M/S Hindustan Tourist & Taxi ... vs M/S Allied Motors Ltd.
2010 Latest Caselaw 5893 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI

 +                    RFA No. 643/1999

 %                                             24th December, 2010

 M/S HINDUSTAN TOURIST & TAXI SERVICE                     ...... Appellant


                                  Through:     Ch. Ranjit Singh, Adv.

                            VERSUS

 M/S ALLIED MOTORS LTD.                                   .... Respondent

                           Through:            Ms. Divya Kapur, Adv.
 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)

1. By the present first appeal under Section 96 of the Code of Civil

Procedure, 1908 (CPC), the appellant/plaintiff challenges the impugned

judgment and decree dated 2.7.1999 whereby the suit has been decreed

only for part of the prayed amount.

2. The case of the appellant/plaintiff was that he deposited an amount

totaling to Rs.2,53,900/- with the respondent/defendant for purchase of

an Ambassador car. It was claimed that the respondent/defendant did

not deliver the car and delivered cars to other persons out of turn. The

RFA No 643/1999 Page 1 appellant/plaintiff therefore not only filed a case before the Consumer

Forum, but also filed the suit for recovery of Rs.2,53,900/- with interest

thereon.

3. The respondent/defendant appeared and contested the suit. The

respondent did not contest the fact that the amount was deposited by the

appellant, however, its case was that there were two firms, one at Delhi

and another at Chandigarh. It was said that both the firms, were being

operated through Mr. Hardev Singh who is the partner and attorney

holder of other partners so far as the plaintiff firm is concerned and was a

sole proprietor of the firm at Chandigarh. The respondent pleaded that

running accounts were maintained for about 14 years and various on

account payments were regularly made by the appellant/plaintiff. It is

further the case of the respondent that depending on the convenience of

the appellant/plaintiff, delivery was taken either at Delhi or Chandigarh on

account of the different tax structures prevailing in the two states.

4. After the pleadings were completed, the trial court framed the

following issues.

"1. Whether the plaintiff is entitled to recover the amount of Rs.3,44,900/- as claimed in the suit.

2. Whether the suit filed by the plaintiff was not maintainable in view of his earlier complaint filed before the consumer court?

3. Relief?"

RFA No 643/1999 Page 2

5. The only important issue is issue no.1 which after detailed

discussion, examination of the documents, examination of the testimonies

and so on has been held in favour of the respondent-defendant and

against the appellant-plaintiff. The relevant discussion is contained in

paras 7 to 11 and which are reproduced hereunder:

"7. ISSUE NO.1

The defendant has not denied the receipt of Rs.2,53,900/- from the plaintiff. The only question to be seen is whether the adjustment of this amount made by the defendant against the other accounts was lawful or not. Mr. Hardev Singh, who claimed to be the partner of the plaintiff firm, appeared as PW1 and stated that plaintiff firm was a partnership firm and he was attorney holder of other partners. He admitted that he was the proprietor of M/s. Dhanoa Transport Services and used to purchase cars under his firm's name against the bills and used to make payments against the bills upto 1995. He denied the suggestions that M/s. Dhanoa Transport Services had to make any payment to the defendant. He admitted that he had made another payment of Rs.50,000/- by cheque to the defendant but voluntarily said that it was given for another car.

