[Cites 14, Cited by 0]
Gujarat High Court
A.K.Moitra vs B.A.S.F. India Ltd on 8 May, 2026
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1883 of 2007
With
R/FIRST APPEAL NO. 4075 of 2006
With
CIVIL APPLICATION (FOR ORDERS) NO. 2 of 2006
In R/FIRST APPEAL NO. 4075 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
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Approved for Reporting Yes No
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A.K.MOITRA
Versus
B.A.S.F. INDIA LTD. & ORS.
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Appearance:
MR BHARAT JANI(352) for the Appellant(s) No. 1
MR ADIL R MIRZA(2488) for the Defendant(s) No. 1,2,5
RULE UNSERVED for the Defendant(s) No. 3,4
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D.
KARIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
Date : 08/05/2026
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE L. S. PIRZADA)
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1. The captioned First Appeals have been preferred by the
respective defendants under Section 96 of the Code of
Civil Procedure, 1908 (for short 'the Code, 1908')
challenging the Judgment and Decree dated
30.06.2006 passed by the learned Principal Civil
Judge, Valsad in Special Civil Suit No.180 of 1993,
whereby, the learned Principal Civil Judge has partly
allowed the suit of the plaintiff and directed the
original defendant nos. 1 to 5 and 8 to be jointly and
severally liable to pay Rs.27,29,585.75 from the date of
filing of the suit till realization at the rate of 9% per
annum to the plaintiff.
2. Both the captioned appeals have been challenging the
same aforesaid Judgment and Decree passed by the
learned Trial Court, hence, it has been decided by this
Common Judgment in this appeal.
3. The appellant of the First Appeal No.1883 of 2007 has
been shown as defendant no.2 in the suit and the
appellant of First Appeal No.4075 of 2006 has been
shown as defendant no.1. For the sake of brevity, the
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parties herein are referred to as per their original
status as that in the suit.
4. Factual matrix leading to the present appeal is that the
present respondent no.1 - original plaintiff had filed a
Special Civil Suit No.180 of 1993 before the Principal
Civil Judge, Valsad and it is also pertinent to note that
initially the present suit was filed on 06.09.1993 by
original plaintiff - Cynamide India Limited.
Subsequently, a Company Petition was preferred
before the Bombay High Court by Company Petition
No.514 of 1997 and by Application No.19 of 1997 a
scheme was presented to be amalgamated into M/s.
Cynamide Agro Limited and subsequently, as per the
order of the Bombay High Court dated 14.10.1997,
Cynamide Agro was assigned to recover the dues of the
original plaintiff - Cynamide India Limited and
subsequently, Cynamide Agro Limited and B.A.S.F.
Limited preferred a Company Petition No.415 of 2001
and Application No.93 of 2001 for the amalgamation
scheme which was confirmed on 22.06.2001 and
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subsequently, in the suit B.A.S.F. India Limited has
been joined as the original plaintiff in place of the
Cynamide India Limited.
5. Originally, it is the case of the plaintiff that the original
plaintiff - Cynamide India Limited is registered under
the provisions of the Companies Act, 2013 having its
registered office at Mumbai and manufacturing unit at
Atul, Taluka: Valsad. The original plaintiff is engaged
in the business of manufacturing and supplying
pesticides, agricultural products and pharmaceutical
goods used for the health and protection of animals
and cattle. The present dispute arises out of
commercial transactions entered into between the
plaintiff and the defendants in the ordinary course of
business.
6. Defendant No. 1 is a co-operative society registered
with the Registrar of Co-operative Societies, Bharuch
District and defendant nos.2 to 5 are its agents and
stockists responsible for the distribution, storage and
handling of goods supplied by the original plaintiff. The
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defendants were acting in a fiduciary and commercial
capacity and were entrusted with the goods supplied
by the plaintiff for sale and further distribution.
