The High Court · 2025

acknowledgment from the defendant under fax dated 14.07.2004, wherein ^\.^_-. 2 AKS,J&P'RKR,J CCCA No.39 2014 the defendant requested for the Goods Receipt Notes. After adjustment of an amount of {4,11,7881- towards maintenance charges, the defendant stood indebted to a sum of {14,89,000/, out of which part payment of <4,40,796l- was affected by cheque dated 17.07.2004. Despite repeared demands and the issuance of a legal notice dated 17.ll.20}4,the defendant failed and neglected to pay the balance amount. The conduct of the defendant compelled the plaintiff to institute the above suit seeking recovery of the balance amount of {l 0,48,204/- together with interest at lSoh per annum from February, 2002 till January 2005, aggregating to Rs.18,52,264/-.

4. In reply to the plaint averments, the defendant filed written statement and additional written statement denying the claim of the plaintiff. tt is contended that the suit is not maintainable either on facts or in law, as there was no agreement or privity of contract between the parties in respect of the alleged purchases, and the plaintiff had no authority, either oral or written, to procure material on behalf of the defendant. The letter dated

12.08.2004 relied upon by the plaintiff only pointed out breaches and misrepresentations on the part of the plaintiff, for which the defendant suffered losses, and despite such loss, a sum of Rs.2,00,000/- was paid as an advance to the plaintiff. It was further contended that no promise to (r --,. ) 3 .{KS.J&YI{KR,J (:C('.4,Yo.39 _2014 reimburse the alleged costs was made by him and that ttre issuance of a cheque dated 17.07.2004 has been misrepresented by the plaintiff and in fact, the def-endant has always acted fairly and never played any fraud. II. ISSUES FRAMED BY THE TRIAL COURT:

5. Based on the above pleadings, the trial Court framed the following issues for determination: (i) Whether there is privity of contract between the plaintiff and the defendant? (ii) Whether the plaintiff purchased material, at the request of the del'endant? (iii) Whether the plaintiff is entitled to the decree, as prayed for? (iv) To what relieP III. EVIDENCE ON RECORD

6. During the course of trial, the plaintiff examined himself as PWI and got marked Exs.Al to A25 on his behalf, whereas the Senior Manager- Accounts for the defendant was examined as DWI and got marked Ex.Bl on behalf of defendant. IV. FINDINGS OF THE COURT:

7. After considering the rival contentions, the trial Court, by judgment dated 13.06.2013, decreed the suit in favour of the plaintiff holding that I 4 AKS,J&YRKR,J CCCA No.39 2014 there is a privity of contract between the plaintiff and defendant and the plaintiff purchased the cable material in order to sell the same to the defendant and as the suit transaction is a commercial transaction, the plaintiff is entitled to interest at the rate of l2o/o per annum.

8. Aggrieved by the same, the defendant filed the present Appeal to set aside the impugned judgment and decree. V. SUBMISSTONS OF THE.PARTIES: a)

9. The learned counsel for the appellant/defendant submits that the impugned judgment and decree, is vitiated by perversity, inasmuch as the trial Court, having itself recorded that there existed no document of contract between the parties and that there was no documentary evidence evidencing any agreement between them, has nevertheless proceeded to decree the suit in favour of the plaintiff. It is further argued that t[re trial Court overlooked the categorical admission of the plaintiff/respondent in his own evidence that the defendant never issued any letter for supply of TV cable material to him, nor is there any written assurance given by the defendant regarding reimbursement of any alleged cost incurred by the plaintiff and in the absence of such foundational evidence, the decree passed by the trial Court is wholly unsustainable. The learned counsel lor /" { 5 AKS,J&''RKR,J CCCA No.39 2014 the appellant/delendant submits that the trial Court ourght not to have decreed the suit once it had already observed that the plaintiff had failed to establish that h,.: purchased the alleged material for and on behalf of the defendant. It is further submitted that the trial Court grossly erred in answering Issue No.l (whether there was privity of contract between the plaintiff and the defendant) in favour of the plaintiff merely on the basis of statements elicited in the cross-examination of DWl, wherein he referred to one Milind Karnik at Mumbai and one Ch. Rajasekhar at Hyderabad giving certain instructions to the plaintiff. The said inference drawn by the trial Court is wholly. rnisplaced, as such third-party references cannot establish a contractual relationship between the plaintiff and defendant in the absence of docurnentarr, evidence.

