1 JPP IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 186 OF 2009 IN SUMMARY SUIT NO. 830 OF 2009 Sunil Gaurishankar Goenka. ... Plaintiff. V/s. M/s. R.M. Diamonds and Ors. ... Defendants. Mr. Virag Tulzapurkar, Sr. Counsel with Prakash Paranjpe and S.S. Purohit i/b. M/s. Wadia Ghandy & Co. for the Plaintiff. Mr. S.U. Kamdar, Sr. Counsel with S. Parikh i/b. Little & Co. for Defendants 1 and 3. Mr. Jayendra S. Shah for Defendant 2. CORAM : R.Y. GANOO, J. DATED : 21st JUNE 2010. P.C. :- Heard learned Senior Counsel on both sides. The Plaintiff had advanced monies to Defendant No.1 from time to time and by letter dated 14th June 2006, Defendant No.3, a partner of Defendant No.1 admitted the liability of Defendant No.1 qua the Plaintiff to the tune of Rs.86,10,645/- (hereinafter referred to as the said amount). The Plaintiff has instituted this Suit for recovery of the said amount alongwith interest as set out in the particulars of claim. Parties herein 2 have completed their pleadings. 2. The Plaintiff relied upon the balance confirmation letters issued from time to time by Defendant No.1 through their partner right from 1999 and last such letter is dated 31st March 2006 where there is an admission of liability to the tune of said amount. According to the Plaintiff, he had sent a letter dated 3rd January 2009 to the Defendants calling upon them to make the payment in terms of the said notice of demand to which a reply has been sent by the Defendants through their partner and the said reply is dated 16th January 2009. Defendant No.1 has relied upon the said reply. A copy of the same was made available to the Court by the learned Senior Counsel for the Plaintiff. 3. It is the stand of Defendant No.2 that he has stopped participating in the activities of the firm with effect from 2004 and for the purposes of filing of affidavit in reply in the Summons for Judgment, he has derived knowledge from Defendant No.3 who according to him was actively participating in the affairs of Defendant No.1. As a result of this affidavit in reply filed by Defendant No.2 is of no 3 assistance for the purposes of determining point in dispute. 4. Defendant No.3 has filed affidavit in reply. According to Defendant No.3, the Firm was liable to pay to the Plaintiff the said amount however, in the month of May 2006 i.e. on 9th may 2006, Defendant No.1 sold diamond worth Rs.86,25,000/- and that is how the transaction as regards the said amount got squared and that Defendant No.1 became entitled to recover from the Plaintiff a sum of Rs.14,355/-. Defendant No. 3 has filed income tax return for the assessment year 2007-2008 and in the list of sundry debtors, the Plaintiff is shown as a sundry debtor qua Defendant No.1 to the tune of Rs.14,355/-. This amount of Rs.14,355/- turns out to be the difference between the cost of diamonds alleged to have been sold by Defendant No.1 to the Plaintiff and the amount which was to be paid by Defendant No.1 to the Plaintiff. 5. According to the Plaintiff, the confirmation letter dated 31st March 2006 supported by letter dated 14th June 2006 on the basis of which the present Suit has been filed clearly indicate that the Defendants were liable to pay the Plaintiff 4 the said amount. As against this, according to Defendant No. 3, the letter dated 14th June 2006 is forged one. Argument was advanced that the telephone numbers appearing on the said letter are 7 digit though in the year 2006 telephone numbers in Bombay were that of 8 digits. It is also sought to be suggested by relying upon affidavit of printer of Defendant No.1 that new letterheads were prepared prior to June 2006 and therefore, the said letterhead on which the signature of Defendant No. 3 is found is patently forged. I am not very much impressed by this argument. A mere stand that the said letter dated 14th June 2006 is forged one just cannot be accepted on the back drop of facts pleaded in affidavit in reply. The defence taken by Defendant No.1 as regards the sale of diamonds has the effect of admitting that Defendant No.1 was liable to pay to the Plaintiff to the tune of said amount and on account of sale of diamonds to the Plaintiff, the said liability came to an end. 6. Now, I turn to test the case of Defendant No.1 as regards sale of the diamonds. Defendant No.1 relied upon the invoice which is prepared by the office of Defendant No.1. A 5 copy of which is annexed to affidavit in reply filed by Defendant No.3. The Plaintiff deals in chemicals. It is difficult to believe the case of Defendant No.1 that the Plaintiff purchased diamonds worth Rs.86,25,000/-. The very stand that Defendant No.1 sold diamonds to Plaintiff to the tune of Rs.86,25,000/- appears to be without any substance. If the Plaintiff is dealing in chemical, why the Plaintiff would purchase diamonds worth Rs.86,25,000/- is mystery. The total weight mentioned in the invoice is 287.50 carats and what is sold is cut and polished diamonds. It is to be noted that except the invoice no other material is produced by Defendant No.1 to show that the Plaintiff purchased said diamonds. Defendant No.1 has not produced any document to show that diamonds as per invoice were delivered. In the absence of any documentary evidence, as discussed aforesaid, the case of Defendant No.1 that diamonds as above were sold to the Plaintiff cannot be accepted. 7. As Defendant No.1 has come out with a case that diamonds worth of Rs.86,25,000/- were sold to the Plaintiff and the loan liability was adjusted, the case put up by the 6 Plaintiff that the Defendants were liable to pay said amount is required to be accepted. 