Harish Mansukhani vs Ashok Jain
2008 Latest Caselaw 2028 Del

*                          IN THE HIGH COURT OF DELHI


                                 Judgment reserved on : October 15, 2008
%                            Judgment delivered on : November 19, 2008



+                                      RFA 4/2008
HARISH MANSUKHANI                                 ...... Appellant
                      Through:    Mr. Adarsh Ganesh, Advocate


                                  VERSUS


ASHOK JAIN                                        ...... Respondent
                      Through: Mr. K.C. Jain, 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. The appellant i.e. the defendant is aggrieved by the

judgment and decree dated 1.7.2007 passed by the learned

Trial Court whereby the suit filed by the respondent has been

decreed in sum of Rs.11,53,470.50 (Rupees Eleven Lacs Fifty

Three Thousand Four Hundred and Seventy and Paisa Fifty)

together with pendente lite and future interest @ 6% per

annum. The break up of the amount is Rs.9,61,941.05/- as the

amount shown as outstanding in the statement of account,

Ex.PW-1/1; Rs.1,92,816.68 towards sales tax due on account of

ST-35 forms not being supplied; and Rs.2,200/- as the notice

charges paid to the lawyer when the pre-suit notice of demand

was raised vide Ex.PW-1/3.

2. For sake of convenience we shall be referring to the

parties as the plaintiff and the defendant.

3. Case of the plaintiff was as pleaded in para 1 of the

plaint as under:-

"That the plaintiff is the proprietor of M/s. Jain Plastic Works and is a manufacturer of various items of plastic goods and is having its regd. Office at 9090, Gali Zamir Wali, Nawab Ganj, Azad Market, Delhi - 110006 and the defendant had been purchasing plastic goods on credit basis from the plaintiff and the sale transactions and its part payments were duly maintained and reflected in the statement of account maintained by the plaintiff, copy of which is annexure A."

4. The statement of account, Annexure A, reflects that

as on 30.5.2005 a sum of Rs.9,61,941.05 is payable being a

debit entry in said sum. It was further pleaded that despite

assurances, the defendant did not issue any ST-35 form for

which Rs.1,92,816.68 became payable towards sales tax.

5. The defendant disputed the liability to pay as

reflected in the statement of account relied upon by the plaintiff.

6. At the trial, besides examining himself as PW-1,

plaintiff examined his field officer, Sh. Rakesh, as PW-2.