8. DW1 is Rajesh, Accountant of the defendant company. He brought the ledger of the defendant company. He stated that he was working in defendant company since 1987 and have dealt with accounts and plaintiff was having two accounts one in the name of M/s. Hindustan Tourist & Taxi Services and other in the name of M/s. Dhanoa Transport Services. Both firms were having accounts in Chandigarh branch as well as in Delhi branch of the defendant and the payment used to be received in cheque. The payment used to be adjusted against balance and as part payment against bills. He deposed that the amount of Rs.1,03,900/- and RFA No 643/1999 Page 3 Rs.1,50,000/- paid by the plaintiff were received by the defendant. These amounts were received against diesel Ambassador car and transfer entry was made in the account books of the defendant and transfer of Rs.2,00,691/- was made from Delhi account to Chandigarh account of the plaintiff firms. He further stated that at that time Sales Tax was less in Chandigarh and more in Delhi. The plaintiff was depositing some payments in Delhi and some in Chandigarh and car was being taken from Chandigarh to save tax, and, therefore, this money was transferred to Chandigarh. It is stated that whenever car was taken from Delhi the amount was adjusted against Delhi account or verbal instruction of plaintiff. After transferring the above amounts to Chandigarh, an amount of Rs.53,683/- was in the credit of the plaintiff as per books of the defendant. On 31.03.95, an amount of Rs.18,625/- was transferred to the account of M/s. Dhanoa Transport Services from plaintiff's account. Then, an amount of Rs.35,058/- only remained in the credit balance of plaintiff. Plaintiff made further payment of Rs.50,000/- and the credit balance became Rs.85,058.35. This amount was still lying in the credit of the plaintiff in the books of the defendant. The car could not be delivered as the price of care was more than Rs.2,50,000/- while the amount of the plaintiff lying with defendant was only Rs.85,000/-(approximately). The witness did not deny that the two accounts were different accounts but he stated that proprietor was the same and accounts used to be operated by the same person. The witness further stated that the plaintiff had gone to the Sales Manager of the defendant and given oral instructions to transfer the money from Delhi to Chandigarh. DW2 is Vibhu Ranjan Sarkar, Senior Accounts Officer of the defendant company, who brought the original ledger books of the defendant company and proved the statement of accounts as maintained by the defendant as DW2/1 and DW2/10.

These statements of accounts are in respect of plaintiff as well as in Chandigarh and the same was the case of M/s Dhanoa Transport Services, proprietorship firm of Hardev Singh and it was also RFA No 643/1999 Page 4 having one account in Delhi and other in Chandigarh. He stated that the entry of 31.03.95 shows that the plaintiff firm was having a debit balance of Rs.2,00,691/- in Chandigarh account. He stated that in 1995 diesel Ambassador car used to cost about Rs.2,89,000/-. The amount paid by the plaintiff to the defendant has been reflected in the account books of the defendant and the transfer from Delhi account to Chandigarh account was done on oral instructions. He denied that there were no such instructions.

9. From the testimony of defendant's witnesses, it is clear that Hardev Singh was proprietor of M/s Dhanoa Transport Services and he was the main partner of M/s Hindustan Tourist & Taxi Services, the present plaintiff. No suggestion has been given to DW1 or DW2 that both these firms were not having accounts in Chandigarh and Delhi. The ledger proved by defendant have not been challenged or denied. The contention of the plaintiff that he had made payment of Rs.2,53,900/- against purchase of diesel car does not stand the scrutiny, as plaintiff has failed to explain as to why did he pay another amount of Rs.50,000/- to the defendant despite the fact that no delivery of the car had been made up to June, 1995 when he made further payment. This simply shows that plaintiff had not come to the court with clean hands and the contention of the defendant that plaintiff had given oral instructions to transfer the amount to Chandigarh was correct.

10. The ledgers proved by the defendant make it clear that M/s. Hindustan Tourist & Taxi Services and M/s Dhanoa Transport services both were having accounts in Delhi and Chandigarh with the defendant and they were making payments from time to time against the cars purchased from the defendant. The plaintiff had not pointed out a single entry wrongly made by the defendant. The defendant ledger reflected the various payment made by the plaintiff and the adjustment made by the defendant against the sale of cars. It is not the case of the plaintiff that the cars shown sold in the ledgers were not actually RFA No 643/1999 Page 5 sold to the plaintiff. I, therefore, consider that plaintiff was having two accounts with the defendant, one at Delhi and other at Chandigarh and the plaintiff was also having another entity in the name of M/s. Dhanoa Transport Services which was also having two account, one in Delhi and other in Chandigarh. It is settled law that the proprietorship firm has no legal entity and it is only the owner who has the legal entity and is liable for all transactions of the proprietorship firm. Similarly, a partnership firm has got no separate legal entity from its partners. A partnership firm is known by its partners and partners are jointly and severely liable for all the dealings of partnership firm. I, therefore, consider that defendant had right to adjust the amount paid by the plaintiff against the debit balance reflected in the Chandigarh account of the plaintiff as well as against the debit balance reflected in the other firm of Hardev Singh. In AIR 1963 PUNJAB 49 the Hon'ble High Court held that where there are two separate accounts between the parties and suit is filed on one account, the defendant has a right to adjust the amount of one account against the other account. Similarly, in AIR 1964 MP 231 the Hon'ble High Court held that on general principle a person is entitled to pay to himself that amount which due to him from another if he has money belonging to that other provided that his dues are legally recoverable. The Hon'ble High Court further observed that such a person is not obliged to sue for recovery of money which he is already in possession of. I, therefore, consider that the defendant had every right to adjust the amount against the payments due from the plaintiff and defendant rightly adjusted the amount.

