Phoenix International Ltd. vs Dhampur Polymers Pvt. Ltd
2019 Latest Caselaw 1194 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 366/2007

%                                                   22nd February, 2019

PHOENIX INTERNATIONAL LTD.                ..... Appellant
                 Through: Mr. Bimlesh K. Singh and Mr.
                           Ashutosh Bhardwaj, Advocates
                           (9873388834)
                          versus

DHAMPUR POLYMERS PVT. LTD.                               ..... Respondent

Through:

CORAM:

HON'BLE MR. JUSTICE VALMIKI J. MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit

impugning the Judgment of the trial court dated 28.02.2007 by which

the trial court has decreed the suit filed by the respondent/plaintiff for

an amount of Rs. 15,23,093/- (suit amount) along with interest at 10%

per annum.

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

the subject suit pleading that it supplied polythene bags and packing

material to the appellant/defendant. It was pleaded by the

respondent/plaintiff that as on 14.08.2001, there was a debit balance of

Rs. 10,37,389/- due against the appellant/defendant. It was pleaded

that the appellant/defendant had issued necessary C-Forms of the

Central Sales Tax with respect to the respective invoices/bills under

which supplies were made. The subject suit was filed claiming the

balance as per the statement of account of Rs. 10,37,389/-, and to

which interest was added, to claim the suit amount of Rs. 15,23,093/-.

3. The appellant/defendant contested the suit by filing

written statement. Receipt of the material was not denied. Two main

defences were raised by the appellant/defendant. Firstly, that three

payments of Rs. 50,000/- each were made by the appellant/defendant

to the respondent /plaintiff in terms of the cheque nos. 056236,

057728 and 057729 have not been accounted by the

respondent/plaintiff. These cheques according to the appellant/

defendant were credited in the bank account of the respondent/plaintiff

on 13.11.2000, 05.12.2000 and 12.12.2000. Consequently, the

amount claimed which was of Rs. 10,37,389/-, was denied. Secondly,

it was pleaded by the appellant/defendant that on account of the

supply of defective goods, the appellant/defendant had raised debit

notes, and therefore, the respondent/plaintiff is not entitled to the suit

amount.

4. The following issues were framed in the suit:

(i) Whether the suit of the plaintiff is barred by Limitation?

(OPD)

(ii) Whether the suit of the plaintiff is without any cause of action? (OPD)

(iii) Whether the plaintiff has suppressed material facts qua the payment received and defective goods etc.? (OPD)

(iv) Whether the plaintiff is entitled for the decree for the recovery of Rs.15,23,093? (OPP)

(v) Whether the plaintiff is entitled for the interest on suit amount on future and pendentelite interest. If so, at what rate? (OPP)

(vi) Relief."

5. On behalf of the respondent/plaintiff evidence was led

through deposition of Sh. Satish Chandra, Director of the

respondent/plaintiff. Sh. Satish Chandra deposed and proved the

various invoices as Ex. PW 1/8 to Ex.PW1/53. The CST forms were

proved as Ex.PW1/54 and Ex.PW1/55. The Legal Notice served upon

the appellant/defendant was proved as Ex.PW1/56 and AD Card

Ex.PW1/57. The appellant/defendant in its evidence sought to file and

prove the debit notes as Ex.DW1/3 to Ex.DW1/7. These debit notes

are dated 31.10.2001 and 30.11.2001. In support of these debit notes,

the appellant/defendant filed and proved the statement of account of

the respondent/plaintiff maintaining its books of account from

01.04.2001 to 31.3.2002. This statement of account was exhibited as

Ex.DW1/2 and which contained three entries. The first entry is the

amount due from the appellant/defendant towards the

respondent/plaintiff being a sum of Rs. 8,68,656/- and thereafter there

are two debit entries of Rs. 5,32,630/- and Rs. 3,26,163/-, and which

are with respect to the amounts as stated in the debit notes Ex.DW1/3

to DW1/7. However, in the cross-examination of the witness of the

appellant/defendant, Sh. G.K. Mishra, it was admitted by Sh. G.K.

Mishra on 27.11.2006 that there were no signatures of the

respondent/plaintiff which appear either on the statement of account

(of the respondent/plaintiff in the books of account of the

appellant/defendant) Ex.DW1/1 and Ex.DW1/2 or on the debit notes

Ex.DW1/3 to DW1/7.

6. The payments of Rs. 50,000/- each by means of three

cheques were sought to be proved by the appellant/defendant in terms

of the statement of account Ex.DW1/8 to DW1/10, but these

statements of accounts were rejected by the trial court by observing

that these statements of account are not proved as per the Bankers'

Books Evidence Act, 1891 and are merely photocopies.

7. In my opinion, though the trial court was justified in

decreeing the suit for recovery of moneys, the suit however could not

have been decreed for the sum prayed of Rs. 15,23,093/- i.e. Rs.

