Sri N Jaya Raj

IN THE COURT OF THE XXIV ADDITIONAL CHIEF JUDGE:

CITY CIVIL COURTS: AT HYDERABAD

Dated this the 1st day of June, 2016.

PRESENT: SRI N. JAYA RAJ, B.Com.,LL.B.,

XXIV ADDL.CHIEF JUDGE

O.P.No. 2181 of 2015

Between:-

M/s. Meenakshi Energy Private Limited, NSL Icon, H.No. 8-2-684/2/A, Plot No. 1 to 3, 2nd floor, Road No.12, Banjara Hills, Hyderabad, rep. by it's Chief Executive Officer Mr.Bernard Esselinckx, R/o.Hyderabad.

...PETITIONER

And

M/s. Krishnapatnam Port Company Limited, ground floor, Plot No.379, Road No.10, Jubilee Hills, Hyderabad, rep. by it's Authorised Signatory.

...RESPONDENT

This petition coming on for final disposal before me in the presence of Sri Duvva Pavan Kumar, Advocate for petitioner and of Sri G.Subba Rao, Advocate for respondent and the matter having stood over for consideration till this day, this Court made the following:- : O R D E R :

This is a petition filed by the petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 praying this Court (a) to direct the respondent to return to the petitioner the amount of

Rs.10,00,00,000/- (Rupees ten crores only) received by it on the wrongful, fraudulent and unjust invocation and encashment of the bank guarantee, or in the alternative, to deposit the said amount of Rs. 10 crores in the Hon'ble Court or secure the amount in the manner directed by and to the satisfaction of this

Court; (b) to grant an injunction restraining the respondent, its officers, agents, employees, representatives, directors etc. or any -2- O.P.No. 2181/2015 one claiming through or under it, from making any further demands in respect of the petitioner's alleged liability in paying compensation charges for failure to meet the minimum guaranteed tonnage prescribed under the Port Services

Agreement; (c) to grant an injunction restraining the respondent, it's officers, agents, employees, representatives, directors etc., or any one claiming through or under it, from taking any coercive action in pursuance of or pursuant to the Port Services

Agreement dated 01-6-2012, including in pursuance of or pursuant to the respondent's letter dated 21-10-2015, whether in respect of claims regarding the petitioner's alleged liability in paying compensation charges of the amount of

Rs.16,76,43,000/-, or the alleged balance amount of

Rs.6,76,43,000/- to the respondent for the petitioner's alleged failure to meet the minimum guaranteed tonnage prescribed under the Port Services Agreement, or it's demands for the petitioner to provide a non-interest bearing deposit of Rs.10 crores or an unconditional bank guarantee in favour of the respondent for the same value, or otherwise, (d) to grant an injunction restraining the respondent, it's officers, agents, employees, representatives, directors, etc. or any one claiming through or under it, from terminating the Port Services

Agreement dated 01-06-2012 or treating the Port Services

Agreement as automatically cancelled/terminated, or from acting upon and pursuant to or in pursuance of any purported termination or cancellation of the Port Services Agreement dated -3- O.P.No. 2181/2015 01-06-2012 whether vide the respondent's letter dated 21-10- 2015 or otherwise, (e) to pass ex-parte ad-interim orders in terms of the prayers (a) (b), © and (d) above and to direct the respondent to pay costs.

2.The case of the petitioner, in brief, is as follows:-

The Petitioner is a company incorporated under the provisions of the Companies Act, 1956, and represented herein by its Chief Executive Officer, Mr.Bernard Esselinckx, who is authorized to file this petition on behalf of the Petitioner. The

Respondent is a company incorporated under the provisions of the Companies Act, 1956. The Respondent has developed and is operating the Port situated at Krishnapatnam, SPSR Nellore

District, Andhra Pradesh (“Krishnapatnam Port”)

The petitioner is setting up the thermal power station (project) of a capacity of 1000 MV at Thamminapatnam and

