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TMI Blog2019 (10) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... sh 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Plaintiff and against the Defendants for a sum of ₹ 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. - CS(OS) 2244/2010 - - - Dated:- 18-10-2019 - SANJEEV NARULA J. Plaintiff Through: Mr. K. K. Bhuchar with Mr.B. L. Wali, Advs. Defendants Through: Mr. Abhay Mani Tripathi, Adv. for D-1 to 4 and 6 to 17. JUDGMENT SANJEEV NARULA, J. 1. Plaintiff who is engaged, inter-alia, in the business of manufacturing beverages i.e. Indian Made Foreign Liquor (IMFL), wine, spirit and liquor products including their by-products has filed the present suit for recovery of ₹ 2,50,96,591.44/- along with pendente lite and future interest and costs against the Defendants. Defendant No. 1 is a Partnership Firm constituted by Defendants 2 to 17 as its partners and is involved in stocking and retail sale of alcoholic beverages from its outlets at Gurgaon. Case of the Plaintiff 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The notice did not yield the desired result and criminal proceedings were initiated. Pursuant thereto, Defendant No. 1 made payment of ₹ 10 lacs to the Plaintiff in the court of Metropolitan Magistrate and the criminal complaint filed by the Plaintiff was disposed of in terms thereof. Case of the Defendants: 4. Defendants have contested the suit by way of a joint written statement. Although Defendant No. 1 admits that it had business relationship with the Plaintiff, however it is contended that as per the agreement between the parties, the payment for the supplies was to be made on the sale of the goods and there was no credit period. As per the agreement between the parties, Defendant No. 1 was entitled to 20% rebate on the invoice value. Plaintiff had also agreed to pay ₹ 40 lacs for displaying advertisement material on the premium outlets of the Defendants. Plaintiff has not filed any document exhibiting the actual supply of goods to Defendant No. 1. Form L-32, relied upon by the Plaintiff does not evidence the actual supply of goods. It only manifests that permission was granted by the Excise Department allowing purchase of liquor to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plaintiff Company dated 27th July 2010 [Ex. PW 1/1]. The certified copy of the extract of the Minutes of Meeting of the Board was proved by producing the original Minutes Book. The relevant extract of the affidavit by way of evidence is reproduced hereunder: I say that by and under a resolution of Board of Directors of the Plaintiff passed on 27.07.2010, the deponent being the Assistant Company Secretary of the Plaintiff company is authorized and empowered to institute a suit for and on behalf of the Plaintiff and to appoint legal advisors and advocated for the said purpose. The deponent being the Assistant Company Secretary of the Plaintiff is well versed with the facts and circumstance of the present case and is otherwise empowered to institute the present suit, sign and verify the pleadings for and on behalf of the Plaintiff and to take such other steps for recovery of the amount due to the Plaintiff form the Defendants and to do all such acts, deeds and things as may be necessary for the prosecution of the case for and on behalf of the Plaintiff. The present suit is accordingly signed, verified and instituted by the deponent for the recovery of the suit amount ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the pleadings on behalf of the company by a resolution passed by the Board of Directors to that effect or by a power of attorney being executed in favour of any individual. A company can even ratify the actions of its officers in signing the pleadings by an express or implied authorization. It will be a travesty of justice if the Plaintiff herein is to be non-suited for a technical reason that the authority was lacking and defective. Defendant s contention regarding the missing seal is wholly misconceived. No law has been shown to say that seal is necessary to authenticate the minute book. 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. 11. It would also be profitable to note the views expressed by this Court on this issue. The Division bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is shows that plaintiff No. 2 has ratified the action of Mr. Chetan Gupta of signing the plaint and, thereafter, continuing with the same. 35. For the foregoing reasons, this issue is decided in favour of the plaintiffs and against the defendant. 13. In view of the above discussion, 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. Issue 2: Whether the Plaintiff is entitled to recover the amount of ₹ 2,50,96,591.44/- from the Defendants? 14. Plaintiff claims that the Defendants failed to make payments for the liquor supplied to them. Defendants on the other hand refuted the liability primarily taking the plea of non-delivery. They contend that no material was received against the invoices that are subject matter of the suit. Plaintiff has not filed any document showing the actual suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The permit [L-32] carries the name of the vendor and the manufacturer and remains valid for the period mentioned therein. This Form signifies that the vendor specified has the requisite permission to purchase the maximum quantity of alcohol indicated therein. The vendor can nevertheless, if it chooses, purchase lesser quantity, but cannot exceed the limit. On the submission of Form L-32 by the vendor, the manufacturer becomes entitled for issuance of Form L-34 from the Excise Department which signifies that the quantity demanded by the vendor can be moved out of the warehouse of the manufacturer, as indicated on Form L-34 itself. Form L-34 is thus a permission by the Excise Department to move the liquor out of the premises of the manufacturer in accordance with Form L-32. 