Delhi High Court

M/S Tin Box vs M/S Gom Industries Ltd. on 29 April, 2011

Author: Indermeet Kaur

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                              Date of judgment: 29.4.2011



+            R.S.A.No.86/2007 & CM No.4166/2007

M/S TIN BOX                          ...........Appellant
                         Through:    Mr.Rajat Aneja and Ms.Vidhi
                                     Jain, Advocates.

                   Versus

M/S GOM INDUSTRIES LTD.              ..........Respondent
                  Through:           Mr.Alok Mahjan and Mr.Rajesh
                                     Arya, Advocates.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

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

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

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

INDERMEET KAUR, J. (Oral)

1. This appeal had impugned the judgment and decree dated

17.1.2007 which endorsed the finding of the trial judge dated

25.8.2004 whereby the suit filed by the plaintiff (under Order

XXXVII of the Code of Civil Procedure) seeking recovery of

Rs.1,69,238/- had been decreed; the application filed by the

defendant seeking leave to defend had been dismissed.

2. Plaintiff had filed the aforenoted suit under the provisions of

XXXVII of the Code of Civil Procedure (hereinafter referred to as

„the Code‟). He was supplying goods to the defendant against

invoices. A running account was maintained; defendant failed to

make the payments despite reminders and even after having

confirmed the balance as on 31.03.1996. The statement of

account from the ledger of the plaintiff maintaining the account of

the defendant company had been filed along with the plaint. On

31.7.1998 the suit had been decreed as the defendant had failed

to appear in spite of service. On his application under Order 9

Rule 13 of the Code the ex parte decree was set aside. Leave to

defend was filed by the defendant. The letter dated 08.2.1996

sent by the defendant to the defendant had confirmed the balance

of Rs.1,28,350/- as on 31.03.1996. This was in conformity with

the statement of account filed by the plaintiff. The three following

defences were raised by the defendant in his application seeking

leave to defend:

i. entry of Rs.25,086/- against invoice no.0061 dated 23.3.1996 ii. Rs.10,910/-

iii. Rs.60,000/-

3. It was stated that these payments were not payable by the

defendant. Trial judge was of the view that the payment of

Rs.25,086/- has been confirmed by the defendant in para 3C of

his application for leave to defend; he has admitted signatures on

the said invoice; the goods had been supplied. Qua the second

entry of Rs.10,910/-; the same was confirmed vide annexure P-IV

which had been filed by the plaintiff along with his reply to the

application for leave to defend. The account of outstanding dues

of Rs.1,28,350/- was also confirmed as on 31.3.1996. The third

amount of Rs.60,000/-, as per the plaintiff was paid to Devender

Mohand Bhatnagar, Manager of the plaintiff company, in cash;

court was of the view that this was the only payment which had

been paid in cash; in the entire transactions between the parties

from 1993 to 1996 all payments were made by cheques; it was

difficult to believe that each transaction of Rs.60,000/-; there was

no explanation as to why the defendant did not obtain a receipt for

the said payment. All amounts claimed by the plaintiff stood

adequately explained; goods had been supplied by the plaintiff to

the defendant for which he was to receive payments and which

had not been paid. The defence raised by the defendant was

moonshine; his application had been dismissed.

4. This was affirmed in first appeal.

5. This is a second appeal. It has been admitted and on

17.4.2007 the following substantial questions of law were

formulated:

1.Whether a sum of Rs.60,000/- was misappropriated by Mr.Devender Mohan Bhatnagar, as per report lodged by the respondent with the police on 8.7.1996 wherein specific allegation was made that Rs.60,000/- was received from Tin Box Company?

2.Does it stand proved by filing invoice dated 23.3.1996 that goods were delivered to the respondent without production of delivery challans?

6. On behalf of the appellant, it is pointed out that the

impugned judgment suffers from an infirmity for the reason that

the defendant had all along stated that Rs.60,000/- had been paid

by him to the Devender Mohan Bhatnagar who was the manager

of the plaintiff company; this has also been admitted by the

plaintiff in his complaint which he had lodged on 08.7.1996; which

was a complaint against Devender Mohan Bhatnagar. In this

complaint it has been mentioned that certain misappropriation of

funds had been done by Devender Mohan Bhatnagar which also

included a sum of Rs.60,000/- received from Tin Box Company. To

counter this submission, learned counsel for the respondent has

submitted that this complaint was filed in July 1996 pursuant to

the information received by the plaintiff company from its various

customers that they had paid the amounts to Devender Mohan

Bhatnagar but he had misappropriated them.

7. Trial judge while dismissing the application for leave to

defend had dealt with this contention in the following manner:

"So far as dispute of `60,000/- is concerned, the plaintiff avers that the same was paid to one Shri D.M.Bhatnagar, Manager of the plaintiff company, in cash. There is no receipt of the same. It is pertinent to mention that entire payment since the beginning of transactions in 1993 upto 1996 was made through cheques. In these circumstances there does not appear any reason of payment in cash event if it is assumed that it was so tendered it does not appeal to logic that the same will be paid by the defendant firm without any receipt and if it is so paid, the defendant is making such payments at its own peril. Moreover, terms and conditions at para 4 of Annexure P-II invoice specifically mentions that payment are to be made through Bank draft or cheque."

8. This finding had clearly noted that all the transactions

between the parties had been effected through cheque payments;

this was between the year 1993 to 1996; it is difficult to believe

that the defendant would have paid a sum of Rs.60,000/- to the

manager of the plaintiff company without obtaining a receipt;

more so when all other transactions were by cheques and this was

the solitary transaction by cash. This was a moonshine defence;

which was rejected. This finding calls for no interference.

9. The second submission made by the learned counsel for the

appellant relates to the payment of Rs.25,086/- which the plaintiff

has claimed in view of the goods supplied on 23.3.1996. In para 7

of the plaint the payments claimed by the plaintiff have been

detailed. As per the plaint, on 23.3.1996 supplies were made of

goods worth Rs.25,086/- under invoice No.0061; due date was

23.5.1996. The defence of the defendant in his application for

leave to defend was that goods were in fact not supplied and this

amount is not due. However, in para 3C of his application (leave

to defend) the defendant had admitted that on 23.3.1996

Devender Mohan Bhatnagar had visited the office of the defendant

and obtained the signatures of Mr.Mehra on the invoice and had

assured that the delivery of goods would be made immediately

thereafter; goods were, however, not delivered. Trial judge had

noted that the defendant had admitted his signatures on the

invoice for Rs.25,086/; it would be difficult to imagine that in a

business dealing a person would sign an invoice without taking

the physical delivery of the goods and agreeing to take the

delivery on a later date; this defence was also found to be

moonshine. This finding returned while disposing of the

application for leave to defend on this score reads as follows:-

"So far entry pertaining to `25,86,00/- is concerned the same stands duly confirmed as the defendant in leave to defend application in para 3 C has admitted signature on the said invoice but has contended that goods were never supplied for the same. "

10. The admission of the defendant had correctly weighed in the

mind of the trial judge. Moreover it is also not in dispute that the

defendant had confirmed the balance of Rs.1,28,350/- vide

balance confirmation dated 08.4.1996. The application for leave

to defend had been dismissed taking into account all these factors.

11. This court has to answer only the two substantial questions

of law which have been formulated as aforenoted. They relate to

payment of Rs.60,000/- and the delivery of goods vide invoice

dated 23.3.1996 which relate to the payment of Rs.25,086/-.

These fact findings as returned by the two fact finding courts

below do not in any manner call for any interference. There is no

perversity in this finding. Substantial questions of law are