Madras High Court
M/S.Nekkanti Agencies vs Hindustan Unilever Limited on 25 October, 2021
A.S.No.419 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25.10.2021
CORAM:
THE HONOURABLE MS.JUSTICE P.T.ASHA
A.S.No.419 of 2018
M/s.Nekkanti Agencies,
Kovelamudivari Street,
Near Swathi Office,
Surayraopet, Vijayawada-520002
rep. by its Sole proprietor
Nekkanti Surya Narayana Murthy ...Appellant/Defendant
Vs
Hindustan Unilever Limited,
Ponds House,
No.101, Santhome High Road,
Chennai 600 028
Rep by its Regional Legal Manager and
Authorised Signatory, Mr.Saif Jamali ...Respondent/Plaintiff
PRAYER Appeal Suit filed under Section 96 of the Code of Civil
Procedure against the Judgment and decree passed by the Hon'ble
XVIIIth Additional City Civil Judge, Chennai on 21.12.2017 in
O.S.No.4113 of 2017 and allow the appeal by dismissing the suit.
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A.S.No.419 of 2018
For Appellant : M/S.R.Sathish Kumar
For Respondents : Mr.Karthick Ram Mohan
for S.Ramasubramaniam & Associates.
JUDGMENT
The defendant has invoked the appellate jurisdiction of this
Court Section 96 of the Code of Civil Procedure, challenging the
Judgment and decree passed by the XVIII Additional City Civil
Court, Chennai in OS.No.4113 of 2017.
2.The suit in OS.No.4113 of 2017 has been filed by the
respondent/plaintiff for recovery of a sum of Rs.14,78,812/- together
with interest @ 12% per annum from the date of the filing of the suit
till the date of the payment. It is necessary to allude to the facts of
the case which has ultimately resulted in filing of the appeal, so as to
appreciate the grievance of the defendant to the Judgment and
Decree under appeal. The parties for the ease of understanding are
referred to the same ranking as before the Trial Court.
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3.The plaintiff had filed the above suit as an 'Under Chapter
suit'. It is the case of the plaintiff that they were supplying goods to
the defendant, in respect of which, invoices have been raised on the
plaintiff. The defendant had admitted their liability vide e-mail dated
22.10.2016 and the plaintiff would contend that this admission of
liability by the defendant would constitute a written admission of
liability entitling the plaintiff to file this summary suit. The plaintiff
would contend that they are one of the largest Consumer goods
industry in India, manufacturing different and distinct categories of
soap, detergents, shampoos, water purifiers etc., The plaintiff's
company market its product under different brands like a Lux,
Lifebuoy, Surf Excel, Rin, Wheel, Vaseline, Fair & Lovely, Ponds,
Lakme, Dove, Clinic Plus Knor, Kisan, Kwality Wall's etc., and the
water purifier with the name of 'Pureit'.
4.The defendant had been appointed as Redistribution stockist
at Vijayavada on 2009. The plaintiff had done the necessary
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background check of the defendant, prior to entering into the
redistribution agreement dated 12.09.2013. The plaintiff had also
been supplying goods from time to time based on the purchase
orders being placed by the defendant. The plaintiff is facilitated
with e-banking service called 'ACH Mechanism' ( Automated
Clearing House ) as a mode of payments.
5.The plaintiff would submit that in the month of January
2016, the defendant had placed orders for supply of goods to the
tune of Rs.14,78,811.68/-. The plaintiff had also supplied the said
consignment of goods under seven invoices, all dated 18.06.2016.
The goods were delivered to the defendant on the very same day and
the defendant had also received the goods supplied to them.
However, the payment for these invoices had not been transferred
through the 'ACH Mechanism'.
6.The plaintiff would contend that they had received
intimation that the transaction bearing reference No.443593 for a
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A.S.No.419 of 2018
sum of Rs. Rs.14,78,811.68/- from HSBC Bank had been
dishonoured with an endorsement 'Balance insufficient'. The
plaintiff sent a written memo on 21.07.2016 and the plaintiff had
also intimated the defendant about the dishonour of their payment.
