Virender Kumar vs Mool Chand Shripal Jain
2017 Latest Caselaw 3923 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 689/2017

%                                                      4th August, 2017

VIRENDER KUMAR                                             ..... Appellant
                          Through:       Mr. Samir Sagar Vasishth, Ms.
                                         N.Suri and Mr. Abhishek Pratap
                                         Singh, Advocates.

                          versus

MOOL CHAND SHRIPAL JAIN                                  ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

C.M. Appl. No. 27640/2017 (for condonation of delay)

For the reasons stated in the application the delay of 24 days in

filing the appeal stands condoned.

C.M. stands disposed of.

RFA No. 689/2017 and C.M. Appl. No. 27639/2017 (for stay)

1. This Regular First Appeal is filed under Section 96 of the

Code of Civil Procedure, CPC by the defendant no. 1 in the suit

impugning the judgment of the trial court dated 25.1.2017 by which

the trial court has decreed the suit for recovery of Rs.7,91,776/- along

with interest on account of fuel/diesel purchased by the

appellant/defendant no. 1 from the respondent/plaintiff who owns a

retail petrol pump outlet of Bharat Petroleum in Delhi.

2. The facts of the case are that the respondent/plaintiff

pleaded that the appellant/defendant no. 1 was in transportation

business and owned various trucks. It was further pleaded in the

plaint that the appellant/defendant no.1 approached the

respondent/plaintiff for supply of fuel on credit basis and with respect

to which interest at the rate of 1.25% per month compounded quarterly

was to be charged. Appellant/defendant no.1 was pleaded to be in

default right from the very first bill and outstanding amount kept on

inflating on each subsequent bill whereby the appellant/defendant no.

1 offered to liquidate the outstanding amount in installments by

desiring to get a running account with the respondent/plaintiff. It is

then pleaded in the plaint that the outstanding amount remained

unpaid as in August 2004. It is further pleaded that when credit was

obtained and the account to be maintained by the respondent/plaintiff

the same was subject to a security deposit, which though was

originally waived, but, when appellant/defendant no. 1 sought revival

of his account with the respondent/plaintiff then the

respondent/plaintiff was given by the appellant/defendant no. 1 cheque

as security and which was to be used and encashed in case there were

defaults in clearing of the outstanding amount. It is then pleaded in

the plaint that the history of defaults in payments continued and last

supply was drawn by the appellant/defendant no. 1 in November 2005.

It was pleaded that in September 2006 the outstanding amount came to

Rs.7,91,776/-. It is then pleaded in the plaint that when the

respondent/plaintiff deposited the cheque for recovery of the

outstanding amount, the same was dishonored and therefore not only

the subject suit was filed but a complaint under Section 138 of the

Negotiable Instruments Act, 1881 was also filed and which is pending

disposal before the concerned court of Metropolitan Magistrate.

3. Appellant/defendant no. 1 contested the suit and pleaded

that the suit is barred by limitation. It was also pleaded that the

security cheque which was claimed by the respondent/plaintiff was of

a period prior to three years prior to the date of filing of the suit. It

was further pleaded that the security cheque was a blank cheque which

did not bear any date or amount. Appellant/defendant no. 1, however,

did not dispute that he had been taking fuel from the petrol pump of

the respondent/plaintiff and that he owned a fleet of ten trucks and was

in the business of transportation. It was pleaded in the written

statement that the respondent/plaintiff was inflating bills and therefore

the credit facility was discontinued since inception itself. It is further

pleaded that the appellant/defendant no. 1 in good faith and trust upon

the respondent/plaintiff agreed to keep the security cheque with the

respondent/plaintiff although no purchases were to be made on credit

basis. The suit was accordingly prayed to be dismissed.

4. After pleadings were complete, the trial court framed the

following issues:-

"1. Whether the plaintiff firm is a registered partnership firm and competent to file the suit? OPP

2. Whether the suit is barred by limitation? OPP

3. Whether the plaintiff has misutilised the security cheque? OPD

4. Whether the plaintiff is entitled for recovery of the amount? OPP

5. Whether the plaintiff is entitled for interest, if so, at what rate?

OPP

6. Relief."

5. Issue no. 2 with respect to limitation has been held in

favour of the respondent/plaintiff that the statement of account relied

upon by the respondent/plaintiff is not an open, mutual and current

account and therefore the suit is not covered under Article 1 of the

Limitation Act, 1963.

