I.Yogesh Prabhu S/O Late ... vs M/S Karnataka Soaps And ...
2021 Latest Caselaw 7038 Kant

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

     DATED THIS THE 22ND DAY OF DECEMBER 2021

                             BEFORE

  THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY

                   R.F.A.No.451 OF 2012

BETWEEN:

I.Yogesh Prabhu,
S/o Late Raghavendra Prabhu,
Major, Prop.M/s.Yogish Prabhu,
Main Road,
Moodabidri,
South Canara Dist,
Mangalore.

Since dead, represented by

  1) a) Raghavendra Prabhu,
     Aged about 52 years,
     Residing at D.No.12-1-100(1),
     Sulochana, Kallabettu,
     Moodabidri,
     D.K.District.

  1) b) Smt. Vaishali Prabhu,
     Aged about 51 years,
     W/o Gopalakrishna Prabhu,
     "Alice Minor", 3rd Floor,
     Pathrao Lane,
     Karangalpady,
     Mangalore-575 003.

  1) c) Smt.Sandya V. Pai,
     Aged about 50 years,
     W/o Vivekananda Pai,
     309, `B' Wing,
                                                   RFA.No.451/2012
                                2


       Pasal Apartments,
       Veera Desai Road,
       Andheri (W),
       Mumbai-400 053.

   1) d) Smt.Rekha A. Kamath,
      Aged about 48 years,
      Door No.6-9-255/1,
      Sri Gajana Krupa,
      Mannagudda,
      Mangalore.                                .. Appellants

       ( By Smt. P.V.Kalpana, Amicus Curiae)

AND:

M/s.Karnataka Soaps and
Detergents Ltd.,
(Govt. of Karnataka Undertaking)
Bengaluru Branch,
No.307, 1st Cross,
6th Main, Malleshwaram,
Bengaluru-560 055.                              .. Respondent

 ( By Sri Gurudhatta K., Advocate )

        This Appeal is filed under Section 96 read with Order XLI
Rule 1 of Code of Civil Procedure, against the judgment and
decree dated 9.12.2011, passed in O.S.No.5482/2003, on the
file of XL. Addl.City Civil Judge, Bengaluru, partly decreeing the
suit filed for recovery of money.

      This Appeal coming on for Hearing through Physical
Hearing/Video Conferencing Hearing, this day the Court
delivered the following:

                           JUDGMENT

This is the defendant's appeal. The present respondent,

as a plaintiff, had instituted a suit against the present original RFA.No.451/2012

appellant in the Court of learned XL Addl.City Civil Judge, at

Bengaluru (CCH-41), (hereinafter for brevity referred to as

`trial Court'), in O.S.No.5482/2003, for the relief of recovery of

a sum of `58,056.15 ps., together with interest thereupon at

18% p.a. from the defendant.

2. The summary of the plaint averments was that the

plaintiff is a manufacturers and distributors of their products

like soaps, detergents, Agarbathies, Talcum powder, Shampoos,

facial creams etc., and carrying on its business activities in the

name and style of `Karnataka Soaps and Detergents Ltd.,

which is a Government of Karnataka undertaking. For its sales,

it has got its several distributors and their agents. The

defendant is a general merchant carrying on business in a place

called Moodabidri in Dakshina Kannada District. The defendant

had purchased the goods from the plaintiff between 1st April

1999 to 31st March 2001 on various dates by placing orders and

the plaintiff had supplied those goods to him. The goods were

delivered to the defendant through road by carrier services.

The defendant was making part payments now and then and

the same were being given credit to the running account

maintained with the plaintiff. As such, after adjustment of the RFA.No.451/2012

account, it was found that the defendant was still liable to pay a

sum of `41,076.15 ps. as at the end of March 2001. In that

regard, a notice dated 03.08.2001 was also sent to the

defendant calling upon him to clear the said outstanding due

towards the plaintiff. However, the defendant did not pay the

said amount. The plaintiff thereafter again have written letters

and sent one more legal notice on 30.04.2003, demanding the

payment of the outstanding due. Even though the defendant

received the said notice served upon him, since he did not pay

the outstanding due, the plaintiff was constrained to institute

the suit.

