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2007 DIGILAW 702 (JHR)

Bihar Air Products v. Asiatic Oxyzen

2007-08-31

D.G.R.PATNAIK

body2007
JUDGMENT D.G.R. Patnaik, J. 1. This appeal filed by the plaintiff-appellant is against the judgment dated 03.06.1999 and its corresponding decree dated 19.06.1999 passed in Money Suit No. 3 of 1994 by the Sub-Judge III, Saraikella, whereby the plaintiff-appellant's suit was dismissed on contest with cost. The plaintiff-appellant had filed the suit for a Money decree of Rs. 6,32,107.75 Paise together with interest against the defendant and also for a direction to the defendant to handover to the plaintiff 252 Argon Gas ' Cylinders in good condition. 2. The case of the plaintiff is that it is a manufacturer of industrial gases and it is also a distributor of the products of the Gujarat State Fertilizer Corporation, who is producing Argon Gas and the same is supplied to the plaintiff. The defendant-company has been taking supplies of Argon Gas from the plaintiff-Company for the purpose of sale to its customers. The supplies used to be taken by the defendant Company from the plaintiff's industrial premises at Gamha:ia and the sale of this product was used to be made to customers in West Bengal. During the period of business transactions till 31.03.1992, the Defendant-Company had taken supply of the Argon Gas in cylinders but has failed and refused to return a total number of 250 Argon Gas cylinders to the plaintiff. On account of the non-refund of the cylinders, the plaintiff was put to a great loss on account of payment of rent @ Rs. 3.50 per day per cylinder to the Gujarat State Fertilizer Corporation. The defendant has neither returned the cylinders since June, 1992 nor have paid the rent for the cylinders. On the other hand, the defendant has subsequently notified that they had accumulated only 79 Gas cylinders belonging to the plaintiff and had asked the plaintiff to send their representatives to the defendant's workshop to take back the 79 cylinders, and have thus refused to acknowledge the remaining gas cylinders. The plaintiff has claimed, therefore, that it is entitled to realize rent @ Rs. 3.50 per day per cylinder for each of the 252 Argon Gas cylinders from the defendant and is also entitled to claim and receive interest on the total amount of rent charges @ 24 per cent per annum commencing from May, 1992 till October, 1993 besides recovery of the 252 Argon Gas cylinders from the defendant. 3.50 per day per cylinder for each of the 252 Argon Gas cylinders from the defendant and is also entitled to claim and receive interest on the total amount of rent charges @ 24 per cent per annum commencing from May, 1992 till October, 1993 besides recovery of the 252 Argon Gas cylinders from the defendant. The details of the computation of the amounts have been mentioned in Schedule A of the plaint. 3. The defendant-Respondent has contested the suit of the plaintiff by filing its written statements, wherein, the entire claim of the plaintiff has been denied and disputed. The case of the defendant-Respondent is that just as the plaintiff-Company, the defendant-Company is also a manufacturer of Gases. On 25.01.1975, the defendant-Company and its associate Companies entered into a collaboration agreement with the Bihar State Industrial Development Corporation for setting up a plant at Jamshedpur for manufacturing the gases. As per Article 138 of the Articles of Association of the plaintiff-Company, the Managing Director of the plaintiff-Company was a person, who would be nominated by the defendant-Company and, accordingly, one Shri S. S. Mallick was appointed as the Managing Director of the plaintiff-Company from its inception. However, the person, who was appointed as the Managing Director of the Plaintiff-Company on account of his inefficient handling of the Company affairs, had brought the financial status of the plaintiff-Company in very bad shape and having thus been justified in discontinuing the post, he resigned on 31st April, 1992 from his post of Managing Director of the Plaintiff-Company. After his resignation, Shri Mallick joined hands with the Bihar State Industrial Development Corporation and thereafter he withdrew Ms resignation from his post, which he had held in the plaintiff-Company. In spite of protests made by the defendant-Company, permission was granted by the Board for the withdrawal of resignation and thereafter, Mr. Mallick was allowed to continue as the Managing Director of the plaintiff-Company in violation of the Collaboration