7. In pursuance of business dealings, the plaintiff
supplied various consignments of pesticides,
particularly a product known as "Dermet" to defendant
No.1 under multiple invoices including a consignment
dated 23.06.1989. The plaintiff contends that the
goods were duly delivered and accepted by defendant
No.1 without any immediate objection, thereby
completing the contractual obligations on the part of
the plaintiff.
8. During the period from 27.09.1989 to 18.01.1990, the
plaintiff supplied approximately 34,000 liters of
Dermet products to the defendants amounting to a
total value of Rs. 51,55,373.74. Out of this amount, a
sum of Rs. 32,73,345.50 was collected by defendant
no.4 on behalf of defendant no.1 leaving a substantial
balance amount due and payable to the plaintiff.
9. After adjusting the payments received, the principal
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outstanding amount remained Rs.19,18,584.24. As per
established commercial usage and trade practice,
interest at the rate of 18% per annum was applicable
on delayed payments. Accordingly, interest amounting
to Rs.16,22,003.03 accrued bringing the total
outstanding liability of the defendants to
Rs.35,40,587.27.
10. Despite repeated demands and reminders, the
defendants failed and neglected to pay the outstanding
dues. The plaintiff, therefore, issued a legal notice
dated 18.06.1992 through its advocate and also served
a statutory notice upon the District Registrar, Co-
operative Societies, Bharuch. However, the defendants
neither complied with the notice nor made any
payment towards the outstanding amount.
11. The plaintiff further alleges that defendant No.1 in
collusion with defendant nos.2 to 5 manipulated
accounts and created false and fabricated records to
misrepresent the actual stock position and returns of
goods. Discrepancies were found in the quantities of
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goods allegedly returned and shown in stock which did
not correspond with the actual supply made by the
plaintiff, thereby indicating misappropriation and
falsification of accounts.
12. In light of such acts, the plaintiff has initiated criminal
proceedings against the defendants under Sections
408, 409, 468, 477-A, and 114 of the Indian Penal
Code, 1860 alleging criminal breach of trust, forgery
and falsification of accounts. The said criminal
proceedings are presently under investigation.
13. It is also relevant that defendant No. 5 has instituted a
separate Civil Suit against the plaintiff, thereby
compelling the plaintiff to file the present suit for
recovery of its legitimate dues. The plaintiff has also
approached the Competent Authority under the Co-
operative Societies law for recovery proceedings,
however, no effective relief has been obtained.
14. The defendants have contested the claim and denied
the receipt of goods as well as the correctness of the
plaintiff's accounts contending that the claim is false,
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illegal and not maintainable. The learned Principle
Civil Judge has allowed the suit of original plaintiff
holding that defendant nos.1 to 5 are jointly and
severally liable to pay Rs.27,29,585.75 with interest @
9% per annum from date of suit till the date of
recovery.
15. Being aggrieved and dissatisfied with the Judgement
and Decree passed by learned Principal Senior Civil
Judge, Valsad original defendant No.2, defendant no.1
has filed present appeals.
Submission of appellant - original defendant no.2
of First Appeal No.1883 of 2007
16. Heard learned advocate Ms.Mohini Bhavsar for learned
advocate Mr.Bharat Jani appearing for the appellant.
17. Learned advocate Ms.Mohini Bhavsar submitted that
the present appellant who is original defendant no.2 in
the suit was working in the original plaintiff company
and the transaction was taken place between the
plaintiff and the goods were sold to the defendant no.1.
Hence, there is no privity of contract with defendant
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nos. 2 to 5, who are Officers of the original plaintiff
company and therefore, no vicarious liability can be
attributed to them. Consequently, the learned Trial
Court has erred in holding the original Defendant No.2
liable, along with the other defendants, to pay the
decretal amount to the plaintiffs.
18. It was submitted that a criminal case was filed against
original defendant nos. 2 to 5 before the Chief Judicial
Magistrate Court, Bharuch, and in that case all the
accused have been discharged. As there is no privity of
contract between the parties and therefore, the
judgment and decree passed by the learned Trial Court
are required to be set aside.
