to record that on being

cross examined, Krishna Chaudhary denied knowledge of the

banker with whom she was maintaining an account in the

name of her sole proprietary firm. It is also relevant to note

that in her examination-in-chief, Krishna Chaudhary never put

up a case, with respect to the cheques in question, as was

sought to be argued in appeal. Indeed, an adverse inference

has to be drawn against Krishna Chaudhary for not producing

her account books and not producing her banker if there was

any other than Indian Bank Branch at Defence Colony.

28. It is true that PW-3, the Manager of Indian Bank

who produced the statement of account of

M/s.H.K.International failed to disclose the name of the sole

proprietor of the firm M/s.H.K.International, but that does not

detract from the fact that the said account was indeed

pertaining to the sole proprietary firm of Krishna Chaudhary,

evidenced by the fact that PW-1 was not cross examined,

much less his testimony challenged, with respect to the

entries in the statement of account maintained by M/s.Promila

Leather Company pertaining to M/s.H.K.International, being

Ex.PW-1/16 and Ex.PW-1/17 which record credit entries on

payment being received from M/s.H.K.International, the sole

proprietary firm of Krishna Chaudhary. The witness

categorically deposed that the cheques were drawn on the

account of M/s.H.K.International, the sole proprietary firm of

Krishna Chaudhary. No suggestion was put to the witness

that the firm M/s.H.K.International referred to by him was not

the sole proprietary firm of Krishna Chaudhary.

29. As noted by us, PW-1 gave the names of three

employees of the firm M/s.H.K.International who received

some of the bills. We note that Krishna Chaudhary, in her

examination-in-chief never disclaimed that the said three

persons namely Mr.Bhatia, Mr.Sunny and Mr. Singh were not

her employees.

30. We concur with the view taken by the learned Trial

Judge that the evidence on record establishes business

transactions between the parties. We concur with the view

taken by the learned Trial Judge that Krishna Chaudhary failed

to prove any dealings between her firm and ITI Calcutta much

less entrusting any cheques to Rajinder Bajaj beneficiary

whereof was ITI Calcutta, much less the fact that any cheque

was misused.

31. On the issue of interest the learned Trial Judge has

granted interest @12% per annum on the sum of

Rs.4,90,006.20 which we find is fair and reasonable.

32. We find no merit in the appeal.

33. The same is dismissed with costs.

PRADEEP NANDRAJOG, J.

J.R. MIDHA, J.

December 05, 2008 mm