Delhi High Court
M/S Rubfila International Ltd. vs Alok Gupta on 4 December, 2012
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on:November 7, 2011
Judgment Pronounced on: December 04,2012
+ RFA (OS) No.40/2011
M/S RUBFILA INTERNATIONAL LTD. .... Appellant
Represented by: Ms.V.Mohana, Advocate.
versus
ALOK GUPTA .... Respondent
Represented by: Mr.Arun Birbal, Advocate.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE MANMOHAN SINGH
PRADEEP NANDRAJOG, J.
1. The respondent Alok Gupta filed a suit against the appellant
pleading that he was carrying on business as the sole proprietor of
M/s.Alok Enterprises and with effect from November 01, 1996 was
appointed as an agent by the appellant for sale of its products in Northern
India and he had to receive commission @1% on the sales made by the
appellant to third parties on orders obtained by him and further that a part
of his property would be taken on rent @ `5,000/- per month from
November 01, 1996 by the appellant and additionally he was to be
reimbursed office expenses for the office use made by the appellant of his
premises and further that his wife Renu Gupta was employed by the
appellant as a Sales Executive at a salary of `10,000/- per month and that
one Jacob Thomas, an employee of the appellant and his i.e. Alok‟s wife
Renu Gupta started managing the office from the premises of the
respondent. At the asking of the appellant he paid salary to his wife and
debited the said sum to the account of the appellant and further that he
bore the office expenses and debited the same to the account of the
appellant. He pleaded that this initial arrangement lasted, till when in the
month of October, 1997 a meeting was held between him and one
Mr.Raasaih and Mr.R.J.Menon, Managing Director and Marketing
Manager respectively of the appellantat the factory of the appellant
wherein it was agreed that with effect from April 01, 1997 the appellant
shall pay to him commission at revised rates on slab basis. He further
pleaded that in the month of July, 1998, another meeting took place
between him and the Managing Director of the appellant wherein it was
agreed that with effect from April 01, 1998 the appellant shall pay to him
commission at the revised rate of 2% for the entire sales in North India.In
the month of December, 1998 another meeting was heldwherein it was
confirmed that he shall be paid commission at the revised rate of 2% for
the year 1999-2000. He pleaded that he was entitled to a rendition of
accounts from the appellant and that if accounts were rendered he would
be entitled to receive at least `13,51,521/- from the appellant.
2. In the written statement filed by the appellant, it was pleaded that it
had never appointed Alok as an agent for sale of its products and that
whatever sales were made to him were direct sales on principal to
principal basis. Admitting that his wife Ms.Renu Gupta was appointed as
the Marketing Executive of the appellant it was denied that any salary on
behalf of the respondent was paid by the appellant to her and it was
pleaded that she alone had a right, if any to claim salary. It was pleaded
that Alok and his wife visited the office of the appellant in October 1996
and desired to be appointed as the agent in the Northern region. The
appellant did not agree because M/s.Filatex India was acting as its agent
in Northern India and thus it was agreed that Alok‟s wife would work as
a Marketing Executive of the appellant and his sole proprietary firm
could purchase the product manufactured by the appellant on principal to
principal basis. That it was agreed that if Alok procured orders from
third parties, he would be paid 1% commission, but would not be entitled
to any commission for direct sales made to him. It was denied that the
premises of Alok were taken on rent. It was denied that he was entitled
to be reimbursed any office expenses. It was pleaded that Alok was
liable to pay `29,52,317/- to the appellant. Being relevant, certain
averments in the written statement need to be noted; and we do. They
read as under:-
"(c) During the discussion the defendant herein asked the
plaintiff to do market study in order to find out the
marketability of their product. The defendants were not
immediately agreeable for appointing them as agents since
M/s.Filatex India was, already existing in the Northern
Territory. The plaintiff however represented that they can buy
the products of the defendant and sell it to their customers
while Ms.Renu Gupta, wife of the plaintiff will act as the
Marketing Executive of the defendant. Therefore, the
defendant appointed Ms.Renu Gupta on 5.11.96 as their
employee (Marketing Executive) on a monthly salary of
`10,000/-. It was also agreed that for whatever orders the
plaintiff procure he would get a special commission of 1%
and for the goods which the plaintiff purchases for M/s.Alok
Enterprises no commission will be allowed. This was an oral
understanding and there was no agreement executed
appointing the plaintiff as an agent. There is no relationship of
agency in that sense between the plaintiff and the defendant.
7) .....It is false to contend that the defendant had agreed
to pay the plaintiff a Commission of 1% on the total sales
made by him directly or by the company on the orders
procured through him plus reimbursement of all telephone and
office expenses. It is submitted that Ms.Renu Gupta, wife of
the plaintiff was appointed as their Marketing Executive on
November 5, 1996 for a salary of `10,000/- per month. She
had also been given some incentive for the business procured
by her. The amount which was payable to Ms.Renu Gupta
was adjusted in the amount receivable by the defendant from
the plaintiff on the purchases made by the plaintiff. Mr.Jacob
Thomas was deputed to Delhi for effective supervision of the
market and for collection of the amounts due.
8) .....It is submitted that for the purpose of obtaining
Central Excise as well as Sales Tax registration and
certificate, the premises of the plaintiff were shown as rented
premises by the defendant. However, there is no lease
agreement between the parties and certain account
adjustments have been made in the amount payable by the
plaintiff to the defendant. There is no amount due on that
account to the plaintiff.
9) In reply to Para 5 it is a total false hood to state that the
defendant had appointed other persons apart from Ms.Renu
Gupta and Mr. Jacob Thomas in Delhi. There were no other
staff and there were no office expenses in Delhi. It is incorrect
to state that M/s.Alok Enterprises met all the office expenses
which was debited to the account of the defendant. In fact the
entire expenses were met by the defendant and they have been
debited in the defendant‟s books of accounts. The plaintiff
was not paid any office expenses as claimed by him."
3. In addition to the written statement filed, the appellant filed a
counter claim in sum of `32,24,628.61 together with interest @24% per
annum, inter-alia pleading that Alok had purchased goods in sum of
`27,65,840/- from the appellant during the period from August 07, 1998
to March 31, 2001. In addition thereto, he had also purchased goods in
sum of `14,274/-, `22,588/- and `1,49,615/- from D.R.Trading Company,
M.D.R.Tapes and M/s.H-Lon Industries respectively during the said
period for which he had to make payment to the appellant.
4. On the basis of pleadings of the parties, vide order dated January
18, 2004 following issues were framed by the learned Single Judge:-
"1. Was the plaintiff appointed as an agent by the
defendant for Northern India? If yes, on what terms? OPP
2. Was Mrs.Renu Gupta, wife of the plaintiff employed by
the defendant as a Marketing Executive at a monthly salary of
`10,000/- with further right to get special commission of 1%
for the good supplied on bookings effected by her? OPD
3. To what amount, if any, is the plaintiff entitled to from
the defendant? OPP
4. If issue No.3 is decided in favor of the plaintiff,
whether plaintiff is entitled to any interest and at what rate?
OPP
5. To what amount is the defendant entitled to from the
plaintiff? OPD
6. If issue No.5 is decided in favor of the defendant,
whether defendant is entitled to interest from the plaintiff and
at what rate? OPD
7. Relief to the parties."
5. In support of his case, the respondent examined himself and his
wife Ms.Renu Gupta as PW-1 and PW-2 respectively.
6. In his testimony, the respondent as PW-1, essentially reiterated the
averments made in the plaint filed by him. It would be relevant to note
the following portion of his examination-in-chief:-
"6. ...As per the agreement between the parties the salary
of Shrimati Renu Gupta was to be initially paid by the
plaintiff and the sum was then going to be reimbursed to the
plaintiff by the defendant."
.....
12. That subsequently vide agreement as reflected in the
minutes of meeting held on October 01, 1997 at Kerala
factory in which the plaintiff was represented by his wife, it
was agreed that the plaintiff shall be paid the commission of
2% instead of one percent and further the plaintiff shall not be
reimbursed the office expenses. The wife of the plaintiff was
never paid any commission nor she was incurring the office
expenses nor was she entitled to reimbursement. Thus it is
clear that the reference to the wife of the plaintiff was to the
plaintiff only.
....
