1 s-1839-99 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi SUIT NO. 1839 OF 1999. Maharashtra Agro Industries Developoment Corporation Limited, having its registered office at Rajan House, 3rd Floor, Prabhadevi, Mumbai-400 025. ..Plaintiff. vs. 1. M.G. Enterprises, A Partnership Firm, having Registered Office at M.G. House, Opp. Mithakhali Bus Stand, Ellis Bridge, Ahmedabad-380 006. 2. Shri Suresh Punjabi, Partner of Defendant No.1, Having address at M/5/1/7, Shastrinagar, Ahmedabad-380013. ..Defendants. .... Mr. Rohit Sakhadeo, i/b. V.P. Vaze, for Plaintiff. None for Defendants. .... CORAM : S.J. KATHAWALLA, J. DATE : 13TH SEPTEMBER 2011. JUDGMENT : By this Suit, the Plaintiff prays for an order and decree against the Defendants to pay to the Plaintiff a sum of Rs.3,37,890/- together with interest on Rs.2,35,530.94 paise at the rate of 18% per annum from the date of filing of the Suit till realisation. Though the Writ of Summons is served on the Defendants and an Affidavit of Service to this effect dated 26th September 2000 is filed in Court, the Defendants have not filed their written statements and none appeared for the Defendants. The Suit therefore by an order dated 9th 2 s-1839-99 October 2006 is transferred to the list of undefended Suits and has now appeared on board under the caption ‘For Ex-parte Decree’. 2. Shri Suresh Govind Kane, Deputy Manager, Marketing of the Plaintiff, has filed his Affidavit in lieu of Evidence dated 9th March 2011. The said Affidavit is taken on record and marked ‘X’ for identification. 3. It is stated in the Plaint as well as in the Evidence as follows :- 4. The Plaintiff has filed this Suit against the Defendants. Shri Kane has deposed that Shri Dinkar Pundlik Khadye has signed, verified, declared and filed the Plaint on behalf of the Plaintiff and that Shri D.P. Khadye has since not been in service of the Plaintiff on account of retirement. Shri Kane has deposed that he is conversant with the facts of the case on the basis of the record maintained by the Plaintiff in its regular course of business and is able to depose to the same. Shri Kane is authorised by the Power of Attorney dated 22nd October 2010 executed by the Plaintiff in his favour to represent the Company in legal proceedings and to make Affidavit on its behalf. Shri Kane has produced the said Power of Attorney which bears the company seal and is signed by Shri Saurabh Vijay, the Managing Director of the Plaintiff. Shri Kane identifies the signature of Shri Saurabh Vijay. The said original Power of Attorney is taken on record and marked Exhibit ‘P-1’. 5. The Plaintiff is engaged in manufacturing and trading activities in respect of agricultural goods, fertilizers, pesticides and processed fruit product items. The Defendant No.1 is a Partnership Firm and the Defendant No.2 is a Partner of Defendant No.1 who has 3 s-1839-99 represented and carried on all the transactions with the Plaintiff on behalf of the Defendant No.1. The Defendants are Traders and Merchants dealing in processed fruit product items and other goods. Under the Consignment Agency Agreement dated 7th November 1994, the Plaintiff appointed the Defendant No.1 as its Agent to store and sell their goods for the consideration and on the terms and conditions contained therein. A copy of the aforesaid Agreement is produced before this Court by Shri Kane. Shri Kane has deposed that the original of the said Agreement dated 7th November 1994 is with the Defendant No.1. Shri Kane has deposed that the said Agreement is signed by Shri A.M. Pandey, Deputy General Manager of the Plaintiff and by the Defendant No.2 on behalf of the Defendant No.1 and that he identifies their signatures as he had seen/compared the same from the record of the Plaintiff. The said Agreement is taken on record and marked Exhibit ‘P-2’. 6. The said Agreement dated 7th November 1994 was modified by or under the Memorandum of Understanding (MOU) dated 6th January 1995. Shri Kane has produced the original of the said MOU. Shri Kane has deposed that the said MOU is signed by Shri A.M. Pandey, Deputy General Manager (N/E) of the Plaintiff and by the Defendant No.2 on behalf of the Defendant No.1. Shri Kane has deposed that the contents of the said MOU are correct. The MOU dated 6th January 1995 is taken on record and marked Exhibit ‘P-3’. 