w w w . L a w y e r S e r v i c e s . i n

M/s. Srikant & Co., by Partner G.Shri Hari Naicker, Kamakshipuram & Others v/s Vijay Yarn Trading Company by Partner T. Shanmugasundaram

Company & Directors' Information:- M L YARN (INDIA) PRIVATE LIMITED [Active] CIN = U51494WB1998PTC087708

Company & Directors' Information:- J. K. YARN PRIVATE LIMITED [Active] CIN = U51909WB2008PTC122024

Company & Directors' Information:- VIJAY TRADING COMPANY PRIVATE LIMITED [Active] CIN = U51909MH2005PTC153705

Company & Directors' Information:- S B YARN (INDIA) PVT LTD [Active] CIN = U51101MN1991PTC003530

Company & Directors' Information:- S B YARN INDIA PRIVATE LIMITED [Not available for efiling] CIN = U25209MN1991PTC003580

Company & Directors' Information:- K. U. YARN PRIVATE LIMITED [Active] CIN = U15321GJ2007PTC049969

Company & Directors' Information:- B D YARN PRIVATE LIMITED [Active] CIN = U17111DL2001PTC112510

Company & Directors' Information:- V K YARN PRIVATE LIMITED [Active] CIN = U17115DL2005PTC143050

Company & Directors' Information:- S R YARN PRIVATE LIMITED [Active] CIN = U17115DL2005PTC144116

Company & Directors' Information:- SHRI HARI CORPORATION LIMITED [Strike Off] CIN = U15422PN2012PLC142075

Company & Directors' Information:- P V YARN PRIVATE LIMITED [Active] CIN = U17111TZ2000PTC009324

Company & Directors' Information:- SHRI HARI TRADING PRIVATE LIMITED [Converted to LLP] CIN = U51909DL2002PTC117395

    A.S.No.79 of 1988

    Decided On, 19 February 2001

    At, High Court of Judicature at Madras


    T.P. Manoharan, for Appellants. S. Natarajan, for Respondent.

Judgment Text

1. The defendants are the appellants herein. The averments in the plaint are as follows: The respondent/ the plaintiff is a partnership firm doing yarn business. The appellants 2 and 3 are the partners of the first appellant firm. The second appellant as the partner of the first appellant purchased certain quantities of yarn on credit from the respondent at Erode on 16.4.1984 for setting right the deficit with Sangili Bank at Coimbatore and Erode. The appellant took delivery of the yarn, Hence they are liable to pay Rs.93,320. The second appellant on behalf of himself and appellants 1 and 3 promised to pay the amount within three days from the date of purchase, i.e., 16.4.1984. They committed default. As per the business usage and the appellants are liable to pay the interest at 18% per annum. The suit has been filed for recovery of Rs.1,09,398.20 with interest at 18% per annum.

2. Written statement was filed by the second appellant, which was adopted by the appellants 1 and 3. According to the written statement, the respondent firm is managed by one Thangavelu in the name of his son, who shows as a partner in the cause title, but actually it is the said Thangavelu, who is behind this action. Thangavelu was the agent of one Sri Hari Mills at Erode. The second appellant is the Managing Director of Sri Hari Mills and the third appellant is the Director. As an agent the said Thangavelu had not furnished the correct account. He has also fabricated several accounts to defeat the claim of the said Hari Mills. Therefore, the appellants 2 and 3 on behalf of Sri Hari Mills, wanted to take action against Thangavelu, one of the partners of the respondent and they had also taken a step to verify the account as a counter steps. The said Thangavelu has filed this suit and other suits in O.S.Nos.189 to 191 of 1985. The claim that the appellants purchased yarn on 16.4.1984 as per invoice No.1/40 is false. There were no transactions between the parties at Erode at any time. The entire amount is false. The invoice is not true. The appellant had not authorised any one to purchase the goods on 16.4.1984. The accounts are all forged. Even if, they are found to be true, the price, value, quality and despatch of goods must be proved. The court has no jurisdiction to try the suits. No part of cause of action took place at Erode. Therefore, the suit must be dismissed.

3. The learned Subordinate Judge of Erode had framed the following issues:

1. Whether the plaintiff is entitled to the suit claim as prayed for.

2. Whether the claim of the plaintiff is baseless.

3. Whether the entire account is true.

4. Whether the defendants have taken delivery of the times of yarn on 16.4.1984.

5. Whether this Court has no jurisdiction to try this suit.

6. To what relief.

In all, nineteen documents were marked on behalf of the plaintiff/ respondent. Two documents were marked on behalf of the appellant/ defendants. The partner of the respondent was examined as P.W.1. The second appellant was examined as D.W.1 and the learned Judge decreed the suit with interest at 9% per annum of Rs.93,320 from the date of plaint till the date of realisation.

