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2009 DIGILAW 448 (DEL)

Ring Road Car Clinic v. H. L. Advani

2009-04-18

V.B.GUPTA

body2009
Judgment V.B.Gupta, J. 1. Appellant has filed this appeal challenging the judgment dated 5th August, 1996 passed by Addl. District Judge, Delhi, vide which suit filed by respondent No.1 herein, was decreed for a sum of Rs.31,784.37 together with interest @ 18% per annum, from the date of filing of the suit till realization. Proportionate costs was also awarded in favour of the respondent no.1. 2. The brief facts of this case are that respondent No.1 filed suit for recovery against appellant and respondents 2 to 4. Respondent No.1 is sole proprietor of his firm. Appellant, on credit basis had been purchasing motor parts from respondent no.1 from 8th December, 1974 to 20th May, 1977. Last payment was received by respondent no.1, on 27th April, 1997 for Rs. 3,000/- by cheque and this payment was made by respondent no.3. Goods were also purchased after this date. Appellant and respondent No.3, are sister concern of respondent No.2. Respondent No.3 had been placing orders on behalf of appellant. Respondent No.4 was the workshop manager of appellant and respondents 2 & 3. 3. It had been further alleged that the goods were supplied along with bill and the same were received by the appellant or respondent No.2 and 3 by themselves or by their employees and the bills were signed on account of receipts of the goods. Parties were maintaining running account. 4. On 29th May, 1997, the accounts were checked by Sh.Satnam Singh, respondent No.4 and Sh.Rajinder Singh, partner of appellant and respondent No.2. It was found that sum of Rs.21,684.17p. was due and payable by appellant and respondents 2 & 3. A credit note of Rs.694/- was also issued by respondent No.1 in favour of appellant and respondents 2 and 3 and after giving credit of this amount, balance due to the respondent No.1 stood as Rs.21,684.17p. Interest on the aforesaid amount had been calculated @ 18% per annum till 21st April, 1980 and only a sum of Rs.10,000/- is claimed on this account. Appellant and respondent Nos.2 & 3, in spite of repeated letters, dated 14th September, 1977, 14th February, 1978 and 13th March, 1978 failed to liquidate their dues. Legal notice dated 5th January, 1978 was also served, but of no consequence. 5. Appellant as well as respondent Nos.2 to 4 were duly served. Appellant and respondent Nos.2 & 3, in spite of repeated letters, dated 14th September, 1977, 14th February, 1978 and 13th March, 1978 failed to liquidate their dues. Legal notice dated 5th January, 1978 was also served, but of no consequence. 5. Appellant as well as respondent Nos.2 to 4 were duly served. However, none appeared on behalf of respondent No.4, as such he was proceeded ex parte, by the trial court on 23rd May, 1980. 6. Appellant in its written statement took the defence that respondent No.1, filed the present suit in collusion with respondent No.4, who was employee of the appellant. He had played fraud on the appellant, in collusion with respondent No.1, therefore, respondent No.4 was dismissed from service. 7. It is further stated that there had been no purchase of goods whatsoever on and from the end of March, 1977. However, appellant admits the last payment of Rs.3,000/-, but the said payment was not made since no goods were ever purchased thereafter. It was denied that respondent No.3 was sending orders for the appellant. 8. It is alleged that many fictitious bills are expected to have been created without supply of the corresponding goods. Respondent No.4 was never authorized to create liabilities qua appellant and no amount is due to respondent No.1. 9. Respondents 2 & 3 in their written statement took the plea that they had no dealing with respondent No.1 and there was no privity of contract, as such no cause of action has arisen to respondent No.1. Since in account books of respondent No.1, name of appellant has been mentioned, these respondents have admittedly no liability whatsoever towards respondent No.1. 10. Trial court framed the following issues; “1.Whether there was no privity of contract between the plaintiff and the defendants 1 and 2? OPD 2.Whether the suit is bad for mis-joinder of parties? OPD 3.Whether the suit does not disclose any cause of action against the defendants 1 and 2? OPD 4.Whether the suit has been filed in collusion with defendant No.4? OPD 5. To what amount and rate of interest is the plaintiff entitled and from which of the defendants? OPP 6.Relief.” 11. OPD 3.Whether the suit does not disclose any cause of action against the defendants 1 and 2? OPD 4.Whether the suit has been filed in collusion with defendant No.4? OPD 5. To what amount and rate of interest is the plaintiff entitled and from which of the defendants? OPP 6.Relief.” 