7. In terms of the said Agreement and MOU, the Plaintiff supplied to the Defendant No.1 goods from time to time. The Plaintiff raised its Invoices on the Defendant No.1. The Defendant No.1 sold the said goods to its customers and became liable to pay to the Plaintiff the amounts of its Invoices. The Plaintiff has maintained a running 4 s-1839-99 account of the transactions with the Defendant No.1. The Defendant No.1 made part payments to the Plaintiff from time to time. A sum of Rs. 2,35,534.94 was due and payable by the Defendant No.1 to the Plaintiff at the foot of the said running account as on 6th January 1997. Shri Kane has produced the statement of outstandings prior to filing of the Suit. Shri Kane has deposed that the said statement is signed by Shri S.U. Pandey, Deputy Manager, Accounts of the Plaintiff. Shri Kane has deposed that he identifies the signature of Shri Pandey and the contents of the same are correct. The said running account statement as on 6th January 1997 is taken on record and marked Exhibit ‘P-4’. 8. Shri Kane has deposed that in the correspondence exchanged between the parties, before filing of the Suit, the Defendants have promised to discharge their liability towards the Plaintiff from time to time. Shri Kane has produced the original letter of the Defendants dated 25th May 1996. Shri Kane has deposed that the said letter is signed by the Defendant No.2 on behalf of the Defendant No.1 and he identifies his signature. Shri Kane has further deposed that by the said letter, the Defendants forwarded the cheque for Rs. 25,000/- to the Plaintiff towards outstanding dues of the Plaintiff. The Defendants also enclosed the list of replacement stock which the Defendants were holding. They requested the Plaintiff to look into and solve the matter amicably. The said letter dated 25th May 1996 is taken on record and marked Exhibit ‘P-5’. 9. In response to the letter dated 25th May 1996, the Plaintiff sent a letter dated 2nd July 1996 to the Defendants. The Plaintiff by their said letter recorded that an amount of Rs.1,02,899.50 is still overdue and requested the Defendants to expedite the overdue outstanding 5 s-1839-99 payment. As regards replacements, it was recorded as under :- “You are quite well aware that during the year 94-95 and 95-96 you have signed the M.O.U. And as per the Point No. 8 of the M.O.U. Responsibility of damaged stock would be that of M/s. M.J. Enterprises and it was agreed upon by you that you will not claim any such reimbursement on account of damaged stock or unsold stocks. Under the Circumstances, we are unable to consider your request for replacement of damaged stock.” Shri Kane has produced the copy of the said letter. Shri Kane has deposed that the said letter is signed by Shri D.P. Narkhede, Assistant Manager, Marketing, on behalf of the Plaintiff and he identifies his signature. Shri Kane has deposed that the contents of the said letter are correct. The said letter dated 2nd July 1996 is taken on record and marked Exhibit ‘P-6’. 10. In response to the letter dated 2nd July 1996 of the Plaintiff, the Defendants sent letter dated 9th July 1996 to the Plaintiff informing the Plaintiff that the Defendants have decided to leave the agency in wake of their problems not being heard. The Defendants therefore suggested that the ties between the Plaintiff and the Defendants should be wound up smoothly. Along with the said letter was enclosed another letter written by the Defendants to Shri D.P. Narkhede, Assistant Manager (Marketing) of the Plaintiff which was also dated 9th July 1996. In the said letter, as regards the payments outstanding to the Plaintiff, the Defendants have stated as follows :- “We have not been able to collect our outstandings from the market and even today we are having the amount of Rs. 75,000/- in the market which we are unable to collect either due the replacement problem or some other. In view of our money stuck in the market we also are unable to send the amount to you. We have however sent you the 6 s-1839-99 monies on earlier occasions whenever we have committed.” As regards replacement of stocks, the Defendants recorded that the Plaintiff’s stand that they will not settle the replacement problem is not correct. Shri Kane has produced the original letter of the Defendant No.2 dated 9th July 1996 along with its enclosure also dated 9th July 1996. Shri Kane has deposed that the said letter is signed by the Defendant No.2 and identifies his signature. The said letter dated 9th July 1996 is taken on record and marked Exhibit ‘P-7’. The enclosure dated 9th July 1996 is also taken on record and marked Exhibit ‘P-8’. 