7. The plaintiff proved the statement of account

referred to in the plaint as Ex.PW-1/1. 128 bills drawn in the

name of the defendant on various dates between 4.4.2004 till

2.5.2005 were collectively proved as Ex.PW-1/2. Lawyer‟s notice

dated 1.9.2005 raising the demand before suit was filed was

proved as Ex.PW-1/3. The notice served during trial under Order

12 Rule 8 was proved as Ex.PW-1/5. A notice of demand dated

4.7.2006 issued by the Sales Tax Authorities raising a demand

on the plaintiff in sum of Rs.1,91,529/- for sales tax due for the

assessment year 2004-05 was proved as Ex.PW-1/7. In respect

of no proof being with the plaintiff by way of acknowledgment

from the side of the defendant pertaining to receipt of the bills

Ex.PW-1/2 or the goods there-under, in harmony with the

pleadings in the plaint, PW-1 deposed that due to cordial

relationship and there being goodwill between the parties, the

precaution of obtaining signatures of the defendant or its

representative on the bills or when goods were delivered was

not observed. However, PW-2 Mr.Rakesh the field officer of the

plaintiff, examined as PW-2, deposed to the effect:-

"That all the goods supplied to the defendant either to himself or at this instructions directly to his customers were sent from our factory at Narela, Delhi. The defendant used to call me at his residence cum office at CB/14C, Shalimar Bagh, Delhi - 110088 and he used to tender his bill (of the same goods as being sent by us) with the instructions to further deliver the said goods to his customers/parties such as M/s. Arbo Pharmaceuticals, Kirti Nagar, New Delhi, M/s. Kamal Pharmaceuticals, Zakhira, New Delhi. But whenever the goods were to be supplied to one of his party at Gurgaon namely M/s. Pect India, Gurgaon or M/s. Lark Laboratories, Bhiwari, he used to request me to book the goods through road transport M/s. S.K.Golden Transport Company, Zakhira........ The defendant rarely received the goods at his office as there was no sufficient space to store the goods which were too big in size....... Since the defendant was one of valued customer of the plaintiff he never insisted to obtain the signatures of defendant on the carbon copies of such bills, only to maintain cordial relations between us."

8. The defendant examined himself as his witness and

deposed that he had to make no payment to the plaintiff as per

Ex.PW-1/1. In cross examination he admitted facing prosecution

for dishonour of cheques issued by him to the plaintiff.

9. On the basis of the evidence on record the learned

Trial Judge has decreed the suit. Four pronged reasoning can be

culled out from the decision of the learned Trial Judge. From the

fact that the defendant admitted having issued cheques to the

plaintiff and in respect whereof he was being prosecuted the

conclusion drawn is that the said evidence evidences

commercial transactions between the parties and led assurance

to the truthfulness of the case pleaded in the plaint more

particularly for the reason the defendant did not produce his

account books. Secondly the reason that the defendant did not

refute the notice of demand served by the plaintiff on 1.9.2005,

proved as Ex.PW-1/3. Thirdly that the defendant did not

produce the original of the 128 bills when called upon to do so

vide Ex.PW-1/5 i.e. the notice served by the plaintiff upon the

defendant during trial under Order 12 Rule 8 CPC. An adverse

inference has been drawn against the defendant for non-

production of the original bills. Lastly, the notice of demand

dated 4.7.2006, Ex.PW-1/7, has been held as proof of sales

effected by the plaintiff under the bills in question since the

sales tax authorities had raised a demand for payment of sales

tax qua said bills.

10. At the hearing held on 15.10.2008, learned counsel

for the appellant urged that the learned Trial Judge failed to

appreciate that the principle of law was that there can not be a

variance between pleading and proof and thus erred in ignoring

the fact that whereas case pleaded in the plaint was of goods

being delivered to the defendant, the evidence brought on

record was that most of the goods were supplied to third parties

allegedly at the instance of the defendant. Counsel urged that

the plaintiff did not even bifurcate the alleged delivery to the

defendant and the alleged delivery to the third parties stated to

be at the instance of the defendant. Counsel further urged that

the whole theory of receipt of bill(s) and the goods not being

obtained from the defendant due to the stated cordial relations

between the parties gets demolished by the fact that the goods

covered by most of the bills, as deposed to by PW-2, was made

to third parties, with whom, the plaintiff obviously had no

dealings, as per the version of the plaintiff, and thus it remained

unexplained as to why delivery of the goods to said third parties

as and when the same was effected was not got acknowledged.

Counsel further urged that the plaintiff ought to have examined

S.K.Golden Transport Company, Zakhira to establish that goods

were supplied through the said transporter to the parties named

in the statement of PW-2. Pertaining to Ex.PW-1/7 counsel

urged that the same was a notice of demand and not an

assessment order and the plaintiff failed to link the same to the

bills in question. On the issue of not producing the originals of

the 128 bills resulting in an adverse inference being drawn

against the defendant, learned counsel urged that an adverse

inference can be drawn against a party for not producing the

original documents only if it is established that the party

concerned was in possession of the documents. Non response

to the legal notice Ex.PW-1/3 resulting in an adverse inference

being drawn against the defendant was sought to be watered

down by learned counsel for the defendant who urged that non

response to a legal notice is a mere presumptive evidence and

the totality of the evidence has to be considered by the Court.

