((-1-)) mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.1129 OF 1980 The Bank of Rajasthan Ltd. Plaintiff versus M/s.Hazarimal Chhogalal & ors. Defendants Ms.P.D.Tiwari i/by SRS Legal for plaintiff. None for defendants. CORAM : A.S.OKA, J. DATE : 05th December 2008 JUDGEMENT :- 1. The plaintiffs have filed this suit essentially for recovery of a sum of Rs.6,97,008=42 Ps. with interest on the sum of Rs.5,99,887=03 Ps. @ 20% p.a. from the date of filing of the suit till the judgement. I find from the record that the suit was dismissed for default. Notice of Motion no.3774 of 1999 was taken out by the plaintiffs for restoration of the suit. The said Notice of Motion was disposed of by order dated 6th September 2001. By the said order, this Court restored the suit only as against first to fourth defendants. The said order records that the order of dismissal as against 5th and 6th ((-2-)) defendants stands confirmed. 2. According to the case of the plaintiffs, the first defendant is a partnership firm and 2nd to 4th defendants are the partners of the said firm. Under an agreement in writing executed by the first defendant on 1st February 1979 in the form of a letter addressed to the plaintiffs, an advance was granted by the plaintiffs in favour of the first defendant up to a limit of Rs.9.10 lakhs by purchasing the bills of exchange drawn and/or endorsed by the first defendant in favour of the plaintiffs and drawn on the customers of the first defendant. The first defendant agreed that the goods covered by the documents accompanying the bills would remain hypothecated in favour of the plaintiffs by way of first charge in respect of the amounts to be advanced by the plaintiffs to the first defendant under the said agreement. Pursuant to the said agreement, from time to time, the plaintiffs advanced diverse amounts to the first defendant by purchasing the bills of exchange drawn by the first defendants on their customers. The procedure allegedly followed by the parties has been set out in paragraph no.4 of the plaint, which reads ((-3-)) thus:- "The 1st defendants used to present to the plaintiffs Bills of Exchange drawn by them on their customers and in favour of the plaintiffs together with invoices and the Motor Transport Receipts issued by the Transport Companies. Upon presentation of such bills, the plaintiffs used to grant advances to the 1st defendants in their current account. The plaintiffs used to present the said bills of exchange together with the accompanying documents through their branch office to the 1st defendants’ customers. Upon receipt of payment from the 1st defendants’ customers, the documents of title including the consignment notes and/or lorry receipts used to be handed over to the 1st defendant’s customers and the amount so received would be credited to the bills purchased account. The suit herein is filed in respect of the bills of exchange drawn by the 1st defendants on their customers and against which advances were granted by the plaintiffs to the 1st defendants, between 2nd August 1979 and 24th September 1979 as more particularly set out hereinafter." 3. According to the case of the plaintiffs, between 2nd August 1979 and 24th September 1979 the first defendants presented to the plaintiffs 37 bills of exchange drawn by them on their customers together with respective invoices and the motor lorry receipts issued by the 5th and 6th defendants covering the consignments. A sum of Rs.5,99,887=63 Ps. was advanced by the plaintiffs to the first defendant against such bills of exchange upon ((-4-)) presentation. A list of said bills of exchange is annexed to the suit. It is stated that in respect of the bills of exchange at item nos.1 to 3, 6 to 15, 18, 21, 22, 24, 25, 27 to 29 and 35, 37 the goods covered thereunder were entrusted by the first defendant to the 6th defendant. The goods covered by the rest of the bills of exchange were entrusted to the 5th defendants by the first defendant. According to the case of the plaintiffs, 5th and 6th defendants issued motor lorry receipts in favour of the plaintiffs and the plaintiffs were shown consignees thereof. The case of the plaintiffs is that the plaintiffs presented the said bills of exchange to the customers of the first defendant, however, the said customers did not make payment of the amounts covered by the