4. The defendants have filed this appeal.

The question that arises in this appeal is whether the respondent have proved that they have supplied the goods to the appellant and whether the appellant took delivery of the yarn on 16.4.1984.

5. The learned counsel for the appellant took me through the pleadings and documents to show that actually one Doraisamy, appears to have signed in the alleged invoice- Ex.A.11, by which the goods are said to have sent to the appellant on credit. It is the case of the respondent that this Doraisamy was an authorised person of the first appellant, but the appellants have totally denied that there was any such person by name Doraisamy in their employment and they also denied that they had authorised such a person to place orders for purchase of goods or to purchase goods from the respondent firm.

6. The learned Judge had come to the conclusion that Doraisamy was indeed a person authorised by the appellant, on the basis of what the learned Judge calls admission by the second appellant as D.W.1. Now, if we see the evidence of D.W.1, this is what he says

The learned counsel admitted on the one hand that there was no admission by D.W.1 that Doraisamy was a Depot agent of Sri Hari Mills and what is more the evidence of P.W.1 also shows that there was no record to show that Doraisamy was an authorised agent of the defendant. The learned counsel also pointed out the contradiction in P.W.1's evidence, where on the one hand he says that Doraisamy took delivery of the goods and in a few line after that he had contradicted himself and stated that since Doraisamy did not take delivery, he did not know in which lorry the goods were transported. The further evidence of P.W.1 is that the second appellant had given instructions over phone that he was authorising Doraisamy to take delivery, but there was nothing in writing. It is also admitted by P.W.1 in the evidence that neither in the plaint nor in the suit they had made any reference that Doraisamy taking delivery of the goods. The learned counsel pointed out next the conclusion drawn by the court below from merely the similarity in the signature Ex.A-11, Ex.A-13 and Ex.A-14 is not justified, since when there is nothing to link that the said Doraisamy with the appellant firm. Even assuming without admitting that the signature in these three documents are one and the same person that will not advance the case of the respondent.

7. The learned counsel also submitted that the Court below had presumed to draw conclusion on surmises by stating that it is not uncommon for a single person to act as a common agent or an employee for the sister concerns in our country. Therefore, the learned Judge had erroneously presumed that merely because the said Doraisamy had signed Ex.A-12, which is a carbon copy of the letter sent by the Erode Sales Depot of Sri Hari Mills in which the defendants were the Managing Director and Director respectively, the same Doraisamy would automatically be an employee of the first appellant firm. As regards the day book, which is Ex.A-9 in which the relating entry is Ex.A-10 would show the purchase of suit item of year and Ex.A-7, the ledger of the plaintiff firm and Ex.A-8 is the relative entry, the learned counsel submitted that these entries have not been proved. The evidence of P.W.1 is

It is also the evidence of P.W.1 that it was only a clerk who made those entries and that clerk was not examined as witness. Therefore, the learned counsel submitted that even if these entries have been made in books of accounts regularly, they automatically cannot be accepted without further proof to fix liability on the appellant. Learned counsel submitted that the Court below while conceding with the clerk, who made the entries had not been examined ought not to have proceeded to conclude that since the transaction has been proved by Ex.A-11 and Ex.A-13, these entries must also be true. Therefore, according to the learned counsel, when the documents do not show that the Doraisamy who received the goods under the suit invoices had anything to do with the appellant and when the books of account and the entries therein have not been proved in accordance with law and when the learned Subordinate Judge come to the conclusion that the defendant had denied that Doraisamy was their employee, no decree ought to have been granted against the appellant.

8. Learned counsel appearing for the respondents submitted that there were enough materials which were borne in mind by the court below to come to the conclusion that the defendant, namely, the appellant had indeed failed to pay the amount due under the invoice. The suit notice, in which the details of invoice, the date of invoice and the quantity of yarn that was purchased were all got down in detail. The appellant's by reply under Ex.A-6 acknowledged the receipt of the suit notice, but stated that since the appellants were out of station, the counsel would be sending a detailed reply in the fortnight time. This reply by the appellant's counsel was given on 30.1.1985. The suit itself was filed some time in 3.5.1985. Inspite of four months time, no attempt was made by the appellant to give a suitable reply for setting out their defence. Two other documents were pointed out by the learned counsel for the respondent, namely Ex.A-16, dated 20.9.1984 and Ex.A-18, dated 10.10.1984. In Ex.A-16, one Thangavelu have written a letter to the second appellant as partner of the first appellant referred to the supply of 150 cone yarn bags on 16.4.1984 and that the appellant had sought 15 days time for payment but inspite of several letters and phone calls, the amount had not been cleared. Therefore, the request has made by Thangavelu under Ex.A-16 to clear the amount due in respect of the said supply made on 16.4.1984. Ex.A-19 written by the second defendant is as follows:

According to the learned counsel for the respondent, this was a clear acknowledgment that the cotton yarn sent on 16.4.1984 was received by the second appellant and there was also an acknowledgment to the fact that payment was not made promptly and there is a clear request that time should be given for settling the amount due. Therefore according to the learned counsel for the respondent that even assuming that all the other documents are not given any weight too and also the evidence of P.W.1, these two documents read with each other will clinch the issue. To this the learned counsel for the appellant replied that there is really no reference in Ex.A-19 to the letter written under Ex.A-16 and therefore unless one proceeded on surmises, Ex.A-16 and Ex.A-19 should not be linked to one another.

