CS(OS) No. 1252/1999 Page 1 of 11 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) No.1252/1999 % Date of Decision: 27.05.2009 M/s. Percept Advertising Ltd. …. Plaintiff Through Mr.V.D. Costa, Advocate Versus M/s. Kedia Castle Dellon Industries Ltd. …. Defendant Through Nemo CORAM: HON’BLE MR. JUSTICE ANIL KUMAR 1. Whether reporters of Local papers may be allowed to see the judgment? YES 2. To be referred to the reporter or not? NO 3. Whether the judgment should be reported in the Digest? NO ANIL KUMAR, J. * 1. This is a suit for recovery of an amount of Rs.2,07,68,394/- alleged to be due from the defendant to the plaintiff for the services rendered by the plaintiff as the advertising agent of the defendant in terms of the letter of appointment dated 1st December, 1994. 2. The plaintiff is an advertising company having its registered office at 67/69, M.K. Marg, Marine Lines, Mumbai -400002 and its regional office at No.2, Santh Nagar, New Delhi -110048. The plaintiff has CS(OS) No. 1252/1999 Page 2 of 11 averred that the plaint has been signed and verified by Shri I.D. Khera, General Manager of the plaintiff company, who has been authorized to sign and verify the plaint by virtue of the resolution dated 25th February, 1999. 3. The Defendant is alleged to be company engaged in the business of manufacturing and marketing alcohol beverages, having its registered office at 6-B, Express Towers, 42A, Shakespeare Sarani, Calcutta - 700017. The defendant is also stated to have an office at J-66, South Extension-I, New Dlehi-110049. 4. The plaintiff has alleged that the defendant had engaged them as their Advertising Agent and consultant for advertising, Publicity and Promotion with corporate and financial advertising for the House of Kedia with effect from 1st December, 1994 on the terms and conditions as stated in the letter of appointment dated 1st December, 1994 issued by the Defendant. The plaintiff has alleged that during the course of the work, various invoices were raised on the Defendant, however, the defendant only paid the amount of some of the invoices or part of the amount of some of the invoices. It is alleged that the amounts are, therefore, still outstanding against the defendant. CS(OS) No. 1252/1999 Page 3 of 11 5. The plaintiff has averred that they, on instructions from the Defendant, had booked requisitions with the News Television India Limited for advertisements of the products of the Defendant to be telecasted on the channels of Star TV. The Defendant is also alleged to have acknowledged and accepted the booking requisitions. The plaintiff has contended that in its dealings with News Television India Limited, it was merely acting as an agent and that the defendant had undertaken to make payments directly to News Television India Limited. The plaintiff has alleged that the Defendant has not only failed to make all the amounts due to the plaintiff for the services rendered by them but also has defaulted in making payments to the News Television India Ltd. 6. The Defendant had issued 10 post dated cheques for 25 lakh each to News Television India Ltd. in discharge of its liability towards them and 2 cheques, dated 9.10.96 for Rs.25 lakh each in favour of the plaintiff in partial discharge of its liability towards them. All the cheques issued by the Defendant, including the cheques issued to the plaintiff were dishonored on presentation for want of sufficient funds and even the fresh cheques issued by the Defendant in favour of News India Private Ltd. in lieu of the earlier cheques were once again dishonoured on presentation. A complaint under Sections 138 & 141 of the Negotiable Instruments Act, 1881 filed by the plaintiff company CS(OS) No. 1252/1999 Page 4 of 11 regarding the dishonor of the two cheques dated 9th October, 1996 is pending before the Chief Metropolitan Court. 7. The plaintiff has averred that News Television India Ltd. has instituted a summary suit in the Bombay High Court against the defendant as well as the plaintiff on the same transaction praying for a decree of a sum of Rs.3,12,81,383 jointly and severally against the defendant and the plaintiff. The plaintiff has contended that no amount is due and payable by the plaintiff to News Television India Limited as it was merely acting as an agent of the defendant while booking the advertisement and the plaintiff cannot be held personally liable by the contracts entered into on behalf of its dislcosed principal, the defendant. 