Delhi High Court
M/S Mc Dowell And Co. Ltd. vs M/S Shashi Mohan Garg & Ors. Fc on 22 February, 2010
Author: S.Ravindra Bhat
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
DECIDED ON: 22.02.2010
+ CS (OS) 1376/2002
M/S MC DOWELL AND CO. LTD. ..... Plaintiff
Through: Mr. Hitender Kapur, Advocate
versus
M/S SHASHI MOHAN GARG & ORS. FC ..... Defendant
Through: Mr. J.K. Chawla, Adv. for the defendant
No.3.
Ms. Nandita Abhot, Adv. for the defendant No.2.
Mr. Harsh Khanna with Mr. K. Mittal and Mr.
Abhishekh Sharma, Advs. for defendant No.1.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
1.
Whether the Reporters of local papers YES
may be allowed to see the judgment?
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
% Arguments heard on behalf of the parties.
2. The plaintiff in this suit seeks a decree for the sum of Rs.45,75,045/-. The foundation of
the claim is that the vehicle purchased from the first defendant was a stolen one. The said first
defendant, in its written statement denies liability and also contested the filing of the suit,
arguing that the person who verified the suit was not authorized to act on behalf of the plaintiff.
CS (OS) 1376/2002 Page 1
3. This court by a judgment dated 12th July, 2007, discussed the materials as well as the
pleadings and drew strength from Sections 14 and 27 of the Sale of Goods Act. The court noted
that the first defendant's statement under order 10 Rule 2 CPC was recorded on 4th August, 2006,
in the following terms:-
"It is correct that I sold Car Toyota Land Crulser bearing registration No.
DLSCB-3180 to the plaintiff/MC Dowell and company Ltd. for a consideration of
Rs.37,90,000/- I have received the full amount from the plaintiff. However, car
was registered in their name prior to receiving this consideration as per their
desire. I never knew that the car in question was stolen car. After about a year in
the month of August, 2001, I was informed by the Manager of the plaintiff
company that there was some problem with regard to the ownership of the car
and the Bombay police had arrived to take possessions of the car because of non-
payment of custom duty. It is correct that I have already filed a suit for recovery
against Mrs. D. Dhillon, Mr. Dhillon and Mr. S.K. Miglani from whom I had
purchased this Car." (emphasis supplied)
4. The Court thereafter in the said order dated 12th July, 2007 extracted Sections 14 & 27
which specifically deals with the aspect of implied warranty on the goods sold or purchased. On
that reasoning the Court, concluded as follows:-
"18. Consequently, subject to the preliminary issue with regard to the
competence and authorization of the attorney to file the present suit being
decided in favour of the plaintiff, it is clear that so far as the claim for an amount
of Rs.37,90,000/- paid towards consideration of amount of vehicle in question to
the defendant is concerned, the same appear to be totally justified.
19. Counsel for the defendant No.1 has relied on various decisions to
contend that a decree under Order 12 Rule 6 CPC cannot be passed in a case
like present where triable issues are raised and there is no clear, unambiguous
and unequivocal admission made by the defendant in the written statement.
20. It is contended by the defendant No.1 that various triable issues
arise. From the preliminary objections of the defendants, it appears that the
defendant has even sought to question the corporation of the plaintiff as a limited
company under companies Act, 1956. Apart from this, objections have been
raised with regard to the constitution of a valid attorney in favour of the
signatory of the plaintiff, Mr. V.N. Taneja. So far as the challenge to the
incorporation of the plaintiff company is concerned, in my view, the same is not
permissible in view of the fact that defendant no. 1 had itself dealt with the
plaintiff which constitutes recognition by defendant no.1 of the existence of
defendant no.1 as a juristic entity. Defendant No.1 is therefore stopped from
now challenging the very incorporation of the plaintiff. So far as the other
CS (OS) 1376/2002 Page 2
objections raised by the defendant no.1 are concerned, in my view, the following
preliminary issue arises and is accordingly framed. However, it is made clear
that in case the plaintiff succeeds in proving the following preliminary issue, the
costs thereof, shall be to the account of defendant no.1;
1. Whether the suit has been signed, verified and instituted by a duly
authorized person? OPP" (emphasis supplied)
5. In the light of the above findings the Court apart from the issue of the suit being instituted
by duly authorized person, framed the following issues:-
"2. Whether the plaintiff is entitled to claim the following amounts
from defendant no.1?
