M/S. Percept Advertising Ltd. vs M/S. Kedia Castle Dellon ...
2009 Latest Caselaw 2282 Del

*               IN THE HIGH COURT OF DELHI AT NEW DELHI

+                            CS(OS) No.1252/1999

%                         Date of Decision: 27.05.2009

M/s. Percept Advertising Ltd.                                  .... Plaintiff

                       Through Mr.V.D. Costa, Advocate

                                   Versus

M/s. Kedia Castle Dellon Industries Ltd.                    .... Defendant

                       Through Nemo

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR

1.    Whether reporters of Local papers may be               YES
      allowed to see the judgment?
2.    To be referred to the reporter or not?                 NO
3.    Whether the judgment should be reported                NO
            in the Digest?



ANIL KUMAR, J.

*

1. This is a suit for recovery of an amount of Rs.2,07,68,394/-

alleged to be due from the defendant to the plaintiff for the services

rendered by the plaintiff as the advertising agent of the defendant in

terms of the letter of appointment dated 1st December, 1994.

2. The plaintiff is an advertising company having its registered office

at 67/69, M.K. Marg, Marine Lines, Mumbai -400002 and its regional

office at No.2, Santh Nagar, New Delhi -110048. The plaintiff has

averred that the plaint has been signed and verified by Shri I.D. Khera,

General Manager of the plaintiff company, who has been authorized to

sign and verify the plaint by virtue of the resolution dated 25th

February, 1999.

3. The Defendant is alleged to be company engaged in the business

of manufacturing and marketing alcohol beverages, having its registered

office at 6-B, Express Towers, 42A, Shakespeare Sarani, Calcutta -

700017. The defendant is also stated to have an office at J-66, South

Extension-I, New Dlehi-110049.

4. The plaintiff has alleged that the defendant had engaged them as

their Advertising Agent and consultant for advertising, Publicity and

Promotion with corporate and financial advertising for the House of

Kedia with effect from 1st December, 1994 on the terms and conditions

as stated in the letter of appointment dated 1st December, 1994 issued

by the Defendant. The plaintiff has alleged that during the course of the

work, various invoices were raised on the Defendant, however, the

defendant only paid the amount of some of the invoices or part of the

amount of some of the invoices. It is alleged that the amounts are,

therefore, still outstanding against the defendant.

5. The plaintiff has averred that they, on instructions from the

Defendant, had booked requisitions with the News Television India

Limited for advertisements of the products of the Defendant to be

telecasted on the channels of Star TV. The Defendant is also alleged to

have acknowledged and accepted the booking requisitions. The plaintiff

has contended that in its dealings with News Television India Limited, it

was merely acting as an agent and that the defendant had undertaken

to make payments directly to News Television India Limited. The

plaintiff has alleged that the Defendant has not only failed to make all

the amounts due to the plaintiff for the services rendered by them but

also has defaulted in making payments to the News Television India

Ltd.

6. The Defendant had issued 10 post dated cheques for 25 lakh

each to News Television India Ltd. in discharge of its liability towards

them and 2 cheques, dated 9.10.96 for Rs.25 lakh each in favour of the

plaintiff in partial discharge of its liability towards them. All the cheques

issued by the Defendant, including the cheques issued to the plaintiff

were dishonored on presentation for want of sufficient funds and even

the fresh cheques issued by the Defendant in favour of News India

Private Ltd. in lieu of the earlier cheques were once again dishonoured

on presentation. A complaint under Sections 138 & 141 of the

Negotiable Instruments Act, 1881 filed by the plaintiff company

regarding the dishonor of the two cheques dated 9th October, 1996 is

pending before the Chief Metropolitan Court.

7. The plaintiff has averred that News Television India Ltd. has

instituted a summary suit in the Bombay High Court against the

defendant as well as the plaintiff on the same transaction praying for a

decree of a sum of Rs.3,12,81,383 jointly and severally against the

defendant and the plaintiff. The plaintiff has contended that no amount

is due and payable by the plaintiff to News Television India Limited as it

was merely acting as an agent of the defendant while booking the

advertisement and the plaintiff cannot be held personally liable by the

contracts entered into on behalf of its dislcosed principal, the

defendant.