3. In response to the summons served upon him, the

defendant appeared through his counsel and filed his written

statement, wherein he admitted that he is running a General

Stores and was procuring the goods supplied by the plaintiff

and was selling it as a part of his business. He has stated that,

on several occasions, the goods were supplied to him even

based upon his oral orders also. However, he specifically

contended that he has cleared all the dues payable to the

plaintiff and that there was no due, much less, suit claim

payable by him to the plaintiff. He specifically took up a RFA.No.451/2012

contention that the goods supplied to him under the Invoice

No.185, dated 30.04.1998 by the plaintiff was without any

order being placed by the defendant requesting for supply of

goods. As such, the invoice amount of `45,299/- in the said

Invoice No.185 was not liable to be paid by him. It was also his

contention that since he had not placed any order for supply of

the goods under the said Invoice No.185, he requested the

plaintiff to take back the goods. However, despite receiving the

goods of the said value, the plaintiff has again filed the suit

demanding the value for the same though he had returned the

goods worth for the said amount to the plaintiff.

4. Based on the pleadings of the parties, the trial Court

framed the following issues and additional issue :

1. Whether the plaintiff proves that it has supplied its materials to the defendant for the period from 1-4-1999 to 31-3-2001 and there is an outstanding dues of `41,076.15 ps. and inspite of several demands the same has not been paid as alleged?

2. Whether the defendant proves that he has fully paid all the amounts in respect of the supplies made between 1-4-99 to 31-3-2001 by way of issuing cheques as alleged in para-4 of the written statement?

RFA.No.451/2012

3. Whether the defendant further proves that the supply of goods under invoice number 185 dated 30-4-1998 were without placing any order and as such he returned the same to the plaintiff through the sales representatives of the plaintiff by name Devendra Naik on 20-9-1998 and there is no liability on his part as alleged in para-8 of the written statement?

4. Whether plaintiff is entitle to charge interest at 18% p.a. on the due amount?

5. Whether the plaintiff is entitle to recover suit claim of `58,056.15 ps. with interest at 18% p.a. from the defendant?

6. To what relief, if any, the parties are entitle?

Additional Issue:

1. Whether defendant proves that this Court has no jurisdiction to try the suit as alleged in para-11 of the written statement?

5. In support of its case, plaintiff got examined one of its

Officer-cum-Power of Attorney Holder by name Sri Venkatesh,

son of Thimmaiah as PW-1 and got marked documents from

Exs.P-1 to P-13 and closed its side. On behalf of the defendant,

one Sri Raghavendra Prabhu, who is said to be the son of the RFA.No.451/2012

defendant was examined as DW-1 and two documents at

Exs.D-1 and D-2 were marked from his side.

After hearing both side, the trial Court by its judgment

and decree dated 09.12.2011, while answering issue No.1 in

the affirmative, issue Nos.2, 3 and additional issue No.1 in the

negative and issue Nos.4 and 5 partly in the affirmative and

partly in the negative, proceeded to decree the suit of the

plaintiff in part and directed the defendant to pay the plaintiff a

sum of `41,076.15 ps., with interest at 12% p.a. from the date

of the suit i.e., from 31.07.2003 till realisation. Being

aggrieved by the same, the defendant in the trial Court has filed

the present appeal.

6. During the pendency of this appeal, reporting the

death of the appellant/defendant, his legal representatives

came on record as appellant Nos.1 (a) to 1(d).

7. Records from the trial Court are called for and the

same are placed before the Court.

8. Since the learned counsel for the appellants had

remained absent on several dates of hearing in this matter, this

Court by its order dated 07.12.2021, appointed learned counsel RFA.No.451/2012

Smt.P.V.Kalpana as Amicus Curiae for the appellants. The

learned Amicus Curiae was provided with the copies of all

necessary documents, paper book filed in this matter and other

required documents from the Court file to enable her to address

her arguments.

9. Heard the arguments of learned Amicus Curiae for the

appellants and the learned counsel for the respondent and

perused the materials placed before this Court, including the

impugned judgment and the trial Court record.

10. For the sake of convenience, the parties would be

referred to as per their rank before the trial Court.

The points that arise for my consideration are,

1. Whether the plaintiff has proved that as on the date of filing of the suit, the defendant was liable to pay to it a sum of `41,076.15 ps.?

2. Whether the defendant could able to prove that he had returned the goods worth `45,299/- supplied to him by the plaintiff under Invoice No.185, as such, he was not liable to pay the said amount to the plaintiff?

