Gujarat High Court
Patel Rameshchandra Hiralal Through ... vs Urvashiben Pravinchandra Patel on 17 July, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
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Reserved On : 24/04/2025
Pronounced On : 17/07/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2104 of 2022
With
CIVIL APPLICATION (FOR WITHDRAWAL/DISBURSEMENT OF AMOUNT)
NO. 2 of 2023
In R/FIRST APPEAL NO. 2104 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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PATEL RAMESHCHANDRA HIRALAL THROUGH PARTNER JASMIT
NATUBHAI PATEL & ORS.
Versus
URVASHIBEN PRAVINCHANDRA PATEL & ORS.
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Appearance:
MR SALIL M THAKORE(5821) for the Appellant(s) No. 1,2,3,4
MR VIRAT G POPAT(3710) for the Defendant(s) No. 1,2.1,2.2,2.3
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Present Appeal is preferred under Section 96 of the
Code of Civil Procedure, 1908 (hereinafter referred to as
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'CPC' for short) by the original defendant being aggrieved
and dissatisfied by the judgment and order passed by the
Judge, Commercial Court, Ahmedabad (hereinafter
referred to as 'the learned Commercial Court' for short)
in Commercial Civil Suit No. 359 of 2021.
2. The appellant is the original defendant in the Civil
Suit whereas respondent is the original plaintiff. For sake
of brevity, the parties are referred to as per the cause-
title of the Civil Suit.
3. The controversy which has resulted in filing of the
present appeal is that an oral contract was entered into in
the year 1987 between the plaintiff and the defendant
qua purchase of Isabgul. The goods were to be purchased
through the defendant. The terms of the oral contract
indicated that 25% of the purchase value of Isabgul had
to be paid by the plaintiff and the rest of the amount, i.e.
75% was to be invested by the defendant for which the
plaintiff was liable to pay interest at the rate of 18% per
annum. Further, it was agreed between plaintiff and the
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defendant to store Isabgul (hereinafter referred to as 'the
goods' for short) from time to time in defendant's godown
in Unjha and plaintiff had agreed to pay rent for the same
at the end of each year. In total, 5239 bags of Isabgul
were purchased. It was further agreed that the defendant
will charge commission from the plaintiff for such
purchases. It was the case of the plaintiff that the
defendant had agreed and were duty bound to store and
continue to store the goods in their godown till the
plaintiff desired. As per plaintiff, the defendant had
categorically agreed for the same. It was the case of the
defendant that they had sent demand for various amounts
as payment to the defendant upto 31.3.1990. The amount
were towards 25% of the purchase price, godown rent,
interest and commission. It was the case of the plaintiff
that they had paid in total an amount of Rs.49,10,026.79
paise to the defendant.
4. It was the case of the plaintiff that the goods
purchased were stored in the godown of the defendant
from 1987 onwards. Time and again, the plaintiff had
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made payment for the same and the last payment was
made in April, 1990, which was acknowledged by the
defendant.
5. However, in the year 1993, the defendant raised
some dispute with regard to the percentage of price of
payment to be made by the plaintiff to the defendant. In
wake of such controversy, the defendant sold the goods
stored in the godown in the year 1993. The defendant
intimated the plaintiff by way of communication dated
9.7.1993 and 10.7.1993, informing the plaintiff that they
had sold 3089 bags of goods as well as another set of
2190 bags of goods at the rate of Rs.190/- per 20 kg.
6. It was the case of the plaintiff that the sale made by
the defendant was illegal and void. The defendant had
sold the goods without the permission of the plaintiff
dehors the contractual obligation and with an ulterior
motive. It was the case of the plaintiff that the defendant
had no authority or right to sell the goods and the action
of the defendant was without the consent of the plaintiff
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and hence was illegal, arbitrary and unjust. It was further
the case of the plaintiff that they had made payment of
almost Rs.49 lakh, which was not disputed by the
defendant. Despite such payment, the goods were
illegally sold out by the defendant.