15. Thus as per the agreements between the parties dated
November 04, 1996, October 01, 1997 and July 27, 1998, the
plaintiff was entitled to the commission for the business
procured by him for the defendant at the agreed rate. In
addition he was to get the reimbursement of the expenses
incurred by him for the following purposes:
(a). Salary paid to Shrimati Renu Gupta @ `10000/- wef
November 01, 1996 till March 31, 1998 and the other staff.
(b). Rent of the premises @ `5,000/- per month wef
November 01, 1996 till August 31, 1999.
(c) Expenses incurred for running the defendant‟s office at
Delhi till October 01, 1997 or August 01, 1999 as the case
may be found by this Hon‟ble Court."
7. He was cross-examined and it would be relevant to note the
following portion of the cross-examination of the respondent:-
"The commission for which the suit has been filed is pursuant
to an agreement appointing me as an agent. I have produced
that agreement which is Exhibit PW-1/36, Minute of the
meeting held at RIL, Palakkad on 4th November, 1996.
It is correct that Exhibit PW-1/36 is not an agreement
but only the minutes. It is correct that Exhibit PW-1/36 only
contemplates about appointment of agent and by that
document I was not appointed as an agent.
My property was used as business premises at the instance of
the defendant company for my wife. No lease agreement was
executed between me and the defendant company for the use
of business premises in my property.
It is correct that there is no written agreement for
payment of any commission by the defendant company to me.
Volunteered: Only the minutes are there.
It is correct that I have claimed the salary payable to my
wife in the present suit who is not a party to the suit.
It is correct that Exhibit P-1/D-1 to D-21 were issued in
respect of goods sent by defendant company to me (Objected
to by the learned counsel for the plaintiff)
Payments have been made by me against invoices
marked as Ex.P-1/D-1 to Ex.P-1/21. Payments made can‟t be
linked to a particular invoice as payments were made of a
lump sum amount. There is no particular entry in my accounts
relating to the payments against invoice No.467, Ex.P-1/52 as
payments were made in lump sum.
It is incorrect to suggest that I was a mere purchaser
was claiming to be an agent of the defendant company there
were lot of complaints made against me to the defendant
company by the customers."
8. In her testimony, Ms.Renu Gupta PW-2, deposed that on
November 05, 1996 she was appointed to the post of Marketing
Executive in the appellant company. As per the understanding between
the parties her salary was to be paid by her husband and the appellant was
to reimburse her husband the salary paid by him to her. The office of the
appellant was at premises bearing Municipal No.F-11, Pandav Nagar,
Delhi, taken on rent by the appellant from her husband, who used to bear
the expenses incurred at the aforesaid premises and the appellant was to
reimburse her husband the amount incurred towards office expenses.
9. She was cross-examined and it would be relevant to note the
following portion of her cross-examination:-
"The salary is the part of claim in the present suit but I do not
think that I have signed the claim....It is incorrect to suggest
that address of F-11, Pandav Nagar, Delhi was used by the
defendant company only for the purpose of giving the address
to the Central Excise and Sales Tax Authorities."
10. In support of its case, the appellant examined Mr.Sudesh, Assistant
Manager (Secretarial and Legal) and Mr.Ashok Kashyap, a handwriting
expert, as DW-1 and DW-2 respectively.
11. In his testimony, Sudesh DW-1, essentially reiterated the
averments made in the written statement/counter claim filed by the
appellant. In addition thereto, Sudesh deposed that R.J.Menon left the
services of the appellant in the month of December, 1998 and he expired
in the year 2005. It would be relevant to note the following portion of the
cross-examination of the witness:-
"Mr.J.R.Rasaih is Managing Director of defendant company
and he is still the Managing Director....I am recognizing
handwriting and signature of Mr.Jacob Thomas on Ex.PW-
1/23. I do not know whether facts stated in Ex.PW-1/23 are
correct. It is wrong to suggest that I am deliberately denying
the facts stated in Ex.PW-1/23 as facts are contrary to the
stand of defendant company. Ex.PW-1/24 bears the original
signatures of Mr.R.J.Menon and at the time of carrying out
admission/denial of the document, I had only denied only the
contents of this document and not the signatures. I recognize
the signatures of Mr. Jacob Thomas on Ex.PW-1/5. As per
Ex.PW-1/5, an attempt was made to settle the accounts
between the plaintiff and the defendant company but it was
never settled. I will be able to recognize the handwriting of
Mr.Jacob Thomas but except for his signatures Ex.PW-1/5 is
not in the handwriting of Mr.Jacob Thomas. It is incorrect to
suggest that I intentionally liked while denying Ex.PW-1/5 to
be in handwriting of Mr.Jacob Thomas. I do not know
whether cash payments were accepted by the defendant
company vide Ex.PW-1/6 to Ex.PW1/8 and vide Ex.P-3.
Documents Ex.PW-1/6 to Ex.PW-1/8 appears to have been
signed by Mr.Rumy Chandy. These cash payments are not
shown in the accounts of the defendant company as these
payments were not received by the defendant company. It is
incorrect to suggest that salary was not paid to Ms.Renu
Gupta by the defendant company as payment was to be made
to her by the plaintiff who was to recover the amount from the
defendant company. Volunteer, the salary was paid to
Ms.Renu Gupta by the defendant company directly. In
relation to entry dated March 25, 1998 in Ex.DW-1/11
relating to Ms.Renu Gupta was reversed following audit
objection as amount was credited to the account of the
plaintiff by mistake. It is incorrect to suggest that I have stated
falsely as regard the reversal of entry dated March 25, 1998 in
Ex.DW-1/11 by manipulating the accounts as the correct
position was the amount was actually due to the plaintiff as
per the understanding between the parties. Mr.J.R.Rasai is
hale and hearty and is the managing director of the defendant
company at present." (Emphasis Supplied)
12. Pandit Ashok Kashyap DW-2, a handwriting expert, deposed that
he had examined the signatures of Mr.R.J.Menon purportedly contained
in the minutes of the meeting dated November 04, 1996 Ex.PW-1/36
with his admitted signatures and prepared the report dated April 22, 2006
Ex.DW-2/A-I in said regards. It would be relevant to note following
portion of the testimony of the witness:-
"8. My considered opinion in this case after the
examination of relevant documents is as follows:-
1. The suspected signature marked Q-1 on Exhibit No.
P.W.1/36 dated November 04, 1996,.....are forged and have
not been signed by the author of the admitted signatures
marked........S-8 on Exhibit No. P.W/24 dated October 01,
1997 and S-9 & S-10 running in two sheets on Exhibit
No.P.W1/28 dated July 27, 1998 i.e., Mr R.J. Menon."
(Emphasis Supplied)
13. Since extensive documents were exhibited at the trial and the
resolution of the disputes centers around said documents, we briefly note,
the relevant documents proved by Alok and the stand of the appellant
pertaining thereto. In a tabular form, the same would read as under:-
S. No. Particulars of the Documents Whether admitted or denied by
the appellant company
1. Ex.PW-1/5: A memo issued by Signatures admitted. Contents
the appellant company denied.
indicating that expenses in sum
of `2,32,825/- were incurred in
the office of the appellant
company at Delhi for the
period from November, 1996 to
March, 1997. The document
contains the signatures of
Mr.Jacob Thomas, an
employee of the appellant
company.
2. Ex.PW-1/6: A voucher dated Signatures admitted. Contents
August 05, 1998 signed by denied.
Mr.Jacob Thomas recording
that the respondent had paid a
sum of `6,98,000/- to the
appellant company.
3. Ex.PW-1/7: A voucher dated Signatures admitted. Contents
July 22, 1998 signed by denied.
Mr.Jacob Thomas recording
that the respondent had paid a
sum of `5,94,200/- to the
appellant company.
4. Ex.P-3: A receipt issued by Admitted.
M/s Alok Enterprises recording
that on August 30, 1999 the
respondent had paid a sum of
`2,78,640/- to Mr.Roony, an
employee of the appellant
company.
5. Ex.P-24: The letter dated Admitted.
November 05, 1996 issued by
the appellant company
appointing the wife of the
respondent Ms.Renu Gupta on
the post of Marketing
Executive in the respondent
company at a salary of
`10,000/- per month.
