1 sj656-04.sxw pps IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Summons for Judgment No. 656 of 2004 in Summary Suit No.1044 of 2004 Tej Singh Baid .. Plaintiff v/s. Rawatmal S. Banthia & Others ..Defendants Mr.S.C.Naidu i/b. C.R.Naidu & Co. for the plaintiff Mr.Shailesh Shah with Ms. Mamta Sadh, Ms. Sapna Rachure i/b.B.N.Tripathi & Co. for the Defendant Nos.1 to 5 for the Defendants CORAM : R.Y.GANOO, J. DATED : 27th October , 2010 P.C. : 1. Mr.Man Singh Baid instituted aforesaid Summary Suit on 19.1.2004 for recovery of Rs.17,52,640/- and for interest as set out in the body of the plaint. One Mr. Rawatmal S. Banthia (hereinafter referred to as Rawatmal) was joined as defendant no.1 in his purported capacity as Constituted Attorney of M/s. Rawatmal Rishabdev. a partnership 2 sj656-04.sxw firm -defendant no.5. Defendant Nos.2, 3 and 4 are the partners of defendant no.5. Defendant no.5 is joined as partnership firm against whom the liability is sought to be fixed along with partners namely defendant nos.2, 3 and 4. During pendency of this suit, defendant no. 1 Rawatmal expired. His name came to be deleted. Similarly, during the pendency of the suit Mr. Man Singh Baid expired. Hence Mr. Tej Singh Baid was brought on record as plaintiff as his heir and successor and other heirs were joined as non contesting defendants, namely defendant nos.6 to 10. Summons for Judgment was taken out against Rawatmal, original defnedant no.1, defendant nos.2, 3, 4 and 5. It is really surprising to note that heirs of original plaintiff Man Singh Baid are also added as persons against whom summons for judgment has been taken out. On account of deletion of name of Rawatmal in the suit, summons for judgment does not survive as against Rawatmal. Since defendant nos.6 to 10 are non contesting defendants it does not survive against those defendants. Hence learned Counsel for the plaintiff pressed summons for judgment against defendant no.5- partnership firm and defendant nos.2, 3 and 4 as partners. It is also to be noted that one person by name Master Rsihabdas was admitted as the person entitled to benefits of the 3 sj656-04.sxw partnership firm and he was shown as minor as on 24.7.2003 when the demand notice was issued. He has not been joined as party defendant in the suit. This is an incidental observation. 2. The plaintiff, claims that original defendant no.1 Rawatmal since deceased contacted original plaintiff Man Singh Baid (hereinafter referred to as plaintiff) and told him that if the monies are kept with defendant no.5 he would get interest on it at the rate of 16.20% per anum. According to the plaintiff, he paid in all a sum of Rs.21 lakhs by issuing three different cheques of three different dates. The plaintiff has approached this Court with a case that money was lent and advanced to defendant no.5. It is also the case of the plaintiff that on 1.9.2001 on the letterhead of the defendant no.5, a document came to be prepared and signed by Rawatmal as constituted attorney of Defendant No.5 and according to the plaintiff by the said document at Exhibit A to the plaint the firm agreed to pay to plaintiff Rs.21 lakhs along with interest at the rate of 1.35. According to plaintiff in the books of account of defendant no.5, ledger account of the plaintiff was opened and due entries were made as regards the receipt of money on loan, payment of interest etc. It is also the case 4 sj656-04.sxw of the plaintiff that the said Rawatmal issued certificate of deduction of tax at source under Section 203 of the Income Tax Act as regards interest paid by defendant no.5 to him, being certificate dated 10.10.2001, 11.11.2001 and 28.5.2002 respectively voz. Exhibit A2, A3 and B. It is also the case of the plaintiff that manager of defendant no.5 prepared a document which can be termed as letter confirming the account and signed same for Defendant No.5 and Rs. 17,52,640/- was treated as balance payable by defendant no.5 as of 31.3.2002. The said figure was confirmed by the plaintiff by passing an endorsement on the said certificate of confirmation of account. This document is Exhibit C to the plaint. In the course of filing the additional affidavit in the nature of rejoinder, plaintiff has produced the certificate regarding payment of interest being certificate dated 30.10.2000 and according to plaintiff the said certificate is signed by the partner of defendant no.5. 3. According to plaintiff the document mentioned above taken together constitute written agreement between the defendant nos.2, 3, 4 and 5 on one hand and plaintiff on the other and by these documents the defendant no.5 and its partners had admitted their liability to pay the 5 sj656-04.sxw sum of Rs.17,52,640/- as of 31.3.2002 and that is how the plaintiff has instituted this Summary Suit on the strength of documents mentioned above which are at Exhibit A, A-1, A-2, A-3, B and C. 4. It was brought to the notice of the court that demand notice dated 24.7.2003 was issued to Rawatmal, defendant nos.2, 3, 4 and 5 and Master Rishabdeo asking them to make the payment as set out in the said notice. It is the case of the plaintiff that this notice has not been appropriately replied to deny the averments. Plaintiff therefore claims that Defendant Nos.2 to 5 are liable to make payment. 