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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 ..... Defendants' request and commenced supplies. Against each supply, it raised invoices in the name of Defendant No.1, setting out description of the goods, rate and the sale price. The goods were supplied in accordance with the prerequisite documents for vending liquor viz Form L-32 issued to Defendant No. 1, and transport permit L-34 issued by the Excise Department. However, contrary to the assurances extended by Defendant No.1, except for making some part-payments, it failed and neglected to make complete payment of the invoices. As a result, over a period of time, huge amounts became outstanding and due towards the Plaintiff. Requests for liquidation were ignored. On Plaintiff's persistence, Defendant No.1 issued a balance confirmation letter dated 19th April, 2010 and acknowledged principal outstanding amount of Rs. 2,04,71,000/- (Rupees two crore four lakhs seventy one thousand only). Plaintiff asserts that it regularly maintains books of accounts of its dealings with Defendant No.1 and the same is categorized as running account. In terms thereof, a principal sum of Rs. 2,11,92,940 (Rupees Two Crores Eleven Lacs Ninety Two Thousand Nine Hundred Forty Only) along with sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Defendants have no outstanding liability, as claimed in the suit. 5. On the basis of the pleadings of the parties, vide order dated 18th July 2012, the following issues were framed: i. Whether Mr. Satish Chandra Pandey is duly authorised to sign, file and institute the present suit on behalf of the plaintiff company? OPP ii. Whether the Plaintiff is entitled to recover the amount of Rs. 2,50,96,591.44 from the Defendants? OPP iii. 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? OPP iv. Whether the Plaintiff did not supply the quantity of beverages in accordance with the invoices in question? OPD v. Relief. Evidence in the Case- 6. Plaintiff has examined 2 witnesses namely Mr. Satish Chandra Pandey (PW-1), Assistant Company Secretary of the Plaintiff company and Shri Ram Vohra (PW-2). Defendants examined Shri Rajeev Garg, Defendant No. 4, (DW-1) to depose for them. Issue 1: Whether Mr. Satish Chandra Pandey is duly authorised to sign, file and institute the present suit on behalf of the plaintiff company. 7. Plaintiff, contends that Mr. Satish Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are at place marked A and B." 9. There is no effective cross-examination by the Defendants on this issue and they have sought to advance an argument that since the Minute Book produced by Mr. Satish Chandra Pandey (PW-1) did not contain the seal of the company and was not signed by the other members of the Board, the filing of the suit is without proper authorization. The relevant portion of the cross examination of Mr. Satish Chandra Pandey to this effect is reproduced hereunder: "I am working as an Assistant Company Secretary with the plaintiff. I am looking after legal compliances as well as legal matters of the plaintiff.... ... I have been authorized by means of resolution dated 27.07.2010. (Vol.). I have brought the original minutes book today and a copy has already been on record as Ex PW-1/1. It is correct that the same do not bear the seal of the company. (Vol.). The seal was not required to be affixed and the documents It is correct that the same are signed by the Chair Person. (Vol.). As the signatures of others members of board are not required. It is incorrect to suggest that I have wrongfully claimed that the signatures of the other members are not required. I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Procedure, to ensure that injustice is not done to any party who has a just cause. We may herein quote from the said judgment: 9... Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. 10.. .A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l any witness from the accounts department to prove the same. Plaintiff has failed to produce the monthly sales statement, the statutory document that evidences the actual supply and have therefore failed to prove that the quantity of liquor mentioned in the invoice was actually supplied. The balance confirmation letter dated 19th April 2010 is also denied. 15. On the basis of the aforenoted contentions, it emerges that Defendant No. 1 admits having business transactions with the Plaintiff. In fact, during the course of arguments, learned counsels informed the Court that till date, the parties are transacting with each other and the Plaintiff is making supply of goods to Defendant No. 1. Be that as it may, since the onus of this crucial issue is on the Plaintiff, let us examine and scrutinize the evidence led by the parties to see if the Plaintiff has successfully proved the same. In order to establish the liability, Plaintiff has sought to rely upon a) Invoices along with Form L-32 and L-34. b) Balance confirmation letter issued by the Defendants and c) Statement of Accounts. A. Invoices and Forms L-32 and L-34. 