Alok Gupta vs M/S Rubfila International ...
2010 Latest Caselaw 5829 Del

         THE HIGH COURT OF DELHI AT NEW DELHI
%                     Judgment Reserved on: 21.12.2010
                      Judgment Pronounced on: 22.12.2010

+           CS(OS) No. 2497/1999

ALOK GUPTA                                     .....Plaintiff

                            - versus -


M/S RUBFILA INTERNATIONAL LIMITED .....Defendant

Advocates who appeared in this case:
For the Plaintiff:      Mr. Arun Birbal
For the Defendant:      Ms. V. Mohana

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

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

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

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

V.K. JAIN, J

1.          This is a suit for recovery of Rs.1351521/- and

rendition of accounts and a Counter Claim for recovery of

Rs 32,42,628/-        The plaintiff, who is carrying business

under the name and style of M/s Alok Enterprises claims

that he was appointed as an agent by the defendant for the

sale of its products in northern India and the defendant had


CS(OS)No. 2497/1999                                 Page 1 of 43
 agreed to pay a commission of 1% on the total sales made

by him directly or made by the defendant on the orders

procured       through   him,    along   with reimbursement         of

telephone and office expenses.           It is further alleged that

Smt. Renu Gupta, wife of the plaintiff was also appointed as

an officer of the defendant company on a salary of

Rs.10,000/- per month and the defendant had taken the

premises of the plaintiff on rent of Rs.5,000/- per month for

using it as its office.         It is also alleged that all office

expenses including the salary of Smt. Renu Gupta was paid

by the plaintiff and was added to the account of the

defendant, which its officers used to confirm from time to

time.

2.          It is further alleged that in a meeting held in the

month of October 1997, at the factory of the defendant with

the Managing Director and Marketing Manager of the

defendant company, it was agreed that from 1st April 1997

the plaintiff will be paid commission at a revised rate, on

slab basis. This was followed by a meeting in Delhi with the

Managing Director of the defendant, when it was agreed that

from 1st April 1998, the plaintiff will be paid commission at

a revised rate of 2%. This was confirmed in a later meeting

CS(OS)No. 2497/1999                                      Page 2 of 43
 held in December 1998 between the plaintiff and Managing

Director and Vice President of the defendant company. It is

alleged that a sum of Rs.13,51,521/- is due to the plaintiff,

whereas the defendant is claiming a sum of Rs.32Lacs from

him.     The plaintiff has accordingly claimed the aforesaid

amount of Rs.13,51,521/- along with pendente lite and

future interest on that amount.

3.          The defendant has contested the suit. It is alleged

in the written statement that there was no relationship of

agent and principal between the parties. It is also alleged

that the plaintiff has no locus standi to claim salary on

behalf of some Smt. Renu Gupta and, therefore, the suit is

bad for misjoinder for causes of action.      On merits, it is

alleged that in October 1996, the plaintiff, along with the his

wife Smt. Renu Gupta, claiming themselves to be the owner

of M/s Alok Enterprises, visited the defendant in Palakkad,

Kerala and desired to become agent of the defendant in the

entire Northern Region.     The defendant, however, was not

immediately agreeable to appoint them as agent since

another firm was already functioning as its agent in the

Northern territory.     The defendant appointed Smt. Renu

Gupta as its employee on 5th November 1996, on a monthly

CS(OS)No. 2497/1999                                  Page 3 of 43
 salary of Rs.10,000/-. It was also agreed that the plaintiff

will get a special commission of 1% on the orders procured

by him and no commission will be allowed on the material

purchased by him for Alok Enterprises, though it was only

an oral understanding and no agreement was executed

between the parties. It is also claimed that the defendant

had appointed Mr. Jacob Thomas to be stationed in Delhi

for supervision and for canvassing their products in the

Northern Region. It is further alleged that at the behest of

Smt. Renu Gupta, the salary payable to her was adjusted

from the balance receivable from the plaintiff.     It is also

claimed that the services of Smt. Renu Gupta were

terminated w.e.f. 1st September 1998 and the amount which

was payable to her was adjusted in the amount receivable

by the defendant from the plaintiff.     It is alleged in the

written statement that for the purpose of obtaining Central

Excise as well as Sales Tax registration, the premises of the

plaintiff were shown as rented by the defendant, though

there was no lease agreement between the parties and

certain account adjustments were made in the amount paid

by the plaintiff to the defendant. It is also claimed that the

entire office expenses at Delhi were met by the defendant.

CS(OS)No. 2497/1999                                 Page 4 of 43
 4.          The defendant has also filed a Counter Claim of Rs.

32,42,628/-. In the counter claim, it is alleged that it was

agreed between the parties that Mrs Renu Gupta would get

a special commission at 1% on the orders procured by her,

but no commission will be allowed on the purchases made

by the plaintiff for Alok Enterprises. It is also alleged that at

the behest of Mrs Renu Gupta, the salary payable by the

defendant to her was adjusted from the balance receivable

from the plaintiff.       The counter-claim represents Rs

29,52,317/- being the amount outstanding against the

plaintiff in the account which he had with the defendant

with respect to the goods purchased by him from time to

time.      This includes Rs 14,274/- towards price of the

material alleged to have been taken by the plaintiff from

D.R. Trading Company. Rs 22,588/- towards the price of

the material taken back by the plaintiff from M.D.R. Tapes

and Rs 1,49,615/- towards the price of the goods taken

back by plaintiff from M/s H-Lon Industries. The balance

amount of Rs 2,90,311/- represents interest at the rate of

12% per annum till the date of filing of the Counter Claim.

