IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Regular First Appeal No.70 of 2002. Judgment Reserved on: 16.12.2008. Date of decision: 19.12.2008. Subhash Chand Mahajan & Another ..Appellants Versus Mohan Meakin Limited …Respondent Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 For the Appellants: Mr.Bhupender Gupta, Senior Advocate with Mr.Neeraj Gupta, Advocate. For the Respondents: Mr.K.D. Sood, Advocate. Dev Darshan Sud,J. The defendants have appealed against the judgment and decree passed by the learned Additional District Judge, Solan. The respondent-Plaintiff instituted a suit for recovery of Rs.2,85,075/- on the allegations that it is a Company duly registered and incorporated under the Indian Companies Act, 1956, has its Registered Office at Solan Brewery and Shri H.N. Handa (PW-1), its Secretary, was duly authorized to represent the Company in all capacities in Court. 1 Whether the reporters of Local Papers may be allowed to see the judgement? 2 The plaintiff pleaded that appellant No.2 herein was the proprietor of appellant No.1, M/s.Subhash Chand & Company, who were duly licenced vendors of liquor having their vends at Barmana and other places. The case pleaded is that the appellant obtained supply of Indian made Foreign Liquor or Beer manufactured by the plaintiff-respondent, from its whole sale depot at Mandi on credit from 1.8.1995 to 14.3.1996. Payments were made by the defendant-appellant on various dates. These payments were duly recorded in accounts which were mutual, open, current and running account as maintained in the books of accounts of the plaintiff. The plaintiff, pleaded that cheque bearing No.RBV 503605, dated 31.3.1998 in the sum of Rs.2,84,000/- was paid towards the price of goods purchased by the appellant- defendant, but this was dishonoured by the bank with the remarks, “Account closed”. A sum of Rs.2,80,862.50 was claimed as due and outstanding from the appellant- defendant on 2.11.1998. Interest at the rate of 18% per annum was claimed from 2.11.1998 to 1.11.1999. A decree for a sum of Rs.2,85,075/- along with costs of the suit and future interest at the rate of 18% per annum till the amount has been paid, has been claimed. The suit of the plaintiff was resisted by the defendant on the allegations that the defendant had business dealings with S/Shri Nand Kumar and Vinod Kumar, Mohan Meakins Mandi and those persons used to supply liquor and beer to the defendant in District 3 Bilaspur. The defendant was a licencee duly licenced by the Excise Department and was running L-2 and L-14 shops in Bilaspur Circle for the year 1.4.1997 to 31.3.1998. The defendant was working under the name and style of M/s.Mahajan & Company and he was its sole proprietor. Any privity of contract between the plaintiff and defendant was denied and it was stated that the defendant was dealing only with S/Shri Nand Kumar and Vinod Kumar sons of Shri Ashwani Kumar. It was pleaded:- “2. … … … … It is specifically denied that the defendants had any concern with the plaintiff company rather one Shri Nand Kumar and Vinod Kumar S/o Shri Ashwani Kumar Mohan Meakins L-1 Mandi Distt. Mandi (H.P.) had some business transaction of Wine and Beer with the defendants… … … …”. In other words it is a complete denial of any existing or past contractual relationship with the plaintiff. It was urged that three cheques of Rs.1,76,586/-, 1,50,000/- and 2,84,000/- were given as security for the supply of liquor and beer and no supply or consignment was delivered at Bilaspur by Shri Nand Kumar. The learned trial Court, after appraisal of the evidence on the record, which consisted of PW-1 Shri H.N. Handa, Secretary of the plaintiff, PW-2 Shri 4 Nand Kumar, Manager of the plaintiff, PW-3, Shri Chaman Lal, Junior Assistant in the office of the Excise and Taxation Commissioner, DW-1 defendant and DW-2 Shri Gopal Mahajan, held the case of the plaintiff as having been proved. In addition, the plaintiff led documentary evidence Ex.PW-2/A which was copy of the ledger account of the defendant, Ex.PW-2/1 to Ex.PW- 2/34, which were the invoices prepared by the plaintiff from time to time, Ex.PW-2/30 debit notes prepared by the plaintiff, Ex.PW-2/32 cheque issued by the defendant Subhash Chand of Rs.2,84,000/- on Punjab National Bank, The Mall, Shimla, in favour of the plaintiff. Ex.PW-2/33 and Ex.PW-2/34 are returning memos. The defendant relied upon notice Ex.D-1 issued to Nand Kumar and Vinod Kumar C/o Mohan Meakin Limited, Mandi District Mandi, Ex.D-2 copy of the plaint filed in Civil Suit No.50/1 of 1999 for permanent prohibitory injunction restraining the two persons of the suit from encashing the cheque of Rs.2,84,000/-, Ex.D-3, copy of written statement filed by the defendants in that case, Ex.D-4 and Ex.D-5, statements in the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881, (hereinafter referred to as the `Act’) made by Shri Nand Kumar. This is the entire evidence on the record. Learned counsel for the appellant-defendant urges that the Court did not have any jurisdiction to try the case as even according to the pleadings on 5 record, all payments/transactions took place in Mandi and the Court at Solan has no territorial jurisdiction to try the case. This objection was settled as an issue by the learned District Judge who has held against the appellant. Before taking up this objection for further discussion, the provisions of law may be noticed. Section 21 of the Code of Civil Procedure, 1908, (hereinafter referred to as the `Code’) provides that objection as to territorial or pecuniary jurisdiction must be taken in the first instance at least at or before the settlement of issues and no judgment or decree can be set aside unless there has been a consequent failure of justice. All these conditions must co-exist. (See: Pattuamma vs. Kuntilakith, (1981)3 SCC 589, R.S.D.V. Finance Co.Pvt.Ltd. vs. Shree Vallabh Glass Works Ltd. (1993)2 SCC 130). Section 21 is clear and unequivocal. Sub-section (3) of Section 21 reads:- “21. Objection to jurisdiction.