11. Issue Nos.1 to 3 being interconnected were decided in favour of appellant and against respondent No.1, holding that respondent No.1 has failed to disclose any cause of action against respondents 2 & 3 and qua these respondents, the suit was dismissed. 12. Issue Nos.4 and 5 were decided in favour of respondent No.1 and against the appellant. 13. It is contended by learned counsel for the appellant that, the fact that respondent No.4 who had been in collusion with respondent No.1 appeared as a witness as PW-2, to support respondent No.1, although respondent No.4 did not file any written statement. This fact alone goes on to show that there was collusion between respondent No.1 and respondent No.4. 14. It is further contended that the bills relied upon by respondent No.1, are fictitious and respondent No.4 had no authority, either to place any order on behalf of appellant or to receive any goods on his behalf. 15. Another contention is that the documents which had been proved on record are only true copies of the bills but neither the originals nor copies bearing signatures of DW-1 had been placed on record, to prove these documents. These documents have been got exhibited in the statement of PW-2 which should not be taken the admission of the fact on the part of the appellant. The conduct of respondent No.1 is mala fide from the fact that vide mentioning that the challans had been submitted along with the bills to the appellant, in fact, no goods were supplied. As such there was no existence of challan and accordingly, the supply of the goods had not been proved. Therefore, there was no reason for raising the bills or receiving the bills by the appellant. 16. It is also contended that interest on interest cannot be granted. On this point, learned counsel has cited the following judgments; 1) Sanyukt Nirmta v. Delhi Development Authority, 2002 (65) DRJ 409 2) Mohan Construction Co. (M/s.) v. DDA, 2005 VII AD (DELHI) 44 3) M.G.Kapoor (Lt.Col.) v. Union of India & Ors. 1999 III AD (DELHI) 623. 17. 16. It is also contended that interest on interest cannot be granted. On this point, learned counsel has cited the following judgments; 1) Sanyukt Nirmta v. Delhi Development Authority, 2002 (65) DRJ 409 2) Mohan Construction Co. (M/s.) v. DDA, 2005 VII AD (DELHI) 44 3) M.G.Kapoor (Lt.Col.) v. Union of India & Ors. 1999 III AD (DELHI) 623. 17. On the other hand, it has been contended by learned counsel for respondent No.1, that respondent No.4 was the workshop manager of appellant during the period in dispute and he had been dealing with respondent No.1-firm on behalf of appellant. The goods were supplied on the orders of the appellant and the orders forms were returned along with the bill to the appellant. Employees of the appellant, used to sign the bill in token of having received the goods. 18. It is further contended that the appellant had been paying amount on account and on 29th May, 1997 the accounts were checked by respondent No.4 and Sh.Rajinder Singh on behalf of the appellant, it was found that a sum of Rs.21,684.17 was due against the appellant. Respondent No.1 also issued one credit note of Rs.694/- in favour of the appellant and after giving credit of this amount, the balance of Rs.21,684.17p was due. Respondent No.1 had proved all the bills and appellant also admitted that there was running account between the parties. As such there is no ambiguity in the judgment of the trial court and the present appeal is liable to be dismissed. 19. Before filing the suit, respondent No.1 gave legal notice (Ex.P-74) to the appellant stating therein that a sum of Rs.21,684.17p. is due from the appellant, on account of costs of motor parts supplied by respondent No.1 to his workshop. In this notice, interest @ 24% per annum as agreed, was also claimed. 20. Since no reply to the notice was sent by appellant to respondent No.1, hence averments made in the notice shall be deemed to be admitted as correct. 21. Now coming to the defence of the appellant, the case of the appellant is that there had been no purchase of the goods whatsoever on and from the end of the March, 1977. It means that prior to this period, appellant had been purchasing goods from respondent No.1. 21. Now coming to the defence of the appellant, the case of the appellant is that there had been no purchase of the goods whatsoever on and from the end of the March, 1977. It means that prior to this period, appellant had been purchasing goods from respondent No.1. Appellant in its written statement admitted the last payment of Rs.3,000/- but thereafter no goods were ever purchased by him. 22. Another defence of the appellant is that, respondent No.1 had filed the present suit in collusion with respondent No.4, who was employee of the appellant and respondent No.4 had played fraud on the appellant in collusion with respondent No.1. 