Karnataka High Court
M/S Sri Lakshmi Traders vs M/S Karnataka Soaps And Detergents Ltd on 4 September, 2024
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NC: 2024:KHC:36195
RFA No. 751 of 2010
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MR JUSTICE UMESH M ADIGA
REGULAR FIRST APPEAL NO. 751 OF 2010 (MON)
BETWEEN:
1. M/S SRI. LAKSHMI TRADERS,
SAMEER COMMERCIAL COMPLEX,
POST BRAHMAVARA DAKSHINA
KANNADA DISTRICT-576 213,
REPRESENTED BY
MR. MANOHAR HEGDE
AND SMT. NAYANA HEGDE.
2. SMT. NAYANA M HEGDE,
W/O. B MANOHAR,
AGED ABOUT 49 YEARS,
SRI. LAKSHMI TRADERS
SAMEER COMMERCIAL COMPLEX,
POST BRAHMAVARA DAKSHINA
KANNADA DISTRICT- 576 213,
(WRONG ADDRESS SHOWN)
X PROPERIETOR OF
Digitally signed by KORLAHALLI
SRI. MAHALAKSHMI
BHARATHIDEVIKRISHNACHARYA
Location: HIGH COURT OF TRADERS,'ASHIRWAD',
KARNATAKA
DR.AMBEDKAR ROAD
NEAR NIRMAL HIGH SCHOOL,
BRAHMAVARA-576 213,
RESIDING AT JANNADY
KUNDAPUR TALUK
UDUPI DISTRICT- 576 222.
3. SRI. B. MANOHAR,
S.O LATE P.B. HEGDE,
AGED ABOUT 56 YEARS,
SAMEER COMMERCIAL COMPLEX,
POST BRAHMAVARA DAKSHINA
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RFA No. 751 of 2010
KANNADA DISTRICT- 576 2139
(WRONG ADDRESS SHOWN),'
RESIDING AT JANNADY,
KUNDAPUR TALUK
UDUPI DISTRICT- 576 222.
...APPELLANTS
(BY SRI. K. S. CHANDRAHASA, ADVOCATE FOR
APPELLANT NO.1 AND APPELLANT NO.2,
VIDE ORDER DATED 08/08/2024,
APPEAL OF APPELLANT NO.3-ABATES)
AND:
M/S KARNATAKA SOAPS AND
DETERGENTS LTD,
BANGALORE BRANCH,
OFFICE POST BOX NO.5531,
RAJAJINAGAR,
BANGALORE-560 055
REPTD. BY ITS
BRANCH MANAGER
SRI. D. N. VASANTH KUMAR
...RESPONDENT
(BY SRI. H. M. MURALIDHARA, ADVOCATE (ABSENT))
THIS RFA IS FILED UNDER SECTION 96 O-41 R-1 & 2 OF
CPC, AGAINST THE JUDGMENT AND DECREE DATED.
02.01.2010 PASSED IN O.S. NO. 7115/1997 ON THE FILE OF
THE XXXI ADDL. CITY CIVIL JUDGE, BANGALORE CITY,
DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE UMESH M ADIGA
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RFA No. 751 of 2010
CAV JUDGMENT
This is defendant's appeal challenging judgment and
decree passed in O.S.No.7115/1997 on the file of XXXI
Additional City Civil Judge, Bengaluru city dated 02.01.2010
(for the sake of brevity hereinafter for short referred to as 'trial
court').
2. I refer to the parties as their ranks before the trial
court.
3. It is a case of the plaintiff that it is an undertaking
of the Government of Karnataka dealing with manufacturing
and sale of sandalwood oil, soaps, detergent cakes, powder,
agarbathies, etc. It deals with the products through
distributors. Defendant Nos.1 and 2 are such distributors of
plaintiff's product from the year 1992. Defendants used to
place orders for the products of plaintiff and plaintiff used to
send the goods and defendants were required to make
payments of the said goods supplied by the plaintiff within a
stipulated period of 30 days from the date of delivery of the
products or the period fixed by the Company. The defendants
were not punctual in payment of the amount of the products
sent by the plaintiff. From 30.06.1995 till 25.09.1995, plaintiff
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had sent goods under the different invoices, totally worth
Rs.4,29,852-37 ps. Defendants did not pay the amount of said
invoices and an amount of Rs.4,29,852-37 ps was due from
defendants.
