Khemka Capital Services (P) Ltd. & ... vs I.S. Gupta (Since Deceased) Thru ...
2011 Latest Caselaw 2927 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             Judgment delivered on: 31.05.2011

                        + RSA No.90/2011

KHEMKA CAPITAL SERVICES (P) LTD. & ORS.
                                                   ........Appellants
                  Through:    Mr. Manish Kohli, Advocate.

                  Versus

I.S. GUPTA (SINCE DECEASED) THRU LRs & ORS. ....Respondent
                Through: None


      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 has impugned the judgment and decree dated

08.11.2010 which has endorsed the finding of the trial judge

dated 15.03.2010 whereby the suit filed by the plaintiff seeking

recovery of money had been decreed; suit of the plaintiff had

been decreed for a sum of Rs.95,000/- and also another sum of

Rs.12,500/- alongwith interest @6% per annum.

RSA No.90/2011 Page 1/7

2. Plaintiff had dealings with the defendants who were share

brokers; defendant No.2 and 3, being the directors of defendant

No.1. Initial transaction of the defendant was with plaintiff

No.1; since the relations between the parties were amicable,

plaintiff No.1 asked his other family members i.e. plaintiff No.2

to 5 to also purchase shares through the defendants. In

October, 1999 plaintiffs No.2 to 5 instructed defendant to

purchase shares of HDFC company worth Rs.95,000/-; further

instructions were to transfer these shares in the name of

plaintiff No.1 to whom they wanted to give a gift. Plaintiff No.2

and 3 had also handed over 50 shares of the State Bank of

India(SBI) worth Rs.12,500/- to the defendants on 07.11.1999

for sale in the stock market with instructions to give the sale

consideration to plaintiff No.1. However the HDFC shares have

since not been transferred to plaintiff No.1; the sale

consideration qua the SBI shares have also not been received;

the present suit was filed accordingly.

3. In the written statement the defence was that plaintiff No.1

alone had transactions with the defendants; it was denied that

any amount was received from plaintiff No.2 to 5; it was

however admitted that sum of Rs.95,000/- has been received

from plaintiff No.1 but the said amount had been adjusted

RSA No.90/2011 Page 2/7 against the earlier transactions made between plaintiff No.1

and the defendants, no amount is due.

4. On the pleadings of the parties following issues are framed:

1) Whether the suit of the plaintiff is liable to be dismissed for

want of common cause of action? OPD.

2) Whether the suit of the plaintiff is bad for misjoinder of

defendant No.3 as party to the suit? OPD.

3) Whether the plaintiff is entitled to decree for recovery of

Rs.95,000/- against defendants as prayed for? OPP.

4) Whether the plaintiff is entitled to decree in sum of

Rs.12,500/- against defendants towards minimum sale

consideration amount of 50 SBI shares as prayed for? OPP.

5) Whether the plaintiff is entitled to interest, if so, at what rate

and for which period? OPP.

6) Relief.

5. Oral documentary evidence was led which included four

witnesses on behalf of plaintiff and one witness of the

defendant.

6. While disposing of issue No.3, the court noted that the plaintiffs

have proved on record through oral and documentary evidence

that a sum of Rs.95,000/- has been paid by the plaintiff to

defendant for the purchase of HDFC shares and 50 shares of

RSA No.90/2011 Page 3/7 SBI worth Rs.12,500/- have been given to the defendant. Court

had proceeded on the admission made by the defendants in the

written statement. It would be necessary to advert to this

admission. In para 4 of the written statement, defendants have

admitted:

"Plaintiff No.1 had paid Rs.95,000/- to defendant No.1 firm through cheque as well as cash on different dates only as an account payment in respect of the previous transactions."

This admission of the defendants weighed in the mind of both

the courts below. There are concurrent findings of fact that this

amount of Rs.95,000/- had been received by the defendant; his

submission with this amount stands adjusted against earlier

transactions of the plaintiff had however not been proved.

7. Court had noted that Ex.DW1/2 was a certified copy of the

computerized statement of account maintained by the defendant

qua the plaintiff for the period 01.04.1999 to 31.03.2000.

