Delhi High Court

M/S. Amco Vinyl Ltd. vs M/S. Classic Industries on 25 May, 2012

Author: Valmiki J. Mehta

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.523/2004

%                                                           25th May, 2012

M/S. AMCO VINYL LTD.                              ..... Appellant
              Through:              Mr. Uchit Bhandari, Advocate.


                      versus

M/S. CLASSIC INDUSTRIES            ..... Respondent

Through: Mr. V.K. Dhar, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. I may note at the outset that counsel for the respondent states

that respondent/defendant is not contacting him for a long period of time.

In my opinion, this is not a sufficient reason for adjourning this old appeal

of the year 2004.

2. This Regular First Appeal filed under Section 96 of the Code

of Civil Procedure, 1908 (CPC) impugns the judgment of the trial Court

dated 9.12.2003 dismissing the suit filed by the appellant/plaintiff for

recovery of Rs. 4,30,198/- alongwith interest being the amounts which

were due with respect to unpaid invoices drawn towards supply of goods

being Metallised Polyester film. The suit has been dismissed because it has

been held not to have been validly instituted and also because the amount

claimed in the suit is different from the total amounts of invoices.

3. The facts of the case are that the appellant/plaintiff filed the

subject suit for recovery of amounts under the invoices bearing Nos.228,

289 and 328 dated 25.9.1997, 8.10.1997 and 18.11.1997 for the amounts of

Rs. 1,42,336/-, Rs. 75,577/- and Rs. 94,222/- respectively. The

appellant/plaintiff claimed that the last payment of Rs. 1,70,900/- was made

by the respondent/defendant by means of pay orders on 13.5.2000. As the

respondent/defendant is stated to have failed to make the balance payment,

a legal notice dated 17.11.2000 was served, which having failed to elicit the

desired response, the subject suit came to be filed.

4. In the written statement, the respondent/defendant stated

forgery and fabrication in the statement of account of the appellant/plaintiff

with respect to various entries, however, those entries I may state were not

the subject matter of the suit. There is also defence of certain cash

payments being made but there are no details of the alleged cash payments

in the written statement. The authority of Mr. Anchal Bhargava on behalf

of the appellant/plaintiff to sign and verify the suit was also challenged.

5. After completion of pleadings, the trial Court framed the

following issues:-

"1. Whether the plaint has been signed, verified and the suit is instituted by duly authorized person? OPP

2. Whether the plaintiff is entitled to recover the suit amount from the deft.? OPP

3. Whether the plaintiff is entitled to interest, if so for what period and on what amount? OPP.

4. Relief."

6. So far as the issue No.1 is concerned, the trial Court has held

the suit not to have been validly instituted by making the following

observations:-

"8. Issue No.1:

This issue is whether, the plaint is signed and verified and whether the suit is instituted by duly authorized person. Onus of proof of this issue is on plaintiff.

9. PW1 Sh. Anchal Bhargava deposes in his affidavit that company passed a resolution in the board meeting held on 29-1-2002, by which he was duly authorized to file the present case. In cross- examination for deft, PW1 Sh. Anchal Bhargava admits that PW.1/2 does not mention regarding signing and verifying the plaint. It is also admitted by the witness that he does not have the power given by plaintiff to sign and verify the plaint. Thus, it is held that the plaint has not been signed and verified and the suit has not been instituted by duly authorized person. In other words, issue No.1 is decided against the plaintiff and in favour of the deft."

7. In my opinion, the trial Court has fallen into an error in

holding that the suit has not been properly filed allegedly because the

resolution Ex.PW1/2 & Ex.PW1/3 (being the extract and complete

resolution respectively) does not mention with regard to signing and

verification of the plaint. When we look at the resolution dated 29.1.2001

(wrongly mentioned dated 29.1.2002), it is seen that Mr. Anchal Bhargava

has been authorized to appoint a lawyer and sign all the documents on

behalf of the company including making any statement in the Court. In my

opinion, this is sufficient authorization and it cannot be said that the suit

has not been validly instituted and filed because signing of documents will

include signing of pleadings and thus filing of the suit. In fact, the

Supreme Court has in the judgment reported as United Bank of India vs.

Naresh Kumar & Ors., 1996 (6) SCC 660: AIR 1997 SC 3 held that the

suits filed by companies should not be dismissed on technical grounds once

they are pursued to the hilt. I therefore set aside the findings of the trial

Court with respect to issue No.1 and hold that the suit has been validly

instituted and filed.

8. So far as the issue of liability of respondent/defendant to the

appellant/plaintiff is concerned, trial Court has dealt with the same in paras

10 to 12 of the judgment which read as under:-

"10. Issue No.2:-

This issue is whether the plaintiff is entitled to recover the suit amount from the deft. Onus to proof of this issue is on the plaintiff. PW.1 in his affidavit deposes that the deft placed order to the plaintiff from time to time for supply of Matelised Polyester film with the plaintiff in Delhi. The plaintiff ordered goods to the deft and raised invoices dt: 25-5-97 for ` 1,42,336, dt: 28-10-97 for ` 75,577/- and dt: 18-11-97 for ` 94,222/-, the copies of invoice are Ex.PW.1/2 to PW.1/6.

11. In cross-examination for deft, PW.1 Anachal Bhargava deposes that the basis of recovery in the suit is only three bills, which are Ex.PW.1/4, PW.1/5, PW.1/6. After these bills i.e. Ex.PW.1/4, PW.1/5, PW.1/6, the company has received a sum of ` 1,70,000/-. There was no other supply made after the supply of material under bills, Ex.PW1/4, PW1/5, PW1/6. It is denied that payment of ` 1,70,000/- was made towards the amount due in Ex.PW.1/4, PW.1/5, PW.1/6. The witness volunteered that this amount was paid against the previous due payments as per the statement of account.

12. The evidence of PW.1 Anchal Bhargava shows that the amount against bills, Ex.PW.1/4, PW.1/5, PW.1/6 is wholly due to the plaintiff from the deft. It is worth noting that the amounts of ` 1,42,336/-, 75,577/- and ` 94,222/- make a total of ` 3,12,135/-. It is also worth noting that as per the documents filed for plaintiff, out of the amount of ` 4,30,198/- claimed by the plaintiff ` 2,28,386/- have been claimed as principal amount and remaining amount has been claimed as interest. Thus, the figures show the claim of the plaintiff is not based on three bills Ex.PW.1/4, PW.1/5, PW.1/6. In other words, plaintiff has failed to prove his claim against the deft in respect of principal amount. Thus issue No.2 is decided against the plaintiff and in favour of the deft."

9. Once again even on this issue the trial Court has committed a

grave error in dismissing the suit although invoices have been proved and

exhibited as Ex.PW1/4 to Ex.PW1/6. The sales tax C-form which was

issued by the respondent/defendant qua these invoices and other invoices

have been filed and proved on record as Ex.PW1/9. No C-form would

have been issued by the respondent/defendant unless goods were received

under the subject invoices. I therefore hold that the appellant/plaintiff

supplied goods to the respondent/defendant under the subject invoices

Ex.PW1/4 to Ex.PW1/6, and therefore the amounts due would be the

amount after adjustment of a sum of ` 1,70, 900/-, which was paid by the

respondent/defendant on 13.5.2000. Since total of three invoices comes to

` 3,12,135/-, reducing therefrom a sum of ` 1,70,900/- a sum of `