IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF AUGUST 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.1387 OF 2011 BETWEEN:
Mr.Ganasham Shetty S/o. Jaranna Shetty, Aged about 44 years, Proprietor, M/s. Sunlight Luminaries, Yeyyadi Chickpet, Mangalore. …Appellant (By Sri. K.Govindaraj, Advocate) AND:
M/s. Kalpana Lamps & Components Ltd., G.N.T.Road, Ponniammanmedu Post, Madhavarram, Chennai-600 910. …Respondent (By Sri. Rajendra S. Advocate for Sri. S.V.Prakash, Advocate) This Regular First Appeal is filed under Section 96 of CPC, against the judgment and decree dated:5.1.2011 passed in O.S.No.5705/2004 on the file of the III Addl. City Civil and Sessions Judge, Bangalore (CCH No.25), decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing, this day, the Court delivered the following:
JUDGMENT The present respondent had instituted a suit against the present appellant in the Court of learned III Addl.City Civil & Sessions Judge, (CCH-25), Bengaluru City, (hereinafter for brevity referred to as `trial Court’), in O.S.No.5705/2004, seeking recovery of a sum of `64,428/- together with interest thereupon at 12% p.a., which suit came to be decreed by the trial Court by its judgment and decree dated 05.01.2011. It is against the said judgment and decree, the defendant in the trial Court has preferred this appeal.
2. The summary of the case of the plaintiff is that, it is a Company incorporated under the Companies Act, and that it is a manufacturer of Fluorescent Tubelights and GLS Bulbs, accessories and luminaries. The defendant was its customer for its products for several years. The defendant used to place the orders with the plaintiff-Company at its Branch Office at Bengaluru and used to make the payment in respect of the goods supplied to him and that the plaintiff-Company used to adjust the amount paid by the defendant on the goods supplied by the plaintiff to the defendant and the plaintiff-Company had accommodated an account in the name of the defendant in the ordinary course of the business and that as on 1.4.2002, the defendant was due to the plaintiff in a sum of `49,913.98 ps. Since the defendant did not make good the said amount, the plaintiff got issued a legal notice dated 20.6.2003/7.8.2003, demanding the defendant to pay the arrears of the amount with interest thereupon. However, the defendant sent an untenable reply, denying his alleged liability under the notice. This constrained the plaintiff to institute the suit.
3. In response to the summons served upon him, the defendant appeared before the trial Court and filed his written statement, wherein, he admitted that he was a customer with the plaintiff-Company and used to place orders for the supply of products manufactured by the plaintiff-Company. He also admitted about the exchange of legal notices between them in connection with the suit transaction. However, he contended that the plaintiff-Company has not been properly represented before the trail Court, as such, the suit was not maintainable. He also stated that the plaint is vague and would not give the details as to on what basis the alleged outstanding liability has accrued. On the other hand, the defendant himself presuming that the suit claim must have been with respect to three invoices bearing Nos.11, 49 and 62, has proceeded to state that he has made payment with respect to all the three invoices. The defendant also contended that among the alleged supplies made by the plaintiff, there were many defective goods which have been returned to the plaintiff. As such, with respect to those returned defective goods, since he was not liable to make any payment, he has not made it. With this, the defendant contended that he is not liable to plaintiff in any manner, much less, to the suit claim.
4. Based on the pleadings of the parties, the trial Court framed the following issues :
1. Whether signatory of the plaint has authority to represent the plaintiff Company?
2. Whether plaintiff proves that in view of the transaction between it and defendant, the plaintiff has accommodated an account in the name of the defendant and as on 1.4.2002, the defendant became due to the plaintiff in a sum of Rs.49,913.98 ps. as alleged?
3. Whether defendant has made payments towards the invoices referred as in para No.9 of the written statement?
4. Whether plaintiff proves that this court has territorial jurisdiction to try this suit?
5. Whether plaintiff is entitle to recover the suit sum from the defendant?
6. Whether plaintiff is entitled to the pendente lite and future interest at the rate of Rs.12% p.a. as claimed?
7. What order or decree?
In its support, the plaintiff got examined one Sri A.Augustian, its Senior Manager (Accounts) as PW-1 and got marked documents from Exs.P-1 to P-6. The defendant got himself examined as DW-1 and got marked documents from Exs.D-1 to D-5. After hearing both side, the trial Court by its judgment and decree dated 05.01.2011, decreed the suit of the plaintiff. It is against the said judgment and decree, the defendant has preferred this appeal.
