2019 (10) TMI 1479 - DSC - VAT and Sales Tax

Non-supply of C-Form - recovery on account of C-Form - application u/o 1 Rule 10 CPC - HELD THAT - It is rightly submitted by learned Sh. Deepak that at this stage it would not be proper to strike out defendant no. 2 and defendant no. 2 appears to be proper party because firstly a letter purportedly issued by defendant no. 2 asking plaintiff to supply particulars for issuance of C Form is on record. This prima facie reflects that defendant no. 2 was under obligation or at least was having some express or implied contract to issue C Form. Total claim of recovery of ₹ 91,65,975/ of plaintiff includes the amount on account of C Form. Secondly, bills were allegedly issued in the name of defendant no. 2. It is rightly submitted by learned Sh. Deepak that while passing a decree, court may decide whether decree is to be executed partly or in full against both the defendants jointly or a particular sum is to be recovered from one or other defendant only. Application u/o 1 Rule 10 CPC is dismissed - Matter be put up for admission/denial of documents and framing of issues on 16.03.2020.

Summary

Issues involved:
- Whether defendant no. 2 is a necessary party in the suit based on an agreement with plaintiff and defendant no. 1.
- The liability of defendant no. 2 regarding the issuance of C-Form and the balance amount mentioned in the prayer clause.
- The consideration of defendant no. 2 as a proper party based on the documents and invoices presented during the proceedings.

Analysis:

The first issue revolves around whether defendant no. 2 is a necessary party in the suit. The plaintiff argued that the suit is based on an agreement between the plaintiff and defendant no. 1, with all goods supplied and the cheque issued by defendant no. 1. The defendant no. 2 was claimed to have no involvement in the transactions. However, the defendant no. 2 presented a letter requesting particulars for the issuance of a C-Form, indicating some level of obligation or contract. The court acknowledged the prima facie evidence of defendant no. 2's involvement based on the letter and the invoices raised in their name. Therefore, the court decided not to strike out defendant no. 2 at this stage, considering the potential liability or contract with regard to the C-Form.

Moving on to the second issue, the liability of defendant no. 2 concerning the issuance of the C-Form and the balance amount mentioned in the prayer clause was disputed. The defendant no. 2 argued that the agreement between plaintiff and defendant no. 1 specified that it was solely defendant no. 1's responsibility to supply the C-Form. However, the court found merit in the argument presented by the defendant no. 1's advocate, highlighting the importance of the documents and invoices indicating defendant no. 2's potential obligations. The court emphasized the need to consider whether the decree should be executed against both defendants jointly or partially against one of them.

In conclusion, the court dismissed the application under Order 1 Rule 10 CPC, stating that defendant no. 2 should remain a party in the proceedings. The matter was scheduled for further proceedings related to the admission/denial of documents and the framing of issues. The judgment highlighted the importance of the documents and invoices in determining the involvement and liabilities of defendant no. 2 in the suit based on the agreement between the plaintiff and defendant no. 1.