5. The defendants have filed affidavit in reply to the summons for judgment. Two additional affidavits have also been filed. Present plaintiff has two affidavit in the nature of rejoinder. 6. It is the contention of the defendant nos.2, 3, 4 and 5 (hereinafter referred to as defendants taken together) that the plaintiff has been carrying on money lending business and therefore defendants are entitled to unconditional leave. On record one finds rival pleadings in so far as this point is concerned and after having gone through the 6 sj656-04.sxw relevant record I am not impressed by this stand taken by the defendants. To that extent the argument advanced by learned Counsel Mr. Shah is rejected. 7. It has been the stand of the defendants that Rawatmal to whom plaintiff calls as Constituted Attorney of defendant no.5 was in fact never the Constituted Attorney of defendant no.5 and as such he had no authority to deal with the plaintiff on behalf of defendant no.5. The defendants have denied keeping the money with them as alleged by the plaintiff. It is also contended by the defendant Rawatmal had no authority to issue TDS Certificates. It was also sought to be contended that the Manager who is said to have executed the balance confirmation letter at Exhibit C to the plaint had no authority to sign such a letter and as such the said letter does not bind the defendants. It is also the contention of the defendants that the various documents which are relied upon by the plaintiffs and on the strength of which the present summary suit is filed are not signed by any of the partners of defendant no.5 and as such those documents do not bind the defendants. 7 sj656-04.sxw 8. It was also sought to be contended by learned Counsel for the defendants by taking me through the affidavits that document at Exhibit A to which plaintiff calls as Khate Peta Receipt is not in any case a document which can be called as Khate Peta Receipt as the said document is not in the books of the plaintiff and it does not bear the signature of the partner of defendant no.5. So far as the ledger account at Exhibit A-1, it was submitted that the contents of the same are denied by the defendants and as it does not bear the signature of any of the defendants the same can’t be acted against the defendants. So far as the exhibits at Exhibit A-2, A-3, B, it is the stand of the defendants that the said documents indicate that they are signed by Rawatmal and the said Rawatmal had not authority to issue documents on behalf of defendant no.5. Same is the position as regards document at Exhibit C. It was also sought to be contended that the present summary suit filed on the basis of the documents as above is not maintianable as summary suit as these documents singly or taken together do not fall within the parameters of Order 37 Rule 2 of C.P.C. So far as the balance confirmation letter at Exhibit C it was contended that the said document cannot be termed as account settled and confirmation by the defendants as the said document even 8 sj656-04.sxw if accepted as true and validly executed on behalf of defendant no.5 does not fit in within the parameters of what can be referred to as balance confirmation letter settling the account. 9. Learned Counsel for the plaintiff had relied upon certain judgments and they are as follows: a) Judgment in Case of M/s. Mechalec Engineers & Manufacturers vs. M/s. Basic Equipment Corporaiton, AIR 1977 SC 577 was relied upon by learned Counsel for the plaintiff to indicate to the court the principles to followed while considering summons for judgment and as to how the court should appreciate the record to decide whether the defendants should be put to terms or unconditional leave to defend should be granted. b) Judgement in the case of M/s. Manekchand Mohanlal Poonawala v. Shah Bhimji Kundanmal & Company reported inLXXI Bombay Law Report 370 was relied upon by the counsel for the plaintiff to point out as to what is Khate Peta Receipt and as to how the document to be called at Khate Peta Receipt amounts to an implied 9 sj656-04.sxw promise by the defendant and on the basis of which the summary suit is maintainable. c) Judgment in case of Sun N Sand Hotel Ltd. vs. M/s.V.V.Kamat HUF reported in 2003 (3) Mh.L.J. 932 was referred to point out the liability on the basis of a document which could be termed as balance confirmation. d) Judgement in case of R. Kumar & Company v. Chemicals Unlimited reported in AIR 2001 Bom 116 was relied upon to point out to the court to appreciate the admission made by the defendants in the documents. e) Judgment in case of BOI Finance Ltd. v. Padma Alloy Casting Pvt. Ltd. & Ors. reported in AIR 1999 Bombay 340 was relied upon to submit that for the purpose of accepting the summary suit on the strength of written agreement document accepted or exchanged by and between themselves can be construed to be agreement in writing. This judgment was relied upon to say that the document at Exhibit A to C can be termed as documents on the basis of which the summary 10 sj656-04.sxw suit can be filed and entertained by the court. f) Judgment in the case of M/s. Nellai Metal Rolling Mills (P) Ltd. through its Managing Director v. The Southern India Central Benefit Fund (P) Ltd. by its Managing Director, A.S.Rangaswami, reported in 1986 Madras Law Journal Reports 370 was relied upon to show that if certain