IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN THURSDAY, THE 20TH MAY 2010 / 30TH VAISAKHA 1932 SA.No. 992 of 1996() -------------------- AS.31/1992 of III ADDL. DISTRICT COURT, ERNAKULAM OS.48/1990 of ADDL.SUB COURT, KOCHI .................... APPELLANT/RESPONDENT/PLAINTIFF: --------------------------------------------------------- M/S. POLYMER PACKS, XII/967-A, VARU VAIDYAR ROAD, MOOLAMKUZHI VILLAGE, KOCHI TALUK, REPRESENTED BY ITS MANAGING PARTNER, P.O. PHILIP. BY ADV. SRI.P.K. ABOOBACKER, SRI.P. CHANDRASEKHAR. RESPONDENT/APPELLANT/DEFENDANT: ------------------------------------------------------------ M/S. SUJITHA FOOD INDUSTRIES COMMONLY KNOWN AS M/S.SUJITHA FOODS, SOUTH CHITTOOR, CHERANELLUR VILLAGE, KANAYANNUR TALUK, REPRESENTED BY ITS PROPRIETOR A.K. CHANDRASEKHAR. BY ADV. SRI.T.N.HAREENDRAN THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 20/05/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. P.BHAVADASAN, J. ------------------------------------- SA No.992 of 1996-B ------------------------------------- Dated 20th May 2010 Judgment The Second Appeal arises out of OS No.48/90 before the Sub Court, Kochi. The Trial Court decreed the suit. The defendant carried the matter in appeal. The Appellate Court reversed the decree and dismissed the suit. 2. The suit was one for money. The essential facts necessary for the disposal of the case are as follows : The plaintiff, which is a partnership firm, is engaged in the business of printing and supply of polythene bags. According to the plaintiff, the defendant, representing himself to be the proprietor of Sujitha Foods, placed orders for polythene bags with the plaintiff firm and the firm supplied the same. But, the price was not paid by the defendant. An amount of Rs.22,232.35 was due to the plaintiff towards the polythene bags so supplied, as on SA 992/96 2 01.02.1990. To the notice sent by the plaintiff in this regard, the defendant sent a reply, containing false statements. When the amount was not paid, the suit was laid. 3. The defendant resisted the suit. It was contended that he is not the proprietor of Sujitha Foods and it is owned and run by his wife Chandrika. According to him, he was the proprietor of Sujitha Food Industries and that concern had no dealings, whatsoever, with the plaintiff firm. Therefore, according to him, he was not liable to pay any amount to the plaintiff. 4. It appears that the plaintiff had filed a replication, pointing out that all throughout, the defendant had held himself out as the Proprietor of Sujitha Foods and had been placing orders for the polythene bags and receiving the same. At no point of time, the said concern was pointed out to be owned by Chandrika. According to the plaintiff, Chandrasekharan was personally in charge of the affairs of Sujitha Foods and in the said circumstances, SA 992/96 3 he is liable to pay the amount due to the plaintiff. 5. The Trial Court raised necessary issues for consideration. The evidence in the case consists of the testimonies of PWs1 to 3 and documents marked as Exts.A1 to A15 from the side of the plaintiff. The defendant examined DW1 and Exts.B1 to B9 were marked. On an evaluation of the evidence in the case, the Trial Court came to the conclusion that though there were two firms namely Sujitha Foods and Sujitha Food Industries, both the firms were owned and run by Chandrasekharan and that he was liable to pay the amount to the plaintiff. The Court found that all throughout, Chandrasekharan was representing himself as the owner and proprietor of Sujitha Foods, placing orders with the plaintiff in that capacity and receiving the goods. The Court also found that in all the correspondence, Chandrasekharan held himself out as representing the concern and incurred all the liabilities. 6. It was also found that there were no transactions with Smt.Chandrika and therefore, she could SA 992/96 4 not be made liable since the liability was incurred by Chandrasekharan and the decree was passed against him. In appeal, it seems that the Appellate Court was impressed by the argument that two different persons were carrying on two different proprietory concerns and accordingly, the appeal was allowed and the judgment and decree of the Trial Court was reversed. 7. The following substantial questions of law are seen formulated in this Second Appeal. “1. Whether or not the defendant having represented as proprietory concern known as 'Sujitha Foods' owned by A.K.Chandrasekharan and entering into transactions with the plaintiff is not estopped from contending that 'Sujitha Foods' is a proprietory concern owned by his wife Chandrika, under Section 115 of the Evidence Act ? 2. Whether or not the plaintiff is not entitled to prove by adducing admissible evidence that the defendant is known as 'Sujitha Foods' in the area under the proprietorship of A.K.Chandrasekharan inspite of existence of 'Sujitha Foods' owned by his wife Chandrika, as an SSI unit ? 