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Escorts Limited v/s Bombay Auto Agencies

    Suit Appeal No. 1415 of 1994

    Decided On, 12 September 1997

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE C.M. NAYAR

    For the Appearing Parties: Avtar Singh, H.R. Arora, Advocates.



Judgment Text

C. M. NAYAR, J.


(1) THE present suit is filed by the plaintiff for recovery of Rs. 15,78,400. 00.


(2) THE plaintiff is a Company duly incorporated under the Companies Act, having its registered office at H-2, Connaught Circus, New Delhi. Shri Charanjit Singh, son of, late Dr. Ram Singh is the Executive Vice-President and Company Secretary and Principal Officer of the plaintiff company. It is stated that he is fully conversant with the facts of the case and is, accordingly, competent, to sign, verify and file the plaint and to prosecute the suit on behalf of the Plaintiff Company. It is next contended that the plaintiff is a well known manufacturing company having its factories at Faridabad in the State of Haryana and Surajpur in the State of Uttar Pradesh and is engaged in the manufacture and sale of diverse products including Motor Cycles and allied goods. The registered office of the plaintiff company is situated at New Delhi.


(3) DEFENDANT No. 1 is a partnership business operating under the name and style of Messrs. Bombay Auto Agencies and defendants 2 and 3 are its partners. Therefore, it is contended that the liability of defendants 2 and 3 in respect of the claim in the suit is joint and several and both of them are personally liable for the amounts due to the plaintiff company.


(4) THE facts and details with regard to the transactions entered into between the parties are referred to in paragraphs 4, 5 and 6 of the plaint which may be reproduced as follows:-


"4. That the defendant No. 1 was inter alia appointed by the Plaintiff Company as its Dealers for the sale of Motor Cycles and spare parts manufactured and marketed by the Plaintiff Company in the area comprising District of Malappuram of the State of Kerala. Accordingly, an agreement dated 7. 4. 1987 was executed between the plaintiff and the defendants to that effect. All dealings between the plaintiff and the defendant were on Principal to Principal basis. 5. That the Plaintiff Company had been supplying the said goods to the defendants from time to time and in respect of the said supplies, the Plaintiff forwarded its bills to the defendants for payment. The said bills were inter-alia for the payment of the value of the goods supplied as aforesaid as also various other diverse charges which became due and payable by the Defendants to the Plaintiff. 6. That in respect of the goods supplied by the Plaintiff Company to the Defendants from time to time, the defendants requested that they may be accommodated and allowed credit facilities. The defendants had then assured the Plaintiff that the payment in respect of the supplies would be made within a short period of time. The Plaintiff acting on the representation as above, and believing the same to be true, supplied the Motor Cycles and allied goods to the defendants as per the details given in its bills. "


(5) THE details of the amounts allegedly due from the defendants and the credit as available to them are stated in paragraphs 7, 8, 9, and 10 of the plaint. These, paragraphs read as follows:-


"7. That the Defendants made diverse payments from time to time and besides the same, the defendants were allowed credits for warranty claims, service incentives, other credits on different account and in addition to the above the defendants were also allowed credit for refund of security deposit and interest on the account of security deposit with the Plaintiff. Credit to the extent of Rs. 1,22,000. 00 has been allowed for refund of security deposit and interest thereon upto date. "

8. That the Defendants' became indebted to the Plaintiff to the extent of principal amount of Rs. 10,73,122. 30 in respect of the goods supplied after giving credit for all amount mentioned in para 7 except the amount of Rs. 1,22,000. 00 being refund of security and interest.


9. "that a further sum of Rs. 41,182. 02 is also due and payable by the defendants to the plaintiff at the rate of 7% CST in lieu of "c" Forms not supplied by the defendants in respect of the bills submitted by the Plaintiff from time to time for payment of sales tax. "


10. "that after giving credit for the refund of security deposit and interest thereon, the Defendants still remained indebted to the plaintiff in the sum of principal amount of Rs. 9,92,304. 32 (Rs. 11,14,304. 32 - Rs. 1,22,000. 00 = 9,92,304. 32). A further sum of Rs. 5,86,108. 45 is also due and payable by the defendants to the plaintiff on account of interest for delays in payment of the dues of the plaintiff at the agreed rate of 18% per annum upto the date of filing of the suit. Accordingly, the defendants are liable to pay to the plaintiff a sum of Rs. 15,78,412. 77 which the defendants have not paid in spite of repeated demands. Although, the defendants have been admitting their liability to pay the aforesaid amount, they have failed and neglected to pay the same to the plaintiff in spite of several demands made by the plaintiff company. However, the plaintiff claims Rs. 15,78,400. 00 and gives up its claim for the rest of the amount. "


(6) ON the basis of the above it is contended that a sum of Rs. 15,78,400. 00 is due to the plaintiff from the defendants.