8. The plaintiff has contended that the defendant, vide a letter dated 23rd December, 1997 had accepted and acknowledged that an amount of Rs.1,67,00,000/- is due and payable to the plaintiff and an amount of Rs.2,27,00,000/- is due to the News Television of India Limited. The plaintiff has alleged that the defendant has failed to pay the amount due under the various outstanding invoices and that it had even failed to pay the amount admitted and acknowledged by the defendant as due in their letter dated 23rd December, 1997. The plaintiff has contended that as on 30th April, 1999 an amount of Rs.2,07,68,394/- is CS(OS) No. 1252/1999 Page 5 of 11 outstanding against the defendant, which amount includes the amount of Rs.1,67,00,000/- which has been acknowledged by the defendant as due and interest at the rate of 18% per annum on the amount of Rs.1,67,00,000/- amounting to Rs.40,68,394/-. 9. Though an appearance was initially put in by the defendant, no written statement was filed despite sufficient opportunities being granted and he was subsequently proceeded ex-parte vide order dated 28th January, 2002. 10. In support of its case the plaintiff has filed the depositions of Shri Balwant Singh Rawat, Manager Accounts of the plaintiff company, PW1; Sri Harish Sharma, Manager, Accounts and Administration of the plaintiff company, PW2 and Shri Nitin Beri, Group Head of the plaintiff company, PW3. None of the witnesses has been cross examined by the defendant. 11. PW1 has deposed that the plaintiff company was appointed as the defendant’s advertising agent and consultant for advertising, publicity and promotion with corporate and financial advertising for the House of Kedia with effect from 1st December, 1994 on the terms and conditions as stated in the letter of appointment dated 1st December, 1994. He has deposed that the original of the said letter of appointment was lost while CS(OS) No. 1252/1999 Page 6 of 11 the plaintiff company shifted its office from 1, Esplanade, 160, Dr. D.N. Road, Mumbai to 67/69, M.K. Marg, Marine Lines, Mumbai and thereafter to 22 Raghubanshi Estate 11/12, Senapati Bapat Marg, Mumbai. He has deposed that the copy of the said letter exhibited as PW1/1 is a true copy of its original. He has also deposed that during the course of the plaintiff company’s work, it has raised various invoices on the defendant, copies of which have been exhibited as Pw1/2 to PW 1/11. He has also identified the signatures on the invoices as his. It was also deposed that the original office copies of the invoices were misplaced by the plaintiff company while shifting its offices and cannot be traced. 12. PW2 has deposed that Shri I.D. Khera, General Manager, Commercial of the plaintiff company was duly authorized to sign and verify the plaint vide company resolution dated 25.02.1999. The said company resolution has been exhibited as PW2/1 and PW2 has deposed that the said Sri I.D. Khera had signed the plaint in his presence. He has deposed that, pursuant to the letter of appointment issued by the defendant dated 1st December, 1994 and on instructions from the defendant, the plaintiff company had booked requisitions with News Television India Limited for advertisement of the products of the defendant to be telecasted on the channels of Star TV. He has also deposed that the plaintiff company had merely acted as an agent in its CS(OS) No. 1252/1999 Page 7 of 11 dealings with the News Television India Limited and did not contract personally with News Television India Limited. He has further deposed that the defendant defaulted in making payments to the plaintiff for the services rendered by the plaintiff as well as neglected in making payments to the News Television India Limited directly on various occasions. He has also deposed that the 10 post dated cheques of 25 lakh each issued in favour of News Television India Limited were dishonored on account of paucity of funds. A letter dated 5.08.1996, issued by the defendant and addressed to News television India Pvt. Ltd. with a copy marked to the plaintiff, prove the factum of dishonor of four of the above mentioned cheques, which have been exhibited as PW2/2. He has also deposed that the defendant has issued two cheques of 25 lakh each, dated 9.10.1996 which were dishonored and the said cheques have been exhibited as PW2/3 and PW2/4. The legal notice sent to the defendant on the dishonor of the cheques, the postal registered receipt of the notice and the AD card received back bearing the signature and seal of the defendant company have been exhibited as PW2/5. PW2/6 and PW2/7 respectively. The criminal complaint filed by the plaintiff company on the defendant’s failure to pay the amount of the cheques has been exhibited as PW2/8. PW2 has also deposed that the Defendant, vide a letter dated 23rd December, 1997 sent to the plaintiff company, had accepted and acknowledged that an amount of Rs.1,67,00,000/- is due and payable to the plaintiff company and the said letter was exhibited as PW2/9. PW2 has also identified the CS(OS) No. 1252/1999 Page 8 of 11 signature of Mr. Ajay Kumar Kapoor, the authorized signatory of the defendant on the above stated letter, deposing that he had seen Mr. Ajay Kumar Kapoor signing during the usual course of business/correspondences. PW2 has also deposed that the scope and the relief sought in the complaint filed under Sections 138 & 141 of the Negotiable Instruments Act, 1881 against the defendant is different and distinct from the present suit. 13. The deposition of PW3 is to the same effect as that of PW1 and PW2. 