Telangana High Court
M/S. Kalinga Industrial Fasteners Pvt ... vs M/S. Itw India Limited on 4 April, 2025
Author: Abhinand Kumar Shavili
Bench: Abhinand Kumar Shavili
THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
AND
THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA
CITY CIVIL COURT APPEAL No.50 OF 2008
JUDGMENT:
(Per Hon'ble Smt. Justice Tirumala Devi Eada)
This is an appeal filed by the appellant being aggrieved by
the judgment and decree, dated 14.03.2005, passed in
O.S.No.268 of 1996 by the learned III Senior Civil Judge, City Civil
Court, Secunderabad (for short "the trial Court").
2. The appellant herein is the defendant and the respondent
herein is plaintiff before the trial Court and the parties herein are
referred to as they were arrayed in the suit before the trial Court
for the sake of convenience and clarity.
3. The brief facts of the case before the trial Court are that the
plaintiff is a company which supplies industrial components,
epoxies/cold welding components etc., and the defendant has
been carrying on the business of distribution and sale of this
material and therefore, it has been buying and distributing the
plaintiff's products. Since the defendant has been purchasing
large quantities of material, the plaintiff has permitted the
defendant to avail the credit facility. But during the course of
transactions, the defendant failed to pay the amounts, inspite of
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reminders made by the plaintiff and when the plaintiff has
presented the cheques they were dishonoured. Even after the
dishonor of cheques, when the plaintiff requested the defendant
company, the defendant has failed to pay the same and further
raised invoices and the plaintiff has supplied the material but the
defendant has failed to pay any amount, thereafter, the plaintiff
getting vexed with the attitude of the defendant, filed the suit for
recovery of money.
4. The defendant company has filed its written statement
admitting that he is a dealer of the plaintiff company but had
denied the averments with regard to the payment saying that the
plaintiff is playing fraud on him and that he was induced by
M/s.Rourkela Steel Plant to place such bulk order and that the
same could not be consumed by the customers and the fact of
non receipt of orders from any of the customers was brought to
the notice of the plaintiff but the plaintiff still induced them to
purchase more material and thus, he raised the invoices and it is
further contended that the letter dated 30.03.1996 written by the
defendant to the plaintiff would also make it clear that the
payment released by M/s.Rourkela Steel Plant, and that the
orders placed by the defendant on 19.04.1996 also show that the
order was being placed on the assurance given by the Area Sales
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Manager of the plaintiff company and that the defendant was
ready and willing to return the goods that were supplied to them
but the plaintiff avoided to receive the same. He further averred
that as per the terms and conditions of the dealership issued to
the defendant by the plaintiff, the defendant was to be the sole
distributor of the products and that he is entitled to a trade
commission of 23% in the sales made by the plaintiff company in
the area for which the defendant was appointed as authorized
dealer. It is his further contention that the Rourkela branch of
the company has taken goods worth Rs.90,000/- by duly signing
the challan and the defendant has not received any payment for
the same. Thus, the defendant is entitled to a sum of Rs.90,000/-
and thereby, he filed a counter claim to that effect.
5. To the said counter claim, the plaintiff has again filed a
written statement denying the material allegations and contended
that the defendant is not entitled for the amount claimed in the
counter claim.
6. Based on the above rival pleadings, the trial Court has
framed the following issues:
"1. Whether this Court has no territorial jurisdiction
to try the suit claim?
2. Whether the defendant is a dealer of the plaintiff
company?
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3. Whether there is short supply of goods to the
defendant vide invoice dt.19.04.1996?
4. Whether the plaintiff is liable to account for the
commission at the rate of 23% to the sales effected
through M/s Usha Engineering of Jharsuguda?
5. Whether the defendant is entitled to a decree of
Rs.90,000/- against the plaintiff?
6. Whether the plaintiff is entitled to the suit claim?
7 To what relief?"
7. On behalf of the plaintiff, PW1 was examined and Exs.A1 to
A9 were marked. The defendant has not adduced any evidence
before the trial Court.
8. Based on the evidence on record, the trial Court has
decreed the suit for a sum of Rs.20,30,145.20 ps. with costs
together with interest on Rs.19,51,005/- @ 12% per annum from
the date of suit till the date of decree and @6% p.a. from the date
of decree till realization against the defendant. The counter claim
of the defendant is dismissed. Aggrieved by the said judgment and
decree, the present appeal is filed by the defendant.
9. Heard Smt.Manjari S.Ganu, learned counsel for the
appellant and Sri M.S.Srinivasa Iyengar, learned counsel for the
respondent.
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10. The learned appellant counsel has submitted that the
judgment of the trial Court is contrary to law and evidence and
that the trial Court has grossly erred in answering issue No.1 in
favour of the plaintiff and that the trial Court has failed to
appreciate the fact that the appellant was the sole distributor of
the respondent and that the appellant was entitled to trade
commission and that it was appointed as a distributor in
M/s.Rourkela Steel Plant to sell the respondent's material and
that it had sold the same but no commission was paid to the
appellant and that though the trial Court has framed several
issues none of the issues were answered based on the evidence
and that the trial Court has simply answered all the issues in
favour of the appellant and that the appellant ought to have been
given a chance to lead evidence and to substantiate its counter
claim for a sum of Rs.90,000/-, that the trial Court has acted in a
haste and disposed of the suit in a hurried manner without giving
any opportunity to the appellant to lead evidence.
