IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28/10/2011 C O R A M THE HONOURABLE Mr.JUSTICE M.VENUGOPAL Appeal Suit No.155 of 2006 1. M/s. Aysha Plantations Unit of M/s.Ashique Enterprises Firm rep. by its Managing Partner Mr.P.C.Thahir. Kozhikode. 2. P.C.Thahir 3. Mrs.Sakeena Thahir ... Appellants/ Defendants 2 to 4 Vs 1. C.O.Ramaswamy Proprietor of Ashok Kumar Tea Nursery Coonoor. ... Respondent/plaintiff 2. The Vayitri Plantations Limited rep. by its Managing Director Madurai. ... Respondent/Defendant-1 Appeal filed under Section 96 of the Code of Civil Procedure against the Judgment and Decree dated 6/12/2005 passed by the District Judge, Udagamandalam in O.S.No.10 of 2005. For Appellants : Mr.Perumbulavil Radhakrishnan For Respondents : Mr.A.Poobblie for R.1 No appearance for R.2. J U D G M E N T The Appellants/Defendants 2 to 4 have projected the present First Appeal as against the Judgment and Decree dated 6/12/2005 in O.S.No.10 of 2005 passed by the Learned District Judge, Udagamandalam. https://hcservices.ecourts.gov.in/hcservices/ 2. Before the trial Court, in the main suit, 1 to 6 issues have been framed for trial. On behalf of the first Respondent/plaintiff witness, P.W.1 has been examined and exhibits A.1 to A.27 have been marked. on behalf of the defendants, D.W.1 has been examined and exhibits B.1 to B.4 have been marked. 3. On an appreciation of oral and documentary evidence available on record, the trial Court viz., the Learned District Judge, Nilgiris at Udhagamandalam, while passing the judgment in O.S.No.10 of 2005 on 6/12/2005 has many other things observed that “No doubt, the invoices and delivery notes which claims to be in the custody of the plaintiff (first respondent) were not filed though the plaintiff (first respondent) claimed that the entire two lakhs plants were supplied to the first Defendant (second Respondent). In view of the admission of D.W.1 in the cross-examination, it is not necessary for the Plaintiff (First Respondent) to file the invoices and delivery notes in support of the claim of supply of two lakhs tea plants and resultantly, held that the Plaintiff (First Respondent) is entitled for recovery of the suit claim with interest at 12% p.a., from the date of the suit till the date of the decree and thereafter, 6% p.a., till realisation and accordingly, decreed the suit for a sum of Rs.6,81,500/- against the defendants with further interest on Rs.4,70,000/- at 12% p.a., from the date of suit till the date of decree and thereafter, at 6% p.a., till realisation with costs. 4. Being dissatisfied with the Judgment and Decree of the trial Court in O.S.No.10 of 2005 dated 6/12/2005, the Appellants/Defendants 2 to 4 have projected the instant appeal before this Court as aggrieved persons. 5. The points that arise for consideration in this appeal are:- (i). Whether the First Respondent/Plaintiff is entitled to the suit claim as prayed for in the plaint? (ii). Whether the suit is bad for mis-joinder of necessary parties? (iii). Whether the suit is barred by limitation? (iv). Whether the cause of action for the suit has arisen before the territorial jurisdiction of the trial Court?” 6. THE CONTENTIONS, DISCUSSIONS AND FINDINGS ON POINT No. (i):- The Learned counsel appearing for the Appellants/Defendants 2 to 4 submits that the trial Court has failed to appreciate the issues https://hcservices.ecourts.gov.in/hcservices/ based on the materials before it, it has resorted to presumptions and materials inadmissible in evidence. 7. The Learned counsel appearing for the Appellants/Defendants 2 to 4 urges before this Court that the trial Court has brushed aside the non-filing of the invoices and delivery notes on the basis of extracted deposition of D.W.1 without considering that the same has to be read in the light of the entire deposition and does not amount to an admission. 8. According to the Learned counsel for the Appellants/Defendants 2 to 4, there is no privity of contract between the First Respondent/Plaintiff and the Appellants/Defendants 2 to 4 and therefore, no claim can be made against the Appellants/Defendants. 9. Advancing his arguments, it is the contention of the Learned counsel appearing for the Appellants/Defendants 2 to 4 that D.W.1 in his evidence has deposed that the First Respondent/Plaintiff is not entitled to any amount from the Defendants 2 to 4 but the same has not been appreciated by the trial Court in a proper and real perspective, which has resulted in miscarriage of justice. 10. The Appellants/Defendants, take a plea that, even according to the First Respondent/Plaintiff, in the plaint, there is an admission that the Second Respondent/First Defendant is duty bound to make payment in two lakhs plants ordered by him and delivered to him and when that being the factual position, it is far fetched and fasten the liability on the defendants 2 to 4. 