Southern Petrochemicals Industries Corporation Limited v. K.Bhoomaiah

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :18.06.2009CORAMTHE HONOURABLE MR.JUSTICE M.VENUGOPALAPPEAL SUIT NO.417 OF 2002- - - -Southern Petrochemicals IndustriesCorporation Limited,Registered office at No.36-40, Armenian Street,Chennai 600 032.having its Branch Office at:No.97, Mount Road,Guindy, Chennai - 600 032.rep by its Secretary Santhana Krishnan... Appellant/Plaintiff Vs.K.Bhoomaiah... Respondent/DefendantAppeal suit filed under Section 96 of Code of Civil Procedure,against the judgment and decree dated 20.04.1998 in O.S.No.15027 of1996 on the file of the IV Additional City Civil Judge, Madras.For appellant: Mr.RangarajanFor Respondent: Mr.B.Giridhara Rao J U D G M E N TThe appellant/plaintiff has filed this appeal against thejudgment and decree dated 20.04.1998 made in O.S.No.15027 of 1996 bythe learned IV Additional City Civil Judge, Madras in dismissing thesuit.2.The necessary facts for disposal of the appeal are set outbelow:(i)The appellant/plaintiff is engaged in the manufactureand sale of fertiliser products. The respondent/defendant iscarrying on business as Dealer in fertiliser products under the nameof M/s.Sri Siddirameshwara Fertilisers as Proprietor. The appellantand the respondent have entered into an agreement dated 26.6.1984 at https://hcservices.ecourts.gov.in/hcservices/ Madras in and by which the defendant has been appointed as a Dealerfor the appellant/plaintiff's products on a non-exclusive basis forthe location at Nizampet in Medak District.(ii)By virtue of the agreement dated 26.6.1984 therespondent/ defendant has been placing orders with theappellant/plaintiff for supply of its products in variousquantities. The appellant has made supplies to therespondent/defendant as per orders. In regard to the said supplies,the parties do have a running account. The payments effected by therespondent/defendant in regard to the supplies made have been givencredit to after debiting the cost of the supplies made by theappellant to the respondent.Because of the said supplies made by the appellant to therespondent/defendant, there is an outstanding sum of Rs.3,87,079/-as per the running account.(iii)When the appellant presented the cheques to itsbankers, the same have been dishonoured by the respondent's bankersfor the reason 'Refer to Drawer'. Though the respondent/defendanthas been given credit against each purchase order, the defendant hasnot been given credit for more than 30 days in regard to thesupplies made. Despite many reminders and personal request made bythe appellant's representatives, the respondent/defendant has notbothered to pay. Still there is an outstanding amount ofRs.2,69,299.84 towards principal, due from the respondent. As perthe covenants of agreement dated 26.6.1984 the respondent/defendantis to make the payment to the appellant/ plaintiff at Madras by wayof crossed demand drafts/cheques.(iv)The respondent is liable to pay an amount ofRs.2,69,229.84 in respect of principal and Rs.1,17,849.16 towardsinterest at the prevailing rate fixed in the invoice by theappellant at 20% per annum till the date of plaint and in all a sumof Rs.3,87,079/- is due as per the statement of accounts. Since theclaim is a commercial cause, the appellant claims future interest atthe rate of 20% per annum from the date of plaint till the date ofrealisation.(v)The appellant/plaintiff has issued a legal notice dated29.10.1987 to the respondent/defendant claiming the payment ofbalance amount along with interest. The respondent/defendantreceived the notice but has not issued any reply. Hence, the suit islaid for recovery of sum of Rs.3,87,079/- along with interest at 20%per annum on Rs.2,69,229.84 from the date of plaint till the date ofdecree and for future interest at the rate of 20% per annum on the https://hcservices.ecourts.gov.in/hcservices/ decree amount from the date of realisation in full and for costs.3(i). The respondent/defendant has taken the pleas in thewritten statement that no invoices have been raised on 25.4.1986,28.4.1986, 30.4.1986, 13.6.1986, 29.5.1986 and 30.6.1986 and that nogoods have been delivered to him on the aforesaid dates fromHyderabad or Kamareddy where the appellant's warehouses are locatedand further that he has issued 10 or 12 blank signed undated chequesto one Mr.B.Ashokan, Resident Sales Officer of the appellant companyand this has been the policy of the appellant's company and that thedates of 10.7.1986, 21.7.1986, 22.8.1986, 21.5.1986, 28.5.1986 and5.8.1986 have been filled by the said Sales Officer, who depositedthe said cheques drawn on a Bank in Kalvakunta, Medak District,Andra Pradesh, in Hyderabad, outside the jurisdiction of the trialCourt, without