11. Before discussing the evidence on the record and the

pleadings of the parties, certain features of the 128 bills

collectively proved as Ex.PW-1/2 may be noted for the reason

they are important and relevant to appreciate the rival versions

keeping in view the circumstance that there is no evidence on

record to show that the defendant acknowledged the bills as

also the fact that there is no evidence of delivery of goods to the

defendant as per the particulars of the goods set out in the bills.

The first and the foremost feature is that at the rear of as many

as 88 bills the names of various parties have been written. We

have made a statement of the said 88 bills in a tabular form.

The same is as under:-

   Name of Company                              No.

1. RADICURE PHARMA ,B-117 OKHLA

                                                BILLS
2 A.K. LABORATORY ,BHIWARI (RAJASTHAN)

                                                BILLS
3 LARK LABORATORIES ,BHIWARI

                                                BILLS
4 GURGAON                                        1 BILL




 5 ARBO PHARMACY ,6/14 KIRTI NAGAR

                                             BILLS
6 K.P. BOTLA ,14- SHIVAJI ROAD ,ZAKHIRA      1 BILL

8 KAMAL PHARMA ,ZAHIRA,NEW DELHI

                                             BILLS
9 ABYSS PHARMA ,B-121 PHASE I, MAYAPURI

                                             BILLS
10 BIOTECH DRUG ,A-212, 215 CHAWLA

                                             BILLS
11 SUPER MAR ,F 90/25 OKHLA INDUSTRIAL

                                             BILLS
12 KUMAN PHARMA ,GURGAON

                                             BILLS
13 KUNDALI ,AMRO PHARMA,175-176 HSIDC        1 BILL

14 PET PHARMA                                1 BILL

15 MR. SURESH ,0-64 ,LAJPAT NAGAR ,DELHI - 1 BILL

16 PECT INDIA , GURGAON INDUSTRIAL AREA 2 BILLS

17 SALEX PHARMA ,NARELA

BILLS

BILLS

19 B-6 BADLI INDUSTRIAL AREA 1 BILL

20 KARNAL ASHOK GILAY, PRILAK BAZAR 1 BILL

21 COS MAS PHARMACEUTICALS 1 BILL

22 LEAGUE PHARMA 1 BILL

23 SHAKTI BOTTLE ,B4-556, TILAK BAZAR

BILLS 24 VARDMAN PACKAGING 1 BILL

27 YASHPAL & SONS, LUDHIANA 1 BILL

28 VARDHMAN PHARMA ,KARNAL 1 BILL

29 NATIONAL BOTTLE, TILAK BAZAR 1 BILL

30 ASHOKA BOTTLE , SHAHDRA 4BILLS

31 MAIDEN PHARMA, KUNDALI 1 BILL

12. The second feature of the bills is that the first bill

commences at serial No.2854 and the number continues till

serial No.3065. We clarify that between said serial nos. i.e.

2854 to 3065, 125 bills have been issued in the name of the

defendant. The bills till serial No.2950 have two telephone

numbers printed thereon being telephone number 3534267 and

3525263. On the bills from serial No.2951 onwards three

telephone numbers being 23525263, 23545700 and 27785600

have been printed. The last three bills have serial numbers 1, 2

and 3 thereon with telephone numbers as per the bills from

serial No.2951 onwards.

13. As held in the decision reported as AIR 1968 SC 1083

Om Prabha Vs. Abinash Chand it is now settled that a decision

cannot be based on facts not pleaded and no evidence would be

permissible to be led with regard to a fact which has not been

pleaded in its pleading by a party.

14. There is considerable merit in the contention urged

by learned counsel for the appellant that having embarked on

the journey by pleading in the plaint that goods were supplied to

the defendant the plaintiff could not prove that the goods were

supplied to third parties, but at the asking of the defendant.

