FA/883/2007 1/13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 883 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE H.B.ANTANI ===================================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment? NO 2 To be referred to the Reporter or not? NO 3 Whether Their Lordships wish to see the fair copy of the judgment? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any Order made thereunder? NO 5 Whether it is to be circulated to the Civil Judge? NO ========================================================= GIRNAR EXTRUSIONS PVT. LTD. - Appellant Versus ROYAL ANTIBIOTICS & INVESTMENT PVT. LTD. - Respondent ========================================================= Appearance : MR B R GUPTA for the Appellant. MR Y B PANDIT with MR JAYKAR B PATEL for the Respondent. ========================================================= CORAM : HONOURABLE MR.JUSTICE H.B.ANTANI Date : 30/01/2008 ORAL JUDGMENT 1. This appeal preferred under Section 96 of the Code of Civil Procedure is directed against the judgment and order dated 27-12-2002 passed by the FA/883/2007 2/13 JUDGMENT learned Additional Senior Civil Judge and Judicial Magistrate (First Class) at Gandhinagar in Special Civil Suit No. 91 of 2002. 2. The short facts giving rise to the present appeal are as under:- The appellant – original plaintiff – M/s Girnar Extrusions Private Limited through its Managing Director filed the suit against the respondent – original defendant - M/s Royal Antibiotics & Investments Private Limited for declaration and recovery of the amount to the tune of Rs. 7,26,685/- (Rupees Seven Lakhs Twenty Six Thousand Six Hundred And Eighty-Five Only) with costs and interest. The appellant is having a factory at GIDC Gandhinagar. It supplies aluminum tubes as per the order given to it. The respondent was supplied the goods and the payment was made by the respondent by cheque as well as demand draft. Even the appellant used to supply the goods to the respondent on credit. The appellant supplied the goods and produced 8 bills, as stated in paragraph 2 of the appeal, to the tune of Rs. 7,26,685/-. The respondent paid the amount of 6 bills to the appellant by cheque and the amount of the last bill was not paid by the respondent. When the cheques were credited in the Bank by the appellant, they were returned dishonoured. The appellant gave a notice to the respondent for recovery of Rs. 7,26,685/- but the respondent could FA/883/2007 3/13 JUDGMENT not make the payment and did not respond to the notice given by the appellant. Therefore, the appellant was constrained to file a suit for recovery of Rs. 7,26,685/- with costs and interests. The respondent filed written statement vide Exh. 14 wherein it was contended that the aluminum tubes supplied by the appellant was defective. The material used in the aluminum tubes was of sub- standard quality. Even the lids of the aluminum tubes were not upto the mark. The respondent, therefore, requested the appellant to accept the defective goods. However, the appellant-company did not accept the defective goods and no replacement was made by the appellant-company of the defective goods. Even, as per the contention of the respondent, the goods, which were exported, were returned because of the defective material used in preparing aluminum tubes. Thus, the respondent suffered extreme loss because of the defective supply of the goods by the appellant. During the course of hearing, the appellant supplied documentary evidence vide list at Exh. 18. On the basis of the averments made in the plaint and the written statement, issues were framed by the learned Judge. After considering the entire gamut of oral deposition and documentary evidence, the learned Judge dismissed the suit. Being aggrieved by the aforesaid order passed by the learned Judge, the original appellant has preferred the present appeal. 3. Learned Advocate Mr. B. R. Gupta for the FA/883/2007 4/13 JUDGMENT appellant submitted that the judgment rendered by the learned Judge is ex facie contrary to the facts and evidence on record. The learned Advocate further submitted that the learned Judge has grossly erred in deciding the issue about the outstanding amount of Rs. 7,26,685/- against the appellant. The learned Advocate submitted that on the basis of evidence adduced by the parties on record of the case, the learned Judge ought to have held that the appellant has established that the respondent owes the appellant principal sum of Rs. 7,26,685 as the value of the goods sold and delivered and, therefore, he is required to pay the said amount to the appellant with costs and interest. It is submitted that the learned Trial Judge has erred in holding that the appellant has miserably failed to prove the case against the respondent for recovery of the amount to the tune of Rs. 7,26,685/-. As submitted by the learned Advocate, the learned Judge ought to have held that, on perusal of paragraph 6 of the written statement at Exh. 14, the respondent had admitted in written statement that the goods were received by it at Vapi and, therefore, the respondent is required to be fastened with the liability to pay the suit claim of Rs. 7,26,685/-. The learned Advocate argued that the oral deposition adduced by the respective parties in the case was not appreciated by the learned Judge in proper perspective while dismissing the suit-claim of the appellant. The learned Advocate emphatically submitted FA/883/2007 5/13 JUDGMENT that the learned Judge utterly failed to consider the provisions contained in Section 139 of the Negotiable Instruments Act, 1981 which raises legal presumption in favour of the holder of the dishonoured cheques that the said cheques received by the holder are in discharge of the debt or legal liability of the issuer of the cheques. The learned Advocate further submitted that the learned Judge ought to have held that in view of clear provisions of Section 139 of the Negotiable Instruments Act, the respondent is liable to pay the appellant the suit-claim and, therefore, the suit is liable to be decreed as prayed for by the appellant. The learned Advocate submitted that the learned Judge has grossly erred in observing that before filing of the suit by the appellant, a recourse to arbitration proceedings was not taken by the appellant inasmuch as no such requirement was stipulated in the suit transaction and, therefore, the observation made by the learned Judge was not borne out from the record of the case. Thus, the learned Advocate submitted that on the basis of the evidence on record of the case, the appeal preferred by the appellant requires to be allowed with costs and interests. 