16. Plaintiff sought to prove the supply of liquor on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the statement is reproduced hereunder: "L-32 is an excise format /permit, granted to L1 License holders for the purpose of placing orders for purchasing of liquor/wine. It is in respect of Indian made foreign liquor. It is correct that the form L-32 is a permit for distributors, allowing them to purchase a particular quantity of liquor and it is not an actual purchase order. (Vol.). No purchase order can be placed in the absence of L-32. Q. Please see the records and tell whether any purchase orders are placed on record? A. Yes. (Vol.). As L-32 is the document which contains the requisite quantity of liquor to be supplied by the plaintiff to the defendants. XXX I can tell from the record as to which invoice has been issued in respect of any particular purchase order/L-32/L-34. L-34 is issued by the Department in the name of the manufacturer. It is correct that L-34 is issue for the purpose of permission to the manufacturer to sell the liquor (Vol.) subject to issuance of L-32 by the purchaser. L-34 also bears the details of the purchaser. It is incorrect to suggest that L-34 is merely a permission in favour of the manufacturer to sell. It is incorrect to suggest th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monthly sales statement. (Volunteered. Since the same was not summoned). The quantity of liquor mentioned in L-32 may vary sometimes from L-34. It is correct that vehicle number is compulsorily required to be noted on L-34. Question: Is it correct that L-34 and sales invoice are required to be drawn simultaneously? Answer: The department has nothing to do with sales invoice. It is correct that sales invoice is never submitted to the department. I cannot say if the sale invoice should also bear the vehicle number. (Volunteered, since the department has nothing to do with sales invoice). The record of transportation of the liquor to the godown of licensee is maintained by the licensee under the supervision of department. Plaintiff alsomaintains this record. (Volunteered, it is compulsory). The record of bilty of the transport is not maintained by the Excise Department. The liquor from the godown of the plaintiff is transported in the presence of an Excise Officer. The working hours of Excise Inspector are not specified. The office hours are 9AM to 5PM. (Volunteered. But we are on duty 24 hours). It is not practically possible to be physically present at the Godown of the licences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove delivery of the goods and since the same has not been brought on record, Plaintiff has not proved supply of goods. This contention of the Defendant is misconceived. Plaintiff has produced sufficient oral and documentary evidence on record whereby it can be inferred that the goods have indeed been delivered. The Defendants have admitted Form(s) L-32 [Ex. P-1 to Ex. P-35]. The admission of the said documents exhibits the intention of the Defendant to purchase from the Plaintiff, the quantity of liquor specified therein. This intention is translated into actual sale purchase by virtue Form(s) L-34. 22. It is also a vital fact that all the three documents i.e. L-32, L-34 and the invoices have correlation with each other. Each L-34 contains the particulars of the goods, the relevant L-32 and the name of the beneficiary. The invoice contains all the above particulars, the price, CST and VAT. All the above entries contain the particulars of the beneficiary i.e. Defendant No. 1. The Defendants' plea of non-delivery also appears sham and without substance. Mr. Rajeev Garg (DW-1) during his cross examination deposed to the following effect: "Q. Whenever the quantity or quality of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is reproduced hereunder: "It is correct that Transporter cannot move liquor without L-34. (Volunteered. However, it is not mandatory that the material has actually been supplied as L-34 is mere permission obtained to transport the liquor). It is correct that the Transporter while delivering the liquor gives the copy of L-34 to us. It is correct that we received the copy of L-34 for each and every delivery made by the Transporter of the liquor supplied by the plaintiff. I cannot say if all the transporters bilty are in our possession of the liquor supplied from the plaintiff. (Volunteered- Because of income tax scrutiny). I do not remember if we made all the entries in our books of account of all the bilties received from the Transporters. I do not remember if the entries of the bilties thereafter are entered to the computer." 24. In the instant case, Form L-34 does mention the truck number that was used for transportation of the goods. No doubt, the goods receipt (GRs) have not been filed along with the suit, however, there is a valid explanation given by the Plaintiff for not doing so. Plaintiff has contended that the transportation was arranged by the Defendants. Sh. Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some must have been submitted with Income Tax Department at the time of scrutiny. We were not given any receipt by the income tax office of the document submitted with them during scrutiny. The Income Tax Department gave a notice to us for scrutiny. That notice is available with us. The documents submitted by us to Income Tax during scrutiny were checked and verified by us before submitting. I do not know if any list was prepared by us of the documents submitted with Income Tax Authorities. We were receiving invoices from the Plaintiff. We made respective entries as per invoices as and when received in our account books. Most of the books of accounts of us are still with income tax authorities as the scrutiny is still pending. Scrutiny started most probably in the financial year 2011-12. The invoice is kept in a file after making the entries in the books. (Volunteered. Copy of the invoice is provided to the client after endorsing receiving on it). I do not know if the invoices were in our possession when the notice of this suit was served in 2010. It is correct that the invoices were in our possession when the written statement was filed in September, 2011. XXX "Q. Is there an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avoid liability, without any substance and that Plaintiff's case is proved through preponderance of probability. 