7. Being aggrieved by the action taken by the
defendant, the plaintiff instituted a Suit before the
Commercial Court on 27.7.1993, which came to be
numbered as Civil Suit No. 3702 of 1993. The prayer
made in the Suit was for recovery of Rs. 1.00 Crore being
the amount of goods sold. Pursuant to the initiation of the
proceedings under the Commercial Courts Act, the suit
came to be renumbered as Commercial Civil Suit No. 359
of 2021. The learned Commercial Court, by way of the
judgment and order dated 21.10.2021 allowed the suit
partly declaring that the act of the defendant in selling
out the goods without prior permission of the plaintiff was
clearly in breach of the contract and thereby the
defendant was ordered to refund the amount of Rs.
49,10,026.79 ps along with interest at the rate of 9% per
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annum from the date of filing of the suit till its realization.
The amount of Rs.49.10 lakh was arrived as actual
payment being made to the defendant. Being aggrieved
by the judgment and order passed by the learned
Commercial Court, the original defendant has preferred
the present First Appeal.
8. Heard Mr. Salil Thakore, learned advocate for the
Appellant and Mr. Virat Popat, learned advocate for the
defendants. It was vehemently submitted by Mr. Thakore
that the learned Commercial Court has misconstrued the
oral evidence. The learned Commercial Court has erred in
holding that the plaintiff has paid the entire purchase
amount of the goods that they were required to pay. The
conclusion drawn by the learned Commercial Court from
the oral evidence is incorrect. It was further submitted
that the learned Commercial Court has failed to
appreciate that the defendant firm has every right to sell
of the goods in order to recover its cost and losses
considering that the plaintiff trust has failed to discharge
its obligation of paying the balance consideration and the
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expenses considering that the price of the goods had
fallen. The learned Commercial Court has failed to
appreciate that the sale was not at all wrongful but was
necessary so that the defendant could recover its losses/
cost that had occasioned because of non-payment by the
plaintiff of money that it was required to pay.
9. It was further submitted by Mr. Thakore that the
learned Commercial Court has erred in not appreciating
the fact that the plaintiff was negligent in payment of
substantial portion of the purchase amount. A huge sum
of money which was due and payable by the plaintiff to
the defendant towards godown rent and other ancillary
expenses were required to be recovered from the
plaintiff. The learned Commercial Court failed to
appreciate that even after recovery of money by selling
goods, an additional amount was required to be paid by
the plaintiff to the defendant. In wake of such
submissions, Mr. Thakore has contended that the learned
Commercial Court has failed to appreciate that it is the
plaintiff who has breached the terms of agreement and
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the defendant has acted as per law.
10. It was further submitted by Mr. Thakore that the
appellant- original defendant had never accepted any
averment mentioned in the plaint relating to oral
evidence. However, the learned Commercial Court has
erred in holding that the defendants have admitted to
such averment. It was further submitted by Mr. Thakore
that the plaintiff has produced their Books of account,
which clearly reflect that the plaintiff owed money to the
defendant and such admission made by the plaintiff is a
clear proof by itself that they have not paid the due
amount. Further, when the ledger balance produced by
the plaintiff itself shows that the amount was due to be
paid by the plaintiff to the defendant. The learned
Commercial Court ought to have accepted the same in
evidence to hold that it was the plaintiff who owe money
to the defendant and not the other way round.
11. Mr. Thakore further relied on the deposition of
Pravinchandra Patel, i.e. plaintiff witness No.2 and Mr.
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Jayantilal Jivanlal Patel, defendant witness at Exh-122. It
was submitted by Mr. Thakore that on a bare reading of
the deposition of the witnesses of the defendants, it can
be seen that the plaintiff owed money to the defendant
and the defendant was very much within his right to sell
the goods.
