HONBLE SRI JUSTICE D.V.S.S. SOMAYAJULU
CCCA No.169 of 1999
09-11-2017
M/s. Plywood Syndicate, a partnership firm and 2 others Appellants/Defendants
M/s. National Ply Wood Industries Limited, Hyderabad. Respondent/Plaintiff
Counsel for the appellants: V.S.R. Anjaneyulu
Counsel for the Respondents: None appeared.
<Gist:
>Head Note:
? Cases referred:
2010 (6) ALD 484
2 AIR 1973 AP 149
3 AIR 1983 SC 684
4 (1982) 2 SCC 202
5 MANU/TN/3504/2010
6 AIR 1989 SC 1269
7 2004 (1) ALD 269 (DB)
8 AIR 1966 SC 275
HONBLE SRI JUSTICE D.V.S.S. SOMAYAJULU
CCCA No.169 of 1999
JUDGMENT:
CCCA No.169 of 1999 is filed against the judgment and
decree of the IV Senior Civil Judge, Hyderabad, dated
29.10.1998 passed in O.S.No.297 of 1989.
2. The suit was filed by Pioneer Wood Products Pvt.
Ltd., initially and later as per the orders dated 21.02.1997 in
I.A.No.878 of 1996 in O.S.No.297 of 1989, the plaintiffs name
was amended to National Plywood Industries Ltd.
The defendants are Plywood Syndicate, a partnership firm and
its two partners. The suit was filed for recovery of money due
towards the goods supplied by the plaintiff to the first
defendant with interest and costs. The defendants filed the
written statement denying the suit claim and stating that if the
accounts are actually taken and credit was given certain claims
of the defendants, the suit will have to be dismissed and the
plaintiff will have to pay the amount back. After the
amendment to the plaint in the cause title and additional
written statement were also filed.
3. The lower Court framed issues and also framed an
issue of territorial jurisdiction. Ex.A.1 to A.107 were marked
for plaintiff. Exs.B.1 to B.21 were marked for defendants. One
witness each was examined by plaintiff and defendants. After
trial, the suit was decreed with costs. Aggrieved by the same,
the defendants preferred the present appeal.
4. As it is a first appeal, the parties are hereinafter
referred to as plaintiff and defendants only, for the sake of
convenience.
5. Heard Sri V.S.R. Anjaneyulu, learned counsel for
the appellants. None appeared for the respondent/plaintiff.
6. The first and foremost point that was urged by the
learned counsel for the appellants/defendants is that the Court
at Hyderabad did not have the territorial jurisdiction to
entertain the suit. As per the defendants, the entire transaction
took place in Vijayawada and merely because the plaintiffs
head office is at Hyderabad, the suit is not maintainable. The
defendants also pleaded that the plaintiff had a depot in
Vijayawada in which orders were placed by the defendants and
material was also supplied from the said depot to the
defendants, who admittedly are carrying with business in
Vijaywada. Hence, learned counsel argued that the entire
cause of action arose at Vijayawada alone and that no part of
the cause of action arose at Hyderabad or within the
jurisdiction of Senior Civil Judge, City Civil Courts,
Hyderabad. The lower Court also framed an issue on this
point. The learned counsel cited the judgment reported in
Tirumala Tirupathi Devasthanam, Tirupati v. Shree
Distributors, Hyderabad in support of his submission.
7. However, a reading of the entire evidence reveals
that the plaintiff stated that the defendants used to purchase
the plywood from the office at Hyderabad and that the
payments were made sometimes by cash and sometimes by
cheques and demand drafts. The defendants in their written
statement in page-2 at para-3 state that correspondence with
Hyderabad office and making of payments to Hyderabad office
for the sake of convenience will not enable the plaintiff to file
the suit at Hyderabad. Thus, the defendants admitted the
payments were made at Hyderabad. The witness examined on
behalf of the defendants as DW.1 is the partner of the first
defendant firm. On 31.07.1998 during the course of his cross-
examination, he clearly admits that he used to make payments
to the plaintiff at Hyderabad office and also correspondence
was with Hyderabad office. In addition, the correspondence
clearly shows that the issues relating to the suit transaction
alone were discussed in the exhibits filed and most of the
letters are addressed to the plaintiffs office at Sultan Bazar,
Hyderabad.