Despite receiving this letter from the plaintiff, the defendant did not
come forward to regularize the amount. The plaintiff had made
several requests and ultimately issued a legal notice dated
16.08.2016 calling upon the defendant to pay the above sum. The
defendant had received the notice and sent a reply dated 03.09.2016
containing frivolous and untenable allegations.
7.The plaintiff despite receiving the reply contacted the
defendant through its representative and requested them to either
make the payment or return the goods supplied, which were kept in
the godowns of the defendant as stated in the reply dated
03.09.2016. On 20.10.2016 the plaintiff had sent an e-mail
informing the defendant about the transaction for Rs.14,78,811.68/-
being dishonoured and requested the defendant to return the
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outstanding stock or transfer Rs.5,00,000/- worth stock to the depot
on or before 21.10.2016. In response to this request, the defendant
agreed to transfer the stock worth Rs.5,00,000/- . However, by e-
mail dated 22.10.2016, the defendant would submit that the
outstanding amount from the market was Rs.8,18,000/- and the
outstanding amount to the plaintiff by the defendant and the
remaining stock worth Rs.28,00,000/- would be settled as a full and
final payment. However, the defendant failed to honour their
commitment.
8.On 31.12.2016, the defendant issued a notice to two
employees of the plaintiff making allegations against them and
seeking recovery of a sum of Rs.7,80,000/- . This appears to be
backlash to the legal notice issued by the plaintiff to the defendant
dated 16.08.2016. The letter dated 31.12.2016 appears to be a
defence strategy if the plaintiff were to approach the Court of law.
Since, payments were not made, the plaintiff had filed a suit as the
Summary suit (Under Chapter suit) to recover the aforesaid sum.
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9.The defendant on being served with the summon in the
above suit had filed an application for granting an Unconditional
leave to defend the suit in I.A.No.143 of 2017. In the affidavit filed
in support of the said petition, the defendant would contend that the
summary suit was maintainable as it is filed for recovery of money
based on alleged admissions of liability by the defendant. The
defendant at the outset took a defence that the plaintiff had not
complied with Clause 18 of the agreement dated 12.09.2013. It is
their contention that the agreement contained a dispute resolution
mechanism which had to be adopted by the plaintiff in case there
was a dispute regarding the transaction. The defendant also refuted
the said agreement. He would contend that claim was only based on
invoices, all dated 18.06.2016.
10.They would further contend that post 2013, no dues had
been claimed by the plaintiff which would only go to show that the
defendant had been very prompt in his payment and clearing up the
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dues. It is the case of the defendant that the plaintiff owed a sum of
Rs.9,24,000/- , on June 2016 which had been clearly mentioned in
several correspondence that it is a triable issue and therefore a
Summary suit would not be the ideal remedy as it would cause
severe prejudice to the defendant.
11.The defendant would submit that even through reply dated
03.09.2016, it is informed to the plaintiff that a sum of Rs.9,24,000/-
was due and payable from the plaintiff's personnel to the defendant.
The defendant would also submit that even in the letter of
admission, the amount admitted was only a sum of
Rs.12,37,285.94/- whereas the suit is filed for a higher value.
Therefore, there was a dispute with regard to the amount that was
due from the plaintiff. The defendant would submit that the reasons
given below would demonstrate that the suit involves triable issue
and therefore leave to be granted.
(a) Whether the Court had jurisdiction in the light of Clause
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18 of the agreement dated 12.09.2016?
(b) Whether the defendant was entitled to a sum of
Rs.9,24,000/- from the plaintiff's employees which had to be
deducted from out of the claim of Rs.14,78,811.68/-?
(c) Whether the acts of the plaintiff's employees are actions in
the course of their duty and therefore the plaintiff is vicariously
liable for any such amount due to the defendant?
(d) Whether the plaintiff could invoke the provisions of Order
37 Rule (2) of the Code of Civil Procedure, especially when the
defendant had disputed the quality of the goods that was allegedly
supplied by the respondent?
Therefore, the defendant would submit that leave had to be
granted to them.