8. The plaintiff has contended that the defendant, vide a letter dated

23rd December, 1997 had accepted and acknowledged that an amount

of Rs.1,67,00,000/- is due and payable to the plaintiff and an amount

of Rs.2,27,00,000/- is due to the News Television of India Limited. The

plaintiff has alleged that the defendant has failed to pay the amount

due under the various outstanding invoices and that it had even failed

to pay the amount admitted and acknowledged by the defendant as due

in their letter dated 23rd December, 1997. The plaintiff has contended

that as on 30th April, 1999 an amount of Rs.2,07,68,394/- is

outstanding against the defendant, which amount includes the amount

of Rs.1,67,00,000/- which has been acknowledged by the defendant as

due and interest at the rate of 18% per annum on the amount of

Rs.1,67,00,000/- amounting to Rs.40,68,394/-.

9. Though an appearance was initially put in by the defendant, no

written statement was filed despite sufficient opportunities being

granted and he was subsequently proceeded ex-parte vide order dated

28th January, 2002.

10. In support of its case the plaintiff has filed the depositions of Shri

Balwant Singh Rawat, Manager Accounts of the plaintiff company, PW1;

Sri Harish Sharma, Manager, Accounts and Administration of the

plaintiff company, PW2 and Shri Nitin Beri, Group Head of the plaintiff

company, PW3. None of the witnesses has been cross examined by the

defendant.

11. PW1 has deposed that the plaintiff company was appointed as the

defendant's advertising agent and consultant for advertising, publicity

and promotion with corporate and financial advertising for the House of

Kedia with effect from 1st December, 1994 on the terms and conditions

as stated in the letter of appointment dated 1st December, 1994. He has

deposed that the original of the said letter of appointment was lost while

the plaintiff company shifted its office from 1, Esplanade, 160, Dr. D.N.

Road, Mumbai to 67/69, M.K. Marg, Marine Lines, Mumbai and

thereafter to 22 Raghubanshi Estate 11/12, Senapati Bapat Marg,

Mumbai. He has deposed that the copy of the said letter exhibited as

PW1/1 is a true copy of its original. He has also deposed that during

the course of the plaintiff company's work, it has raised various invoices

on the defendant, copies of which have been exhibited as Pw1/2 to PW

1/11. He has also identified the signatures on the invoices as his. It was

also deposed that the original office copies of the invoices were

misplaced by the plaintiff company while shifting its offices and cannot

be traced.

12. PW2 has deposed that Shri I.D. Khera, General Manager,

Commercial of the plaintiff company was duly authorized to sign and

verify the plaint vide company resolution dated 25.02.1999. The said

company resolution has been exhibited as PW2/1 and PW2 has

deposed that the said Sri I.D. Khera had signed the plaint in his

presence. He has deposed that, pursuant to the letter of appointment

issued by the defendant dated 1st December, 1994 and on instructions

from the defendant, the plaintiff company had booked requisitions with

News Television India Limited for advertisement of the products of the

defendant to be telecasted on the channels of Star TV. He has also

deposed that the plaintiff company had merely acted as an agent in its

dealings with the News Television India Limited and did not contract

personally with News Television India Limited. He has further deposed

that the defendant defaulted in making payments to the plaintiff for the

services rendered by the plaintiff as well as neglected in making

payments to the News Television India Limited directly on various

occasions. He has also deposed that the 10 post dated cheques of 25

lakh each issued in favour of News Television India Limited were

dishonored on account of paucity of funds. A letter dated 5.08.1996,

issued by the defendant and addressed to News television India Pvt.

Ltd. with a copy marked to the plaintiff, prove the factum of dishonor of

four of the above mentioned cheques, which have been exhibited as

PW2/2. He has also deposed that the defendant has issued two cheques

of 25 lakh each, dated 9.10.1996 which were dishonored and the said

cheques have been exhibited as PW2/3 and PW2/4. The legal notice

sent to the defendant on the dishonor of the cheques, the postal

registered receipt of the notice and the AD card received back bearing

the signature and seal of the defendant company have been exhibited as

PW2/5. PW2/6 and PW2/7 respectively. The criminal complaint filed by

the plaintiff company on the defendant's failure to pay the amount of

the cheques has been exhibited as PW2/8. PW2 has also deposed that

the Defendant, vide a letter dated 23rd December, 1997 sent to the

plaintiff company, had accepted and acknowledged that an amount of

Rs.1,67,00,000/- is due and payable to the plaintiff company and the

said letter was exhibited as PW2/9. PW2 has also identified the

signature of Mr. Ajay Kumar Kapoor, the authorized signatory of the

defendant on the above stated letter, deposing that he had seen Mr.