Agreement. On resuming the charge of office, Mr. Mallick, in connivance with the then Company Secretary of the plaintiff-Company, began taking the arbitrary decisions in the Company affairs. Mallick was allowed to continue as the Managing Director of the plaintiff-Company in violation of the Collaboration Agreement. On resuming the charge of office, Mr. Mallick, in connivance with the then Company Secretary of the plaintiff-Company, began taking the arbitrary decisions in the Company affairs. The defendant-Company filed a suit in the High Court at Calcutta on 09.06.1993, vide Suit No. 199 of 1993 for a declaration that Shri S.S. Mallick had ceased to hold the post of Managing Director of the Plaintiff-Company, since he was no more the nominee of the defendant-Company after 23rd April, 1992, and for a further declaration that the various Board meetings held on 29th May, 1992 and thereafter are illegal and void. The High Court vide its order dated 09.06.1993 granted an ad interim injunction restraining Mr. Mallick from functioning as the Managing Director of the plaintiff-Company and the restraint order was subsequently made absolute by order dated 14.07.1993. The Court had also declared that any decision taken by the Board of the plaintiff-Company in its meeting held on 29.05.1993 and thereafter should not be given effect to. Thereafter, both the plaintiff-Company and Mr. Mallick filed an appeal against the order dated 14.07.1993, which is pending before the High Court of Calcutta. The contention of the defendant is that the said Mr. Mallick in collusion with the Company Secretary, namely, Shri N.C. Mukherjee thereafter filed frivolous cases against the defendant-Company. On 07.02.1994, they filed a Criminal Complaint Case vide Case No. Cl-62 of 1994 in the court of the learned Chief Judicial Magistrate, Jamshedpur under Section 420 and 406 of the I.P.C. against the defendant-Company and its officers on the allegation that the defendant-Company has not returned 252 Argon Gas cylinders. The defendant-Company challenged the order of cognizance of the offences as passed by the trial court, before this Court vide Criminal Misc. Case No. 3068 of 1994 (R). This Court after admitting the Cr. Misc. Case of the defendant-Company stayed further proceedings in the complaint case pending before the court below. After the order of stay was passed by this Court, the Plaintiff-Company filed the present Mcney Suit on the basis of the same allegations as made in the Criminal Complaint Case. Case No. 3068 of 1994 (R). This Court after admitting the Cr. Misc. Case of the defendant-Company stayed further proceedings in the complaint case pending before the court below. After the order of stay was passed by this Court, the Plaintiff-Company filed the present Mcney Suit on the basis of the same allegations as made in the Criminal Complaint Case. The Criminal complaint case was quashed by the order of this Court, whereafter the plaintiff-Company filed yet another Criminal case vide C-1 Case No. 175 of 1994 in the court of the learned Chief Judicial Magistrate, Jamshedpur on the allegation of non-return of security deposit by some other Company and had impleaded the defendant-Company and its Officers as accused in the aforesaid case. The defendant-Company filed Cr. Misc. Case No. 4002 of 1995 (R) of this Court challenging the aforesaid Criminal Prosecution against it and by order passed by this Court, further proceedings in the Criminal Complaint case has been stayed. The defendant-Company have challenged the maintainability of the suit on the ground that there was no cause of action for filing the suit and also on the ground that the suit was barred by limitation, waiver, estoppel and acquiescence. The case of the defendant-Company is that it was declared as a sick industrial Company by the Board of Industrial and Financial Reconstruction (Bihar) in June, 1990. The Government of West Bengal declared the defendant-Company as Relief Undertaking within the meaning of the West Bengal Relief undertakings (Special Provision) Act, 1972. Since it is still continuing to be sick industrial unit, the Board of Industrial and Financial Reconstruction (Bihar), has sanctioned a Rehabilitation Scheme to the defendant-Company by an order dated 08.10.1993. The West Bengal Government while declaring the defendant-Company as a Relief Undertaking, has granted moratorium to the defendant-Company, which is valid up to 25th December, 1996. The plea of the defendant-Company is that the plaintiff-Company has not obtained prior sanction or