IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.344 OF 2011 BETWEEN:
Mr.Shreeyan Sukumar, Aged about 57 years, S/o Late Dasharathaiah Liquor Wholesaler, C/o.Balaji Lodge, Near Government High School Field, B.H.Road, Tumkur – 572 101. .. Appellant ( By Sri Imran Pasha, Advocate ) AND:
M/s.Mysore Sales International Limited, Having its registered office at MSIL House, No.36, Cunningham Road, Bangalore – 560 052, Represented by its General Manager (Company Secretary) Sri A.M.Rao. .. Respondent ( By Smt. Kusuma M., Advocate ) This Regular First Appeal is filed under Section 96 read with Order 41 of CPC, against the judgment and decree dated 4.11.2010, passed in O.S.No.2206/2007, on the file of the 42nd Addl.City Civil and Sessions Judge, Bangalore, decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing, this day, the Court delivered the following:
JUDGMENT The suit filed by the present respondent as a plaintiff against the present appellant arraigning him as defendant in the Court of learned 42nd Addl.City Civil & Sessions Judge, Bengaluru City (CCH No.43), (hereinafter for brevity referred to as `trial Court’), in O.S.No.2206/2007, for the recovery of a sum of `2,57,241.68 ps. together with interest thereupon at the rate of 15% p.a., came to be decreed for a sum of `1,63,977.08 ps. together with future interest thereupon by the judgment and decree dated 04.11.2010. It is against the said judgment and decree, the defendant has preferred this appeal.
2. The summary of the case plaintiff in the trial Court is that, it is a Company incorporated under the Companies Act, 1956 and is also an undertaking of Government of Karnataka. As a part of its activities, it transacts as a Distributor of liquor products as per the licence granted by the Excise Department of the State Government. On the request of the defendant, the plaintiff had supplied and delivered IMFL, Beer and liquor products from time to time and on June 2003 to the defendant, for which, there was an outstanding due for a sum of `18,68,347.08 ps. payable by the defendant as at the end of June 2003. However, the defendant had remitted a sum of `17,04,370/-, keeping an outstanding liability of `1,63,977.08 ps. The said amount being due from the defendant, the plaintiff got issued a legal notice to the defendant on 30.12.2006, calling upon the defendant to pay the outstanding balance amount. Since the defendant failed to repay the said amount, the plaintiff was constrained to institute the suit for recovery of money, including the interest thereupon.
3. In response to the suit summons received by him, the defendant appeared through his counsel and filed his written statement, wherein he denied the plaint averments made by the plaintiff. He denied that there was any supply and delivery of IMFL, Beer and other liquor products to him from time to time and during 2003 by the plaintiff and that there is a due of a sum of `1,63,977.08 ps. by him towards the plaintiff. Thus, the defendant denied his alleged liability towards the plaintiff.
4. Based on the pleadings of the parties, the trial Court framed the following issues :
1. Whether the plaintiff proves that it supplied liquor to the defendant?
2. Whether the suit is barred by limitation?
3. Whether the plaintiff is entitled to the sum claimed?
4. To what order or decree?
In support of its contention, the plaintiff got examined its Deputy General Manager as PW-1 and General Manager as PW-2 and got marked documents from Exs.P-1 to P-9. However, considering the memo filed by the plaintiff on 1.3.2010, to the effect that PW-1, whose cross-examination was still due, had left the plaintiff-Company, the evidence of PW-1 was rejected. As such, from the plaintiff’s side, the evidence available is that of only PW-2. The defendant got himself examined as DW-1. No documents were marked from his side.
After hearing both side, the trial Court by its judgment and decree dated 04.11.2010, answered issue No.1 in the affirmative, issue No.2 in the negative, issue No.3 partly in the affirmative and decreed the suit of the plaintiff as aforesaid. It is against the said judgment and decree, the defendant has preferred this appeal.