Ajay Kumar Kapoor signing during the usual course of

business/correspondences. PW2 has also deposed that the scope and

the relief sought in the complaint filed under Sections 138 & 141 of the

Negotiable Instruments Act, 1881 against the defendant is different and

distinct from the present suit.

13. The deposition of PW3 is to the same effect as that of PW1 and

PW2.

14. I have heard the learned counsel for the plaintiff and perused the

evidence led on behalf of the plaintiff. None of the plaintiff's witnesses

were cross examined. PW1 has categorically deposed that Shri I.D.

Khera was duly authorized to sign and verify the plaint on behalf of the

plaintiff company. The board resolution dated 25.02.1999 authorizing

Shri I.D. Khera to institute, sign and verify the plaint has also been

exhibited as PW1/1. PW1 has also identified Shri I.D. Khera's signature

on the plaint. In the circumstances it has been established the plaint

has been signed, verified and instituted by a duly authorized person on

behalf of the plaintiff company.

15. A copy of the agreement dated 1st December, 1994 entered into

between the plaintiff and the defendant whereby the plaintiff company

was appointed as the defendant's advertising agent and consultant for

advertising, publicity and promotion with corporate and financial

advertising for the House of Kedia, with effect from 1st December, 1994,

on the terms and conditions as stated in the letter of appointment dated

1st December, 1994 has been exhibited as PW1/1. Copies of the

invoices raised by the plaintiff company on the defendant for the

services rendered by the plaintiff company to the defendant have been

exhibited as PW1/2 to PW1/11 and PW3/1 to PW3/104. PW1, PW2 and

PW3 has categorically deposed that the original of the agreement dated

1st December, 1994 and the original office copy of the invoices were

misplaced when the plaintiff company shifted its offices from 1,

Esplanade, 160, Dr. D.N. Road, Mumbai to 67/69, M.K. Marg, Marine

Lines, Mumbai and thereafter to 22 Raghubanshi Estate 11/12,

Senapati Bapat Marg, Mumbai. I find no reasons to disbelieve the

depositions of PW1, PW2 and PW3.

16. The plaintiff company has also proved the letter dated 23rd

December, 1997, exhibited as PW2/9. PW2 has identified the signature

of Ajay Kumar Kapoor, the authorized signatory of the defendant who

has signed the said letter. In the said letter the defendant has

categorically admitted that there reconciled accounts show an

outstanding balance of Rs.394,10,747/- and that the amount of

Rs.1.67 crore which is due and payable by them to the plaintiff would

be paid shortly. In the said letter the defendant has also acknowledged

their liability to pay Star TV Network an amount of Rs.2.27 crores.

17. The inevitable inference that can be drawn from the above facts is

that an amount of Rs.1.67 crore is due from the defendant for the

services rendered by the plaintiff. The plaintiff has also claimed an

interest of 18% per annum on the above stated amount of 1.67 crore

from 23rd December, 1997 to the date of filing of the suit, i.e. 30th April,

1999. Clause 3 of the agreement dated 1st December, 1994 stipulates

that the payments would be cleared within 45 days of the appearance of

the advertisement and that beyond this credit period an interest of 18%

per annum will be payable. The invoices raised on the defendant by the

plaintiff had also clearly stipulated that an interest of 18% would be

charged if the bills were not paid within the due date. In the

circumstances it has to be held that the plaintiff is entitled for interest

at the rate of 18% per annum on the amount of Rs.1.67 crore payable

by the defendant to the plaintiff, amounting to Rs.40,68,394/-.

Therefore, the plaintiff is entitled for a total sum of Rs.2,07,68,394/-

from the defendant.

18. In the facts and circumstances the suit of the plaintiff is decreed

and a decree for recovery of a sum of Rs.2,07,68,394/- (Rupees two

crores, seven lakhs, sixty eight thousand, three hundred and ninety

four) is passed in favor of plaintiff and against the defendant. Pendent

lite and future simple interest at the rate of 8% per annum is also

awarded to the plaintiff against the defendant from the date of

institution of the suit till realization of the decreetal amount. Costs of

the suit is also awarded to the plaintiff against the defendant.

Decree sheet be drawn.

MAY 27, 2009                                             ANIL KUMAR, J.
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