6. Ex.PW-1/23: A statement Signatures admitted. Contents
dated February 03, 1997 made denied.
by Mr.Jacob Thomas.
7. Ex.PW-1/24: The minutes of Denied.
meeting dated October 01,
1997 held between the
respondent, wife of the
respondent (Ms.Renu Gupta)
and officials of the appellant
company. The document
purportedly contains the
signatures of Mr.R.J. Menon,
the Marketing Manager of
the appellant company.
8. Ex.PW-1/28: The minutes of Signatures Admitted. Contents
meeting dated July 27, 1998 Denied.
held between the respondent
and officials of the appellant
company. The document
purportedly contains the
signatures of Mr.R.J. Menon,
the Marketing Manager of
the appellant company.
9. Ex.PW-1/36: The minutes of Denied.
meeting dated November 04,
1996 held between the
respondent and officials of the
appellant company. The
document purportedly
contains the signatures of
Mr.R.J.Menon, the
Marketing Manager of the
appellant company.
10. Ex.PW-1/51: A credit note Signatures admitted. Contents
dated October 31, 1997 signed denied.
by the Managing Director of
the respondent company
recording that expenses in sum
of `3,99,185/- has been
incurred at Delhi office of the
appellant company for the
period from April, 1997 to
October, 1997.
11. Ex.PW-1/52: An extract of the Denied.
statement of account of the
respondent with the appellant
company recording that a sum
of `13,51,521/- is due from the
appellant company to the
respondent.
14. Similarly, the appellant proved many documents, and in respect of
the relevant ones we would note the stand of Alok Gupta. Put in a
tabular form the same would be as under:-
S. No. Particulars of the Documents Whether Alok admitted or
denied the document.
1. Ex.P-1/D1 to Ex.P-1/D21: Denied.
Invoices issued by the
appellant company in respect
of the goods purchased by the
respondent for the period from
August 07, 1998 to February
22, 1999. Be it noted here that
as per said 21 invoices the
respondent had purchased
goods worth `27,65,840/-
from the appellant company.
2. Ex.D-2 to Ex.D-5: A letter Admitted.
dated February 13, 1997
written by Ms.Renu Gupta to
Mr.R.J.Menon, Marketing
Manager of the appellant
company, on the letter head of
the appellant company
detailing the expenses incurred
in the office of the appellant
company at Delhi for the
month of December,1996. Be it
noted here that in the letter
head 'F-11, Pandav Nagar,
Delhi - 110 091' has been
shown as the address of the
appellant company.
3. Ex.DW-1/11: An extract of the Denied
statement of account of the
appellant company with the
respondent for the period from
April 01, 1996 to March 31,
2001 recording that a sum of
`29,52,317.43 is due from the
respondent to the appellant
company, which extract
contains following relevant
entries:-
i) A sum of `2,32,825/-
towards 'DELHI OFFICE
EXP. A/C.' has been credited in
the account of the respondent
on March 31, 1997.
ii) A sum of `1,40,914/-
towards 'COMMISSION
PAYABLE COMMISSION FOR
96-97 PROVIDED EARLIER
CR GIVENT O PARTY NOW'
has been credited in the
account of the respondent on
September 18, 1997.
iii) A sum of `1,40,914/-
which was credited in the
account of the respondent on
September 18, 1997 transferred
to the account of Ms.Renu
Gupta on March 25, 1998.
iv) A sum of `2,32,825/-
which was credited in the
account of the respondent on
March 31, 1997 transferred to
the account of Ms.Renu Gupta
on March 25, 1998.
15. Vide impugned judgment dated December 22, 2010 it was held by
the learned Single Judge that:- (i) the appellant company is liable to pay a
sum of `2,18,666/- to the respondent, being the salary paid by the
respondent to his wife Renu Gupta for the period from November 05,
1996 to August 31, 1998 and adjusted against the sum payable by the
respondent for the goods purchased by him; (ii) the appellant is liable to
pay a sum of `1,70,000/- to the respondent, being the rent payable by the
appellant company for the premises bearing No.F-11, Pandav Nagar,
New Delhi leased from the respondent; (iii) the appellant company is
liable to pay a sum of `6,32,010/- to the respondent, being the amount
paid by the respondent towards the expenses incurred in the office of the
appellant company at Delhi; (iv) the respondent has been able to establish
that he had paid a sum of `2,78,640 + `6,98,000 + `5,94,000 =
`15,70,640/- to the appellant company; (v) the appellant company is
liable to pay a sum of `1,40,914/- to the respondent, being the
commission payable to the respondent for the year 1996-1997 as
evidenced from the statement of accounts Ex.DW-1/11 of the appellant
company. The appellant company is entitled to receive a sum of
`27,65,840/- from the respondent for the goods purchased by him from
the appellant company. The net result is that the appellant company is
entitled to receive a sum of `27,65,840/- - `27,32,230/- (`2,18,666/- +
`1,70,000 + `6,32,010/- + `15,70,640/- + `1,40,914 = `27,32,230/-) =
`33,610/- + a sum of `323/- (pre-suit interest @12% per annum
calculated for the period from April 01, 2001 till the date filing of counter
claim) = `33,933/- from the respondent together with pendente lite and
future interest @12% per annum.
16. As regards the claim of commission for the period from November
04, 1996 to August, 1999 raised by the respondent, the learned Single
Judge has divided said period into 3 sub-periods viz., November 01, 1996
to October 31, 1997, November 01, 1997 to July 26, 1998 and July 27,
1998 to August, 1999. With respect to the issue of commission payable to
the respondent for the period from November 01, 1996 to October 31,
1997 the learned Single Judge held as under:-
"32. Though the plaintiff has claimed a sum of `13,51,521/-
towards commission, he has not been able to prove his
entitlement with respect to whole of this amount. As noted
earlier a sum of `1,40,914/- was credited by the defendant in
the account of the plaintiff on 18th September, 1998 towards
commission for the year 1996-97. The defendant cannot
escape its liability to pay the aforesaid amount to the plaintiff.
The plaintiff is, therefore, entitled to adjustment of this
amount against the amount of `1,74,524/- payable by him to
the defendant.
33. As per clause 4 of the minutes of the meeting held on
04th November, 1996 (Ex.PW-1/36), the plaintiff was to be
paid a commission for all orders procured to be supplied
directly by the company (defendant) and all materials
purchased by the plaintiff for re-selling. The learned counsel
for the plaintiff fairly conceded that no evidence has been led
by the plaintiff to prove the order procured by him for direct
supply by the company. It is difficult to accept that the
plaintiff was not in a position to give details of such orders, if
any, procured by him. If a person procures an order for
another person, he would definitely be having all the
particulars pertaining to that order such as the name of the
purchaser, date of the order, quantity of the goods to be
supplied and the price at which the goods were to be supplied.
Therefore, it was not at all difficult for the plaintiff to provide
all those details to the Court. As regards the materials
purchased by the plaintiff for re-selling, though there is
evidence showing the value of the goods purchased by the
plaintiff from the defendant-company from time to time, there
is no evidence to prove what was the value of the goods which
the plaintiff had re-sold to others or which were purchased by
him for re-selling. It was contended by the learned counsel for
the plaintiff that since the plaintiff does not have any
manufacturing facility all the goods purchased by him from
the defendant-company were meant only for re-selling and
were actually sold by him. However, in the absence of
specific evidence to prove that all the goods which the
plaintiff purchased from the defendant were meant for re-
selling and were actually re-sold by him, it is difficult to say
that he was entitled to commission on all the purchases made
by him from the defendant company."