10,37,389/- plus interest totaling to Rs. 15,23,093. This is because the

respondent/plaintiff did not file and prove its ledger account or a

proper statement of account by filing a copy of that statement of

account and by proving the same by bringing the original ledger of the

statement of account in Court. It is noted that the amount claimed by

the respondent/plaintiff of Rs. 10,37,389/- is on the basis of typed

entries as found in the plaint itself, and no statement of account was

proved and exhibited. The entries are also found as stated by the

respondent/plaintiff in the plaint only up to 14.06.2000, and the

amounts which are said to have been credited in the bank account of

the respondent/plaintiff by cheques of the appellant/defendant are of

subsequent dates being 13.11.2000, 5.12.2000 and 12.12.2000. In my

opinion, the first entry dated 13.11.2000 cannot be accepted because

this entry is only clearing entry whereas the subsequent two entries as

Ex.DW1/9 and Ex. DW1/10 should be accepted by this Court because

these entries show payment by name to the respondent/plaintiff for a

sum of Rs. 50,000/- each. I may note that at the time of exhibition of

the statement of account as Ex.DW1/9 and Ex.DW1/10, there was no

objection which was raised on behalf of the respondent/plaintiff that

the statements of account are not duly proved as they are not certified

under the Bankers' Books Evidence Act or are merely photocopies,

and once no objection was raised by the respondent/plaintiff before

commencement of cross-examination of the witness of the

appellant/defendant Sh. G.K. Mishra, therefore, in view of the ratio of

the judgment of the Hon'ble Supreme Court in the case of R.V.E.

Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple

and Another, (2003) 8 SCC 752, the statements of account Ex.DW1/9

and Ex.DW1/10 are to be taken to have been duly proved. The effect

of proving of Ex.DW1/9 and Ex.DW1/10 would mean that a sum of

Rs. 1,00,000/- would stand reduced from the principal sum of Rs.

10,37,389/- due and claimed by the respondent/plaintiff. It is noted

that in the statement of account Ex.DW1/2 filed on behalf of the

appellant/defendant, the appellant/defendant as on 01.04.2001 has

shown the principal amount due to the respondent/plaintiff as a sum of

Rs. 8,68,656/-, and since this is a document of the appellant/defendant

itself, this Court takes the figure of dues as against the

appellant/defendant and in favour of the respondent/plaintiff to be a

sum of Rs. 8,68,656/- as on 01.04.2001 i.e. after giving on credit to the

appellant/defendant including two credits of Rs. 50,000/- each as per

Ex.DW1/9 and Ex.DW1/10.

8. The next issue is as to whether the appellant/defendant is

entitled to the amount due from the debit notes, and the same are

identified as the amounts of Rs. 5,32,630/- and Rs. 3,26,163/- in terms

of two entries in the statement of account Ex.DW1/2. In my opinion,

the trial court has rightly rejected the claims of the appellant/defendant

for the debit notes amounts because simply by issuing debit notes, it

cannot be proved that the goods supplied to the appellant/defendant by

the respondent/plaintiff were defective. The debit notes do not have

credibility/weight because the witness of the appellant/defendant

admitted that they did not bear the signatures of the

respondent/plaintiff. Same is the position with respect to the

statements of account/Ex.DW1/1 and Ex.DW1/2. Entries in the books

of account, including towards the amounts of debit notes, have to be

proved by corresponding documents which will show that actual

goods supplied to appellant/defendant as alleged by it were defective,

but not a single correspondence or any other documentary evidence

has been filed and proved by the appellant/defendant to show that the

goods supplied with respect to which debit notes were issued for sums

of Rs. 5,32,630/- and 3,26,163/- were defective goods. Further, in my

opinion, there is no credibility whatsoever in the debit notes because

the debit notes are suddenly issued on two dates on 31.10.2001 and

30.11.2001, and the last transaction between the parties was of June

2000. Obviously, these debit notes were conveniently created by the

appellant/defendant to falsely dispute and deny its liability towards the

respondent/plaintiff.

9. The net result of the above discussion is that the suit of

the respondent/plaintiff should have been decreed, but not for the

alleged principal amount of Rs. 10,37,389/- plus interest totaling to

Rs. 15,23,093/- on the date of the suit, and the suit should have only

been decreed and is decreed for an amount of Rs. 8,68,636/- along

with simple interest at 9% per annum from 01.04.2001, the date of

filing of the suit on 04.11.2003, and thereafter pendente lite and future

at the same rate till deposit of certain amount in this Court by the

appellant/defendant. After the date of deposit in this Court by the

appellant/defendant, the respondent/plaintiff will only be entitled to

interest at the rate which has accrued on the FDR, as the amount

deposited by the appellant/defendant has been put in an FDR in this

Court. Parties are however left to bear their own costs.

10. In view of the above discussion, this appeal is partially

allowed, and the suit of the respondent/plaintiff will be decreed for a

sum of Rs. 8,68,656/- along with interest at 9% per annum from

01.04.2001 till 04.11.2003, and on the consolidated amount due on

04.11.2003 pendente lite and future interest will be payable at 9% per

annum simple till the deposit of amount in this Court by the

appellant/defendant. Since the appellant/defendant has deposited 50%

of the decretal amount in this Court , the Registry will now calculate

the amount due to the respondent/plaintiff in terms of the present

judgment, and in case the amount deposited in this Court would be

found to be more than the amount due to the respondent/plaintiff, only

and only then, in such case, the appellant/defendant can be paid the

excess amount deposited in this Court, but it is also further clarified

that if no amount is due to the appellant/defendant and in fact further

amount is due to the respondent/plaintiff from the appellant/defendant,

the amount deposited in this Court along with accrued interest will be

liable to be released only to the respondent/plaintiff in appropriate

satisfaction of the present judgment and decree, and for any further

balance due to the respondent/plaintiff under the present judgment and

decree, the respondent/plaintiff can always initiate appropriate

execution proceedings.

11. The appeal is accordingly partially allowed and disposed

of, leaving the parties to bear their own costs. Decree sheet be

prepared.

FEBRUARY 22, 2019 /ib                       VALMIKI J. MEHTA, J