M/s. Kaling_a. lndustrial Faste_ners @vt) ltd v. THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA

(Per Hon'bte Smt. Justice Ttrumala Deui Eqda) This is an appeal Iiled by the appellant being aggrievcd by the judgment and decree,. dated 14.03.2005, passed in O.S.No.268 of 1996 by the learned III Senior Civil Jr_rdge, 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 Lhe trial CourL for the sake of convenience and clarity.

3. The brief facts of the case before the triai Cour[ 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 anC sale of this material and therefore, it has been buying and distributing the plaintiffs products. Since the defendant has bee:n purchasing large quantities of material, the plaintiff has permitted the defendant to avail the credit facility. But during the coursc of transactions, the defendant failed to pay the amounts, inspite of ,./ .t 2 AKs,J & ETD,I CCCA No.50 2008 i. reminders made by the plaintiff and r,r,hen thc plaintiff has presented the cheques they were dishonoured. Even after the dishonor of cheques, when the plaintiff requestcd the defendant company, the defendant has failed to pay thc 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, rrled the suit for recovery of money.

4. The defendant company has fited its writtcn 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 u,as induced by M/s.Rourkeia Steel Plant to place such bulk ordcr 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 brough[ 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 3a 3 A(S,] & ETD,] CCCA No.50 2008 Manager of the plaintilT company and that the defendant rvas ready and willing to re[urn the goods that were surpplicd to them but the plaintifl avoided to receive the same. He lurther averred that as per thc 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 23o/o in the sales made by the plaint_ifl 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/- try duly signing the challan and the defendant has not received ar:y payment lor the same. Thus, the defendant is entitled to a sum of Rs.9O,0O0/- and thereby, he filed a counter claim to that effect.

5. To the said counter claim, the plaintiff has ergain filed a written statement denying the material allegations zrnd contended that the defendant is not entitled for the amount t:l:rimed in the counter claim.

6. Based on the above rival pleadings, the tnal Court has lramed the followrng issues: "7 2 Whether this Court has no territorial j urisdiction to try the suit claim? Whether the defendant is a dealer of the plaintitf company? .l 4 AKS,J & ETD,I CCCA No.50 2008 t J 4 5 6 7 Whether there is short supply of goods to the defendant vide invoice dt. 19.04.1996? Whether the plaintiff is liable to account for the commission at the rate of 23o/o to the saies effected through M/s Usha Engineering of Jharsuguda? Whether the defendant is entitled to a decree of Rs.90,000/- against the plaintifP Whether the plaintiff is entitied to the suit claim? To what relieL2"

7. On behalf of the plairttiff, PW1 was examined and Exs.Al to A.9 were marked. The defendant has not adduced anv 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.19,51,0O5/- @ l2oh per annum from the date of suit till the date of decree and @6ok 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 lor the appellant and Sri M.S.Srinivasa Iyengar, learned counsel for the respondent. \ 5 AKS,J & ETD,J CCCA No.50 2008

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 answerin g rssue 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 wds 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 rvas paid to the appellant and that though the trial Court has lramed several issues none of the iss'ues were answered based on the evidence and [hat the trial Court has simply answered a]l the issues in favour of the appellant and that the appellant oug.:lt 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 Courr, 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 specihc contention that the chief examination of PWl is sworn on 3o.ll.2OO2, though thc same is filed on 22.09.2OO3, further the said PW1 rvas recalled on 27.1O.2OO3 for marking r_he documents. Pleading the said averments, learned counsel for the appellant has ,// 6 AKS,J & ETD ] CCCA No.50 2008 I prayed this Court to set aside the judgment and decree passed by thetrialCourtdatedl4.o3.2oo5byallowingthisappealand further prayed to allow their counler claim

12. The learned respondent counsel' on the other hand' has submitted that the appellant failed to lead any evidence inspite ol several opportunities before the trial Court and that the trial Court has rightly decreed the suit, based on the evidence placcd by the plaintiff, he therefore, prayed to uphold the judgment and decree passed bY the trial Court' l3.Basedontheaboverivalsubmissions,thisCourtframcsthe following points for consideration: 1 . Whether the plaintiff is not entitled to recover the suit amount? 2 J defendant is entitled to the counter Whether the claim? Whether the judgment and decree dated 14 03 2005 by trte t."iat court is sustainable in lau' and ;;;;t under the facts?