17. With respect to the issue of commission payable to the respondent
for the periods from November 01, 1997 to July 26, 1998 and July 27,
1998 to August, 1999 the learned Single Judge held as under:-
"34. In terms of the agreement reached between the parties
in the meeting held on 1st October, 1997 (Ex.PW-1/24), the
sale commission became payable on slab basis in respect of
the sale of entire northern region. Though as per the minutes,
the sale commission was payable to Mrs.Renu Gupta who was
employed as Marketing Executive with the defendant-
company, I have, while deciding issue No.1, came to the
conclusion that the commission was in fact payable to the
plaintiff irrespective of whether it has to be paid in his name
or in the name of his wife Mrs.Renu Gupta. There is no
evidence to prove the sales made by the defendant-company
in northern region w.e.f. 1st November, 1997 when the
agreement reached in the meeting held on 1st October, 1997
was to come into force. The minutes also stipulated that there
will be no reimbursement of expenditure towards maintenance
of office, including telephone expenses etc. It is not known
whether these expenses have been claimed by the plaintiff
and/or his wife Mrs.Renu Gupta or not. Till the total value of
the sale made by the defendant in the northern region w.e.f. 1st
November, 1997 is known, the amount of commission
payable to the plaintiff in terms of the minutes of the meeting
held on 1st October, 1997 cannot be worked out. As and when
such amount is worked out, the reimbursement, if any, already
taken by the plaintiff towards maintenance of office, including
telephone expenses, etc. for the period 1st November, 1997
onwards will have to be deducted from that amount. At this
stage, no adjustment can be given to the plaintiff except for
the amount of `1,40,914/- already acknowledged in the
account books of the defendant-company."
35. As per the decision taken in the meeting held at Hotel
Maurya Sheraton on 27th July, 1998 (Ex.PW-1/28), the
plaintiff was not to be paid any commission for the material
purchased in the name of his firm Alok Enterprises, but was to
paid 2% commission sale made to on all other customers of
entire northern region. The amount of commission payable to
the plaintiff in terms of the decision taken in the meeting held
on 27th July, 1998 cannot be worked out unless the amount of
sale made by the defendant to all customers other than the
plaintiff, in the entire northern region is known. Since the sale
figure of the defendant company for the northern region is not
known, the plaintiff cannot be given any further adjustment at
this stage towards the commission payable to him.
xxx xxx
39. ....Since the amount of commission payable to the
plaintiff in respect of the decisions taken in the meeting held
on 31st October, 1997 and 31st July, 1998 cannot be worked
out unless the defendant provides the figures of the sale made
by it in the northern region w.e.f. 1st November, 1997 the
plaintiff is entitled to a decree for rendition of account with
respect to commission payable to him w.e.f. 1st November,
1997. The plaintiff will get commission on slab basis in terms
of the minutes of meeting held on 1st October, 1997, in respect
of all the sales made by the defendant in the entire northern
region. The reimbursement, if any, already obtained by the
plaintiff and/or his wife Mrs.Renu Gupta towards
maintenance of office, including telephone expenses, etc for
the period from 1st November, 1997 will be set off against the
amount which is found payable to the plaintiff towards
commission in terms of the decision taken in the meeting held
on 1st October, 1997.
The amount of commission payable to the plaintiff
w.e.f. 27th July, 1998 will be carried out at the rate of 2%, but,
he will not be entitled to any commission for the material
purchased in the name of Alok Enterprises w.e.f. 27th July,
1998. The defendant is directed to furnish figures of the sale
made by it in the northern region w.e.f. 1st November, 1997.
The defendant will give separate figures one for the sales
made by it in the northern region w.e.f. 1st November, 1997 to
26th July, 1998 and the other with respect to the sales made to
customers other than Alok Enterprises in the northern region
w.e.f. 27th July, 1998. The defendant will also furnish figures
of the reimbursement, if any, paid to the plaintiff and/or his
wife Mrs.Renu Gupta towards maintenance of office,
including telephone expenses, etc for the period from 1st
November, 1997."
18. On the issue that as per the minutes of meeting held on October 01,
1997 the commission was payable to the wife of respondent Ms.Renu
Gupta the learned Single Judge held as under:-
"18. ....Relying upon Ex.PW-1/24 it was contended by the
learned counsel for the defendant that commission was
payable to Mrs.Renu Gupta and not the plaintiff Shri Alok
Gupta. The facts and circumstances of the case, in my view,
indicate that the commission was actually payable to the
plaintiff irrespective of whether it was paid in his name or in
the name of his wife Mrs.Renu Gupta. This is an admitted
case that both, the plaintiff Alok Gupta and his wife Renu
Gupta, had visited the office of the defendant and participated
in the first meeting which was held on 04th November, 1996.
In fact, the defendant has specifically alleged in the written
statement that in October, 1996, the plaintiff alongwith his
wife Mrs.Renu Gupta "claiming themselves to be the owner
of Alok Enterprises" visited his office in Palakkad, Kerala and
desired to become agent of the defendant for the entire
Northern Region, but, the defendant was not immediately
agreeable to appoint "them" as agent. It is also alleged in the
written statement that the salary payable to Mrs.Renu Gupta
was adjusted from the balance receivable from the plaintiff. It
is also alleged that the service of Mrs.Renu Gupta were
terminated w.e.f. 1st September, 1998 and the amount which
was payable to her was adjusted in the amount receivable by
the defendant from the plaintiff.
19. Ex.PW-1/28 are the minutes of the meeting held at
Hotel Maurya Sheraton on 27th July, 1998. Clause 3, 6 and 15
of the minutes read as under:-
....
The defendant has admitted the signatures of
Mr.R.J.Menon and Mr.Jacob Thomas on this document during
the course of admission/denial of documents on 09th
December, 2009. Clause 3 referred above is yet another proof
that the plaintiff was to be paid commission by the defendant
and in the meeting held on 27th July, 1998 it was decided that
the commission would be given to him at the rate of 2%, but
he would get it only on the sale made to other customer of
Northern Region and he will not get any commission on the
materials purchased in the name of Alok Enterprises. This
meeting was attended not only the plaintiff Alok Gupta, but
also by his wife Mrs Renu Gupta. Admittedly, neither any
salary was actually paid by the defendant to Mrs Renu Gupta
nor was any commission paid to her.
20. From the facts and circumstances discussed above, it
appears that both plaintiff Alok Gupta and Mrs Renu Gupta
were working together and under an arrangement between the
parties, commission was to be paid to the plaintiff which
initially was fixed at 1%, was modified w.e.f. 1st November,
1997 so as to make it 1.5% on sale upto Rs 40 lacs, 2% on the
sale for next Rs 20 lacs and 2.5% on the sale of next 10 lacs
and above. It was further modified in the meeting held on 27th
July, 1998 when the plaintiff promised to work only for the
defendant. Adjustment of salary of Mrs.Renu Gupta against
receivables from the plaintiff is yet another circumstance,
indicating that the plaintiff as well as his wife Mrs.Renu
Gupta were acting in unison and irrespective of whether the
commission was to be paid in the name of the plaintiff and in
the name of his wife Mrs.Renu Gupta, the actual beneficiary
was the plaintiff Alok Gupta. It would be pertinent to not here
that Mrs.Renu Gupta is not independently claiming either any
commission or her salary from the defendant. She has come in
the witness-box as PW-2 and has supported the case of the
plaintiff. I find no merit in the contention of the learned
counsel for the defendant that amount of commission can be
claimed by Mrs.Renu Gupta and not by the plaintiff. I,
therefore, hold that though the plaintiff was not formally
appointed as an agent of the defendant for the Northern
Region, he was entitled to commission in terms of the
agreement contained in the minutes of the meeting held on
04th November, 1996 (Ex.PW-1/36), 1st October, 1997
(Ex.PW-1/24) and 27th July, 1998 (Ex.PW-1/28)."