8. It is pertinent to note that in the income tax return filed by Defendant No.1 for the assessment year 2007-2008, the Plaintiff is shown as a sundry debtor to the extent of Rs. 14,355/-. This will mean that to the Income Tax Department, Defendant No.1 has conveyed that the said amount was payable by the Defendants to the Plaintiff and on account of sale of diamonds to the Plaintiff, the said liability came to an end. This will again confirm the liability of Defendant No.1 to the Plaintiff to the tune of said amount. Since the story of Defendant No.1 as regards sale of diamonds to the Plaintiff is not accepted for reasons mentioned above, the Defendants are liable to pay to the Plaintiff said amount. To that extent, case of the Plaintiff has to be accepted at the stage of hearing of the Summons for Judgment. 9. It was argued by the learned Senior Counsel for Defendant No.1 that letters of confirmation of amounts have been issued by Defendant No.1 to the Plaintiff from time to 7 time that is from 1999 upto 31st March 2006 and after March 2006 that is for the period 31st March 2007, 31st March 2008, 31st March 2009, no such documents are sent and therefore, the story of Defendant No.1 that the amount got squared off account of sale of diamonds is required to be accepted. I am not inclined to accept this submission. Non-production of such letters is not a circumstance to accept the defence of the Defendants. The Suit is instituted by the Plaintiff on the strength of confirmation of account letter dated 31st March 2006. 10. It was sought to be suggested that the confirmation of accounts statement dated 31st March 2006 was returned to Defendant No.1 by the Plaintiff after the transaction got squared off and that the Plaintiff had in a way admitted that Defendant No.1 is not liable to pay to the Plaintiff to the tune of Rs.86 lakhs and odd amount. Since the case of Defendant No.1 about sale of diamonds is being negatived as to how this statement of confirmation of accounts came back to Defendant No.1, in my view is irrelevant. 8 11. Across the bar, the learned Senior Counsel for the Plaintiff had also produced one copy of confirmation of account statement dated 31st March 2006 duly signed by Defendant No.3 as partner of Defendant No.1 and by the Plaintiff. Across the bar there was no unanimity between the learned Senior Counsels as regards procedure for sending these confirmation of accounts letters and obtaining signatures of the Plaintiff. Once story of sale of diamonds by Defendant No.1 to the Plaintiff is negatived, the liability of Defendant No.1 as of 1st April 2006 to the tune of Rs.86 lakhs and odd amount is undoubtedly made out. 12. It is pertinent to note that when the Plaintiff demanded the monies to the tune of Rs.86 lakhs and odd amount by their Advocates notice dated 3rd January 2009, the Defendants had sent their reply dated 16th January 2009. In the said reply there is no whisper about the transaction as regards the sale of the diamonds by Defendant No.1 to the Plaintiff. Said letter proceeds on denials and hence, the stand of Defendant No.1 that the diamonds were sold cannot be accepted. 9 13. For the reasons mentioned aforesaid, I am inclined to observe that the Plaintiff has made out the case that he was entitled to recover from the Defendants said amount. The Defendants will have to be put to terms to defend the Suit by ordering them to deposit monies in the Court. 14. Looking to the entire transaction and looking to the confirmation of accounts letter dated 31st March 2006 and letter dated 14th June 2006 by which the liability was confirmed as of 31.3.2006 to the extent of Rs.86,10,645/-, I am inclined to fix the figure of Rs.86,10,645/- to be deposited in the Court by the Defendants for defending the Suit. The Plaintiff no doubt has claimed that he is entitled to interest of 15% per annum. There is some discrepancy about it. It was sought to be suggested that initially interest at the rate of 18% was charged and thereafter, it was reduced to 15% per annum. It is, in these circumstances, the amount of interest payable on Rs.86,10,645/- after 1st April 2006 has not been taken into consideration while fixing the aforesaid amount. 15. In the circumstances mentioned aforesaid, the Summons 10 for Judgment is disposed of by passing the following order :- (i) Upon the Defendants depositing in this Court a sum of Rs.86,10,645/-, the Defendants are permitted to defend the Suit. (ii) The aforesaid amount should be deposited by the Defendants in this Court on or before 16th August 2010. (iii) Upon the Defendants depositing Rs.86,10,645/-, the Defendants to file written statement on 23.8.2010 in Court. (iv) There shall be no order as to costs. 16. The Suit is adjourned to 23rd August 2010 for filing written statement. 17. After the aforesaid order is passed, the learned Senior Counsel appearing on behalf of the Plaintiff submitted that if the Defendants deposit a sum of Rs.86 lakhs and odd amount as ordered by the Court, the Plaintiff be permitted to withdraw the same. 11 18. The learned Senior Counsel for the Defendants objected to the request made by the Counsel for the Plaintiff. I have considered the request. If the Defendants deposit the amount of Rs.86,10,645/-, the Plaintiff is permitted to withdraw 75% of the said amount on furnishing Bank Guarantee in a nationalised bank to the satisfaction of Prothonotary and Senior Master. (R.Y. GANOO, J.)