11. The Plaintiff replied to the Defendants’ letter dated 9th July 1996 vide its letter dated 8th August 1996. The Plaintiff by its said letter requested the Defendants to arrange dispatch of the stocks lying with them in their godown at Ahmedabad to the Plaintiff’s factory at Nagpur. Shri Kane has produced the copy of the said letter dated 8th August 1996. Shri Kane has deposed that the said letter is signed by Shri S.C. Tongaonkar, Manager, Marketing, on behalf of the Plaintiff and identifies his signature. Shri Kane has deposed that the contents of the said letter are correct. The said letter dated 8th August 1996 is taken on record and marked Exhibit ‘P-9’. 12. By a letter dated 25th November 1996, the Plaintiff after recording that the Defendants have failed to return the stock to the Plaintiff’s factory at Nagpur as requested by the Plaintiff, forwarded to the Defendants its Invoice dated 22nd November 1996 for the unsold and unreturned stock of the goods. Shri Kane has produced the copy of the said letter dated 25th November 1996. Shri Kane has deposed that the said letter is signed by Shri N.D. Kamat, Manager 7 s-1839-99 (NOGA-A/cs), on behalf of the Plaintiff and identifies his signature. Shri Kane has deposed that the contents of the said letter dated 25th November 1996 are correct. The said letter dated 25th November 1996 is taken on record and marked Exhibit ‘P-10’. 13. By a letter dated 11th December 1996, the Union Bank of India, Ahmedabad forwarded to the Plaintiff a sum of Rs.2,00,000/- being the amount of encashed Bank Guarantee given by the Defendant No. 1. The Plaintiff received the said amount at Mumbai. Shri Kane has produced the original of the said letter. The said letter dated 11th December 1996 is taken on record and marked as Exhibit ‘P-11’. 14. By the letter dated 28th February 1997 addressed to the Defendants, the Plaintiff after referring to their letter dated 21st January 1997 vide which they had informed the Defendants that they are holding the goods returned by the Defendants at their risk and cost subject to quality check by their factory, informed the Defendants that they have now received report from their factory informing that the entire material dispatched by the Defendants has outlived its shelf life and is not fit for sale. The Plaintiff therefore forwarded a copy of their earlier Invoice dated 22nd November 1996 for Rs. 3,33,591.79 paise towards the costs of the said stock and considering the payments received called upon the Defendants to pay Rs.2,92,369/- within seven days from receipt of the said letter. Shri Kane has produced the copy of the said letter. Shri Kane has deposed the the said letter is signed by Shri N.D. Kamat, Manager, Accounts, on behalf of the Plaintiff and identifies his signature. Shri Kane has deposed that the contents of the said letter are correct. The said letter dated 28th February 1997 is taken on record and marked Exhibit ‘P-12’. 8 s-1839-99 15. In response to the Plaintiff’s letter dated 28th February 1997, the Defendants vide their reply letter dated 27th March 1997 contended that as regards the unsold stocks the Plaintiff cannot raise the bill on the Defendants and returned the bills/invoice to the Plaintiff. Shri Kane has produced the original letter of the Defendants. Shri Kane has deposed that the said letter is signed by the Defendant No.2 on behalf of the Defendant No.1 and identifies his signature. The said letter dated 27th March 1997 is taken on record and marked Exhibit ‘P-13’. 16. Shri Kane has produced the original letter of the Defendants dated 11th April 1997 wherein it is recorded that the Defendants are forwarding further stocks to the Plaintiff. Shri Kane has deposed that the said letter is signed by the Defendant No.2 on behalf of the Defendant No.1 and identifies his signature. The said letter dated 11th April 1997 is taken on record and marked Exhibit ‘P-14’. 