19. In arriving at the aforesaid conclusion(s), it was held by the learned
Single Judge that:- (i) the fact that the Managing Director J.R.Rasiah did
not step into the witness box on behalf of the appellant company to
controvert the case set up the respondent that the minutes of meeting
dated November 04, 1996 Ex.PW-1/36 is a genuine document leads to an
inference that the minutes Ex.PW-1/36 is a genuine document coupled
with the facts that:- (a) appellant company had admitted in its written
statement that a meeting had taken place between the respondent and his
wife and the officials of the appellant company wherein it was agreed
that the respondent would get a commission of 1% on the orders procured
by him but no commission would be payable on the materials purchased
by him; (b) an entry was contained in the statement of accounts Ex.DW-
1/11 of the appellant company wherein a sum of `1,40,914/- was credited
in the account of the respondent towards commission payable to him for
the year 1996-1997; (c) it was admitted by the appellant company that the
minutes of meeting dated October 01, 1997 Ex.PW-1/24 contain the
signatures of its Marketing Manager J.R.Menon inasmuch as the
handwriting expert examined by the appellant company Ashok Kashyap
had taken the signatures of R.J.Menon contained in the document
Ex.PW-1/24 as genuine signatures for ascertaining the genuineness of
minutes of the meeting dated November 04, 1996 Ex.PW-1/36; (d) the
appellant company had admitted that the minutes of meeting dated July
27, 1998 Ex.PW-1/28 contain the signatures of its Marketing Manager
J.R.Rasaih and its employee Jacob Thomas establishes that the appellant
company had agreed to pay commission to the respondent though no
formal agency agreement was executed between the parties; (ii) the facts
that the appellant company had not furnished any proof of payment of
salary made to the wife of respondent Renu Gupta and that the appellant
company admitted in its written statement that the salary payable to Renu
Gupta was adjusted against the sum payable by the respondent for the
goods purchased by him establish that it was agreed between the parties
that respondent would pay salary to his wife and the appellant company
would reimburse said amount to the respondent; (iii) the facts that the
appellant company had stated in its written statement that it was running
an office in Delhi and it is not the case of the appellant company that it
was running the office in Delhi from some premises other than the
premises of the respondent, neither Runy Chandy nor Jacob Thomas
stepped into the witness box on behalf of the appellant company to
controvert the case of the respondent that they were posted in Delhi and
used to function from the premises of the respondent, the appointment
letter Ex.P-24 issued by the appellant company to the wife of respondent
Renu Gupta recording that Renu Gupta would be working in Delhi and
the appellant company admitted signatures of Jacob Thomas on the
statement Ex.PW-1/23 which records that the respondent had let out the
premises in question to the appellant company at a rent of `5,000/- per
month establish that the respondent had let out premises bearing
Municipal No.F-11, Pandav Nagar, Delhi to the appellant company at a
rent of `5,000/- per month; (iv) clause 5 of the minutes of meeting dated
November 04, 1996 Ex.PW-1/36 which prescribes that the expenses
incurred in the office of the appellant company in Delhi would initially
be borne by the respondent and subsequently the appellant company
would reimburse said amount to the respondent when seen in the light of
the letter Ex.D-2 to Ex.D-5 written by wife of the respondent Renu Gupta
to the Marketing Manager of the appellant company, memo Ex.PW-1/5
signed by Jacob Thomas, credit note Ex.PW-1/51 signed by the
Managing Director of the appellant company and an entry contained in
the statement of accounts Ex.DW-1/11 of the appellant company wherein
a sum of `2,32,825/- has been credited in the account of the respondent
towards Delhi office expenses establishes that the appellant company is
liable to reimburse the respondent for the amount paid by him towards
the expenses incurred in the office of the appellant company at Delhi; (v)
the receipt dated August 30, 1999 Ex.P-3 issued by the appellant
company to the respondent and vouchers dated August 05, 1998 Ex.PW-
1/6 and July 22, 1998 Ex.PW-1/7 when seen in the light of the facts that
the receipt Ex.P-3 was admitted as a genuine document by the appellant
company and that the appellant company had admitted that the vouchers
Ex.PW-1/6 and Ex.PW-1/7 contain the signatures of its employee Jacob
Thomas but did not produce Jacob Thomas to dispute the contents of said
vouchers establish that the respondent had paid a sum of `2,78,640 +
`6,98,000 + `5,94,000 = `15,70,640/- to the appellant company and (vi)
the appellant company has not been able to establish that goods worth
`1,86,477/- was received by the respondent from D.R.Trading Company,
M.D.R.Tapes and M/s.H-Lon Industries and thus the respondent is not
liable to pay said amount to the appellant company.
20. Whereas Alok Gupta has not filed any cross appeal or cross
objections, meaning thereby such findings which have been returned
against him by the learned Single Judge have attained finality, the
appellant has filed the above-captioned appeal challenging the decree
passed against it and not in its favour.
21. During the hearing of the appeal, following 6 arguments were
advanced by the counsel appearing for the appellant company:-
A That the learned Single Judge committed an illegality in holding
that the minutes of the meeting dated November 04, 1996 Ex.PW-1/36 is
a genuine document. In said regards, counsel pointed out that the address
of the branch office of the appellant company has been shown as 'F-11,
Pandav Nagar, New Delhi - 110091' in the letter head on which the
minutes of the meeting dated November 04, 1996 are recorded though
even as per the respondent the aforesaid premises were taken on rent by
the appellant company only after November 04, 1996. According to
counsel, the aforesaid discrepancy in the minutes Ex.PW-1/36 is a strong
indicator to the fact that the said minutes are forged. To further
substantiate the contention that the minutes Ex.PW-1/36 is forged
document the counsel pointed out that a perusal of the minutes Ex.PW-
1/36 shows that meeting held on November 04, 1996 was attended by 4
persons namely, J.R.Rasiah, R.J.Menon, respondent and his wife Renu
Gupta but the minutes Ex.PW-1/36 bears the signatures of only the
respondent and J.R.Rasiah.
B That the learned Single Judge did not correctly appreciate the
minutes of the meeting dated November 04, 1996 Ex.PW-1/36, October
01, 1997 Ex.PW-1/24 and July 28, 1998 Ex.PW-1/28, particularly the
minutes Ex.PW-1/24. Counsel highlighted that clause 2 of the minutes
Ex.PW-1/24 prescribes that the „sales commission payable to Mrs.Renu
Gupta, Marketing Executive as an incentive would be given on slab wise
sale of entire Northern Region as given below as per turnover based on
the basic sale price.' Counsel argued that minutes Ex.PW-1/24 clearly
bring out that the commission was payable to the wife of the respondent
Renu Gupta and not to the respondent. Counsel further submitted that the
entries contained in the statement of accounts Ex.DW-1/11 of the
appellant company wherein the amount which was credited in the
account of the respondent towards commission payable was transferred
in the account of wife of respondent is yet another pointer to the fact that
the commission was payable to the wife of the respondent and not the
respondent. Counsel argued that such being the factual position the
respondent had no locus to claim the commission from the appellant
company.
C Because the learned Single Judge failed to note that the statement
of accounts Ex.PW-1/52 filed by the respondent did not support the case
projected by the respondent in his plaint.
D Because the learned Single Judge failed to appreciate that the
statement of accounts Ex.DW-1/11 of the appellant company when seen
in the light of the invoices Ex.P-1/D1 to Ex.P-1/D-21 issued by the
appellant company in respect of the goods purchased by the respondent
for the period from August 07, 1998 to February 22, 1999 demonstrate
that the transaction(s) between the appellant company and respondent
were on principal to principal basis and belies the case of the respondent
that he was an agent of the appellant company.
E Because the learned Single Judge committed an illegality in
allowing the claim made by the respondent relating to the salary of his
wife Renu Gupta when Renu Gupta was not a party in the suit in
question.
F Because the learned Single Judge committed an illegality in
holding that the respondent had made payment in sum of `15,70,640/- to
the appellant company when there was not even a single averment to the
said effect in the pleadings filed by the respondent. Counsel submitted
that it is settled legal position that a party can be permitted to adduce
evidence on the basis of the case pleaded by him in his pleadings.
Counsel argued that such being the position, the learned Single Judge
ought to have ignored the evidence led by the respondent in said regard.
22. We begin our discussion by noting the contents of the letter dated
November 05, 1996 Ex.P-24 appointing Renu Gupta as the Marketing
Executive. It reads:-
"Dear Ms. Renu Gupta
REF: APPOINTMENT OF MARKETING
EXECUTIVE
In continuation of the discussion you had with us, we have
pleasure in offering you the position of MARKETING
EXECUTIVE in our organization with effect from
November 01, 1996 under the following terms and
conditions:-
A. SALARY
1. Your consolidated salary from date of appointment
will be `10000/- (Rupees Ten Thousand Only) per month.
Increments are dependent on individual performance and
based on the merit so as to recognize outstanding job
performance.
....
D. LOCATION
You will be based at New Delhi"
23. Ex.PW-1/23, which is a hand written document and bears the
signatures of Mr.Jacob Thomas, which signatures are not denied by
contents denied reads as under:-
"STATEMENT
I, Jacob Thomas, son of Shri M.C.Thomas, resident of F-285,
Pandav Nagar, Delhi - 91 authorized signatory of M/s.Rubfila
International Ltd. F-11, Pandav Nagar, Delhi - 91 do hereby
state and declare as under:
1. I have started business in re selling of HRLRT (Heat
Resistant Latex Rubber Thread) with effect from November
01, 1996 in local and central trade.