6.(i) With respect to issue nos. 3 and 4 trial court has held that

there is no misutilization of the security cheque and this security

cheque was rightly presented by the respondent/plaintiff to clear

unpaid invoices Ex.PW1/2 to Ex.PW1/9. Trial court has further held

that the respondent/plaintiff has proved that there were purchases by

the appellant/defendant no. 1 of the fuel on credit basis and there is no

proof for the court to hold that the invoices Ex.PW1/2 to Ex.PW1/9

are for inflated amounts. Trial court also referred to admission of

DW-1/Sh. Virender Kumar/appellant that he used to take fuel from the

respondent/plaintiff sometimes on credit basis also and that the

transactions with the respondent/plaintiff continued in cash or by way

of cheque or on credit in the year 2005-06. It was further held by the

trial court that the appellant/defendant no.1 admitted that he never

gave any notice or any letter to the respondent/plaintiff with respect to

alleged discrepancies in the bills because of inflation of the bills on the

ground that litres said to be filled in the trucks were less than actually

what was filled in. The trial court relied upon the invoices Ex.PW1/2

to Ex.PW1/9 and held that amounts were due to the

respondent/plaintiff for the unpaid bills and for which security cheque

was deposited. Trial court has held that the security cheque cannot be

said to have been misutilized by the respondent/plaintiff because the

cheque admittedly is of the bank account of the appellant/defendant

no. 1 and also it bears the signatures of the appellant/defendant no. 1.

On preponderance of probabilities, trial court has held that the cheque

was good for encashment for lawful liability. Trial court also noticed

that the respondent/plaintiff served a legal notice Ex.PW1/14 to the

appellant/defendant no. 1 and though DW-1 denies giving reply to any

such notice but DW-1 conceded in his cross-examination when

confronted with the complaint Ex.DW1/P-1 where DW-1 himself has

stated that he had sent a reply in response to the legal notice sent by

the respondent/plaintiff.

(ii) The aforesaid conclusions have been arrived at by the trial court

on the basis of the following paras of the impugned judgment and

which paras read as under:-

"20. If we consider the evidence of defendants, DW-1 Virender Kumar in his evidence has testified all the above stated facts however, has failed to explain certain necessary details. First of all if according to defendants, cheque was given only for security of outstanding amount, it was necessary for defendant to explain as to when same was issued and under which authority, defendants claim that same could not have been presented for encashment. Law with regard to issuance of any cheque is well settled, upon issuance of a cheque there is a presumption under section 139/118 of NI Act, that it must have been issued towards payment of a legally enforceable debt. No doubt, such presumption is rebuttable. But, defendant was required to give some documentary or specific evidence to establish that the said cheque No. 907997 was not given for encashment or that was given only as security. If cheque was admittedly bearing the signatures of defendant and rest of the details were not filled on the cheque. That by itself does not render the cheque to be not good for encashment of any lawful liability. When it is denied by the plaintiff that cheque was given as security rather positive evidence was given specifically of PW-1, PW-2 and PW- 7, who have testified that said cheque was given for clearing the outstanding amount.

21. The argument on behalf of defendant that such cheque has been misused only to make a time barred claim, appears to be not sustainable when DW-1 in his cross examination has admitted that he has been issuing the cheque for payment of outstanding amount and has also admitted that he continued to have transaction with plaintiff firm in cash or by way of cheque as well as on credit, in year 2005-06 as well. DW-1 further admits that when said cheque returned dishonoured, he had received legal notice from plaintiff which is Ex.PW1/14. However, DW-1 denies giving any reply to such notice of plaintiff but DW-1 was confronted with the complaint Ex.DW1/P1 of defendant Virender Kumar, in which he himself has stated in that complaint that he had sent the reply in response to the notice sent by plaintiff firm. These facts assume importance and are sufficient to establish that defendant has failed to establish that cheque was not meant for encashment or that it was given only as security. Defendant to my conclusion has failed to rebut the presumption under section 139/118 of NI Act and has failed to establish that cheque was misused by the plaintiff firm.