11. The Learned counsel appearing for the Appellants/Defendants submits that the First Respondent/Plaintiff can only assert a right as “unpaid seller”. As per Section 45 of the Sale of Goods Act, when admittedly, he no longer has any lien on the goods sold and delivered. Further more, as per Section 19 of the Sale of Goods Act, property in the goods has passed on to the Second Respondent/First Defendant and the Appellants/Defendants 2 to 4 and by no stretch of imagination come under the definition of buyer. 12. Lastly, it is the contention of the Learned counsel appearing for the Appellants/Defendants 2 to 4 that in the absence of clear cut evidence that the Appellants/Defendants 2 to 4 have purchased the tea plants from the Second Respondent/First Defendant, knowing the involvement of the Second Respondent/First Defendant in the transaction with the First Respondent/Plaintiff fixing the liability on Appellants/Defendants 2 to 4 is clearly unsustainable in the eye of law. 13. Per contra, it is the contention of the Learned counsel appearing for the First Respondent/Plaintiff that the trial Court, on an appreciation of oral and documentary evidence available on record https://hcservices.ecourts.gov.in/hcservices/ and after analysing the entire subject matter in issue between the parties has clearly decreed the suit for a sum of Rs.6,81,500/- against the Defendants and that the Appellants/Defendants 2 to 4 have purchased the property with full knowledge of the suit transaction and have taken over the plants with the Estate and as such the Appellants/Defendants 2 to 4 are jointly and severally liable with the Second Respondent/First Defendant to pay the suit amounts. 14. A perusal of the plaint filed by the First Respondent/Plaintiff indicates that the Second Respondent/First Defendant has placed an order with the First Respondent/Plaintiff for the supply of two lakhs VP Tea clones of B/6/61 variety at the rate of Rs.23,500/- per lorry load of 10,000 plaints with Door delivery at its Talamala Estate situated at Vayitiri. The First Respondent/Plaintiff delivered the aforesaid two lakhs clones in consecutive lorries with the desired intervals commencing from 25/4/2001 and before 15/5/2001 as per the order. 15. The Second Respondent/First Defendant agreed in writing to pay the cost of the clones (plants) supplied as per order and acknowledged by the Second Respondent/First Defendant in six equal monthly instalments commencing from 1/6/2001 and ending with December 2001 by which time, the entire payment shall be discharged in full. 16. The Second Respondent/First Defendant, instead of making the payments has written an unilateral letter dated 16/6/2011 assigning him a lame excuse that Kerala Forest Department is giving troubles to the plantation at Vayithri and only 64,000 plants could be planted and that the balance of 1,36,000 plants (already with the Second Respondent/First Defendant) could not be planted and are 'not wanted' by the Second Respondent/First Defendant. The Second Respondent/First Defendant's request to take back the plants is illegal. 17. As per the Sales of Goods Act, 1930 the Second Respondent/First Defendant is duty bound to make payment for 2 lakhs clones ordered by it and the First Respondent/Plaintiff supplied the same with great difficulty within the time limit, by availing a Bank loan. The Second Respondent/First Defendant has placed an order at the Plaintiff's Nursery at Coonoor after satisfying himself at the clones and the order itself has been placed at Coonoor. Hence, the cause of action has arisen at Coonoor. 18. The First Respondent/Plaintiff has come to know that the Second Respondent/First Defendant sold Talamala Estate to the Second Defendant Firm represented by its partners viz., the Defendants 3 and 4 by six sale deeds on 22/6/2002 and that the Defendants 2 to 4 are in possession of the said Estate. As a matter of fact, the https://hcservices.ecourts.gov.in/hcservices/ Appellants/Defendants 2 to 4 have purchased the property with full knowledge of the suit transaction and have taken over the plants with the Estate and therefore, they are jointly and severally liable with the Second Respondent/First Defendant to pay the suit amounts to the First Respondent/Plaintiff. The First Respondent/Plaintiff sent a registered letter dated 20/11/2002 to the First Respondent/Plaintiff claiming the value of the plants amounting to Rs.4,70,000/-. 19. The Second Respondent/First Defendant sent replies dated 18/10/2002 and 18/8/2003 admitting his dues, but mentioned that, he is unable to pay the due to the “crisis in the tea industry” and that he will pay the reduced amounts, if agreed by the Plaintiff. The Second Defendant has sent a reply dated 6/12/2002 feigning ignorance of the transaction and claimed an air of an injured innocence. The First Appellant/Second Defendant states that it purchased only 8 hectares from the Second Respondent/First Defendant. However, the sale deed shows otherwise. 