IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT SUIT SUIT NO.167 OF 1983 NO.167 OF 1983 NO.167 OF 1983 M/s.Supreme Textiles .. Plaintiffs Versus O.P. Marda & Ors. .. Defendants Mr.A.K.Tripathi i/by Shantilal & Co for the plaintiffs. Mr.Ashok Singh i/by R.N.Gaonkar for the defendants CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE DATE DATE ON WHICH JUDGMENT ON WHICH JUDGMENT ON WHICH JUDGMENT IS IS IS RESERVED RESERVED RESERVED : 12th December 2008. 12th December 2008. 12th December 2008. DATE DATE DATE ON WHICH JUDGMENT ON WHICH JUDGMENT ON WHICH JUDGMENT IS IS IS PRONOUNCED PRONOUNCED PRONOUNCED : 09th February 2009. 09th February 2009. 09th February 2009. JUDGMENT: JUDGMENT: JUDGMENT: . The present suit is filed for recovery of a sum of Rs.03,80,625/- with interest on Rs.03,75,000/- at the rate of 6% per annum from the date of filing of the suit till passing of the decree and thereafter at such higher rate as this Court may think proper. 2. The plaintiffs are claiming to be a partnership firm duly registered under the Indian Partnership Act, 1932. The original defendant is M/s.Marda Agents. One Bhagirath Prasad Marda was the proprietor of M/s.Marda (2) Agents. It appears that during the pendency of the suit the defendant nos.1 to 11 were brought on record as the the heirs and representatives of the proprietor of M/s.Marda Agents. 3. The case of the plaintiffs is that on 08th May 1982 for valuable consideration, the defendants had issued six cheques in the sum of Rs.01,00,000/-, Rs.50,000/-, Rs.50,000/-, Rs.50,000/-, Rs.75,000/- and Rs.50,000/- respectively more particularly described in paragraph no.2 of the plaint. According to the plaintiffs the said cheques were issued by the defendants as per the settlement of disputes and accounts between the plaintiffs and defendants as recorded in letter dated 08th May 1982. According to the case of the plaintiffs the said cheques were dishonoured when presented by the plaintiffs for encashment. After the first cheque dated 08th May 1982 was returned dishonoured on 15th May 1982, the defendants addressed a letter dated 17th May 1982 claiming that the defendant had not received a letter addressed to their bankers as alleged to have been promised by the plaintiffs. The plaintiffs replied by letter dated 20th June 1982 stating that they had never promised to give any such letter addressed to the (3) bankers of the defendants. 4. By advocate’s letter dated 21st September 1982, the plaintiffs called upon the defendants to pay a sum of Rs.03,75,000/- being the total amount payable under the dishonoured cheques together with interest thereon at the rate of 6% per annum from the respective dates of the cheques till the payment. The defendants replied to the said letter by reply dated 28th September 1982. In the reply the defendants contended that the cheques were issued by the defendants subject to the defendants receiving a letter addressed to their bankers by the plaintiffs withdrawing the notice given by the advocate for plaintiffs and confirming that settlement was arrived at. It was contended that the plaintiffs never issued letter addressed to the bankers, but proceeded to deposit the cheques for clearance. In the reply it was contended that there was a fresh settlement on 30th July 1982 at the instance of one Mr.O.P.Goenka and in terms of the fresh settlement, the defendants had arranged a demand draft for a sum of Rs.02,00,000/- on 14th August 1982. It was contended that the defendants were waiting for arrival of the confirmed settlement from the plaintiffs. It was contended in the reply that the said demand draft was handed over by them to Mr.O.P.Goenka on (4) 22nd September 1982 who has forwarded the same immediately to his Madurai office to effect the exchange of demand draft with the letter of the plaintiffs addressed to bankers. The advocate for the plaintiffs issued rejoinder dated 15th October 1982 and denied the allegations in the reply. By the said rejoinder, the case made out in the reply of the fresh settlement was denied. The plaintiffs contended that they were not aware of the alleged demand draft in the sum of Rs.02,00,000/-. Thereafter, the present suit has been filed. 