documents are executed by a person as agent or authorised person of a particular person and if said particular person had the benefit of the transaction he cannot refute the document which has come into existence on account of the signatures of the agent or authorised person. g) Judgment in case of Divyesh K. Kothari vs. M/s. Aatam Gems & Others reported in 2006(2) AIR Bom R 291 was relied upon to indicate how a transaction of jangad is entered into and the effect of Jangad note. At this juncture itself it is required to be mentioned that reliance of these judgment of Divesh Kothari is inappropriate and it is not necessary to consider this judgment at all. 10. So far as the defendants are concerned, learned Counsel for the 11 sj656-04.sxw defendants Mr.Shah had relied upon the judgment in the case of S.P.Brothers vs. Biren Ramesh Kadakia reported in 2009(1) Bom.C.R.453 to point out that TDS Certificate issued by a party does not amount to acknowledgment and it does not refer to any contract between the parties and as such the summary suit is not maintainable on the basis of TDS Certificate which may have been issued by a particular party. h) Judgment in case of Jyotsna K. Valia vs. T.S.Parekh & Co. reported in 2007 (3) Bom.C.R.772 was relied upon and in particular my attention was drawn to para 29 of the said judgment where it is indicated that the settled account done by the person who is called upon to make the payment i.e. the defendant in a typical case. This judgment was cited to contend that balance confirmation letter at Exhibit C is infact a document purported to have been signed by the Manager of the Defendant No.5 and the figures therein are said to have been confirmed by the original plaintiff and therefore the document at Exhibit C cannot be treated as the document arrived at on the basis of account settled as between the parties as the confirmation is not by Defendants. 12 sj656-04.sxw 11. I have considered the rival contentions. I am required to decide whether document at Exhibit A can be termed as Khate Peta Receipt. It was contended that the language of the document at Exhibit A by itself does not indicate that the firm defendant no.5 had admitted its liability to pay Rs.21 lakhs. Even otherwise the said document is prepared and scribed on a small letterhead of defendant no.5. Looking to the judgment in the case of M/s. Manekchand Mohanlal Poonawala, I am inclined to observe that the requirement of typical Khate Peta Receipt are not fulfilled in terms of document at Exhibit A because any typical Khate Peta Receipt should be scribed in the books of Creditor under the signature of a person who could be styled as debtor. In view of this observation document at Exhibit A cannot be termed as Khate Peta Receipt. In so far as the person who is said to have signed the document it is clear that the said document is purported to have been signed by one Rawatmal in his capacity as constituted attorney of defendant no.5. Defendants i.e. defendant nos.2, 3, 4 and 5 have disputed the claim of the plaintiff that said Rawatmal was constituted attorney defendant no.5. Except stating that said Rawatmal was constituted attorney of defendant no.5, no 13 sj656-04.sxw material is placed before the court to show as to how plaintiff confirmed the said fact of Rawatmal trying to act as Constituted Attorney of defendant no.5. To that extent question whether said Rawatmal was the constituted attorney of defendant no.5 becomes a triable issue. On this count the defendants will be entitled to unconditional leave so far as Exhibit A. So far as the document at A-1 being portion of the ledger account it is required to be observed that the same is denied by the defendants. Even otherwise it does not bear signature of any person for and on behalf of the defendant no.5. Hence no credence can be given to the said document today at the stage of summons for judgment. In view of judgment delivered in the case of S.P.Brothers vs. Biren Ramesh Kadakia, reliance on the TDS Certificate at Exhibit A-2, A-3 and B for the purpose of instituting summary suit would not be proper and to that extent these document would not help the plaintiff for treating this suit as summary suit. Apart from the aforesaid observations it is required to be noted that certificate at Exhibit A-2 is dated 10.10.2001. It deals with the payment of interest said to have been done on 14.9.2001. The document at Exhibit A-3 is interest certificate dated 11.9.2001. It indicates that the interest was paid on 2.11.2001. The document at 14 sj656-04.sxw Exhibit B is dated 28.5.2002 and it says that the interest is paid on 31.3.2002. These three documents if read alongwith the averment in the plaint would indicate that the plaintiff wants to state that interest was paid by defendants to the plaintiff from time to time and the income tax was deducted while payment of interest on tax so deducted was deposited in the relevant bank for paying it to the Government of India. These three certificates and the relevant averments as regards payment of interest and deduction of tax, if perused in the light of contents of para 4 of demand notice dated 24.7.2003, I am inclined to observe that these three interest payment certificates have to be looked with doubt. The plaintiff issue demand notice dated 24.7.2003 and in para 4 one finds a