bills. Reference has been made in the plaint to the letters addressed by the plaintiffs to the first defendant informing the said defendant that the bills have been remained unpaid. A reference has also been made to the correspondence made by the plaintiffs with 5th and 6th defendants informing them that the goods shall not be delivered to the customers of the first defendant as the plaintiffs were entitled to ((-5-)) exercise lien over the said goods. According to the case of the plaintiffs a sum of Rs.3,149/- standing to the credit of the first defendant in their current account was adjusted against the amount payable by the first defendants under the loan account. 4. According to the case of the plaintiffs, 5th and 6th defendants were called upon to deliver the goods to the plaintiffs but the said defendants declined to deliver the goods. As the requisite amount was not paid, the present suit has been filed by the plaintiffs. Apart from a decree for recovery of the amount due and payable by the 1st to 4th defendants, various reliefs have been claimed in the plaint as regards goods in the custody of the 5th and 6th defendants. 5. The suit was contested by the defendants by filing written statements. The written statement of 1st to 4th defendants is of denials. The 5th defendant filed written statement contending that the Court Receiver appointed by this Court has taken possession of the suit consignments from the godown of the 5th defendant. The 5th defendant claimed a ((-6-)) right of lien over the said consignments for unpaid freight charges, unpaid storage charges etc.. The 6th defendant also filed written statement denying the claim of the plaintiffs. The 6th defendant came out with the case that there was an agreement between the 6th defendant and one Omprakash Budhia in respect of the goods. It is alleged that the said Omprakash Budhia misappropriated the goods. 6. On 6th August 1999 issues were settled by this Court. The issues settled between the plaintiffs and 1st and 2nd, the plaintiffs and 3rd and 4th, the plaintiffs and 5th defendant as well as plaintiffs and 6th defendant are relevant which read thus :- "Issues "Issues "Issues between plaintiffs and 1st and between plaintiffs and 1st and between plaintiffs and 1st and 2nd 2nd 2nd defendants :- defendants :- defendants :- 1. Whether the Plaintiffs prove that they are entitled to a decree in the sum of Rs.6,97,008.42 P with further interest on Rs.5,99,887.03 P. at the rate of 20% per annum from the date of the suit till payment as claimed in the Plaint? 2. Whether the 1st Defendants were a partnership firm and that defendant nos.2 to 4 were partners of defendant no.1 at the time when the suit transaction took place? 3. Whether the defendants prove that the plaint discloses no cause of action against them as claimed in para 1 of the ((-7-)) written statement? 4. Whether the defendants prove that present suit as filed is not maintainable as alleged in para 2 of the written statement? 5. Whether the defendants prove that the suit is bad for misjoinder of causes of action as alleged in para 4 of the written statement? 6. Whether the defendants prove that the suit is barred by the law of limitation as alleged in para 5 of the written statement? 7. Whether the defendants prove that the Agreement dated 1st February, 1979 annexed as Exh.‘A’ to the plaint is not a valid document as alleged in para 8 of the written statement? 8. Whether the defendants prove that by agreement dated 1st February 1979 goods covered by the documents accompanying the bills were not hypothecated to the plaintiffs as alleged in para 8 of the written statement? 9. Whether the defendants prove that defendant nos.2 to 4 prove a blank document Ex.‘A’ to the plaint as alleged in para 8 of the written statement? 10. Whether the defendants prove that various clauses in agreement Ex.‘A’ to the plaint are penal in nature and opposed to public policy as alleged in para 8 of the written statement? 11. Whether the defendants prove that signatures of defendant nos.2 to 4 were obtained by misrepresentation on agreement dated 1.2.79 Ex.‘A’ to the plaint as alleged in para 8 of the written statement? 12. Whether the defendants prove that the contents of particulars as set out in Ex.