3. That, prior to the start of Delhi Branch, the company is
engaged in manufacturing and reselling of HRLRT in the
State of Kerala at New Industrial Development Area,
Menopara Road, Kanjikode, Palakkad - 678 621.
4. The area of business premises is approx. 300 sq.ft.
5. This Business premises is taken on rent from Shri Alok
Gupta at the rate of `500/- per month.
6. Investment made in this company, by transfer from
Head Office is `30,000/-" (Emphasis Supplied)
24. Ex.PW-1/24 being the minutes of the meeting held on October 01,
1997 which bears the signatures of Mr.R.J.Menon, a Marketing Manager
of the appellant, which document has been denied by the appellant, reads
as under:-
"MINUTES OF THE METTING HELD AT RIL,
PALAKKAD, ON 0October 01, 1997
PARTICIPANTS
MR. J.R. RASIAH
MR. R.J. MENON
MR. JACOB THOMAS
MRS. RENU GUPTA
1. It was discussed that the sales prior to entry of
Mrs.Renu Gupta and Mr.Jacob Thomas were about 17 tonnes
out of the total market of 65 tonnes per month as per the
records and from December, 1996 onwards this average
improved to 33 tonnes per month and is intended to improve
further to 40 tonnes.
2. Sales Commission payable to Mrs.Renu Gupta,
Marketing Executive as an incentive would be given on slab
wise sale of entire Northern Region as given below as per
turnover based on the basic sale price. There will be no other
reimbursement expenditure towards maintenance of office,
including telephone expenses etc.
Upto 40 Lacs - 1.5%
Next 20 Lacs - 2.0%
Next 10 Lacs and above - 2.5%
3. F-11, Pandav Nagar to remain as RIL office and
premises hired by Mr.Thomas to be vacated at earliest.
4. Average Price of 38, 52 & 90 (both Spool and Ribbon)
Count would have to be maintained which is to be notified.
For the month of October the rates are as follows:
`116/Kg Counts 20 upto 40
`118/Kg Counts 42 upto 44
`128/Kg Counts 52 upto 55
`200/Kg (Ribbon) Count 90
`220/Kg (Spool)
`220/Kg (Ribbon) Count 100
`240/Kg (Spool)
`240/Kg (Ribbon) Count 105
`260/Kg (Spool)
This is the basic price without Excise Duty, Sales Tax,
Insurance and Freight. This price you will have to realize on
an average Countwise in North.
5. Sales Tax and Excise Registrations to be maintained at
the same premises.
6. Modalities for stock transfer on a branch transferor or
consignment transfer to be worked out, so that sales tax
benefit can be accrued to RIL.
7. Papers for credit notes to be completed within 15 days
and to be signed by Mrs. Renu Gupta, Mr. Jacob Thomas and
Mr. R.J. Menon.
8. The new set up to begin operation from 1st November,
1997. The Sales commission to the Marketing Executive will
become operative with effect from 1.11.1997.
9. Rate of Commission from November, 1996 upto
October 1997 to be settled soon. It was mentioned that RIL
agreed with Marketing Executive Mrs. Renu Guptha, a sales
commission @1% of the basic price. However based on actual
expenditure it will be considered." (Emphasis Supplied)
25. Ex.PW-1/28, being the minutes of the meeting dated July 27, 1998
which bears the signatures of Mr.R.J.Menon, the Marketing Manager of
the appellant, which signatures are admitted by the appellant, but
contents of the document denied, reads as under:-
"MINUTES OF THE MEETING HELD AT MAURYA
SHERATON ON 27TH JULY 1998.
Participants were:-
1. Mr.J.Jayabalan, Mg.Director, Rubfil Sdn. Malaysia,
2. Mr.J.R.Rasiah, Mg.Director, Rubfila International Ltd.,
Palghat,
3. Mr.S.Sriram, Gen.Manager, Rubfila International Ltd.,
Palghat,
4. Mr.R.J.Menon, Marketing Manager, Rubfila
International Ltd., Palghat,
5. Mr.Jacob Thomas, Marketing Executive, Rubfila
International Ltd., Palghat,
6. Mrs.Renu Gupta, Marketing Executive, Rubfila
International Ltd., Delhi,
7. Mr.Alok Gupta, Proprietor, Alok Enterprises, Delhi.
Note: Rubfila International Ltd., will be denoted as RIL
hereafter in the following text for convenience.
It has been agreed in the meeting that:-
1. M/s.Alok Enterprises will be supplied two trucks of the
product HRLRT of various gauges, as per party‟s order. One
truck will be of 1st choice matl and the other truck, medium
choice matl meant for distribution to only Radhufil, Filatex
customers. M/s.Alok Enterprises will give a list of such
customers to RIL.
2. Rate for the first choice material is decided as `105/ kg
basic (18% excise duty, 2% CST, transit insurance, freight
extra) for July dispatches. This will be billed at a special rate
of `70/kg basic, and over and above this, `35/kg will be
deposited to RIL a/c maintained at SBT, Karolbagh, or will be
sent as demand draft to RIL directly, immediately, after the
dispatch. As a special case for July, only, 50% of `35/kg will
be deposited immediately and balance 50% within 45 days
from date of dispatch.
3. M/s.Alok Enterprises will not be paid any commission
for the goods purchased in their name. They will be given a
margin of `5/kg on all purchases and 2% commission on all
other customers of entire northern region.
4. M/s.Alok Enterprises‟s claims for rejection will be
attended to, after analysis of samples received at RIL. These
samples should be collected countwise, colorwise, and
different batch wise, with all box details such as carton no.,
net wt/gr wt etc.
5. C90 (B) samples are to be collected again from
different parties, and must be sent to RIL for testing. Test
results along with fresh samples will be sent to Delhi for
references.
6. M/s.Alok Enterprises promised to work for only RIL.
7. Filatex average rate is `125/kg now.
8. MD agreed to send a technician to Delhi for attending
customer complaints.
9. Box labels sometimes gets wiped off during transit to
Delhi. Quality of label will be improved.
10. Overloading of cartons will be checked.
11. Shrink wrapping cost will be worked out.
12. Tare wt of both coarser and finer counts boxes will be
checked.
13. In order to maintain individual customer ledges, all
invoice photocopies will be sent to RIL Delhi office.
14. M/s.Alok Enterprises will hand over cheque for `8 lacs
of June dispatch today itself, and more over, 2 payments of `4
lacs each promised for Aug 1st& 2nd weeks respectively will
be honored.
15. If M/s.Alok Enterprises shows excellent performance
and clears all pending dues by Aug end, they can be
considered for a sole selling agent from 1st Sept. onward.
16. Swastik Technofab Ltd.:- Old cheques of June & July
98 will be deposited immediately, after discussing with the
party"
26. The minutes of the meeting dated November 04, 1996, Ex.PW-
1/36, which bear the signatures of Mr.R.J.Menon, the Marketing
Manager of the appellant, signatures and contents whereof are denied by
the appellant reads as under:-
"Minutes of the meeting held at RIL Palakad on November 4,
Participants
1. Mr. J.R. Rasaih
2. Mr. R.J. Menon
3. Mr. Alok Gupta
4. Mrs. Renu Gupta
1. It was discussed that Alok Enterprises to appointed as
an agent for the company with effect from 1st November,
1996 for entire Northern Region.
2. Mrs.Renu Gupta be appointed the marketing executive
of RIL to whom a monthly salary @ `10,000/- be paid.
3. F-11, Pandav Nagar, Delhi - 110091, premises owned
by M/s.Alok Enterprises be hired by M/s.Rubfila International
Ltd. @ `5000/- per month and the same be registered with the
sales tax and excise authorities.
4. Alok Enterprises be paid a commission of 1% basic
price for all orders procured to be supplied directly by the
company and all goods purchased by it for reselling.
5. All the expenses including the salary of Mrs.Renu
Gupta, telephone and other office expenses be incurred by
Alok Enterprises for RIL Delhi to be subsequently reimbursed
by Rubfila International Ltd. Palakkad in addition to
commission."
