Regular Second Appeal No. 3621 of 2005 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Regular Second Appeal No. 3621 of 2005 Date of decision : March 18, 2011 M/s Suntex Handicrafts and another ....Appellants versus Poddar International Limited and others ....Respondents Coram: Hon'ble Mr. Justice L.N. Mittal Present : Mr. Alok Jain, Advocate, for the appellants None for the respondents L.N. Mittal, J. (Oral) Plaintiffs who were successful in the trial court but have been non-suited by the lower appellate court are in second appeal. Plaintiff no. 1 is M/s Suntex Handicrafts (through partner Sudhir Chaudhar) and plaintiff no. 2 is Sita Ram another partner of plaintiff no. 1. Defendant no. 1 Poddar International Limited is a company whereas defendants no. 2 and 3 are Chairman-cum-Managing Director and Director respectively of defendant no. 1 company having head office at New Delhi. Plaitniffs' case is that the defendants after inspecting quality of goods at plaintiffs' premises at Panipat placed orders for supply of Regular Second Appeal No. 3621 of 2005 -2- handloom goods. Defendants had also a godown at Panipat. The plaintiffs supplied the goods to defendants at Panipat and raised bills. In all the plaintiffs supplied goods worth Rs 10,64,875.44 to the defendants who paid Rs 3,25,000/- in all to the plaintiffs i.e. Rs 3 lacs by three bank drafts of Rs one lac each dated 3.6.1994 and Rs 10,000/- each in cash on 2.2.1995 and 3.2.1995 and Rs 5000/- in cash on 5.2.1995. Accordingly, principal amount of Rs 7,39,875.44 remained due from the defendants to the plaintiffs. Interest @ 21% per annum as agreed and also as per prevalent market custom was also claimed. The plaintiffs alleged that interest amount for pre-suit period comes to more than Rs 4 lacs but the plaintiffs restricted their claim of interest to Rs 60,000/- and odd amount making total suit amount to be Rs 8 lacs for recovery of which suit was filed. The defendants, inter alia, pleaded that they had purchased goods worth Rs 3,25,000/- only from the plaintiffs and the said amount was paid i.e. Rs 3 lacs by way of demand drafts and Rs 25,000/- in cash. The defendants broadly denied the other plaint averments. It was pleaded that no amount is due from the defendants to the plaintiffs. Territorial jurisdiction of court at Panipat was also disputed. Various other pleas were also raised. Learned Civil Judge (Senior Division), Panipat decreed the plaintiffs' suit for recovery of Rs 8 lacs with pendente lite and future interest @ 10 % per annum. However, first appeal preferred by the defendants has been allowed by learned Additional District Judge, Panipat vide judgment and decree dated 14.2.2005 and thereby suit filed by the plaintiffs stands Regular Second Appeal No. 3621 of 2005 -3- dismissed. Feeling aggrieved, the plaintiffs have filed the instant second appeal. I have heard learned counsel for the appellants and perused the case file whereas none has appeared for the respondents. Plaintiffs have produced various inspection notes whereby part of the goods supplied by the plaintiffs were accepted and part of the goods were rejected. Bills regarding accepted goods have been produced. Copy of ledger has also been produced in evidence by the plaintiffs. On the other hand, defendants' only oral testimony is of defendant no. 2. He did not bring account books of the defendants. Defendant no. 1 is a company and is, therefore, supposed to maintain its account books under the law. Withholding of account books by the defendants gives rise to adverse inference against them. In addition to the aforesaid, the defendants have not produced bills of the goods for Rs 3,25,000/- allegedly supplied to them by the plaintiffs. The bills produced by the plaintiffs would not aggregate to Rs 3,25,000/- even if amount of some of the said bills is taken into consideration. There is very significant circumstance which has perhaps been over-looked by the lower appellate court. Defendant no. 2 admitted in the cross-examination that cheques Exs. P14 to P17 appeared to have his signatures although he stated that he could not say so with certainty. This statement, thus, implies that the said cheques have been issued by defendant no. 1 under the signatures of defendant no. 2 as also stated by plaintiffs' Regular Second Appeal No. 3621 of 2005 -4- witness. The said cheques are for Rs 75,800/-, Rs 47,200/-, Rs 6 lacs and Rs 6,50,683.35. Issuance of said cheques for different amounts has not been explained by the defendants in any manner. If the defendants had paid the entire amount of the goods supplied to them as pleaded by them, it is not explained why all these cheques for different amounts were issued by defendant no. 1 company under the signatures of defendant no. 2 in favour of plaintiff no. 1. Cheques Ex. P15 and P16 are dated 5.1.1995 whereas cheques Ex. P14 and P17 are dated 25.12.1994 and 15.10.1994 respectively. Issuance of these cheques completely demolishes the defendants' case that they had paid the entire amount of goods supplied by the plaintiffs. The defendants in the written statement also pleaded that plaintiffs had issued receipt stating that no amount was due from the defendants. However, no such receipt has seen the light of the day. It again gives rise to adverse presumption against them and demolishes their entire case. For the reasons aforesaid, I find that the plaintiffs have successfully proved that the suit amount is due to the plaintiffs from the defendants. Finding of the lower appellate court to the contrary is completely perverse, illegal and unsustainable and is based on misreading and misappreciation of evidence. Lower appellate court held that court at Panipat has no jurisdiction to try the suit. However, this finding of the lower appellate court is also untenable. The plaintiffs have produced various documents to depict that the goods were inspected and accepted at Panipat and even some Regular Second Appeal No. 3621 of 2005 -5- payments were made at Panipat. On the contrary, defendants have not produced any document in support of their version. Consequently, it is held that court at Panipat has territorial jurisdiction to try the suit. Finding of the lower appellate court to the contrary is perverse and illegal and therefore, not sustainable in law. Substantial questions of law regarding findings recorded by the lower appellate court arise for adjudication in the instant second appeal as noticed in the preceding paragraphs. The said substantial questions are answered in favour of the plaintiffs/appellants. Accordingly, the instant second appeal is allowed. Judgment and decree of the lower appellate court are set aside and the judgment and decree of the trial court decreeing the plaintiffs' suit are restored with costs throughout. ( L.N. Mittal ) March 18, 2011 Judge 'dalbir'