5. Lower Court records were called for and the same are placed before this Court.
6. Heard the arguments of the learned counsel from both side and perused the materials placed before this Court, including the memorandum of appeal and the impugned judgment.
7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
8. The learned counsel for the appellant in his argument submitted that the very suit filed by the plaintiff in the trial Court was not maintainable since PW-1 who is the signatory of the plaint, as well the witness for the plaintiff, had no authority to represent the Company. As such, his evidence is not that of the plaintiff-Company, but, he is only a formal witness. He further submitted that the plaintiff has utterly failed to establish the suit claim by producing any cogent evidence, including any documents. He submitted that the document at Ex.P-3 is shown to be an account extract, which is a computer generated two pages document, which cannot be considered as an authenticated and acceptable document with respect to the account maintained by the plaintiff with respect to the defendant. He submitted that the plaintiff has failed to produce the original Account Books, Ledgers or any registers, as such, Ex.P-3 does not deserve any consideration by this Court. He also submits that the plaint is very vague and it does not speak about as to how the plaintiff has arrived at an alleged outstanding liability as against the defendant. Learned counsel further submitted that the invoices which the plaintiff has produced at Exs.P-4, P-5 and P-6 have been duly made payment of by the defendant, who also has produced his Accounts Statement issued by the Banker, which is at Ex.D-1. The transport receipt for the return of defective goods produced at Ex.D-4 and the invoices payment details at Ex.D-5 also makes it very clear that the defendant was in no way due for any sum to the plaintiff. With this, learned counsel for the appellant submits that the trial Court without considering these aspects in its proper prospective, has carried away by the designation of PW-1 to hold that he is representing the Company and also accepted Ex.P-3 without properly appreciating it.
9. Learned counsel for the respondent in his argument submitted that PW-1 being a Senior Manager in Accounts of the plaintiff-Company has got every authority to represent the Company, both in institution of the suit, as well in giving evidence on behalf of the plaintiff-Company. He further submitted that the defendant has not pleaded and not produced any documents to show as to what were the value of the alleged damaged goods returned by him to the plaintiff. Thus, the trial Court after taking into consideration all these aspects, has rightly decreed the suit of the plaintiff.
10. In the light of the above, the points that arise for my consideration are :
(1) Whether the plaintiff has proved that the defendant was liable to it `49,913.98 ps. as on the date of the institution of the suit?
(2) Whether the suit filed by the plaintiff is maintainable?
(3) Whether the judgment and decree under appeal deserves any interference at the hands of this Court?
11. PW-1 in his examination-in-chief in the form of affidavit evidence has reiterated the contentions taken up by the plaintiff in the plaint. He has stated that the plaintiff-Company is a manufacturer in Tubelights and other electrical accessories and the defendant was a customer with it. Towards the supply of the goods to the defendant at his request, the plaintiff was maintaining an account which shows an outstanding due of `49,913.98 ps. payable by the defendant to the plaintiff. Since the defendant failed to pay the said outstanding amount even after service of legal notice, the plaintiff was constrained to institute the suit.
In support of its claim, the plaintiff got produced a copy of the legal notice sent by it to the defendant and dated 20.6.2003 at Ex.P-1, reply to the said notice sent by the defendant to it at Ex.P-2, a document with two sheets said to be an account extract at Ex.P-3, three invoice copies at Exs.P-4, P-5 and P-6 respectively.
In his cross-examination, PW-1 adhered to his original version.