27. As evident from the aforesaid conspectus of facts, the case set up
by the respondent is predicated upon the minutes of the meetings dated
November 04, 1996 Ex.PW-1/36, October 01, 1997 Ex.PW-1/24 and July
28, 1998 Ex.PW-1/28 statedly held between the respondent, the wife of
respondent Ms.Renu Gupta and officials of the appellant company.
28. Whereas the respondent contends that the minutes Ex.PW-1/36,
Ex.PW-1/24 and Ex.PW-1/28 are genuine documents the appellant
contends to the contrary.
29. Ex.PW-1/36 is the minutes of the meeting held between the
respondent, the wife of respondent Ms.Renu Gupta and officials of the
appellant on November 04, 1996. The said minutes are purportedly
signed by Mr.R.J.Menon, the Marketing Manager of the appellant
company. As per said minutes, it was decided between the parties that:-
(i) with effect from November 01, 1996 the respondent would act as an
agent of the appellant company for the northern India; (ii) the wife of
respondent Ms.Renu Gupta will be appointed to the post of Marketing
Executive in the appellant company at a salary of `10,000/- per month;
(iii) premises bearing Municipal No.F-11, Pandav Nagar, New Delhi
shall be let out by the respondent to the appellant company at a rent of
`5,000/- per month; (iv) the appellant company shall pay a commission
@1% to the respondent for all orders of supply procured by him and all
materials purchased by him for reselling and (v) the appellant company
shall reimburse the respondent for all the expenses of office of the
appellant company at Delhi borne by him including the payment of salary
made by him to his wife Ms.Renu Gupta. As already noted hereinabove,
the appellant company has disputed the genuineness of said document.
30. In order to determine whether the minutes Ex.PW-1/36 is a
genuine document we look at the documentary evidence led by the
parties.
31. We first look at the letter dated November 05, 1996 Ex.P-24 issued
by the appellant company appointing the wife of respondent Ms.Renu
Gupta to the post of Marketing Executive at a salary of `10,000/- per
month with effect from November 01, 1996. The appellant company has
not disputed the genuineness of the letter Ex.P-24. The letter Ex.P-24
corroborates the minutes Ex.PW-1/36 which records that it was decided
between the parties that the wife of respondent Ms.Renu Gupta will be
appointed to the post of Marketing Executive in the appellant company at
a salary of `10,000/- per month.
32. We then look to the statement dated February 03, 1997 Ex.PW-
1/23 of Jacob Thomas, an employee of the appellant company. The
statement Ex.PW-1/23 records that the appellant company had leased out
the premises bearing Municipal No.F-11, Pandav Nagar, New Delhi from
the respondent at a rent of `5,000/- per month. The appellant company
had admitted that the statement Ex.PW-1/23 contains the signatures of
Jacob Thomas but disputed the contents of said statement. It is not the
case of the appellant company that the respondent had forcibly or
fraudulently obtained the signatures of Jacob Thomas on the statement
Ex.PW-1/23 or on blank papers. In that view of the matter, the statement
Ex.PW-1/23 has to be taken as a genuine document. The statement
Ex.PW-1/23 corroborates the minutes Ex.PW-1/36 which prescribe that it
was decided between the parties that the respondent shall let out the
premises bearing Municipal No.F-11, Pandav Nagar, New Delhi at a rent
of `5,000/- per month.
33. Lastly, we note the extract of the statement of account Ex.DW-
1/11 of the appellant company for the period from April 01, 1996 to
March 31, 2001. As per said statement, sums of `2,32,825/- and
`1,40,914/- were credited by the appellant company in the account of the
respondent towards 'DELHI OFFICE EXP. A/C.' and „COMMISSION
PAYABLE FOR 1996-1997' respectively. Yet again, the statement of
account Ex.DW-1/11 of the appellant company corroborates the minutes
Ex.PW-1/36 which prescribe that the appellant company shall pay
commission to the respondent and reimburse the appellant for the
expenses of the office of the appellant company at Delhi borne by him.
34. In view of the fact that the letter dated November 05, 1996 Ex.P-
24, statement Ex.PW-1/23 and statement of account Ex.DW-1/11
corroborates the minutes Ex.PW-1/36, it can safely be concluded that the
minutes Ex.PW-1/36 is a genuine document.
35. Nothing much turns on the argument advanced on behalf of the
appellant predicated upon the address contained in the minutes Ex.PW-
1/36 for it is quite possible that the parties got prepared the letter head as
per the understanding arrived between them soon after the meeting dated
November 04, 1996 and the minutes of said meeting were typed on the
newly prepared letter head or it is possible that oral agreement was
arrived at a little earlier. The letter heads were got printed in advance and
one leaf was used to type out Ex.PW-1/36.
36. Once it has been held that the minutes Ex.PW-1/36 is a genuine
document it has to be further held that the appellant company is liable
to:-
(a) Pay rent to the respondent for the premises bearing Municipal
No.F-11, Pandav Nagar leased by it:- The respondent has claimed
`5,000/- x 34 months = `1,70,000/- for the rent of the premises in
question for the period from November, 1996 to August, 1999. The
learned Single Judge has rightly held that the appellant company is liable
to pay said amount to the respondent.
(b) Reimburse the respondent for the salary paid by him to his wife
Ms.Renu Gupta: - The respondent has claimed a sum of `2,18,666/- as
the reimbursement of the salary paid by him to his wife Renu Gupta. The
learned Single Judge has rightly held that the appellant company is liable
to pay said amount to the respondent more so for the reason the appellant
has led no evidence to prove that it had directly paid the salary to Renu
Gupta.
As regards the argument advanced by the appellant company that
the respondent had no locus to claim the salary payable to his wife
suffice would it be to state that the respondent has not claimed the salary
which was payable to his wife but the reimbursement of the salary paid
by him to his wife as per the agreement arrived between the parties in the
meeting held on November 04, 1996.
(c) Reimburse the respondent for the expenses of office of the
appellant company at Delhi borne by him: - The respondent had claimed
a sum of `6,32,010/- as the reimbursement of the expenses of office of
the appellant company borne by him. The memo Ex.PW-1/5 coupled
with the statement of account Ex.DW-1/11 of the appellant company and
the credit note Ex.PW-1/51 establish that the expenses in sum of
`2,32,825/- and `3,99,906/- respectively were borne by the respondent.
The learned Single Judge has rightly held that the appellant company is
liable to pay said amount to the respondent.
37. As regards commission @ 1%, the learned Single Judge has
correctly opined that the respondent had to establish orders booked by
him between November 01, 1996 till September, 1997 inasmuch as it was
the case of the respondent that evidenced by Ex.PW-1/24 the sales
commission and terms were changed and thus the period November 01,
1996 till September, 1997 had to be treated as a distinct segment period.
He not having established orders procured by him, the learned Single
Judge correctly relied upon the appellant‟s statement of account Ex.DW-
1/11 which showed appellant having acknowledged commission in sum
of `1,40,914/- payable to the respondent.
38. Learned counsel for the appellant had nothing to explain with
respect to Ex.DW-1/11, and thus we hold that apart from the three sums
noted by us in sub-paras (a), (b) and (c) of para 36 above, the appellant
would be liable to pay to the respondent `1,40,914/- towards
commission.
39. For the period thereafter, the minutes of the meeting dated October
01, 1997 Ex.PW-1/24 records that „Sales Commission payable to
Mrs.Renu Gupta, Marketing Executive as an incentive would be given
on slab wise sale of entire Northern Region as given below as per
turnover based on the basic sale price. There will be no other
reimbursement expenditure towards maintenance of office, including
telephone expenses etc.' The decision arrived between the parties in the
meeting held on October 01, 1997 was to take effect from November 01,
1997.
40. The minutes Ex.PW-1/24 purportedly bear the signatures of
Mr.R.J.Menon, the Marketing Manager of the appellant company. The
appellant company has denied that the minutes Ex.PW-1/24 bears the
signatures of Mr.R.J.Menon.
41. A very interesting thing has happened. We have noted herein
above that the appellant had examined as DW-2 Pandit Ashok Kashyap
to disprove R.J.Menon‟s signatures on Ex.PW-1/36 and interestingly the
expert witness, at the asking of the appellant has treated R.J.Menon‟s
signatures on Ex.PW-1/24 as the sample, meaning thereby the signatures
to be genuine, and if for no other reason, it has to be held against the
appellant with respect to its plea qua R.J.Menon‟s signatures on Ex.PW-
1/24.