23. There is nothing on record to show that the appellant ever took any legal action against respondent No.4, being its employee, when appellant had come to know that respondent No.4 had played fraud in collusion with respondent No.1, except for the bald statement of appellant that respondent No.1 was thrown out of employment, because he colluded with respondent No.1 and is not in their employment since 1977. 24. When respondent No.4, who appeared in a witness box as PW-2, no suggestion was given to him on behalf of the appellant that he was thrown out of the employment by the appellant since he had played fraud on appellant and colluded with respondent No.1. So, this defence of the appellant that respondent No.4 had played fraud upon him, in collusion with respondent No.1, has no legs to stand. 25. Appellant in his cross-examination admitted that all the bills on which reliance had been placed upon by respondent No.1, that is, Ex. P-1 to P-68 had been received by appellant and respondents 2 & 3 and the amount of the bills is correct, as there is no correction in the same. Appellant also admitted that respondent No.4 Sh.Y.K.Burman was his Workshop Manager. 26. Respondent No.4 when appeared in witness box as PW-2, categorically stated that Satnam Singh another employee, was also receiving goods on behalf of the appellant and orders were also placed by them, on behalf of the appellant. He also identified the signatures of the Satnam Singh on most of the bills. 27. 26. Respondent No.4 when appeared in witness box as PW-2, categorically stated that Satnam Singh another employee, was also receiving goods on behalf of the appellant and orders were also placed by them, on behalf of the appellant. He also identified the signatures of the Satnam Singh on most of the bills. 27. Respondent No.1 had also proved on record the letter (Ex.P-71) and this document has been received on behalf of the appellant by Sh.Satnam Singh and respondent No.4 had proved the signatures of Satnam Singh on this document and had identified the same. 28. Appellant in his statement stated that they had been maintaining stock register but the stock register had not been placed or proved. There is also contradiction in the case of the appellant, as in its written statement it had taken the stand that no goods were supplied to them after March, 1997 whereas, in his deposition on oath in the Court as RW1, he admitted the receipt of the bills Ex.P-1 to P-68. 29. Appellant also stated in his examination-in-chief that the delivery challans and the bills were submitted along with the goods and if some goods were returned back to respondent No.1, necessary correction in the bills were made, but no such correction was made in Ex.P-1 to P-68. 30. This shows that no goods were returned to respondent No.1 on the aforestated bills and the goods sent along with these bills were dully received by the appellant, for which payment had to be made. Appellant also admitted in its written statement the last payment of Rs.3,000/-. The case of the appellant is that the bills Ex.P-53 to P-67 which are for the period from 13th April, 1977 to 13th May, 1977 are fictitious and no goods had been received with regard to these bills. 31. However, in cross-examination appellant admitted that all the bills which are Ex.P-1 to P-68, are correct and for that reason they contain no correction. He also admitted that corrections were made only on those bills where certain goods were returned back to respondent No.1. 32. So, from the statement of appellant, it is clear that the dispute now raised by him with regard to bills Ex.P-53 to P-67, is contrary to his own statement, wherein he admitted the receipt of bills Ex.P-1 to P-68. He also admitted that corrections were made only on those bills where certain goods were returned back to respondent No.1. 32. So, from the statement of appellant, it is clear that the dispute now raised by him with regard to bills Ex.P-53 to P-67, is contrary to his own statement, wherein he admitted the receipt of bills Ex.P-1 to P-68. Respondent No.4 had identified the signatures of Satnam Singh on these bills who has received the goods on behalf of the appellant. 33. Respondent No.1 had also proved his statement of account which is Ex.P-69 and credit note Ex.P. 70 vide which credit of Rs.694/- had been given by respondents No.1, to the appellant. 34. Under these circumstances, I do not find any ambiguity in the judgment of the trial court and the findings of the trial court on issue No.4 are confirmed. 