5.          The following issues were framed on the pleadings

of the parties:-

CS(OS)No. 2497/1999                                    Page 5 of 43
 i.          Was the plaintiff appointed as an agent by the

defendant for Northern India? If yes on what terms? OPP

ii.         Was Mrs. Renu Gupta, wife of the plaintiff

employed by the defendant as a Marketing Executive at a

monthly salary of Rs 10,000/- with further right to get

special commission of 1% for the material supplied on

bookings effected by her? OPD

iii.        To what amount, if any, is the plaintiff entitled to

from the defendant? OPP

iv.         If issue No.3 is decided in favour of the plaintiff,

whether plaintiff is entitled to any interest and at what rate?

OPP

v.          To what amount is the defendant entitled to from

the plaintiff? OPD

vi.         If issue No.5 is decided in favour of the defendant

whether defendant is entitled to interest from the plaintiff

and at what rate? OPD

vii.        Relief to the parties.

6.          Issue No.1

            The plaintiff has come in the witness-box as PW-1

and has also produced his wife Mrs Renu Gupta as PW-2.

The     defendant     has   products   its   Assistant   Manager

CS(OS)No. 2497/1999                                      Page 6 of 43
 (Secretarial and Legal) Mr Sudhesh and has also produced a

hand-writing expert Pandit Ashok Kashyap, who has been

examined as DW-2.

7.          In his affidavit, the plaintiff has alleged that in a

meeting held on 04.11.1996 between him, his wife Mrs

Renu Gupta, the Managing Director of the defendant and

Shri R J Menon, Marketing Manager of the defendant, he

was appointed as an agent in the Northern Region under an

agreement between the parties. The terms of the agreement

were reduced in to writing in the form of minutes of the

meeting. He further stated that the defendant had initially

agreed to pay a commission of 1% on the total business

procured by him at Delhi. According to him, in the meeting

held on 1st October, 1997 at Kerala factory of defendant in

which he was represented by his wife, it was agreed that he

will be paid commission of 2% instead of 1%, but shall not

be reimbursed for the offices expenses. He also stated that

reference in the minutes of the meeting held on 1 st October,

1997 was to him only and in fact no commission was ever

paid to his wife. He further stated that the commission at

the rate of 2% was reiterated in the meeting held between

him and the Managing Director of the defendant at Hotel

CS(OS)No. 2497/1999                                    Page 7 of 43
 Maurya Sheraton, New Delhi.

8.          In rebuttal, DW-1 Mr Sudhesh has stated that in

October, 1996, the plaintiff along with his wife Mrs Renu

Gupta, claiming themselves to be the owner of Alok

Enterprises visited their office in Palakkad, Kerala and

expressed desire to become agent for the entire Northern

Region.       The defendants, however, were not immediately

agreeable to appoint them as agents since M/s Filatex was

their agent of Northern Region. The plaintiff represented

that they could buy the products of the defendant and sell it

to their customers, whereas Mrs Renu Gupta could act as

the Marketing Executive for the defendant in Delhi.         The

defendant accordingly appointed Mrs Renu Gupta as its

employee. It was also agreed that she would get special

commission of 1% on the orders procured by her, but no

commission would be payable on the material purchased for

Alok     Enterprises.    According to him,    there was       no

relationship of agency between the plaintiff and the

defendant. He has also stated that the plaintiff has filed the

present suit as a counter-blast to the criminal complaints

which they have filed against him under Section 138 of

Negotiable Instruments Act at Coimbatore.

CS(OS)No. 2497/1999                                 Page 8 of 43
 9.          Ex.PW-1/36 purport to be the minutes of the

meeting held at Palakkad, Kerala on 04th November, 1996.

As per the minutes, four person, namely, the plaintiff Alok

Gupta, his wife, Mrs Renu Gupta, Mr J.R. Rasiah and Mr

R.J. Menon participated in the meeting. Clause 1 and 4 of

the minutes which are relevant for this issue read as

under:-

            "1. It was discussed that Alok Enterprises
            to appointed as an agent for the company
            with effect from 1st November, 1996 for
            entire Northern Region.

            4.       Alok Enterprises to be paid a
            commission of 1% of basic price for all
            orders procured to be supplied directly by
            the company and all material purchased
            by it for re-selling."

10.         The case of the defendant is that this document

does not bear signature of Mr R.J. Menon. The handwriting

expert produced by Pandit Ashok Kashyap has opined that

the purported signature of Mr R.J. Menon on this document

does     not tally     with his admitted   signatures on the

documents PW-1/24, PW 1/P-14 and PW-1/28. It has also

come in the testimony of DW-1 that Mr R.J. Menon has

since expired.        The defendant has, however, not produced

its Managing Director Mr J.R. Rasiah in the witness-box, to


CS(OS)No. 2497/1999                                  Page 9 of 43
 controvert the oral deposition of the plaintiff and no good

reason has been assigned for not producing him in the

witness-box. Since Mr R.J. Menon is stated to have died, it

became more important for the defendant to produce Mr

J.R. Rasiah in the witness-box to controvert the case stated

by the plaintiff on oath.

11.         Section 114(g) of the Evidence Act provides that

the Court may presume that evidence which could be and is

not produced would, if produced, be unfavourable to the

person who withholds it.

12.         In Enuga Lakshmamma Vs. Vennapuse Chinna

Malla Reddy (Dead) by Lrs., 1985 (2) SCC 100, there was

dispute      with     respect   to   the   date   of   birth     of     the

plaintiff/appellant. It was noticed that the father of the

plaintiff/appellant was not produced as a witness. Supreme

Court was of the view that non-examination of the father of

the plaintiff/appellant on the most material issue, namely,

the birth date of the plaintiff will have to be regarded as

fatal to the plaintiff's case and the High Court was right in

drawing adverse inference against the plaintiff on this

aspect.

            In Iswar Bhai C. Patel @ Bachu Bhai Patel Vs.

CS(OS)No. 2497/1999                                            Page 10 of 43
 Harihar Behera & Anr. 1999 (3) SCC 457, the appellant did

not enter the witness-box to deny on oath. The statement of

defendant/respondent No.2 that it was at the instance of

the appellant that he had advanced a amount of Rs 7,000/-

to the appellant by issuing a cheque on the account of

respondent No.1. The Court was of the view that the

appellant having not entered the witness box and having not

presented himself for cross-examination, an adverse

presumption has to be drawn against him on the basis of

the principles contained in Illustration (g) of Section 114 of

Evidence Act.