- 1. … … … … … … … … … 2. … … … … … … … … … 3. No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the executing Court at the 6 earliest possible opportunity, and unless there has been a consequent failure of justice.” Learned counsel for the appellant has been unable to point out as to how the trial at Solan has resulted in failure of justice. He submits that the defendants were made to run from Mandi to Solan which is perse proof of the fact that the defendant has suffered prejudice. I am unable to accept this contention. It is not the mere traveling involved from one place to another, which results in placing the party under hardship in pleading his defence, gathering evidence, witness or access to legal services etc. to establish his/her right. Travelling from one District to another may entail inconvenience, but failure of justice would require that other factors as noticed should be established on the record. I find no facts either in the pleadings or in the evidence of the defendant to prove hardship and failure of justice. This argument, therefore, cannot be accepted and is accordingly rejected. Learned counsel appearing for the respondent- plaintiff submits that even otherwise, the condition as imposed by clause-10 of the invoices (Ex.PW-2/1 to Ex.PW-2/34) which reads:- “10. All the orders by the purchaser for supply of the goods shall be 7 deemed to have been made at Solan (Himachal Pradesh) and the supplies of the invoice shall be deemed to have been made from Solan (Himachal Pradesh) as if being made in response to such orders received at (Himachal Pradesh)” has been, the subject matter of interpretation by this Court in Inder Singh Dhir vs. M/s.Mohan Meakin Breweries Ltd., Solan, ILR(Himachal Series) (1977)6 HIM, 271, Mohan Meakin Ltd. Vs. M/s.Rajmat Liquors (P) Ltd., 1997(1) sim.L.C. 401 and M/s.Mohan Meakin Ltd. Vs. M/s.Surjit Beverages Pvt.Ltd., 2000(2) Shim.L.C. 335, which decisions clearly lay down that the Courts at Solan would have jurisdiction to try suits founded on this clause. Learned counsel appearing for the appellant submits that this clause cannot be treated as binding on the appellant as he was not a signatory to these invoices and he has no contractual relationship with the plaintiff. He also submits that the invoices have not been proved in accordance with law as the original have not been produced. I am not inclined to accept this argument for the reasons that the original of the invoices is always sent to the person who purchases the goods and it is the carbon copy which is retained by the seller. In this case there is evidence on the record to establish that the originals were sent to the purchaser. These invoices have been proved in 8 accordance with law and when coupled with the ledger account of the appellant-defendant Ex.PW-2/A, I have no doubt in my mind that the defendant only wants to avoid his liability on any flimsy pretext. Even if for the sake of argument if clause-10, as noticed above, is excluded, there is no evidence on record showing prejudice to the appellant in the trial. The submissions made by the learned counsel for the appellant cannot be accepted. Learned counsel for the appellant urges that Ex.D-5 evidence in the criminal proceedings is contrary to what has been pleaded and sought to be proved in civil proceedings. I am unable to appreciate as to how the case of the plaintiff can be held to be not proved. Not only have the ledger accounts been proved in accordance with law, but the invoices in the debit notes as noticed stand proved. Learned counsel submits that the presumption of consideration of a negotiable instrument under Section 118 of the Act stands dis-proved as the cheque issued does not show as to against which liability it has been paid. He submits that since the suit is based on negotiable instrument and the cheque does not at all represent the claim, as pleaded, such presumption in law under Section 118 of the Act stands rebutted. Again this argument has been made merely to be rejected as the pleadings are clear that regular supplies were being taken and accounts in the regular course of 9 business were being maintained which were proved as Ex.PW-2/A, The cheque was issued by the defendant and was dishonoured by the bank with the remarks, “account closed”. Learned counsel then submits that this cheque was not payable to the plaintiff. It has been given as a surety and that claim of the payee has been manipulated in this case. The appellant never intended to issue this cheque in favour of the plaintiff nor did he fill in the cheque in a manner so as to be payable to the plaintiff. This submission also cannot be accepted as there is no evidence to show any interpolation in the negotiable instrument Ex.PW-2/32. It does not stand to reason as to why a cheque should be made payable in the name of the plaintiff by the defendant when he denies his contractual relationship between them. The last submission of the appellant is that irrespective of the other grounds urged, the rate of interest which has been charged is excessive. It is submitted that there is no evidence on record to show that interest was chargeable at 18% per annum as claimed. I do find force in this submission made by the appellant. I do find that there is any evidence to show that interest as claimed at the rate of 18% per annum is established. For this purpose, the plaintiff could have led evidence in the nature of bank Circulars or Instructions of the Reserve Bank of India from time 10 to time governing the rate of interest to show the commercial rate of interest chargeable for commercial transaction was at the rate of 18% per annum or any other rate. Section 34 of the Code of Civil Procedure grants discretion to this Court to fix the rate of interest at the rate of 6% or at any other higher rate agreed to between the parties. As there is no evidence on the record regarding this, I deem it fit and proper that the decree of the learned District Judge is modified to the extent that the interest prior to the institution of the suit as claimed at 18% be reduced to 9% per annum chargeable from 2.11.1998 to 1.11.1999 and thereafter also the suit amount of Rs.2,80,862.50 shall carry interest at the same rate i.e. 9% per annum from the date of suit till its realization. This appeal is accordingly disposed of. There shall be no order as to costs. December 19, 2008. (Dev Darshan Sud) (aks) Judge.