3. Whether the plaintiff is entitled for the interest on the suit claim and if so, at which rate?

RFA.No.451/2012

4. Whether the impugned judgment and decree under appeal deserves any interference at the hands of this Court?

11. PW-1 in his examination-in-chief filed in the form of

affidavit evidence has reiterated the contentions taken up by

the plaintiff in the plaint. Reiterating that the defendant was

its customer, for whom, the goods were supplied by the

plaintiff as and when requested by the defendant and in that

regard the plaintiff had maintained a running account of the

defendant, the witness has got produced and marked the

statement of account from 1st April 1999 to 31st March 2001

and got it marked as Ex.P-2. He has also produced his office

copy of the legal notice dated 03.08.2001 at Ex.P-3. The reply

to the notice at Ex.P-3 was also produced by the witness and

marked it as Ex.P-4. The office copy of the letter by the

defendant to the plaintiff dated 06.12.2001 is produced at

Ex.P-5. A copy of the Courier acknowledgment is produced at

Ex.P-6. Office copies of two letters said to have been written

by the plaintiff to the defendant dated 23.11.2002 and

04.01.2003 respectively at Exs.P-7 and P-8. The postal

acknowledgment shown to have been acknowledged by the RFA.No.451/2012

defendant is produced at Ex.P-9. A copy of the legal notice

dated 30.04.2003 sent on behalf of the plaintiff to the

defendant is marked as Ex.P-10 and its postal

acknowledgement is at Ex.P-11. The copies of the Invoice

No.6318 and dated 31.03.2000 raised by the plaintiff in favour

of the defendant and a copy of the Lorry receipt dated

08.04.2000 are produced at Exs.P-12 and P-13 respectively.

The witness was subjected to a detailed cross-

examination from the defendant's side, wherein he adhered to

his original version.

12. On behalf of the defendant, DW-1 also has filed his

affidavit evidence in the form of examination-in-chief, wherein

he reiterated the summary of the contentions taken up by the

defendant in his written statement. He produced a copy of the

letter dated 29.12.2000 shown to have been written by the

plaintiff to him at Ex.D-1 and General Power of Attorney shown

to have been executed by the parents of DW-1 at Ex.D-2.

13. From the pleadings and evidence of the parties, the

undisputed fact remains that the plaintiff as a manufacturers

and suppliers of the goods in toiletries and other incidental RFA.No.451/2012

products had supplied its products to the defendant who has

been running a General Store selling in various items,

including the products of the plaintiff. It is also not in dispute

that the defendant was placing orders either through phone or

through the representatives or agents of the plaintiff and

getting the supply of the goods supplied by the plaintiff. It is

also not in dispute that the defendant was making the payment

towards the supplied goods to the plaintiff. The credits of

which were being given by the plaintiff by maintaining an

account with it in the name of the defendant.

It is the contention of the plaintiff that, in the said

process, the defendant has retained a balance of a sum of

`41,076.15 ps. as a due as on 31.03.2001, which he did not

pay despite several letters written to him and also issuing legal

notices to him. However, the contention of the defendant was

that though he was being supplied with goods by the plaintiff,

but, a consignment under Invoice No.185 which was supplied

to him was not ordered by him for its supply, as such, he had

returned those goods worth `45,299/-. Thus, when the said

amount is deducted in the statement of account with the plaintiff,

there would be no due payable by the defendant to the plaintiff.

RFA.No.451/2012

14. Highlighting the above contention taken up by the

defendant in his written statement, as well in his evidence, the

learned Amicus Curiae for the appellants in her argument

submitted that the defendant from the very first instance of his

reply to the plaintiff under Ex.P-4 has been taking a stand that

he has returned the goods worth `45,299/- supplied to him

under Invoice No.185, as such, if the said invoice amount is

deducted in the alleged outstanding balance, there would be no

liability by the defendant towards the plaintiff. She further

contended that the defendant apart from his oral evidence, has

also produced a letter written by the plaintiff, which is at

Ex.D-1, which also go to show that the defendant had returned

the goods. These points the trial Court did not appreciate in its

proper perspective, which has led to pass an erroneous

judgment.

15. Learned counsel for the respondent in his brief

argument submitted that the supply of the goods by the

plaintiff to the defendant is an admitted fact, so also, that the

defendant making the payments in installments frequently,

which has been given credit to the account of the defendant

maintained with the plaintiff. As such, as shown in Ex.P-2, RFA.No.451/2012

there is an outstanding liability of principle amount of

`41,076.15 ps. as on the date of filing of the suit. He further

submitted that even though the letter at Ex.D-1 is a letter

written by the plaintiff to the defendant, but, it is not an

acknowledgement of receipt of the returned goods which is

alleged by the defendant. However, it only says that the

plaintiff had asked its Transport Operator to collect the goods

from the defendant and to submit to it, but, it does not mean

that the Transport Operator had obeyed the said instruction.

Therefore, the trial Court has rightly decreed the suit of the

plaintiff which does not warrant any interference at the hands

of this Court.