‘C’ to the plaint are incorrect as alleged in para 10 of the written statement? ((-8-)) 13. To what other reliefs, if any, the plaintiffs are entitled?" "Issues "Issues "Issues between plaintiffs and 3rd and between plaintiffs and 3rd and between plaintiffs and 3rd and 4th 4th 4th defendants :- defendants :- defendants :- 1. Whether the defendant nos.3 and 4 prove that the statements made in the plaint are vague and improper as claimed in para 2 of the written statement? 2. Whether the defendant nos.3 and 4 prove that there is no privity of contract between the plaintiffs and defendant nos.3 and 4 as alleged in para 5 of the written statement? 3. Whether the defendant nos.3 and 4 prove that there is no continuing liability or guarantee as claimed in para 5 of the written statement? 4. Whether defendant nos.3 and 4 prove that there is no cause of action as against them as alleged in para 1 of written statement? 5. To what order reliefs, if any, the plaintiffs are entitled?" "Issues "Issues "Issues between plaintiffs and 5th between plaintiffs and 5th between plaintiffs and 5th defendant defendant defendant :- 1. Whether any cause of action survives against defendant no.5 on the Court Receiver taking possession of the suit-consignments? 2. Whether defendant no.5 is entitled to their dues from the sale proceeds of the suit-consignments? 3. Whether the defendant no.5 prove that they have a right of lien over the said suit consignments as alleged in para 1 of the written statement? 4. Whether the plaintiffs are entitled to sale of goods enlisted in Exh.‘M’ as claimed in the plaint? ((-9-)) 5. Whether the plaintiffs prove that they are entitled to a decree in the sum of Rs.1,86,853.31 as claimed in the plaint? 6. To what reliefs, if any, the plaintiffs are entitled?" "Issues "Issues "Issues between plaintiffs between plaintiffs between plaintiffs 6th th th defendants:- defendants:- defendants:- 1. Whether the defendant no.6 prove that they are not necessary parties or that the suit is bad for misjoinder of parties as alleged in para 1 of the written statement? 2. Whether the defendant no.6 prove that the goods covered by item nos.1 to 3, 6 to 15, 18, 21, 22, 25, 27 to 29, 35 and 37 as enlisted in Ex.‘C’ to the plaint were not entrusted to defendant no.6 as alleged in para 4 of the written statement? 3. Whether the defendant no.6 prove that they had not refused to deliver goods or that the defendants are not bound and liable to deliver goods as alleged in para 12 of the written statement? 4. Whether the defendant no.6 prove that they are not guilty of wrongful conversion of the suit consignment and, therefore, not liable to pay damages to the plaintiffs as alleged in para 15 of the written statement? 5. Whether the defendants prove that the said Om Prakash Budhia colluded with defendant nos.1 to 4 and officers of the plaintiffs as alleged in para 15 of the written statement? 6. Whether the defendant no.6 prove that the G.C. Notes alleged to be issued on behalf of defendant no.6 without actually taking possession of the goods as alleged in para 15 of the written statement? 7. Whether the defendant no.6 prove that the plaint does not disclose any cause of action as against defendant no.6 as ((-10-)) alleged in para 14 of the written statement? 8. Whether the defendant no.6 prove that the plaintiffs are not entitled to reliefs as claimed in paras 15 and 16 of the plaint as alleged in para 13 of the written statement? 9. Whether the plaintiffs are entitled to sale of goods enlisted at Exhibit ‘N’ to the plaint as claimed in the plaint? 10. Whether the plaintiffs are entitled to a decree in the sum of Rs.4,13,033.72 as claimed in the plaint? 11. Whether the plaintiffs are entitled to claim interest and if so, at what rate? 12. What decree? What order?" 7. The plaintiffs examined Mr.Omprakash Agarwal, Joint Manager and Constituted Attorney as a witness. The examination-in- chief of the said witness was recorded before this Court on 12th November 2008. None appeared for the defendants on that date and hence the said witness has not been cross examined the defendants. The plaintiffs have produced and proved following documents :- "1. Certified copy of Power of Attorney dated 28/11/1981 of the Plaintiffs in favour of its Constituted Attorney Mr.Omprakash Agarwal, Joint Manager. 2. Agreement dated 01/02/1979 executed by the Defendant no.1. 3. Undertaking dated 01/02/1979 executed ((-11-)) by the Defendant no.1. 