8. It is, therefore, clear that issues relating to this suit;
the transactions covered therein and issues pertaining to the
cause of action for this Court including the payments were
made at Hyderabad. Therefore, a part of the course of action
definitely arose at Hyderabad. Consequently, the Court at
Hyderabad had the jurisdiction to decide this matter and this
issue is decided in favour of the plaintiff and against the
defendants. The lower Court did not commit any error on the
issue of the territorial jurisdiction. Therefore, the finding in
para-15 of the judgment on additional issue framed on
13.02.1996 is confirmed. The case law cited in Shree
Distributors, Hyderabad (1 stated supra) is not applicable to the
facts of the present case for the reason that in that case there
there was a written contract and the goods were supplied to
Tirupati. The appellant in that case is Tirumala Tirupati
Devasthanam. The learned single Judge rightly held that the
Court at Hyderabad does not have jurisdiction and that the
parties by a contract cannot confer jurisdiction on a Court.
Hence, the said judgment is not applicable to the facts of the
present case.
9. The learned counsel for the appellant/defendants
also argued that the lower Court failed to frame an additional
issue on the point whether the new plaintiff substituted in
place of the original plaintiff could pursue the suit.
He argued that there was no proof of the amalgamation.
National plywood Industries Ltd with its registered office at
Makkum Road, Tinsukia, District Tinsukia, Assam was
substituted as a plaintiff in place of Pioneer Wood Products
Ltd. The plaintiff was substituted by virtue of the orders
passed in I.A.No.878 of 1996 in O.S.No.297 of 1989 dated
21.02.1997. Apparently, there was no revision preferred
against the said order and the same has become final.
The learned counsel also argued that no evidence was placed
with regard to the amalgamation of the original plaintiff with the
substituted plaintiff. This submission does not appear to be
correct since Ex.A.61 was filed by the plaintiff and it is an order
of the Honble Assam High Court in Company Petition No.3 of
2013 dated 18.12.1992 under which Pioneer Wood Products
Ltd was amalgamated with a National Plywood Industries Ltd.
There was no cross-examination whatsoever on this exhibit nor
on the contents of this exhibit. Therefore, this Court does not
find any substance in the submission of the learned counsel
that there is no proof that the current plaintiff is entitled to
prosecute the suit.
10. On the merits of the claim, the learned counsel for
the appellants/defendants submitted in the written statement
that they have raised a plea that as the goods are supplied on
credit and that as there are debits and credits in the accounts,
the plaintiff will not be entitled to suit claim and certain
adjustments have to be made under the five heads which are
described in the written statement. As per the learned counsel
for the defendants if these five heads of claim are considered,
nothing will remain to be paid to the plaintiff in the suit.
11. The learned counsel argued that the finding of the
lower Court that they did not prove this aspect was not correct
and stated that they have filed correspondence to this effect.
However, a perusal of the correspondence filed does not
support the monetary claim raised by the defendants.
In the course of the business, many letters are exchanged but
when it comes to a proof in a court, the defendant will not have
proved their case with reasonable certainty at least.
The five claims of the defendants are discussed in paras17 to
20 of the impugned judgment and as rightly noticed by the
lower Court, the monetary aspect of the claim is not clearly
borne out in the record and more so the correspondence.
12. In the written statement, among various heads
pointed out, they have claimed a sum of Rs.1,58,125/- as
differential credit amount for two trucks of unwanted goods
sent through Kaleswari Lorry Service. The learned counsel for
the appellants/defendants argued that Exs.B.15 to B.17 read
with Exs.B.20 & 21 would prove this claim. Ex.B.15 is a letter
stating that two trucks of plywood with two delivery challans
are sent back. The two delivery challans are Exs.B.16 and
B.17. Ex.B.20 is an acknowledgement of receipt by the
plaintiffs office at Hyderabad. These documents do not
establish the monetary claim of Rs.1,58,123/-.
13. Similarly, there is another claim of Rs.94,741/-,
and as per the appellant, credit is not given for wrongful supply
of pionex brand instead of pioneer brand.