Mommidi Villages, Near Krishnapatnam Port. SPSR Nellore

District, A.P.-524003. The project is envisaged to be implemented in three phases, i.e. phase I comprising of 2x150 MW and phase II comprisisng of 2x350 MW. In order to meet the fuel requirement for phases I and II of the project, the petitioner procures imported/indigenous coal through cargo vessel(s), and thus approached the respondent for its services in connection with unloading and handling the coal procured by the petitioner at the

Krishnapatnam Port and for dispatch and delivery of such coal from the berth to delivery point by a coal conveyor. On 1-6-2012, the petitioner and respondent entered into a Port Services -4- O.P.No. 2181/2015

Agreement (amended on 26-6-2012) (port Services Agreement), whereby the petitioner engaged the respondent for providing the above mentioned port services, subject to the terms and conditions set out therein. Under the port services Agreement, the respondent agreed to build, commission and make available the service of a berth and conveyor up to the port boundary for direct transfer of coal onto the petitioner’s power plaint’s conveyor on unloading from the ships to the petitioner as set out in schedule 4 and schedule 5 to the port services agreement, the respondent is required to commission the facilities and make the same available for the petitioner’s use on the date specified in the written notice issued by the petitioner (NTP), provided that the notice period for the commissioning of the facilities shall be not less than 33 months from the date of NTP. Under clause 4.3.3 of the port services agreement, the respondent shall make available temporary arrangements for unloading and delivery of coal until the commissioning of the facilities. Under clause 2.2 of the Port Services Agreement, the petitioner agreed to furnish to the respondent a non-interest bearing deposit of Rs.10 crores or alternatively a bank guarantee for the said amount in favour of the respondent, within seven days from the date of signing of the

Port Services Agreement being 16-6-2012 bearing No.13260 is executed by the state Bank of Hyderabad in favour of the respondent for the amount of Rs.5 crores that the parties had discussed and agreed that a bank guarantee for the amount of

Rs.5 crores would be sufficient discharge of the petitioner’s -5- O.P.No. 2181/2015 obligation under clause 2.2 and accordingly, the parties have been acting on the Port Services Agreement. The said bank guarantee was to expire on 15-6-2015. Before the expiry thereof on 10-6-2015, the petitioner furnished a fresh Bank Guarantee

dated 10-6-2015 bearing No.15232 executed by the State Bank of

Hyderabad in favour of the respondent, for the amount of Rs.10 crores (Bank Guarantee). The said Bank guarantee was valid until 9-6-2016. That the petitioner issued the NTP to the respondent on 30-6-2012. While the petitioner stated in the NTP that the facilities shall be required from 1-7-2012, in light of the minimum notice period of 33 months contemplated in clause 4.3.2 of the Port Services agreement, the respondent was required to commission the facilities for the petitioners use on or

before 31-3-2015 (being 33 month from the date of the NTP, i.e.

30-6-2012). That the respondent has not yet commissioned the facilities for the petitioner in accordance with the port services agreement, however that in accordance with clause 4.3.3 of the port services agreement, for the interim period, the respondent has made available to the petitioner temporary arrangements for unloading and delivery of coal at the Krishnapatnam Port. For this purpose, the petitioner and respondent entered into a separate coal transport services agreement dated 7 November 2013, under which the petitioner pays to the respondent charges for transportation and delivery of the coal. Since the facilities have not been constructed and commissioned by the respondent, the interim arrangements made by the respondent under the coal -6- O.P.No. 2181/2015 transport Services agreement are to deliver the coal from the port to the petitioner’s site by trucks, for which charges are separately paid by the petitioner as mentioned above, in addition to the charges payable under the Port Services Agreement (which include the cost of the conveyor over the term). That the said coal transport services agreement expired on 31-8-2015. The respondent continued to provide the coal transport services after the expiration and in the interim discussed and negotiated the terms of a fresh agreement. The petitioner and the respondent entered into a coal transport services agreement dated 29-10- 21015 (coal transport services agreement) to replace the agreement that expired on 31-8-2015. That in the month of June 2015, the respondent issued to the petitioner a debit invoice

