M/S Three Star Paper Mills Pvt. ... vs M/S Dewan Kraft System Pvt. Ltd.
2009 Latest Caselaw 4333 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

                        + RFA No. 51/1998

                                        Date of decision : 27.10.2009
IN THE MATTER OF :

M/S THREE STAR PAPER MILLS PVT. LTD.              ..... Appellant
                  Through: Mr. R.K. Jain, Advocate with
                  Mr. Vikas K. Chadha, Advocate

                  versus

M/S DEWAN KRAFT SYSTEM PVT. LTD.                             ..... Respondent
                 Through: Nemo

CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

     1. Whether Reporters of Local papers may
        be allowed to see the Judgment? No.

     2. To be referred to the Reporter or not?      No.

     3. Whether the judgment should be
        reported in the Digest? No.

HIMA KOHLI, J. (ORAL)

1. The present appeal is directed against the judgment and

decree dated 10.07.1997 by which, the suit for recovery of

Rs.66,990/- instituted by the respondent against the appellant was

decreed with costs alongwith pendent lite and future interest @ 18%

per annum till realization.

2. Briefly stated, the facts of the case are that in the year

1990, the respondent/plaintiff had instituted a suit for recovery of

Rs.66,990/- against the appellant (defendant in the court below). The

case of the respondent/plaintiff as set out in the plaint was that it was

a manufacturer and supplier of modern fibre recovery cum effluent

treatment system and flotation machinery. It was averred that the

aforesaid goods were sold by the respondent/plaintiff to the

appellant/defendant on different dates as set out below:-

(a) Bill No. 28 dated 15.10.1987 for Rs.1,76,800/-

(b) Bill No. 29 dated 16.10.1987 for Rs.31,200/-

(c) Bill No. 30 dated 16.10.1987 for Rs.25,000/-

3. Sales Tax of Rs.1,000/- was added to the aforesaid Bill No.

30, making a total sum of Rs.2,34,000/-. The respondent/plaintiff

further stated that out of the aforesaid amount of Rs.2,34,000/-, it

had received payment of Rs.2,04,000/- from the appellant/defendant,

thus leaving a balance sum of Rs.43,500/-, as payable. As the

appellant/defendant is stated to have failed to make the payment

despite reminders, the respondent/plaintiff instituted the aforesaid suit

in the trial court claiming principal amount of Rs.43,500/-, along with

interest thereon calculated @18% per annum, amounting to

Rs.23,490/-, thus totalling to Rs.66,990/-. The appellant/defendant

contested the suit and denied that any amount was due or payable by

it to the respondent/plaintiff. After the pleadings in the suit were

completed, documents filed and evidence led by the parties, the trial

court passed the impugned judgment and decree dated 10.07.1997,

decreeing the suit in favour of the respondent/plaintiff. Aggrieved by

the said judgment, the appellant/defendant preferred the present

appeal.

4. At the outset, counsel for the appellant/defendant draws

the attention of this Court to the order dated 29.04.1999 passed in the

present appeal. The aforesaid order is reproduced hereinbelow:

"Admit.

Counsel for the respondent states that so far as the decision on issue No. 10 is concerned, since „C‟ Forms had been supplied in the Court itself, therefore the decision on issue No. 10 has to be modified.

We have perused the proceedings on 7th February, 1992 which show that two „C‟ Forms pertaining to Bill No. 28 and 29 were supplied to the plaintiff (present respondent) in the Court itself. Therefore, there was no question of awarding any amount for the same.

For that reason conclusion of the Trial Court on issue No. 10 requires to be modified to the extent that since „C‟ Forms were supplied the plaintiff i.e. present respondent would not be entitled to any amount on this count. Let appellant deposit the amount of Rs.25,000/- i.e. the amount of the bill No. 30 alongwith interest as awarded by the Trial Court on that amount. On deposit of this amount execution of decree shall remain stayed."