9. I have heard the arguments of both sides. The submissions were made by the learned counsel for the appellant are that there is nothing to link Doraisamy with the defendant and all the documents placed before the Court have been accepted by the court below without any question and actually there is no relation to the suit transaction. These arguments were advanced very persuasively and at the first instance, it seemed that there is nothing to link the Exs.A-11, A-13, A-14 with the defendant, so that liability could be fixed for payment of the amount due under Ex.A-11. However, the appellate Court being a Court of fact, I think it is only proper that all the documents should be perused. Ex.A-11, which bears the name of the first defendant refers to the number of bundles which were purchased for a sum of Rs.93,320. The signature of the buyer is found there, which is N.Doraisamy.

10. I have seen Ex.A-8 which is an entry at page 66 of Ex.A-7 ledger and it is found therein that a sum of Rs.93,320 is due from the first respondent firm on the basis of the suit invoice and the delivery chit-Ex.A-13. Learned counsel for the appellant referred to Sec.34 of the Evidence Act and stated that entries in books of account itself would not be sufficient to charge the person with liability, unless there is an evidence to prove the debt. The account books or the ledgers may themselves not be sufficient to show that the respondent supplied the goods under Ex.A-11 invoice and the appellant was bound to pay the same. The respondent is bound to show that these entries are real and honest transaction.

11. One fool proof method would be to examine the person who wrote the accounts. Here, the person, who wrote the accounts has not been examined. Now, we have to find out whether there is any independent evidence to support the entries made in Exs.A-8 and A-10 and to prove the veracity of Exs.A-11 and A-13, Ex.A-15, is a carbon copy of the letter written by Thangavelu, father of the partner of the first respondent firm. These carbon copies have been maintained in a book, where letter written by the respondents or on behalf of the respondents are found. In this letter, which is dated 8.5.1984 it is found that this Thangavelu has requested the second respondent to pay the sum due for the delivery taken on 16.4.1984. These are the words found there.

Ex.A-16 is dated on 20.9.1984, which is again a letter written by the said Thangavelu to the second appellant Sri Hari, which is also as follows:

In this letter also there is a reference to the supply made on 16.4.1984. Now, when we compare this with the letter, which is marked as Ex.A-19, dated 10.10.1984 written by the second appellant to the respondent. This is what is stated as follows:

The learned counsel for the appellant submitted that Ex.A-19 letter refers to some other transaction. But, when we compare the recitals in Ex.A-15, Ex.A-16 and Ex.A-19, it is clear that all of them refer to the supply made by the respondent on 16.4.1984, for which request have been made on behalf of the respondent repeatedly to the appellant to make payment. There could be no doubt that these three letters referred to the same transactions. The transaction, which is dated 16.4.1984, the ledger book in which Ex.A-15 and Ex.A-16 which are found have been maintained continuously and in that there are several letters, carbon copies of several letters written by and on behalf of the respondents. No doubt, in his evidence, D.W.1 has denied receiving this letters Ex.A-15 and Ex.A-16. But however he has admitted in his evidence in cross examination, Ex.A-19.

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Therefore his request for time to make payment has been admitted by him and when these three letters are read along with Exs.A-11 and A-13 and Ex.A-8, the only conclusion that is possible is that Ex.A-8 has been maintained during the course of business and could be received in evidence, since it is supported by these three independent letters and Ex.A-11 and Ex.A-13 are also genuine documents to show that the supply of goods was made by the respondent to the appellant on 16.4.1984. 12. It is true there are contradictions as pointed out by the learned counsel for the appellant regarding the non examination of Doraisamy and the fact that in the P.W.1 evidence, he says I do not know in which lorry the goods were transported, because Doraisamy did not take delivery. But the evidence of D.W.1 is very unsatisfactory, on the one hand he says that he does not know Dorai or Doraisamy, then again he says that they used to call Doraisamy as Dorai. In his own letter, he has stated in Ex.A-19 that he sent Dorai, Damu and Krishna Iyer to plead the respondent to grant him time to settle the accounts. In view of Ex.A-19, it is evident that his case of not being aware of Dorai or Doraisamy is not true. 13. In view of the conclusion on drawn by me from the Exhibits referred to above that the suit transaction has been proved and the appellant is bound to pay the amount due under Ex.A-11 invoice, and I see no reason to interfere with the judgment of the court below. The appeal is therefore dismissed.