The learned counsel for the appellants/defendants pointed out
that Ex.B.4 is the document in support of the same. Ex.B.4 is
a letter dated 26.04.1984 regarding defective material. It does
not establish the value of the material particularly the value
that is claimed in the written statement. The same is the case
with regard to the other three issues raised in the written
statement and the learned counsel pointed out the
correspondence relating to each of the sub-heads, which
according to him have a bearing on this issue. He also pointed
out that they have filed Exs.B.21 & 22 to prove the 5 claims
they have. Exs.B.21 and B.22 were marked subject to the
objection in the lower Court. Ex.B.21 is a statement. It
particularly appears to have been prepared after the suit is
filed and it bears the suit number and the cause title of the
suit. There is no supporting material filed for the entries in
Ex.B.21. It is clear as per settled law that documents prepared
subsequent to the filing of the suit are to be scrutinized with
greater care when compared to documents which are prior to
the suit. The case law reported in Chakicherla
Audilakshmamma v. Atmakaru Ramarao and others , State
of Bihar v. Radha Krishna Singh , Umesh Chandra v. State of
Rajasthan and P. Kumar v. the State of Tamilnadu is
relevant, wherein the Honble Supreme Court clearly held that
the documents ante litem motam should be scrutinized with
greater care because they may be prepared with the litigation
in mind. Therefore, Ex.B.21 cannot be treated as true and
correct, more so when there is no corroboration for the entries
thereon.
14. As far as the account copy marked as Ex.B.22 is
concerned. it is a computerized printout which is merely signed
by DW.1. No supporting data like books/ledgers/ invoices etc.
to support the entries in Ex.B.22 are produced. As per the
decision reported in Smt. Chandrakantaben and another v.
Vadilal Bapalal Modi and others the Honble Supreme Court
of India held that entries in account books should be
supported by documents like ledgers etc. and somebody
should take care to explain the entries also. In this case, a
computerized sheet is filed and marked as Ex.B.22. Therefore,
this Court is of the opinion that neither Ex.B.21 nor Ex.B.22
are adequately proved as required by law and the lower Court
is right in not giving due weight with these two documents.
Even DW.1 admits ExsB.1 & B.2 do not reflect in our ledger
(last line of cross-examination)
15. In contra distinction to this, the plaintiff filed his
document and also filed exhibits like bills, ledger and
statement of accounts etc. It is also a fact that the defendants
issued cheques towards part payment of the debt due to the
plaintiff which were also dishonoured. The same is borne out
by the oral and documentary evidence. In addition to the
above, DW.1 also admits in his cross-examination on
03.08.1998 in page-8 as follows:
it is true as per our ledger, we have to pay a sum of
Rs.3,51,383.10 to plaintiff towards supply of material.
16. The admission of the defendants is thus clear. It is
also noticed that the plaintiff issued a legal notice demanding
the said sum from the defendants and the defendants did not
reply to the same and the defendants did not also issue a
notice demanding the sums mentioned in their defence
statement. They did not make a counter claim or claim set off
etc. Hence, the lower Court rightly disbelieved the version set
up by the defendants
17. However, the learned counsel is right in pointing
out that the lower Court erred in holding that the failure to
reply to the notice is an admission. This finding of the lower
Court in para-21 is not correct. Mere failure to reply to a notice
does not amount to an admission. The learned counsel for the
appellants/defendants drew the attention of this Court to a
Division Bench of this Court in Manepalli Udaya Bhaskara
Rao v. Kamboyina Dharmaraju . The Division Bench
considered the judgment of the Honble Supreme Court in
Union of India v. Watkins Mayor and Company and came to a
conclusion that the failure to reply to the notices is not an
admission.
18. A perusal of the judgment of the lower Court
reveals that it considered all the aspects in detail and came to a
conclusion that the suit claim is proved. There is no evidence
to contradict the said claim nor are any grounds spelt out to
come to a different conclusion.
19. For all the above reasons, the appeal is dismissed
and the judgment and decree of the lower Court dated
29.10.1998 in O.S.No.297 of 1989 are confirmed. In the
circumstances of the case, there shall be no order as to costs.
Miscellaneous Petitions, if any, pending in this appeal shall
stand closed.