13. Since the defendant has neither produced Mr. J.R.

Rasiah in the witness-box nor given any explanation for not

producing him, an adverse inference needs to be drawn

against the defendant that had Mr J.R. Rasiah been

produced in the witness box, he would not have

controverted the deposition of the plaintiff with respect to

the agreement reached between the parties in the meeting

held on 04th November, 1996.

14. A reading of the minutes of the meeting held on

04th November, 1996 which is Ex. PW-1/36 does not convey

a concluded contract for appointment of the plaintiff as the

agent of the defendant though it does show that the matter

was discussed in that meeting. It would be pertinent to

note here that this is not the case of the defendant that no

meeting in its office was held on 04th November, 1996 and

the defendant has not filed any minutes of that meeting. In

para 4(c) of the written statement, the defendant has

specifically admitted that it was agreed during discussion in

the meeting that the plaintiff would get a special

commission of 1% on the orders procured by him though no

commission would be allowed on the material purchases by

him for his own firm M/s Alok Enterprises. Of course, the

defendant claims this to be only an oral understanding. The

admission made in the written statement leave no doubt

that the defendant had agreed to pay commission to the

plaintiff though no formal Agency Agreement was executed

between the parties.

15. The clinching evidence which proves that the

defendant had agreed to pay commission to the plaintiff is

the Statement of Account filed by the defendant. Ex.DW-

1/11 is the Statement of Account filed by the defendant.

This statement shows credit of Rs 1,40,914/- in the account

of the plaintiff on September 18, 1997, towards commission

for 1996-97. This entry has later been reversed on 25 th

March, 1998 with an endorsement "commission payable

transferred to Renu Gupta‟s account". Had the defendant

not agreed to pay commission to the plaintiff, there could be

no occasion for it to give credit of Rs 1,40,914/- in his

account towards commission for the year 1996-97.

16. Ex.PW-1/24 is the minutes of the meeting held at

the office of the defendant on 1.10.1997. Though during the

course of admission/denial of documents, the defendant

denied this document, it was relied upon by DW-2, Shri

Ashok Kashyap as a document bearing admitted signature

of defendant‟s employee late Shri R J Menon for the purpose

of comparison of question signatures of Shri R J Menon on

Ex.PW-1/36 to PW-1/40 and PW-1/42 to PW-1/44 with his

admitted signatures. Paras 2, 8 and 9 of these minutes read

as under:-

2. Sales Commission payable to Mrs. Renu Gupta, Marketing Executive as an incentive would be given on slab wise sale of entire Northern Region as given below as per turnover based on the basic price. There will be no other reimbursement expenditure towards maintenance of office, including telephone expenses.

Upto 40 lacs - 1.5%

Next 20 lacs - 2.0% Next 10 lacs and above -2.5%

8. The new set up to begin operation from 1 st November, 1997. The Sales commission to the Marketing Executive will become operative with effect from 1.11.1997.

9. Rate of Commission from November, 1996 up to October, 1997 to be settled soon. It was mentioned that RIL agreed with Marketing Executive Mrs. Renu Gupta, a sales commission @1% of the basic price. However, based on actual expenditure it will be considered."

The defendant has not produced its Managing

Director Mr. Rasiah to controvert the case of the plaintiff

with respect to the decisions taken in that meeting. Hence,

an adverse inference needs to be drawn against the

defendant that had Mr. Rasiah come in the witness box, he

would not have controverted these minutes.

17. Moreover, this is not the case of the defendant that

no meeting was held in its office on 1st October, 1997. In

para 6 of the plaint, the plaintiff alleged that in the meeting

held in the month of October, 1997, at the factory of the

defendant with Mr Rasiah, Managing Director and Mr

Memon, Marketing Manager, it was agreed that from 1 st

April, 1997, the defendant will pay commission to the

plaintiff at revised rate on slab basis. This allegation was

not denied in para 6 of the written statement. While

replying to para 6 of the plaint, the defendant merely stated

that the contents of para 2 are matter of record and need no

reply. Thus, the written statement itself contains an

admission not only about payment of commission but also

modification of the rate of commission so as to give

commission at a revised rate, on slab basis.

18. The defendant also has specifically stated in the

Counter Claim that it was agreed between the parties that

Mrs Renu Gupta would get special commission at 1% on the

orders procured by her. Relying upon Ex. PW1/24, it was

contended by the learned counsel for the defendant that

commission was payable to Mrs Renu Gupta and not to the

plaintiff Shri Alok Gupta. The facts and circumstances of

the case, in my view, indicate that the commission was

actually payable to the plaintiff irrespective of whether it

was paid in his name or in the name of his wife Mrs Renu

Gupta. This is an admitted case that both, the plaintiff Alok

Gupta and his wife Renu Gupta, had visited the office of the

defendant and participated in the first meeting which was

held on 04th November, 1996. In fact, the defendant has

specifically alleged in the written statement that in October,

1996, the plaintiff alongwith his wife Mrs Renu Gupta

"claiming themselves to be the owner of Alok Enterprises"

visited its office in Palakkad, Kerala and desired to become

agent of the defendant for the entire Northern Region, but,

the defendant was not immediately agreeable to appoint

"them" as agent. It is also alleged in the written statement

that the salary payable to Mrs Renu Gupta was adjusted

from the balance receivable from the plaintiff. It is also

alleged that the service of Mrs Renu Gupta were terminated

w.e.f. 1st September, 1998 and the amount which was

payable to her was adjusted in the amount receivable by the

defendant from the plaintiff.