19. It was submitted that the suit is barred by the law of
limitation, as it has been filed after the expiry of the
prescribed period of limitation; hence, on this ground
as well, the Judgment and Decree passed by the
learned Trial Court are required to be set aside.
20. It was submitted that the oral evidence has been given
by Officers of B.A.S.F. India Limited, who were not
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associated with the original plaintiff company at the
relevant time and, therefore, do not have any personal
knowledge of the transactions. They have deposed
merely on the basis of documentary evidence. In cross-
examination, both witnesses, Mr.C.H. Madhavrao and
Mr.Nitin Bhalchandra have admitted that they do not
have any personal knowledge of the transactions. This
material aspect has not been considered and the
plaintiff had failed to prove its case. Nevertheless, the
learned Trial Court has wrongly held defendant No.2
vicariously liable and the suit is also barred by
limitation.
21. Considering this the suit of the present First Appeal
No.1883 of 2007 is required to be allowed and the
Judgment and Decree passed by the learned Trial
Court is required to be set aside.
Submission of appellant - original defendant no.1
of First Appeal No.4075 of 2006
22. Heard learned Senior Advocate Mr.B.S. Patel assisted
by learned advocate Mr.Chirag B. Patel appearing for
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the appellant.
23. It was submitted that the dispute essentially revolves
around the alleged order of materials, namely various
pesticides, by the original defendant No. 1. It was
submitted that the Judgment and Decree passed by
the learned Trial Court are bad in law, illegal, improper
and liable to be set aside.
24. It is submitted that so far as the learned Trial Court
has framed the Issue No.6 with respect to the
limitation whether the suit is filed after the period of
limitation but after considering the evidence, the
learned Trial Court came to completely erroneous
conclusion that the suit is filed within the period of
limitation.
25. It is submitted that as per the averments made in the
plaint by the plaintiff itself the transaction period is
from 27.09.1989 to 18.01.1990 and it is not the case
that after 18.01.1990 any payment has been made or
anything like that so from 18.01.1990 suit ought to
have been preferred within 3 years which expired on
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18.01.1993 but in the present case the suit has been
filed by the plaintiff on 04.09.1993 and merely the
learned Trial Court has come to the conclusion that an
advocate has issued a notice on 19.06.1992 to the
Registrar Gujarat Cooperative Society and that cannot
extend the limitation for filing the suit, hence
apparently the suit is time barred.
26. It is submitted that the original defendant no.5 has
also challenged the Judgment and Decree passed by
the learned Trial Court and defendant no.5 Krushico
Sales Corporation has also challenged the said
Judgment and Decree by the Trial Court by preferring
First Appeal No.3842 of 2006 and Division Bench of
this Court by Judgment dated 19.12.2025 has allowed
the appeal and qua original defendant no.5 the
Judgment and Decree has been quashed and set aside.
27. Considering this the captioned First Appeals are
required to be allowed.
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Submission made by the respondent no.1 in both
the appeals -original plaintiff.
28. Heard learned advocate Mr.Adil Mirza appearing for
the respondent no.1 - original plaintiff.
29. It was submitted that findings recorded by the learned
Trial Court is just and proper and does not require any
interference.
30. Further, it was submitted that as the original
defendant no.2 was the employee and it was his
responsibility to recover the amount from the
defendant no.1 but the amount was not recovered.
Hence, the original plaintiff - Company was
constrained to file a criminal case against them and
considering the overall aspects as well as the
documentary evidence adduced before the learned
Trial Court, learned Trial Court had rightly passed the
decree against all the defendants as all the defendants
are jointly and severally liable to pay the amount.
31. It was submitted that the books of account had
already been produced in the Trial Court and perusing
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the same, it is an admitted position that when the
goods were supplied, the amount was not paid by the
original defendant no.1. Hence, the suit was filed for
recovery of the amount.
