9911796707
TMI Blog2021 (12) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... relief may not be sought but whose presence is essential for the determination of the questions involved in the suit. A reading of the clauses of the agreement between the respondent no.1/plaintiff and respondent no.2/defendant no.1 clearly demonstrates that the said agreement was on a principal-to-principal basis and the liability to make payment towards the goods supplied was that of the respondent no.2/defendant no.1. Clause 4 of the said agreement specifies that it is the respondent no.2/defendant no.1 who shall be responsible for default in the deposit of C Forms to the respondent no.1/plaintiff, even if the forms could be submitted by the respondent no.2/defendant no.1 or petitioner/defendant no.2 - taking into account the pleadings of the respondent no.1/plaintiff before the Trial Court and the conduct of the respondent no.1/plaintiff before this Court, it is found that neither was any relief sought by the respondent no.1/plaintiff against the petitioner/defendant no.2 nor was there a cause of action pleaded in respect of the petitioner/defendant no.2. The petitioner/defendant no.2 is neither a proper nor a necessary party to the suit. Accordingly, there is a manifest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fendant no.1 vide cheque returning memos. 2.5 The respondent no.1/plaintiff issued the letter dated 14th December, 2007 calling upon the respondent no.2/defendant no.l to submit Form C under the Central Sales Tax Act, 1956 (hereinafter referred to as C Forms ) in respect of the supplies made. 2.6 The respondent no.2/defendant no.1 vide letter dated 18th December, 2007 called upon the petitioner/defendant no.2 to supply the C Forms to the respondent no.1/plaintiff. 2.7 The contract between the petitioner/defendant no.2 and the respondent no.2/defendant no.1 was terminated on 4th March, 2008, at the instance of petitioner/defendant no.2, by serving notice of three months. 2.8 The respondent no.1/plaintiff issued legal notices against the respondent no.2/defendant no.l and the petitioner/defendant no.2 on 27th March, 2008. 2.9 The petitioner/defendant no.2, vide letter dated 5th May, 2008 stated that that they would be issuing the C Forms after certain information/clarification had been supplied by the respondent no.1/plaintiff. 2.10 The respondent no.2/defendant no.1 vide their letter dated 14th May, 2008, informed that the petitioner/defendant no.2 had started t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit has been filed only on the basis of cheques issued by respondent no.2/defendant no.1 in favour of the respondent no.1/plaintiff as detailed in paragraph 11 of the plaint and the said cheques were dishonoured as described in paragraph 12 of the plaint. 6. Attention is drawn to paragraph 15 of the plaint to contend that the respondent no.1/plaintiff had filed the present suit only in respect of ₹ 60,47,218/-, which was the principal amount and ₹ 31,18,757/-, which was the interest calculated at the rate 24% per annum. However, it is specifically noted in paragraph 15 of the plaint that the present suit is not claiming any amount towards the penalty imposed on the respondent no.1/plaintiff on account of non-furnishing of C Forms. 7. The relevant portions from the plaint are set out below: 8. That it is submitted that from time to time, the Defendant No.1 for and on behalf of his firm, had called upon the Plaintiff Company to supply the goods directly to the Defendant No.1 with further directions to raise the Invoices/Bills in the name of Defendant No.2. 10. That after being satisfied with the quality and quantity of goods supplied by the Plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plaintiff Company informed the Plaintiff Company about the dishonour of the above mentioned cheques by Debit memo dated 18.03.2008 20.03.2008. 15. That in addition to the admitted amount of ₹ 60,47,218/- (Rs. Sixty Lakhs Forty Seven Thousands Two Hundred Eighteen only), the Defendants are also liable to make payment of agreed rate of interest @ 24% p.a. on the above outstanding amount of ₹ 60,47,218/- (Rs. Sixty Lakhs Forty Seven Thousands Two Hundred Eighteen only) from the due date of payment which comes to ₹ 31,18,757/- (Rs. Thirty One Lakhs Eighteen Thousand Seven Hundred Fifty Seven Only) calculated upto 31.07.2009. Besides this amount, the Defendants are also liable to pay a sum of ₹ 33,82,155/- (Rs. Thirty Three Lakhs Eighty Two Thousands One Hundred Fifty Five Only) to the Plaintiff Company towards the penalty @ 150% towards non supply of C Forms to the Plaintiff Company. However, the Plaintiff Company is not claiming the said amount of penalty in the present suit since the same is outside the purview of Order XXXVII CPC. 18. That, accordingly, the following amounts are due and payable by the Defendants to the Plaintiff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner/defendant no.2 to the respondent no.1/plaintiff, the petitioner/defendant no.2 had admitted to the liability of ₹ 27,55,300/-; (iv) as per the letter dated 8th January, 2009 issued by the respondent no.1/plaintiff to the petitioner/defendant no.2, it is the liability of the petitioner/defendant no.2 to furnish C Forms; and (v) the respondent no.1/plaintiff is dominus litis and has claimed in the said suit that it has a right to some relief against the petitioner/defendant no.2. 