17. In response to the Defendants’ letter dated 27th March 1997, the Plaintiff replied to the Defendants by its letter dated 23rd April 1997. By the said letter, the Plaintiff drew the attention of the Defendants to clause 9(B) of the Consignment Agreement in which it is agreed that the agents shall be responsible to sell all the stock/Goods which will be sent to him as per his demand/indent. The Plaintiff recorded that in view of the said clause in the Agreement, the Defendants’ contention that the Plaintiff cannot raise bill on the unsold stock is incorrect. By the said letter, the Plaintiff further recorded that they will not accept any more stock dispatched by the Defendants which they were unable to sell and the Defendants should not dispatch any stock to the Nagpur factory of 9 s-1839-99 the Plaintiff. By the said letter, the Plaintiff once again requested the Defendants to expedite payment of Rs.2,92,369.86 paise within seven days from the receipt of the said letter. Shri Kane has produced the copy of the said letter. Shri Kane has deposed that the said letter is signed by Shri N.D. Kamat, Manager, Accounts, on behalf of the Plaintiff and identifies his signature. Shri Kane has deposed that the contents of the said letter are correct. The said letter dated 23rd April 1997 is taken on record and marked Exhibit ‘P-15’. 18. The Plaintiff therefore through its Advocates notice dated 13th May 1997 called upon the Defendants to pay the outstanding dues of Rs.2,92,369.86 paise. Shri Kane has produced the copy of the said notice and deposed that the contents of the said notice are correct. Shri Kane has deposed that the Defendants received the said notice. The said notice is taken on record and marked Exhibit ‘P-16’. 19. In response to the said notice dated 13th May 1997, the Advocate for the Defendants by his letter dated 4th June 1997 inter alia recorded as follows :- “That my client has instructed me to reply to your client’s said notice and I wanted to give detail correct reply soon but before I do so, I personally feel that I should go through in detail the correspondence that my client had with your client. You must be quite aware that it runs into hundreds of pages and hence I would require sometime to go through the same. As I am not keeping well due to infection, I fear, probably, I would not be able to reply to you soon and hence I request your goodself to bear with me for 15 to 20 days. I assure you to dispatch detail, correct reply to your clients said notice at the earliest and latest by the end of this month and till then, I request you not to initiate any actions.” The learned Advocate also recorded that in the meantime, the 10 s-1839-99 contents of the notice sent on behalf of the Plaintiff are denied. A copy of the said letter dated 4th June 1997 is taken on record and marked Exhibit ‘P-17’. However, the Advocate for the Defendants failed to send any detailed reply to the Plaintiff and/or its Advocates. Since the Defendants failed to pay the aforesaid amount, the Plaintiff filed the above Suit for recovery of amount of Rs. 3,37,890/- as per the particulars of claim annexed as Exhibit ‘A’ to the Plaint together with interest at the rate of 18% per annum on Rs.2,35,530.94 paise from the date of filing of the Suit till realisation and for costs. 20. I have gone through the averments made in the Plaint and also the Evidence along with compilation of Documents filed by the Plaintiff. From Exhibit ‘P-1’, it is established that under the Agreement of Consignment Agency dated 7th November 1994, the Plaintiff appointed the Defendant No.1 as its agent to store and sell their goods for the consideration and on the terms and conditions contained therein. Under clause 9(A) of the Agreement, it is agreed between the parties that no goods should remain in stock till the expiry of shelf life/expiry date for any reason whatsoever. Under clause 9(B) of the Agreement it is agreed that the Agent (Defendants) shall send their indent (demand) for goods to the Company in writing taking into account their stock position at the depot and that the agent shall be responsible to sell all the stocks/goods which will be sent to him as per his demand/indent. From Exhibit ‘P-3’, it is clear that the said Agreement dated 7th November 1994 was modified under the Memorandum of Understanding (MOU) dated 6th January 1995 whereunder in addition to 4.5% consignment agent’s commission, the Plaintiff agreed to pay to the Agent/Defendants 9% additional discount to enable them to meet the expenses set out in clause (2) of the said 11 s-1839-99 MOU. 21. The Plaintiff has deposed that they supplied goods to the Defendant No.1 from time to time and raised its invoices on the Defendant No.1. The Defendant No.1 sold the said goods to its customers and became liable to pay to the Plaintiff the amounts raised in the said invoices. Exhibit ‘P-4’ establishes that the Plaintiff maintained a running account of the transaction