the supply of goods and moreover, the agreementbetween the parties has been signed in Nizampet and therefore, thesame will not confer jurisdiction on the trial Court. (ii)Added further, the respondent/defendant has taken astand that the cheques in favour of the appellant's company, in theIndian Overseas Company in Hyderabad by the said Sales Officerwithout the knowledge of the respondent/defendant. Furthermore, thepractice of the appellant's company is to have their agents giveblank, signed, undated cheques to their Sales Officer which are themfilled by him against goods delivered and in the present case, nogoods have been delivered and no delivery notes have been signed bythe respondent/defendant since no supplies have been effected to therespondent. In short, no goods have been delivered between 25.4.1986to 30.6.1986 to the respondent/defendant. Besides the above, therespondent/defendant has complained to the Manager Mr.Vasudevan ofthe fraud committed by the said Ashokan. Since the respondent doesnot owe to the appellant/plaintiff the principal sum ofRs.2,69,329.84, the issue of interest does not arise.(iii)On the basis of the above pleadings, the trial Courthas framed as many as eight issues and resultantly has come to theconclusion that the appellant/plaintiff is not entitled to claim thesuit amount and dismissed the suit without costs.(iv)Before the trial Court, on the side of appellant,P.W.1 has been examined and Exs.A.1 to A.52 have been marked. On theside of respondent/ defendant, D.W.1 has been examined and noexhibits have been marked.4.The points that arise for determination are:(1)Whether the plaintiff is entitled to claim the suit https://hcservices.ecourts.gov.in/hcservices/ amount along with interest as prayed for in the plaint?(2)Whether the respondent/defendant has issued blankunsigned undated cheques to the Resident Sales Officer of theappellant company Mr.B.Ashokan?(3)Whether the appellant/plaintiff company has proved thedelivery of supplies of fertilisers to the respondent/defendant?5.Findings on Point Nos.1 and 3:-P.W.1 in his evidence has deposed that therespondent/defendant has placed orders with theappellant/plaintiff's company for supply of fertilisers and the saidinvoices are Exs.A.2 to A.14 and that the appellant/plaintiffcompany has supplied the fertilisers to the respondent/defendant asper Exs.A.2 to A.14 and the delivery notes are Exs.A.15 to A.27 andthat the respondent/ defendant has issued cheques Exs.A.28 to A.39and they have returned by the Bank as per endorsements Ex.A.40 toA.49 and the factum of return of cheques by the bank has beeninformed to the respondent/defendant and that therespondent/defendant has not paid the amount and therefore, thelawyer's notice Ex.A.50 has been issued, for which therespondent/defendant has not replied and Ex.A.51 is theacknowledgement for the notice issued and that the account copy isEx.A.52 and that the respondent has to pay a sum of Rs.3,87,079/- ason date of filing of the plaint along with interest at 20% perannum.6.The evidence of P.W.1 during his cross examination is to theeffect that the respondent/defendant has signed Ex.A.1 agreement atChennai and at that time, he has not been present and that thedelivery notes have been issued by the Sales Officer B.Ashokan andthat the letters given by the respondent/ defendant has not beenfiled and that the signatures found in Ex.A.15 to A.27 are that ofthe agent of the respondent and that the said Ashokan is not inservice at present.7.At this stage, it is useful to refer to the evidence ofD.W.1/respondent to the effect that he has signed in Ex.A.1agreement at Nizampet in Andra and that the said Ashokan has broughtEx.A.1 agreement and obtained his signatures and the appellant'scompany's sales representative is Ashokan and the Secretary of theappellant/plaintiff's company has already affixed his signature whenhe has signed in Ex.A.1 and also the agreement contained the sealand after signing the agreement he has given the unfilled chequeswith his signatures affixed therein the cheques will be filled upand presented before the Bank after the supplies are effected andthat he has not issued supply orders Exs.A.2 to Ex.A.14 and in the https://hcservices.ecourts.gov.in/hcservices/ delivery notes Exs.A.15 to A.27 he has not signed and that he hasnot received the goods and the cheques Ex.A.28 and A.39 have beenfilled up by the appellant/plaintiff's Sales Officer Ashokan and thesignatures found in the cheques belonged to him and when he askedthe said Ashokan as to why he has deposited the cheques in the bankswithout supply of goods the said Ashokan has replied that he willsell the goods to third party and remit the money and that he hasnot complained to the appellant/plaintiff