20. The First Respondent/Plaintiff issued a legal notice dated 4/8/2003 to the Defendants 1 and 2 and the Second Respondent/First Defendant issued a reply dated 18/8/2003 admitting liability but asking for reduction. Since the Appellants 2 to 4 are the Defendants 2 to 4, as partners of the Second Defendant have purchased the Estate in June 2002 and hence the suit is in time against all the Defendants. Hence, the First Respondent/Plaintiff has filed a suit for recovery of a sum of Rs.6,81,500/- from the Defendants and for further interest of Rs.4,70,000/- at 12% p.a., from the date of plaint till the date of payment. 21. In the written statement filed by the Second Respondent/First Defendant, it is mentioned that no part of the cause of action has ever arisen at Coonoor or in the District of Nilgiris and the entire cause of action for the suit, if any has arisen and it is only at Vayithri, Kerala State. 22. The contract, to the knowledge of both parties has become impossible to perform due to the Act of Kerala State on the passing and enforcement of The Kerala Forest (Vesting and Management of Ecologically Fragile Land) Ordinance 2001 resulting in frustration of the contract. Therefore, the suit is to be dismissed in limine. 23. Further, the written statement proceeds to state that the cancellation of the contract has been neither unilateral nor a lame excuse but merely informing the First Respondent/Plaintiff about the frustration of the contract, due to an Act of State. Moreover, the supplies have not been made as per the contract. Also, delivery could not be effected at the Estate as per the terms of the Contract, due to the subsequent intervening Ordinance passed by Kerala State, which has been intimated to the First Respondent/Plaintiff, to take back the goods which has not confirmed to the order placed. As a https://hcservices.ecourts.gov.in/hcservices/ matter of fact, door delivery at the said Estate has neither been effected nor could have been effected by the First Respondent/Plaintiff or anyone else without getting concurrence and requested permits by the First Respondent/Plaintiff by Kerala State Forest Department, which prevented even labourers from walking to the Estate leve alone transport vehicles plying to the Estate etc. 24. The sale effected by the First Defendant to the Appellants/Defendants 2 to 4 vesting of possession with the Appellants is correct. The Defendants had purchased the property by registered sale deeds on 22/6/2002 and have nothing to do either with the contract entered into by the First Defendant or with the Plaintiff and have been deliberately dragged to Court as co- defendants out of malice and ill will, etc. 25. The First Defendant/Plaintiff made first delivery at the Estate premises as agreed to on 18/4/2001. But the supply of plants have not been made according to the specifications. There has been a mixture of one year old seedlings with old and discarded plants and the same was duly pointed out to the Plaintiff as per the First Defendant's letter dated 19/4/2001. 26. The Forest Department even refused to permit Estate Labourers to walk on the said road and threatened to treat the users thereof as trespassers into forest lands, through the lorry driver. The third and subsequent consignments were brought in and the third consignee reached Vayithri by lorry and the said lorry was refused permission to access the Estate and the lorry driver of the First Respondent/Plaintiff has been permitted to walk the said distance of about 3 Kms and speak to the Estate staff. The lorry driver informed the Estate staff that the consignment was at the entrance of the road, etc. 27. The contract stood frustrated by Act of State on the one hand and that no delivery was effected of the said 1,36,000 plants to it and hence the First Defendant is not liable for plants which have been dumped by the staff of the First Respondent/Plaintiff on forest lands of which no delivery could be taken without trespassing on to forest lands etc. The First Respondent/Plaintiff is not entitled to claim monies for plants abandoned on forest land without effecting door delivery to the Defendant in terms of the contract. 28. In the written statement filed by the First Appellant/Second Defendant, it is stated that no part of the cause of action has arisen between the Second Defendant and the Plaintiff and therefore, the Second Defendant is an unnecessary party. On the ground of mis-joinder of parties, the suit is liable to be dismissed. The Third and Fourth Defendants are totally strangers and have nothing to do with the alleged claim of the First https://hcservices.ecourts.gov.in/hcservices/ Respondent/Plaintiff. The Second Defendant has purchased the property from the First Defendant for valid consideration. 