17. There is sufficient independent credible evidence on record to prove the liability. Plaintiff examined Mr. Satish Chandra Pandey, Assistant Company Secretary as PW-1. The statement of PW-1 in the affidavit by way of evidence is reproduced hereunder: I say that accordingly, the defendant No. 1 placed various purchase orders with the plaintiff, from time to time, for supply of various bran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatsoever with any purchaser/proposed purchaser 18. Plaintiff has also examined one Sh. Yatinder Yadav (PW-4), Excise Inspector, who produced the summoned record pertaining to Form (s) No. 34 issued to Defendant No. 1. On the basis of the records produced by him, he confirmed that all the exhibits- copies of the Form L-34 (Ex PW-1/2 to Ex PW 1/36) filed on record were issued by the Excise Department under the respective licenses. During the cross-examination, the said witness also stated that the liquor from the godown of the Plaintiff is transported in the presence of an Excise Officer. The relevant extract of the Statement of Mr. Yatinder Yadav (PW-4) is reproduced hereunder: I have brought the summoned record pertaining to Form NO. L-34 issued to J.D. Wines. Copy of L-34 issued to the licencee dated 20.08.2009 is already on record as Ex. PW l/2.(Office copy seen and returned) XXX Form NO. L-32 is issued to the licensee for authorize possession and transportation of liquor. Licensee cannot remove liquor issued against the permit without Form NO. L-34. Form NO. L-34 authorizes the licensee to remove the liquor against the valid permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arg(DW-1) on the above Form(s) is reproduced hereunder: I say that the issuance of Form L-32 and permit L-34 by the authority merely shows that concerned parties have requisite permission for sale, Purchase and Transport of Alcoholic breweries and nothing more than that. I say that the said licenses and permits do not reflect the actual sale, purchase or transport of intended material. Mr. Rajeev Garg in his cross stated as under: The permission is granted by the Excise Authority on our application in writing. It is correct that this permission is called as Form L-32. It is correct that order is placed on the Plaintiff within the limits of quantity mentioned on form L-32. After placing the order on the plaintiff, we received the material through transporter with proper bilty and we do not send our person to collect the material. I do not know that it is mandatory to sign the register maintained by the Excise Department called L-34 before dispatching the delivery from plaintiffs premises. (Volunteered. Though, it may be mandatory as per Excise Rules). 20. On a careful perusal of the aforenoted testimony of Mr. Yatinder Yadav (PW-4), it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Do you have in your possession any such communication where you wrote to the plaintiff to issue fresh amended invoice? A. No. XXX It is correct that whatever supplies we actually received from the plaintiff were in accordance with L-34 and the invoice accompanying the same. It is correct that for that reason we did not have to write to the plaintiff about any shortage in actual supply. We started making entries in the ledger maintained by us copy of which is Ex. DW-I/1 from the very day when we started receiving supplies. The entries in the ledger account were in accordance with the invoices received by us. 23. Thus, in my considered opinion, failure to produce the monthly statements does not in any way discredit the version of the Plaintiff. It cannot be said that failure to produce the monthly sales statements is fatal to the case of the Plaintiff. There is sufficient independent credible evidence on record to prove the liability. The aforenoted witness from the Excise Department has also stated that the vehicle number is not compulsorily required to be noted on L-34 and that the Excise Department is not involved with the issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances where the transport is not provided by the Plaintiff, there would not be any GR. Since L-34 have been proved, the only logical conclusion is that the goods left the premises of the Plaintiff for delivery to the Defendants. The statement of Mr. Ram Vohra (PW-2) is reproduced hereunder: Question: Can you tell as to in which deliveries to the defendant, transportation was provided by the plaintiff? Answer: As per documents on record, in none of the case transportation was provided by the plaintiff. If we provide transport, the copy of the GR Number will be attached with Form L-32 L-34 and invoice and if we will not provide there will no GR Number. We did not keep any record of the transactions where the transportation was provided by the defendant firm. (Volunteered. It was done on good faith but now we are maintaining this record). It is wrong to suggest that no transportation shall leave our Go-down with liquor without proper documentation like bilty. It is wrong to suggest that the copy of the bilty is also provided to plaintiff even in cases where the transportation is provided by the wholesaler. 