xxxxx xxxxx xxxxx

29. In the present case, if we take into consideration the account statement Ex.PW1/10, wherein all the entries of credit sale of fuel, by plaintiff firm to defendants have been reflected along with different payments received by the plaintiff from time to time, along with the dishonored cheque No. 907997 of Rs.7,91,776/-, one can easily conclude that suit is within limitation because all the transactions regarding different payments made from time to time as well as issuance of different cheques including cheque No. 907997, were carried out within the three years period of accrual of cause of action.

xxxxx xxxxx xxxxx

34. Now, if we consider the evidence of plaintiffs, first of all it be noted that there is no dispute to the fact that defendants have been drawing fuel from the outlet of plaintiff firm. It is also not disputed that the arrangement regarding supply of fuel to the trucks of the defendant was not under any written agreement between the parties. Evidently, it was mutual oral arrangement for supply of fuel to the trucks of defendant regarding which the case of defendants simply is that regarding supply of fuel from the plaintiff firm payments have been regularly made and there was no credit running account. If we consider this aspect of the matter, nothing could come out in the cross-examination of PW-1, PW-2 or PW-7 to show that there was never any credit sale of fuel for trucks of defendants. In the entire cross examination of PW-1, it is nowhere suggested to the witness that invoices Ex.PW1/2 to Ex.PW1/9 are not correct or in any way inflated etc. In the absence of any such suggestion coming in the evidence of PW-1, it impliedly means that defendants have disputed raising of such bills by plaintiff firm regarding supply of fuel to the trucks of defendants.

35. In this context, counsel for the defendant has argued that inflated bills were raised by plaintiff firm by charging amount for 400 ltrs, whereas the fuel tanks of the trucks had maximum capacity to store only 350 ltrs. at one time. It is argued that such facts clearly show that claim of the plaintiff was not only exaggerated but patently false. It was also argued that defendants never had any credit accounts in the books of plaintiff as cash amount has been paid on each occasion of drawing fuel from the outlet of the plaintiff firm. Taking such plea on the face of it, first of all it be again noted here that PW-1 is partner of the plaintiff firm who has deposed about the claim of the plaintiff firm but in his cross-examination it is nowhere even suggested to this witness that exaggerated bills have been raised or supply of fuel has been shown to be more than even the maximum capacity of any truck. Such defence on the face of it appears to be convincing but I find that same has not been proved on record, firstly nothing has come in evidence of either of the witnesses of plaintiff. Now, if we consider the evidence of DW-1 Virender Kumar, he though had testified these facts, but in his cross-examination DW-1 had

admitted that he used to take fuel from plaintiff sometimes on credit basis also. DW-1 has also admitted that his transactions with plaintiff firm continued in cash or by way of cheque or on credit in year 2005-06. DW-1 further admits that he had never given any notice or letter to plaintiff regarding discrepancies in quantity of liters supplied to the trucks of defendant as mentioned in para 10 of his affidavit. Thus, it is clear that nothing could come out in the evidence of DW-1 or DW-2 Dilbag Singh to establish that plaintiff had inflated their claim by falsely showing larger quantity of liters of fuel supplied than actual supply.

xxxxx xxxxx xxxxx

38. Now, if we consider the above said evidence of DW-1 and DW-2, first of all it is testified by DW-1 that he had never taken fuel from plaintiff on credit. But, at the same time, DW-1 in his cross-examination has admitted that he had dealing with plaintiff firm for purchasing fuel even on credit basis. Thus, if we read the evidence of DW-1 in totality, it is no where establish that transaction between plaintiff firm and defendant no. 1 were entirely on cash/sale basis and there was never credit sale of fuel by plaintiff firm to defendant no. 1. So, it can be safely concluded that this aspect of the defence of defendant no. 1 have not be proved. Certain arguments has been raised regarding number of trucks or regarding name of the firm mentioned in the photographs. But, I find those aspects do not have much bearing in the fact and circumstances of the case because substantially this court is required to evaluate whether there is any legal liability existing against defendants regarding purchase of fuel from plaintiff firm or not. As I have already noted above, that in the absence of any written agreement/arrangement between the parties regarding purchase of the goods, in the absence of anything coming in the evidence of defendant that there was no liability at all for payment to be made, I find that defendants have failed to disprove the case / claim of plaintiff. Merely alleging that plaintiff firm had allured the defendant no. 1 for purchasing fuel from its petrol pump and that assurance was given for discount, does not by itself negate any legal liability of outstanding amount, for supply of fuel which has been duly proved by the plaintiff firm by preponderance of probabilities and could not be disproved by defendants." (underlining added)