42. Now, as per the document, the commission has to be paid at a slab
rate to the wife of Alok Gupta and not to him. As against his claim and
proof that at the asking of the appellant he was paying salary to his wife
requiring the same to be reimbursed to him by the appellant and likewise
at the asking of the appellant he was bearing the office expenditure
requiring the same to be reimbursed, it is not his case that he was paying
the commission agreed upon as per Ex.PW-1/24 to his wife at the asking
of the appellant, requiring the same to be reimbursed and thus we must
differ from the view taken by the learned Single Judge, who has ignored
as aforesaid for the reason it was for Renu Gupta to have made such
claim.
43. After October 01, 1997, a meeting was held between the
respondent, wife of respondent Ms.Renu Gupta and officials of the
appellant company on July 27, 1998.
44. The appellant company had admitted that the minutes of the
meeting dated July 28, 1998 Ex.PW-1/28 contain the signatures of its
Managing Director J.R.Rasiah and employees R.J.Menon and Jacob
Thomas. Yet again, it is not the case of the appellant company that the
respondent had forcibly or fraudulently obtained the signatures of said
persons on the minutes Ex.PW-1/28 or some blank papers. Such being
the position, the minutes Ex.PW-1/28 has to be taken as a genuine
document.
45. As per the respondent, in terms of Ex.PW-1/28 he was to be paid
commission for all sales made in the Northern region and in respect of
the claim, the learned Single Judge has held that the amount of
commission payable to the respondent for the period from July 27, 1998
to August, 1999 cannot be worked out „unless the amount of sale made
by the defendant to all customers other than the plaintiff, in the entire
northern region is known' and thus the appellant company is liable to
render accounts to the respondent for the sales made by it during the said
period. In so concluding, the learned Single Judge has proceeded on the
premise that the respondent was the sole agent of the appellant company
for the northern region during said period.
46. We are afraid, this was not the case. The learned Single Judge
failed to note clause 15 of the minutes Ex.PW-1/28 which prescribe that
'if M/s Alok Enterprises shows excellent performance and clears all
pending dues by August end, they can be considered for a sole selling
agent from 1st Sept. onward.' Clause 15 of the minutes Ex.PW-1/28
coupled with the fact that in the pleadings in the plaint the respondent
had never claimed himself to be the sole agent of the appellant company
makes it clear that the respondent was not entitled to any benefits as the
sole selling agent for the reason Ex.PW-1/28 made it contingent upon
respondent clearing pending dues and showing excellent performance of
his being made the sole selling agent for the entire northern region.
47. The respondent has not furnished any details whatsoever of the
persons introduced by him to the appellant company or the orders
procured by him for the sale of the goods of the appellant company. Such
being the position, nothing would come out of sales figures of the
appellant company for the said figures would include the sales made at
the instance of the respondent as also other agents of the appellant
company and there would be no means to ascertain the number of the
sales which were made at the instance of the respondent. Thus, we hold
that no commission is payable to the respondent for the period of July 27,
1998 to August, 1999.
48. Before proceeding further, we note the decision of the Supreme
Court reported asAIR 1967 SC 333Narandas Morardas Gaziwala &Ors
v S.P. Papammal wherein the right of an agent to sue the principal for
accounts was dealt in the following terms:-
"The first question presented for determination in these
appeals is whether the plaintiff is entitled to sue for accounts,
he being the agent and defendant- Surat firm being the
principal. Section 213 of the Indian Contract Act specifically
provides that an agent is bound to render proper accounts to
his principal on demand. The principal‟s right to sue an agent
for rendition of accounts is, therefore, recognized by the
statute. But the question is whether an agent can sue the
principal for accounts. There is no such provision in the
Indian Contract Act. In our opinion, the statute is not
exhaustive and the right of the agent to sue the principal for
accounts is an equitable right arising under special
circumstances and is not a statutory right.
....
In our opinion, the legal position in India is not different.
Though an agent has no statutory right for an account from his
principal nevertheless there may be special circumstances
rendering it equitable that the principal should account to the
agent. Such a case may arise where all the accounts are in the
possession of the principal and the agent does not possess
accounts to enable him to determine his claim for commission
against his principal. The right of the agent may also arise in
an exceptional case where his remuneration depends on the
extent of dealings which are not known to him or where he
cannot be aware of the extent of the amount due to him unless
the accounts of his principal are gone into."
49. The respondent has claimed himself to be an agent of the appellant
company. As far as payment of commission to the respondent for the
period from November 01, 1996 to October 31, 1997 is concerned, it is
noteworthy that the minutes Ex.PW-1/36 prescribe that the appellant
company shall pay commission @1% to the respondent for all the orders
procured by him and the materials purchased by him for re-selling. No
special circumstances exist which render it equitable that the appellant
company should render accounts to the respondent for the period from
November 01, 1996 to October 31, 1997 inasmuch as it is not the case
that the all the accounts were in the possession of the appellant company
or that amount of commission payable to the respondent could have been
determined without looking into the accounts of the appellant company.
Thus in view of the law laid down by the Supreme Court in Narandas‟s
case (supra), the relief of rendition of accounts claimed by the respondent
in respect of payment of commission to him for the period from
November 01, 1996 to October 31, 1997 is not even maintainable.
50. Lastly, we deal with the argument advanced by the appellant
company relating to the finding of the learned Single Judge that the
respondent has successfully established that it had paid a sum of
`15,70,640/- to the appellant company for the goods purchased by him.
51. The respondent had produced the receipt dated August 30, 1999
Ex.P-3 issued by the appellant company to the respondent and vouchers
dated August 05, 1998 Ex.PW-1/6 and July 22, 1998 Ex.PW-1/7 to
establish that he paid the sums of `2,78,640/-, `6,98,000/- and
`5,94,200/- respectively to the appellant company for the goods
purchased by him.
52. As already noted hereinabove, the appellant company admitted the
receipt dated August 30, 1999 Ex.P-3 as a genuine document. The
appellant company had also admitted that the vouchers dated August 05,
1998 Ex.PW-1/6 and July 22, 1998 Ex.PW-1/7 contain the signatures of
its employee Jacob Thomas but disputed the contents of the same. It is
not the case of the appellant company that the respondent had forcibly or
fraudulently obtained the signatures of its employee Jacob Thomas on
vouchers Ex.PW-1/6 and Ex.PW-1/7 or some blank papers. In that view
of the matter, it does not lie in the mouth of the appellant company to
dispute the contents of the vouchers Ex.PW-1/6 and Ex.PW-1/7.
53. It is trite that the respondent had not averred in his pleadings about
the aforesaid payment(s) made by it to the appellant company. The plaint
filed by the respondent is an inartistically drafted plaint. The fact of the
matter is that the evidence on record clearly establishes that the
respondent had made aforesaid payment(s) to the appellant company. It
would be unjust to penalize the respondent for the laxity of his counsel in
drafting the plaint in question. The interests of justice require that it
should be held that the respondent had made the payment of `15,70,640/-
to the appellant company for the goods purchased by him. As regards
sales made by the appellant to the respondent, though in the pleadings
denied by him, but admitted during cross-examination the invoices Ex.P-
1/D-1 to Ex.P-1/D-21 evidence he having received goods worth
`27,65,840/- from the appellant. The sales are on principal to principal
basis. Thus inter se adjustment has rightly been granted by the learned
Single Judge.
54. The net result of the above discussion is that the impugned
judgment and decree dated December 22, 2010 passed by the learned
Single Judge insofar it had awarded a sum of `33,933/- to the appellant
company together with pendente lite and future interest @12% per
annum is affirmed. The impugned judgment insofar it has passed a decree
of rendition of accounts in favor of the respondent is set aside.
55. The impugned judgment and decree dated December 22, 2010
passed by the learned Single Judge is modified in terms of para 54 above.
The suit filed by the respondent against the appellant is dismissed and the
counter claim filed by the appellant is decreed in sum of `33,933/-.
56. Since both parties have spoken half lies and half truth, they shall
bear their own costs all throughout.
(PRADEEP NANDRAJOG)
JUDGE
(MANMOHAN SINGH)
JUDGE
DECEMBER 04, 2012
dk