________________________
D.V.S.S. SOMAYAJULU, J
Date: 09.11.2017
CCCA No.169 of 1999
09-11-2017
M/s. Plywood Syndicate, a partnership firm and 2 others Appellants/Defendants
M/s. National Ply Wood Industries Limited, Hyderabad. Respondent/Plaintiff
Counsel for the appellants: V.S.R. Anjaneyulu
Counsel for the Respondents: None appeared.
<Gist:
>Head Note:
? Cases referred:
2010 (6) ALD 484
2 AIR 1973 AP 149
3 AIR 1983 SC 684
4 (1982) 2 SCC 202
5 MANU/TN/3504/2010
6 AIR 1989 SC 1269
7 2004 (1) ALD 269 (DB)
8 AIR 1966 SC 275
HONBLE SRI JUSTICE D.V.S.S. SOMAYAJULU
CCCA No.169 of 1999
JUDGMENT:
CCCA No.169 of 1999 is filed against the judgment and
decree of the IV Senior Civil Judge, Hyderabad, dated
29.10.1998 passed in O.S.No.297 of 1989.
2. The suit was filed by Pioneer Wood Products Pvt.
Ltd., initially and later as per the orders dated 21.02.1997 in
I.A.No.878 of 1996 in O.S.No.297 of 1989, the plaintiffs name
was amended to National Plywood Industries Ltd.
The defendants are Plywood Syndicate, a partnership firm and
its two partners. The suit was filed for recovery of money due
towards the goods supplied by the plaintiff to the first
defendant with interest and costs. The defendants filed the
written statement denying the suit claim and stating that if the
accounts are actually taken and credit was given certain claims
of the defendants, the suit will have to be dismissed and the
plaintiff will have to pay the amount back. After the
amendment to the plaint in the cause title and additional
written statement were also filed.
3. The lower Court framed issues and also framed an
issue of territorial jurisdiction. Ex.A.1 to A.107 were marked
for plaintiff. Exs.B.1 to B.21 were marked for defendants. One
witness each was examined by plaintiff and defendants. After
trial, the suit was decreed with costs. Aggrieved by the same,
the defendants preferred the present appeal.
4. As it is a first appeal, the parties are hereinafter
referred to as plaintiff and defendants only, for the sake of
convenience.
5. Heard Sri V.S.R. Anjaneyulu, learned counsel for
the appellants. None appeared for the respondent/plaintiff.
6. The first and foremost point that was urged by the
learned counsel for the appellants/defendants is that the Court
at Hyderabad did not have the territorial jurisdiction to
entertain the suit. As per the defendants, the entire transaction
took place in Vijayawada and merely because the plaintiffs
head office is at Hyderabad, the suit is not maintainable. The
defendants also pleaded that the plaintiff had a depot in
Vijayawada in which orders were placed by the defendants and
material was also supplied from the said depot to the
defendants, who admittedly are carrying with business in
Vijaywada. Hence, learned counsel argued that the entire
cause of action arose at Vijayawada alone and that no part of
the cause of action arose at Hyderabad or within the
jurisdiction of Senior Civil Judge, City Civil Courts,
Hyderabad. The lower Court also framed an issue on this
point. The learned counsel cited the judgment reported in
Tirumala Tirupathi Devasthanam, Tirupati v. Shree
Distributors, Hyderabad in support of his submission.
7. However, a reading of the entire evidence reveals
that the plaintiff stated that the defendants used to purchase
the plywood from the office at Hyderabad and that the
payments were made sometimes by cash and sometimes by
cheques and demand drafts. The defendants in their written
statement in page-2 at para-3 state that correspondence with
Hyderabad office and making of payments to Hyderabad office
for the sake of convenience will not enable the plaintiff to file
the suit at Hyderabad. Thus, the defendants admitted the
payments were made at Hyderabad. The witness examined on
behalf of the defendants as DW.1 is the partner of the first
defendant firm. On 31.07.1998 during the course of his cross-
examination, he clearly admits that he used to make payments
to the plaintiff at Hyderabad office and also correspondence
was with Hyderabad office. In addition, the correspondence
clearly shows that the issues relating to the suit transaction
alone were discussed in the exhibits filed and most of the
letters are addressed to the plaintiffs office at Sultan Bazar,
Hyderabad.