positive statement that the defendants did not pay any interest to the plaintiff since 1.9.2001. The relevant statement is as follows : “Our client state that since 1.9.2001 you have not paid interest as promised.” It is really surprising as to how plaintiff could plead in the plaint that interest was paid on various dates, if in the demand notice which is foundation of the suit the specific stand is taken that no intereset is paid from 1.9.2001. It is in the light of this observation one will have 15 sj656-04.sxw to come to conclusion that these three tax deduction certificates have been procured by the plaintiff by joining hands with Rawatmal (who unfortunately is no more today) so as to create material against the defendants. In any case, these three certificates cannot be used by the plaintiff for instituting the summary suit as there is no question of plaintiff having received any interest as mentioned by him in terms of clause 4 of the said demand notice. 12.Apart from the aforesaid observation these interest certificates are signed by Rawatmal, Constituted Attorney. Since defendants are contesting the claim of the plaintiff that Rawatmal was their Constituted Attorney and had no authority to sign documents on behalf of the defendants, these three certificates cannot bind the defendants as such these three certificates are of no use to the plaintiff. 13. The last document on the basis of which the plaintiff has come to the court for filing this summary suit is document which is being called as balance confirmation of account. This document is in the nature of letter addressed to the plaintiff purported to have been 16 sj656-04.sxw signed by Manager of defendant no.5. It is for the period 1.4.2001 to 31.3.2002. It does not bear any date whatsoever and the figures mentioned in the said document which are in the tabular form are sought to be confirmed by the plaintiff under his signature. Learned Counsel Mr. Naidu pressed this document in service to say that by this document defendant no.5, through their Manager admitted its liability. In the first place this document is signed by the Manager and the status and authority of this Manager has been challenged to and doubted by the defendant no.5 which is triable issue. In any case, Manager of the firm cannot bind the firm unless there is specific authority which could bind the firm in terms of money. Even the name of the Manager is not mentioned in the entire plaint as well as the said document. If the plaintiff had obtained this certificate from the Manager, it was just possible for the plaintiff to know his name and mention it in the plaint. All this makes me to look to this document with doubt and in any case the said certificate is without any authority flowing from defendant no.5. 14.Even if this certificate is to be treated as genuine certificate, this certificate cannot fit in within the requirement of balance 17 sj656-04.sxw confirmation account. This is so because in order to treat a document confirming liability in terms of the balance, the said document should bear the signature of the person to be called as debtor thereby confirming the figures mentioned in the said document. No doubt learned Counsel for the plaintiff had tried to submit that though in the present case the figures are mentioned under the signature of the Manager of defendant no.5 and that the confirmation is done by the original plaintiff Man Sing Baid, and the same should be used in favour of the plaintiff with all force Looking to the judgment in case Jyotsna K. Valia vs. T.S.Parekh & Co. as well as judgment in the case of Sun N Sand Hotel Ltd., vs. M/s. V.V.Kamat (HUF), it is required to be noted that the document which is to be termed as balance confirmation account for the purpose of settlement of liability should bear the endorsement of the person confirming his liability. It is clear that the confirmation must come from the person who is to be styled as judgment debtor in future and the said confirmation cannot come from a person who could be styled as plaintiff in future. 15. For these reasons mentioned aforesaid, I am inclined to observe 18 sj656-04.sxw that the present summary suit instituted by the plaintiff on the basis of documents at Exhibit A to C canot be accepted for the purpose of summary suit under Order 37 Rule 2 of CPC. as these documents do not constitute a written agreement as per the provisions of Order 37 Rule 2 of CPC. I have also given reasons as to how the aforesaid documents cannot be used in favour of the plaintiff. 16.For the reasons mentioned aforesaid I am inclined to observe that the defendants are entitled to unconditional leave to defend. The summons for judgment has to be disposed of with no orders so far as defendant nos.6 to 10. Hence following order is passed to dispose of the summons for judgment. ORDER i. Unconditional leave to defend is granted to defendant nos.2, 3, 4 and 5. ii. Defendant nos.2, 3, 4 and 5 to file written statement directly in the office on or before 13.1.2011. Defendants to serve copy of the 19 sj656-04.sxw written statement upon advocate for the plaintiff within 10 days from filing of the written statement in the office. iii. The summons for judgment is disposed of with no order as against defendant nos.6 to 10. iv. There shall be no order as to costs. [R.Y.GANOO, J.]