16. Towards the supply of the goods by the plaintiff to

the defendant, plaintiff claims that it was maintaining a running

account of the defendant with it and was giving credit as and

when the payments were received by it from the defendant. In

that regard, PW-1 apart from his oral statement, has also

produced a statement of account at Ex.P-2 which is for a period

from 01.04.1999 to 31.03.2001.

RFA.No.451/2012

17. In the cross-examination of PW-1, a suggestion was

made from the defendant's side to PW-1 to the effect that the

plaintiff was maintaining a running account of the defendant

with it, the opening balance of the said running account was

shown as a sum of `47,283.85 ps. as shown in Ex.P-2. By

making the said suggestion, the defendant has admitted that

the plaintiff was maintaining a running account regarding the

payments to be made by the defendant to the plaintiff. It was

also suggested to PW-1 in his cross-examination that, as and

when the defendant was placing orders for supply of goods, the

plaintiff used to supply the goods to the place of business of

the defendant at Moodabidri. The witness has not only

admitted the said suggestion as true, but, also stated that,

sometimes the defendant used to place orders by telephone

and sometimes through its agents and then plaintiff used to

supply the goods to the defendant. Thus, the supply of goods

by the plaintiff to the defendant frequently has not only been

admitted in the pleading, but, also has been brought out in the

evidence of PW-1, which has remained an undisputed fact.

18. It was elicited from PW-1 in his cross-examination

that the plaintiff had once supplied goods to the defendant RFA.No.451/2012

under Invoice No.185 worth `45,299/-. It was also suggested

to the witness that the plaintiff through its representatives of

one Hullaiah was requested to take back the goods since the

same were not moving in his shop, however, PW-1 did not

admit the said suggestion as true. Though PW-1 denied the

same, the defendant through DW-1 has reiterated the same in

his evidence, in which regard, they have also produced a letter

of the plaintiff written to the defendant and dated 29.12.2000

at Ex.D-1. A reading of the said letter would go to show that

the plaintiff had requested its Transport Operator M/s.VRPM

Transport, Mangaluru, to arrange for taking back the stocks of

their products available at their stockist M/s.I.Yogishprabhu,

Moodabidri, (defendant) and rebook the stocks to Bengaluru

under intimation to them. It is based upon the said document,

the defendant has throughout being contending that the goods

worth `45,299/- supplied under Invoice No.185 were returned

to the plaintiff, as such, the defendant is not liable to pay the

alleged due amount to the plaintiff.

19. A careful reading of Ex.D-1 would only go to show

that the plaintiff had asked its Transport Operator to collect the

goods and bring it to Bengaluru. Though it falsifies the RFA.No.451/2012

evidence of PW-1, who in his cross-examination has denied that

the defendant had requested the plaintiff to take back the

goods supplied under Invoice No.185, but, at the same time,

it does not show that those alleged refused goods were taken

back by the plaintiff or was collected by its Transport Operator

at Mangaluru and delivered to the plaintiff at Bengaluru. This

observation also gains support by the document at Ex.P-5,

which is a copy of the letter by the plaintiff to the defendant

dated 06.12.2001, which clearly mentions that plaintiff has

brought to the notice of the defendant that the goods which are

said to be 7 CB of Air Freshners are not received by the plaintiff

till date. In the said letter, the plaintiff have also requested the

defendant to submit an acknowledgement, if any, to show that

the defendant had delivered those goods to Transport Carrier

M/s.VRPM Transports. The said letter further says that in case

the defendant does not submit any acknowledgement showing

the delivery of rejected goods by him to the Transport

Operator, then, the defendant was required to clear his

outstanding dues immediately.

20. In spite of the said letter, it appears that the

defendant has not produced any document to the plaintiff to RFA.No.451/2012

show the alleged return of the goods through the Transport

Operator M/s.VRPM Transports. Had the defendant delivered

the goods to the said Transport Operator for its onward carriage

and delivered to the plaintiff, then, the defendant should have

necessarily maintained some document, including Lorry receipt

with him, which document the defendant could have submitted

to the plaintiff in response to the letter at Ex.P-5.

Therefore, in the absence of any cogent evidence, including the

documentary proof like the Lorry receipt evidencing the delivery

of the goods by the defendant to the Transport Operator, it

cannot be held that the defendant, who is said to have refused

to accept the goods supplied to him under Invoice No.185, had

returned those goods to the plaintiff. It is for the said reason,

the outstanding due amount at Ex.P-2, the entries in it have not

been specifically and categorically denied by the defendant,

shows an outstanding balance of `41,076.15 ps. as at the end

of the date 31.03.2001 payable by the defendant to the

plaintiff.