29. It is the case of the First Respondent/Plaintiff that supplies have been made between 25/4/2001 and 10/5/2001 through the bills raised against the First Defendant during the period 18/4/2001 and 16/5/2001 and the supply and delivery of Tea clones is one in the nature of sale of goods with no specific contract arisen, with regard to possession and lien/charge by the seller viz., the First Respondent/Plaintiff. In the absence of such contract between the First Respondent/Plaintiff and the Second Respondent/First Defendant and when the Second Defendant is in possession in pursuance of a bonafide transaction, the right of the First Respondent/Plaintiff if any could be an action for recovery of price of goods delivered and has absolutely no right to bring in the immovable property which even admittedly conveyed to the Second Defendant for valid consideration. 30. It is to be pointed out that the claim to sue for the price of goods really arises from the contract of sale and not under Section 55 (1) of the Sale of Goods Act, which only enables the seller to sue for the price of the goods according to the terms of the contract, as opined by this Court. 31. In law, the seller must be ready and willing to deliver the entire goods and not part of the goods. Moreover, the buyer's neglect does not entitle the seller to put an end to the contract. The rights of a seller do not depend on any implied agreement between the parties, but re-incidents attached by the law to the contract of sale and are peculiar to it. As a matter of fact, the seller can recover only interest when he is in a position to recover the price. When he can only sue for damages for breach of contract, he is not entitled to claim interest as per Section 61 (2) of the Sale of Goods Act, 1930. As per Section 56 of the Sale of Goods Act where the buyer wrongfully neglects or refuses to accept or pay for the goods, the seller may sue him for damages, for non-acceptance. 32. If the buyer has repudiated his obligations, the seller has the option of either affirming the contract or treating it discharged. A contract of sale becomes a sale only when the property in the goods is transferred to the buyer under the terms of the contract itself. When an individual has agreed to buy the goods, to come within the meaning of 'buyer', he must be contractually bound to purchase the goods. Even the buyers insolvency does not operate without more, as a recession. 33. P.W.1 in his evidence has deposed that, he supplied hundreds of plants during May 2001 to the First Defendant (Second Respondent in appeal) and it is correct to state that the First Defendant has to pay the amount by December 2001 and it is also correct to state that the said amounts will have to be paid in six https://hcservices.ecourts.gov.in/hcservices/ monthly instalments and it is also correct to state that the last six monthly instalments ends in December 2001 and it is correct to state that the suit has been filed on 9/3/2005. 34. P.W.1 in his further evidence has deposed that in Bettati, an order has been finalised by means of a talk and the order has been obtained through tapal and that the Second Respondent/First Defendant has personally come and has placed orders and Ex.A.1 is the order placed and as per order, 2 lakhs plants will have to be door delivered and that the plants will have to be sent through a lorry by means of a lot of 10,000/- and that it is incorrect to state that they have door delivered 2000 plants and for door delivery, they have obtained the signature of the Second Respondent/First Defendant and that the delivery note is in the office and that they have not filed the door delivery note till date before the trial Court. 35. P.W.1 has also deposed that the defendants have signed in 20 delivery notes and it is not correct to state that they have unloaded the plants in the forest land and as a result of problem being created by the forest guard, the defendant has talked to him over the phone and 44,000 plants have been taken by the men of the First Defendant, etc. 36. That apart, it is the evidence of P.W.1 that 64,000 plants have been taken over by the Defendant and that they could not take the balance which has been informed as per Ex.A.3 letter of the First Defendant for which, they have given a reply. Further, it is incorrect to state that since 44,000 plants have been removed and that transport expenditure has been incurred for which a reply has not been sent and in Ex.A.27, the defendant has stated if reduction is given, they would settle the matter. 37. P.W.1 in his cross-examination has stated that it is not correct to state that the defendants 2 to 4 are unnecessary parties to the suit and further, he does not know that the defendants 2 to 4 have purchased the property from the First Defendant for a valuable consideration. 