relief from the Board of Industrial and Financial Reconstruction (Bihar) for the purpose of making a mandatory claim against the defendants as advanced in the plaintiff's suit. Therefore, such claim is not maintainable under Section 22 of the Sick Industrial Companies (Special Provision) Act, 1985. In addition to the aforesaid pleadings, the defendant-Company has denied to have retained the 252 numbers of the Argon Gas cylinders of the plaintiff-Company. Therefore, such claim is not maintainable under Section 22 of the Sick Industrial Companies (Special Provision) Act, 1985. In addition to the aforesaid pleadings, the defendant-Company has denied to have retained the 252 numbers of the Argon Gas cylinders of the plaintiff-Company. The defendant has explained that the plaintiff-Company used to take gas filled for each of its customers from the defendant-Company and vice-versa and in the process, the defendant-Company used to send its cylinders to the plaintiff-Company. On assessing the balance of account on sales, it was found that till May, 1992 a total number of 603 Oxygen gas cylinders were refundable by the plaintiff-Company to the defendant-Company and the plaintiff-Company has illegally withheld the gas cylinders belonging to the defendant-Company and for the unlawful retention of the gas cylinders, the defendant-Company has been suffering substantial financial losses. The defendant has denied and disputed the genuineness of the bills mentioned in the Schedule of the plaint and has claimed the same to be false, incorrect and misleading. 4. The trial court on the basis of the rival pleadings of the parties framed the following issues on recast for adjudication: 1. Is the suit as framed maintainable? 2. Has the plaintiff got any valid cause of action for the suit? 3. Is the suit barred by limitation? 4. Is the suit-barred by waiver, estoppel, and acquiescence? 5. Has this court got jurisdiction to entertain this suit? 6. Whether the defendant company has retained 252 Argon gas cylinders of the plaintiff company? 7. Whether the plaintiff company is entitled to charge rental @ Rs. 3.50 P. per day per cylinders with interest prevalent and future interest without any contact in between companies? 8. Is the plaintiff company entitled to get 252 Argon gas cylinders from the defendants company? 9. To what other relief or reliefs, if any, the plaintiff is entitled to get? 5. Taking the issue No. 6 as to whether the defendant-Company has retained 252 Argon Gas cylinders of the defendant Company as the main issue, the trial court after examining the evidences of the plaintiff-Company and the defendant-Company on this issue, has recorded its finding that the plaintiff has not been able to prove and establish that the defendant-Company has been withholding the alleged 252 Gas cylinders of the plaintiff-Company. On the issue as to whether the suit was barred by limitation, the trial court had considered the evidences adduced by the plaintiff and has recorded its finding that the suit was barred by limitation. On the remaining issues also after considering the evidences adduced by the parties, the trial court had recorded its findings against the plaintiff and on the basis of its findings had dismissed the suit of the plaintiff. 6. The appellants have assailed the impugned judgment and decree of the learned court below primarily on the ground that the findings of the learned court below on the various issues and in particular, the issue relating to limitation and also the issues relating to the plaintiff's right to to claim and realize the amount computed towards rental charges of the gas cylinders from the defendant-Company are perverse and against the weight of evidence on record. It is further claimed that the learned trial court has erred in failing to appreciate that even the defendant-Company by its letters (Exhibit-2 and 2/A) had acknowledged to have retained 79 Argon Gas Cylinders belonging to the plaintiff and on such admission, the trial court ought to have directed the defendant to return the 79 gas cylinders and also to pay the rental charges for retaining the gas cylinders. The further ground is that the learned court below has misinterpreted and misconceived Exhibi:-6, which is a statement of account, in the balance sheet, maintained by the plaintiff-Company in respect of the sale transactions entered into by and between the plaintiff and the defendant Company and which clearly and categorically confirmed that total number of 252 Argon Gas cylinders were received by the defendant Gas Company