4. Plaintiff continuously demanded for payment of the
said amount and defendants represented by third defendant,
had written a letter dated 01.08.1996 acknowledging their
liability. However, defendant No.3 sought some time to repay
the said amount since he was in financial difficulties.
Thereafter, to repay the said amount defendant No.2 issued a
cheque bearing No.082325 dated 24.09.1996 drawn on Vijaya
Bank, Brahmavara Branch for a sum of Rs.4,29,852.37 ps.
Plaintiff presented the said cheque for encashment and it was
dishonoured, on the ground of "insufficient of funds" in the
accounts of defendant. In this regard, plaintiff filed criminal
case under Section 138 of Negotiable Instruments Act, 1881
against defendant Nos.2 and 3 in C.C.No.16743/1997 on the
file of XIII Additional CMM Court at Bengaluru. With these
reasons, plaintiff filed present suit for recovery of
Rs.4,29,852.37/- and interest there on.
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5. Defendants have admitted their distributorship of
products manufactured by plaintiff since 1992. They contended
that during the end of 1995, plaintiff had stopped sending the
products manufactured by it. Due to accident and some other
financial constraints, defendants could not pay the amount to
the plaintiff in time. However, later on defendants have paid
entire dues. Defendants are not liable to pay the suit claim and
hence prayed for dismissal of the suit.
6. The trial Court framed following issues:
1) Whether the plaintiff proves that the defendants
are In arrears of Rs.4,29,852-37 in regard to the goods
supplied as per invoices pleaded in paragraph 4 of the
plaint dating from 30.6.95 till 25.9.95?
2) Whether the plaintiff proves that it is entitled to
interest the rate of 18% per annum?
3) What decree or order?
7. Plaintiff to prove its case examined PW-1 and got
marked Exs.P1 P1 to P22. Defendants examined DWs-1 and 2
and got marked Exs. D1 to D28.
8. The trial court after hearing both the parties and
appreciating evidence on record has decreed the suit with cost
by impugned judgment and decree dated 02.01.2010. Being
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aggrieved by the same, the defendants preferred this appeal on
the various grounds stated in the appeal memo.
9. I have heard the arguments of learned counsel for
appellant.
10. The learned counsel for appellant has submitted
that the suit claim is in respect of some of the invoices from
june 1995 till September 1995 and total amount was
Rs.4,29,852-37 ps. Defendants paid the said outstanding
amount. The list of payments are at Ex.D27. The said
payments are admitted by PW-1. The total payment made by
defendants was Rs.6,87,759.20 ps that is, more than the
amount claimed in the suit. It clearly shows that there were no
dues from the defendants. The officials of the plaintiff did not
maintain the accounts properly in respect of payments made by
defendants. Suit claim is misconceived. The trial court had not
considered the documents placed by the defendants and
calculations were not properly made and hence wrongly
decreed the suit and therefore prayed for setting aside the
impugned decree and judgment and dismiss the suit.
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11. The following question emerges for my
determination:
Whether the learned trial judge justified in
holding that appellant-defendants are liable to pay
Rs.4,29,852.37/- ps to the plaintiff.
12. I answer the above question in the affirmative for
the following reasons:
A very short point is involved in this case. The following
points are not in dispute; that the plaintiff-respondent is
manufacturing and dealing with soaps, detergents, cakes,
powder, agarbathis, etc; The defendants are distributors of
said products since 1992 and they had transactions in this
regard. It is also not in serious dispute that on the request of
the defendants, plaintiff use to send the goods on credit basis;
that defendants received goods mentioned in invoice, as
detailed in the plaint as well as evidence of PW-1. The plaintiff
has also produced relevant invoices as well as copy of the
statement of accounts maintained by it belonging to
defendants, at Exs.P1 to P22; That defendant No.2 issued
cheque for payment of the suit claim and that was dishonoured
due to insufficient funds in the account of defendant; Plaintiff
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had sent letter dated 01.08.1996 as per Ex.P15: plaintiff lodged
criminal case in this regard; In view of these admissions, there
is no need to discuss the evidence of both sides in detail, in
respect of admitted facts.
13. The defendants in written statement and evidence
have not explained the reasons to issue cheque of
Rs.4,29,852.37 ps., which is suit claim, if said amount was due
from them. The presumption available under Section 118 of
Negotiable Instrument Act favours case of plaintiff, that said
cheque was issued to clear off above dues.