(7) THE plaintiff company maintains a regular books of account in the normal course of its business and the amounts as held due from the defendants an debited and are duly entered in the books of account which are maintained regularly from day to day during the usual course of business and are duly audited by the statutory Auditors of the plaintiff company.


(8) SUMMONS in the suit was issued to the defendants but despite service they have not put in appearance and by order dated October 8, 1996 the defendant were directed to be proceeded against ex-parte. The plaintiff was also directed to file evidence by way of affidavits.


(9) THE evidence by way of affidavits has been filed by one Shri Brij Lal Vaish Supervisor, Shri P. K. Khanna, Assistant Manager and Shri V. K. Malhotra, Manager (Finance) of the plaintiff company. They have reiterated the averments as made in the plaint. The documents which have been filed are duly exhibited. Exhibit Public Witness-1/ 1 is the copy of Resolution No. 7 passed in the meeting of the Board of Directors oi the plaintiff company held on 22nd December, 1989 giving general power of attorney in favour of Mr. Charanjit Singh, Executive Vice President and Secretary of the Company who has signed and a the general power of attorney in favour of the same person. Exhibit Public Witness-1/3 is the certificate of incorporation of the plaintiff company. Exhibit Public Witness-2/1 is the Dealer's Sales Agreement executed between the plaintiff company and the defendants on 7th April, 1987. Exhibits Public Witness-2/2 and Public Witness-2/3 are letters dated 8th May, 1992 and 6th June, 1992 respectively demanding payments from the defendants. Exhibits Public Witness-2/4 to Public Witness-2/7 are the letters addressed by the defendants to the plaintiff company admitting their liability. Exhibit Public Witness-2/8 is the Credit Note dated 5th November, 1993 sent by the plaintiff to the defendants. Exhibits Public Witness-2/9 to Public Witness-2/ 18 are the carbon copies of the bills sent to the defendants by the plaintiff in respect of the goods supplied to the defendants. Exhibit Public Witness-2/19 is the copy OF Credit Note dated 30th October, 1992 sent to the defendants by the Plaintiff. Exhibit Public Witness-2/20 is copy of the bill dated 19th, June 1990 sent to the defendants. Exhibits Public Witness-2/21 and Public Witness-2/22 are the copies of Credit Notes sent to the defendants by the plaintiff. Exhibits Public Witness-2/23 and Public Witness-2/24 are copies of publicity material orders debit notes sent by the plaintiff to the defendants. Exhibits Public Witness-2/ 25 to Public Witness-2/28 are copies of the bills sent to the defendants by the plaintiff. Exhibit Public Witness-2/29 is the copy of Credit Note dated 31st July, 1992. Exhibits Public Witness-2/30 is the copy of warranty adjustment note dated 31st August, 1992 sent to the defendants by the plaintiff. Exhibit Public Witness-2/31 is the copy of warranty instant credit note dated 30th September, 1992. Exhibit Public Witness-2/32 is the carbon copy of legal notice 16th February, 1993 addressed to defendant No. 1. Exhibits Public Witness-2/33 and Public Witness-2/34 are the postal receipt and registered AD Card relating to the legal notice dated 16th February, 1993. Exhibits Public Witness-3/1 to Exh

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ibits Public Witness-3/10 are copies of ledger accounts maintained by the plaintiff company, in respect of the account of the defendants. Exhibits Public Witness-3/11 to Public Witness-3/23 are copies of the ledger account of the plaintiff company in respect of the account of the defendants. Exhibits Public Witness-3/24 to Public Witness-3/27 are copies of the ledger account maintained by the plaintiff in respect of the account of the defendants. (10) THE plaintiff has proved the averments as made in the plant and filed documents indicating the amounts due from the defendants which have been duly exhibited as referred to above. The defendants have not cared to appear in the Court to controvert the averments as made by the plaintiff company. The suit as a consequence is decreed for a sum of Rs. 15,78,400. 00 with costs. The plaintiff company shall also be entitled to interest at the rate of 12% per annum from the date of suit till realisation.
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