8. It is, therefore, clear that issues relating to this suit;
the transactions covered therein and issues pertaining to the
cause of action for this Court including the payments were
made at Hyderabad. Therefore, a part of the course of action
definitely arose at Hyderabad. Consequently, the Court at
Hyderabad had the jurisdiction to decide this matter and this
issue is decided in favour of the plaintiff and against the
defendants. The lower Court did not commit any error on the
issue of the territorial jurisdiction. Therefore, the finding in
para-15 of the judgment on additional issue framed on
13.02.1996 is confirmed. The case law cited in Shree
Distributors, Hyderabad (1 stated supra) is not applicable to the
facts of the present case for the reason that in that case there
there was a written contract and the goods were supplied to
Tirupati. The appellant in that case is Tirumala Tirupati
Devasthanam. The learned single Judge rightly held that the
Court at Hyderabad does not have jurisdiction and that the
parties by a contract cannot confer jurisdiction on a Court.
Hence, the said judgment is not applicable to the facts of the
present case.
9. The learned counsel for the appellant/defendants
also argued that the lower Court failed to frame an additional
issue on the point whether the new plaintiff substituted in
place of the original plaintiff could pursue the suit.
He argued that there was no proof of the amalgamation.
National plywood Industries Ltd with its registered office at
Makkum Road, Tinsukia, District Tinsukia, Assam was
substituted as a plaintiff in place of Pioneer Wood Products
Ltd. The plaintiff was substituted by virtue of the orders
passed in I.A.No.878 of 1996 in O.S.No.297 of 1989 dated
21.02.1997. Apparently, there was no revision preferred
against the said order and the same has become final.
The learned counsel also argued that no evidence was placed
with regard to the amalgamation of the original plaintiff with the
substituted plaintiff. This submission does not appear to be
correct since Ex.A.61 was filed by the plaintiff and it is an order
of the Honble Assam High Court in Company Petition No.3 of
2013 dated 18.12.1992 under which Pioneer Wood Products
Ltd was amalgamated with a National Plywood Industries Ltd.
There was no cross-examination whatsoever on this exhibit nor
on the contents of this exhibit. Therefore, this Court does not
find any substance in the submission of the learned counsel
that there is no proof that the current plaintiff is entitled to
prosecute the suit.
10. On the merits of the claim, the learned counsel for
the appellants/defendants submitted in the written statement
that they have raised a plea that as the goods are supplied on
credit and that as there are debits and credits in the accounts,
the plaintiff will not be entitled to suit claim and certain
adjustments have to be made under the five heads which are
described in the written statement. As per the learned counsel
for the defendants if these five heads of claim are considered,
nothing will remain to be paid to the plaintiff in the suit.
11. The learned counsel argued that the finding of the
lower Court that they did not prove this aspect was not correct
and stated that they have filed correspondence to this effect.
However, a perusal of the correspondence filed does not
support the monetary claim raised by the defendants.
In the course of the business, many letters are exchanged but
when it comes to a proof in a court, the defendant will not have
proved their case with reasonable certainty at least.
The five claims of the defendants are discussed in paras17 to
20 of the impugned judgment and as rightly noticed by the
lower Court, the monetary aspect of the claim is not clearly
borne out in the record and more so the correspondence.
12. In the written statement, among various heads
pointed out, they have claimed a sum of Rs.1,58,125/- as
differential credit amount for two trucks of unwanted goods
sent through Kaleswari Lorry Service. The learned counsel for
the appellants/defendants argued that Exs.B.15 to B.17 read
with Exs.B.20 & 21 would prove this claim. Ex.B.15 is a letter
stating that two trucks of plywood with two delivery challans
are sent back. The two delivery challans are Exs.B.16 and
B.17. Ex.B.20 is an acknowledgement of receipt by the
plaintiffs office at Hyderabad. These documents do not
establish the monetary claim of Rs.1,58,123/-.
13. Similarly, there is another claim of Rs.94,741/-,
and as per the appellant, credit is not given for wrongful supply
of pionex brand instead of pioneer brand.
