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2025 DIGILAW 1024 (TS)

G. S. Oils Limited v. Jivanlal and Sons

2025-09-12

ABHINAND KUMAR SHAVLI, VAKITI RAMAKRISHNA REDDY

body2025
JUDGMENT : VAKITI RAMAKRISHNA REDDY, J. 1. This Appeal Suit is filed by the appellant/plaintiff against the Judgment and Decree dated 09.06.2011 in O.S. No. 4 of 2009 on the file of District Judge, Adilabad, wherein the suit filed by the plaintiff against the defendant for recovery of money was decreed in part. 2. For the sake of convenience, the parties will be arrayed as referred before the trial Court. 3. The sole plaintiff filed the above suit vide O.S. No. 4 of 2009 against the sole defendant for recovery of Rs. 42,10,993/-. The case of the plaintiff is that it is a limited company engaged in manufacture and sale of soya oils and soya de-oil cake at Adilabad and that the defendant, which is a trading company, purchased soya products from the plaintiff through K.S. Commodities under Invoice Nos.7 and 8 dated 21.03.2006 and 28.03.2006 respectively worth of Rs.3,52,61,307/- took delivery through railway wagons. Though payments of Rs. 3,25,00,000/- were made, an outstanding balance of Rs. 27,61,307/- remained and the said amount along with interest at 18% per annum from 01.05.2006 to 31.03.2009 amounted to Rs.42,10,993/-. The defendant issued three cheques bearing Nos. i) 562781 dated 07.06.2006 for Rs.11,01,100/, ii) 562786 dated 26.06.2006 for Rs.7,95,418/- and iii) 562785 dated 26.06.2006 for Rs.7,23,011/- respectively towards discharge of above said outstanding liability. However, all the three cheques were dishonored on presentation and thereby leading to issuance of legal notices dated 29.06.2006 and 04.08.2006 by the plaintiff to defendant. Despite repeated demands by the plaintiff, the defendant failed to pay the outstanding dues, compelling the plaintiff to file the suit. 4. In reply to the above plaint averments, the defendant filed written statement and contended that it is holding an Export and Import Licence in soya oils and soya de-oil cake and was approached by the plaintiff, who sought to use his licence for exporting goods to Pakistan and Bangladesh, to which the defendant consented. It is further contended that the plaintiff exported goods in the name of the defendant by taking some blank cheques as security. The defendant remitted the amounts received by him to the plaintiff in good faith and after adjustment, an amount of Rs.26,19,529/- was remained and out of which the defendant was entitled to Rs. 15,18,429/- towards performance charges at 4.5% p.a., leaving Rs.11,01,100/- payable to the Plaintiff. The defendant remitted the amounts received by him to the plaintiff in good faith and after adjustment, an amount of Rs.26,19,529/- was remained and out of which the defendant was entitled to Rs. 15,18,429/- towards performance charges at 4.5% p.a., leaving Rs.11,01,100/- payable to the Plaintiff. It was further alleged that though the defendant demanded the plaintiff for return of cheques admitting his liability to the extent of Rs.11,01,100, the plaintiff has been filing criminal complaints against the defendant. Hence, the defendant prayed to dismiss the suit of the plaintiff. 5. Based on the above pleadings, the trial Court framed three issues. During the course of trial, PW1 was examined and got marked Exs.A1 to A12 on behalf of the plaintiff. On the other hand, DW1 was examined and got marked Ex. B1 to B7 on behalf of the defendant. 6. Upon consideration of the rival contentions, the trial Court, by judgment and decree dated 09.06.2011, decreed the suit in part holding that the plaintiff was not entitled to the entire claim of Rs. 42,10,993/- but only to an extent of Rs. 11,01,100/-, as the defendant was found entitled to performance charges of Rs.15,18,429/- and consequently the defendant was permitted to retain the said amount and directed to pay the outstanding due of Rs. 11,01,100/- to the plaintiff. 7. Aggrieved by the same, the plaintiff filed the present appeal to set aside the impugned judgment and decree and thereby decree the suit for total amount of Rs.42,10,993/-. 8. Heard both sides and perused the record. 9. Now the point for determination is: Whether there are any grounds to set aside the impugned judgment dated 09.06.2011 passed in O.S. No. 4 of 2009 on the file of District Judge, Adilabad? 10. POINT : The learned counsel for the plaintiff submits that the plaintiff proved his case with cogent evidence, the trial court, on mere assumptions and presumptions, erroneously decreed the suit in part for Rs.11,01,100/- instead of decreeing it for the entire claim of Rs.42,10,993/-. The learned counsel for the plaintiff submits that as per the terms of purchase, the defendant had to pay the amount in cash, failing which he is liable to pay interest at 18% p.a. as per trade practice. Against the total purchase price, the defendant paid Rs.3,25,00,000/- on various dates, leaving a balance of Rs.27,61,307/-. The learned counsel for the plaintiff submits that as per the terms of purchase, the defendant had to pay the amount in cash, failing which he is liable to pay interest at 18% p.a. as per trade practice. Against the total purchase price, the defendant paid Rs.3,25,00,000/- on various dates, leaving a balance of Rs.27,61,307/-. On adding interest of Rs.14,49,686/- from 01.05.2006 to 31.03.2009, the total outstanding became Rs.42,10,993/-. 