5. A written statement was filed by the constituted attorney of the defendants Mr.Omprakash Marda. Various contentions were raised in the written statement including the contention that the suit was not maintainable. The defendants admitted the settlement recorded in the letter dated 08th May 1982 enclosing therewith the six cheques subject matter of the suit. The case of the defendants is that before encashing the said six cheques aggregating to sum of Rs.03,75,000/-, the plaintiffs were to hand over to the Manager, Syndicate Bank the original of letter dated 08th May 1982 in respect of certain additional import licences of the plaintiffs. It is contended that while collecting (5) the cheques the plaintiffs handed over to the defendants a copy of their letter dated 08th May 1982 addressed to the bank. According to the defendants the said letter was absolutely necessary for them to utilise additional import licences mentioned in the said letter since otherwise the bank could not release a sum of Rs.30,000/- lying with it and would not permit utilisation of the said licences by the defendants. It is contended that the original letter (a copy of which was annexed to the written statement at Exhibit 7) addressed to the bank was never handed over by the plaintiffs to the bank. It is stated that repeatedly the fact that the letter was not submitted to the bank was pointed out to the plaintiffs. It is alleged that material facts have been suppressed. Reliance was placed on subsequent settlement and a demand draft in the sum of Rs.02,00,000/- dated 11th August 1982 purchased by the defendants. The defendants denied that they are liable to pay any amount. 6. There is a written statement filed by the 4th defendant for himself and in his capacity as the constituted attorney of the 1st, 2nd and 5th to 10th defendants. It was contended in the written statement that proprietor of the defendants late Bhagirathprasad (6) Marda had executed a Will dated 30th July 1993 and under the said Will, the 3rd defendant Ramnath has inherited the proprietary concern M/s.Marda Agents of the said Bhagirathprasad Marda with all assets and liabilities. It is therefore contended that none of the defendants save and except the 3rd defendant are concerned with the alleged liability subject matter of the suit. Apart from raising this contention, various contentions were raised on merits similar to the contentions raised in the original written statement. There is a separate written statement filed by the 3rd defendant which is signed by the 4th defendant in his capacity as a constitutional attorney of the 3rd defendant. In the written statement it is contended by the 3rd defendant that by virtue of Will dated 30th July 1993 executed by the late Bhagirathprasad Marda, the sole proprietor of M/s.Marda Agents, he inherited the assets and liabilities of M/s.Marda Agents. The 3rd defendant raised similar defence which were raised by way of the other written statement. 7. On 18th September 2003 issues were settled. The issues read thus: 1. Whether the plaintiffs have failed to (7) carry out their part of the settlement/agreement/arrangement as particularised in the written statement? 2. Whether the defendants delivered the cheques to plaintiffs subject to the condition that the plaintiffs shall hand over to the Syndicate Bank the original of the letter dated 08th May 1982 in respect of certain additional import licence of the plaintiffs? 3. Whether the plaintiffs have delivered the said letter dated 08th may 1982 to the Syndicate Bank a copy whereof was handed over to the defendants? 4. Whether on account of not handing over the said letter to the said Bank, the bank could not release the amount lying with the said Bank and also could not allow the utilisation of the licences by the defendants? 5. Whether the plaintiffs were liable to (8) withdraw the allegations made against the said Bank and whether the plaintiffs have withdrawn the said allegations? 6. Whether the plaintiffs have suppressed certain material facts from this Hon’ble Court as particularised in the written statement? 7. Whether the matter was referred to the mediation of one Mr.O.P.Goenka and whether the defendants have delivered to the said Mr.O.P.Goenka the demand draft of Rs.02,00,000/- with the request to hand over the said demand draft in exchange of the letter addressed to the Syndicate Bank by the plaintiffs a copy whereof was handed over to the defendants? 8. Whether the plaintiffs have committed breach of the arrangement arrived at between the parties? 9. Whether the plaintiffs have deposited (9) the said cheques for payment without complying with the obligations on their part? 10. Whether the plaintiffs are entitled to recover the amount as claimed in the plaint? 11. What reliefs? 8. The plaintiffs examined one Mr.R.Kailas, one of its partners by filing his affidavit in lieu of examination in chief. He was cross examined before the Court Commissioner appointed by this Court. The defendants examined the 4th defendant Mr.Mahesh Marda by filing affidavit in lieu of examination in chief. The said witness was cross examined by the learned counsel appearing for the plaintiffs before the Court Commissioner for recording evidence. 