with the Defendant No.1 and a sum of Rs.2,35,534.94 paise was due and payable by the Defendant No.1 to the Plaintiff at the foot of the said running account as on 6th January 1997. It is seen from Exhibit ‘P-5’ that the Defendants forwarded a cheque of Rs.25,000/- to the Plaintiff towards outstanding dues of the Plaintiff and also enclosed the list of replacement stock which the Defendants were holding. By Exhibit ‘P-6’, the Plaintiff has recorded that an amount of Rs. 1,02,899.50 paise is still overdue and requested the Defendants to expedite the overdue outstanding payment. Exhibits ‘P-7’ and ‘P-8’ shows that the Defendants informed the Plaintiff that they have decided to leave the agency with the Plaintiff and that the Defendants have admitted that in view of the Defendants money being stuck in the market, they are unable to send the payment to the Plaintiff. The Defendants have also recorded that they do not agree with the stand taken by the Plaintiff pertaining to replacement of stocks. Though by Exhibit ‘P-9’ the Plaintiff allowed the Defendants to arrange despatch of the stocks lying with them in their godown at Ahmedabad to the Plaintiff’s factory at Nagpur, the Plaintiff by Exhibit ‘P-10’ after recording that the Defendants have failed to return the stock to the Plaintiff’s factory at Nagpur forwarded to the Defendants its invoice dated 22nd November 1996 for the unsold and unreturned stock of the goods. Exhibit ‘P-11’ shows that the Plaintiff invoked the bank guarantee 12 s-1839-99 given by the Defendants and received an amount of Rs. 2 lacs from the bank. 22. Exhibit ‘P-12’ establishes the fact that the Plaintiff vide their letter dated 21st January 1997 have informed the Defendants that they are holding the goods returned by the Defendants at their risk and cost, subject to quality check by their factory and that the report received from their factory shows that the entire material despatched by the Defendants has outlived its shelf life and is not fit for sale. It further establishes that the Plaintiff once again forwarded a copy of their earlier invoice dated 22nd November 1996 for Rs.3,33,591.79 paise towards the cost of the said stock and considering the payments already received called upon the Defendants to pay Rs. 2,92,369/- to the Plaintiff within seven days from the receipt of the said letter. Exhibits ‘P-13’ and “P-14’ shows that the Defendants not only took an incorrect stand that the Plaintiff cannot raise the bill on the Defendants as regards the unsold stock but forwarded further unsold stock to the Plaintiff. Exhibit ‘P-15’ shows that the Plaintiff after setting out the relevant provisions of the Agreement and the facts in the matter called upon the Defendants to pay an amount of Rs.2,92,369.86 paise within seven days from the receipt of the said letter. Exhibit ‘P-16’ shows that the Plaintiff through its Advocates called upon the Defendants to pay the outstanding dues of Rs. 2,92,369.86 paise. Exhibit ‘P-17’ shows that the Defendants through their Advocates sent an interim reply requesting the Plaintiff to bear with him for 15 to 20 days since he was unwell and not to initiate any action until the end of June 1997 i.e. till he forwards the detailed reply to the Plaintiff. However, it is clear that the Advocate for the Defendants failed to send any detailed reply to the Plaintiff. 13 s-1839-99 23. Though the Writ of Summons is served on the Defendants and the Affidavit of Service dated 26th September 2000 is filed in Court, the Defendants have not filed their written statements and not come forward to defend the Suit. In view thereof, what is stated by the Plaintiff has gone unchallenged. There is no reason why what the plaintiff has stated in the Plaint as well as in the Affidavit of Evidence should not be accepted. 24. In the above circumstances, in my view, the reliefs sought by the Plaintiff are required to be granted. In view thereof, I pass the following order :- (i) The Defendants are jointly and severally ordered and decreed to pay to the Plaintiff a sum of Rs.3,37,890/- together with interest on Rs.2,35,530.94 paise at the rate of 18% per annum from the date of filing of the Suit till realisation. (ii) The Defendants shall pay costs of this Suit to the Plaintiff. (iii) Plaintiff will be entitled to refund of Court fees, if any, as per Rules. 25. The Suit is accordingly disposed of in favour of the Plaintiff and against the Defendants. [ S.J. KATHAWALLA, J. ]