4. Statement giving the details of dates of advances, number of hundis and/or Bills of Exchange, the amounts due thereunder, the names of the DEfendant no.1’s Customers, the numbers of Motor Lorry Receipts and the names of the carriers being Defendant Nos.5 and 6. 5. Letter dated 08/12/1979 of the Plaintiffs to Defendant No.5. 6. Letter dated 14/12/1979 of the Plaintiffs to Defendant No.5. 7. Letter dated 18/12/1979 of the Defendant No.5 to the Plaintiffs. 8. Letter dated 14/12/1979 of the Plaintiffs to Defendant No.6. 9. Letter dated 26/12/1979 of the Plaintiffs to Defendant no.1. 10. Letter dated 25/04/1980 of the Plaintiffs’ Advocates to Defendant no.5. 11. Letter dated 08/05/1980 of the Defendant No.5 to the Plaintiffs’ Advocates." 8. The said documents are duly proved by the said witness examined by the plaintiffs. A certified copy of the statement of account of the first defendant duly certified in accordance with the Banker’s Books of Evidence Act, 1891 has been produced at Exhibit P-13. 9. As stated earlier, the defence of the 1st to 4th defendants is of denial. The documents at Exhibits P-2 and P-3 prove the case of the ((-12-)) plaintiffs of extending the financial assistance to the first defendant firm. The case of the plaintiffs that 2nd to 4th defendants have been the partners of the first defendant has not been disputed. Hence, their liability will be joint and several along with the first defendant. The certified extract of the account of the first defendant shows that on the date of institution of the suit the first defendant was liable to pay a sum of Rs.5,99,887=03 Ps.. Thus, the claim of the plaintiffs has been duly proved by the evidence of the said witness and the documents produced by him. The version of the said witness of the plaintiffs has gone unchallenged as he was not cross examined. No evidence has been adduced by the plaintiffs. 10. In the plaint the plaintiffs have prayed for further interest @ 20% p.a.. Considering the facts of the case, in exercise of powers u/s 34 of the Code of Civil Procedure, 1908 further interest will have to be fixed @ 10% p.a.. All the issues will have to be answered accordingly. As the suit stands dismissed as against fifth and sixth defendants, the issues between the plaintiffs and the said defendants ((-13-)) need not be decided. 11. It must be stated here that on Notice of Motion No.1062 of 1980 taken out by the plaintiffs the Court Receiver, High Court, Bombay was appointed as the Receiver of the goods in the custody of 5th and 6th defendants on which lien was claimed by the plaintiffs. In the written statement of 5th defendant, it is disclosed that the goods in the custody of 5th defendant were taken over by the Court Receiver. The appointment of the Court Receiver will have to be continued for a period of six months from today to enable the plaintiffs to take appropriate steps in execution. 12. As the suit against 5th and 6th defendants has been dismissed, reliefs in terms of prayer clauses (b) to (g) cannot be granted. 13. Hence, I pass following order :- (a) The suit is decreed in terms of prayer clause (a) as against the 1st to 4th defendants with a modification that the further interest @ 10% p.a. will be payable on a sum of ((-14-)) Rs.5,99,887=03 Ps. from the date of institution of suit till realisation or payment of the decretal amount; (b) The plaintiffs will be entitled to recover costs of the suit from the 1st to 4th defendants; (c) The suit already stands dismissed as against 5th and 6th defendants; (d) Appointment of Court Receiver made by this Court under order 8th September 1980 in Notice of Motion No.1062 of 1980 will continue to operate for a period of six months from today to enable the plaintiffs to take appropriate steps in execution proceedings; (e) If the plaintiffs fail to obtain an order of continuation of the appointment of the Court Receiver in the execution proceedings within a period of six months from today, the Court Receiver will stand discharged without passing accounts subject to payment of costs and charges by the plaintiffs. In such event, the Court Receiver will seek appropriate directions from this Court as regards goods lying in his ((-15-)) custody; (f) The parties and Court Receiver to act on an ordinary copy of this order duly authenticated by the Registry. (A.S.OKA, J.)