3. Whether or not a proprietory concern is not a separate SA 992/96 5 entity apart from its proprietor and is identified with its proprietor ? 4. Whether the suit is not hit by the principles of 'Ex Dolo Malo Non Oritur Actio' in view of the illegal action of the defendant ?” 8. The learned counsel for the appellant contended that the lower Appellate Court was not justified in reversing the decree of the Trial Court. The decree was reversed on the sole ground that the articles were supplied to Sujitha Foods and its proprietrix was Chandrika. According to the learned counsel, the lower Appellate Court conveniently forgot to note various vital aspects. The defendant in the suit had placed orders and received the articles. He had sent all the correspondence, representing himself to be the owner of Sujitha Foods. Under such circumstances, according to the learned counsel for the appellant, even assuming Sujitha Foods is owned by Smt.Chandrika, that does not make any difference. The learned counsel also pointed out that at any rate, Sujitha SA 992/96 6 Foods has derived the benefit of transactions on the basis of the conduct of Chandrasekharan as he held himself out to be the person entitled to place orders and enter into agreements and transactions on behalf of the said concern. 9. There seems to be considerable force in the above argument. One may refer to the evidence of Smt.Chandrika, the wife of the defendant. She has conceded that her husband was looking after her concern. The evidence on record shows that it was the defendant Chandrasekharan, who was representing Sujitha Foods and placing orders on behalf of the said concern. As rightly contended by the learned counsel for the appellant, in all the correspondence between the parties, the plaintiff had addressed Chandrasekharan as the proprietor of Sujitha Foods. At no point of time, Chandrasekharan disputed this fact and pointed out to the plaintiff that it was Chandrika, who was the proprietrix and that he was not the proprietor of the concern. SA 992/96 7 10. The defendant has no case that he had no transactions with the plaintiff. 11. The plaintiff had produced documents to show that in response to the order placed by Chandrasekharan, they had supplied polythene bags. They also produced various correspondence between the parties which indicate that Chandrasekharan was the person, in charge of the affairs of the concern and had placed orders and received the goods. PW3 – the wife of Chandrasekharan had admitted in her deposition that most of the dealings in respect of Sujitha Foods were done by her husband Chandrasekharan. The plaintiff had been maintaining accounts in the name of Sujitha Foods and they bona fidely believed that Chandrsekharan was the proprietor of the concern. Whenever they addressed Chandrasekharan in that manner, there was no indication from his side that it was not so and his wife was the proprietrix. He let the plaintiff believe that he was the proprietor and entered into various dealings with the firm. SA 992/96 8 The Trial Court found that there is nothing to discredit the accounts produced by the plaintiff. 12. It is significant to notice that the plaintiff had taken pains to have the Panchayat records produced. The records so produced would indicate that there is no concern by name “Sujitha Foods” in Cheranelloor Panchayat. The contention taken by the defendant in this regard was that since Sujitha Foods is not a production unit, no licence is required from the Panchayat. That clearly indicates that the said unit was not manufacturing any articles. But the orders placed by Chandrasekharan show that he entered into transactions with the plaintiff holding that it is engaged in manufacturing and receiving goods. In such circumstances, it comes with little grace to say that the defendant is not liable to pay any amount to the plaintiff. It may be true that the two concerns are owned by two different persons. But, as far as the plaintiff is concerned, Chandrasekharan held himself out to be the person in charge of the affairs of Sujitha Foods and SA 992/96 9 Smt.Chandrika was fully aware of the same. Neither of them alerted the plaintiff of the true state of affairs and they enjoyed the benefit of the transactions. The lower Appellate Court is not justified in allowing the appeal. If under such circumstances, the plaintiff bona fide believed that it was Chandrasekharan, who was the proprietor of Sujitha Foods, they could not be found fault with. He had taken advantage of the transactions and his wife, even assuming, she is the proprietrix of Sujitha Foods, too had the benefit of the same. 13. In the result, this appeal is allowed. The Judgment and decree of the lower Appellate Court is reversed and the Judgment and decree of the Trial Court is restored. There will be no order as to costs. P.BHAVADASAN, JUDGE sta SA 992/96 10 SA 992/96 11