5. Counsel for the appellant/defendant submits that in view of

the aforesaid order dated 29.04.1999, the grievance in the present

appeal is now confined to the findings returned by the trial court in

respect of issue No.3, which pertains to Bill No.30 and issue No.11 in

respect of the rate of interest payable. He submits that the findings

returned by the trial court in respect of Bill No.30, and the rate of

interest, covered by issues No.3 & 11 respectively are erroneous and

require interference. Issues No.3 and 11 framed by the trial court are

as below :

"3. Whether the plaintiff had supplied goods to the defendant against bill No. 30? OPP"

11. Whether the plaintiff is entitled to interest, if so, at what rate and to what amount? OPP"

6. Counsel for the appellant/defendant submits that the trial

court erred in relying on the deposition of PW1, Shri Deepak Dewan,

who appeared on behalf of the respondent/plaintiff, while completely

overlooking the deposition of DW1, Shri Jagmohan Chawla, who

appeared on behalf of the appellant. He submits that the observation

of the trial court that the statement of DW1 was full of contradictions

and was evasive on material point is not borne out from a perusal of

his testimonial. He contends that the respondent had failed to

establish that the goods, subject matter of Bill No.30 were ever

delivered to the appellant and having failed to discharge the said onus

placed on it, issue No.3 ought to have been decided in favour of the

appellant/defendant.

7. To examine the aforesaid submission of the learned counsel

for the appellant, this court has gone through the trial court record,

particularly, the evidence adduced on behalf of the respondent,

namely, the deposition of PW1 juxtaposed against the statement of

DW1, made in rebuttal on behalf of the appellant. Apart from above,

the relevant documents, including, Bill No.30 (Ex.PW1/5), packing list

A (Ex.PW1/7), letter dated 12.07.1988 issued by the respondent to the

appellant (Ex.PW1/6) have also been examined in the light of the

findings returned by the trial court in respect of issue No.3.

8. Shri Deepak Dewan, PW1 categorically deposed in the

witness box that the goods, subject matter of Bills No. 28, 29 and 30

were sent to the transporter for being delivered to the

appellant/defendant. Copies of the invoices raised by the

respondent/plaintiff on the appellant/defendant are part of the

documents filed on the record and marked as Exhibits PW1/3 to

PW1/5. It was stated that the goods were sent through a transporter,

whose name is mentioned in Ex.PW1/5. A perusal of the said

document shows that not only was the name and address of the

transporter endorsed on the invoice, but the truck number was also

indicated on the said invoice. The said invoice was duly received and

it bears a signature of the recipient in urdu language, marked "B".

PW1 asserted that the said goods were received on behalf of the

appellant by a person, who signed the invoice in his presence, at Mark

"B". Reference was made by him to a letter dated 12.07.1988 issued

by the respondent/plaintiff to the appellant/defendant (Ex.PW1/6). In

the said letter, the respondent/plaintiff not only mentioned Bill No.29,

but also Bill No.30 and noted the fact that the appellant/defendant had

acknowledged receipt of both the Bills No.29 and 30. Apart from the

aforesaid bills, PW1 mentioned having forwarded a list of materials in

the packing list `A‟ (Ex.PW1/7), duly signed by the

appellant/defendant. PW1 was cross-examined by the

appellant/defendant. In his cross-examination, it was reiterated by

PW1 that a sum of Rs.25,000/- against Bill No.30 (wrongly typed as

Bill No.29 in the evidence recorded in the trial court) was not received

by the respondent/plaintiff. It was further stated by PW1 that the

equipments supplied to the appellant/defendant under the order

placed by it, could not be completed unless and until all the items as

per the quotation were supplied, it being an effluent treatment plant.

9. A perusal of the deposition of PW1 does not bear out the

submission of the counsel for the appellant/defendant that the same

was self-contradictory and ambiguous. Merely because PW1 was

unable to specify the name of the person, whose signatures were

affixed on the invoice(Ex.PW1/5) in confirmation of the receipt of

goods on behalf of the appellant/defendant cannot be a ground for

disbelieving the said witness. The appellant/defendant was unable to

shake the deposition of the said witness. Similarly, the submission of

the counsel for the appellant/defendant that the address shown as "R-

12/48, Raj Nagar, Ghaziabad, U.P." typed out on the top right hand of

Bill No.30, was in fact the residence of the Director of the respondent

company and hence, could not have been a godown, is based on

surmises and conjectures. There is nothing material placed on the

record by the appellant/defendant to disbelieve the statement of PW1,

that the goods were dispatched to the appellant/defendant from the

aforesaid godown situated in Ghaziabad.