5. Lower Court records which were summoned were misplaced by the Lower Court Records Section of this Registry, as such, the parties were permitted to produce the certified copies of the lower Court records if they are in their possession. Accordingly, the appellant/defendant has produced the entire set of the certified copies of the lower Court records, including the order sheet/proceedings sheet, plaint, written statement, issues, depositions of PW-1 and PW-2, Exhibits in `P’ series and deposition of DW-1 with duly indexing them. With the consent from both side, the said certified copies were considered as the lower Court records for disposal of this appeal.
6. Heard the arguments 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. In the light of the above, the points that arise for my consideration are :
1) Whether the finding of the trial Court that the plaintiff has proved the supply of liquor to the defendant is an erroneous finding?
2) Whether the suit is barred by limitation?
3) Whether the judgment and decree under appeal deserves any interference at the hands of this Court?
At the outset, it is the argument of learned counsel for the appellant/defendant that the suit itself was not maintainable, because, admittedly the entire assets and liabilities of the plaintiff-Company was taken over by the Karnataka State Beverages Corporation Limited (hereinafter for brevity referred to as `KSBCL’), after July 2003. As such, the suit which was instituted by the present plaintiff, but, not by said KSBCL subsequent to July 2003, is not maintainable.
9. Learned counsel for the respondent/plaintiff in her submission contended that the suit being twelve years old suit and as the defendant has not taken up any such contention in his written statement, now he cannot take such a contention as to the maintainability.
10. Learned counsel for the appellant in order to substantiate his contention that the suit was not maintainable, drew the attention of this Court to some portion of the evidence of PW-2, who, in his cross- examination, has admitted a suggestion that, after July 2003, KSBCL has taken over the liquor business from the plaintiff-Company. He also admitted a suggestion as true that, after July 2003, the entire liquor business is looked after by the said KSBCL. He also admitted a suggestion as true to the effect that the said KSBCL is doing liquor business in the State of Karnataka and there was a written document between the plaintiff (MSIL) and the said KSBCL. He also admitted a suggestion as true that in the said document, it is mentioned that all the assets and liabilities of MSIL have stood transferred to KSBCL. However, PW-2 denied a suggestion that the plaintiff-Company has no locus standi to institute the suit against the defendant.
11. No doubt, PW-2 in his cross-examination has admitted a suggestion as true that after July 2003 and after KSBCL taking over of assets and liabilities of MSIL, it is said KSBCL which is doing the liquor business in the State of Karnataka. However, it is worth to be noticed that no contention was taken up by the defendant at the earliest opportunity in his written statement.
The Hon’ble Supreme Court in National Textile Corporation Ltd., -vs- Nareshkumar Badrikumar Jagad and others, reported in AIR 2012 SC 264, was pleased to observe at Paragraph-7 as below :
” 7. Pleadings and particulars are necessary to enable the Court to decide the rights of the parties in the trial. Therefore, the pleadings are more of help to the Court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may adduce appropriate evidence on the said issue. It is a settled legal proposition that “as a rule relief not founded on the pleadings should not be granted”. A decision of a case cannot be based on ground outside the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to narrow the area of conflict and to see just where the two sides differ”.
In the very same case, at Paragraph-29, the Hon’ble Apex Court was further pleased to observe as below :
“ 29. ……… It is a settled legal proposition that an agent cannot be sued where the principal is known. In the instant case, the appellant has not taken plea before either of the courts below. In view of the provisions of Order VIII, Rule 2, CPC, the appellant was under an obligation to take a specific plea to show that the suit was not maintainable which it failed to do so. The vague plea to the extent that the suit was bad for non- joinder and, thus, was not maintainable, did not meet the requirement of law. The appellant ought to have taken a plea in the written statement that it was merely an `agent’ of the Central Government, thus the suit against it was not maintainable.”
