M/S Ester Industries Limited vs M/S Subhash Chand Prabhash Chand
2010 Latest Caselaw 5734 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI
 +                      RFA Nos.69/1998 & 94/1998
 %                                         16th December, 2010


 1. RFA No.69/1998


 M/S ESTER INDUSTRIES LIMITED                     ...... Appellant
                         Through:    Mr. Anil K. Kher, Senior
                                     Advocate with Mr. D.R.
                                     Bhatia,   Advocate,        Ms.
                                     Inderjeet Sidhu, Advocate
                                     and Mr. Rishi Manchanda,
                                     Advocate.

            VERSUS

 M/S SUBHASH CHAND PRABHASH CHAND          ....Respondent

Through: Mr. Sanjay Gupta, Advocate with Mr. Ateev Mathur, Advocate.

 2. RFA No. 94/1998

 M/S ESTER INDUSTRIES LIMITED                     ...... Appellant
                         Through:    Mr. Anil K. Kher, Senior
                                     Advocate with Mr. D.R.
                                     Bhatia,   Advocate,        Ms.
                                     Inderjeet Sidhu, Advocate
                                     and Mr. Rishi Manchanda,
                                     Advocate.


            VERSUS

SHRI SUNIL KUMAR, PROPRIETOR, M/S S.K. & CO. ....Respondent Through: Mr. Sanjay Gupta, Advocate with Mr. Ateev Mathur, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

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

2. To be referred to the Reporter or not?

3. Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J (ORAL)

RFA No.69/1998

1. By the present appeal filed under Section 96 of the Code

of Civil Procedure, 1908 (CPC), the appellant-defendant impugns the

judgment and decree dated 6.11.1997 whereby the suit for recovery

filed by the respondent-plaintiff herein was decreed for its dues

towards brokerage/commission.

2. After completion of the pleadings, Trial Court framed the

following issues:-

" i) Whether the claim of the plaintiff is barred by time? OPD

ii) Whether the plaintiff had a valid and enforceable contract with the defendant? OPP

iii) Whether the plaintiff is entitled to recover the amount of Rs.2,95,801/- from the defendant? OPP

iv) Whether the plaintiff is entitled to pendente lite and future interest?

v) Relief."

3. Issue No.2 was the first issue which was argued by the

appellant-defendant before this Court. It was argued that as per the

letter of appointment, the contract was with HUF firm by the name of

M/s. Subhash Chand Prabhash Chand. It was argued that the contract

with the HUF firm to which the brokerage was payable came to an end

on 31.3.1992. It is argued that the partnership which filed the present

suit came into existence on 18.2.1993 i.e. after the dealings of the

parties had already come to an end in March, 1992. It was therefore

urged that the respondent-plaintiff has no locus standi to file the suit

for recovery.

4. I am afraid I do not agree with the argument of the

learned senior counsel for the appellant because no doubt the original

contract was with the HUF concern, however, any creditor can transfer

his debt to a third person and this transaction is known as transfer of

an actionable claim and is duly recognized by Section 130 of the

Transfer of the Property Act, 1882. The learned Trial Court has relying

upon this provision and the partnership deed dated 18.2.1993

Ex.PW1/1 held that there is a signed written instrument for transfer of

the dues of the erstwhile HUF to the partnership concern. The

relevant clause of the partnership concern by which the assets and

liabilities of the erstwhile HUF firm were taken over by the respondent

partnership concern reads as under:

"This Partnership Firm i.e. M/s. Subhash Chand Parbhash Chand have taken over all the assets & liabilities as going concern of the earstwhile firm M/s. Subhash Chand Parbhash Chand (HUF) without any break what so ever."

A creditor can be a transferor and the transferor here is the HUF

concern. The karta of the erstwhile HUF concern is a partner in this

partnership. Therefore there is an instrument in writing signed by the

karta of the HUF evidencing the transfer of the debt by the HUF

concern and which creditor has transferred the right to recover the

dues to the respondent partnership firm. In my opinion, the

requirement of Section 130 of the Transfer of Property Act, 1882 is

wholly satisfied in the facts of the present case. Also, in equity, if

payment has to be made, the same should not be denied on

technicalities and also interpretation of documents should not be done

in such an impractical manner so as to defeat equity and justice.

Therefore, I hold that the partnership firm was duly authorized to get

a decree in its favour and so was held by the trial Court.