That the goods were delivered to the defendant is a fact distinct

from the fact that goods were delivered to a third party, but at

the asking of the defendant. In this connection it assumes

importance that there is no evidence acknowledging receipt of

the bills by the defendant as also that there is no evidence to

establish that the goods covered by the bills were at all

delivered to the defendant or any third party to whom the

defendant allegedly directed delivery to be made. The

justification by the plaintiff of not having obtained any

acknowledgment due to cordial relationship between the parties

holds no water, when, as per the evidence of PW-2 most of the

goods were delivered to third parties. Obviously as per the case

attempted to be proved (without being pleaded) the plaintiff had

no commercial dealings with said third parties and obviously

maintained no cordial relations with them. Thus, normal

prudent business conduct of acknowledging delivery of goods

ought to have been followed and there being no evidence of the

same, the probability would be that no goods were supplied to

any third party at the asking of the defendant. As per the

testimony of PW-2 the services of a transporter was engaged to

deliver the goods to third parties outside Delhi. The said

transporter to whom freight must have been paid has not been

examined. The evidence of the witness of the plaintiff i.e. PW-2

as also of the plaintiff becomes shaky when we browse through

the 128 bills, 88 whereof have been noted in a tabular form

hereinabove. The names of 31 parties are written at the rear of

128 bills. The witness of the plaintiff only spoke about 4 out of

said 31 parties.

15. Mere raising of a bill and reflecting the same in a

statement of account is not good evidence without establishing

delivery of the goods under the bills. We may hasten to add

that in the instant case there is no evidence to even establish

that the bills were raised upon the defendant, in that, were ever

delivered to the defendant. There is no contemporaneous letter

proved on record in which the plaintiff made a grievance upon

the defendant that a huge outstanding amount was due from

the defendant to the plaintiff.

16. Pertaining to the fact that the defendant had issued

certain cheques to the plaintiff and was facing proceedings

under Section 138 of the NI Act 1881 we may note that there is

no evidence as to what were the number of the said cheques

nor is there any evidence of the value of the cheques. The only

evidence is a statement of PW-1 that certain cheques were

issued to him by the defendant and on being returned

dishonoured he had initiated criminal proceedings against the

defendant and the admission of the defendant of being so

prosecuted. Unfortunately, this Court is unable to appreciate

the dispute relatable to the cheques as neither party has cared

to state about the value of the cheques or their number. But,

there is some significant intrinsic evidence, unfortunately

against the plaintiff, which shows that only one cheque which

was bounced could form the subject matter of the dispute

relatable to Ex.PW-1/1. We note that as and when a cheque,

issued by the defendant to the plaintiff, was presented for

encashment, the same has been credited in the account Ex.PW-

1/1 and if a cheque was dishonoured the entry was reversed by

debiting the account in the same amount. Each and every

cheque, save and except one, which was dishonoured was

represented for repayment and cleared evidenced by the fact

that the second credit entry in Ex.PW-1/1 pertaining to the

cheque has not resulted in a reversal of the entry. From the

statement of account we find that only one cheque bearing

No.974238 dated 23.9.2004 credit entry whereof stands

recorded on said date, on being returned on 25.9.2004, has

remained outstanding with the entry being reversed in sum of

Rs.35,000/- on 25.9.2004. It was for the plaintiff to have led

cogent and clear evidence pertaining to the alleged dishonoured

cheques. We repeat, save and except stating that some of the

cheques issued by the defendant have bounced the plaintiff has

not bothered to speak a little more.

17. It remains a mystery as to why have the names of 31

parties been written at the rear of the carbon copies of 88 bills

out of 128 bills filed by the plaintiff before the learned Trial

Judge.

18. The totality of the evidence leans against the

plaintiff, but what is most fatal is the variance between what

was pleaded in the plaint and what was sought to be proved. No

doubt, the defendant did not produce his statement of account

but still, the plaintiff has to stand on his own legs to prove his

case.

19. It would not be out of place to record here that the

statement of account, Ex.PW-1/1, commences with a debit

opening balance of Rs.5,73,399/- as of 1.7.2004. The bills prior

to 1.7.2004 forming part of Ex.PW-1/2, total 28 in number.