10. I have considered the rival submissions. 11. As per Order I Rule 10(2) of the CPC, the Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out. 12. In Mumbai International Airport (P) Ltd. vs. Regency Convention Centre Hotels (P) Ltd. Ors. (2010) 7 SCC 417, the Supreme Court stated that the general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly to the respondent no. 2/defendant no.1 even though the bills were being raised in the name of the petitioner/defendant no.2. It is also an admitted position that the payments were being made by the respondent no.2/defendant no.1 directly in favour of the respondent no.1/plaintiff in respect of the supplied goods. 15. It is an undisputed position that a cheque of ₹ 60,47,218/- and a cheque of ₹ 10,00,000/- were issued by the respondent no.2/defendant no.1 in favour of the respondent no.1/plaintiff on 14th March, 2008 and that the said cheques were dishonoured. 16. A reading of paragraph 15 of the plaint clearly shows that the amounts payable due to non-issuance of C Forms by the petitioner/defendant no.2 to the respondent no.1/plaintiff have not been claimed in the present suit. The amount claimed in the suit corresponds to the amount sought to be paid by way of the dishonoured cheques i.e., ₹ 60,47,218/-. In addition, a sum of ₹ 31,18,757/- has been claimed towards interest with the rate of 24% per annum. However, the amount of ₹ 33,82,155/- payable to the respondent no.1/plaintiff towards the penalty on non-supply of C Forms to the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Second Party or to Sarabhai as may be advised by the Second Party at the rates as may be decided from time to time. 3. That the Second Party shall make payment to the First Party 50% advance along with the Purchase Order and balance 50% payment before delivery of goods; and within 2 days from the receipt of the Intimation from the First Party. 4. That the Second Party or Sarabhai to whom the goods are billed shall submit Form C in advance to the First Party, within 3 months of the First Sale; and that the Second Party shall be responsible for deposit of C Form to the First Party failing which to pay 6% difference in Sales Tax. 12. That the Second Party shall purchase the goods from the first party on Principal-to-Principal basis and nothing contained in this agreement shall constitute a partnership or an agency relationship between the parties; and the First Party does not authorize relationship between the parties; and the First Party does not authorize the Second Party to make any representation or to incur any liability on behalf of the First Party. 18. A reading of the aforesaid clauses of the agreement between the respondent no.1/plaintiff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner/defendant no.2 nor was there a cause of action pleaded in respect of the petitioner/defendant no.2. 23. The finding of the ADJ that since the letter dated 5th May, 2008, issued by the petitioner/defendant no.2 and asking the respondent no.1/plaintiff to supply particulars for issuance of C Forms, was on record, prima facie it was reflected that the petitioner/defendant no. 2 was a proper party and under obligation or at least was having some express or implied contract to issue the C Forms, is erroneous. From a reading of the Clause 4 of the agreement dated 29th September, 2005, it is apparent that even if the C Forms were to be deposited/submitted by the petitioner/defendant no.2, in the event of default in the issuance of the C Forms, the liability to pay 6% difference in Sales Tax was of the respondent no.2/defendant no.1. Furthermore, the letter dated 5th May, 2008 does not admit any liability undertaken by the petitioner/defendant no.2 for payment of 6% difference in Sales Tax in the event of default in deposit/submission of C Forms. 24. As regards the contention of the counsel appearing on behalf of the respondent no.2/defendant no.1 that the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of the counsel for the petitioner/defendant no.2 that the transport receipts referred to by the respondent no. 2/defendant no.1 are of a date after the date on which the dishonoured cheques were issued to the respondent no.1/plaintiff. 28. Therefore, it appears that there was a dispute between the petitioner/defendant no.2 and the respondent no.2/defendant no.1, which led to termination of contract between two of them. However, the inter se disputes between the petitioner/defendant no.2 and respondent no.2/defendant no.1 cannot be agitated in the suit filed by the respondent no.1/plaintiff. 29. During the course of arguments, the counsel for the respondent no.2/defendant no.1 conceded that a separate suit should have been duly filed by the respondent no.2/defendant no.1 against the petitioner/defendant no.2 to establish the liability of the petitioner/defendant no.2 in respect of the amounts recoverable due to the non-deposit of Forms C. 30. The respondent no. 2/defendant no.1 cannot in this manner insist on the petitioner/defendant no.2 being impleaded in the aforesaid suit as the same would amount to expansion of scope of the relief sought in the suit as filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