11. Learned counsel for the appellant raised a specific
contention that the chief examination of PW1 is sworn on
30.11.2002, though the same is filed on 22.09.2003, further the
said PW1 was recalled on 27.10.2003 for marking the documents.
Pleading the said averments, learned counsel for the appellant has
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prayed this Court to set aside the judgment and decree passed by
the trial Court dated 14.03.2005 by allowing this appeal and
further prayed to allow their counter claim.
12. The learned respondent counsel, on the other hand, has
submitted that the appellant failed to lead any evidence inspite of
several opportunities before the trial Court and that the trial
Court has rightly decreed the suit, based on the evidence placed
by the plaintiff, he therefore, prayed to uphold the judgment and
decree passed by the trial Court.
13. Based on the above rival submissions, this Court frames the
following points for consideration:
1. Whether the plaintiff is not entitled to recover the suit
amount?
2. Whether the defendant is entitled to the counter
claim?
3. Whether the judgment and decree dated 14.03.2005
passed by the trial court is sustainable in law and
under the facts?
4. To what relief?
14. POINT NO.1:
a) The case of the plaintiff is that the defendant was its dealer
distributing their products i.e. components, epoxies/cold welding
components etc., and since it was a major distributor for
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purchasing large quantities, they permitted the defendant to avail
credit facility and while the business was going on, the defendant
raised an invoice for purchase of material on 20.11.1995 vide
invoice No.350877 for a sum of Rs.3,56,175/- and on 30.12.1995
vide invoice No.351052 for the materials worth Rs.4,63,038/- and
another invoice dated 19.04.1996 for the material worth
Rs.16,68,702/- respectively. That the plaintiff has supplied the
material and has deposited the cheques issued by the defendant,
but the cheques were returned dishonoured due to insufficient
funds and the defendant failed to pay the said amount. The
plaintiff has reminded the defendant but the defendant has
promised to clear the outstanding amount and placed further
orders. Since the defendant has been carrying on the business
with bulk orders, the plaintiff has relied upon the defendant and
went on supplying the goods, though the defendant has not made
a prompt payment, with an understanding that he would pay the
amount. But the defendant failed to pay the said amount and
therefore, the plaintiff got issued a legal notice on 28.06.1996,
requesting for payment of the outstanding dues, the defendant
has received the notice but instead of paying the amount, he has
issued reply notice.
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b) To prove the case of the plaintiff, they relied upon Exs.A1 to
A9. A perusal of the said exhibits reveals that the defendant was
raising invoices requesting the plaintiff company to supply the
material under different dates. Exs.A1 to A3 are the invoices
dated 30.08.1995, 25.10.1995 and 30.11.1995 respectively.
Ex.A3 further reveals that the materials are required most
urgently and that immediate action in the matter is appreciated,
which shows that the defendant required the material on an
urgent basis and thus, it placed an invoice to the plaintiff
company. Ex.A4 is a letter addressed by the plaintiff company to
the defendant reminding for clearance of payments and the
amount payable is also reflected vide invoice numbers i.e. 350877
and 351052 dated 20.11.1995 and 30.12.1995 respectively and
the total amount is to an extent of Rs.4,80,754/-. Then a perusal
of Ex.A5 reveals that it is another invoice dated 19.04.1996,
wherein there is an endorsement made by the defendant saying
that payment will be made in two installments in the month of
May, 1996 i.e. first payment by 10th May and second payment by
30th May, the old outstanding is being cleared on 30th April.
Ex.A6 is another invoice dated 29.04.1996. Exs.A7 and A8 are
the delivery challans. Ex.A9 is the reply notice given to the
counsel for plaintiff asking them to wait for some more time till
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their advocates issue a reply to their claim. The said reply notice
under Ex.A9 is dated 19.07.1996.
c) Thus, it is made clear from the exhibits that the defendant
was a dealer with the plaintiff company and was receiving
materials as per the invoices under ExsA1 to A3, A5 and A6.
There is also a specific endorsement on Ex.A5 that he shall clear
the outstanding dues in the month of May in two installments,
thus the plaintiff could make out its case with regard to the dues
to be paid by the defendant, whereas the defendant though it has
raised a counter claim has failed to place on record any document
along with the counter claim.
d) The defendant has not adduced any evidence either to prove
its counter claim or to disprove the claim of the plaintiff. There
was no rebuttal evidence at all with regard to the plaintiff's
contention.
e) The learned appellant counsel has relied upon the judgment
of the Apex Court in the case of Robin Thapa v. Rohit Dora 1,
wherein the defendant was set ex parte before the trial Court, after
which he has approached under Order 9 Rule 13 of CPC which
was allowed. The High Court has reversed the said decision, then
(2019) 7 Supreme Court Cases 359
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it has reached the Apex Court and the question before the Apex
Court was whether the ex parte decree should be set aside and the
case heard on merits. Thus, the Apex Court has restored the trial
Court's order allowing the case to proceed on merits. It has
further emphasized that the litigation should not be terminated
due to procedural defaults but should ensure substantive justice.