The learned counsel for the appellants/defendants pointed out
that Ex.B.4 is the document in support of the same. Ex.B.4 is
a letter dated 26.04.1984 regarding defective material. It does
not establish the value of the material particularly the value
that is claimed in the written statement. The same is the case
with regard to the other three issues raised in the written
statement and the learned counsel pointed out the
correspondence relating to each of the sub-heads, which
according to him have a bearing on this issue. He also pointed
out that they have filed Exs.B.21 & 22 to prove the 5 claims
they have. Exs.B.21 and B.22 were marked subject to the
objection in the lower Court. Ex.B.21 is a statement. It
particularly appears to have been prepared after the suit is
filed and it bears the suit number and the cause title of the
suit. There is no supporting material filed for the entries in
Ex.B.21. It is clear as per settled law that documents prepared
subsequent to the filing of the suit are to be scrutinized with
greater care when compared to documents which are prior to
the suit. The case law reported in Chakicherla
Audilakshmamma v. Atmakaru Ramarao and others , State
of Bihar v. Radha Krishna Singh , Umesh Chandra v. State of
Rajasthan and P. Kumar v. the State of Tamilnadu is
relevant, wherein the Honble Supreme Court clearly held that
the documents ante litem motam should be scrutinized with
greater care because they may be prepared with the litigation
in mind. Therefore, Ex.B.21 cannot be treated as true and
correct, more so when there is no corroboration for the entries
thereon.
14. As far as the account copy marked as Ex.B.22 is
concerned. it is a computerized printout which is merely signed
by DW.1. No supporting data like books/ledgers/ invoices etc.
to support the entries in Ex.B.22 are produced. As per the
decision reported in Smt. Chandrakantaben and another v.
Vadilal Bapalal Modi and others the Honble Supreme Court
of India held that entries in account books should be
supported by documents like ledgers etc. and somebody
should take care to explain the entries also. In this case, a
computerized sheet is filed and marked as Ex.B.22. Therefore,
this Court is of the opinion that neither Ex.B.21 nor Ex.B.22
are adequately proved as required by law and the lower Court
is right in not giving due weight with these two documents.
Even DW.1 admits ExsB.1 & B.2 do not reflect in our ledger
(last line of cross-examination)
15. In contra distinction to this, the plaintiff filed his
document and also filed exhibits like bills, ledger and
statement of accounts etc. It is also a fact that the defendants
issued cheques towards part payment of the debt due to the
plaintiff which were also dishonoured. The same is borne out
by the oral and documentary evidence. In addition to the
above, DW.1 also admits in his cross-examination on
03.08.1998 in page-8 as follows:
it is true as per our ledger, we have to pay a sum of
Rs.3,51,383.10 to plaintiff towards supply of material.
16. The admission of the defendants is thus clear. It is
also noticed that the plaintiff issued a legal notice demanding
the said sum from the defendants and the defendants did not
reply to the same and the defendants did not also issue a
notice demanding the sums mentioned in their defence
statement. They did not make a counter claim or claim set off
etc. Hence, the lower Court rightly disbelieved the version set
up by the defendants
17. However, the learned counsel is right in pointing
out that the lower Court erred in holding that the failure to
reply to the notice is an admission. This finding of the lower
Court in para-21 is not correct. Mere failure to reply to a notice
does not amount to an admission. The learned counsel for the
appellants/defendants drew the attention of this Court to a
Division Bench of this Court in Manepalli Udaya Bhaskara
Rao v. Kamboyina Dharmaraju . The Division Bench
considered the judgment of the Honble Supreme Court in
Union of India v. Watkins Mayor and Company and came to a
conclusion that the failure to reply to the notices is not an
admission.
18. A perusal of the judgment of the lower Court
reveals that it considered all the aspects in detail and came to a
conclusion that the suit claim is proved. There is no evidence
to contradict the said claim nor are any grounds spelt out to
come to a different conclusion.
19. For all the above reasons, the appeal is dismissed
and the judgment and decree of the lower Court dated
29.10.1998 in O.S.No.297 of 1989 are confirmed. In the
circumstances of the case, there shall be no order as to costs.
Miscellaneous Petitions, if any, pending in this appeal shall
stand closed.
________________________
D.V.S.S. SOMAYAJULU, J
Date: 09.11.2017
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