28. Thus, considering the overall circumstances in the case, I am unable to accept the plea of the Defendants that the goods in question had not been supplied by the Plaintiff. B. Balance confirmation letter. 29. Defendants' liability is also proved by way of written acknowledgement of debt of Rs. 2,04,71,000/- vide letter dated 19th April 2010 [Balance Confirmation Letter- Ex. Pw 1/72]. It is submitted by the Plaintiff that the said letter is on the letter head of Defendant No. 1 firm and is signed by Mr. Mahesh Kumar. Defendants have taken a completely contradictory plea and have contended that the balance confirmation letter is a forged document, it does not bear the signature of any of the Partners of Defendant No.1 firm and neither does it bear the stamp of the Defendant No.1 firm nor is it printed on the letter head of the firm. Their stand as it emerges from the cross examination of PW-2 is that they have not disputed the signatures of Mr. Mahesh Kumar but have sought to deny his authority to give such a confirmation. The statement of Mr. Rajeev Garg in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to suggest that Ex. PWl/72 is not on the letter head of defendant no.l and is only a computer generated copy. It is wrong to suggest that the presence of Excise Inspector is must at the time vehicle leave our Go-down/depot. It is wrong to suggest that all the documents filed by the plaintiff are forged and fabricated. It is wrong to suggest that plaintiff has received the amount of all the supplies made to the defendants. One Excise Inspector is deputed for every Go-down but in case of some urgency with Excise Inspector, he may ask his colleague to attend his particular Go-down. The said deputation is neither official nor in writing. It is correct that L-34 on record does not bear the stamp of the Excise Inspector. It is wrong to suggest that I am deposing falsely." 32. A bare perusal of the aforenoted statements shows that PW-2 has resolutely maintained his stand and nothing adverse could be proved by the Defendants. Significantly, Defendants do not deny that Mr. Mahesh Kumar was their employee or that the document was signed by him. The onus lay on the Defendants to prove that he did not have the authority to sign the same. Defendant's sole witness Rajiv Garg (DW-1), did not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the document has not been proved as per the mandate of Section 65-B of Evidence Act. 35. Plaintiff has sought to prove the aforementioned Statement of Account [Ex. PW 1/73] by a certificate under Section 65-B, marked as Ex. PW1/126. The aforesaid books of account are maintained in electronic form and a copy thereof has been proved by way of a certificate under Section 65B of the Evidence Act. The extract of statement of Mr. Satish Chandra Pandey from evidence by way of affidavit is reproduced hereunder: "I say that the Plaintiff maintains, in its ordinary and regular course of business, a running account of the Defendant No. 1. As per the accounts of the Plaintiff, a principal sum of Rs. 2,11,92,940 (Rupees Two Crores Eleven Lakhs Ninety two Thousand nine Hundred Forty Only) is due and outstanding from the Defendant No. 1 towards the Plaintiff on account of the above said goods supplied by the Plaintiff to the Defendant no. 1. XXX The certificate by the authorized signatory of the Plaintiff is respect of statement of account/ email/ computer print outs in the suit is Exhibit PW 1/126." 36. Section 34 of the Indian Evidence Act 1872 deals with the relevance of entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the statement of account Ex.PWl/73 is already on record). It is correct that as per the invoice filed by the plaintiff the last transaction with the defendant was vide invoice dated 27.2.2010 Ex.PW-1/71. (Vol. pertaining to this suit amount)." 39. Defendants have not been able to produce any testimony to contradict the stand taken by PW-1, either by way of evidence or examination/cross examination of witnesses. On the contrary, the evidence in the form of invoices which were in their possession have been kept back by the Defendants and accordingly adverse inference ought to be drawn against the Defendants on this aspect. Thus, 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. 40. Accordingly, the aforesaid issue is decided in favour of the Plaintiff and against the Defendants. Issue 3: Whether the Plaintiff is entitled to the award of pendente lite and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon by the Plaintiff do not reflect the actual sale; purchase or transport of the goods. The sole witness who has appeared on behalf of the Defendants did not complete his cross examination and has not been able to discharge the onus of proof to show that the Plaintiff did not supply the quantities of alcohol in accordance with the invoices in question. 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. 46. Accordingly, the issue is decided against the Defendant and against the Plaintiff. Issue 5: Relief. 47. In view of the foregoing discussion, a decree is passed in favor of the Plaintiff and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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