14. I have heard the learned counsel for the plaintiff and perused the evidence led on behalf of the plaintiff. None of the plaintiff’s witnesses were cross examined. PW1 has categorically deposed that Shri I.D. Khera was duly authorized to sign and verify the plaint on behalf of the plaintiff company. The board resolution dated 25.02.1999 authorizing Shri I.D. Khera to institute, sign and verify the plaint has also been exhibited as PW1/1. PW1 has also identified Shri I.D. Khera’s signature on the plaint. In the circumstances it has been established the plaint has been signed, verified and instituted by a duly authorized person on behalf of the plaintiff company. CS(OS) No. 1252/1999 Page 9 of 11 15. A copy of the agreement dated 1st December, 1994 entered into between the plaintiff and the defendant whereby the plaintiff company was appointed as the defendant’s advertising agent and consultant for advertising, publicity and promotion with corporate and financial advertising for the House of Kedia, with effect from 1st December, 1994, on the terms and conditions as stated in the letter of appointment dated 1st December, 1994 has been exhibited as PW1/1. Copies of the invoices raised by the plaintiff company on the defendant for the services rendered by the plaintiff company to the defendant have been exhibited as PW1/2 to PW1/11 and PW3/1 to PW3/104. PW1, PW2 and PW3 has categorically deposed that the original of the agreement dated 1st December, 1994 and the original office copy of the invoices were misplaced when the plaintiff company shifted its offices from 1, Esplanade, 160, Dr. D.N. Road, Mumbai to 67/69, M.K. Marg, Marine Lines, Mumbai and thereafter to 22 Raghubanshi Estate 11/12, Senapati Bapat Marg, Mumbai. I find no reasons to disbelieve the depositions of PW1, PW2 and PW3. 16. The plaintiff company has also proved the letter dated 23rd December, 1997, exhibited as PW2/9. PW2 has identified the signature of Ajay Kumar Kapoor, the authorized signatory of the defendant who has signed the said letter. In the said letter the defendant has categorically admitted that there reconciled accounts show an CS(OS) No. 1252/1999 Page 10 of 11 outstanding balance of Rs.394,10,747/- and that the amount of Rs.1.67 crore which is due and payable by them to the plaintiff would be paid shortly. In the said letter the defendant has also acknowledged their liability to pay Star TV Network an amount of Rs.2.27 crores. 17. The inevitable inference that can be drawn from the above facts is that an amount of Rs.1.67 crore is due from the defendant for the services rendered by the plaintiff. The plaintiff has also claimed an interest of 18% per annum on the above stated amount of 1.67 crore from 23rd December, 1997 to the date of filing of the suit, i.e. 30th April, 1999. Clause 3 of the agreement dated 1st December, 1994 stipulates that the payments would be cleared within 45 days of the appearance of the advertisement and that beyond this credit period an interest of 18% per annum will be payable. The invoices raised on the defendant by the plaintiff had also clearly stipulated that an interest of 18% would be charged if the bills were not paid within the due date. In the circumstances it has to be held that the plaintiff is entitled for interest at the rate of 18% per annum on the amount of Rs.1.67 crore payable by the defendant to the plaintiff, amounting to Rs.40,68,394/-. Therefore, the plaintiff is entitled for a total sum of Rs.2,07,68,394/- from the defendant. CS(OS) No. 1252/1999 Page 11 of 11 18. In the facts and circumstances the suit of the plaintiff is decreed and a decree for recovery of a sum of Rs.2,07,68,394/- (Rupees two crores, seven lakhs, sixty eight thousand, three hundred and ninety four) is passed in favor of plaintiff and against the defendant. Pendent lite and future simple interest at the rate of 8% per annum is also awarded to the plaintiff against the defendant from the date of institution of the suit till realization of the decreetal amount. Costs of the suit is also awarded to the plaintiff against the defendant. Decree sheet be drawn. MAY 27, 2009 ANIL KUMAR, J. ‘k’