Insurance charges claimed to have been paid
by the plaintiff. Rs.1,24,069/-
Interest claimed to have been paid to the
bank Rs.6,02,976/-
Transportation charges claimed to have
been paid for transporting vehicle from
Delhi to Mumbai, Yellow Gate Police Station. Rs.18,000/-
Legal expenses claimed to have been incurred
in defending the Show Cause Notice
issued by Customs Authorities. Rs.40,000/-
3. Whether the plaintiff is entitled to interest? If so at what amount
and at what rate?
4. Relief."
6. The plaintiff was directed to file list of witnesses in relation to preliminary issue within
ten days and file itse affidavits by way of evidence. Apparently the plaintiff company's name
had changed and move the application for substitution of the correct name. That application was
decided after contest by the defendant.
7. The plaintiff submits that this Court need not to go into the preliminary issue separately
and should straightaway proceed with the trial, having regard to the overall circumstances.
Learned counsel emphasized that in the subsequent suit (listed before this Court as Item No.4
today) i.e. CS(OS) No. 1694/2003, the first defendant, has impleaded the present plaintiff as
CS (OS) 1376/2002 Page 3
defendant No.4. Learned counsel has pointed out that the plaintiff M/S MC DOWELL AND
CO. LTD. -arrayed is through its attorney Shri V.N. Taneja who is also the authorized signatory
and attorney who verified the plaint as CS(OS) No. 1376/2002.
8. It is argued that therefore, the first preliminary issue need not be separately tied and that
the Court should direct the parties to lead evidence in accordance with the issues framed.
9. Learned counsel for the defendant resisted the submissions and argued that the order
dated 12th July, 2007 has become final and that the question of deciding subsequent issues would
arise only after the preliminary issue as to the maintainability of the suit is determined. Learned
counsel for the defendant also argued that u/O 12 R 6 application by the plaintiff had been
rejected earlier (i.e. before the order dated 12th July, 2007 and that an appeal against the same is
pending before the Division Bench) and, therefore, all issues would have to be tied together.
10. It is evident from the above discussion that on the merits the Court of the view that
finality to the decision determining the liability of the first defendant at Rs.37,90,000/- in view of
the order dated 12th July, 2007 is not in dispute. The Court has premised its finding on that
question upon the admissions, elicited during the course of the examination in Court in exercise
of power u/O 10 Rule 2 CPC, 2006. The Court had also relied upon Sections 14 and 27.
11. As far as the question of deciding the preliminary issue first and then proceed with the
trial is concerned, this Court is satisfied with the submissions made today by the plaintiff that
there is an implied admission as to the power of Shri V.N. Taneja since the first defendant has
referred to the present plaintiff/ M/S MC DOWELL AND CO. LTD. - (arrayed as forth
defendant in that suit). What is next suit is through the concerned Shri V.N. Taneja.
12. In the light of the above, it is held that there is no need to determine the preliminary issue
before the proceeding to trial.
CS (OS) 1376/2002 Page 4
13. This Court is also satisfied that decree in terms of the order dated 12th July, 2007 needs to
be drawn. The Registry is therefore directed to draw a decree for the sum of Rs.37,90,000/- in
favour of the plaintiff and against the defendant No.1.
14. List on 10th May, 2010 before the Joint Registrar for further proceedings.
S. RAVINDRA BHAT
(JUDGE)
FEBRUARY 22, 2010
ns
CS (OS) 1376/2002 Page 5