32. It was submitted that as the Trial Court had
considered every aspect of the matter in its Judgment
and had decided Issue No.6, which was pertaining to
limitation, the Trial Court had rightly come to the
conclusion that the transaction had taken place
between the plaintiff and the defendant no.1 between
27.09.1989 to 18.01.1990 and as per the law of
limitation, a suit is required to be filed within 3 years
of arising of the cause of action. It is recorded by the
Trial Court that the defendants in the written
statement are not disputing that the transaction had
taken place till 18.01.1990 and subsequently, a notice
under Section 167 of the Gujarat Cooperative Society
Act, 1962 had been issued to the Registrar on
19.06.1992 as per the provisions of the law which was
received on 24.06.1992. After the notice was issued,
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the defendants had failed to pay the amount. Hence,
the suit was filed by the plaintiff on 04.09.1993 and
therefore, the suit is within the period of limitation of 3
years and the findings of the learned Trial Court are
just and proper and do not require any interference.
33. It was submitted that even from the books of account
and the statement of account produced before the
learned Trial Court, it is an admitted position that in
the month of July, 1990, a credit note was issued by
the plaintiff in favor of the defendant no.1 and from
that, the limitation could have been considered to
commence and even though considering this aspect it
can be said that the suit was filed within the
prescribed period of limitation of 3 years.
34. It was submitted that the defendants have neither
entered into witness box nor gave any evidence. Hence,
the learned Trial Court has rightly decreed the suit
against the defendants.
35. Hence, both the appeals are devoid of any merits and
are required to be dismissed.
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36. After hearing rival submissions of the learned
advocates for the respective parties, perusing the
record and proceedings of the Trial Court, following
points come before us for consideration:
(1) Whether the appellant proved that the original
defendant no.2 cannot be held liable as there is
no privity of contract between the plaintiff and
the original defendant no.2?
(2) Whether the appellant proved that suit filed by
the original plaintiff before the learned Trial Court
is time barred?
(3) What order?
37. Our findings are as under:
(1) Affirmative
(2) Affirmative
(3) As per final order.
38. So far as the controversy raised in the present appeals
are concerned, the same is in a very narrow compass.
Only it is required to be considered that how the
original defendant no.2, who is the appellant of First
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Appeal No.1883 of 2007, he can be held liable for this
amount?
39. In this regard, it is required to consider that the suit
has been filed against all the defendants. The main
contention of the plaintiff is that goods were delivered
through defendant no.1 i.e. mostly the pesticide. The
defendant no.1 had placed an order with the plaintiff -
Company by letter dated 23.06.1989 and during the
period of 27.09.1989 to 18.01.1990 pesticides
amounting to total Rs.51,55,000,373.74 was delivered.
Against that, defendant no.1 had paid amount of
Rs.32,73,345.50 and for the rest of the principal
amount towards the delivery of goods i.e.
Rs.19,18,584.24 was due and payable from the
defendant no.1. The plaintiff had also calculated the
interest at the rate of 18% per annum as per the
custom of the business and amount of
Rs.16,22,003.03 and the suit has been filed for the
total amount of Rs.3540587.27. It is the case of the
plaintiff that defendant no.1 had not paid the amount
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to the plaintiff in collusion with the defendant nos.2 to
5 and they had created false and fake documents to
that effect.
40. It is also not in dispute that initially, the suit was filed
by the Company, namely, Cinamide India Limited.
Subsequently, it was taken over by Cinamide Agro
Limited and it was amalgamated and all the dues was
to be recovered by B.A.S.F. India Limited.
41. The plaintiff had examined witness, namely, Nitin
Bhalchandra vide Exhibit 157 and another witness -
Mr.C.H. Madhavrao vide Exhibit 19. As per their
deposition, it is an admitted position that witness -
Nitin Bhalchandra is the employee of B.A.S.F. India
Limited and in the cross examination, he had admitted
that he did not have any personal knowledge regarding
the said transaction. At the time of the transaction, he
was not serving in the plaintiff - Company and gave his
evidence on the basis of the documents only.