till the date of last transaction and the same have not been returned to the plaintiff. It is further contended that the findings of the learned trial court on the point of limitation is also misconceived and misplaced as because the letter of acknowledgment issued by the defendant in May, 1992 had given a fresh cause of action and the suit was filed within three years from 16.04.1994. It is also contended that the learned court below ha s erred in declaring that the suit was covered under Article 68 of the Limitation Act, although on the basis of the facts and circumstances of the case, the suit is governed by Article 70 of the Limitation Act. It is also contended that the learned court below ha s erred in declaring that the suit was covered under Article 68 of the Limitation Act, although on the basis of the facts and circumstances of the case, the suit is governed by Article 70 of the Limitation Act. 7. Learned Counsel for the Respondent on the other hand, has relied entirely upon the findings of the learned trial court on all the relevant issues as contained in the impugned judgment and has claimed that; the trial court has rightly decided the issue on the point of limitation since the last date of transaction between the plaintiff and the defendant-Company was much prior to 31.04.1991 and the suit being filed for refund of the Gas cylinders and for payment of rental charges, the period of limitation was three years and in computing the period from 21.04.1991, the suit ought to have been filed within 21.01.1994 and whereas, the suit was filed much later than 16.04.1994. 8. According to the plaintiff's pleadings, the suit was filed on the claim that the defendants have taken supplies of Argon Gas Cylinders from the plaintiff-Company and have illegally retained 252 Argon Gas, Cylinders and on account of such illegal retention, the plaintiff-Company had suffered loss by way of paying rental charges to the Gujarat State Fertilizer Corporation @ Rs. 3.50 per day per cylinder and, therefore, the defendant-Company is liable not only to refund the Gas cylinders but also to reimburse the plaintiff-Company by making payment of the rental charges, the total amount of which has been computed and specified in the Schedule of the plaint. The defendant has denied to have withheld any Gas cylinder of the Plaintiff-Company and has also disputed the maintainability of the Suit primarily on the ground of limitation. 9. The issues, which therefore arise for determination, are: (i) Whether the plaintiff has been able to prove that the defendant Company have retained 252 Argon Gas Cylinders and are liable to refund the same alongwith the rental charges as claimed by the plaintiff? (ii) Whether the suit is barred by limitation? 10. On the first issue, the plaintiff has adduced oral evidences and has also heavily relied upon the statement of accounts maintained as balance sheet (Exhibit-6), claimed to be the statement regarding the sale transactions between the plaintiff and the defendant. (ii) Whether the suit is barred by limitation? 10. On the first issue, the plaintiff has adduced oral evidences and has also heavily relied upon the statement of accounts maintained as balance sheet (Exhibit-6), claimed to be the statement regarding the sale transactions between the plaintiff and the defendant. The trial court has minutely examined Exhibit-6 and other related documents relied upon by the plaintiff and has come to a finding of fact that the documents do not adequately confirm that the defendant-Company had retained any Gas cylinder belonging to the plaintiff-Company. The trial court has also observed certain glaring inconsistencies in the documents, particularly Exhibit-6 and has recorded its observations that the document (Exhibit-6) does not reflect the correct state of affairs and that the entries contained therein, are incorrect and misleading and do not reflect the actual state of affairs. The discussions made by the trial court on this issue are elaborate and detailed and I do not find any infirmity or impropriety either in the observations recorded or in the inferences drawn and the findings recorded on the basis of the inferences by the trial court on this issue. The plaintiff has certainly failed to establish by reliable evidence that the defendant Company has withheld 252 Organ Gas Cylinders belonging to the plaintiff Company. Admittedly, in course of the business transactions between the plaintiff Company and the defendant Company, there used to be exchange of Gas Cylinders and substantial number of Gas Cylinders belonging to the defendant-Company were received by the plaintiff-Company. The trial court has found that Exhibit 6 does not reflect the correct position as to the actual balance lying with accounts. 