The learned appellant counsel has further relied upon the
judgment of the Apex Court in the case of N.Mohan v. R.Madhu2,
wherein an ex parte decree was passed by the trial Court and the
defendant has filed an application under Order 9 Rule 13 claiming
that he has not received summons as he moved from Trichy to
Chennai. The said application was dismissed by the trial Court
and the High Court has upheld its decision. Subsequently, the
defendant has filed first appeal with a delay of 546 days and the
High Court has rejected the appeal refusing to condone the delay.
The matter went upto the Apex Court and the Apex Court has
condoned the said delay and allowed the appeal to be heard on
merits and reaffirmed that the procedural technicalities should
not override substantive justice.
f) The present case was not adjudicated ex parte. The
defendant has filed written statement but has failed to cross
(2020) 20 Supreme Court Cases 302
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examine the plaintiff's witnesses and has not adduced any
evidence and the case was not dismissed for default either. Thus,
the facts of the cited decision are not applicable to the case on
hand. It is for the defendant to have adduced evidence before the
trial Court which is not done. In this case, the question of Order
9 Rule 13 does not arise. Thus, the facts of the cited decisions are
not applicable to the case on hand. A perusal of trial Court record
reveals that ample opportunities were given to the defendant and
the trial Court has not adopted any technical approach but for
following normal procedure.
g) Though the learned appellant counsel has relied upon the
above cited decisions, the record discloses that the suit pertains
to the year 1996 and the judgment was delivered in the year 2005
that means after nine years, the suit was decreed. Further, a
perusal of the docket proceedings of the trial Court would reveal
that ample opportunities were given to the defendant. The issues
were framed in this case on 06.02.1999, after which the plaintiff's
side evidence commenced on 22.09.2003 and PW1 was further
examined on 27.10.2003, after which it was posted for the cross
examination of PW1 through a commissioner and then four
adjournments were granted till 30.12.2003 and it was posted on
07.01.2004 finally. Then, a memo was filed by the Advocate
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Commissioner saying that the defendant counsel is not present
for proceeding with cross examination. Observing the same, the
trial Court has forfeited the right to cross examine the witness
and it was posted for defendant evidence. The defendant has not
taken any steps to get the said orders set aside. From then on the
case was adjourned for several times for over a period of one year
till 10.02.2005, in spite of which the defendant company did not
chose to lead any evidence on its behalf. Thereby, on 25.02.2005
the judgment was reserved by the trial Court, even then the
defendant had a chance to seek for reopening the case, which was
not done. Thus, the judgment was delivered on 14.03.2005. All
these proceedings before the trial Court would show that the
defendant has not chosen to cross examine the plaintiff's witness
and has also not shown any interest in leading evidence in spite of
several adjournments granted over a period of one year, by the
trial Court.
h) Therefore, in view of the above discussion, it is held that the
plaintiff could prove that the defendant is due to a sum of
Rs.19,51,005/- to the plaintiff company and the plaintiff is
entitled to recover the same from the defendant. Point No.1 is
answered accordingly.
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15. POINT NO.2:
The written statement of the defendant reveals that there
are clear admissions with regard to the dealership under the
plaintiff company and the fact of transactions held with the
plaintiff company but only averment made by the defendant is
that it has purchased the material due to the inducement made
by the plaintiff's branch at Rourkela. The defendant being a
company cannot simply go by an inducement made by another
company, since it was a distributor; it was its duty to conduct the
business as per the agreement. The defendant company in its
written statement has stated that they conducted the business as
per the dealership agreement and has failed to place the same
before the Court. Even at the time of appeal, the appellant who is
the unsuccessful defendant failed to place any material on record
along with the appeal. Though the defendant company was
unsuccessful before the trial Court, even after filing the appeal, it
did not come forward with any document to prove its case. In the
absence of any evidence in its favour, it is difficult to hold that the
plaintiff is due by any amount to the defendant. Therefore, it is
held that the counter claim of the defendant fails and that the
defendant is not entitled to recover any amount from the plaintiff.
Point No.2 is answered accordingly.
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16. POINT NO.3:
In view of the reasoned findings arrived at point Nos.1 and
2, it is held that the judgment and decree passed by the trial
Court do not need any interference and the same are held to be
sustainable in law and under the facts and circumstances of the
case.
17. POINT NO.4:
In the result, the appeal is dismissed upholding the
judgment and decree, dated 14.03.2005, passed in O.S.No.268 of
1996 by the learned III Senior Civil Judge, City Civil Court,
Secunderabad. No costs.
Miscellaneous Applications, if any, pending in this appeal
shall stand closed.
________________________________
ABHINAND KUMAR SHAVILI, J
___________________________
TIRUMALA DEVI EADA, J
Date: 04.04.2025
ns