14. Learned counsel for the appellant repeatedly
submitted that as per Ex.D-27, which is not in dispute,
Rs. 6,87,759.20 ps. was paid to plaintiff from 01.07.1995 to
15.11.1995. PW-1 in his cross-examination has admitted that
the amount due from defendants was only in respect of the
transaction from 30.06.1995 till 25.09.1995. According to
plaintiff, total amount due was Rs.4,29,852.37 ps. and
defendant had paid Rs.6,87,759.20 ps, which clearly indicates
that defendants had paid Rs.2,00,000/- more than what due to
plaintiff. Hence, plaintiff had to refund the excess amount
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received from the defendants. It clearly indicates that there
was no dues from defendants. The trial court has not
considered these facts.
15. The plaintiff had produced Ex.P-22 and copy of the
invoices. In the cross examination of PW-1, contents of
Ex.D-27 were questioned. PW-1 has stated that subject to
dishonour of the cheques, other amounts are paid. On
verification of the same, except Rs.49,166.63 ps dated
31.08.1995 other entries in Ex.P-22, tallies with the entries
mentioned in Ex.D-27. Ex.D-27 are payment pertaining to the
period from 01.07.1995 to 15.11.1995.
Admittedly, defendant took distributorship of the
plaintiff's product since 1992. In Ex.P-22, the plaintiff has
produced Sundry Creditors Ledger account from 1992 onwards
till 23.11.1995. It is not in dispute that defendants due to
some financial constrains and inconveniences could not pay the
amount of goods ordered in time and there was huge sum of
arrears and hence plaintiff refused to send the goods ordered
by the defendants. A letter was sent to defendants for which
defendant No.3 replied as per Ex.P-15 dated 01.08.1996 and
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the said letter acknowledges the dues and defendants
undertaken to clear the dues at the earliest. Defendants have
not disputed the arrears of amount due to plaintiff.
16. The Sundry Creditors Ledger of the year 1995 of
defendants account reveal that opening balance was of
Rs.3,32,735.26 ps. as on 29.01.1995, in addition to that,
amount in the invoices mentioned in the plaint as well as
evidence of PW-1 were added. Thereafter also, defendants
placed the orders and secured the goods. These facts were not
considered by the defendants in Ex.D-27. Amounts due prior to
30.6.1995 and subsequent to 25.09.1995 mentioned in Ex.P-22
are not reflected in Ex.D-27. Therefore, total of both Exs.P-22
and D-27 does not tally. It appears defendant ignoring his
outstanding prior to and subsequent to disputed transactions
contending that entire amount was paid.
17. The plaintiff is a Government of Karnataka
undertaking. It has maintained the records. There are no
reasons to disbelieve or discredit the said records. The
contentions of the defendants that whatever amount paid was
not taken into account by the plaintiff is not acceptable. The
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learned trial judge considered these points and rightly decreed
the suit.
18. Defendants No.1 was a proprietary concern. It had
taken distributorship of plaintiff's product. It had not produced
books of accounts to show the transactions with plaintiff to
disprove the case of plaintiff. Defendants cleverly prepared
Ex.D-27 to suit their contentions. Ex.D-27 do not reflect all the
transactions between plaintiff and defendants. Hence, much
importance cannot be given to it.
19. It is the case of the defendants that blank signed
cheque was given to the plaintiff for the purpose of security
was misused by the plaintiff and records created by its
officers/officials. The plaintiff is a Government concern. The
defendants have not placed any records to show that at the
time of distributorship it had deposited the blank signed cheque
with the plaintiff or offices of plaintiff would get any benefit by
correcting records. Hence, said contention is not tenable.
20. The learned trial judge considered the pleadings
and evidence of both the parties in right perspective and rightly
decreed the suit. The grounds of the appeal are not tenable.
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The appeal is devoid of merits. Accordingly, I pass the
following:
ORDER
The appeal is dismissed, with cost.
The impugned judgment and decree dated
02.01.2010 in O.S.No.7115/1997 passed by
the XXXI Additional City Civil Judge, Bengaluru
City is confirmed.
Registry is directed to send back the trial court
records along with the copy of the judgment.
Sd/-
(UMESH M ADIGA)
JUDGE
AG