4. To what relieL2 74 POINT NO.1 The case of the plaintiff is that the defendant was its dealer a) distributing their products i e' components' epoxies/ cold welding components etc., and since it was a major distributor for --. \ AKs,I & ETD,I CCCA No.50 2008 purchasing Iarge quantities, they permitted the dt:fendant to avail credit facility and while the business was going on, the defendant raised an invoicc for purchase of material on ilo. 1 1. 1995 vide invoice No.350877 for a sum of Rs.3,56,17 S/_ anc on 30.12. 199S vide invoice No.35iO52 for the materials worth Rs.4,63,03g/_ and another invoice dated 19 .O4 .1996 for the rnaterial worth Rs. 16,68,702 / respectively. Thar the plaintiff has supplied the material and has deposited the cheques issued b1.the defendant, but the cheques were returned dishonoured due to insufficient funds and the dcfendant 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 plaintifl 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 delendant failed to pay the sairl amount and therefore, the plaintifl got issued a legal notice on 2g.06.1996, requesting for payment of the outstanding dues, the defenclant has received the notice but ins[ead of paying the amount, he has issued reply nolice. 8 AKS,] & ETD,] CCCA No.50 2008 '1 b) To prove the case of the plaintiff, they relied upon Exs.A 1 to A9. A perusal of the said exhibits reveals that the defendant was raising invoices requesting the plaintiff company to supply thc material under different dates. Exs.Al to A.3 are the invoiccs dated 30.08. 1995, 25.10.1995 and 30. I 1.1995 respectivel-v 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 thc amount payable is also reflected vide invoice numbers i.e. 350877 and 351052 dated 2O.i1.1995 and 30.12.1995 respectively and the total amount is to an extent of Rs.4,8O,754/-. Then a perusal of Dx.AS 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 o[ May, 1996 i.e. first payment by 10d, May and second payment by 3Oh May, the old outstanding is being cleared on 30ft April. Ex.A6 is another invoice dated 29.04.1996. Exs.A7 and A8 are th1 delivery challans. Ex.A9 is the reply notice given to thc .orrr\".1 for plaintiff asking them to wait for some more time till 9 AKS,] & ETD,J CCCA No.50 2008 their advocates issue a reply to their claim. The s;aid reply notice under Ex.A9 is dated 19.O7.1996. c) Thus, it is made clear from the exhibits that thc defendant was a dealer with the plaintiff company and was receiving materials as per the invoices under ExsA i to A 3. A5 and A6. There is also a specific endorsement on Ex.AS that he shall clear the outstanding dues in the month of May in t\ o 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 recorci zrny 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 plaintiffs contentton e) The learned appellant counseI has relied upor-r the judgment of theApex Court in the case of Robtn Thapa u. Rohlt Dorqt, 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 {,019) 7 Supreme Court Cases 359 10 AKS,I & ETD,J CCCA No.50-2008 it has reached the Apex Court and the question before the Apex Court was whether the ex porte 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 lt 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 u' R'Madhn? ' wherein afl ex parte decree was passed by the triai Court and the defendant has filed an appiication 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 andtheHighCourthasuphelditsdecision.Subsequently,the defendanthasfiledfirstappealwithadelayof546daysandthe High Court has relected the appeal refusing to condone the delay' The matter went upto the Apex Court and the Apex Court has condonedthesaiddelayandallowedtheappeattobeheardon merits and reafhrmed that the procedural technicalities should not override substantive justice' I The present defendant has filed case was not adjudicated written statement but has ex pdrte. The failed to cross t 1b2o1 zo srpr"." court cases 302 11 AKS,J & ETD,J CCCA No.50 2008 examine the plaintiffs 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 evid(lnce before the trial Court which is not done. In this case, the qu3stion of Order 9 Rule 13 does not arise. Thus, the facts of the citeC decisions are not applicable to the case on hand. A perusal of tri.l 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 proced ure. d Though the learned appellant counsel has rclied upon the above cited decisions, the recorcl discloses that the suit pertains to the year 1996 and the judgment was delivered in the year 2OO5 that means after nine years, the suit was decreecl. Further, a perusal of the docket proceedings of the trial Court would reveal that ample opportunities were given [o the defendant. The issues were framed in this case on 06.02.7999 , afLer which the plaintifl,s side evidence commenced on 22.09 .2OO3 and pW I was further examined on 27.7O.2OO3, after which it was posted for the cross examination of PW 1 through a commissioner al Ld then four adjournments were granted till 30. l2.2OO3 and it was posted on 07.0..!2O04 hnally. Then, a memo was hled by lhe Advocate 12 AKs,J & ETD,J cccA No.50 2008 \ '1 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 Iead any evidence on its behalf. Thereby, on 25.O2.2OO5 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 I4.O3.2005. All these proceedings before the trial Court would show that the defendant has not chosen to cross examine the plaintifls 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. 19,5 1,005/ - to the plaintiff company and the plaintiff is entitled to recover the same from the defendant. Point No.I is answered accordingly. 1

15. POINT NO. 2: 13 AK5,] & ETD,] cccA No 50 2008 The wriften statement of the defendant re.veals that there are clear admissions with regard to the dcalership under the plaintiff company and the fact of transactions. held with the plaintill company but only avermenl made by the defendan[ is that it has purchased the material due to the inducement made by the plaintifl,s branch at Rourkela. The defendant being a company cannot simply go by an inducement n_.ade by another company, since it was a distributor; it was its dut.,r to conduct the business as per the agre.dment. 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 a ppellant u,ho is the unsuccessful defendant failed to place any material on record along rvith the appeal. Though the defendanr 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 ro hold that the plaintifl is due by any amount to thc defendanr. Therefore, it is held that the counter claim of the defendant fail:; and that the defendant is not entitied to recover any amount from the plaintiff. Point No.2 is answered accordingly_ ,// I I l 74 A(S,J & ETD,I cccA No.50 200E t

16. POINT NO.3: In view of the reasoned hndings arrived at point Nos. I and 2, it is held that the judgment and decree passed by the trial Court do not need any interfercnce and the same are held to be sustainable in law and under the facts and circumstances of the CASC

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 Ill Senior Civil Judge, City Civil Court, Secunderabad. No cosl s. Miscellaneous Applications, if any, pending in this appeal shal1 stand closed //TRUE COPY// SD/- MOHD. ISMAIL EPUTY REGISTRAR SECTION OFFICER To,

1. The Court of the lll Senior Civil Judge, City Civil Court, Secunderabad.

2. One CC to SRI MANJART S GANU, Advocate [OPUC] 3. One CC to SRI M.S. SRIN|VASA |YENGAR, Advocate tOpUCI 4. Two CD Copies Pcsd/gh HIGH COURT DATED:0410412025 1HE 5r.q rr- $ot ($ ( OsIIJEM : O't ,, ii1 -;.)' JUDGMENT CCGA.No.50 of 2008 DISMISSING THE CITY CIVIL COURT APPEAL b