11. The learned Counsel for the plaintiff submits that the defendant admitted the purchase transactions, part-payments; and that Rc. S-11 and A-12 Form-H certificates issued under the Central Sales Tax Act categorically shows the name of the defendant as the seller in respect of the soya transactions, which in fact was admitted by DW1 himself. Instead, the trial court relied upon new pleas taken for the first time in evidence, which were not pleaded in the written statement. It is further submitted that as the defendant himself has admitted the transactions and liability, hence, the suit ought to have been decreed in toto, and the partial decree is liable to be set aside. 12. On the other hand, the learned counsel for the defendant submits that the plaintiff has deliberately suppressed the true nature of the transaction. It is the specific case of the defendant that he was only acting as an Export Agent for the plaintiff, who exported soya oil and soya de-oil cake from Adilabad to Pakistan and Bangladesh. The invoices relied upon by the plaintiff (Exs. A1 and A2) would clearly reveal that the goods were meant for export; however, the plaintiff failed to produce the railway receipts, which would have established that the consignments were in fact destined for foreign buyers. The suppression of these vital documents amounts to concealment of material facts, and therefore, the plaintiff is not entitled to claim the entire amount as alleged. 13. The learned counsel for the defendant submits that under the terms of the arrangement, the plaintiff was bound to pay performance charges at the rate of 4.5% per annum on the goods transported through the export agency of defendant. Since the sale proceeds were to be realized by the defendant in his name from foreign buyers, the plaintiff sought security in the form of three cheques. Thus, the cheques were issued only as security instruments and not towards discharge of any debt. Since the sale proceeds were to be realized by the defendant in his name from foreign buyers, the plaintiff sought security in the form of three cheques. Thus, the cheques were issued only as security instruments and not towards discharge of any debt. While the plaintiff himself had referred to performance charges in the criminal complaints under Section 138 of the Negotiable Instruments Act, no reference to this fact was made in the underlying original suit, nor was any denial offered by way of rejoinder to the written statement. 14. The learned counsel for the defendant submits that the three cheques relied upon by the plaintiff, have been misused and fabricated. The cheques were admittedly handed over in blank form as security, but the plaintiff subsequently filled in the amounts and dates at his own convenience and created a false claim. The plaintiff, acting with mala fide intention, presented all three cheques and instituted a false suit based on those entries, despite knowing that only one cheque for Rs.11,01,100/- represented the actual admitted liability of the defendant. 15. The learned counsel for the defendant further submits that the Defendant is liable to pay only Rs.11,01,100/- after deducting the agreed performance charges, and this fact has already been admitted in the written statement itself. The other two cheques for Rs.7,95,418/- and Rs.7,23,011/- respectively, were given merely as security and the plaintiff had no authority to present them. It is further submitted that the plaintiff by misusing the aforesaid cheques and by suppressing the material facts, seeking to enhance his claim to Rs.42,10,993/- which is wholly untenable. 16. Having heard the submissions of both learned counsel and upon perusal of the material available on record, it is evident that the plaintiff’s case rests upon invoices Exs. A1 and A2, certain payments admittedly made by the defendant, and the three cheques allegedly issued towards the outstanding liability. On the other hand, the defendant consistently contended that he was acting only as an export agent, that the cheques were issued merely as security, and that it was entitled to performance charges at 4.5% per annum as per the understanding between the parties. 17. On the other hand, the defendant consistently contended that he was acting only as an export agent, that the cheques were issued merely as security, and that it was entitled to performance charges at 4.5% per annum as per the understanding between the parties. 17. With regard to the contention of the plaintiff that the trial court failed to decree the suit for the entire sum of Rs.42,10,993/-, it is not in dispute that the defendant through his licence exported goods belonging to plaintiff to Pakistan and Bangladesh under invoices dated 21.03.2006 and 28.03.2006 for a total value of Rs.3,52,61,307/-, and that payments aggregating to Rs.3,25,00,000/- were made by the defendant to the plaintiff. The dispute centres only upon the difference amount of Rs.27,61,307/- , which is being claimed along with interest by the plaintiff and on the other hand the claim of the defendant to an extent of Rs.15,18,429/- towards performance charges at 4.5% per annum. 