12.The defence to this application was that the reasons given
to show that the suit involved triable issue was nothing but a moon
shine defence not backed by evidence. The plaintiff would contend
that even in their e-mail dated 22.10.2016 the defendant had
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admitted their liability to the tune of Rs.12,37,285/-. The defendant
had also in the said e-mail undertaken to settle all the dues after
liquidating the remaining stock worth Rs.28,00,000/- towards full
and final settlement of the dues. The triable issue according to the
plaintiff were illusory in nature and a mere sham raised for the
purpose of obtaining an unconditional leave. The plaintiff therefore
sought to have the application dismissed.
13.The learned XVIII Additional City Civil Judge, Chennai,
by order dated 21.12.2017 had dismissed the leave to defend
application and had consequently proceeded to decree the suit as
prayed for.
14.The defendant has challenged only the decree in the suit
and there is no challenge to the order dismissing the leave to defend
the application.
15.An initial objection was taken by the learned Counsel for
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the plaintiff regarding the maintainability of the appeal filed
challenging the decree in the suit alone, since the Order passed in the
leave to defend application has not been challenged.
16.Mr.Sathish Kumar, learned Counsel appearing on behalf of
the defendant would submit that he has challenged the Order and
finding passed in the I.A.No.143 of 2017 in his ground of appeal and
therefore there is a compliance in challenging the Order passed in
I.A.No.143 of 2017. He would also rely upon the Judgment of the
single Judge of this Court in a Civil Revision Petition and reported
in Shivsu Canadian Clear International Ltd. Vs. Freightcan
Global Logistics Private Limited [2013 (3) CTC 305] in support of
the above argument.
17.The issue involved in the above revision was as follows,
“Whether the right of appeal against a decree to be passed is
consequent upon the dismissal of an Interlocutary application
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under Order XXXVII, Rule 3(5) of the Code of Civil Procedure
thereby, declining to grant leave to defend is the bar for the
aggrieved defendant to challenge the said Order by way of
revision”.
18.The learned Judge dealt with the Judgment of the Hon'ble
Supreme Court and the Judgments of the various High Courts. After
extensively discussing the above Judgements, the learned Judge
observed that the law in the said judgments has been clinchingly
declared by Hon'ble Supreme Court in the case reported as Wada
Arun Asbestos (P) Ltd vs. Gujarat Water Supply & Sewerage
[2009 (2) SCC 432] and would hold that if the above Judgment is
read alongside the other Judgments of the Hon'ble Supreme Court
reported in Ajay Bansal vs. Anup Mehta and others [2007 (2) SCC
275]. The following factors would emerge and one such factor was
that it was open to the defendant to wait till the decree is passed and
thereafter challenge the decree by way of an Appeal and in this
Appeal itself, the appellant could challenge the Order declining the
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grant of leave to defend by the Trail Court. Therefore, the above
Appeal filed by the appellant challenging the Order passed both in
I.A.No.143 of 2017 as well as the suit is maintainable.
19.Once this Court holds that the Appeal is maintainable,
then the next question to be answered is, “Whether the Order of
the Court requires re-consideration or whether the same can be
confirmed?”
20.The primary defence that has been put forward by the
appellant/defendant is that the defendant in response to the legal
notice dated 16.08.2016 issued by the plaintiff had in their reply
dated 03.09.2016 contended that a sum of Rs.9,24,000/- was due and
payable from the plaintiff's personnel to the defendant. He would
refer to a Statement of Account that had been received by the
defendant from the plaintiff whether the closing balance on
28.07.2016 was shown as a sum of Rs.12,37,285.94/-, whereas, the
suit that has been filed on 29.06.2017 would still claims that a sum
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of Rs.14,78,811.68/- was due and payable by the defendant to the
plaintiff. He would further submit that the plaintiff has not produced
the Statement of Accounts and therefore on these grounds also the
Judgment requires re-consideration.
