Madras High Court
The Deputy Director vs P.Viswanathan on 29 October, 2024
SA.No.1038 of 2010
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.10.2024
CORAM
THE HONOURABLE MR.JUSTICE M. JOTHIRAMAN
SA.No.1038 of 2010
and MP.No.1 of 2010
The Deputy Director
Anna Silk Exchange,
Siru Kaveripakkam,
Kancheepuram … Appellant / defendant
V.
P.Viswanathan ... Respondent / Plaintiff
Prayer : This Second Appeal is filed under Section 100 of the
Code of Civil Procedure 1908 against the judgment and decree dated
14.11.2003 made in AS.No.13 of 2001 on the file of Subordinate Judge,
Kancheepuram confirming the judgment and decree dated 20.12.2000
made in OS.No.41 of 1998 on the file of the Principal District Munsif,
Kancheepuram.
For appellant : Mrs.R.Anitha, AGP (CS)
For Respondent : Mr.Govinda Reddy
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1/15
SA.No.1038 of 2010
JUDGMENT
This second appeal is filed against the judgment and decree dated
14.11.2003 passed by the Sub Judge, Kancheepuram [“First Appellate
Court” for short] in AS.No.13 of 2001 confirming the judgment and
decree dated 20.12.2000 made by the Principal District Munsif,
Kancheepuram [“Trial Court” for short] in OS.No.41 of 1998.
2. The appellant herein is the defendant and the respondent herein
is the plaintiff in the suit.
3. For the sake of convenience, the parties are hereinafter referred
to according to their litigative status in the Original Suit.
Case of the plaintiff in brief :-
4. The plaintiff is one of the members in “Anna Silk Exchange”
under the defendant . The defendant exchange buy the raw silks from the
reelers and sell the raw silks to its members on commission. The plaintiff
used to buy the raw silks in cash and carry basis and also on credit basis.
As per the directions from the defendant, the plaintiff had given Bank
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Guarantee to the tune of Rs.75,000/- during the month of August 1995.
Prior to August 1995, the plaintiff was having cash dealings, the plaintiff
was allowed to buy the raw silks on credit basis i.e., on 3 occasions
within the bank guarantee limit. During the month of July 1996, due to
various reasons, he had stopped the credit transactions and informed the
defendant to invoke the bank guarantee offered by him to the exchange
and to close the account on the same day. The plaintiff had purchased
raw silks for nearly Rs.80,000/- by paying cash. The defendant exchange
had not taken any steps to get a sum of Rs.75,000/- from the Bank in
time. The defendant had intimated the plaintiff and directed him to pay a
sum of Rs.1,03,859/- on 26.08.1997 by his letter Na.Ka.No.630/A/95,
after receiving the said intimation letter, the plaintiff requested the
defendant to invoke the bank guarantee and adjust the said Rs.75,000/-
towards due. The plaintiff had paid a sum of Rs.75,000/- to the defendant
by adjusting the Bank guarantee amount on 07.10.1997 and the same
amount had been credited on 14.10.1997. Hence, as on 14.10.1997, he
had paid the entire amount to the defendant. On 09.10.1997, the
defendant sent a letter to the plaintiff stating that the plaintiff will have to
pay only a sum of Rs.95,484/- (principal Rs.94,773/- + Levy Rs.711/-).
Though the said notice had been prepared on 15.10.1997, it was post
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dated for the reasons best known to the defendant.
5. While so, the defendant had sent a letter (notice dated
10.12.1997) to the plaintiff in Na.Ka.No.630/A/97, with a direction to pay
a sum of Rs.30,538/- to the defendant on or before 31.12.1997 failing
which further action will be taken. The plaintiff had already paid a sum
of Rs.8,375/- in excess and the plaintiff is not liable to pay a sum of
Rs.30,538/- as claimed by the defendant. Hence, it is just and necessary
to claim that that the letter in Na.Ka.No.630/A/97 dated 10.12.1997 is
against law, invalid, arbitrary in law.
The case of the defendant in brief :-
6. The plaintiff has never intimated at any point of time to close
and adjust the Bank guarantee amount much less during the month of July
1996. Even though, the Bank guarantee limitation is upto Rs.75,000/-,
and availed the stocks to the tune of Rs.1,47,971/- as on 29.12.1995 and
repaid a sum of Rs.59,147/- on 30.12.1995 and totally he was due as on
Rs.88,824/-. The defendant has sent notice initially to the plaintiff on
26.08.1997 and 2nd notice dated 09.10.1997 before auditing the accounts,.