18. Additionally, the plea of the plaintiff that interest at 18% per annum is payable as per trade practice is not supported by any written agreement between the parties. A careful scrutiny of the oral evidence of PW1 discloses that he admitted that there was no written agreement between the parties and that the arrangementwas purely oral. PW1 further admitted that the goods covered under Exs. A1 and A2 were destined for Pakistan and Bangladesh and that no letters of credit relating to the said exports were produced. PW1 also admitted that Ex.B1 the certified copy of account statement had been filed by him in criminal proceedings and that the same tallied with the value of Exs. A1 and A2. Furthermore, PW1 also admitted that performance charges at 4.5% amounted to about Rs.15,18,429/-, and that Exs. B2 and B3 railway receipts filed in the criminal cases pertain to the same consignments. In the absence of cogent proof of an agreed rate of interest, the trial Court was justified in not accepting the claim of the plaintiff for the entire amount including interest as calculated. 19. It is pertinent to note that the trial court rightly observed that the plaintiff suppressed the fact that the defendant was only an export agent and was entitled to deduct performance charges at 4.5%. 19. It is pertinent to note that the trial court rightly observed that the plaintiff suppressed the fact that the defendant was only an export agent and was entitled to deduct performance charges at 4.5%. Therefore, the trial Court was justified in drawing the inference that the defendant, being a licensed exporter, would not have permitted use of his license for exports worth Rs.3,52,00,000/- without any remuneration, and that in the absenceof any plea or proof of separate charges being paid, the arrangement of performance charges at 4.5% stands established. 20. As regards the issuance of cheques towards the outstanding payable, it is to be noted that mere issuance of cheques, without establishing the underlying enforceable liability, cannot automatically entitle the plaintiff to a decree for the entire suit claim. Further, the pendency of criminal complaints under Section 138 of the Negotiable Instruments Act has no bearing upon the present civil proceedings, since the scope of enquiry in a civil suit is distinct and the plaintiff has to independently establish the liability. 21. With respect to Rc. S-11 and A-12 Form-H certificates issued under the Central Sales Tax; it is not in dispute that the certificates bear the name of the defendant as seller. However, such documents by themselves do not establish the extent of the liability claimed by the plaintiff, particularly when the plaintiff failed to disclose the arrangement governing the transaction. The reliance placed on Form-H certificates cannot substitute proof of the terms of thecontract or discharge the plaintiff from the burden of proving his entitlement to the specific sum claimed herein. 22. It is pertinent to note that, from the above admissions, it clearly emerges that: (i) there was no written agreement of outright sale and purchase between the parties; (ii) the consignments covered by Exs.A1 and A2 were directly exported to Pakistan and Bangladesh and not delivered to the defendant as a purchaser; (iii) the plaintiff received Rs.3,25,00,000/- out of the total invoice value of Rs.3,52,61,307/- and (iv) the plaintiff filed Ex.B1 being a statement in the criminal court proceedings by him, which depicts the entire transaction, including the agreed performance charges, delayed remittances, and the outstanding liability of only Rs.11,01,100/-. In the light of such clear admissions, the plea of the plaintiff that the cheques represented the outstanding balance of Rs.42,10,993/- cannot be sustained, particularly when the evidence establishes that, Exs. In the light of such clear admissions, the plea of the plaintiff that the cheques represented the outstanding balance of Rs.42,10,993/- cannot be sustained, particularly when the evidence establishes that, Exs. A4 and A5 were delivered only by way of a security and not towards any substantive liability. 23. In the light of the above discussion, this Court is of the view that the trial Court while exercising its discretion has rightly decreed the suit in part for Rs.11,01,100/-. The said finding is based on a proper appreciation of both oral and documentary evidence adduced on behalf of both the parties. This court finds no infirmity, illegality or perversity in the well-reasoned judgment and decree passed by the trial Court, warranting interference in the present appeal. The plaintiff has failed to establish any of the grounds urged in the memorandum of appeal. Accordingly the Appeal is devoid of merits and is liable to be dismissed. 24. In the result, the Appeal stands dismissed. In the circumstances, there shall be no order as to costs. As a sequel, miscellaneous applications pending if any in the appeal, shall stand closed.