42. Further, it has come on record that original plaintiff
had filed one criminal complaint against the defendant
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no.2 and other persons and subsequently, defendant
no.2 was discharged by the Court. Against that, the
plaintiff - Company has preferred Revision Application,
whereby, the order of the learned Trial Court was
confirmed.
43. Another witness Mr.C.H Madhavrao gave his evidence
vide Exhibit 190 and admitted that he has no personal
knowledge regarding the transaction. From the
evidence of both these witnesses nowhere it has been
come out that the defendant no.2 can in any way, be
held vicariously liable as he was not an employee of
the defendant no.1 - Company but defendant no.2 was
the Regional Manager of the plaintiff - Company and
other defendant nos.3 and 4 were the Manager and
Sales Executive respectively of plaintiff Company and
defendant no.5, as per the averments of the plaintiff,
was the agent of the plaintiff - Company.
44. Merely because the defendant no.2 was the employee
of the original plaintiff - Company and amount has not
been recovered, it cannot be said that he can be held
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liable for the dues of defendant no.1. Hence, from the
evidence itself, nothing has come out that the
defendant no.2 can be held liable for the dues of the
defendant no.1 to the plaintiff.
45. Hence, considering this, the findings of the learned
Trial Court are required to be considered and the
learned Trial Court has not assigned any cogent
reason to hold that defendant nos.2 to 5 are jointly
and severally liable with the defendant no.1 to pay the
decretal amount to the plaintiff. Hence, the original
defendant no.2 cannot be held liable for the dues of
defendant no.1. Hence, the answer to the issue no.1 is
in affirmative;
Issue No.2
46. The important question, now before us is that whether
the suit filed by the plaintiff is within the limitation or
not?
47. It is not in dispute that so far as the transaction
between the plaintiff and the defendant no.1 are
concerned, it is of the nature of goods sold and
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delivered and against that, suit was filed by the
plaintiff to recover the due amount from the
defendants. Even the Judgment passed by the learned
Trial Court and the case of the plaintiff, it is not in
dispute that as per the order placed by the defendant
no.1, goods were delivered by the plaintiff to the
defendant no.1 between 27.09.1989 to 18.01.1990.
Thereafter, no payment has been made and after
18.01.1990, no transaction had taken place between
the plaintiff and the defendant no.1. As per findings
recorded by the Trial Court, even the part payment of
Rs.32 Lacs has been made by the defendant no.1, i.e.
Rs.32 Lacs. Also, prior to 18.01.1990 and from
18.01.1990, no transaction has been taken place.
From 19.01.1990, the cause of action for filing of the
suit has arisen.
48. The arguments advanced by the learned advocate
Mr.Adil Mirza appearing for the respondent no.1 -
plaintiff are that in the month of July, 1990, a credit
note has been issued by the plaintiff - Company but
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were not produced before the Trial Court. Further, it
can be said that the credit note was issued by the
plaintiff unilaterally. Even assuming for a moment that
credit note has not been issued in the month of July,
1990 then also, the suit is required to be filed before
31.07.1993 by the plaintiff but, in the present case,
the suit has been filed by the plaintiff on 06.09.1993,
i.e. after expiry of the period of three years.
49. As per the law of limitation, for filing of the suit for
recovery of the due amount, more particularly, so far
as Articles 13, 14 and 15 of the Limitation Act, 1963
are concerned, as per Article 14, the period of
limitation is three years and the time period began to
run was from the date of the delivery of the goods.
Further, at this stage, it is required to consider Section
18 of the Limitation Act, 1963 which reads as under:
"18. Effect of acknowledgment in writing.--(1) Where,
before the expiration of the prescribed period for a suit or
application in respect of any property or right, an
acknowledgment of liability in respect of such property or
right has been made in writing signed by the party against
whom such property or right is claimed, or by any person
through whom he derives his title or liability, a fresh period
of limitation shall be computed from the time when the
acknowledgment was so signed.