7. In my opinion, no fault can be found with the reasons,

discussion and conclusion of the trial court holding that the

appellant/defendant no.1 who was in transportation business and

owned trucks used to purchase fuel from the respondent/plaintiff's

petrol pump and that he did not clear the outstanding dues as found in

the invoices Ex.PW1/2 to Ex.PW1/9. The trial court also was justified

in holding that the security cheque was properly presented to recover

the outstanding amount and that a presumption was raised of the

cheque being issued for consideration as per the Negotiable

Instruments Act and which was not rebutted as per the evidence led by

the appellant/defendant no.1. Trial court has rightly observed that

witness of the respondent/plaintiff was not cross-examined for any

alleged inflation of the bills and that on preponderance of probabilities

as per the evidence on record the appellant/defendant no.1 had

purchased fuel on credit basis. Once two possible views arise as per

the record of the trial court, and the trial court has taken one possible

and acceptable view, unless such a view is illegal or perverse this

Court will not interfere with the said findings and conclusion of the

trial court.

8. Learned counsel for the appellant/defendant no.1 argued

that the so called invoices Ex.PW1/2 to Ex.PW1/9 are not invoices but

simply entries in the bill book and therefore it could not be held that

the invoices are proved more so because these invoices as per the

argument of the appellant/defendant no.1 are not found in the

statement of account marked X-1 which is filed by the

respondent/plaintiff in the trial court. It is also argued on behalf of the

appellant/defendant no.1 that the respondent/plaintiff admitted that the

subject cheque was given earlier in the middle of the year 2005 as

security and not for encashment and which was dishonored as per the

respondent/plaintiff when the same was presented on account of non-

payment of outstanding dues.

9.(i) I cannot agree with the arguments urged on behalf of the

appellant/defendant no.1 because invoices Ex.PW1/2 to Ex.PW1/9 are

in the nature of serialized details of invoices, however, these

documents Ex.PW1/2 to Ex.PW1/9 are definitely the copies of the bill

books maintained by the respondent/plaintiff and which is typical of

petrol pump business. Slips of payment with respect to petrol purchase

are issued but thereafter the bills are reflected in a bill book containing

the details of the invoices issued and therefore I do not find any

illegality in the conclusion of the trial court holding that Ex. PW1/2 to

Ex.PW1/9 are the unpaid invoices i.e serialized details of the unpaid

invoices.

(ii) Also the argument urged on behalf of the appellant/defendant

no.1 of the cheque being given in the year 2005 cannot change the

issue that the security cheque can always be given earlier and

presented later so as to recover the outstanding amount and in fact to

the discussion of the trial court I would like to add that if the cheque

of security was wrongly retained by the respondent/plaintiff as alleged

by the appellant/defendant no.1 then why did not the

appellant/defendant no.1 take any steps including giving of notice or

writing letters to seek return of the cheque. It is further seen that the

appellant/defendant no.1 is in transportation business and whose

trucks took fuel from the respondent/plaintiff, which was not paid for

and therefore the respondent/plaintiff had to deposit the security

cheque towards recovery of the outstanding amount and which was

dishonored on presentation and therefore the subject suit came to be

filed.

10. In view of the above, there is no merit in the appeal and

the appeal in the peculiar facts of this case is dismissed with costs of

Rs.50,000/- which would be deposited by the appellant/defendant no.1

with the website www.bharatkeveer.gov.in within a period of four

weeks from today. Registry will list this matter in Court in case

receipt with respect to deposit of costs is not filed in this Court within

a period of six weeks from today.

AUGUST 04, 2017/ AK                           VALMIKI J. MEHTA, J