10. Insofar as the statement of DW1, Shri Jagmohan Chawla is

concerned, the aforesaid witness who was the Managing Director of

the appellant company, admitted having received goods against Bills

No.28 and 29, but denied having received the goods against Bill

No.30. DW1 stated that as the company had its own workshop, it

completed the machinery with its own arrangement and tools and did

not purchase the goods against Bill No. 30 from the

respondent/plaintiff. DW1, however, did not deny the quotation price

of the plant and the goods mentioned in Bill No. 30 (Ex.PW1/5). He did

not deny the fact that the order was placed on the respondent/plaintiff

on the basis of price mentioned in the quotation. However, receipt of

packing list `A‟ and `B‟, stated to have been sent to the

appellant/defendant alongwith the goods was denied by DW1. He

stated that he had brought the register to show the entries of Bills

No.28 and 29 alone. In his cross-examination, the said witness stated

that he was unaware of the fact as to whether any record of goods

received by the appellant/defendant was maintained or not. The

goods mentioned in Bill No.30 were parts of a flotation tank, which

DW1 admitted was a very important part of the effluent treatment

plant and the plant could not have functioned in the absence of the

said equipment.

11. The trial court arrived at the conclusion that as the flotation

tank was a part of the effluent treatment plant and the said plant could

not function in the absence of the parts mentioned in Ex.PW1/5, it was

hard to believe that if the respondent/plaintiff would not have supplied

the said goods to the appellant/defendant, the latter would have made

the payments in respect of the other items, subject matter of Bills

No.28 and 29. The trial court cannot be faulted for disbelieving the

statement of the witness, DW1 that the items in question were

manufactured by the appellant/defendant in its workshop and installed

by it on its own for making the effluent treatment plant operational.

Taking notice of the fact that the appellant/defendant did not lodge

any complaint with the respondent at any stage that the goods in

question were defective, the court rightly arrived at the conclusion that

the goods against Bill No.30 were duly supplied by the respondent to

the appellant and the amount against the said Bill was outstanding and

payable by the appellant.

12. Having perused the deposition of DW1, the contradictions

and ambiguities therein are quite apparent. The replies to pertinent

questions put to DW1 in his cross-examination show that he

deliberately chose to make ambiguous statements with regard to the

quotation received for the effluent treatment plant. At one place, DW1

stated that he had not received any quotation at all whereas

immediately thereafter, he stated that it was correct that in the

quotation, the price of the plant was quoted as Rs.2,40,000/- and that

the order was placed on the respondent/plaintiff after agreeing upon

the price mentioned in the quotation. While accepting the explanation

offered by the respondent/plaintiff with regard to not maintaining a

running account as plausible, the trial court held that the

respondent/plaintiff had successfully proved that the goods as

mentioned in Ex.PW1/5, were part of the quotation, Ex.PW1/1 and had

been duly supplied to and received by the appellant/defendant. In view

of the aforesaid discussion and in the light of the evidence led by both

sides, this Court finds no reason to differ with the findings of the trial

court returned in respect of issue No.3 that payment in respect of Bill

No.30 (Ex.PW1/5) was outstanding and was liable to be paid by the

appellant/defendant to the respondent/plaintiff.

13. Now coming to the question of interest, i.e., issue No. 11,

the court below awarded future and pendent lite interest @ 18% per

annum to the respondent/plaintiff. Counsel for the appellant/defendant

states that the aforesaid rate of interest is extremely high and even

when the case was decided in the year 1997, 18% was not the normal

rate of interest levied in banking transactions. This Court is inclined to

agree with the aforesaid submission of the counsel for the

appellant/defendant with regard to the rate of future and pendent lite

interest awarded in the impugned judgment. Taking into consideration

the then prevalent rates of interest as applicable to banking

transactions, the impugned judgment and decree in respect of issue

No.11 is modified to the extent that the future and pendente lite

interest payable by the appellant to the respondent is liable to be

scaled down from 18% per annum to 12% per annum. As a

consequence of the aforesaid modification, the relief granted to the

respondent by the trial court in para 24 of the impugned judgment, is

modified to hold that the respondent is entitled to a decree of

Rs.66,990/- with costs and pendente lite and future interest fixed @12

% per annum, till realization of the decretal amount.

14. No other ground has been urged by the counsel for the

appellant to assail the impugned judgment except those mentioned

hereinabove. The appeal is partly allowed to the aforesaid extent, with

no orders as to costs.

15. The decree is modified in terms of the aforesaid orders.

After drawing a fresh decree, if the Registry finds that the amount as

deposited by the appellant in the Court, in terms of the order dated

29.4.1999 is in excess of the decretal amount, the appellant shall be

at liberty to seek refund thereof by approaching the Registry directly.

Trial Court records be released forthwith.

                                                        (HIMA KOHLI)
OCTOBER 27, 2009                                          JUDGE
rkb