Karnataka High Court
M/S Darshak Marketing vs Hmt Watches Limited on 4 July, 2024
Author: Krishna S Dixit
Bench: Krishna S Dixit
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RFA No. 461 of 2009
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
REGULAR FIRST APPEAL NO. 461 OF 2009 (MON)
BETWEEN:
1. M/S DARSHAK MARKETING,
A PARTNERSHIP FIRM,
HAVING ITS PLACE OF BUSINESS
AT:5-9-1115/A, GROUND FLOOR,
KANCHANJUNGA COMPLEX, GUNFOUNDRY,
HYDERABAD-500 001.
ANDHRA PRADESH,
RETPD. BY ITS PARTNER
SRI.SUTINDER SINGH.
2. MR.SUTINDER SINGH,
Digitally signed MAJOR,
by CHETAN B
C 3. MR.HUZUR SINGH,
Location: HIGH MAJOR,
COURT OF
KARNATAKA
4. MR.BALJIT KAUR,
MAJOR,
APPELLANTS No.2 TO 4 ARE
R/AT 5-9-22/2, ADARSH NAGAR,
HYDERABAD-500 463.
ANDHRA PRADESH.
...APPELLANTS
(BY SRI. H SRINIVAS RAO., ADVOCATE)
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RFA No. 461 of 2009
AND:
1. HMT WATCHES LIMITED,
A COMPANY REGISTERED
UNDER THE COMPANIES ACT, 1956,
HAVING ITS REGD. OFFICE AT
"HMT BHAVAN", 59, BELLARY ROAD,
BANGALORE-560 032
& ITS WATCH MARKETING DIVISION
AT GROUND FLOOR,"HMT BHAVAN",
NO.59, BELLARY ROAD,
BANGALORE-560 032
REPTD. BY GENERAL MANAGER MARKETING (W)
2. SRI. BALVINDER SINGH,
AGED ABOUT 36 YEARS,
3. SMT.KOMAL SINGH,
AGED ABOUT 37 YEARS,
RESPONDENTS No.2 AND 3 BOTH
ARE R/AT NO.5-9-22/2,
ADARSH NAGAR, HYDERABAD-500 463.
...RESPONDENTS
(BY SRI. N JAGADISH BALIGA., ADVOCATE FOR R1;
R2 SERVED AND UNREPRESENTED
THIS RFA FILED U/S 96 OF CPC, AGAINST THE
JUDGMENT AND DECREE DATED 13.01.2009 PASSED IN
OS.NO.15470/2006 ON THE FILE OF THE IV ADDL. CITY CIVIL
& SESSIONS JUDGE, MAYO HALL UNIT, BANGALORE, PARTLY
DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS RFA COMING ON FOR FURTHER HEARING, THIS
DAY, KRISHNA S DIXIT.J., DELIVERED THE FOLLOWING:
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RFA No. 461 of 2009
JUDGMENT
This appeal by the defendants seeks to call in
question the judgment & decree dated 13.01.2009 entered
by the learned IV Addl. City Civil & Sessions Judge, Mayo
Hall unit, Bangalore, whereby, respondent-HMT's money
suit in O.S.No.15470/2006, has been decreed for a sum of
Rs.1,03,91,700/- with future interest at the rate of 6% per
annum only on Rs.67.77 lakh from the date of suit.
2. BRIEF FACTS OF THE CASE:
(a) Appellants along with Respondent Nos.2 & 3 were the
defendants in the subject money suit filed by the 1st
respondent-HMT. The amount claimed was in a sum of
Rs.2,72,64,208.91 with interest at the rate of 18% per
annum. The Appellant Nos. 1 & 2 had filed their Written
Statement resisting the suit.
(b) On the basis of pleadings of the parties and the
documents accompanying them, the learned Trial Judge
had framed the following eight principal issues:
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"1. Does the plaintiff prove that the defendants
had running account with it?
2. Does the plaintiff prove that the defendants
were due in a sum of Rs.2,72,64,208.91 as on
the date of the suit?