11. Considering the fact that the defendant adjusted the amount still there was a credit balance in favour of the plaintiff which the plaintiff was liable to recover from the defendant. Defendant and the plaintiff are business persons and the transaction between the two were commercial transactions. Since after 1995 the defendant had stopped dealing with Ambassador cars, it was obligatory upon the RFA No 643/1999 Page 6 defendant to itself send the credit balance to the plaintiff along with the interest. The plaintiff has filed this suit for recovery of Rs.3,44,900/- but I consider that plaintiff is only entitled to recover the amount which was legally due to the plaintiff for principal amount of Rs.85,058.35 with interest on this amount starting from Ist June, 1995 at 15% per annum till the recovery of the amount. The issue is decided accordingly."

6. I am in complete agreement with the aforesaid findings and

conclusions of the trial court. It is a fact appearing on record that Sh.

Hardev Singh was the sole proprietor of the firm at Chandigarh and was a

partner of the plaintiff/appellant firm and he was also an attorney holder

of the other partners. Respondent/defendant stated in the written

statement that the running accounts were maintained and this aspect

was specifically admitted in the replication by the appellant/plaintiff. Not

only that, witnesses have appeared on behalf of the

respondent/defendant and who have spoken with respect to the

adjustment of the two accounts on account of the near identity of the two

firms and the fact that the dealings of both the firms by the

respondent/defendant was only on behalf Sh. Hardev Singh. Sitting as an

Appellate Court, I am not entitled to interfere with the findings of the trial

court unless the same are perverse or illegal. I do not find any illegality

or perversity in the aforesaid findings and conclusions. On the contrary, I

am in complete agreement with the same.

RFA No 643/1999 Page 7

7. The learned counsel for the appellant has argued that there could

not have been adjustment of account on oral instructions and that liability

has not been proved of the Chandigarh firm because simply statement of

accounts were filed and no documents in support of the statement of

accounts had been filed. It was argued that receipts were issued for a

specific Ambassador car and no reply was given to the legal notice and

therefore in terms of the Sections 59,60 and 61 of the Contract Act, 1872

the payment against a specific car could not be adjusted against other

dues.

I am afraid I am unable to agree with any of the contentions as

raised by the learned counsel for the appellant. Firstly, it is not as if only

a statement of account was filed. The statement of account was filed and

proved by the witnesses of the respondent who appeared in support of

the case of the respondent. As per Section 34 of the Evidence Act, 1872

no doubt a simple statement of account is not good enough, however,

once a witness deposes in addition to the filing of the statement of

account, then, the said statement of account can be relied upon to fasten

liability. Further the appellant has admitted that there exists a running

account and therefore there can adjustments for all dues in a running

account though receipts show payment towards an Ambassador car.

Further, if the appellant was honest and correct in its stand, the

appellant ought to have filed the statement of account of the firm at RFA No 643/1999 Page 8 Chandigarh and which is a fact in special knowledge under Section 106 of

the Evidence Act of Sh. Hardev Singh. Obviously, since the statement of

account at Chandigarh would have gone against the appellant, the same

was not filed. So far as the non-response to the legal notice is concerned,

it is settled law that silence to a legal notice is only one of the aspects to

be considered with the entire evidence which is led in a case for arriving

at a final conclusion. Simply by non-reply nothing turns in favour of the

appellant except a presumption and which has been adequately rebutted

by the respondent by the evidence which has been led in this case.

8. In view of the above, I do not find any reason to interfere with the

detailed, well considered and exhaustive judgment of the court below.

The appeal is therefore dismissed leaving the parties to bear their own

costs.

Trial court record be sent back.

DECEMBER 24, 2010                                   VALMIKI J. MEHTA, J
ib




RFA No 643/1999                                                         Page 9