12. It was further submitted by Mr. Thakore that the
defendants are creditors and not debtors. The amount
owned by the defendant was specifically mentioned in the
letters dated 9.7.1993 and 10.7.1993. This aspect was not
responded by the plaintiff. The defendant being agent
was entitled to sell the goods and recover of the cost of
goods which were purchased by the defendant.
13. Apart from the issues on merits, further contention
raised by Mr. Thakore was that the suit has been filed by
a Private Trust without bringing the resolution of the
Trust which would substantiate the authentication to the
person who filed suit on behalf of the trust. In absence of
the same, the suit would not be maintainable. The
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judgment and order passed by the learned Commercial
Court, is, thus, to be set aside on this ground alone.
14. Per contra, Mr. Virat Popat, learned advocate for the
respondent- original plaintiff has submitted that the
defendants have sold the goods for wrongful gains and to
cause wrongful loss to the plaintiff. The details of the sale
are not put on record. The sale made by the defendants
are to the persons who were known to the defendants and
who were in collusion with the defendant to cause loss to
the plaintiff. The defendant has not placed on record any
factual aspect with regard to the sale transaction, had the
goods been sold in the open market, the plaintiff would
have received an amount of Rs.90 lakh and odd and if at
all there were investments made by the defendant, that
would have been recovered from such amount. It was
further submitted that the defendant has wrongfully
charged commission without any basis. The plaintiff was
duty bound to recover such amount. The plaintiff had
produced on record the Books of account with regard to
the amount paid to the defendant. Despite the legitimate
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amount being paid to the defendant, the goods were sold
by the defendant in breach of the oral agreement. In
wake of such submissions, Mr. Popat has contended that
the first appeal is meritless and the judgment and order
passed by the learned Commercial Court is just and
proper.
15. Having heard learned counsels for the parties and
perused the judgment of the learned Commercial Court
as well as the evidence on record, the primary point of
determination in the present first appeal would be:
i. Whether the Commercial Court was justified in
coming to the conclusion that the plaintiff was
entitled to recover the amount that was paid to the
defendant?
Before determining the point, it is necessary to go
through the issues that were framed before the learned
Commercial Court, which are as under:
Issue No. 1. Whether the plaintiff No.1 prove that
the goods sold i.e. 239 bags weighing 30292 kg of
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Isabgul were stored in the godown of the
defendants?
Issue No. 2. Whether the plaintiffs prove that they
entered into contract, showing with the terms and
conditions in the year 1987, with the defendants as
stated in para. 3 of the plaint?
Issue No. 3. Whether the plaintiffs prove that they
paid the amount of Rs.49,10,026.79 ps. to the
defendants as stated in para.3 of the plaint?
Issue No. 4. Whether the defendants prove that the
plaintiffs have committed breach of contract?
5. Whether the plaintiffs are entitled to recover
Rs.1,00,63,199.70ps. with interest @18% from the
defendants?
6. Whether the plaintiffs are entitled for the relief as
prayed for?
7. As per order passed below Exh.139 following
issue is added, Whether the plaintiff proves that it
do not require any prior permission from the
respective charity commissioner to file and
prosecute present suit?
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It is worthwhile to note that Mr. Thakore has not
raised any controversy or dispute with regard to the
findings of the trial Court on issue Nos. 1, 2 and 3.
Therefore, it is not in dispute that there was an oral
contract between the parties and the plaintiff had made
payment of Rs. 49,10,026.79 ps to the defendant.
Therefore, the fulcrum of controversy would be the
findings and observations made on issue Nos.4 and 5. To
discuss on the findings of issue Nos. 4 and 5 as well as to
determine the point framed in the present appeal, it
would be necessary to go through the documentary and
oral evidences that were produced before the learned
Commercial Court, which are as under:
ORAL EVIDENCE OF PLAINTIFF:
Sr. No. Exhibit Particulars
Number
1. 46 Deposition of witness No.1 of plaintiff
Mr.Pravinchandra Baldevbhai Patel
on affidavit.