25. The abovementioned statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the documents and files were taken by Income Tax Authority, therefore we are not in a possession of any such invoice. 26. Be that as it may, since the Defendants have not produced the original invoices, the copies of the invoices produced by the Plaintiff have to be admitted as evidence. Defendants contention that the Plaintiff did not bring any person from the accounts department to prove the invoices is misconceived. PW-1, was looking after the legal compliances and has proved the same in accordance with law on the basis of the records produced by the Plaintiff company. 27. Thus, 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 suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and confirming the alleged principal outstanding balance of ₹ 2,04,71,000/- (Rupees Two Crores Four Lakhs Seventy one thousand only) a due and payable by Defendant no.1 to the Plainitff as on 31.3.2010. I say that the letter is forged, and created document. I say that it does not bear the signature of any of the partners or employees and also it does not bear stamp of the company. I say that the Plainitff has forged the letter in attempt to substantiate its nonexistent claim. 30. Sh. Ram Vohra (PW-2) in his evidence by way of affidavit in paragraph 9 has stated that Mr. Mahesh Kumar signed Ex. PW 1/72 in his presence and he identified his signatures. The extract of the statement in the evidence by way of affidavit is reproduced below: I say that Shri Mahesh Kumar, Accountant of the Defendant Firm issued balance confirmation vide letter dated 19.04.2010 and the said letter is signed by him and I identify his signatures as he has signed the said letter in my presence. The balance confirmation letter dated 19.04.2010 issued by the defendant is Exhibit PW 1/72. 31. Plaintiff Company had no reason to disbelieve or suspect that Mr. Mahesh Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose before the Court about the truthfulness of the said authority. Defendants have also failed to produce the employees register/ muster roll or any other document to refute the claim of the Petitioner in this regard. The statement of Mr. Rajeev Garg (DW-1) to this effect is reproduced hereunder: I do not remember if employees register is maintained by the defendant. 1do not remember the number of employees working with the defendant in 2009 till this suit was filed. 1 cannot even provide the approximate figures of employees. I do not remember if the defendant maintains the salary register of its employees. 33. Thus Defendants denial that Mr. Mahesh Kumar did not have the authority to sign the same, has not been decisively rebutted. Defendants have also not produced any evidence to suggest that Mr. Mahesh Kumar had been induced or defrauded into signing the said document or any material to suggest that any action was taken against Mr. Mahesh Kumar for the alleged transgression of the limits of his authority or if any legal action was taken against him in respect of Ex. PW 1/72. Heavy duty lies upon the party who seeks to avoid the balance confirmation. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of entries in the books of account including those maintained in an electronic form. Under the said provision, entries into the books of account including those maintained in the electronic form, regularly kept in the course of business are relevant whenever they refer to a matter into which the Court has to enquire. However, such statements alone do not qualify as sufficient evidence to charge any person with liability. Though there is no specific method of proving the books of account, however, oral and documentary corroborative evidence relating to the entries in the books of account is regarded as sufficient proof of the entries made therein. 37. Plaintiff has produced the invoices, Form(s) L-32 L-34 to corroborate the entries. The said documents have been proved in accordance with law. The items/entries reflected in the statement of account have thus been proved by independent evidence to prove the genuineness of the transactions shown therein. This evidence is sufficient corroboration of the statement of account maintained in the regular course of business. Defendants attempt to discredit PW-1 on the ground that he is not competent to prove the statements is mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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? 41. Plaintiff contends that Defendants are jointly and severally liable to pay the principal sum of Rs. ₹ 2,11,92,940/- (Rupees Two Crores Eleven Lakhs Ninety Two Thousand Nine Hundred Forty Only) and a sum of ₹ 39,03,651.44/- (Rupees Thirty Nine Lakhs Three Thousand Six Hundred Fifty One and paise Forty Four Only) towards interest on the said principal amount calculated at the rate of 24 % per annum from the date of expiry of 90 days of credit on each invoice till the date of filing of the suit. The Defendants are also liable to pay pendente-lite and future interest @ 24 % per annum on the said total amount from the date of filing of this suit till the actual date of payment. 42. Plaintiff relies upon the invoices [Exhibit PW-1/37 to Exhibit PW-1/71], which stipulate that if the payment is not made within the due date, interest would be charged at 24% per annum till the date of payment. Plaintiff has placed on record the calculation of interest accrued and payable in accordance with the stipul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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