In the instant case, it is for the first time, such a point is canvassed in this appeal regarding maintainability. In fact, no specific suggestion regarding the maintainability in the express terms was also not made to PW-2 in his cross-examination. Since the question of maintainability is not a pure question of law, but, in the facts and circumstances of the case, it is purely a question of fact. There ought to be necessarily some pleading in that regard, more particularly, in the written statement filed by the defendant. Admittedly, there is no such plea taken up by the defendant in his written statement. As such, the plaintiff had no opportunity to meet the contention of the alleged non-maintainability of the suit while leading his evidence in examination-in-chief as PW-2. Had such a plea has been taken by the defendant in his written statement, then, the plaintiff in his evidence as PW-2 would have come up with his stand or defence in that regard. Therefore, on a question of fact, in the absence of any pleading, any amount of evidence led by the party cannot be considered.
Further, PW-2 even in his cross-examination also has no where stated that KSBCL is the only successor which can proceed to institute cases against the alleged defaulters, rather, PW-2 has denied a suggestion that it has no locus standi to institute the suit against the defendant. PW-2, apart from denying a suggestion that since the liability has been taken over by KSBCL, the plaintiff has no right to file a suit or to collect funds from the defendant, has also stated that the statement of account was maintained by MSIL (plaintiff) and recoveries by KSBCL are also adjusted in the said account. Thus, PW-2 in his evidence has shown that, even though the assets and liabilities are alleged to have taken over by KSBCL, still, so far as the old customers are concerned i.e., transactions up to the end of June 2003, it is MSIL which is still an existing Company by itself is maintaining the accounts and taking actions for recovery of the alleged dues.
For the above two reasons, the first point of argument of the learned counsel for the appellant that suit is not maintainable is not acceptable.
12. The second point of argument of learned counsel for the appellant is that the plaintiff has failed to prove the outstanding due from the defendant and the alleged supply of the liquor. In that regard, the evidence of PW-2 and DW-1 is required to be looked into.
Both PW-2 and DW-1 have reiterated in their evidence in Examination-in-chief which was led in the form of filing of an Affidavit evidence, the contents of what they have stated in their plaint and the Written Statement respectively. Apart from stating that the defendant was being supplied with IMFL, beer and liquor products from time to time, PW-2 has also stated that, as on June 2003, as against an outstanding due of a sum of `18,68,347-08, the defendant had remitted only a sum totaling to `17,04,370/-, thus, leaving behind a balance of a sum of `1,63,977-08 as the due amount payable to the plaintiff.
PW-2 has also stated that the legal notice in that regard was also issued to the defendant which invoked no response from him. As such, the plaintiff - Company was constrained to institute a suit against the defendant.
PW-1 in his evidence had got produced and marked a copy of the legal notice issued by the plaintiff – Company to the defendant at Ex.P-1; postal acknowledgement to show service of said legal notice upon the defendant at Ex.P-2; Statement of Account Extracts alleged to have been maintained by the plaintiff – Company at Ex.P-3 initially. However, subsequently through PW-2, a copy of the invoice cum delivery challan, two copies of Power of Attorney and one more copy of the invoice cum delivery challan which was earlier produced, postal receipt and ‘Under Certificate of Posting’(UCP) were also produced and marked as Exs.P-4 to P-9 respectively. Among these Exhibits, Exs.P-4 to P-7 are one and the same documents.
In the cross-examination of PW-2, it was elicited that, after July-2003, it was Karnataka State Beverages Corporation Limited (KSBCL) which took over the Assets and Liabilities of the plaintiff - Company. However, the witness has also stated that the said KSBCL has intimated the plaintiff to take action for recovery and accordingly, the plaintiff demanded repayment of the outstanding due from the defendant. Several denial suggestions made to PW-2 in his cross-examination were not admitted as true by the witness.