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(2) Where the writing containing the acknowledgment is
undated, oral evidence may be given of the time when it
was signed; but subject to the provisions of the Indian
Evidence Act, 1872 (1 of 1872), oral evidence of its
contents shall not be received.
Explanation.--For the purposes of this section,--
(a) an acknowledgment may be sufficient though it omits to
specify the exact nature of the property or right, or avers
that the time for payment, delivery, performance or
enjoyment has not yet come or is accompanied by a refusal
to pay, deliver, perform or permit to enjoy, or is coupled
with a claim to set off, or is addressed to a person other
than a person entitled to the property or right,
(b) the word "signed" means signed either personally or by
an agent duly authorised in this behalf, and
(c) an application for the execution of a decree or order
shall not be deemed to be an application in respect of any
property or right."
50. Considering Section 18 of the Limitation Act, 1963 if
there is any acknowledgment by the defendant in
writing regarding the debt, from that period, only the
limitation can be extended and further three years can
be extended for filing the suit from the written
acknowledgment of date by the defendant. So if any
written acknowledgment of date was made by the
defendant no.1, in that circumstances only, the
limitation can be extended.
51. In this regard, now it is required to consider the
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findings recorded by the Trial Court. The learned Trial
Court while deciding Issue No.6, has mainly recorded
the finding that as the suit was filed by the plaintiff for
the recovery of the amount and as per the case of the
plaintiff, the transaction between plaintiff and the
defendant no.1 took place between 27.09.1989 and
18.01.1990. It was recorded by the learned Trial Court
that the defendant had admitted this transaction.
Subsequently, a suit is required to be filed within three
years from the last date of transaction that is
18.01.1990 but plaintiff has issued a notice under
Section 167 of the Gujarat Cooperative Society Act,
1962 and the said notice was served on the defendant
on 19.06.1992 which was received on 24.06.1992.
Hence, inspite of the receipt of the notice, defendant
no.1 has not paid the amount. The learned Trial Court
recorded that the suit was filed on 04.09.1993, from
1992 within three years, the same has been filed and
hence, it is not time barred.
52. In our humble opinion, the findings recorded by the
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learned Trial Court are against the settled principle of
law, as merely by issuing a notice under Section 167 of
the Gujarat Cooperative Society Act, 1962, the Trial
Court cannot extend the period of limitation. If any
part payment was made within three years or if any
acknowledgment of date was given in writing by the
defendant, then only in these two eventualities the
limitation period could have been extended for further
period of three years. But the findings of the learned
Trial Court is that by issuance of notice in the year
1992 the limitation period gets extended is settled
principle of law and apparently, as we discussed
above, the last transaction took place on 18.01.1990
and thereafter, no further transaction has been made
and the suit has been filed on 04.09.1993. So
admittedly, when the suit is filed after three years it is
time barred. Only on this ground also, the Judgment
and Decree passed by the learned Trial Court is
required to be quashed and set aside. Hence, we
answer the issue no.2 in the affirmative.
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53. As discussed above, we are of the considered view that
as the suit is time barred as it is filed after period of
three years and original defendant no.2 cannot be held
liable, the Judgment and Decree passed by the learned
Trial Court is against the settled principle of law and is
required to be quashed and set aside.
54. Accordingly, the First Appeal No.1883 of 2007 and
First Appeal No.4075 of 2006 are hereby allowed. The
judgment and decree passed by learned Principal
Senior Civil Judge, Valsad in Special Civil Suit No.180
of 1993 dated 30.06.2006 is hereby quashed and set
aside.
55. Decree is to be drawn accordingly.
56. In view of the above, the Civil Application (For Orders)
No.2 of 2006 would not survive and the same stands
disposed of accordingly.
(BHARGAV D. KARIA, J)
(L. S. PIRZADA, J)
DIKSHA
