Case: Kumar'S Liquors &amp; Beers Private Limited &amp; Another Vs. Bda Limited &amp; Another

2. Special Civil Suit No. 183/1997 was filed by the appellant in First Appeal No. 282/2000 and First Appeal No. 283/2000, namely, Kumars LiquorsBeers Private Limited [hereinafter referred to as Kumar Liquors], claiming refund of security deposit of Rs. 1,00,00,000/(Rs. One Crore) from the defendant in that suit, namely, BDA Limited [hereinafter referred to as BDA Limited]. That Suit was initially filed at Secunderabad City Civil Court vide Original Suit No. 427/1994came to be transferred to Aurangabad for its trial along with Special Civil Suit No. 375/1995. Special Civil Suit No. 375/1995 was filed by BDA Limited against Kumar Liquors, for recovery of sum of Rs. 2,93,73,919.46, towards the liquorwine supplied to later with interest at 18%. Trial court has by impugned judgment dated 11.10.1999, partly decreed Special Civil Suit No. 375/1993 and Kumar Liquors has to pay sum of Rs. 1,03,29,717.40, with interest at 12 % on it calculated from the date of suit i.e. 2941995 till payment. Special Civil Suit No. 183/1997 filed by Kumar Liquors is dismissed because of adjustment or appropriation of security deposit of Rs. 1,00,00,000/towards money claim of BDA Limited.3. In First Appeal No. 283/2000, as also First Appeal No. 282/2000, appeal memo and prayers are identical. However, Kumar Liquors has submitted that one of its appeal challenges decree and judgment dismissing its Special Civil Suit No. 183/1997, while the other challenges judgment and decree passed in Special Civil Suit No. 375/1995 against it. BDA Limited has filed First Appeal No. 425/2000 for the remaining monetary claim which has been rejected by the trial court including the exercise of adjustment of security deposit undertaken by it.

Court's reasoning:
17. Before proceeding further, we find that the trial court framed common issues in both these suits, after they were clubbed together. Those issues and findings recorded by trial court upon it are reproduced by us for convenience :1.Does the plaintiff prove that the defendant was appointed as a distributor in pursuance of letter datedDoes the defendant prove that the plaintiff has appointed it as a distributor by virtue of letter datedIs the suit bad forf necessary parties i.e. M/s. Shaw WallaceCo. Ltd. and M/s. CruikshankCo. Ltd.In the Negative.Whether M/s. Shaw WallaceCo. Ltd. and M/s. Cruikshankand Co. Ltd. are liable for the recovery of amount alleged to be due against thedefendantIn the Negative.5.Does the plaintiff prove that it has supplied the goods to the defendant as per list of invoices annexed with theplaintIn the affirmative.6.Does the plaintiff prove that it has supplied the goods amounting to Rs. 3,93,73,919.40 Ps. to thedefendantPartly in the affirmative, to the tune of Rs. 3,91,89,549.4 Ps.7.Is the plaintiff entitled for decree of an amount claimed under the suit with interest, asprayedPartly in the affirmative to the tune of Rs. 1,03,29,717.46 Ps. along with interest at 12 % p.a. from the date of suit till realization with proportionate costs.8.Is the defendant entitled to money decree of Rs. 1,00,0000/against the plaintiff as claimed in Special Civil Suit No.183/97In the negative, in view of adjustment in Special Civil Suit No. 375/1995.8b.If yes, whether the plaintiff is entitled to adjustment of said amount, as claimed in Special Civil Suit No.375/95Amount of deposit of Rs. 1.00 Crore is adjusted in payment of dues in Special Civil Suit No. 375/1995.9.What decree andorderSpecial Civil Suit No. 375/1995 is partly decreed to the tune of Rs. 1,03,29,717.46 Ps. with proportionate costs, as per final order and Special Civil Suit 183/1997 is dismissed in view of adjustment of deposit amount in Special Civil Suit No. 375/1995. the plaintiff in Special Civil Suit No. 183/1997, to get 2/3rd court fees refund in the said suit, if permissible under the Andhra Pradesh Court Fees Act.When suit at Secunderabad was for a specific purpose and was being opposed, BDA Limited accepted receipt of amount of Rs.but did not point out its adjustment. It is in the background of this situation, that this Court is called upon to appreciate the oral evidence. Though there is challenge to maintainability of suit as presented by M/s. BDA Limited, we find that said issue was looked into by trial court and it has passed separate order overruling the objections to its maintainability or to competency of Mr. Sudhirkumar Sinha, to either present the plaint or to depose.Ledger debit as per these printouts filed by BDAcertified by chartered accountant Shri Indapurkar also call for attention. An amount of Rs. 3,54,64,835.60/is debited to the account of Kumar Liquors for Aurangabad region as on 31.12.1992 in it. Rs. 2,09,94,943.00/is shown on debit side towards sales for Bombay region as on 31.12.1992. Thus, as on 31.12.1992, total amount of Rs. 5,64,59,779.60/was recoverable from Kumar Liquors by BDA. As on 31.01.1993, amount of sale consideration due for Aurangabad region is Rs. 3,47,66,929.00for Bombay sales, it is Rs. 2,59,33309.Considering the amounts separately credited during 1.1.1993 till 31.01.1993 in the account of Kumar Liquors, the liability as on 31.12.1992 was not cleared till 31.01.1993. Ledger position as on 28.2.1993 for Aurangabad region is Rs. 3,99,25,730.10/for Bombay area, outstanding towards sales is Rs. 2,91,83,171.00/. Net balance as on 31.03.1993 for Aurangabad area is Rs. 2,07,05,671.10/for Bombay, Rs. 98,47.544.88/. Last entry in this ledger printout is for date 27th April, 1993. Balance towards sales as on 27.04.1993 for Aurangabad area