19. Ex.PW-1/28 are the minutes of the meeting held at

Hotel Maurya Sheraton on 27th July, 1998. Clause 3,6 and

15 of the minutes read as under:-

"3. M/s Alok Enterprises will not be paid any commission for the material purchased in their name. They will be given a margin of Rs 5/kg. on all purchases and 2% commission on all other customers of entire northern region.

6. M/s Alok Enterprises promised to work for only RIL.

15. If M/s Alok Enterprises shows excellent performance and clears all pending dues by Aug end, they can be considered for a sole selling agent from 1st Sept. onward."

The defendant has admitted the signatures of Mr

R.J. Memon and Mr Jacob Thomas on this document during

the course of admission/denial of documents on 09th

December, 2009. Clause 3 referred above is yet another

proof that the plaintiff was to be paid commission by the

defendant and in the meeting held on 27th July, 1998, it was

decided that the commission would be given to him at the

rate of 2%, but he would get it only on the sale made ot

other customer of Northern Region and he will not get any

commission on the materials purchased in the name of Alok

Enterprises. This meeting was attended not only by the

plaintiff Alok Gupta, but also by his wife Mrs Renu Gupta.

Admittedly, neither any salary was actually paid by the

defendant to Mrs Renu Gupta nor was any commission paid

to her.

20. From the facts and circumstances discussed

above, it appears to me that both plaintiff Alok Gupta and

Mrs Renu Gupta were working together and under an

arrangement between the parties, commission was to be

paid to the plaintiff which initially was fixed at 1%, was

modified w.e.f. 1st November, 1997 so as to make it 1.5% on

sale upto Rs 40 lacs, 2% on the sale for next Rs 20 lacs and

2.5% on the sale of next Rs 10 lacs and above. It was

further modified in the meeting held on 27th July, 1998

when the plaintiff promised to work only for the defendant.

Adjustment of the salary of Mrs Renu Gupta against

receivables from the plaintiff is yet another circumstance,

indicating that the plaintiff as well as his wife Mrs Renu

Gupta were acting in unison and irrespective of whether the

commission was to be paid in the name of the plaintiff and

in the name of his wife Mrs Renu Gupta, the actual

beneficiary was the plaintiff Alok Gupta. It would be

pertinent to note her that Mrs Renu Gupta is not

independently claiming either any commission or her salary

from the defendant. She has come in the witness-box as

PW-2 and has supported the case of the plaintiff. I find no

merit in the contention of the learned counsel for the

defendant that amount of commission can be claimed by

Mrs Renu Gupta and not by the plaintiff. I, therefore, hold

that though the plaintiff was not formally appointed as an

agent of the defendant for the Northern Region, he was

entitled to commission in terms of the agreement contained

in the minutes of the meeting held on 04th November, 1996

(PW-1/36), 1st October, 1997 (Ex.P-1/24) and 27th July,

1998 (Ex.PW-1/28).

21. It was pointed by the learned counsel for the

defendant that on Ex.PW-1/36 which purports to be the

minutes of the meeting held at the office of defendant on

04th November, 1996, the address of the branch office of the

defendant has been shown as F-11 Pandav Nagar though

admittedly, the aforesaid premises had not been taken on

rent by 04th November, 1996, which, in turn, indicates that

Ex.PW-1/36 is the forged document. The contention of the

learned counsel for the plaintiff in this regard was that

though this document represents the minutes of the

meeting held on 04th November, 1996, the minutes were

recorded after the defendant had already taken the premises

in F-11 Pandav Nagar on rent and, therefore, it cannot be

said to be a forged document. I, however, need not go into

this aspect of the matter since the evidence produced on

record clearly proves that the defendant had agreed to pay

commission to the plaintiff.

It was also contended by the learned counsel for

the defendant that the signature of Mr R.J. Menon on this

document had been forged by the plaintiff, as is evident

from the opinion of DW-2 Mr Ashok Kashyap. Mr R.J.

Menon, who was the best witness with respect to the

signature, bearing on this document having expired, it is

not possible to say with certainty that his signature on this

document have been forged. The opinion of the handwriting

expert cannot be substitute for the direct evidence and is

meant only to assist the Court in arriving at an appropriate

conclusion. The defendant did not make a request to the

Court to send documents to CFSL/FSL for comparison of

the disputed signatures with the admitted signatures of Mr.

R.J. Menon and give opinion as to whether the disputes

signatures tally with the admitted signatures or not. It

rather chose to engage a private handwriting expert. It is

well-known that such private handwriting experts are

produced in the Court only if they agree to support the case

set up by the party which engages them. Hence, not much

reliance can be placed on the opinion given by a private

handwriting export. It would be useful here to refer to the

decision of Supreme Court in Gulzar Ali Vs. State of H.P.

(1998) 2 SCC 192, where the accused had produced a

handwriting expert to show that the opinion of the

Government examiner of questioned documents was faulty.

The High Court had observed that there was an inter alia

tendency on the part of an expert witness to support the

view of the person who called him and, therefore, it

preferred the opinion of the Government examiner PW-20

M.L. Sharma. It was held by the Supreme Court that the

aforesaid observation of the High Court could not be down

staged for many so called experts had been shown to be

remunerated witnesses making themselves available on hire

to pledge their oath in favour of the party paying them.

Relying upon the aforesaid decision of the Supreme Court,

this Court in Deepa Arora vs. Saurabh Arora & Anr. FAO

No.3/05 decided on 10th December, 2007 declined to rely

upon the testimony of the handwriting expert produced by

the Objector before the Court holding that not much

importance could be attached to the testimony and report of

the handwriting expert. In fact, way back in 1933, Lahore

High Court in Diwan Singh vs. Emperor AIR 1933 Lah 561

quoted with approval the following passage:

"It must be borne in mind that an expert witness, however, impartially he may wish to be, is likely to be unconsciously

prejudiced in favour of the side which calls him. The mere fact of opposition on the part of the other side is apt to create a spirit of partisanship and rivalry, so that an expert witness is unconsciously impelled to support the view taken by his own side. Besides, it must be remembered that an expert is often called by one side simply and solely because it has been ascertained that he holds views favourable to its interests."