Thus, the statement of account does not even detail the said 28

bills. Indeed, the feature of the bills as noted hereinabove being

that the bills till serial number 2950 have a 7 digit telephone

number printed thereon makes them susceptible inasmuch as

the said bills, being 59 in number, have ostensibly been issued

in the year 2004. It is a matter of common knowledge that with

effect from the year 2002 all telephone numbers in India were

prefixed with the digit „2‟ and in Delhi all telephone numbers

became 8 digit telephone numbers. The possible argument that

bills are got printed in bulk and the existing telephone number

as on date of the printing of the bills would be reflected in the

bills and thus the date on which the bill is issued becomes

irrelevant with relation to the telephone number printed thereon

cannot even be urged by the plaintiff for the reason as noted

above, there is continuity in the bill number as the immediate

next bill after 2950 is bill number 2951 and so on till the number

3065. Evidenced by the fact that the last 3 bills recommence

with the number 1 and bear further numbers 2 and 3 it is

apparent that the plaintiff would get printed fresh serial

numbers in one lot of the bills as and when proforma thereof

was got printed. Thus bills from serial No.2900 till 3100 ought

to have been printed together.

20. Ex.PW-1/7 is a writ of demand and not an assessment

order, as was correctly urged by the learned counsel for the

appellant. It does not refer to any bill, much less the bills in

question. It is relevant to note that the demand raised therein

pertains to the assessment year 2004-05 i.e. the financial year

1.4.2003 - 31.3.2004. The plaintiff forgot that the bills on which

he was relying are drawn on dates between 4.4.2004 till

2.5.2005. Obviously, the bills do not relate to the assessment

year 2004-05. Further, the bills span not one but two financial

years and hence would span not one but two assessment years.

Thus, Ex.PW-1/7 is no evidence of goods being supplied by the

defendant to the plaintiff as per the disputed bills.

21. An adverse presumption can be drawn against a

party who does not produce a document in his possession.

Thus, before a presumption can be drawn against a party called

upon to produce a document, it has to be proved that the

document production whereof was sought was in the possession

of the party concerned. The defendant had denied that any bill

was raised on him. Thus, without proving that the plaintiff had

raised the bills on the defendant, in that, without establishing

that physical custody of the bills was with the defendant, no

adverse inference could be drawn against the defendant.

22. No doubt, not responding to a legal notice is a piece

of evidence wherefrom an adverse inference can be drawn

against the noticee. But, the said adverse inference is no more

than presumptive evidence which by its very nature is weak

evidence. Where the totality of the evidence weighs in favour of

the person issuing the notice, non response to a notice by the

noticee can be put in the scales to reassure the Court that

contemporaneously the noticee kept silent evidencing a kind of

acquiescence. But, the quality of evidence led to prove the case

positively and its probative value has always to be kept in mind

and given primacy.

23. A plaintiff has to prove his case and stand on his own

legs. No doubt, the defendant did not produce his books of

account but that does not mean that the plaintiff must succeed

on said account.

24. The evidence led by the plaintiff is shaky. The

variance between what the plaintiff pleaded and attempted to

prove is a serious infirmity in the case of the plaintiff.

Unfortunately, the learned Trial Judge has eschewed reference

to the quality of the evidence led; the variance between

pleading and proof; as also has ignored certain essential

features of the evidence to which we have referred to in our

decision, thereby rendering the impugned judgment and decree

liable to be reversed.

25. The appeal is allowed. Impugned judgment and

decree dated 1.10.2007 is set aside. The suit filed by the

plaintiff is dismissed. We leave the parties to bear their own

costs all throughout.

26. If any money has been deposited by the appellant

pursuant to the order dated 9.1.2008 we direct the Registry to

return the same to the appellant together with accrued interest

if any.

PRADEEP NANDRAJOG, J.

J.R. MIDHA, J.

November 19, 2008 mm