Delhi High Court
A.K.Investments vs Sh. Milan Dhar on 20 January, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 84/2000
% 20th January, 2011
A.K.INVESTMENTS ...... Appellant
Through: Mr. Rajeshwar K. Gupta
and Ms. Sumati Sharma,
Advocates.
VERSUS
SH. MILAN DHAR ...... Respondent
Through: None.
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? Yes
3. Whether the judgment should be reported in the Digest? Yes
VALMIKI J. MEHTA, J (ORAL)
1. This case is on the „regular board‟ of this court since 3.01.2011 and
is effective item no.1 on the „regular board‟ today but no one has
appeared on behalf of the respondent although it is 3.30 pm. I have
therefore heard the learned counsel for the appellant and am proceeding
to hear and dispose of the appeal.
2. The challenge by means of the present appeal is to the impugned
judgment and decree dated 27.9.1999 of the trial court whereby the suit
of the respondent/plaintiff has been decreed for Rs.3,39,937.77 p. along
with interest. The suit has been decreed on the basis of the balance
appearing in the foot of the account on account of the relationship
between the parties whereby the appellant was the main broker and the
respondent/plaintiff was the sub-broker of the appellant.
3. The case of the respondent/plaintiff in the trial court was that there
were dues to him on account of certain bad deliveries of shares and also
value of certain shares which were sent to the appellant for rectification
and which were not received back. Claim was also made for an amount of
Rs.1,50,000/- towards cheques issued by the appellant and which were
dishonoured and for refund of the security deposit of Rs.70,000/-.
4. The trial court has, in substance, relied basically upon the statement
of account of the appellant in the books of respondent/plaintiff for
decreeing the suit. The suit was filed for recovery of Rs.4,39,937.77 p and
it has been decreed for Rs.3,39,937.77 i.e., Rs.1 lac less. This adjustment
of Rs.1 lac was given because the respondent/plaintiff admitted in his
cross examination that after dishonor of the cheques issued by the
appellant of Rs.1,50,000/-, he has received an amount of Rs.1 lac in cash
from the appellant. I may note that in the plaint as also in the statement
of account, this amount of Rs.1 lac was shown to be payable i.e., the
respondent/plaintiff had denied having received this amount of Rs.1 lac.
5. As per Section 34 of the Indian Evidence Act, 1872 a mere
statement of account is not sufficient to fasten a person with liability. This
principle of law is, because there must be shown to be proper documents
and vouchers of the transactions to backup the entries in the statement of
account. The principle is that if simple entries in the statement of account
are made, anyone can make entry in the statement of account and can
fasten liability upon the other party. Of course, the exception of this rule
is that if it is shown that the statement of account is maintained in the
normal course of business and the said statement evokes credibility and
acceptance, then, the suit on the basis of statement of account along with
deposition in support of the said statement of account regularly and
properly maintained in due course of business is sufficient to fasten the
opposite party with liability.
6. I may note in the present case, admittedly, there are no documents
and vouchers of the transactions with respect to the debit entries made
by the respondent/plaintiff in the statement of account of the appellant
which was maintained by the respondent/plaintiff in his books of account.
Further, in my opinion, the statement of account filed by the
respondent/plaintiff is such that the same does not inspire confidence
because various entries which are of earlier date are found at a later date
such as for bad delivery of shares. Since the statement of account is the
basis of the decree passed by the trial court, and as I have said that the
statement of account does not inspire credibility and confidence I may
refer to the ending portion of the statement of account which has been
argued by learned counsel for the appellant to challenge the authenticity,
validity and credibility of the said statement of account. The last page of
the statement of account is therefore reproduced as under:-
"
Month PARTICULARS FOLIO DEBIT CREDIT Dr. or Balance
& Date Rs. P.
Rs. P. Cr. Rs. P
xxxxx xxxx xxxxxx xxxxx xxxx xxxx xxx xxxx Xxxx
177 22.4.95 5 ICICI 5936 60
25.4.95 50 PREMIER 1986 00
VINYAL
15 13.5.95 50 PREMIER 1986 00
VINYAL
13.5.95 By Cash 25,000.00
1.5.95 Cash 1,00,000 00
Received
1 26.5.95 100 25060 40
RELIANCE
INDUSTRIES
1 27.5.95 100 13136 50
VIDEOCON
INTL.
2 1.7.95 600 11796 00
RELIANCE
PETRO
5.7.95 400 7982 95
RELIANCE
3762 PETRO
5.7.95 100 ITC LTD. 24757 25
5.7.95 100 SCICI 7174 55 2,22731.06
1,73,000.00 25981 16
16.5.95 Cheque 1,00,000 00
Recover
014140
18.5.95 Cheque 1,00,000.00
recover by
Bank
18.5.95 Recover 50,000 00
cheque
No.0141141
20.5.95 Cheque 50,000.00 2,22731.06
Return by
Bank
June 95 Bad Delivery 12,000.00
Given in June
21.5.94 Security 70,000.00
Deposit
Given on 5,000.00
21.5.94
Divident on 43000.00
Bad Delivery
share Bad 87,20671
Delivery 4,39,937.77
share with us
Inerest
16.5.95 to
27.5.96
Certified that the total amount
outstanding covered as per
accounts maintained in the
normal course of business".
7. A reference to the aforesaid entries shows that the entry of May,
1995 is after the entry of July, 1995. Further, the entry of June, 1995 is
also after the entry of July, 1995 and there is an entry of May, 1994
appearing right at the very end. Clearly, the statement of account is not
such which can be said to have been regularly maintained in the ordinary
course of business because statement of accounts which are maintained
in the regular and ordinary course of business would not contain jumbled
up entries. The counsel for the appellant has also correctly argued that
the last entry of interest is on the basis that the complete dues are
payable as stated in the statement of account, however, the trial court
has decreed the suit for this entire amount of interest of Rs.87,206.71
although the said amount had to be proportionately reduced considering
that the suit decreed was for Rs.1 lac less than what was prayed in the
suit and the total amount prayed to be decreed was inclusive of the
interest of Rs.87,206.71.
8. The net conclusion of the above is that the statement of account as
relied upon by the respondent/plaintiff is not credible and cannot be relied
upon to fasten liability. However, I cannot but fail to note that the
appellant/defendant has not filed though it could have filed its statement
of account because after all there were running transactions over a long
period between the two parties and surely, a broker such as the appellant
would have in fact been maintaining the statement of account of the
respondent/plaintiff in its books of account. Also, it is not disputed by the
appellant that it had received a security deposit of Rs.70,000/- from the
respondent.
Accordingly, since, there is an undisputed amount of Rs.70,000/-
lying with the appellant on account of the said amount having been
furnished as a security to the appellant by the respondent, the suit is
therefore entitled to be decreed for the said sum of Rs.70,000/- without
anything more.
9. The impugned judgment and decree is therefore set aside. The suit
will therefore stand decreed for a sum of Rs.70,000/- with pendente lite
and future interest till realization at 12% per annum. Decree sheet be
drawn up accordingly. The appeal is therefore disposed of as partly
allowed. Parties are left to bear their own costs. Trial court record be sent
back.
JANUARY 20, 2011 VALMIKI J. MEHTA, J.
ib