3. Does the plaintiff prove that the defendants
acknowledged their inability?
4. Does the plaintiff prove that the agreement
executed by the defendants is a continuing
guarantee?
5. Do the defendants prove that the suit is
barred by limitation?
6. Do the defendants prove that suit is not
maintainable for the reasons given in para-3 of
the written statement?
7. Do the defendants prove that the actual
amount due by them to the plaintiff is only
8.98 lakhs?
8. Has the plaintiff valued the suit properly and
paid adequate court fee?
9. Is the plaintiff entitled for decree as prayed
for? If so what order or decree?"
(c) To prove their case, the plaintiff-HMT had got
examined its officials namely Mr.B.Ashok Kumar as PW-1
& Mr.K.Ramdoss as PW-2. In their depositions 25
documents came to be produced & marked as per Ex.P-1
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to 25. They inter alia comprised of Minutes of Board
Meetings, Stockist Agreement, RDS Agreement, Deed of
Guarantee, cheques, debit notes on interest, etc. From the
side of defendants the partner of the 1st Appellant-firm
Mr.Sutinder Singh was examined as DW-1 and in his
depositions 13 documents came to be produced & marked
as D-1 to D-13. They comprised of letter correspondence
between the parties, cheques, statement of outstanding
dues, cheque clearance records by the Drawee Banks, etc.
Learned Trial Judge after considering pleadings of the
parties and the evidentiary material placed on record has
entered the subject judgment & decree that are put in
challenge in this appeal, now at our hands.
3. Learned counsel appearing for the appellants
vehemently submits that the bone of contention between
the parties arises only in terms of Issue No.2 as to liability
of his clients to make payment of the suit claim; the
learned Trial Judge has answered the said issue partly in
the affirmative and thereby partly decreed the suit only for
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a sum of Rs.1,03,91,700/-with future interest on a part of
that; this is absolutely in disregard of admitted position;
the accounts were settled in terms of Ex.D-3 for a sum of
Rs.18.98 lakh; appellants letter dated 27.06.2005 at Ex.D-
4 for the grant of twelve installments was acceded to
although the plaintiffs vide letter dated 08.07.2005 at Ex-
D-5 restricted the number to two equal installments
instead of twelve; in terms of that the Bank Draft for
payment of Rs.5 lakh dated 15.07.2005 at Ex.D-6 given
by the appellants was encashed by HMT. This was in
addition to a likesum earlier paid in terms of settlement
dated 25.09.2004; that being the position the impugned
decree needs to be set at naught. Learned Panel Counsel
appearing for the respondent-HMT fervently resists the
appeal making submission in justification of the judgment
& decree. He adds that the judgment is arguably wrong,
per se is not sufficient for setting it aside; the appellants
have to further show that the same is unsustainable.
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4. Having heard the learned counsel for the parties
and having perused the Appeal Papers, we are broadly in
agreement with the submissions made on behalf of the
appellants that important admissions in writing have been
disregarded by the learned Trial Judge. The document at
Ex.D-3 dated 25.09.2004 was confronted to PW-1 in cross
examination; he did not fully deny it, but only said he was
not aware of it; similarly PW-1 was confronted with
another document Ex.D-4 dated 27.06.2005 which
mentioned settlement dated 25.09.2004 (wrongly
mentioned as 25.09.2005 that date was apparently yet to
come); it mentioned the settlement amount of Rs.18.98
lakh; appellants had sought for twelve equal installments.
The request of the appellants was conceded vide letter
dated 08.07.2005 at Ex.D-5 which specifically mentions
about the letter dated 27.06.2005 at Ex.D-4. Ex.D-5 was
issued by none other than the Joint General Manager of
HMT and not some First Division Clerk. In terms of this,
the bank draft for a sum of Rs.5,00,000/- dated
15.07.2005 was given by the appellants and the same has
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been encashed by the HMT. All these documents namely
Ex.D-3 to Ex.D-6 constitute one transaction spread over a
time frame. Therefore, these documents could not have
been disregarded by the learned trial Judge.