21.The learned Counsel would therefore submit that the
plaintiff has not come to the Court with a definite case and therefore
only if leave is granted, they would be in a position to prove the
above payment. Since, important and substantial issues have been
raised for consideration, the leave should be granted
22.Per-contra, Mr.Karthik Ram Mohan, learned Counsel for
the plaintiff would submit that in their e-mail dated 22.10.2016, the
defendant had clearly and categorically submitted that a sum of
Rs.12,37,285.94/- was due and payable by them. In the said mail,
they have also stated that a sum of Rs.8,18,000/- was still
outstanding from the market and further stock worth Rs.3,00,000/-
would be transferred with the consent of the plaintiff, the remaining
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stock which is worth around Rs.28,00,000/- was outstanding amount
from the market.
23.He would submit that nowhere in this mail, has the
defendant made any mention about the sum of Rs.9,24,000/- due to
them. Further, even according to the defendant a sum of
Rs.9,24,000/- was due from the two employees in individual
capacity and not from the company. That being the case, the defence
pleaded is nothing but, illusory and therefore the Court below has
rightly dismissed the leave to defend application and the plaintiff
having established the liability, the learned Trial Court Judge has
rightly decreed the suit.
24.Heard the learned Counsels and perused the records filed in
support of the above Appeal.
25.The plaintiff has come forward with a case that a sum of
Rs.14,78,811.68/- is due under seven invoices, all dated 18.6.2016
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for different amounts. The said amount has not been paid. The
defence to the above claim which is in the form of the affidavit filed
in support of the leave to defend application would set out that the
dues alleged were based on seven invoices dated 18.06.2016. The
defendant would contend that after the year 2013, no demands were
made by the plaintiff which only goes to show that the defendant has
been very prompt in clearing their dues. As on June 2016, it is the
plaintiff who owed a sum of Rs.9,24,000/- to the defendant which
was the amount payable by two of the employees of the plaintiff
who had fudged the funds belonging to the defendant.
26. The plaintiff was vicariously liable for the acts of their
employees and therefore a sum of Rs.9,24,000/- was due and
payable by the plaintiff to the defendant. In this regard, a perusal of
the notice dated 16.08.2016 issued by the plaintiff to the defendant
(Exhibit A5) would show that a sum of Rs.14,78,811.68/- has been
made towards the seven invoices.
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27.The plaintiff has called upon the defendant to pay the above
sum within 15 days. The defendant had sent a reply dated
03.09.2016 (Exhibit A6), in which they had raised an issue of
amounts beings payable by Mr.Govardhan Gowda, RamKumar and
ASM Pradeep Bhandari who are the staffs of the plaintiff liable to
the tune of Rs.9,24,000/-. The defendant has categorically denied his
liability. Thereafter an e-mail has been issued by the plaintiff dated
20.10.2016 (Exhibit A7), in which the demand for payment for a
sum of Rs.14,78,811.68/- was reiterated. To this, a reply mail dated
22.10.2016 has been sent, in which the defendant had categorically
admitted that, as on that date a sum of Rs.12,37,285/- was due and
payable by them to the plaintiff, therefore there is an admission of
liability to the said extent.
28.Therefore, on considering of the entire evidence it is ample
clear that defence taken is nothing but, illusory which was not
backed by evidence, more particularly, when it is the case of the
defendant themselves that the amounts were payable by the
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employees of the plaintiff and not by the plaintiff themselves.
Further, it is seen that there has been an admission of liability to the
tune of Rs.12,37,285/- and the Statement of Accounts forwarded by
the plaintiff to the defendant would also only indicate about the
same.
Therefore, the appeal is partly allowed. The decree is modified
to a sum of Rs.12,37,285/- from Rs.14,78,811.68/-. In all other
respects, the Judgment and decree stands confirmed. No costs.
Consequently, connected Miscellaneous Petition is also closed.
25.10.2021
Index : Yes/No
Internet : Yes/No
Speaking Order/Non Speaking Order
gd
To
1. XVIIIth Additional City Civil Judge,
Chennai
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A.S.No.419 of 2018
P.T.ASHA, J,
gd
A.S.No.419 of 2018
25.10.2021
https://www.mhc.tn.gov.in/judis