4. As against the aforesaid submissions, learned Advocate Mr. Y. B. Pandit appearing on behalf of the respondent submitted that the learned Judge has, after considering the entire oral deposition and documentary evidence on record of the case, came to FA/883/2007 6/13 JUDGMENT the conclusion that as the appellant miserably failed to establish the suit transaction with the respondent, the suit was rightly dismissed. It is submitted that the appellant had supplied the goods prior to the present transaction which was of a defective nature and the learned Judge has taken into account the aforesaid aspect while dealing with the claim made by the appellant. The learned Advocate further placed reliance on Section 75 of the Evidence Act and submitted that Section 75 of the Evidence Act provides distinction between a public document and a private document. A public document is prepared by a public servant in discharge of his public duties while private document is one that is prepared by a person for his private interest under his private right. The aforesaid provision was properly considered by the learned Judge in dismissing the suit. The learned Advocate submitted that the appellant ought to have resorted to the remedy available under the Negotiable Instruments Act. Instead of resorting to the remedy available under the Negotiable Instruments Act, the appellant has filed the present suit for recovery of outstanding amount and, therefore, the learned Judge has rightly dismissed the suit claim of the appellant and as no case was made out by the appellant, the suit was dismissed by the learned Judge. After considering the oral deposition and the documentary evidence adduced by both the parties, the learned Advocate submitted that the learned Judge FA/883/2007 7/13 JUDGMENT has rightly held that the appellant has not established that an outstanding amount of Rs.7,26,685/- was due from the respondent. It is further submitted that the learned Judge has further held that that the appellant has miserably failed to produce the bills as well as the counter-foils. According to the learned Advocate, the learned Judge has noted that even the accounts between the appellant and the respondent and that the transaction which took place between the appellant and the respondent has not been established by the appellant in support of the claim of Rs.7,26,685/- from the respondent. The learned Advocate submitted that, thus, the appellant has not proved the suit transaction by adducing oral deposition and the documentary evidence and, therefore, the suit of the appellant was dismissed. 5. Heard learned Advocate Mr. B. R. Gupta for the appellant and learned Advocate Mr. Y. B. Pandit with learned Advocate Mr. Jaykar B Patel for the respondent at length and in great detail. I have perused the record and proceedings of the case and the judgment rendered by the learned Judge in Special Civil Suit No. 91 of 2002 and the reasons assigned by the learned Judge. 6. As per the appellant, who is the original plaintiff, the suit was for recovery of Rs. 7,26,685/- with costs and interest. The appellant had delivered the aluminum tubes as per the order given by the respondent. The respondent used to pay FA/883/2007 8/13 JUDGMENT the amount to the appellant either through a cheque or a Demand Draft. The appellant supplied the goods worth Rs. 7,26,685/- and the details with regard to 8 bills and the total amount has been reiterated in paragraph 2 of the plaint. As per the submission of the learned Advocate, the respondent gave the cheque of 6 bills while the last bill remained unpaid by the respondent. When the cheques were deposited, they were returned dishonoured. The appellant was, therefore, constrained to give a notice to the respondent for recovery of Rs. 7,26,685/-. It has been strenuously contended by the learned Advocate on behalf of the respondent that the goods which were supplied by the appellant were defective and of inferior quality but on perusal of the entire documentary evidence and the written statement filed by the respondent, it becomes clear that even though the appellant had supplied the goods of the inferior quality prior to the present transaction, the respondent had given a cheque of 6 bills as mentioned in paragraph 2 of the plaint. If the goods were of an inferior quality, then the respondent would not have given the cheque of 6 bills as stated in paragraph 2 of the plaint and, therefore, this submission with regard to the inferior quality of the goods, in my considered view, does not hold water and it is liable to be rejected and, therefore, the same is hereby rejected. 