9. The learned counsel appearing for the plaintiffs has taken me through the pleadings and notes of evidence. He submitted that the plaintiffs have made out a case for adducing secondary evidence of the (10) documents relied upon by them, the true copies of which were produced alongwith the affidavit in lieu of examination in chief of Mr.R.Kailas. He submitted that there is nothing on record to show that the plaintiffs had agreed to issue any letter to Syndicate bank. He submitted that evidence on record shows that a copy of letter dated 08th May 1982 (Exhibit A to the plaint) was served to the said bank. From the cross examination of the defendant no.4 he pointed out that even the defendants tried to tender a true copy of the letter dated 08th May 1982 (Exhibit 7 to the written statement) to the Syndicate bank but the same was not accepted. He submitted that there is absolutely no material on record to show that the plaintiffs had agreed to address any separate letter to the bank. He submitted that complete settlement between the parties has been recorded in letter dated 08th May 1982 which is sent by the defendants to the plaintiffs and the said letter is completely silent about the requirement of plaintiffs submitting any letter to the bank. He submitted that by letter dated 28th June 1982 the plaintiffs had categorically informed the defendants that they never promised to give any letter to the bankers of the defendants. He submitted that the defendants did not deny the contents of the said letter. He submitted that (11) there is absolutely no evidence on record to show that there was any settlement arrived at the instance of Mr.O.P.Goenka. He submitted that the plaintiffs have not committed any breach of the Agreement between the parties and the stand taken by the defendants is totally frivolous. 10. The learned counsel appearing for the defendants invited my attention to the letter dated 17th May 1982 sent by the 1st defendant to the partner of the plaintiffs in which specific understanding between the parties has been recorded that the plaintiffs were to address a letter to the said bankers of the defendants. He submitted that the said stand has been specifically taken at the earliest point of time on 17th May 1982. He pointed out that there was a fresh settlement between the parties at the instance of Mr.O.P.Goenka and in terms of the fresh settlement, a demand draft in the sum of Rs.2,00,000/- was drawn in favour of the plaintiffs and the said demand draft was forwarded by the defendants to Mr.O.P.Goenka who was to hand over the same to the plaintiffs in exchange of letter addressed by the plaintiffs to the bankers. He invited my attention to the evidence of Mr.Mahesh Marda, the 4th defendant. He invited my attention to a letter dated (12) 21st August 1982 sent by Mr.O.P.Marda and the plaintiffs. He pointed out that by the letter dated 27th November 2007 the defendants pointed out to the plaintiffs that the letter addressed to the bankers is not made available. In fact the demand draft in the sum of Rs.2,00,000/- dated 14th August 1982 was forwarded by the defendants to the plaintiffs. In the said letter it was mentioned that the balance payment of Rs.01,75,000/- will be made one month after the receipt of the required letter addressed to the bankers of the defendants. He submitted that the plaintiffs never complied with requirement of addressing a letter to the bankers and committed breach of the terms and conditions of the settlement and hence they are not entitled to any relief. 11. The plaintiffs have produced xerox copies of the documents relied upon by them. In affidavit in lieu of examination in chief of Mr.R.Kailas he has stated as under: "5. I say that I made the attempts to find out original documents at plaintiffs Madhurai office and also at the Advocates’ offices at Mumbai but I could not traced. During the (13) period 1982 to 1984 when the hearing of the Summons for Judgment and the appeal in the above suit, they were in my possession and were brought to the Court also. I say that thereafter either they are misplaced in my Advocate Mr.Varma’s office or M/s.Shantilal & Co., in Mumbai or Plaintiff’s office at Madurai. I say that since last one month we have tried to find out the original documents at Madurai and at Mumbai but they are not traced or found in either places and as the matter is about 20 years old I do not recollect where they are and inspite of the efforts to find them at the plaintiffs office at Madurai and their Advocate’s office at Mumbai they are not traceable. Hence, I say that I may be permitted to produce and tender xerox copies of the settlement letter and 6 cheques alongwith the memos issued by the Bank which are admitted by the defendants in the written statement." There is no serious challenge to the said version in the cross examination of the said witness. In fact there does not seem to be any dispute regarding the execution (14) and genuineness of the documents produced alongwith the affidavit. Therefore, the plaintiffs will have to be permitted to lead secondary evidence of the said documents in the form of xerox copies of the said documents produced alongwith the affidavit. 