38. D.W.1 in his evidence (authorised representative of the First Defendant Company) has deposed that it is correct to state that the First Defendant's Estate name is Talamala Estate and in the First Defendant's Talamala Estate, two properties have been purchased by the defendants 2 to 4 (appellants) and the tea plants purchased from the First Respondent/Plaintiff, plantations have not been planted in the sold property, but those plants have been purchased for planting in a different place. 39. Also in Ex.A.5 of the Second Respondent/First Defendant's letter dated 25/6/2001 addressed to the First Respondent/Plaintiff https://hcservices.ecourts.gov.in/hcservices/ Ex.A.4 letter has been pointed out in the reference and it is mentioned that the tea plants have been purchased on bonafide intention and also that an endeavour has been made to sell the tea plants and Ex.A.27 is the reply letter of the Second Respondent/Second Defendant dated 18/8/2003 sent for the lawyer's notice issued by the first respondent/plaintiff. 40. Continuing further, it is the evidence of D.W.1 (in cross-examination) that in Ex.A.3 letter of the Second Respondent/First Defendant dated 6/2/2001, there is a mention that they are desirous of returning 1,36,000 plants and also the place in which they have to be off-loaded has been made mention of. Further more, D.W.1 has stated that in Ex.A.19 letter of the Second Respondent/First Defendant dated 5/11/2002, they prayed for small discount and they had mentioned to pay the balance amount in instalments about which he does not know. 41. That apart, it is the evidence of D.W.1 (to a suggestion made on behalf of the first respondent/plaintiff) that whether they are prepared to pay the suit amount in one instalment, the necessary is that, if the First Respondent/Plaintiff withdraw the suit, they will negotiate and settle the matter. 42. Significantly, D.W.1 in his cross-examination has tacitly admitted that it is correct to state that the Second Respondent/First Defendant has to pay the entire amount. In law, admission of a person in evidence as per Section 17 of the Indian Evidence Act, is the best forum of evidence. In the instant case, in Ex.A.3 letter dated 16/6/2001, the Second Respondent/First Defendant has stated that due to the enforcement of the recent Kerala Forest Ordinance 2001, it is facing difficulties from the Forest Department and thereby causing undue hindrance to the new planning and operations and that so far, they have used 64,000 plants out of 2 lakhs seedlings supplied by the First Respondent/Plaintiff. 43. Also, the Second Respondent/First Defendant has mentioned that because of the situation beyond their control, it is forced to return the unutilised balance of Rs.1,36,000 plants and has requested the First Respondent/Plaintiff to inform them as to the place of delivery of the plants at their own costs. 44. A perusal of Ex.A.3 indicates that the Second Respondent/First Defendant has categorically stated that they have used so far 64,000 plants out of 2 lakhs seedlings supplied by the First Respondent/Plaintiff. Therefore, it is crystal clear that the First Respondent/Plaintiff has supplied 2 lakhs tea plants to the Second Respondent/First Defendant. 45. In Ex.A.4 letter dated 20/6/2001 of the First Respondent/Plaintiff addressed to the Managing Director of the Second https://hcservices.ecourts.gov.in/hcservices/ Respondent/First Defendant, it is mentioned that the First Respondent/Plaintiff has availed a bank loan against the tea Nursery and it has ensured due repayments to the Bank showing the order and supply of the Second Respondent/First Defendant etc. 46. In Ex.A.5 letter of the Second Respondent/First Defendant dated 25/6/2001 addressed to the First Respondent/Plaintiff, it is mentioned that the Second Respondent/First Defendant is facing great difficulties in the pre-planning operations due to the enforcement of the ordinance and further the tea clones have been purchased with a good intention to complete the entire planning during the current season itself and that the matter is beyond their control and they are unable to proceed further. 47. As a matter of fact, in Ex.A.27 letter dated 18/8/2003 of the Second Respondent/First Defendant addressed to the lawyer of the First Respondent/Plaintiff, it is mentioned that the Second Respondent/First Defendant has suffered huge losses and are unable to recover in spite of their best efforts and further, the Second Respondent/First Defendant has requested for one time settlement of a reduced sum to avoid long drawn legal process and to rebuild the good relationship in future in the good times to come. In as much as the Second Respondent/First Defendant, Ex.A.3 letter dated 16/6/2001 addressed to the First Respondent/Plaintiff has admitted the supply of two lakhs seedlings the wrong filing of invoices by the First Respondent/Plaintiff is not fatal to the suit filed by the First Respondent/Plaintiff in regard to the supply of 2 lakhs tea clones (plants). 48.