5. The vehement contention of the learned Sr.
Panel Counsel appearing for the HMT that the letter at
Ex.D-6 was issued by an incompetent authority and
therefore does not have legal status, is bit difficult to
countenance, in the absence of such a contention being
demonstrated by producing the rules of procedure and job
chart of the said Joint General Manager (SR). This very
designation of the officer shows his stature. Added to this,
when we specifically asked, the learned Panel Counsel in
all fairness answered that there is no material on record to
show that any disciplinary action was taken against the
said officer for unauthorisedly issuing the letter dated
15.07.2005 at Ex.D-6 whereby, appellants' claim in letter
dated 27.06.2005 at Ex.D-4 was accepted and they were
given permission to make payment in two equal
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installments instead of the twelve as claimed. What all
transaction happens within the Board of the HMT is a
matter of Indoor Management and the outsiders like the
appellants will not have any access to the same. That is
how the doctrine of Indoor Management comes to the aid
& rescue of the outsiders like the appellants herein. This
aspect of the matter has not been considered by the
learned trial Judge though there was enough material
placed on record. Thus, the impugned judgment & decree
are not only wrong but highly prejudicial to the interest of
the appellants. Therefore, they are unsustainable.
6. All the above being said, the appellants cannot
justifiably contend that absolutely no amount is payable by
them. It is true that even in terms of settlement dated
25.09.2004 vide Ex.D-3, they were liable to make a
payment of Rs.18,98,000/- and only a part payment of
this was made i.e., Rs.10,00,000/-. Be that as it may. The
appellants in terms of the interim order dated 23.07.2009
have deposited a sum of Rs.18,00,000/- plus another sum
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of Rs.15,00,000/-; thus, totally the same amounts to
Rs.33,00,000/-. We are told by the learned counsel
appearing for the appellants that a Coordinate Bench of
this Court had permitted withdrawal of Rs.18,00,000/- and
accordingly, this amount was withdrawn by the
respondent-HMT along with interest of Rs.2,09,211/- [i.e.,
in all Rs.20,09,211/-] on 15.05.2010. The remaining
amount is still lying with the Registry in the interest
earning deposit.
7. A Coordinate Bench of this Court vide order
dated 9.11.2022 had suggested to the parties to sit under
the shadow of a tree for exploring the possibility of
amicable settlement. The said order reads as under:
"Respondent-HMT Watches Ltd., has supplied
watches to the appellants and claimed Rs.2.7
Crores. Shri Badri Vishal, learned advocate for the
appellants submits that settlement was arrived
between the parties whereunder appellants were
liable to pay Rs.18 Lakhs. Shri N.Jagadish Baliga,
learned advocate for the respondents submits that
there was no settlement. It is not in dispute that
respondent-HMT Watches Ltd., has supplied watches
to the appellants. Shri Badri submits that some
money has been returned
to respondent-HMT Watches Ltd. Parties shall
reconcile accounts and explore possibility of
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settlement. By consent of learned advocates on both
sides, call on 17.11.2022."
8. Learned Panel Counsel appearing for the HMT is
very stubborn in saying that his client is not agreeable for
any more settlement talks and that court be pleased to
pass the order on merits of the case. We were at one point
of the hearing, inclined to remand this matter for fresh
consideration at the hands of the learned trial Judge.
However, we did not venture that since suit is of the year
2006 and appeal is of the year 2009. Already, eighteen
years have lapsed. The total amount deposited by the
appellants pursuant to interim order of the Coordinate
Bench is Rs.33,00,000/-. One happy thing is that in terms
of Settlement of Accounts vide Ex.D-3, the appellants have
paid Rs.5,00,000/- earlier and another likesum vide
Demand Draft dated 15.07.2005 vide Ex.D-6. As observed
above, the HMT has withdrawn a sum of Rs.20,02,911/-
from the Registry of this Court more than a decade ago.
HMT will also get remainder of the amount in deposit along
with interest.