Taylor in his work on the "Law of Evidence" 12

Edition, Volume-I observed as under:

"Perhaps the testimony which least deserves credit with a jury is that of skilled witnesses. These witnesses are usually required to speak, not to facts, but to opinions; and when this is the case, it is often quite surprising to see with what facility, and to what an extent, their views can be made to correspond when the wishes or the interests of the parties who call them. They do not, indeed, willfully misrepresent what they think, but their judgments become so warped by regarding the subject in one point of view, that, even when conscientiously disposed, they are incapable of forming an independent opinion. Being zealous partisans, their belief becomes synonymous with faith as defined by the apostles, and it too often is; but 'the substance of things hoped for, the evidence of things not seen'."

Taking into consideration of the facts and

circumstances of the case including the failure of the

defendant to produce its Managing Director in the witness

box, not much reliance can be placed on the opinion of PW-

2 Mr. Ashok Kashyap. The issue is decided accordingly.

It is not in dispute that Mrs Renu Gupta, wife of

the plaintiff, was employed by the defendant as a Marketing

Executive at the monthly salary of Rs 10,000/-. This has

been expressly admitted in the written statement and,

therefore, no evidence was really required to prove this

averment of the plaintiff. Ex.P-24, which is an admitted

document, is the letter appointing Mrs Renu Gupta as

Marketing Executive w.e.f 1st November, 1996 at the salary

of Rs 10,000/- per month. As regards commission payable

to Mrs Renu Gupta, while deciding issue No.1, I have taken

a view that the actual beneficiary of the commission was

plaintiff Alok Gupta, irrespective of whether it was payable

in his name or in the name of Mrs Renu Gupta. Admittedly,

Mrs Renu Gupta has not initiated any proceeding against

the defendant for recovery of arrears of her salary. It is also

not in dispute that as per agreement between the parties,

the salary of Mrs Renu Gupta shall be adjusted against the

amount which the plaintiff had to pay the defendant

towards price of the goods purchased by him. In her

affidavit Mrs Renu Gupta has stated that there was an

understanding between the parties that the amount of

salary will be reimbursed by the defendant to the plaintiff.

The issue is decided accordingly.

These issues are inter-connected and can be

conveniently decided together. Admittedly, no amount has

been paid by the defendant to Mrs Renu Gupta towards her

salary for the period from November, 1996. In her affidavit,

Mrs Renu Gupta has stated that she continued in the

service of the defendant from 5th November, 1996 till

August, 1999. The case of the defendant, however, is that

her services were terminated w.e.f. 1st September, 1998.

Even if it is assumed that the services of Mrs Renu Gupta

were terminated w.e.f 1st September, 1998, the defendant is

liable to pay salary to her for the period from November,

1996 to August, 1998 which comes to Rs 218666/-. Though

it is stated in the affidavit of DW-1 Mr Sudhesh that the

salary of Mrs Renu Gupta was always paid to her from the

company, there is no proof of any such payment. As noted

earlier, it is admitted in the written statement that the

salary of Mrs Renu Gupta was to be adjusted against the

receivables from the plaintiff. In her affidavit, Mrs Renu

Gupta has stated that she was paid salary by the plaintiff.

Since the defendant had agreed that the salary of Mrs Renu

Gupta shall be paid by the plaintiff and would be

reimbursed by it, plaintiff is entitled to adjustment of Rs

2,18,666/- being the salary of Mrs Renu Gupta for the

period from 05th November, 1996 to 31st August, 1998.