8. Section 34 of the Indian Evidence Act had been adverted to as

also the deposition of DW1. DW1 had admitted that the

computerized copy of the statement of account is from the

ledger books maintained by him; defendant had however not

produced these ledger books; court had also noted that there is

no entry in Ex. DW1/2 to show as to whom this money was paid

RSA No.90/2011 Page 4/7 as also the purpose for which the money was paid; there was

also no evidence of the adjustments purported to have been

made by the defendants; ledger books were not produced and

the person who had prepared the statement of account had also

not come into the witness box.

9. The two courts below had rightly noted that the plaintiff is

entitled to the decretal amount; defendant having admitted the

receipt of Rs.95,000/- and his only defence being that he had

adjusted this amount against earlier transactions which had not

been substantiated by Ex.DW1/2. Moreover, Ex.PW3/2, PW3/3,

PW3/4 were receipts issued by the defendant to the plaintiff

admitting the receipt of the aforenoted amounts; it is also not

the case of the defendant that he had not received the 50 shares

of SBI. His contention that the amounts stood adjusted was

based on no evidence.

10. The impugned judgment had returned the following finding in

this context. It reads as follows:

"The appellants have placed on record the computer generated copy of the statement of account to substantiate their case and justify their claim but have failed to prove the same in terms of Section 34 of Evidence Act which is relevant law to be looked into. The amendment carried out in the Evidence Act after introduction of the Information Technology Act, 2000 which has recognized the electronic data etc. which has found reference in Section 34 of Evidence Act itself. However, it does not dispense with the production of original books of ledger. It is not the case of the appellant that they are not maintaining the ledger account or that

RSA No.90/2011 Page 5/7 they are maintaining only computer records. Therefore, in these circumstances, it was mandatory for the appellant to prove the statement of account as per law in order to show that the amount adjusted was in fact due from late Shri I.S. Gupta; Failure on the part of the appellant on this context further gets compounded in view of the fact that respondent has specifically raised objections in its replication towards the so called claim of the appellant and still the appellant chose not to bring sufficient and cogent evidence to justify its action against late Shri I.S. Gupta. Thus adverse inference drawn against the appellant was justified. In this context reference can be made to the judgment in Bharat Aluminium Co. Vs. M.A. Corporation 159 (2009 DLT 489 where it was observed in the following words:

"Since the plaintiff has failed to prove its statement of account by leading any evidence much less cogent evidence in regard to the same, it cannot be said that the plaintiff has proved its claim against the defendant. However, the learned Senior Counsel appearing on behalf of the plaintiff has relied upon the admission of the defendant contained in letter Ex.P6 dated 15.04.1986 and Ex.P7 dated 18.03.1986. The alleged admission by the defendant in these letters Ex.P6 and Ex.P7 is of no legal consequence because the present suit was filed by the plaintiff on 28.11.1988 after more than 2.1/2 years of the alleged admission and it is not the case of the plaintiff that no dealings at all had taken place between the parties after these alleged admission. In fact, the plaintiff was required to prove its statement of account before the defendant could be burdened with the liability for payment in this suit."

The claim of the appellant is not foolproof and above board in view of the fact that on account payment in itself does not reflect as to which account the appellant is talking about. It may be in the context of shares applied for or shares sold by the appellant on the instructions of the respondent. The only plausible way through which the appellant could have shown that on account payment meant with regard to the earlier transactions between the appellant and Mr. I.S. Gupta was by production of ledger books where the outstanding amount could have been shown by the appellant. It gives a drubbing to the appellant's case, which ultimately proved fatal.

In view of foregoing discussions, it is apparent that there is no cogent ground available with the appellant which may warrant interference in the impugned judgment. Accordingly, the appeal stands dismissed.

11. The Apex court in (1967) 1 SCR 898: AIR 1967 SC 1058:37

Comp Cas 108 Chandradhar Goswami v. Gauhati Bank Ltd. in

the context of Section 34 of the Evidence Act had noted:

RSA No.90/2011 Page 6/7 "That a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them."

12. This finding in no manner calls for any interference. There is

no perversity in findings of the two fact finding courts below.

Substantial questions of law have been embodied on the page

11 of the body. No such substantial question of law has arisen.

Appeal is dismissed in limine.

(INDERMEET KAUR) J.

May 31, 2011

ns




RSA No.90/2011                                                         Page 7/7