2. 125 & 131 Deposition of witness No.2 of plaintiff
Mr. Shaileshbhai Balmukund Bhavsar
on affidavit and additional affidavit.
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DOCUMENTARY EVIDENCE OF PLAINTIFF:
Sr. No. Exhibit Particulars
Number
1. 57 & 58 Copy of debit note regarding interest,
60 TO 66 rent, labour charges, dalali, godown
rent, telephone charges etc.
2. 59 Copy of credit note.
3. 67 Copy of statement
4. 68 Copy of account regarding to amount
of interest, godown, labour charges
etc.
5. 69 Copy of debit note.
6. 70 Copy of letter dated 31.03.1992
7. 71 Copy of letter dated 22.05.1992
8. 72 Copy of credit note
9. 73 TO 77 Copy of debit note
10. 78 Copy of books of account.
11. 85 Copy of letter dated 23.04.1990
12. 86 Copy of letter dated 24.04.1990.
13. 87 Copy of letter dated 01.06.1993
14. 88 Copy of acknowledge receipt
15. 89 Copy of letter book
16. 90 Copy of letter dated 14.06.1993
17. 91 Copy of letter dated 09.07.1993
18. 92 Copy of letter dated 10.07.1993
19. 93 Copy of Trust Deed
20. 156 Copy of letter dated 23.04.1990
21. 157 Copy of letter dated 24.04.1990.
22. 158 Copy of letter dated 01.06.1993
23. 159 Copy of acknowledgment receipt.
24. 160 Copy of letter dated 21.06.1993.
25. 161 Copy of letter dated 14.06.1993.
26. 162 Copy of letter dated 09.07.1993.
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27. 163 Copy of letter dated 10.07.1993.
28. 164 & 165 Copy of books of account
29. 166 Copy of letter dated 22.10.1987.
30. 167 TO 169 Copy of books of account.
ORAL EVIDENCE OF DEFENDANT:
1. 122 Deposition of defendants No.3 of Mr.
Jayantilal Jivanlal Patel on affidavit.
DOCUMENTARY EVIDENCE OF DEFENDANT:
--NIL--
16. To determine this point, the first aspect would be to
go through the evidence that has been produced. The
plaintiff has produced the Books of account at Exh-78.
Even the defendant has not disputed the fact that an
amount of Rs.49.10 lakh was paid by the plaintiff to the
defendant.
17. The first contention of the defendant is that there
were other dues over and above Rs.49.10 lakh to be paid
by the plaintiff to the defendant, due to non-payment of
which the goods were sold. To justify this aspect, the
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defendant has not produced their Books of account. The
defendant has also not produced on record any proof of
the the sale transactions which were made by them in
open market. The defendant has not produced a single
piece of evidence or information with regard to what was
additional dues that they were demanding from the
plaintiff and what would be the adjustment after the
goods were sold in the open market. Merely making bald
allegation that they were supposed to get an additional
amount over and above Rs.49.10 lakh paid by the
plaintiff, would not justify the demands of the defendant.
To add to this factual aspect, a recovery suit was
preferred by the defendant. The said suit is already
dismissed and there is no appeal preferred by the
defendant. Therefore, the assertion made by the
defendant that they had legitimate right of selling the
goods, due to the legitimate demand of pending dues over
and above Rs.49.10 lakh, cannot be justified by any
evidence on record. Therefore, the primary contention of
the appellant-original defendant with regard to any
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additional dues in favour of the defendant, cannot be
substantiated.
18. Another point with regard to the very same
argument raised by Mr. Thakore is that the plaintiff has
produced his Books of account. According to Mr. Thakore,
the ledger account of the defendant in the Books of
account of the plaintiff is self-explanatory and once the
plaintiff has recorded that some amount was due to the
defendant, the dues to be paid by the plaintiff to the
defendant cannot be controverted. Unfortunately, this
argument of Mr. Thakore cannot be countenanced for
variety of reasons. The defendant has not produced on
record the audited Books of their accounts. The
defendant has also not produced on record any details
quantifying the amount recovered through the sale of
goods.