13. DW-1 in his Examination-in-Chief has denied the alleged transaction with the plaintiff and has denied his alleged outstanding liability towards the plaintiff - Company. However, in his cross-examination, he has stated that he was doing transaction with MSIL about five to six years back. Once again, he has stated that he had transactions with the plaintiff for ten to fifteen years. He admitted a suggestion as true that till 2005, he had transactions with MSIL and thereafter for a period of two years till 2007, he did not have any transaction with it. He also admitted the receipt of legal notice dated 30-12-2006 as per Ex.P-1, by him. He also admitted as true that a demand for payment of `1,63,977-08 was made in the said legal notice and he did not reply to the said legal notice. However, he denied that he was liable to the said extent to the plaintiff. He also stated that he has not received a sales invoice as per Ex.P-4.
14. From a reading of the evidence of the witnesses and also perusal of the documents, it clearly goes to show that, the defendant has not denied the instances of business transaction relationship between him and the plaintiff - Company. Undisputedly, the business transactions of the plaintiff with the defendant were for supply of IMFL, beer and liquor products, etc. Thus, the defendant has not disputed the supply of those goods or articles made to him by the plaintiff - Company.
However, the argument of the learned counsel for the defendant/appellant was that, there is no evidence to show that there was any supply of goods as shown in the invoice at Ex.P-4 (copy of the same is at Ex.P-7 also). Admittedly, the said invoice which shows that some quantum of articles has been supplied by the plaintiff – Company to the defendant, does not bear the signature of the recipient of the goods acknowledging the delivery of goods mentioned therein to him. Even though PW-2 in his cross-examination has stated that they have got a separate document to show that the defendant has acknowledged the receipt of the goods delivered under Ex.P-4, but, the plaintiff has not produced the said document. However, it is noteworthy that the suit of the plaintiff is not just based on Exhibit P-4 and invoices, but, it is based on an account which is said to have been maintained by the plaintiff with respect to the transactions which the defendant had with it. The said account extracts, the plaintiff has produced at Ex.P-3. In the said document, the plaintiff has given the details of the transactions which the defendant had with it. In the said account extracts, there is also reference to the invoice at Ex.P-4 in the entry dated 31-05-2003 and the said invoice of `3,79,847/- is also reflected as an amount due from the defendant. In the subsequent entries dated 09-06-2003 and 16-06-2003, two more credit entries each for a sum of `1,00,000/- is shown as the amounts received from the defendant towards invoice No.19 dated 31-05-2003 which invoice is at Ex.P-4 (and also at Ex.P-7). Therefore, when the defendant is shown to have made a substantial payment towards the said invoice at Ex.P-4 and when the alleged outstanding liability is less than the said invoice amount, it is hard to believe that there was no supply of goods under invoice at Ex.P-4 to the defendant.
Had the goods under Ex.P-4 invoice were not supplied to the defendant, then he would not have made payment totalling to a sum of `2,00,000/- to the plaintiff – Company, as observed above. In case the goods under Ex.P-4 were not supplied to the defendant, the question of the plaintiff claiming any outstanding due which is to the extent of a sum of `1,63,977-08 would not have arisen, because in such a case, payment made by the defendant would have been excess than the goods supplied to him.
Thus, the documents and the evidence of PW-2 only leads to an inference that the defendant was supplied with and received the goods from the plaintiff including the goods shown in Ex.P-4. Further, it is interesting to note that, nowhere in the cross- examination of PW-2, the defendant had made any suggestion to the witness suggesting that he is not supplied with or delivered the goods shown in Ex.P-4. Even DW-1 also in his cross-examination has only stated that he has not received invoice at Ex.P-4, but has not stated that he has not been delivered with the goods mentioned therein. Thus, the argument of the learned counsel for the defendant/appellant that there was no supply of goods to the defendant by the plaintiff – Company, is not maintainable.
15. The Ledger Account Extracts at Ex.P-3 which runs into several pages give the details of the amounts received by the plaintiff from the defendant and about the invoices raised against the defendant while supplying the goods.
It is the argument of the learned counsel for the defendant/appellant that, the said Account extracts no where mention the figure of the outstanding due as on June-2003 and the outstanding liability after giving deductions to the alleged payments made by the defendant.