10. The learned counsel for the appellant/defendant further argued that the trial Court committed a grave error in answering Issue No.2 (whether the plaintifl'purchased material at the request of the defendant) in favour of the plaintif{ despite recording a clear finding that rhe alleged goods covered under Exs.Al0 and Al l, dated 29.04.2004, 04.05.2004,

11.04.2004 and 24.04.2004, were not delivered, as there was no goods receipt signed by the authorized person. T 6 AKS,J&YRI{R.J CCCA No.39 2014 I

11. The learned counsel for the appellant/defendant submits that the plaintiff failed to explain as to why the invoices were produced only in 2004 when the alfeged purchases were said to have been made in February 2002 and no material was filed showing the break-up of amounts under each invoice. The lack of such particulars abundantly demonstrates that the said invoices are fabricated and manipulated documents. b) Submissions on behalf of the resoondent (partv-in-oersod:

12. The respondent/plaintiff submits that in or about February, 2002, the appellanVdefendant approached the respondent/plaintiff and requested hi m to purchase cable network material like amplifiers, RG-l l, RG-6 cables, cable accessories, etc. The appellant/defendant promised to reimburse the respondent/plaintiff of all that cost that would be incurred by the respondenUplaintiff for the said material and influenced by the appellant's/defendant's superior bargaining position and previous financial dealings, the respondenVplaintiff purchased the materials, expecting proper settlement for the expenses. However, later, at the request of appellant/defendant, the respondent/plaintiff forwarded the bills on

29.06.2004, which the appellant/defendant acknowledged but then requested a Goods-Received Note (GRN). The appellant/defendant subsequently adjusted a sum of Rs.4,11,788b against maintenance owed by .4 7 .AKS,J&I'RKR,J CCCA No.39 2014 the respondent/plaintiff and issued a cheque of Rs.4,.10,7961- as part payment in Decr:rnber 2004,leaving an outstanding balance.

13. The respr>ndent/plaintiff turther submitted that there are numerous written requests and notices between June and November 2004 that led to further delays by the appellant/defendant, who admitted the transactions but avoided payment. Despite repeated assurances, the appellant/defendant continued to withhold the remaining principal balance of Rs.10,48,204/- and left without other remedies, the respondent/plaintiff served a legal notice dated 17.11.2004 and ultimately filed a suit for: recovery of the outstanding amount, with accrued interest calculated al. l8o/o per annum from February 2002 to January 2005, totaling to an amount of Rs.18,52,2641-.

14. The respondent/plaintiff further submits that the trial Court has rightly decreed the suit for recovery of sum of Rs.18,52,264/- with subsequent intcrest at l2%o per annum from the date of fiiing of the suit till the date of decree and thereafter, at 6oh per annum till realization on the principal amount of Rs. 10,48,2041-, andthat there being no merit in the present appeal. prayed to dismiss the same. t. n ,1t j 8 AKS,J&VRKR,J CCCA No.39 2014

15. Heard both sides and perused the record including the grounds of appeal W. ISSUE FOR CONSIDERATION:

16. Having heard the leamed counsel appearing for the appellant and the respondent (party-in-person) and having gone through the material on record, the only issue that arises for consideration in this Appeal is: " l[lhether there are any grounds to set aside the impugned judgment dated 13.06.2013 passed in O.5.No.255 of 2005 on the file of XIV Additional Chief Judge (FTC), City Civil Court? " VII. ANALYSIS:

17. As seen from the record, the Senior Manager Accounts of the defendant, who was examined as DWl, admitted in his cross examination that one Milind Karnik at Mumbai and one Ch. Rajasekhar at Hyderabad gave instructions to the plaintiff with regard to the suit contract and other contracts. Admittedly, Milind Karnik is the President and Company Secretary (Finance) of the defendant working since 2000.