is Rs. 2,39,45,812.58/for Bombay, Rs. 73,15,496.The ledger therefore does not show or support separate accounting for period covered in suit or for supplies mentioned in it. It does not show a particular date by which or on which, Kumar Liquors had brought down its liability to NIL so as to enable BDA Ltd. to urge that the nonpayment by Kumar Liquors is for supplies effected after said date/dates for respective area. We find it necessary to revert back to plaint filed by BDA where in Exhibit B it claims Rs. 1,80,27,311.31/towards sales in Aurangabad areards Bombay area. BDA has, in said exhibit, claimed Rs. 71,83,994.44/as interest on amount due to it for sales in Bombay area. Thus, this ledger extract prepared by its own chartered accountantproduced or sought to be used by BDA can definitely be used against BDA itself. Sums figuring as due on the strength of this ledger extract countermand thes. Here, we can only conclude with certainity that legal notice dated 2831995 could not have been for Rs. 3,93,73,919.40/hence, oral statement that amount of Rs. 2,93,73,919.40/demanded in notice was after adjusting Rs. 1 Crore has to be discarded as afterthought.57. When certified copy at Exhibit 1230 is of report dated 21st June 1996, it is obvious that company auditor at Bombay Mrs. Lovelock and Lewes must have had the advantage of perusing original ledger book and cashbook/accounts. They must be the legal auditors appointed as per mandate of S.227 of the Companies Act. Why their audit report and details pointing out amount recoverable from Kumar liquors could not be pressed into service and a certificate dated 6th August 1998 from a total stranger like Shri Indapurkar was required to be filed with his affidavit It amply demonstrates that BDA could not rely upon the accounts and audits report of recognized auditor and hence, prepared the certificate dated 6th August 1998 to suit its purpose. This also explains why it did not dare to tender Indapurkar as a witness. It also explains refusal of BDA to produce its accounts before trial court.58. Legal provisions noted supra contained in Companies Act also apply to Kumar liquors. Its refusal to produce the accounts and the ledger book cannot be viewed by applying different yardstick. The trial court has already drawn an adverse inference against it for this omission. It ought to have drawn similar inference also against BDA. Trial court has vide its order passed on 11.10.1999 due to Exhibit 1174 exhibited 19 letters produced on record through one Dinkar Kanse by BDA with list Exhibit 1175. It has also drawn adverse inference against Kumar Liquors for its omission to produce office copies of those letters or such letters. But, in controversy of present nature that is not sufficient to compute the liability of Kumar Liquors.Trial court has looked into a chart which is a compillation containing all details about the amounts due and payable by Kumar liquors to BDA preparedsubmitted by BDA for convenience. Its copy is also given to us by the learned Counsel for BDAwe perused it with the assistance of respective Counsel. The Marks and calculations on this chart which consist of 19 pages with the remarks like "added" or "erasures" ,show that trial court has applied its mind with reference to this document. Indents looked into therein start from 23rd April 1993 and are up to 30th January 1993. This period is inconsistent with duration of supplies given in exhibit B with plaint noted supra. In plaint, period up to 27th April 1993 is included while the supplies begin from 15th February 1993. Amount shown due from Kumar liquors in this compillation isonly. This includes amount of Rs.towards differential excise duty. However, the finding of fact of erasures in the originals or of additions in handwriting done therein recorded by the trial court is not perverse.61. The difference in principal amount claimed in plaint and worked out by chartered accountant Indapurkar is noteworthy. Authentic document showing payment or nonpayment is not produced by any of the parties. Amount of costperiod of supplies in ledger extract does not tally with pleadings in plaint filed by BDA. In this situation, when BDA has claimed lesser amount than amount claimed in some indent/voucher, trial court could not have accepted it by adopting logic that as it was lesser than the amount shown as due in indents, it must be correct. This incongruity as also its finding that BDA suppressed some payments and its indents/vouchers contained handwritten additions, should have put it on guard. When the indents or vouchers were not creditworthy, evasive certificate issued by Indapurkar, inconsistencies interse in various documents should have either led in discarding the passes and vouchers as also secondary evidence in the shape of certificate/charts showing supplies or then, the trial court ought to have called upon parties to produce the original running accounts to find out how continuous supplies have been accounted for and paid. Material produced before it by BDA itself demonstrated that proof of mere supplies by it to Kumar liquors was not sufficient to infer nonpayment or to crystalize/compute the liability. Suit claim was of Rs.while as per certificate issued by Shri Indapurkar, amount ofwas due and payable by Kumar liquors to BDA. Thus there was difference of Rs. 81,12,648.46 between the claim of BDA and claim certified by its chartered accountant Indapurkar. BDA, though relied upon certificate and affidavit of said chartered accountant, it never amended its claim to bring it in consonance with the said certificate of chartered accountant. BDA cannot