24. The plaintiff has also claimed adjustment of Rs

1,70,000/- towards rent from November, 1996 to August,

1999. In his affidavit, the plaintiff has stated that premises

No.F-11, Pandav Nagar, belonging to him were taken by the

defendant at a monthly rent of Rs 5,000/- for its office

purposes w.e.f 1st November, 1996. He has also stated that

his wife Mrs Renu Gupta as well as Mr Jacob Thomas,

another employee of the defendant were posted in Delhi

office. He has further stated that in September, 1995, Mr

Jacob Thomas was transferred back to Kerala and in his

place Mr Runy Chandy was appointed to look after the

business of defendant at Delhi. The defendant has not

produced either Mr Jacob Thomas or Mr Runy Chandy to

controvert the deposition of the plaintiff in this regard. In

fact, this is not at all the case of the defendant that neither

Mr Jacob Thomas nor Mr Runy Chandy was ever posted at

Delhi. This is also not the case of the defendant that it was

running office from some premises other than F-11, Pandav

Nagar during the period from November, 1996 to August,

1999. This is an admitted case of the parties that Mrs Renu

Gupta was appointed as an employee of the defendant-

company w.e.f. 5th November, 1996. This is not the case of

the defendant that Mrs Renu Gupta was functioning from

some place other than F-11, Pandav Nagar. It has been

stated in the written statement that for the purpose of

obtaining central excise and sales tax registration, the

premises of the plaintiff were shown as rented by the

defendant and certain account adjustments were made in

the amount paid by the plaintiff to the defendant. It is also

alleged in the written statement that entire office expenses

at Delhi were met by the defendant. By claiming that entire

„expenses for the Delhi office‟ were met by it, the defendant

has admitted that it had an office in New Delhi. The

appointment letter of Mrs Renu Gupta Ex.P-24 shows that

her location was based at New Delhi. This is yet another

proof of the defendant having an office in Delhi. As noted

earlier, this is not the case of the defendant that its office

was functioning from some premises other than the

premises of the plaintiff. If the premises of the plaintiff were

taken on rent, it would be immaterial that no lease

agreement was executed between the parties since the

premises could have been let out without a written lease

agreement. Ex.P-1/23, which is an admitted document, is

the statement made by Mr Jacob Thomas, authorized

signatory of the defendant for the purpose of obtaining sales

tax registration. In this statement, he has given the address

of defendant-company as F-11 Pandav Nagar, Delhi-91. In

clause 5 of the statement, he expressly stated that the

business premises have taken on rent from Shri Alok Gupta

at the rate of 5,000 per month. The signature of Mr Jacob

Thomas on this document has been admitted by defendant

during admission/denial of documents conducted on 09th

December, 2009. DW-1 has also admitted the handwriting

and signature of Jacob Thomas on Ex.PW-1/23. He has also

admitted that Mr Jacob Thomas was posted at Delhi and

was their Marketing Executive. He did not deny the

statement made in Ex.PW-1/23. Neither Mr Jacob Thoms

nor Mr Runy Chandy has been produced in the witness-box

to controvert the deposition of the plaintiff about their

posting in Delhi and working for the defendant-company in

the premises taken from the plaintiff at F-11, Pandav Nagar,

Delhi. This is not the case of the defendant that it had

made payment of rent for the premises at F-11, Pandav

Nagar to the plaintiff. Hence, the plaintiff is entitled to

adjustment of Rs 1,70,000/- which was payable to him

towards rent of the premises let out to the defendant-

company.

25. The plaintiff has also claimed an amount of Rs

6,32,010/- towards expenses incurred by him on the office

of the defendant-company in Delhi. In his affidavit by way of

evidence, the plaintiff has stated that as per agreement

dated 04th November, 1996, all office expenses, including

telephone expenses, fax expenses, photocopying,

conveyance, payment to staff appointed for cleaning

purposes and messenger, etc. were to be initially borne by

him and the defendant was to reimburse that amount to

him. Clause 5 of the minutes of the meeting held at the

office of the defendant on 04th November, 1996, (Ex.P-1/36)

reads as under:-

"All the expenses including the salary of Mrs Renu Gupta, telephone and other office expenses be incurred by Alok

Enterprises for RIL Delhi to be subsequently reimbursed by Rubfila International Ltd., Palakkad in addition to commission."

26. Ex.D-2 and D-3 are the documents filed by the

defendant. Ex.D-2 is the letter written by Mrs Renu Gupta

to Shri R.J. Menon, sending details of travelling, office

expenses, salary and telephone bill, whereas D-3 are the

details of travelling and conveyance for the month of

December, 1996. In both these documents, F-11, Pandav

Nagar, Delhi has been shown as the address of the

defendant-company and telephone number given in these

documents also is of Delhi. The defendant itself has placed

on record a letter dated 24th December, 1998, addressed to

Mr Runy Chandy. Vide this letter, he has been appointed at

Delhi office of the defendant-company. Since this is a

document filed by the defendant, it can be read against it

even if it has not been proved in evidence. These

documents also prove that the premises of the plaintiff were

being used by the defendant for running its office and

expenses were being incurred in connection thereto.

27. The defendant, therefore, is liable to reimburse all

the office expenses incurred by the plaintiff in respect of its

Delhi office at F-11, Pandav Nagar. Ex.Pw-1/5 is an

interoffice memo regarding reimbursement expenses. It is

signed by Mr Jacob Thomas on 13th March, 1997. As per

this document, the expenses for December, 1996, January,

1997, February, 1997 and March, 1997 amounted to Rs

30,690/-, 64,160/-, 67,872/- and 47,203/- respectively

coming to a total sum of Rs 2,32,825/-. As noted earlier,

Mr Jacob Thomas has not been produced in the witness box

to controvert the case of the plaintiff in this regard and to

say that his interoffice memo does not bear his signature.

No explanation has been given by the defendant for not

producing Mr Jacob Thomas in the witness box. When the

plaintiff stated, on oath, that this document was signed by

Mr Jacob Thomas, it was obligatory for the defendant to

produce him in the witness box if it was disputing the

signature of Mr Jacob Thomas on this document. This

document finds corroboration from the Statement of

Account Ex.DW-1/11 filed by the defendant. There is a

credit of this amount on March 31, 1997 towards Delhi

office expenses from November 1996 to 31st March, 1997.

Later, this amount has been debited to the account of

defendant on March 25, 1998. It was pointed out by the

learned counsel for the plaintiff that though the interoffice

memo alleged to have been signed by Mr Jacob Thomas,

acknowledging office expenditure, amounting to Rs

2,32,825/-, purports to be signed on 13th March,1997, it

contains the amount of commission up to 27 th March, 1997,

which could not have been possible on 13 th March, 1997. I

find that the plaintiff has not been cross-examined with

respect to this discrepancy. He was not asked to explain,

how the expenses upto 27th March, 1997 were

acknowledged on 13th March, 1997. In the absence of his

cross-examination on this aspect, the plaintiff did not get an

opportunity to explain this discrepancy. In any case, since

these expenses have been admitted in the Statement of

Account Ex.DW-1/11 filed by the defendant, it is difficult to

deny their adjustment to the plaintiff, particularly when

there is no explanation for giving credit for this amount to

the plaintiff in the first instance. Had this amount not

been payable to the plaintiff, the defendant would not have

credited the same in the account of the plaintiff on 31st

March, 2007 towards daily office expenses. The entry,

whereby this amount was debited in the account of the

plaintiff on March 25, 1998 shows that the amount was

transferred to the account of Mrs Renu Gupta. Transfer of

the amount to the account of Mrs Renu Gupta also shows

that the defendant-company acknowledged its liability to

pay the aforesaid amount towards office expenses. though it

decided to give credit for this amount in the account of Mrs

Renu Gupta after debiting the same in the account of the

plaintiff. Admittedly, this amount has not been paid by the

defendant even to Mrs Renu Gupta. As noted earlier, the

office expenses were payable to the plaintiff and not to Mrs

Renu Gupta. The defendant, therefore, had no justification

for debiting this amount in the account of the plaintiff on

25th March, 1998. The plaintiff therefore is entitled to

adjustment of this amount from the amount which is

payable by him to the defendant-company.