19. The initial contract during purchase of goods was
payment in the ratio of 25:75. Further, the plaintiff was
also required to pay interest and the godown rent.
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Therefore, during the recording of initial transaction, the
plaintiff would definitely show such amount as credit
balance in their ledger accounts. Further, the
reconciliation of the payment can only be ascertained
from the Books of account of the defendant which has not
been produced. Further, from the Books of account of the
plaintiff, the actual payment of Rs.49.10 lakh is not
disputed by the defendant. Therefore, the defendant was
required to give his version of the Books of account
showcasing the transaction of sales of goods and the
balance effect thereafter which may be deficient or
surplus in favour of the defendant. Once this is so done,
the demand by the defendant would be completely
malafide and the amount paid by the plaintiff would be
subject matter of recovery. No infirmity, therefore, can be
attached to the order passed by the learned Commercial
Court.
20. Mr. Thakore has further placed strong reliance on
the deposition of two witnesses, i.e. the plaintiff witness
No.2- Shaileshbhai Balmukund Bhavsar as well as the
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defendant witness No.3 Jayantilal Jivanlal Patel. As
mentioned hereinabove, a strong objection was raised by
the defendant counsel to the communication dated
23.4.1990 wherein condition of the transaction was
communicated by the plaintiff to the defendant. It was
mentioned therein that the defendants were not supposed
to sell the goods in question. An issue has been raised by
Mr. Thakore that the receipt of this communication is not
on record and it is a highly disputed document. However,
this argument of Mr. Thakore cannot be countenanced,
inasmuch as, in the examination-in-chief of the plaintiff
witness, the document has been categorically referred to
and proved by the witness, the defendant, however, has
not cross-examined the witness on the said aspect. The
document has, thus, been proved by the plaintiff's
witness. Therefore, the argument that the plaintiff has not
communicated to the defendant vis-à-vis the transaction,
is baseless and cannot be accepted.
21. The further issue agitated by Mr. Thakore is that the
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defendant was an agent and the admission in the Books of
account of the plaintiff are admission against the maker
of the document. Mr. Thakore has placed heavy reliance
on the documents produced by the plaintiff and
particularly the ledger account. It is the case of the
defendant that when the ledger account of the plaintiff
itself shows an amount to be credited in favour of the
defendant, they are the admission by the plaintiff with
regard to amount due to the defendant. For this aspect,
the deposition of defendant witness Mr. Jayantilal Patel
becomes very important. It is noteworthy that the plaintiff
has adduced oral evidence and documentary evidence
both. However, the defendant has adduced only one oral
evidence, i.e. the testimony of Mr. Jayantilal, which is at
Exh-122. This testimony finds place at Page-'205' of the
paper-book. In the examination-in-chief, it has been
categorically accepted by Mr. Jayantilal on behalf of the
defendant that amount of Rs.49.10 lakh was paid by the
plaintiff to the defendant. In the cross-examination, at
question Nos. 10 to 14, particular questions were put to
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Mr. Jayantilal, who has categorically accepted that the
goods were purchased were by them and the bills with
regard to such purchases were available with them and
they will produce the same on record. Despite this
statement, the purchase bills by the defendants are not
produced on record.
22. Further, at question Nos. 17 and 19, defendant's
witness accepted that partial payment as admitted in the
oral contract, was made by the plaintiff. At question
No.22, the witness has categorically accepted that the
delivery challans of the goods which were in the godown
are not with the defendant. From question Nos. 27 to 33,
categorical query with regard to the godown, it is to be
noted that it has been accepted by the witness that the
godown in which the goods were stored did not belong to
the defendants. Further, they did not have any evidence
with regard to the payment made towards rent of the
godown where goods were allegedly stored.