18. The cross examination of DWl further reveals that defendant paid an amount of Rs.4,40,796/- to the plaintiff for the material purchased by the ptaintiff on behalf of the defendant and the same was marked as Ex.A8 and that the amount mentioned in Ex.A8 is equyxdlent with the amounts of item 9 AKS,J&''RKR,J CCCA No.39_2014 Nos.5 to 9 of lrx.A2l. In the cross examination of PWl, the learned counsel for the r-lefendant gave a suggestion that Ex.A8 was created for the purpose of the suit. on one hand, the defendant admiits that Ex.A8 is equivalent with the amounts of item Nos.5 to 9 of Ex.A2l and on the other, contends that Ex.A8 is created for the purpose of this case. The defendant cannot blow hot and cold at a time on the same issue.

19. Once the defendant admitted about the instructions given by its agents to the plaintiff in regard to suit transactions and also about the payments madi: by them to the plaintiff towards suit transactions, the defendant cannot deny the liability to pay the amount to tl're plaintiff on the ground of lack of privity of contract between plaintiff and defendant.

20. The learned counsel for the appellant/defendant submits that the trial Court grossly rnisdirected itself in relying upon DWI's admission that he knew the plaintiff as one who sold networks to the defendant and that mere acquaintance or past business dealings cannot, by any stretch, amount to proof of the alleged contract in the present case.

21. The learned counsel for the appellant/defendant submits that there was no material proof filed by the plaintiff to establish that the defendant ever informed him about adjustment of Rs.4, 11,788/- towards maintenance i l0 AKS,J&I/RKR,J CCCA No.39-2011 of network and assured payment of the balance of Rs.14,89,000/- and no authentic documentary proof was filed by the plaintiff to establish that the alleged payment of Rs.4,40,796/- by way of cheque dated 17.07.2004 was in relation to the suit transaction. On the contrary, the said cheque predates the issuance of the legal notice under Ex.Al8 dated 17.11,.2004. The cheque was realized only on 16.12.2004, clearly showing that it related to an independent transaction and not to the alleged purchases under dispute. In the absence of such proof, the finding of the trial Court is wholly unsustainable.

22. The learned counsel for the appellant/defendant further submits that the trial Court failed to apply the settled principle of law that the plaintiff must succeed or fail on the strength of his own case, and cannot take advantage of weaknesses in the defence, therefore, the impugned judgment is liable to be set aside on this ground alone.

23. There is absolutely no doubt that the plaintiff has to depend upon his own case rather than depending upon the weakness of the defendant. However, it is also to be seen that the plaintiff had not only relied upon his oral evidence but also relied upon documentary evidence under Exs.Al to A25 and thus, it cannot be said that the plaintiff relied upon weakness of the defendant to establish his case. ,,/ 1l AKS,J&TRKR,J CCCA No.39-2014

24. It is also pertinent to note that in the cross examination, PWI was given a suggesl.ion by the leamed counsel for the delrendant that the plaintiff had already received the suit claim from the defbndant and that he filed a false suit against the defendant. [nitially, the defendant denied about the existence of any contract between plaintiff and defendant and at a later stage, defendant gone to the extent of giving suggestion that the plaintiff had already received the suit claim from the defendant. Once the defendant denied the claim of the plaintiff on the ground of lack of privity of contract between plaintiff and defendant, the question of payment of consideration on the said contract does not arise. 'Ihus, the above suggestion given by the leamed counsel for the defendant to PWI draws an adverse inference against the defendant that the plaintil'f performed his part of contract as per the instructions given by the agents of the defendant, who is liable to pay the consideration to the plaintiff for the services rendered by the plaintiff Thus, the defendant cannot approbate an,C reprobate on the same aspect.