35. Now coming to the interest, it has been contended by learned counsel for the appellant that trial court has granted interest over interest. 36. Respondent No.1 in its legal notice (Ex.P-74) claimed interest @ 24% per annum as agreed. Respondent No.1 when appeared in witness box stated that he had charged interest @ 18% per annum, though there is an agreement of interest @ 24% per annum printed on the bills. This 18% interest rate is also prevalent in the market. 37. No cross-examination on this aspect had been conducted on behalf of the appellant and appellant in its written statement simply stated, that respondent No.1 is not entitled to any interest. 38. Since there had been no cross-examination of respondent No.1 with regard to the interest and respondent No.1 claimed interest @ 18% only, though in the bills he claimed interest @ 24% only, the trial court rightly awarded interest @ 18% p.a. 39. Now coming to the contention of the appellant that the trial court has granted interest over interest, the same is not permissible under law. 40. Grant of interest over interest is prohibited under Section 3(3)(c) of the Interest Act, 1978 and the relevant Section read as under; “Section 3(3) Nothing in this section, (c) shall empower the court to award interest upon interest.” 41. In view of the specific provision, no interest over interest can be granted. 40. Grant of interest over interest is prohibited under Section 3(3)(c) of the Interest Act, 1978 and the relevant Section read as under; “Section 3(3) Nothing in this section, (c) shall empower the court to award interest upon interest.” 41. In view of the specific provision, no interest over interest can be granted. Respondent No.1 filed the present suit before the trial court on 28th April, 1980 for the total claim of Rs.31,784.37, as per details given below. “ i) Amount due : Rs.21784.37 ii) Interest @ 18% till 21.4.80 though interest Amounts to Rs.11609.36 Only Rs.10,000/- is claimed : Rs.10000.00 Total : Rs.31784.37” 42. The suit of respondent No.1 was decreed on 5th August, 1996 for a sum of Rs.31,784.37p. together with interest @ 18% p.a. from the date of filing of the suit (that is, 28th April, 1980) till realization. 43. Since the decretal amount of Rs.31,784.37p. include the sum of Rs.10,000/- as interest, there was no occasion for the trial court to grant further interest @ 18% p.a. on the interest amount of Rs.10,000/-. 44. Under these circumstances, appellant is directed to pay or deposit the decretal amount of Rs.31,784.37p. within one month from today. Appellant is further directed to pay interest @ 18% p.a. on the sum of Rs.21,784.37p. from the date of filing of the suit (that is w.e.f. 28th April, 1980) till realisation. 45. On 12th December, 1996 when this appeal was filed, the appellant was directed to deposit the decretal amount of Rs.21,784/- along with interest @ 10% p.a. from the date of the suit till date and thereafter vide order dated 4th August, 2000 respondent No.1 was given opportunity to withdraw the same on furnishing necessary security. The appellant shall get adjustment for the deposit made by him in terms of the order dated 12th December, 1996 passed by this Court. 46. It is well-settled that when litigation has been needlessly protracted by an unsuccessful litigant, he should be burdened with heavy costs. The general rule is that the successful party is entitled to costs, unless he is guilty of misconduct, negligence or omission. 47. In the present case, respondent No.1 supplied goods to the appellant in April, 1977 for which appellant did not make any payment, even though respondent No.1 served him with the legal notice also. The general rule is that the successful party is entitled to costs, unless he is guilty of misconduct, negligence or omission. 47. In the present case, respondent No.1 supplied goods to the appellant in April, 1977 for which appellant did not make any payment, even though respondent No.1 served him with the legal notice also. The appellant had been fighting this litigation since 1977 having no legal rights at all and had dragged respondent No.1, up to this Court. It had taken nearly thirty two years to conclude this matter. 48. Under the circumstances, appellant is directed to pay Rs.25,000/- as costs to respondent No.1. Costs shall be paid to respondent No.1 or deposited in the trial court/executing court within one month from today. In case, appellant fails to comply with the above directions, the executing court shall execute the decree by coercive process after expiry of one month from today. 49. Subject to above directions, the appeal is dismissed. 50. Trial court record be sent back forthwith.