16. A perusal of Ex.P-3 (Account extracts) would clearly go to show that, in the second page of the said document, the plaintiff has clearly shown that as at the end of June-2003, the outstanding balance was a sum of `18,68,347-08 which is a debit entry, i.e. payable by the defendant to the plaintiff. In the subsequent entries of the same Account extract, after giving deductions to several other credits/payments made by the defendant, the balance went on reducing periodically and ultimately as at the end of March-2005, the outstanding balance is shown as `1,63,977-08 as a debit balance which is payable by the defendant to the plaintiff - Company. As such, the account extracts show the total outstanding due after the amount alleged to have been remitted by the defendant to the plaintiff and the outstanding liability. Thus, the argument of the learned counsel for the defendant/appellant on the said point also, is not acceptable.
On the other hand, the finding of the Trial Court which has held that the plaintiff has proved the supply of goods to the defendant and the outstanding liability in a particular amount as claimed by the plaintiff, finds no error in it.
17. The last point of argument of the learned counsel for the defendant/appellant is with regard to the period of limitation. Learned counsel for the appellant has contended that the suit was barred by limitation because the last alleged supply of goods under invoice No.19 was dated 31-05-2003 as could be seen in Ex.P-4 and the suit was filed on 15-03-2007, as such, the suit was barred by limitation.
Learned counsel for the appellant also submitted that, in the Account Extracts at Ex.P-3, a sum of `43,100/- is shown to have been paid by the defendant to the plaintiff on two different dates, i.e. on 02-11-2004 and 05-11-2004, but, those payments were not made by the defendant, as such, the suit stands barred by limitation.
18. No doubt, a suggestion to the effect that the payment of `43,100/- shown as a last entry in Ex.P-3 was made to PW-2, in his cross-examination, suggesting that the said payments were not made by the defendant, however, PW-2 did not admit the said suggestion as true. Even assuming for a moment that the said amount of `43,100/- has not been paid by the defendant, as such, the plaintiff ought not to have given deduction towards the said amount, still, the previous entry of the alleged payment made by the defendant on the very same day i.e. on 31-03-2005 which is for a sum of `3,25,000/- and other two entries for a sum of `25,000/- each and a sum of `10,000/- which are shown to have been made on 27-03-2004, the credit of which is also given in the very same account in Ex.P-3, has not been denied or disputed by the defendant. As such, even from the said date of last transaction between the parties also, the suit falls within the period of limitation.
19. Apart from the above, it also can be observed that in case a sum of `43,100/- is taken as an amount not paid by the defendant, then, the liability of the defendant towards the plaintiff would further increase by the said sum. Thus, it enhances the burden upon the defendant. However, since the plaintiff has stated that the said amount of `43,100/- is also a payment made by the defendant and after giving deduction to the said amount since the plaintiff has claimed the outstanding due as a sum of `1,63,977-08 only, as on the date of institution of the suit, the said amount alone stands proved as the outstanding liability from the defendant to the plaintiff. Thus, the last point of argument canvassed by the learned counsel for the defendant/appellant that the suit was barred by limitation, also cannot be accepted.
20. Barring the above, the defendant/appellant has not raised any ground worth consideration and in view of the above analysis, since it has been noticed that the plaintiff has proved the issues framed by the Trial Court and has made out a case proving that the defendant is liable to pay the plaintiff – Company the suit claim amount and in view of the fact that the Trial Court after analysing the materials placed before it has arrived at a proper finding on the issues framed by it and has awarded a reduced rate of interest than what was claimed, after considering the circumstances of the case, I am of the view that the impugned judgment and decree does not warrant any interference at the hands of this Court.
21. Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal is dismissed;
[ii] The judgment and decree dated 04-11-2010 passed in O.S.No.2206/2007 by the learned 42nd Additional City Civil and Sessions Judge at Bangalore City (CCH No.43), is hereby confirmed;
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE bk/BMV