IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 22ND DAY OF JULY 2009/31ST ASHADHA 1931 AS.No. 53 of 1998 ( ) ---------------------- AGAINST THE JUDGMENT IN OS 531/1995 of ADDL.SUB COURT, KOZHIKODE DATED 28-02-1997 APPELLANT/PLAINTIFF: ------------------------ M/S. COMMISSION AND GENERAL AGENCY REP. BY ITS MANAGING PARTNER K. MOIDU, AGED 43 YEARS S/O. AHAMMED HAJEE HAING ITS REGISTERED OFFICE AT MERIDIAN NANSION WYNAD ROAD, CALICUT BY ADVS.SRI.V.V.SURENDRAN SRI.P.A.HARISH RESPONDENT/DEFENDANT: -------------------- M/S.ICONET COMMUNICATION PVT. LTD. 3RD FLOOR, MATAJI COMPLEX,1 WALLTERS LANE, MOUNT ROAD CHENNAI. BY ADV. SRI.K.A.SALIL NARAYANAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 22-07-2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. SURENDRA MOHAN, J. ------------------------------------------------------------ A.S. NO: 53 OF 1998-C ----------------------------------------------------------- Dated this the 22nd July, 2009. JUDGMENT This is an appeal filed by the plaintiff in O.S. 531/1995 of the Sub Court, Kozhikode, challenging the decree dated 28.2.1997 passed in the case. 2. The appellant is a registered partnership firm and the respondent is a private limited company manufacturing fax machines. According to the appellant, the company had appointed them as its agent for the sale of the fax machines manufactured by them. The appellant has paid an amount of Rs.20,000/- as security deposit as per a draft drawn on the State Bank of Travancore in the name of the respondent on 27.11.1991. The security is alleged to have been furnished for the proper running of the agency. The respondent is alleged to have encashed the demand draft. 3. The appellant subsequently terminated the dealership and issued a letter to the company on 8.11.1993, requesting for return of the security amount. However, there was no response. Therefore, a reminder was issued on 20.11.1993. When the respondent neglected to pay the amount, a Lawyer's notice was issued demanding payment of the amount with interest. The respondent then issued a reply to the appellant's lawyer requesting him to forward copies of the letters A.S. 53/1998 2 terminating the dealership. Accordingly, the appellant furnished xerox copies of the letters sent by them along with their letter dated 27.6.1995. Thereupon, the respondent sent a reply stating that they had not received the two letters, copies of which were sent by the respondent. Therefore, the appellant filed suit O.S.531/1995 before the Sub Court, Kozhikode for return of the amount due to them. The respondent contested the suit by filing a written statement. According to the respondent, the averment of the appellant in the plaint that they had been appointed as Agents for selling Fax machines manufactured by the respondent was not true. The further averment that the respondent had encashed a draft for Rs.20,000/- sent by the appellant as security deposit was also not true. The other averment of the plaintiff that the agency had been terminated by them and termination of the dealership had been intimated to the respondent was also not denied. Therefore, the respondent contended that it had no occasion either to appoint the appellant as agent for sale of Fax machines or to receive the amount of Rs.20,000/- as security deposit, as alleged. For the above reason, the respondent prayed for dismissal of the suit. 4. The suit was tried by the court below after framing five issues. The evidence in the case consists of the oral testimony of P.W.1 and Exts.A1 to A9 documents. A.S. 53/1998 3 5. After an elaborate consideration of the evidence on record, in the light of the pleadings and the contentions of the parties, the court below came to the conclusion that there was no evidence to show that the appellant had been appointed as an agent for selling the Fax machines manufactured by the respondent. It is also found that there is no evidence to show that the amount of Rs.20,000/- claimed by the plaintiff was actually deposited with the respondent as claimed by the plaintiff. Since there was no evidence to show that any amount was due from the respondent to the appellant the court below dismissed the suit. 6. According to the learned counsel for the appellant, Ext.A1 is the counterfoil of the pay-in-slip of the State Bank of Travancore which shows that a demand draft had been issued in favour of the respondent-company. The covering letter Ext.A2 shows that the demand draft was actually despatched to the respondent. Since there is evidence to show that a demand draft had been issued and that the same was duly sent to the respondent, it should be presumed that they had encashed the same. Since encashment of the demand draft was a fact which the appellant was not capable of proving, the respondent should have produced their account details or other evidence, to support their case that, that such amount was not received. According to the counsel, the presumption drawn by the court below that the amount covered by the demand draft would have been A.S. 53/1998 4 some other amount due to the respondent is pointed out to be unsupported by any evidence. Therefore, he contends that the judgment and decree of the court below are liable to be set aside. 