7. Taking into consideration the suit-claim of the appellant, it has been stated by the appellant in FA/883/2007 9/13 JUDGMENT paragraph 2 of the plaint of about 8 bills and the total amount which was due and outstanding from the respondent. Out of 8 bills, the respondent had issued cheques for the 6 bills and that fact is also clearly reflected in paragraph 2 of the plaint. For the remaining 2 bills, cheques were issued but with regard to 6 bills for which the cheques were issued, same were returned dishonoured. The appellant instead of filing complaint under Section 139 of the Negotiable Instruments Act, preferred the present suit against the respondent claiming the payment for the outstanding amount to the tune of Rs. 7,26,685/-. It is upto the appellant to decide about the forum of preferring the litigation. Thus, the appellant, in view of the aforestated facts and circumstances, can definitely file a suit for recovery of the amount. Thus, there is no substance in the argument canvassed by the learned Advocate on behalf of the respondent that the appellant ought to have taken recourse of filing criminal proceedings instead of filing the present suit and the same is liable to be rejected and it is hereby rejected. 8. On perusal of the written statement produced at Exh. 14 page 33, it has been stated in paragraph 6 that the respondent does not materially dispute that M/s Girnar Extrusions Private Limited used to receive orders from the respondent – M/s Royal Antibiotics And Investments Private Limited at Vapi. Even in paragraph 8 of the written statement, the respondent has accepted the fact that goods worth Rs. 7,26,685/= FA/883/2007 10/13 JUDGMENT was sent by the appellant to the respondent – M/s Royal Antibiotics And Investments Private Limited at Vapi but the same was defective. Thus, the respondent has admitted in his written statement that the goods worth Rs. 7,26,685/- was sent by the appellant. In view of the clear and categorical averments made in the written statement, the respondent, in my view, cannot wriggle out from the liability to pay the amount towards the claim of the appellant. 9. Save and except the aforesaid contentions, no other contentions were raised by the learned Counsel of both the sides. However, on perusal of the documentary evidence, more particularly, the deposition adduced by Mr. Anil Kumar Jain, Director of Girnar Extrusions Private Limited, vide Exh. 19, it becomes clear that six cheques, as mentioned in paragraph 2 of his deposition, were returned dishonoured. The amount of Rs. 7,26,685/- was due and payable as per 8 bills, which are elaborately mentioned by this witness in his deposition vide Exh. 19, and as the amount in question was not paid, the Company was constrained to issue notice to the respondent to pay the amount. The gruelling cross- examination was made of this witness by the learned Counsel for the respondent, but nothing turned out from his cross-examination so as to dislodge his version given in paragraph 2 of his examination-in- chief. The notice with regard to the demand made by the appellant is produced vide Exh. 20. On perusal FA/883/2007 11/13 JUDGMENT of the said notice, the appellant-Company has reiterated its demand of Rs. 7,26,685/- from the respondent. Six cheques bearing No. 382147 for Rs. 71,109; No. 382148 for Rs. 65,368/-; No. 382147 for Rs. 55,873; No. 382314 for Rs. 1,29,244; No. 382315 for Rs. 1,19,304 and No. 382316 for Rs. 1,02,150/-, produced vide Exhs. 25, 26, 28, 30, 31 and 32 as well as the advices sent by Union Bank of India vide Exhs. 23, 24, 27, 29 are perused by me. The cheques were written in the name of the appellant and signed by the Director of the respondent – Company. Thus, the cheques were not honoured by the respondent – Company. On behalf of the respondent, one Mr. Bharat N. Jhaveri has been examined vide Exh. 46. It has been contended by Bharat N. Jhaveri that the suit, as filed by the appellant, is not maintainable. The main contention in the deposition adduced by him is with regard to the inferior quality of the goods supplied by the appellant. His cross-examination was conduced by the learned Counsel representing the appellant in an exhaustive manner wherein he has admitted that the respondent-Company had business relationship with the appellant-Company in the year 2000-2001. It has been stated by him in the cross- examination that the goods worth Rs. 7,26,685/- was in dispute as the goods supplied by the appellant was of an inferior quality. Even on earlier occasion, the appellant had supplied the goods of inferior quality. He has admitted in the cross-examination FA/883/2007 12/13 JUDGMENT that the cheques issued by the respondent were in respect of the supply of goods by the appellant and the appellant had credited the cheques in the Bank. The letters addressed to the appellant by the respondent and produced vide Exhs. 47, 49, 51, 52, 54, 56 and 58 are carefully perused by me. The main thrust of the argument on behalf of the respondent was that the goods supplied by the appellant was of inferior quality and taking into account that aspect, the suit claim of the appellant cannot be allowed. However, on perusal of entire oral deposition and documentary evidence, the contention raised by the learned Counsel for the respondent has no substance, as the cheques which I have discussed hereinabove, were issued by the respondent and they were dishonourned. Thus, taking into account the entire gamut of oral deposition and the documentary evidence adduced by both the sides, the appellant, in my considered view, has proved the suit-claim of Rs. 7,26,685/- with costs and interest at the rate of 9% p.a. from the date of suit till realization. 10. For the foregoing reasons, the appeal is allowed. The judgment and order passed by the learned 7th Additional Senior Civil Judge at Gandhinagar in Special Civil Suit No. 91 of 2002 is quashed and set aside. The respondent is directed to pay the suit amount of Rs. 7,26,685/- with costs and interest at the rate of 9% p.a. from the date of filing of the suit till realization. Decree to be FA/883/2007 13/13 JUDGMENT drawn accordingly. [H. B. ANTANI, J.] /shamnath