12. For dealing with the first issue, a reference will have to be made to the averments made in the plaint. Exhibit A to the plaint is a letter dated 08th May 1982 addressed by the defendants to the plaintiffs. A xerox copy of the origianl has been annexed to the affidavit in lieu of examination-in-chief. There is no dispute between the parties as regards the contents of the said letter. It will be necessary to refer to the contents of the said letter. The relevant part of the said letter addressed by the defendants to the plaintiffs reads thus: "Settlement of accounts against all three Additional Import Licence No.P/W/2875463 dt.28/9/79, No.P/W/2873210 dt.19/12/78 and No.P/W/2847638 dt.19/8/80 and REP Licence No.P/K/2877018 dt.21/1/80 and No.P/K/2876998 dt.10/1/80. (15) With reference to our personal discussion had with you Mr.Kailas R. Lalan today with the Attorney Mr.O.P.Marda, we are pleased to confirm as follows: 1. That entire account between you and us of premium consideration and service charges has settled mutually for Rs.3,75,000/- and the payment of the same is to be made as follows by us: a) for Rs.1,00,000/- by cheque No.108968 dt.8/5/82. b) for Rs.50,000/- by cheque No.108969 dt.15/6/82. c) for Rs.50,000/- by cheque No.108970 dt.30/6/82. d) for Rs.50,000/- by cheque No.108971 dt.15/7/82. e) for Rs.75,000/- by cheque No.108972 dt.30/7/82. (16) f) for Rs.50,000/- by cheque No.108973 dt.15/8/82. 2. That this settlement is in full and final of our entire dealings till today and is subject to realisation of the above said cheques in full. 3. That there is no claim by either side of us of any type save and except as above and we both shall co-operate with each other for any documentation etc. Please confirm as to the above by signing the duplicate of this letter as a token of your confirmation." 13. Thus, the letter indicates that a sum of Rs.03,75,000/- was payable by the defendants to the plaintiffs in full and final settlement of entire claim. There is no condition recorded in the said letter which requires plaintiffs to issue any letter to the Syndicate bank (bankers of the defendants). From a xerox copy of (17) the letter dated 08th May 1982 annexed to the affidavit in lieu of examination in chief of the partner of the plaintiff, it appears that there is an acknowledgment in writing of the plaintiffs of having received the original letter alongwith the cheques in token of confirmation of settlement. The said letter shows that a copy of the said letter was received by the Syndicate bank, Worli, Bombay. In the affidavit in lieu of examination in chief, a categorical statement has been made in paragraph 6 that save and except the letter dated 08th May 1982 no other settlement or writing was arrived at between the plaintiff and defendant. The witness Mr.R.Kailas stated that the said settlement letter has been already given to Syndicate bank and there is an endorsement of the Syndicate bank on the copy of the said letter. 14. The defendants are relying upon a letter dated 17th May 1982 sent by them to the plaintiffs in which the 1st defendant informed Mr.R.Kailas of the plaintiff that the defendants have not received the required letter for their bankers as promised by Mr.R.Kailas on 09th May 1982. By letter dated 28th June 1982, Mr.R.Kailas informed the defendants that 09th May 1982, was a Sunday and on that day he had not met either the (18) proprietor or a representative of the defendants. It was pointed out that the first cheque issued by the defendants in the sum of Rs.01,00,000/- was dated 08th May 1982 and was due for presentation on the same day. By the said letter, plaintiffs recorded that the first cheque was already dishonoured. 