21. Therefore, the trial Court has rightly held that the

plaintiff has proved that as on the date of filing of the suit, the

defendant was liable to pay the plaintiff the principle amount of RFA.No.451/2012

`41,076.15 ps. and the defendant could not able to prove that

he had returned the goods supplied to him under Invoice

No.185, to the plaintiff, which is worth `45,299/-.

22. The learned Amicus Curiae for the appellants also

submitted in her argument that the suit of the plaintiff is barred

by limitation, as such, the trial Court ought not to have decreed

the suit of the plaintiff.

According to the plaintiff, the goods were being supplied

to the defendant by it up to the end of March 2001, as such, as

at the end of March 2001, the outstanding due payable by the

defendant to it was a sum of `41,076.15 ps. The defendant

also has admitted of the regular and frequent supply of goods

by the plaintiff to him over a long period of time. The suit claim

is not with respect to any one particular supply of goods on any

one particular date, but, it is an alleged outstanding liability of

the defendant towards the plaintiff in a running account said to

have been maintained by the plaintiff for the supplies made to

the defendant over a period of time. As already observed

above, it is not only the pleading of the plaintiff, but, also its

evidence through PW-1, which evidence of PW-1, apart from RFA.No.451/2012

not being denied, has been further corroborated by making a

suggestion to the same effect by the defendant in the cross-

examination of PW-1. As such, the statement of account, which

is at Ex.P-2, is a statement of a running account of the

defendant with the plaintiff. A large number of entries of both

debit and credit are recorded in the said document, which

admittedly have not been disputed by the defendant. As and

when the supplies were made, they were showing as the

liability to be cleared by the defendant and as and when the

defendant was making the payment, the credits of the same

were given to his account and outstanding liability was being

reduced proportionately. Thus, it is not only the oral evidence

of PW-1, but, also the documentary evidence at Ex.P-2, which

shows that it is a running account and at the end of March

2001, the outstanding due of the defendant towards the plaintiff

was a sum of `41,076.15 ps. It is in that regard, the legal

notices were sent to the defendant, the copies of which are

produced at Ex.P-3 and also at Ex.P-10. Thus, within three

years, when the liability of the defendant at `41,076.15 ps. was

crystalised on 31.03.2011, the plaintiff had instituted the suit in RFA.No.451/2012

the trial Court for recovery of the due. Therefore, the suit

cannot be called as barred by limitation.

23. The plaintiff has claimed interest on the principle

amount of `41,076.15 ps. at the rate of 18% p.a. and a legal

notice charge of `350/-, thus, in total a sum of `58,056.15 ps.

as the suit claim amount. Towards liability of the interest, PW-1

in his cross-examination has specifically stated that there is no

agreement between the plaintiff and the defendant to charge

interest on the dues, if any. In the invoice at Ex.P-12, the

terms and conditions at Sl.No.5 in it only mentions that

payments received after due dates will attract interest charges

at the prevailing bank rates. Considering the said terms and

conditions in the invoice and also in the absence of any

evidence, either oral or documentary, to show as to what was

the prevailing bank rate of interest in a commercial transaction

as at the end of 31.03.2001, I am of the view that the interest

claimed at the rate of 18% p.a. by the plaintiff, no doubt, was

an exorbitant rate of interest as observed by the trial Court,

but, the interest awarded by the trial Court, which is at the rate

of 12% p.a., is also on the higher side. By considering the

nature of transaction and the facts and circumstances of the RFA.No.451/2012

case, the rate of interest be confined only at the rate of 9% p.a.

on the outstanding principle amount, which is a sum of

`41,076.15 ps. from the date 31.07.2003 till its realisation.

It is only to that extent of modification of the decree regarding

rate of interest, the appeal deserves to be allowed, but, not for

dismissing the suit of the plaintiff.

24. Accordingly, I proceed to pass the following order :

ORDER

The Regular First Appeal is allowed in-part. The

judgment and decree dated 09.12.2011, passed by the learned

XL Addl.City Civil Judge, Bengaluru (CCH-41), in

O.S.No.5482/2003, though confirmed with respect to the

defendant's liability to the plaintiff of paying a sum of

`41,076.15 ps. with interest, but, the rate of interest is

modified, reduced and fixed at 9% p.a. from the date

31.07.2003 till its realisation.

Draw modified decree accordingly.

The Court while acknowledging the service rendered by

the learned Amicus Curiae for the appellants- Smt.P.V.Kalpana,

recommends honorarium of a sum of not less than `4,000/- to

her payable by the Registry.

RFA.No.451/2012

Registry to transmit a copy of this judgment along with

records to the concerned trial Court without delay.

SD/-

JUDGE

bk/