since the said Ashokanthreatened him that his dealership will be cancelled and since hehas not received the goods, he is not liable to pay the said amountclaimed for. 8.It is the specific case of the appellant/plaintiff that ithas effected the supplies to the respondent/defendant as per ordersplaced. Further the appellant/plaintiff claims in the plaint thatthe appellant is liable to pay a sum of Rs.3,87,079/- as due for thesupply of fertilisers effected to the respondent/ defendant alongwith interest at 20% per annum etc. In Ex.A.1 agreement dated26.6.1984 entered between the appellant/plaintiff and thedefendant/respondent it is mentioned as 'this agreement entered intoat Madras on 26th day of June 1984'. In Ex.A.1 agreement (printedform at page 4) the witness Niranjan Bhatt of the appellant'scompany, Guindy, Madras-32 has signed. Further, after therespondent/defendant has signed in Ex.A.1 agreement, the witness hassigned for Laxmi Narsimha Trading Company, as Manager on the side ofrespondent/ defendant.Admittedly, the respondent/defendant has notexamined the witness who signed for Laxmi Narsimha Trading Companyon his behalf before the trial Court to substantiate his contentionthat the said agreement has not been executed at Madras and it hasbeen executed only at Nizampet at Medak District in Andra Pradesh.Though the respondent/defendant has averred in his evidence that thesales representative of appellant's company B.Ashokan has come toNizampet and obtained his signature, the said Ashokan has not beenexamined as a witness in the case on behalf of therespondent/defendant to prove to the satisfaction of the Court thatthe said agreement has been signed by the respondent only atNizampet of Medak District. In the absence of the said Ashokan beingexamined as a material witness before the trial Court on behalf ofthe respondent/ defendant and in view of the fact that the Ex.A.1agreement clearly mentions that the same has been entered at Madrason 26.6.1984 it is held by this Court that Ex.A.1 agreement has beenentered into between the parties only at Madras on 26.6.1984 and thesame is answered accordingly.9.In view of the fact that Ex.A.1 agreement dated 26.6.1984 hasbeen executed at Madras the City Civil Court, Chennai hasjurisdiction and in view of the fact that Ex.A.1 agreement clearly https://hcservices.ecourts.gov.in/hcservices/ satisfies that 'the Courts at Madras only shall be deemed to theCourts of jurisdiction in respect of any suits, claims, disputesetc. arising out of or relating to this agreement, this Court comesto the inevitable conclusion that the trial Court has jurisdictionto entertain the suit and decide the same in accordance with law.10.A perusal of the Exs.A.2 to A.14 dealer invoices of theappellant's company has only the signature of the authorisedsignatory of the appellant/ plaintiff's company. These documentswhich are in printed format have been typed out in the relevantportions and in all these, the respondent/defendant signature is notfound. In Exs.A.15 to A.27 delivery note of the appellant's company,the respondent/defendant's fertilisers is found and in the portionreceived the materials in good condition, one individual has signedin Telugu as Consignee/Carrier. In these also the signature of therespondent/defendant Boomaiah is not to be seen.11.It is the categorical stand of the respondent/defendant thathe has not placed orders for the supply of fertilisers as perExs.A.2 to A.14 and further, he has not received the goods in issueand therefore, the appellant/plaintiff company cannot saddled therespondent/defendant with that of the liability to pay the suitamount.12.It is to be remembered that in a civil suit the plaintiff isthe dominus litus and the same is not an absolute or a universalrule in the eye of law. The contention of the appellant/plaintiff'scompany is that the respondent/ defendant's agent has received thefertilisers on behalf of the principal viz., therespondent/defendant and therefore, the respondent/defendant is inlaw under obligation to pay the amount for the goods supplied by theappellant.13.It is not out of place to make a mention that the essentialsof Sale of Goods are: (1) the existence of goods for sale andfurther there must be a contract of sale and there shall also be apromise or payment of consideration. It is for the Court toascertain the intention of parties in regard to the contract theyhave made. Also there must be an agreement or a contract to pay theinterest also. The appellant/plaintiff company has issued Ex.A.50 alawyer's notice dated 29.10.1987 addressed to therespondent/defendant company wherein it is made mention of that therespondent/defendant has been appointed as a dealer of theappellant/plaintiff under the