15. It will be necessary to refer to the cross-examination of the said witness of the plaintiffs. Question no.25 asked in the cross examination is whether as per settlement dated 08th May 1982 the plaintiffs were required to give an authority letter to Syndicate bank in favour of M/s.Marda Agents to deal with licence mentioned in the settlement. The witness responded that request of M/s.Marda Agents was that the letter dated 08th May 1982 be submitted to the bank and accordingly the letter has been submitted to the bank. A suggestion given to the witness was as the plaintiffs did not execute power of attorney in favour of M/s.Marda Agents to restart the operation of the bank account and licence, M/s.Marda Agents were forced to stop the payment. The answer of the witness of the plaintiffs was that the frozen bank account was already allowed to be operated by M/s.Marda Agents and therefore a power of attorney was not at all required. (19) 16. The defendants have relied upon a letter annexed as Exhibit 7 to their original written statement. The said letter dated 08th Mary 1982 is addressed by the plaintiffs to the Manager of Syndicate bank and a copy thereof has been forwarded to the original defendants. In the said letter, the plaintiffs have referred to the settlement dated 08th May 1982. By the said letter it was recorded that the plaintiffs were withdrawing all earlier letters addressed to the bank and confirmed that Mr.O.P.Marda (1st defendant) is authorised to deal with the licences mentioned in the letter as power of attorney holder on the lines of the attorney given to him earlier. It was stated that the plaintiffs were withdrawing the claim in this respect as per the settlement subject to realisation of the cheques concerned. In the written statement the stand taken by the defendants is that the said original letter was not handed over by the plaintiffs to the bank. Mr.R.Kailas, the witness examined by the plaintiffs has been cross examined on this aspect. While replying to question no.27, he stated that the bank did not accept the said letter (at Exhibit 7 to the written statement) as the bank wanted a settlement letter detailing every aspect of the settlement for utilisation of licences by (20) M/s.Marda Agents. He stated that therefore a copy of the letter dated 08th May 1982 (Exhibit A to the plaint) recording the settlement was handed over to the bank and acknowledgment was obtained. In response to question no.35, the witness of the plaintiffs stated that he was not required to furnish the letter (Exhibit 7 to the written statement to the bank) as the said letter was prepared prior to the letter of settlement dated 07th May 1982 (Exhibit A to the plaint). He stated that the bank requested him and M/s.Marda Agents to give the settlement letter in the format and accordingly a copy of the letter dated 08th May 1982 (Exhibit A to the plaint) was submitted to the said bank and an endorsement was obtained from the bank on the original letter. (It must be noted at this stage that in the entire cross examination of the witness of the plaintiffs the reference is to the Exhibit B to the plaint. The learned counsel appearing for the parties agreed that this is an error committed by the learned Commissioner and wherever there is a reference to Exhibit B to the plaint, the same shall be read as Exhibit A to the plaint.) 17. On this aspect, it will be necessary to refer to cross examination of the 4th defendant examined by the (21) defendants. In the cross examination in response to question no.3, he stated that the plaintiffs had agreed to give a letter (Exhibit 7 to the written statement) to the bank. In response to a question, the defendant no.4 stated that a copy of letter at Exhibit 7 signed by the plaintiffs was forwarded to the defendants. He stated that the said letter was given to the bank but the bank refused to take the same on record as it was not the original but it was a copy forwarded by the plaintiff. In the affidavit in lieu of examination in chief in paragraph 16, the 4th defendant has stated thus: "16. I say that the plaintiff were not entitled to put forward six cheques for encashment as plaintiff failed to carry out the agreement and did not give prescribed letter dated 08.05.1982 to the Syndicate bank which was necessary for final settlement of dispute between parties. I say that, defendant intimated the bank not to honour any of six cheques until the plaintiff handed over to the bank the letter duly signed by the plaintiff as required by the bank in order to allow the original defendant to operate the account and (22) utilize the import license." In the said paragraph, the 4th defendant has summed up the defence of the defendants. As pointed out earlier, it is not in dispute that there is only one document recording the complete settlement which is the letter dated 08th May 1982 (Exhibit A to the plaint) addressed by the defendants to the plaintiffs. In the said letter, there is no reference to any other condition such as condition of plaintiffs submitting a separate letter to the Syndicate bank or that the cheques were to be encashed only after the plaintiffs issued such a