After the final audit only, the actual due by the plaintiff has been arrived
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to Rs.30,538/- as on that date and after making all deductions and final
notice to the plaintiff has been given on 10.12.1997. The Bank guarantee
has been cleared and adjusted only on 08.10.1997, the plaintiff has never
given any communication to the defendant with regard to the actual due
to the defendant by the plaintiff to be paid lawfully. The defendant is
having every right to recover the due by due process of law and his legal
right could not be restrained by injunction order.
7. The trial Court based on the pleadings, the trial Court has framed
the following issues :-
(i)Whether the plaintiff is entitled for seeking
declaration against the defendant that the letter sent
by the defendant in Na.Ka.No.630A/1997 dated
10.12.1997?
(ii)Whether the plaintiff is entitled to seek relief
of permanent injunction against the defendant based
on the letter dated 10.12.1997?
(iii)Whether the plaintiff had stopped the credit
transactions and informed to invoke the Bank
guarantee offered by the plaintiff to the exchange and
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closed the account.
(iv)Whether the plaintiff in the month of July
1996 had informed to invoke Bank guarantee to the
exchange and close the bank account.
8. During trial, on the side of the plaintiff, the plaintiff himself
examined as PW1 and Ex.A1 to A10 were marked. On the side of the
defendant, one Tr.Kolappa Pillai was examined as DW1 and Ex.B1 to
Ex.B7 were marked.
9. Upon hearing either side and considering the materials available
on record, the trial Court held that the plaintiff has proved that after
receiving Ex.A1 notice dated 26.08.1997 from the defendant, the plaintiff
had came to know that Bank guarantee amount has not been adjusted and
immediately plaintiff had taken steps. The plaintiff also proves, the fact
that the balance amount was also been tried to settle by way of demand
draft and the same has been denied by the defendant. Thereafter, the
plaintiff has issued the legal notice Ex.A3. Even after receiving
Ex.A3/legal notice dated 10.10.1997. The defendant did not send any
reply and infact, the original bank guarantee was available with the
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defendant. If the defendant had taken necessary steps in the year 1995, to
collect the dues from the plaintiff, then the plaintiff need not pay the
interest amount along with the penal interest and only due to the act of the
defendant alone, the delay has been occurred.
10. Upon dismissal of the suit the defendant has preferred the first
appeal. The first appellate Court held that in Ex.A6 notice dated
10.12.1997, there is no proper calculation as to, how the balance amount
arrived, as stated in Ex.B6, that 22% interest at 5% penal interest were
not reflected in Ex.A6. There is no proper calculation arrived in Ex.A1 &
A6, as to when the plaintiff had availed loan, how much amount due etc.
Even after issue Ex.A6 notice, the defendant had not taken any steps to
recover the amount from the plaintiff thereby confirming the findings of
trial Court and dismissed the first appeal. As against concurrent findings
of the Court below, the present second appeal has been filed.
Substantial Questions of Law
11. At the time of admission, this Court has formulated the
following substantial questions of law :-
“(i)Whether the appellant is competent to
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issue a demand notice Ex.A6 for the breach of trust
committed in the Co-operative Society.
(ii)Whether the plaintiff is entitled to draw the
loan facility beyond the bank guarantee furnished by
him.
(iii)Whether the loan account availed by the
plaintiff beyond the limit of bank guarantee
furnished is not recoverable.”
Submissions on either side
12. The learned Additional Government Pleader (CS) appearing on
behalf of the appellant/defendant would submit that both the Courts
below over looked, the stand taken in written statement, that the plaintiff
availed loan beyond the credit capacity of Rs.75,000/- especially when
the total outstanding, to an extent of Rs.80,000/- which has been admitted
by the plaintiff himself. The findings of the first appellate Court to an
extent of suggesting, the defendant to initiate separate proceedings or
initiate civil suit for recovery of the amount, than issuing demand
notice/Ex.A6 is incorrect, as the plaintiff could have discharged the
admitted debt of Rs.30,538/-, pursuant to the issuance of the Ex.A6.