25. There is no dispute that the plaintiffrPWl and defendant have acquaintance rvith each other as the plaintiff used to be an agent of the defendant. Even as per the contention of the defendant, there were transactions between defendant and plaintiff in connection with cable t2 AKS,J&VRKR,J CCCA No.39 2014 network business. Admittedly, there was correspondence between plaintiff and defendant under Exs.A4 to A7, Al6 to A18. Subsequent to issuance of legal notice dated 17.1 I .2004 under Ex.A I 8, the defendant obtained receipt dated 16.12.2004 from the plaintiff under Ex.A8 by issuing cheque dated

17.07.2004 for Rs.4,40,7961-. [t is to be seen that without there being any transaction, the defendant would not be compelled to issue cheque for Rs.4,40,7961-. The trial Court has rightly observed in the impugned judgment at paragraph No.20 that if the defendant is not liable to pay any amount to the plaintiff, there is no need for the defendant to give cheque for an amount of Rs.4,40,7961-.

26. The admission of DWI in his testimony stated that he was acquainted with the plaintiff, who had been selling networks to the defendant and had acted as a consultant for its cable operations, cannot be disregarded. Mere acquaintance or past business dealings, by themselves, may not establish a contractual obligation in every case. However, in the present case, the record discloses that even during the pendency of the suit, in the year 2008, the plaintiff and the defendant entered into a Business Transfer Agreement under Ex.A25, whereby the plaintiff assigned, transferred and conveyed his primary point business in favour of the defendant along with all his rights, title and interest therein. This v I i I I I i ! ; ! i,! ? : j I i i, T { Ii l1 F I I i I *t { i i I 13 .,,lKS,J&I/RKR,J CCCA No.39-2014 subsequent conduct of the parties establishes that there existed a continuing course of business transactions between the parties.

27. An agent acts on behalf of a principal to create or rnodi$r legal relations u,ith a third party. A principal is bound by- the acts of its agent, provided the agent acts within the scope of their authority. When an agent makes a contract with a third person on behalf of their principal, the principal incurs the rights and obligations of that contract and not the agent. By admitting that its agents gave instructions to the plaintiff, the defendant confirms that lhe agents were acting on its behalf-. 'l'his establishes a principal-agent relationship and the def'endant's liability fbr the agents' actions. Even if a formal agency agreement was not initially clear, the defendant's actions such as acknowledging the plaintitfs rights and making payments constitute an admission. This is a recognizerJ exception to the privity rule, le6ially binding the defendant to the transaction. Therefore, the defendant cannot hide behind a technical lack of direct privity of contract. 'Ihe adrnissions establish the defendant's involvement and accountability fbr the transaction as the principal, making it directly liab,le to the plaintiff.

28. It is not the case of the defendant that the plaintiff is a stranger to the defendant. It is not even the case of the defendant that there were no transactions at all between the plaintiff and defendant. It is also to be seen 'btE \ -f I : T I t I I I I ; I I ,1 i $ t [, t: t I t I i I i I I I I t I ! ! A ! i I d ,j i I I l4 AKS,J&YRKR,J CCCA No.39_2014 that both the plaintiff and the defendant are dealing with same business. But unfortunately, as stated by the plaintiff, he being a small cable TV operator, was in a disadvantageous position, that compelled the plaintiff to accept the offer of the defendant to purchase goods on behalf of the defendant. Having denied the purchases made by the plaintiff on behalf of the defendant in the letter dated 12.08.2024 under Ex.A17, no plausible explanation was given by the defendant as to what prompted it to make payments to the plaintiff. A perusal of Ex.A22 i.e., reply sent by defendant to the plaintiff through FAX, it is clear that the defendant denied the payments towards the bills sent by the plaintiff. The defendant having received the earlier bills of SR Agencies with Goods Received Note, rejected the same without any ground. It further reveals that the plaintiff also sent bills for Krishna CATV Systems Private limited and the said bills were rejected on the ground that the bills were without Goods Received Note. Thus, Ex.A22 makes it clear that defendant has been refusing all the bills sent by plaintiff i.e., bills with Goods Received Note or bills without Goods Received Note. Thus, the malafide intention of the defendant towards plaintiff is evident from its conduct. Perhaps that is the reason as to why the plaintiff was compelled to send the invoices pertaining to the year 2002 in the year 2004, more particularly, when the defendant has been refusing to clear the payments to the plaintiff on one pretext or the other. r'F 15 J(.5: .,/.T I'RKR, J CC('A n'o.-t9 2014 Even as per E>..A2, it is the defendant, who requested the plaintiff to arrange for the (ioods Received Note for earlier bills sent by the plaintiff. I !, i I \. VIII. CONCI,I]SION: f