7. The counsel for the respondent on the other hand contends that there is no evidence in the present case to show that any amount has actually been paid by the appellant and received by the respondent, as claimed in the plaint. There is no evidence of the existence of any agency as alleged between the appellant and the respondent. It is pointed out that no commercial agency of the nature as alleged in the present case exist. If any such agency had been in existence, there would certainly have been other reliable evidence or at least exchange of correspondence between the parties. In the absence of any evidence to show that there was any agency as contended or evidence to support the plaint claim, the court below was right in dismissing the suit, it is contended. 8. I have heard the counsel appearing for the rival parties. I have gone through the records of the case including the evidence, both oral and documentary. 9. The point that arises for consideration is “Whether there is any evidence to show that any amount is due from the respondent to the appellant, as contended?” Ext.A1 is the counterfoil of a pay-in-slip which shows that an amount of Rs.20,050/- was paid into the State Bank of A.S. 53/1998 5 Travancore for the purpose of obtaining a demand draft in favour of ICONET, which is the name of the respondent M/s. ICONET communications (Pvt.) Ltd. Ext.A1 cannot be evidence of any other fact. It does not show whether a demand draft was actually issued from the State Bank of Travancore in favour of the respondent-company. It also does not show whether any such demand draft was actually given to the respondent-company or whether the company had encashed the draft and appropriated the amount. The covering letter that is alleged to have accompanied the demand draft is Ext.A2. Ext.A2 does not even say that the amount was being sent as security deposit. It merely says that a demand draft for Rs.20,000/- was enclosed. Of course Ext.A1 shows that there is a seal affixed by the bank. Though the amount is payable as “Account payee only”, one cannot say whether the draft that was issued was an account payee draft. Further, as pointed out by the counsel for the respondent, the demand draft if any so issued could have been cancelled by the respondent. Therefore, in the absence of evidence to show what had actually happened and what were the circumstances under which such a demand draft was obtained, it is not possible to say one way or the other. 10. Though Ext.A2 contains a request to the respondent-company to acknowledge receipt of the demand draft, there is no evidence to show whether the matter was followed up by the appellant with reminders for A.S. 53/1998 6 issue of the receipt. It is clear that, the company did not issue any acknowledgement. Why the appellant did not pursue the matter is intriguing. 11. There is absolutely no evidence to show that there was any agency in existence as pleaded in the plaint. It cannot be believed that an agency for the sale of Fax machines would have been entered into orally and that too by two commercial establishments, one at Madras and the other at Cannanore. If such an agency as pleaded was actually in existence there would at least have been correspondence between the parties to evidence such agency. A formal agreement also would have been executed. The absence of any such material can only lead to the presumption that there was no agreement as pleaded. It is pointed out by the counsel for the appellant that though Ext.A3 letter dated 8.11.1993 and Ext.A4 reminder dated 20.11.1993 were issued, there was no reply to the same. Subsequently, when Ext.A5 notice was issued through their lawyer, the respondent's response was to issue Ext.A6 letter requesting that they may be furnished with copies of the said letters. Immediately, Ext.A7 letter was sent, furnishing copies of Exts.A3 and A4 letters also. However, they have no case in their said letters that they had not entered into an agency agreement with the appellant. It is only in their written statement that the A.S. 53/1998 7 respondent has denied the agency agreement. The above conduct is pointed out to be absolutely lacking in good faith. 12. It is to be noted that the two letters Exts.A6 and A8 issued by the respondent company do not contain any admission regarding the existence of an agency as pleaded by the appellant. No inference regarding any such agency also can be drawn on the basis of the statements in the said letters. It is true that the respondent has not denied the existence of any agency in Exts.A6 and A8 letters. Nevertheless, they have denied the existence of such an agency in their written statement. The respondent cannot be found fault with for not having denied the existence of an agency in their earlier letters. They have done so at the appropriate time. Since there is no evidence regarding the existence of an agency as pleaded or regarding payment of the amount of Rs.20,000/- as security deposit, the court below was right in dismissing the suit. I see no grounds to interfere with the judgment and decree of the court below. The appeal fails and is therefore dismissed. Sd/- K. SURENDRA MOHAN Judge jj /True copy/ A.S. 53/1998 8 K.SURENDRA MOHAN, J. ------------------------ A.S.NO: 53 OF 1998 C ------------------------ JUDGMENT Dated: 22nd July, 2009 A.S. 53/1998 9