11. As regards the issue of limitation even according to the admitted case of the plaintiff reflected by the plaintiff's document namely, Exhibit-6, the last date of transaction between the plaintiff-Company and the defendant-Company was 24.01.1991. The claim for rental charges tor the Gas cylinders, allegedly retained by the defendant-Company was raised by the plaintiff-Company for the period of transaction ending on 24.01.1991 and according to the plaintiff, it had raised its claim for payment of the rental charges against the defendant on and from 24.01.1991. This claim of the plaintiff Company was denied and refused by the defendant. The cause of action to the plaintiff, according to its own case had accrued on 24.01.1991. This claim of the plaintiff Company was denied and refused by the defendant. The cause of action to the plaintiff, according to its own case had accrued on 24.01.1991. The Suit has been filed by the plaintiff for recovery of the Gas Cylinders and also for realization of the rental charges. The trial court has rightly observed that from the terms of contract and the business transactions between plaintiff and the defendant, there was no such stipulation or promise on the part of the defendant to pay rental charges and that too alongwith interest accrued thereon to the plaintiff for the cylinders supplied. Learned Counsel for the appellant would argue that since the suit is for recovery of the movable properties, which were deposited by the plaintiff to the defendant, Article 70 of the Limitation Act would apply and the period of three years stipulated, therein, would commence from the date when the defendant had refused to return the Gas cylinders. From the nature of the pleadings and the allegations made by the plaintiff, its specific case is that the defendants had, after receiving the Gas Cylinders from the plaintiff-Company, dishonestly misappropriated the same. It is not the case that the Gas Cylinders were deposited or pawned by the plaintiff-Company with the defendant and neither is the plaintiff's case that the defendants had wrongfully taken the Gas cylinders from the possession of the plaintiff. Under such circumstances, as rightly held by the trial court,ii 70 of the Limitation Act will not have application. Even otherwise also, the plaintiff does not appear to have brought on record any such declaration made by the defendant of its refusal to return the Gas Cylinders. Rather, it is the defendant's specific case that it has not retained any Gas cylinders belonging to the plaintiff and in fact, it is the plaintiff, who has illegally retained as many as 603 Gas cylinders belonging to the defendant. The limitation, accordingly, would, therefore commence from the date of last transaction under Article 68 of the Limitation Act. Learned Counsel for the Respondent next refers to Exhibit-2 and 2/A and contends that these are the documents by which the defendant had acknowledged that it had in its possession 79 Gas cylinders belonging to the plaintiff and, therefore, these documents should have been construed as acknowledgment of debt by the defendant. This argument is totally misconceived and misplaced. Learned Counsel for the Respondent next refers to Exhibit-2 and 2/A and contends that these are the documents by which the defendant had acknowledged that it had in its possession 79 Gas cylinders belonging to the plaintiff and, therefore, these documents should have been construed as acknowledgment of debt by the defendant. This argument is totally misconceived and misplaced. None of the aforesaid two documents (Exhibit-2 and 2/A) contain any acknowledgement of debt on the part of the defendant in favour of the plaintiff nor does it declare that the defendant had acknowledged to pay any money by way of rental charges for the cylinders to the plaintiff-Company. These documents, as such, do not offer any support to the plaintiff's case. The learned trial court has rightly recorded its finding that the suit as filed by the plaintiff and for the reliefs claimed, is barred by limitation. 12. In the light of the discussions made above and for the reasons stated, I find no infirmity or impropriety in the findings as recorded by the learned trial court on any of the issues. I find no merit in this Appeal. Accordingly, this Appeal is dismissed with costs. Appeal dismissed.