29. In view of the foregoing discussion and upon an exhaustive consideration of the material available on record, both oral and documentary, v,,e are persuaded to hold that the learne,J trial Court had rneticulously appreciated the evidence adduced by both sides. The trial Court, on a careful evaluation of the pleadings and proof, has rightly decreed the suit in favour of the plaintiff. We are unatrle to discern any perversity, illegality or material irregularity in the findings so recorded by the trial Court. On the contrary, the judgment of the Trial Court appears to be well reasoned, supported by evidence, and in consonance with settled principles of law. We, therefore, find no tenable g;round warranting interference with the judgment and decree impugned here,in. Consequently, the appeal, being devoid of merits, is liable to be dismissed. IX. RESULT:

30. Accordirrgly, and in the result, the appeal fails and is hereby dismissed. [n the facts and circumstances of the case, ure direct that there shall be no order as to costs. l6 AKS,J&YRKR"J CCCA No.39_2014

31. As a necessary corollary, all pending miscellaneous/interlocutory applications, if any, in the a.ppeal, shall also stand closed. SD/. P.GOWRI SHANKAR DEPUTY REGISTRAR //TRUE COPY/ SECTION OFFICER \ To,

1. The XIV Addl. chief Judge, (FTC), City civil court at Hyderabad(with records, if anY)

2. One CC to SRi A TULST RAJ GOKUL, Advocate [oPUC] 3. One CC to tVls. VEDULA CHITRALEKHA, Advocate [oPUC] 4. Two CD CoPies O ADK/PSL I t HIGH COURT DATED 10711012025 JUDGMENT+DECREE 2 DRAFTS CCCA.No.39 of 2014 DISMISSING THE CCCA WITHOUT COSTS a [ 34e0 I IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE SEVENTH DAY OF OCTOBER TWO THOUSAND AND TWENW FIVE PRESENT THE HONOURABLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HONOURABLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY CITY CIVIL COURT APPEAL NO: 39 OF 2014 Between: Hathway Cable AND Data Com Pvt. Ltd., Having Registered Office at Rahejas, 4th Floor, Main Avenue, Santacru,Mumbai Branch Off.,Flat No. 603 and 604, Himayathnagar, Hyderabad. ...AppellanUDefendant AND B.V. Rama Narasimha Redd 405, Major REsidency, Opp ly,, S/o. B. Bhaskar Reddy, Business R/o. Flat No Police Officers Mess, Masab Tank, Hyderabad. ... RespondenUPlai ntiff Appeal under section 96 of C.P.C against the Judgment and Decree Dated 13-06-2013 made in O.S.No.255 of 2005 on the file of the Court of the XlVAddl. Chief Judge, (FTC), City Civil Court at Hyderabad. This appeal coming on for hearing and upon perusing the grounds of appeal, the Judgment and Decree of the Lower Court and the material papers in the Case and upon hearing the arguments of SRI A TULSI RAJ GOKUL, Advocate for the Appellant and of MS. VEDULA CHITRALEKHA, Advocate for the Respondent. This Court doth Order and Decree as follows:

1. That the CCCA be and hereby is dismissed; 2. That there shall be no order as to costs in this appeal SD/. P.GOWRI SHANKAR DEPUTY REGISTRAR /TRUE COPY// S ION OFFICER \

1. The XIV Addl. chief Judge, (FTC), city civit court at Hyderabad 2. Two CD Copies 6 ooxrrsl To, I I HIGH COURT DATED i0711U2A25 DECREE CCCA.No.39 of 2014 DISMISSING THE CCCA WITHOUT COSTS r.]