dispute the amount certified by its chartered accountant Shri Indapurkar and this material was sufficient to discard the vouchers or indents pressed into service by BDA as all of them were not accepted even by its own chartered accountant. The trial court in this situation, ought not to have ventured into province of auditing or writing accountsdismissed the suit as those indents were not sufficient to fasten any liability upon Kumar liquors. The role played by S.K. Sinha who represented BDA before court cannot be lost sight of because at relevant time he was in charge of factory of BDA and suppliesbut was on the pay role of Cruikshank. The trial court has held that Kumar liquors had made payment oftowards the price of goods to BDA which payment was suppressed by BDA and after deducting that amount, BDA was held entitled to Rs. 2,03,29,717.It then proceeded to deduct amount of Rs. One Crore ie 1,00,00,000/payable to Kumar liquors towards refund of its security deposit and found BDA entitled to recover amount of Rs. and 1,03,29,717.It however ignored the fact that claim first in point of time ie notice claim towards recovery of price was ofonly and at that juncture, there was no whisper of any adjustment of security deposit amount of Rs. 1 Crore by BDA. In plaint also there was no story of adjusting said amount of Rs. 1 Crore though Kumar liquors had already filed a civil suit claiming it back. Legal notice claiming the balance amount towards goods supplied was long after the supplies were discontinued and hence, ought to have pointed out appropriation of security deposit of Rs. 1 Crore. Had trial court deducted this security amount and suppressed payment by accepting suit claim to be of Rs.only, its decree, if possible, could not have been for more than Rs. 03,29,717.We need not go into all these niceties, as according to us definite amounts could have been crystallized only with the help of production of and perusal of all relevant papers or then, proper running accounts by the parties. Party wishing to succeed in such suits was dutybound to produce the same. BDA should have demonstrated last paymentits legal appropriation. We are satisfied that BDA Ltd. manipulated indents or vouchers. It may have been with a view to swell the alleged due amount from Rs.to allow adjustment or appropriation of security deposit of Rs. 1 Crore which it was dutybound to refund to Kumar Liquors. Letter dated 8.4.1993 at exhibit 1154 issued by Cruikshank to BDA Limited admittedly shows payment by Kumar Liquors of excise duty for various indents raised by Cruikshank on BDA. This letter also indicates inherent risks in any third party or court trying to write accounts when the complete materialbest evidence in their possession was deliberately withheld by both the parties. They have not assisted the trial court at all and succeeded in misdirecting it. Precious court time and public money has thus been allowed to go waste and judicial process has been77 of the Evidence Act is only about the proof of the contents of original by producing its certified copyit does not obliterate procedure for proving the truth of such contents. Here the material on record warranted an evidence of proof of contents of the balance sheet at Ex. 1230. Thus, here the certified copy issued by ROC is of no consequence as BDA Ltd. has not proved truth of its contentsitself brought on record material to its doubt correctness. Reported judgment of this Court in case of OmprakashBerlia and another Vs. Unit Trust of India and others, (supra) is not of any assistance63. Kumar Liquors could have examined M/s. Cruikshank as its witness to prove its point of view on the agreement between itBDA or any peculiar practice followed in the field. It did not tender any evidence to point out responsibility of M/s Cruikshank to recover the amount from indentors or then its entitlement to take credit for such recoveries by debiting to BDA. It expressly pleads debit of huge amounts to account of BDA in an effort to show that nothing is due from it to BDAhence, to demonstrate that BDA has to refund its security deposit of Rs. 1 Crore to it. BDA only accepted receipt of such deposit amount but did not admit entitlement of Kumar Liquors to its refund. On the contrary, it pleaded nonpayment of price of liquorasserted its right to appropriate said amount of Rs. 1 Crore towards it. Discussion above shows that neither BDA proved alleged nonpayment nor Kumar Liquors established alleged debitstherefore, wiping out of its liability to pay anything to BDA. With the result, Kumar Liquors did not prove its entitlement to seek refund of Rs. 1 Crore. In present matter, declaration of failure of BDA Ltd. to legally prove that it has not been paid price of stocks supplied during specified period by it to Kumar Liquors does not tantamount to holding that Kumar Liquors has paid the price of that stock and does not ipso facto result in bringing on record, Kumar Liquors right to receive back the security deposit. Both the parties therefore, did not establish their entitlement to relief as claimed by them against each other. In any case, when the trial court found BDA justified in appropriating the deposit amount of Rs. 1 Crore, it could not have declared Kumar Liquors entitled to receive it backhence, its Spl. C.S. 183 of 1997 needed to be dismissed. Thus direction by the trial court to refund 2/3rd court fee to Kumar Liquors is unsustainable. Its conclusion that Spl. C.S. 183 of 1997 is decided on admission is liable to be set aside.As a result of this discussion, we find the judgmentdecree of trial court impugned herein unsustainable.