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9. A very happy thing happened at the fag end of
the hearing of this case. The learned counsel appearing for
the appellants being a tall member of the Bar came
forward with a Memo dated 4.7.2024 which reads as
under:
"The Appellants most respectfully submit that,
pursuant to the order dated 23.07.2009 passed by
this Hon'ble Court, they have deposited a sum of Rs.
18,00,000/- (Rupees Eighteen Lakhs only) and Rs.
15,00,000/- (Rupees Fifteen Lakhs only) before this
Hon'ble Court totalling to a sum of Rs. 33,00,000/-
(Rupees Thirty Three Lakhs only). It is submitted
that, the Respondent No. 1 has withdrawn the sum
of Rs. 18,00,000/- (Rupees Eighteen Lakhs only)
along with interest on 15.05.2010 totalling
amounting to Rs. 20,09,211/-. The balance deposit
of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) has
remained in Fixed Deposit before this Hon'ble Court
accruing interest.
It is submitted that, over and above the sums
mentioned herein-above, the Appellants are willing
to pay a sum of Rs. 20,00,000/- (Rupees Twenty
Lakhs only) to the Respondent No. 1 towards full
and final settlement within a period of 3 months.
WHEREFORE, the memo may be taken on record in
the interest of Justice & Equity."
He impressed us that should the appeal be allowed even
partly, the HMT shall be liable to refund excess amount
drawn from him. Going by the simple arithmetics and
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keeping in mind the settlement, what he says is true. He
also told us that even the CBI enquiry directed in the
matter did not yield anything positive to the HMT and
negatived to the appellants. He wisely caveated his offer
that the HMT should not be permitted to draw the milk
from the Memo and take the money offered therein unless
it agrees to put a decent burial to the ongoing lis. This in
our considered view is absolutely fair. Learned Sr. Panel
Counsel appearing for the appellants expressed his
constraints at this stage since he lacked instructions from
the corporate client which has to do its business only in
accordance with law. Be that as it may.
In the above circumstances, we pass the following:
ORDER
[i] This Appeal succeeds in part; the impugned
judgment & decree are modified to the effect that the
defendants/appellants are liable to pay only a sum of
Rs.18,98,000/- (Rupees Eighteen Lakh and Ninety Eight
Thousand) only, is liable to be paid by the appellants in
terms of settlement dated 25.09.2004 vide Ex.D-3 minus
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the amount already remitted by them in terms thereof.
This is subject to the following.
[ii] In terms of modified order now passed as
above in the immediately preceding paragraph, the
appellants shall not be liable to make any payment nor the
respondent-HMT shall be liable to refund any amount to
the appellants, by way of adjustment or otherwise.
[iii] All and whatever amount deposited by the
appellants in the Registry along with interest accruing
thereon shall be payable and released to the respondent-
HMT, of course minus the amount already withdrawn by it.
The Registry shall take all steps to release the said amount
to the bank account of the respondent-HMT immediately.
[iv] The appellants shall remit an additional sum of
Rs.20,00,000/- (Rupees Twenty Lakhs only) to the
Registry within an outer limit of three months and send
intimation to respondent-HMT with instruction to withdraw
the same by way of final settlement of the lis once & for
all, if the respondent-HMT files the affidavit as indicated in
the succeeding paragraph. Failure to remit despite such
affidavit being filed would result into the revival of
impugned judgment & decree as they were before.
[v] The respondent-HMT is entitled to withdraw the
above sum of Rs.20,00,000/- to be deposited by the
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appellants after it's filing an affidavit within two months
from today to the effect that the lis is settled once & for all
with no liberty whatsoever to continue the same by way of
Review, SLP or otherwise, failing which the obligation on
the part of the appellants to make the additional payment
of this amount, stands automatically dislodged.
[vi] Registry to compute & refund the proportionate
court fees paid on the Appeal Memo to the appellants,
forthwith.
Costs made easy throughout.
Sd/-
JUDGE
Sd/-
JUDGE
cbc