5. Learned senior counsel for the appellant very vehemently

argued that there was no case laid out in the plaint of transfer of an

actionable claim and nor was such a case put up before the witnesses

of the appellant-defendant during the course of trial or in any manner

in the Court below. In my opinion, this argument is an argument of

desperation, because once the partnership deed has not been

challenged by the appellant-defendant and which document was duly

proved and exhibited as Ex.PW1/1 before the Court and which

contained the necessary clause, in fact, onus was upon the appellant

to show as to why the dues which were otherwise payable should not

be defeated on a technical ground. I do not agree that the findings in

the judgment of the trial Court should be interfered with on the

ground of technicalities because as per the facts which emerge, which

have emerged in the present case, then, equity and justice must

prevail and not technicalities.

6. The second issue which was argued on behalf of the

appellant was that the suit was barred by limitation. Qua this issue, it

was argued that the suit was instituted on 18.3.1996 whereas the last

admitted transaction between the parties was 20.7.1992 as per

statement of account of the respondent as maintained by the

appellant. It was argued that the suit ought to have been filed before

20.7.1995 and consequently the suit was barred by limitation. I do

not agree. This statement of account maintained by the appellant-

defendant itself in its books of account has been proved and exhibited

as Ex.DW1/P1. As per this statement of account once the last entry in

this account is dated 20.7.1992 which is admitted/proved by the

appellant-defendant, then, in terms of Article 1 of the Limitation Act,

1963 the limitation commences on the last date of the financial year.

The last date of the financial year is 31.3.1993 and therefore the suit

could have been filed upto 31.3.1996. The suit has been filed on

18.3.1996. It cannot be disputed that the statement of account

Ex.DW1/P1 is an open mutual current account containing reciprocal

entries and therefore clearly falls within the meaning of the

expression under Article 1 of the Limitation Act. Accordingly, this

contention that the suit is barred by limitation is rejected.

7. The last contention which was urged on behalf of the

appellant was that rate of interest has been wrongly granted from

February, 1994 @ 15% per annum. I may note that the respondent-

plaintiff duly gave a legal notice dated 27.7.1994 which has been

exhibited as Ex.PW1/5. In paragraph 4 of this notice, the respondent-

plaintiff had claimed interest @ 21% per annum as the commercial

rate. This notice is in accordance with the Interest Act, 1978 which

requires giving of a notice in order to claim interest. Once a legal

notice has been given claiming interest, which was not complied with,

the trial Court was fully justified in granting interest. I do not think

that in the facts and circumstances of the present case interest @

15% p.a. simple is such which calls for interference by this Court in

appeal.

8. Sitting as an Appellate Court, I can only interfere with the

findings of the trial Court if findings of the trial Court are illegal or

perverse. Merely because another view is possible in the facts and

circumstances, this Court is not entitled to interfere with the

impugned judgment and decree. In my opinion, the trial Court has

exhaustively, with clarity, and in a detailed manner, examined all the

issues, the facts, the evidences and has arrived at appropriate

conclusions with respect to each of the issues which were urged

before the trial Court and has also urged before this Court.

In view of the above, the appeal being devoid of merit is

dismissed with costs of the present appeal which are quantified at

Rs.25,000/- for both appeals payable within 2 weeks from today. Trial

Court record be sent back.

RFA No.94/1998

9. Two issues which were argued in this case pertaining to

limitation and the rate of interest have already been dealt with by me

above in RFA No.69/1998 and for the same reasons the pleas of the

suit being barred by time and that interest ought not to be awarded

are accordingly rejected.

10. One issue which was additionally urged in the present

appeal was that in the suit the principal amount claimed was

Rs.1,78,806.96/- but the statement of account filed by the respondent

herein only proved as due an amount of Rs.1,19,859.46/- as on

1.4.1993. It is therefore urged that the suit should not have been

decreed for Rs.1,78,806.96/-.

I am afraid this argument does not deserve acceptance because

the statement of account filed by the respondent-plaintiff was only up

to 1.4.1993, however, the transaction between the parties continued

thereafter and which is clear from the statement of account filed by

the appellant-defendant itself and which showed the last transaction

on 31.6.1993 on account of commission being payable to the

respondent-plaintiff. In this account the balance due as on 30.6.1993

is Rs.1,78,806.96/- i.e., the amount which is in fact claimed by the

plaintiff in the suit. Therefore, the suit has been rightly decreed for

Rs.1,78,806.96/-.

This appeal is also accordingly dismissed. Interim orders in the

appeals are vacated and the security stands discharged. Trial Court

record be sent back.

DECEMBER 16, 2010                               VALMIKI J. MEHTA, J.
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