12. DW-1 in his examination-in-chief in the form of affidavit evidence has reiterated the contentions taken up by him in his written statement. Though he has admitted that he was placing orders with the plaintiff- Company for supply of the electrical goods, but, contended that there was no outstanding liability payable to the plaintiff by him. He further contended that the bank account extract produced by him at Exs.D-1, D-2 and D-3 would go to show that he has honoured three invoices raised by the plaintiff and made payment against them. He also contended that the damaged goods were being returned to the plaintiff through one M/s.Rao & Brothers, a Cargo Movers & Lorry Service, which were duly delivered to the plaintiff. As such also, after giving deductions to the said amount, the defendant is in no way liable to the plaintiff for any amount.
Even in his cross-examination, he adhered to his original version.
13. As already observed above, the business relationship between the plaintiff and the defendant is an admitted fact. However, the only dispute is about the alleged outstanding liability which the plaintiff has claimed as against the defendant. The sole basis for the plaintiff to claim the suit claim against the defendant is the alleged account extract which the plaintiff is claimed to have produced at Ex.P-3.
The plaintiff’s claim is based on accounts. The said aspect is clear in Paragraph-6 of his plaint. He has stated that in the account that was standing in the name of defendant with it as on 1.4.2002, the defendant was shown to be liable to the plaintiff in a sum of `49,913.98 ps.
14. Ex-P3 is a two-sheet document, showing to be of the period from 01-04-2001 to 17-01-2003. In the said document, at sheet-2, the closing balance is shown as `49,913-98 which the plaintiff - Company claims to be the due amount payable by the defendant to it. However, the very acceptability of the said document has been seriously disputed by the learned counsel for the appellant in his argument. Admittedly, Ex.P-3 is not the original ledger or the Books of account, but, it is a computer printout without any certification with express words by the plaintiff - Company certifying the same as the true extract of the original or in any manner to that effect, except bearing a rubber stamp and signature of a person said to be the authorised signatory of the plaintiff - Company. Thus, admittedly, Ex.P-3 is not a primary evidence. Nothing had prevented the plaintiff – Company to produce the primary evidence in the form of any ledger or books of account said to have been maintained by it in its daily business. There is no evidence to contend that Ex.P-3 is a true extract of its original. Had Ex.P-3 been in its original, the plaintiff – Company was expected to produce the same in its entirety showing all the details of the transactions with its authentication by an authorised signatory certifying the same.
15. Admittedly, in the instant case, even though PW-1 has produced the said document, but, he has not got marked the signature of the alleged authorised signatory in the said document. As such, without any marking of the signature or without any evidence to the effect that, the same is true and accurate extract of the original ledger, Ex.P-3 is produced. When the said document, admittedly, is not a primary evidence, then, it has to be seen, whether the said Ex.P-3 amounts to a secondary evidence. Even with respect to the fulfillment of the requirement of a secondary evidence also, the said document falls short of fulfilling the ingredients as required under Section 63 of the Indian Evidence Act, 1872 (hereinafter for brevity referred to as the “Act”). It does not have any certification, as such, it cannot be called as a certified copy given under the provisions of the Act and it is not shown that it is a copy made from the original from a mechanical process or it is not shown as a copy compared with the original. Admittedly, it is not even a counter part of a document as against the parties who did not execute the document. Thus, in the absence of any corroborative evidence to accept the said alleged account extract, as a proof for establishing the alleged liability of the defendant, since the said document does not fulfill any of the criteria, it cannot be taken as a primary evidence. The reliance on the said document to arrive at the alleged liability of the defendant cannot be considered. As such, the plaintiff who has solely relied upon the said document as the only basis for his alleged claim against the defendant could not able to establish the alleged liability of the defendant.
16. Admittedly, Exs.P-4, P-5 and P-6 are only the invoices which do not bear any acknowledgement of the defendant for having received the goods mentioned therein. However, it is not the case of the plaintiff that the alleged liability of the defendant was towards any one or more of these invoices at Exs.P-4 to P-6. As such, except considering them as three invoices, no additional value or weightage can be given to those documents.
17. The defendant has produced his Bank account statement at Exs.D-1 to D-3 spread into three sheets to show that, he has made payment to the plaintiff/appellant as depicted in those three statements for a sum of `41,465/-, `39,215/- and `49,430/- respectively.
