2019 (10) TMI 883 - HC - Indian Laws

Suit for recovery along with pendente lite and future interest and costs against the Defendants - stocking and retail sale of alcoholic beverages from its outlets at Gurgaon - Whether Mr. Satish Chandra Pandey is duly authorised to sign file and institute the present suit on behalf of the plaintiff company? - HELD THAT - Since the resolution of the Board has been proved by producing the original minute book mere absence of seal/signature over the same makes it immaterial. Significantly pursuant to the specific authorization to Mr. Satish Chandra Pandey the Plaintiff Company has consistently participated in the present proceedings and this leaves no room for doubt that the authorization was valid. The prosecution of the suit is itself ratification of the authorization given by the Board - It is established that the suit was validly instituted by a competent person who has been authorized by the Plaintiff Company by way of a resolution by the Board of Directors. Accordingly the issue is decided in favour of the Plaintiff and against the Defendants and it is held that Mr. Satish Chandra Pandey has validly signed filed and instituted the present suit on behalf of the Plaintiff Company. Whether the Plaintiff is entitled to recover the amount of Rs. 2, 50, 96, 591.44 from the Defendants? - HELD THAT - On a conjoint reading of all the documents produced on record i.e. Form L-32 L-34 and invoices it can be firmly inferred that the Plaintiff has successfully proved the supply of goods under the aforesaid forms and the invoices. It is also significant to note that Defendants have led no evidence to the contrary. Undoubtedly the burden of proof for this issue lay upon the Plaintiff as it had to prove the liability. However shifting of onus of proof is a continuous process in the evaluation of evidence. In the present case during trial the Plaintiff had been able to produce sufficient material in the nature of documentary and oral evidence that suggests the high degree of probability of the liability of the Defendants the onus thus shifted on the Defendants - Defendants have failed to discharge the onus and in the absence thereof the burden of proof never shifted back and thus on the basis of high degree of probability established by the Plaintiff it can be said that Plaintiff has discharged the onus. On the basis of the documents and the evidence led it emerges that the defense of the Defendants was only with the intent to avoid liability without any substance and that Plaintiff s case is proved through preponderance of probability. Having regard to the fact that Defendants have not been able to elicit anything adverse with respect to the entries reflected in the said document it can be safely inferred that statement of accounts along with corroborating independent evidence has been led in the present case so as to render the statement of account as reliable evidence within the meaning of Section 34 - the aforesaid issue is decided in favour of the Plaintiff and against the Defendants. Whether the Plaintiff is entitled to the award of pendente lite and future interest @24% per annum and if not at the same rate then at what rate and for what period? - HELD THAT - Defendants have not been able to place anything on record to disprove the documents relied upon by the Plaintiff and therefore it is clear that there was an agreement between the parties to pay interest on the outstanding amount and hence Defendants are liable to pay interest on the outstanding amount. However the rate of interest claimed is found to be on the higher side and accordingly the pendente lite and future interest is awarded in favour of the Plaintiff at the rate of 12% per annum - decided in favour of the Plaintiff and against the Defendants. Whether the Plaintiff did not supply the quantity of beverages in accordance with the invoices in question? - HELD THAT - No evidence affecting a party is admissible against that party unless the latter has had an opportunity of testing its truthfulness by cross examination. Therefore any such statement made by DW-1 favouring the Defendants cannot be relied upon. On the contrary in view of the findings given in respect of Issue No.2 the Plaintiff has duly proved the documents and the transactions between the parties and proved that Defendants have an outstanding liability towards the Plaintiff. Even otherwise the testimony of the Defendants witnesses examination in chief and the cross examination does not prove that there was any shortage of supply - the issue is decided against the Defendant and against the Plaintiff. Relief - HELD THAT - A decree is passed in favor of the Plaintiff and against the Defendants for a sum of Rs. 2, 50, 96, 591.44/- alongwith pendente lite and future interest at the rate of 12% per annum from the date of filing of the present suit till the date of realization. Plaintiff is also entitled to the cost of the suit on furnishing the certificate of cost within a period of three weeks.

Summary

Issues Involved:
1. Authorization of Mr. Satish Chandra Pandey to sign, file, and institute the suit on behalf of the plaintiff company.
2. Entitlement of the plaintiff to recover Rs. 2,50,96,591.44 from the defendants.
3. Entitlement of the plaintiff to pendente lite and future interest at 24% per annum.
4. Whether the plaintiff supplied the quantity of beverages as per the invoices.
5. Relief.

Detailed Analysis:

Issue 1: Authorization of Mr. Satish Chandra Pandey
The plaintiff contended that Mr. Satish Chandra Pandey, Assistant Company Secretary, was duly authorized to institute the suit via a resolution passed by the Board of Directors on 27th July 2010 (Exhibit PW-1/1). The defendants argued that Mr. Pandey was not authorized as the minute book lacked the company seal and signatures of other board members. However, the court held that the absence of a seal or additional signatures did not invalidate the authorization. The court referenced previous judgments, including United Bank of India v. Naresh Kumar, to affirm that procedural defects should not defeat a just cause. The resolution was deemed valid, and the suit was properly instituted. Thus, this issue was decided in favor of the plaintiff.

Issue 2: Entitlement to Recover Rs. 2,50,96,591.44
The plaintiff claimed that the defendants failed to make payments for supplied liquor, supported by invoices, balance confirmation letter, and statement of accounts. The defendants denied receiving the goods and claimed the documents were forged. The court examined the invoices, Forms L-32 and L-34, and the balance confirmation letter. The court found that the plaintiff provided sufficient evidence of delivery, including testimony from an Excise Inspector confirming the issuance of Form L-34. The defendants' arguments were deemed unsubstantiated, and their failure to produce counter-evidence led the court to rule in favor of the plaintiff. Thus, the plaintiff was entitled to recover the claimed amount.

Issue 3: Entitlement to Interest
The plaintiff sought 24% per annum interest on the outstanding amount, as stipulated in the invoices. The defendants denied any agreement on interest. The court found that the plaintiff provided sufficient documentary evidence of the agreement to pay interest. However, the court considered the claimed rate excessive and awarded pendente lite and future interest at 12% per annum. Thus, this issue was decided in favor of the plaintiff but with a reduced interest rate.

Issue 4: Supply of Beverages as Per Invoices
The defendants contended that the plaintiff did not supply the quantity of beverages as stated in the invoices. The court noted that the defendants failed to complete their cross-examination and did not provide evidence to support their claim. The plaintiff successfully proved the supply through corroborated documents and testimony. Consequently, this issue was decided against the defendants.

Issue 5: Relief
Based on the findings, the court decreed in favor of the plaintiff, awarding Rs. 2,50,96,591.44 along with pendente lite and future interest at 12% per annum from the date of filing the suit until realization. The plaintiff was also entitled to the cost of the suit upon furnishing the certificate of cost within three weeks.

Conclusion:
The court ruled comprehensively in favor of the plaintiff, affirming the validity of the authorization, the delivery of goods, the entitlement to recover the claimed amount, and the award of interest, albeit at a reduced rate. The defendants' arguments were found to be unsubstantiated and lacking in credible evidence.