agreement dated 26.6.1984 and that therespondent/defendant has been drawing the products from theappellant and making payments for the same on a running accountbasis and that the respondent/defendant has issued various chequesand the same have been dishonoured by the bankers and that a total https://hcservices.ecourts.gov.in/hcservices/ of Rs.3,53,182.84 published is due to the appellant/plaintiff andthe same is liable to be paid at the rate of 20% per annum as perthe terms of the agreement from 1.9.1987 till the date of payment infull etc. The acknowledgement for the receipt of Ex.A.50 notice hasbeen marked as Ex.A.51. The learned counsel for the appellant/plaintiff has drawn the attention of this court to the fact that theappellant/plaintiff company has issued a lawyer's notice Ex.A.50dated 29.10.1987 and the same has been acknowledged by therespondent/defendant, but the respondent/defendant has not repliedto the said notice and non-sending of a reply to Ex.A.50 notice isfatal to the case of the respondent/defendant. One cannot ignore animportant fact that a sale can be completed without effectingwithout immediate delivery and even without immediate payment and itcannot be forgotten that fixing of prize is not invariably ruled ina contract of sale. 14.It is well settled principle of law that even after thegoods have been delivered into the actual possession of the buyerthe performance of the seller's duties may still be incomplete by areason of the breach of the some of the conditions or warrantyexpressed or implied whether as to title, or quality or fitness towhich it has to bound itself by the contract. In such cases, even ifthere is breach of a clause a covenant purchaser by taking deliverymay treat the same as a breach of warranty in the eye of law. As faras the present case is concerned, Exs.A.15 to 27 relates to thewarehouse delivery note of appellant/plaintiff's company and aperusal of the same indicates that an individual has signed inTelugu as Consignee/Carrier. The appellant/plaintiff's company'sstand is that the said signature in Telugu as Consignee/Carrierrepresents the agent/representative of respondent/defendant companyand therefore, it is clear that the appellant/plaintiff's companyhas supplied the fertilisers to the respondent/defendant. Generally,if an agent receives the goods on behalf of the buyer then the sameis valid in law but in the present case before us, the contention ofthe respondent/defendant company is that the goods have not beendelivered on 25.4.1986, 30.4.1986, 13.6.1986, 30.6.1986, 29.5.1986and 30.6.1986 from Hyderabad or Kamareddy whether the appellant/plaintiff's warehouses have been located. Therefore to thesatisfaction of this Court it is for the appellant/plaintiff companyto establish that the goods delivered by it have been received bythe respondent/defendant or its agent or authorised representativesas the case may be. 15.On a careful consideration of the facts and circumstances ofthe case and upon perusing the oral and documentary evidenceavailable on record, this Court comes to the conclusion that theappellant/plaintiff has not discharged its burden to establish that https://hcservices.ecourts.gov.in/hcservices/ the goods delivered by it to the respondent/defendant have beenreceived by him either personally or through his authorisedrepresentative or his agent. Added further, the non-examination ofone Mr.Ashokan, Sales Officer of the company is a circumstance whichgoes against the case of appellant/plaintiff. When the averments inwritten statement are centred around one Mr.B.Ashokan, being theResident Sales Officer of the appellant/plaintiff company then theappellant/plaintiff company is duty bound to examine him as amaterial witness to rebut the version projected by therespondent/defendant. Nothing prevented the appellant/plaintiff toexamine B.Ashokan (Resident Sales Officer) even though he is not inservice. In fact, the evidence of P.W.1 who speaks from records ofthe case is not helpful to the side of appellant/plaintiff inestablishing the suit claim, in the considered opinion of thisCourt. 16.Be that as it may, another circumstance which goes againstthe appellant/plaintiff is that they have not identified the personwho has signed in the delivery note as Consignee in Telugu languageand the said person has not also been examined as a witness beforethe trial Court. 