18. Another document produced by him at Ex.D-5 is also with respect to the very same amounts with their invoice numbers. Those three payments alleged to have been made by the defendant have been accounted for in Ex.P-3 in the entry of the invoices dated 22-06-2001, 31-07-2001 and 29-08-2001 respectively. As such, Exs.D-1 to D-3 and Ex.D-5 would not, in any way, go to the aid of the defendant. However, since the initial burden is on the plaintiff to show the alleged outstanding liability and in view of the observation made above about Ex.P-3 and observing that Ex.P-3 cannot be taken as a proof of the alleged outstanding liability of the defendant, suffice it to say that the plaintiff has failed to prove that the defendant was liable to him in a sum of `49,913-98.
19. The Trial Court without analysing the documents in its proper perspective was carried away by Ex.P-3 and held that the plaintiff could able to prove the alleged outstanding liability of the defendant against it. Further, it also causes a burden on the defendant to establish that he had returned the damaged goods and as such, he had deducted the payments towards the alleged damaged goods. However, it failed to notice that the said situation of considering the alleged return of the damaged goods would not be of any material effect, in the case on hand, since the plaintiff initially has failed to discharge his burden of proving the alleged outstanding liability by the defendant towards him. Thus, it has to be held that, the finding given by the Trial Court on issue Nos.1 and 2 in the ‘affirmative’ is proved to be erroneous.
20. The plaint is filed on behalf of the appellant - Company by one Sri. A. Augustian, claiming himself to be a Senior Manager - Accounts and the General Power of Attorney holder for the appellant Company. The defendant in his Written Statement has taken a contention that the plaintiff - Company has not been properly represented and the alleged signatory has got no power or authority to represent the plaintiff - Company. In that regard, PW-1 in his evidence has stated that he is the Senior Manager - Accounts and General Power of Attorney holder of the plaintiff - Company. However the same was denied in his cross- examination from the defendant’s side.
21. PW-1 – A. Augustian, though has stated that, he is a General Power of Attorney holder of the plaintiff - Company, but has failed to mark any such document in his support showing that he was authorised to represent the plaintiff - Company. When the plaintiff - Company is undisputedly being a registered Company under the Companies Act, 1956, it was expected to pass a resolution by the Board or execute any appropriate document authorising any one of its employees or any person to represent it in any litigation against the third parties. In the absence of any such document and in the absence of any cogent evidence, it cannot be accepted that the signatory of the plaint and DW-1 were authorised to represent the plaintiff - Company. On this point also, the Trial Court, without assigning any reasons, has simply stated that, merely because DW-1 claims to be a Senior Manager – Accounts of the plaintiff - Company, he was authorised to represent the Company. Under the said observation, it proceeded to decree the suit of the plaintiff - Company.
22. However, in view of the above analysis that, even PW-1 also has not produced any document to show that he was authorised to represent the plaintiff – Company, merely because his designation appears to be a Senior Manager – Accounts, it cannot be held that he was authorised to represent the plaintiff - Company. His evidence as PW-1, at the maximum, would only be an evidence of a formal witness for the plaintiff, but not in his capacity as a representative of the plaintiff- Company. As such also, the suit filed by the plaintiff in the absence of any authorised representative to institute the suit was not maintainable. However, the Trial Court did not appreciate the said aspect in its proper perspective which has resulted in it decreeing the suit of the plaintiff.
23. Since in the above discussion, the said finding of the Trial Court is now found to be erroneous, the impugned judgment and decree passed by the Trial Court deserves to be set aside. Consequently, the suit filed by the plaintiff deserves to be dismissed.
Accordingly, I proceed to pass the following: -
ORDER [i] The Appeal is allowed;
[ii] The impugned judgment and decree dated 05-01-2011, passed by the learned III Additional City Civil and Sessions Judge (CCH-25), Bengaluru City, in O.S.No.5705/2004, is hereby set aside;
[iii] The suit of the plaintiff in O.S.No.5705/2004 is dismissed;
[iv] There is no order as to costs;
[v] The amount, if any, deposited by the appellant in this appeal be refunded to him after the period of appeal and if no appeal is preferred.
Registry to transmit a copy of this judgment along with lower Court records to the Trial Court without delay.
bk/BMV* Sd/- JUDGE