28. Ex.PW-1/15 is the breakup of expenses,

amounting to Rs 3,99,906 /- which is signed by none other

than the Managing Director of the defendant-company on

Ex.PW-1/51. A perusal of Ex.Pw-1/51 shows that this

amount represented Delhi office expenses of defendant from

April, 1997 to October, 1997. The defendant does not claim

payment of this amount to the plaintiff. Hence, the plaintiff

is entitled to adjustment of this amount against the price of

the goods which he purchased from the defendant-

company. Thus, the total amount which the plaintiff can

adjust towards office expenses comes to Rs.6,32,010.

29. The plaintiff has also claimed adjustment of three

cash payments alleged to have been made by him to the

defendant. First payment amounting to Rs 5,94,200/- is

stated to have been made on 22nd July, 1998, the second

payment amounting to Rs 6,98,000 /- is stated to have been

made on 05th August, 1999 and the third payment of Rs

2,78,640/- is stated to have been made on 17 th August,

1999. Ex.PW-1/6 is a voucher signed by Mr Jacob Thomas,

acknowledging payment of Rs 6,98,000/- received from the

plaintiff. Ex.PW-1/7 is the cash voucher signed by Mr Jacob

Thomas, acknowledging receipt of cash payment, amounting

to Rs 5,94,200/- from the plaintiff on 22nd July, 1998 and

Ex.P-3 is the receipt of cash payment of Rs 2,78,640/-

received by Mr Runy Chandy on 30th August, 1999. Ex.P-3

has been admitted by defendant during admission/denial of

documents carried out on 09 th December, 2004. The

defendant has also admitted signatures of Mr Jacob Thomas

on Ex.PW-1/6 and PW-1/7. In his affidavit by way of

evidence, the plaintiff has specifically stated, on oath,

about payment of Rs 6,98,000/- and 5,94,000/- to Mr

Jacob Thomas and Rs 2,78,640/- to Mr Runy Chandy.

Neither Mr Jacob Thomas nor Mr Runy Chandy had been

produced in the witness box to controvert the deposition of

the plaintiff in this regard. Admission of signatures of Mr

Jacob Thomas on Ex.PW-1/6 and Ex.PW-1/7 and signature

of Mr Runy Chandy on Ex.P-3, coupled with the failure of

the defendant to produce them in the witness box to

controvert the deposition of the plaintiff in this regard, is

sufficient to prove receipt of the aforesaid three payments by

the defendant through the above-referred officials. This is

not the case of the defendant that Mr Jacob Thomas and/or

Mr Runy Chandy were not authorized to receive cash

payment from the plaintiff or that they had misappropriated

that amount. The defendant, therefore, must give

adjustment of these amounts to the plaintiff.

30. The defendant has also claimed a sum of Rs

1,86,477 from the plaintiff being the price of the material

alleged to have been taken by him from three firms D.R.

Trading Company, M.D.R. Tapes and M/s H-Lon

Industries. No evidence has, however, been produced by

the defendant to prove that any material was received by the

plaintiff from any of these three firms. Since the defendant

has failed to prove receipt of any such material by the

plaintiff, it is not entitled to any amount out of Rs 1,86,477,

claimed by it in this regard.

31. According to the defendant, it had supplied goods

worth Rs 27,65,840/- to the plaintiff. Since the plaintiff is

entitled to adjustment of Rs 2,18,666/- towards salary paid

to Mr.Renu Gupta, Rs 1,70,000/- towards rent of the

premises taken on rent from the plaintiff, Rs 6,32,010/-

towards office expenses, and Rs 15,70,640/- towards cash

payment received from the plaintiff, the remaining amount

payable to it towards price of the goods sold to the plaintiff

comes to Rs 1,74,524/-.

32. Though the plaintiff has claimed a sum of Rs

13,51,521/ towards commission, he has not been able to

prove his entitlement with respect to the whole of this

amount. As noted earlier a sum of Rs 1,40,914/- was

credited by the defendant in the account of the plaintiff on

18th September, 1998 towards commission for the year

1996-97. The defendant cannot escape its liability to pay

the aforesaid amount to the plaintiff. The plaintiff is,

therefore, entitled to adjustment of this amount against the

amount of Rs 1,74,524/- payable by him to the defendant.

33. As per clause 4 of the minutes of the meeting held

on 04th November, 1996 (Ex.PW-1/36), the plaintiff was to

be paid a commission for all orders procured to be supplied

directly by the company (defendant) and all materials

purchased by the plaintiff for re-selling. The learned

counsel for the plaintiff fairly conceded that no evidence has

been led by the plaintiff to prove the order procured by him

for direct supply by the company. It is difficult to accept

that the plaintiff was not in a position to give details of such

orders, if any, procured by him. If a person procures an

order for another person, he would definitely be having all

the particulars pertaining to that order such as the name of

the purchaser, date of the order, quantity of the goods to be

supplied and the price at which the goods were to be

supplied. Therefore, it was not at all difficult for the plaintiff

to provide all those details to the Court. As regards the

material purchased by the plaintiff for re-selling, though

there is evidence showing the value of the goods purchased

by the plaintiff from the defendant-company from time to

time, there is no evidence to prove what was the value of the

goods which the plaintiff had re-sold to others or which

were purchased by him for re-selling. It was contended by

the learned counsel for the plaintiff that since the plaintiff

does not have any manufacturing facility all the goods

purchased by him from the defendant-company were meant

only for re-selling and were actually sold by him. However,

in the absence of specific evidence to prove that all the

goods which the plaintiff purchased from the defendant

were meant for re-selling and were actually re-sold by him,

it is difficult to say that he was entitled to commission on all

the purchases made by him from the defendant-company.