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13. Per contra, the learned counsel for the respondent/plaintiff
would submit that in the month of July 1996, due to various reasons he
had stopped the credit transactions and informed to invoke the bank
guarantee to the exchange and to close the account. But the exchange had
not taken any steps. On 07.10.1997, the bank guarantee amount of
Rs.75,000/- had been sent to the defendant and as per Ex.A1/letter dated
26.08.1997, the defendant had adjusted his bank guarantee on 07.10.1997
and the balance amount of Rs.28,859/- had been sent to the defendant by
way of demand draft on 09.10.1997. The said amount had been credited
on 14.10.1997, hence as on 14.10.1997, the plaintiff had paid the entire
amount of Rs.1,03,859/- and he was not liable any amount to the
defendant. Whileso, the defendant had sent Ex.A6 letter dated
10.12.1997 with a direction to pay a sum of Rs.30,538/- without any valid
reason and the same is against law.
14. This Court has given anxious consideration to the submission
made on either side and perused the materials available on record.
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15. The defendant has admitted the fact that the plaintiff used to
buy raw silks on cash and carry basis and also on credit basis. Ex.B1 to
ExB5 are the silk exchange cards issued by the defendant. Ex.B6 is the
agreement for sale of silks, on credit basis to the limit of Rs.75,000/-.
Ex.A1 letter dated 26.08.1997, directing the plaintiff to pay a sum of
Rs.1,03,859/- on or before 31.08.1997 it has been also mentioned about
the bank guarantee details.
16. According to the defendant/appellant the plaintiff has never
intimated at any point of time, to close or adjust the bank guarantee much
less during the month of July 1996 and also contended that even though
the Bank guarantee limit is upto Rs.75,000/- he has availed the stock to
the tune of Rs.1,47,971/- as on 29.12.1995 and totally he was due as on
Rs.88,824/-. Ex.A2 is the letter dated 07.10.1997 addressed by the Indian
Oversees Bank to the Deputy Director of Sericulture, wherein it has been
stated that the intimation letter of guarantee, issued on behalf of the
plaintiff for a sum of Rs.75,000/-. Admittedly no explanation was offered
by the defendant as to why the immediate action was not initiated after,
1995 to recover the due amounts from the plaintiff.
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17. Ex.A5/letter dated 09.10.1997 issued to the plaintiff wherein it
was directed the plaintiff to pay a sum of Rs.95,484/- (principal
Rs.94,773/- + Levy Rs.711/-). EX.A6/letter dated 10.12.1997 was issued
to the plaintiff wherein it has been mentioned about Ex.A1 and Ex.A5,
wherein it is also been stated that after conducting final audit, the due
amount payable will be calculated.
18. After receiving Ex.A1, the plaintiff had immediately taken
steps to adjust the bank guarantee amount and also tried to settle the
balance amount by way of demand draft and the same was refused to be
received by the defendant and thereafter, the plaintiff had issued
Ex.A3/legal notice. The defendant has belatedly issued Ex.A6/notice
without any basis and the same is unsustainable under law.
19. The Courts below has thoroughly analysed the evidence and
documents in a proper manner have rendered factual findings and there is
no perversity or illegality in the findings rendered by the Courts below.
The substantial question of law are answered in favour of the plaintiff /
respondent.
“The Hon'ble Apex Court has held in catena of
judgments (i) Karnataka Board of Wakf v.
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Anjuuman-E-Ismail Madris-Un-Niswan – (1999) 6
SCC 343 (ii) Ramanuja Naidu v. V.Kanniah Naidu
– (1996) 3 SCC 392 (iii) Navaneethammal v. Arjuna
Chetty – (1996) 6 SCC 166 and (iv)Secy.,
Taliparamba Education Society v. Moothedath
Mallisseri Illath M.N. - (1997) 4 SCC 484 that if the
findings of fact of the Courts below are based on
legal evidence, the same cannot be interfered by this
Court while exercising power under Section 100 of
the C.P.C.”
20. In the result, the second appeal stands dismissed by confirming
the judgment and decree passed in AS.No.13 of 2001 on the file of the
Subordinate Judge, Kancheepuram and Judgment and decree passed in
OS.No.41 of 1998 on the file of the Principal District Munsif,
Kancheepuram. No costs. Consequently, connected miscellaneous
petition is closed.
29.10.2024
Index : Yes/No
Internet : Yes/No
Speaking Order/Non-Speaking Order
Neutral Citation : Yes/No
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tsh
To
1.The Subordinate Judge, Kancheepuram.
2.The Principal District Munsif, Kancheepuram.
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M. JOTHIRAMAN, J.
tsh
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29.10.2024
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