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23. Further, from question Nos. 59 to 64, it can be seen
that it has been accepted by the defendant witness that
the payments made by the defendants to the purchasers
of Isabgul were by cheques. However, the details of the
cheques are not available with them and have not been
produced on record. It was further stated by the witness
that the goods were purchased from various parties and
the names of such parties are not readily available with
the defendant. It was further accepted by the witness at
question Nos. 76 and 77 that the plaintiff has made their
part of the payment. However, the details of the total
payment having been made towards the godown rent has
not been provided to the plaintiff in writing by the
defendant.
24. Therefore, on overall consideration of the testimony
of the defendant's witness, it is clearly established that
the plaintiff had made the payments as per the oral
contract. The defendant though claims to have made the
payment to satisfy their promise under the oral contract,
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but has failed to place on record anything that transpires
the fact that the defendant had purchased the goods or
the defendant had made the payment towards the
purchase of those goods.
25. Therefore, considering the evidence on record as
well as the testimony of the defendant's witness, it is
clearly established that the learned Commercial Court
has correctly appreciated the evidence to answer the
issue No.4 against the defendant and in favour of the
plaintiff. The learned Commercial Court has categorically
observed that the defendant has not produced the Books
of accounts and any documentary evidence to prove the
issue raised by them. Admittedly, apart from the oral
deposition, no other evidence has been produced.
However, the deposition of the witness of the defendant
rather goes in favour of the plaintiff and against the
defendants. The defendants did not produce documents to
establish its defence, and also has failed to produce
original records. Generally, it is the duty of the party to
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lead the best evidence in his possession, which could
throw light on the issue in controversy and, in case, such
material evidence is withheld, the case may go against
such party. In the present case, there has been
categorical admission of the witness of the defendant that
certain documents were available with them to establish
their defence, however, they have not produced them to
showcase their case with regard to issue No.4. It is a
settled law that no party can be permitted to travel
beyond its pleadings and all necessary material facts
should be pleaded and proved by the parties in support of
the case set-up by it. In the instant case, the defendant
accepted that an amount under the contract was paid by
the plaintiff and suggested to make recovery from the
plaintiff. Such an artificial argument cannot be accepted.
There is no material on record of the case. In view of the
same, the findings given by the learned Commercial
Court cannot be said to be erroneous either in law or on
facts. The appeal deserves to be dismissed, accordingly.
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26. The last feeble attempt made by Mr. Thakore is to
raise an issue to the maintainability of the suit. It was
submitted by Mr. Thakore that in absence of resolution of
the Trust, the suit was not maintainable. It was further
argued that if the Trust stood dissolved, it must be
considered as a dead person and no decree can be passed
against a dead person. However, it has to be understood
that the issue of maintainability was never pleaded nor
got framed before the learned Commercial Court in the
suit. The defendant cannot be permitted to raise the same
at this juncture as the contention raised by Mr. Thakore
would require a factual inquiry and it is not an pure issue
of jurisdiction. This contention raised by Mr. Thakore is
nothing but an afterthought, which cannot be permitted
to be raised in the facts of the present case. The
argument canvassed by Mr. Thakore with regard to
maintainability is, thus, baseless and required to be
rejected outrightly.
27. In view of the above discussion, the point framed in
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this appeal is determined in favour of the plaintiff and
against the defendant. The First Appeal preferred by the
defendant is meritless and is dismissed, accordingly. No
order as to costs.
All the connected Civil Applications, if pending, also
stand disposed of, accordingly.
(SUNITA AGARWAL, CJ )
(PRANAV TRIVEDI,J)
SAJ GEORGE
FURTHER ORDERS
Mr.Himanshu Shah, the learned advocate on behalf
of Mr.Salil M. Thakore requests for grant of stay of the
order. Considering the facts of the case, the request
made by the learned advocate for the defendant is
denied.
(SUNITA AGARWAL, CJ )
(PRANAV TRIVEDI,J)
SAJ GEORGE