17.Hence, this Court is of the considered view that theappellant/plaintiff is not entitled to claim the suit amount andthat it has not proved to the subjective satisfaction of this Courtthat the fertilisers it has supplied to the respondent/defendantcompany have been actually received by the respondent/defendanteither personally or through his agent or authorised representative.Hence, these points are answered against the appellant/plaintiff.18.Point No.2: The plea of the appellant/plaintiff company isthat the respondent/defendant has made payments in regard to thesupply of fertilisers by means of various cheques and when the saidcheques have been presented to the bankers, the same have beendishonoured for the reason 'Refer to Drawer'. Therespondent/defendant has taken a contra stand that therespondent/defendant has issued 10 or 12 blank, signed, undatedcheques to one B.Ashokan, Resident Sales Officer of theappellant/plaintiff company and the policy of the appellant/plaintiff company is to take the blank, signed, undated cheques andthat the dates viz., 10.7.1986, 21.7.1986, 22.8.1986, 21.5.1986,28.5.1986 and 5.8.1986 have been filled by the said Sales Officerwho deposited the said cheques drawn on a bank in Kalvakunta, MedakDistrict, Andra Pradesh in bank in Hyderabad. In Exs.A.28 to A.40the original cheques, the Proprietor of the respondent/ defendanthas signed in Telugu. It is to be noted that in para 13 of thewritten statement an averment has been made to the effect that 'the https://hcservices.ecourts.gov.in/hcservices/ practice of the plaintiff company is to have their agents giveblank, signed, undated cheques to their Sales Officer which are theyfilled by them against the goods delivery and in this case, no goodshave been delivered.' It is pertinent to make a mention that therespondent/defendant has admitted his signatures in the chequesviz., Exs.A.28 to A.39. In law, the Holder of Due Course is entitledto fill up the cheque, which is being a negotiable instrument. WhenD.W.1/respondent/defendant in his evidence has categorically statedthat he has studied upto 3rd standard and that he does not knowEnglish and further that when that the dates in the cheques havebeen filled by the Sales Officer of appellant company Mr.B.Ashokanthen a heavy burden is cast on the appellant/plaintiff to examinethe said Ashokan on appellant/plaintiff's side to establish that thefertilisers have been supplied as per the payment made by therespondent/ defendant and that the respondent/defendant has issuedthe 10 or 12 blank, signed and undated cheques in regard to thepayments to be made for the supply of fertilisers. Unfortunately,the said Mr.B.Ashokan has not been examined on behalf of theappellant/plaintiff company as a witness and the reason ascribed forthe same is that he is not in service and that he has not beendismissed from service. In the present case, Mr.B.Ashokan, ResidentSales Officer of the appellant/plaintiff company has played a vitaland big part and the fact that he has not been examined on behalf ofthe appellant/plaintiff's company to prove its case in entirety muchless in regard to the receipt of 10 or 12 blank, signed, undatedcheques a circumstance which clearly goes against theappellant/plaintiff's company. In this case, theappellant/plaintiff's company has not proved to the satisfaction ofthis Court that the respondent/defendant who does not know Englishand who has studied only upto 3rd standard has issued the blank,signed, undated cheques after knowing the consequences thereto. Whena person is a semi-illiterate and not knowing English language thenit is for the appellant/plaintiff to prove its case before a Courtof law to the subjective satisfaction of the Court. 19.Looking at from any angle and on an overall assessment ofthe facts and circumstances of the case and taking note of the oraland documentary evidence adduced on both sides and after analysingthe same meticulously in an in-depth fashion and the non examinationof Ashokan, the Resident Sales Officer of appellant companyprobabalises the case of the respondent/defendant that the latterhas issued 10 or 12 blank, signed, undated cheques to the saidofficer of the appellant/plaintiff company for filling the sameagainst the goods delivery and further the appellant/plaintiffcompany has not proved that the fertilisers it has delivered havebeen received by the respondent/defendant either personally or byhis authorised representative or agent as the case may be and the https://hcservices.ecourts.gov.in/hcservices/ point is answered against the appellant/plaintiff.20.In fine, for the foregoing reasons, the appeal fails and thesame is hereby dismissed. The judgment and decree passed by thetrial Court are affirmed by this Court in this appeal. Consideringthe facts and circumstances of the case, there shall be no order asto costs.Sd/Asst.Registrar/true copy/Sub Asst.Registrarsgl To1.The IV Additional Judge,City Civil Judge, Madras.2.The Section Officer,VR Section, High Court,Madras.+2ccs to Mr.Rangarajan,Advocate Sr 24124+1cc to Mr.B.Giridhara Rao, Advocate Sr 24158NTK(CO)km/8.7. A.S.No.417 of 2002