34. In terms of the agreement reached between the

parties in the meeting held on 1st October, 1997 (Ex.PW-

1/24), the sale commission became payable on slab basis in

respect of the sale of entire northern region. Though as per

the minutes, the sale commission was payable to Mrs Renu

Gupta who was employed as Marketing Executive with the

defendant-company, I have, while deciding issue No.1, come

to the conclusion that the commission was in fact payable

to the plaintiff irrespective of whether it was to be paid in

his name or in the name of his wife Mrs Renu Gupta. There

is no evidence to prove the sales made by the defendant-

company in northern region w.e.f. 1st November, 1997 when

the agreement reached in the meeting held on 1 st October,

1997 was to come into force. The minutes also stipulated

that there will be no reimbursement of expenditure towards

maintenance of office, including telephone expenses, etc. It

is not known whether these expenses have been claimed by

the plaintiff and/or his wife Mrs Renu Gupta or not. Till the

total value of the sale made by the defendant in the

northern region w.e.f 1st November, 1997 is known, the

amount of commission payable to the plaintiff in terms of

the minutes of the meeting held on 1st October, 1997 cannot

be worked out. As and when such amount is worked out,

the reimbursement, if any, already taken by the plaintiff

towards maintenance of office, including telephone

expenses, etc. for the period 1st November, 1997 onwards

will have to be deducted from that amount. At this stage,

no adjustment can be given to the plaintiff except for the

amount of Rs 1,40,914/- already acknowledged in the

account books of the defendant-company.

35. As per the decision taken in the meeting held at

Hotel Maurya Sheraton on 27th July, 1998 (Ex.PW-1/28),

the plaintiff was not to be paid any commission for the

material purchased in the name of his firm Alok

Enterprises, but was to be paid 2% commission sale made

to on all other customers of entire northern region. The

amount of commission payable to the plaintiff in terms of

the decision taken in the meeting held on 27 th July, 1998

cannot be worked out unless the amount of sale made by

the defendant to all customers other than the plaintiff, in

the entire northern region is known. Since the sale figure of

the defendant-company for the northern region is not

known, the plaintiff cannot be given any further adjustment

at this stage towards the commission payable to him.

After giving adjustments of Rs 1,40,914/-, out of

the amount of Rs 1,74,524/-, the net amount payable by

the plaintiff to the defendant comes to Rs 33,610/-. The

issues are decided accordingly.

36. Issue No.4

In view of my finding on issue Nos. 3 and 5, the

plaintiff is not entitled to any interest from the defendant-

company. The issue is decided accordingly.

37. Issue No.6

The plaintiff has claimed a sum of Rs 290311.61/-

towards interest from the plaintiff. The Counter Claim,

however, does not indicate from which date interest has

been claimed by the defendant-company. No agreement for

payment of interest has been either pleaded or proved by

the defendant-company. However, since this is a suit for

price of goods sold and delivered, interest can be awarded to

the defendant under Section 61(2) of Sale of Goods Act.

Considering all the facts and circumstances of the case, I

deem it appropriate to award interest to the plaintiff at the

rate of 12% per annum on the amount of Rs 33,610/-

38. The amount of interest of Rs 33,610/- at the rate

of 12% per annum for the period from 1st April, 2001 till the

date of filing of Counter-Claim comes to about Rs 323. The

defendant, therefore, is entitled to recover that amount from

the plaintiff towards interest. The issue is decided

accordingly.

39. Issue No.7

In view of my finding on other issues, the

defendant is entitled to a decree for Rs 33,933/- against the

plaintiff alongwith pendente lite and future interest at the

rate of 12% p.a.

Since the amount of commission payable to the

plaintiff in respect of the decisions taken in the meeting held

on 31st October, 1997 and 31st July, 1998 cannot be worked

out unless the defendant provides figures of the sale made

by it in the northern region w.e.f 1st November 1997, the

plaintiff is entitled to a decree for rendition of account with

respect to commission payable to him w.e.f. 1 st November,

1997. The plaintiff will get commission on slab basis in

terms of the minutes of the meeting held on 1 st October,

1997, in respect of all the sales made by the defendant in

the entire northern region. The reimbursement, if any,

already obtained by the plaintiff and/or his wife Mrs Renu

Gupta towards maintenance of office, including telephone

expenses, etc for the period from 1st November, 1997 will be

set off against the amount which is found payable to the

plaintiff towards commission in terms of the decision taken

in the meeting held on 1st October, 1997.

The amount of commission payable to the plaintiff

w.e.f 27th July, 1998 will be carried out at the rate of 2%,

but, he will not be entitled to any commission for the

material purchased in the name of Alok Enterprises w.e.f

27th July, 1998. The defendant is directed to furnish figures

of the sale made by it in the northern region w.e.f 1 st

November, 1997. The defendant will give separate figures

one for the sales made by it in the northern region w.e.f. 1st

November, 1997 to 26th July, 1998 and the other with

respect to the sales made to customers other than Alok

Enterprises in the northern region w.e.f 27th July, 1998. The

defendant will also furnish figures of the reimbursement, if

any, paid to the plaintiff and/or his wife Mrs Renu Gupta

towards maintenance of office, including telephone

expenses, etc. w.e.f 1st November, 1997. The figures in

terms of this order will be given within eight weeks. The

defendant will work out the amount payable to the plaintiff

towards commission in terms of this judgment and will file

details thereof in the Registry along with sale figures as well

as the amount of reimbursement, if any, given to the

plaintiff and/or his wife Mrs Renu Gupta towards the

maintenance of office expenses, including telephone

expenses, etc. w.e.f 1st November, 1997, along with sales

figures. The parties shall be at liberty to apply to the Court

for appointment of a Local Commission, if required, for

taking accounts from the defendant-company in terms of

this order.

Taking into consideration all the facts and

circumstances of the case, there shall be no order as to

costs. The suit and Counter Claim are decreed accordingly.

             Decree    sheet   be   prepared   in   terms     of    this

judgment.




                                                   (V.K. JAIN)
                                                     JUDGE
DECEMBER 22, 2010
Ag/BG