dated 16-6-2015 (“Debit Invoice”) for the amount of

Rs.16,76,43,000/- (Debit Invoice Amount), claiming that the debit invoice amount is payable by the petitioner towards penalty for the shortfall in the quantity of coal received and handled by the respondent, as against the minimum guaranteed quantity of coal for the period from 1-7-2012 to 31-3-2015, at the rate of Rs.100 per Metric Tonne of shortfall. That the petitioner was totally surprised to received the above debit invoice from the respondent. That the petitioner is not obliged to pay any penalty to the respondent as claimed in the above letter. That by way of its letter dated 22-6-2015 the petitioner clarified to the respondent that the penalty contemplated under clause 6.5 of the Port Services Agreement at the rate of Rs.100 per MT is -7- O.P.No. 2181/2015 payable for any shortfall in the minimum guaranteed tonnage from the 34th month onwards i.e. after the commissioning of the facilities by the respondent, and not before. That the petitioner shall be liable to pay the compensation if the petitioner does not fulfill at least 85% of the minimum guaranteed tonnage from the 34th month onwards ie after the commissioning of the facilities (including the conveyor). That the debit invoice raised by the respondent is incorrect, erroneous and is not payable by the petitioner. The petitioner further requested the respondent to reverse the entry of the debit invoice amount by letter dated 22- 6-2015. The respondent replied by way of its letter dated 6-8- 2015 stating that the purported intention of the parties under clause 6.5 of the port services Agreement was to provide a minimum guaranteed tonnage for the entire duration of the port

Services agreement, and that the petitioner would be liable to pay compensation of Rs.100 per metric tonne of shortfall against the minimum guaranteed tonnage. The petitioner replied by way of its letter dated 7-9-2015 stating that clauses 4.3.2 and 6.5 of the Port Services Agreement clearly provide that the petitioner's liability for any shortfall in the coal quantities imported through the Krishnapatnam Port as compared with the minimum guaranteed tonnage will trigger only “for the final stage (i.e. 34th month onwards) after the respondent has fulfilled its obligation to commission the facilities, including the conveyor from the South

Port to the Delivery point. The petitioner further clarified that pending respondent's obligation to construct and commission the -8- O.P.No. 2181/2015 facilities, it was always the parties understanding that the petitioner would not be subject to any liability for compensation for the period prior to the 34th month from the date of the NTP, and the clear commercial intent of the parties is set out in clauses 4.3.2 and 6.5 of the Port services Agreement. The petitioner reiterated that the petitioner is not liable to pay compensation for any shortfall in the minimum guaranteed tonnage for the period between 1-7-2012 and 31-3-2015. That in response to the letter dated 7-9-2015 of the petitioner, the respondent by way of its letter dated 22-9-2015 called upon the petitioner to deposit the debit in voice amount within three days of receipt of the letter, failing which the respondent will be constrained to take remedial action, including but not limited to the invocation of the Bank Guarantee dated 10-6-2015. That the respondent inter alia raised certain untenable claims that the non-commissioning of the facilities is due to the petitioner's failure to make arrangements its obligations under the port services agreement, and on this basis claims that it is not correct

for the petitioner to state that it is not liable to make the

payment of the penalty. That according to bank guarantee acknowledges that KPCL i.e. the respondent is entitled to encash the Bank guarantee provided by MEPL i.e. the petitioner in case

MEPL fails to use the facilities commissioned by KPCL from the time stipulated in the Port Services Agreement dated 1-6-2012.

Thus the state Bank guarantee is conditional and could only be invoked by the respondent in the event the petitioner failed to -9- O.P.No. 2181/2015 use the facilities commissioned by the respondent under the Port

Services Agreement. That while petitioner was evaluating its options under law on 29-9-2015 to the petitioners shock, the petitioner came to know from its relationship Manager at the

State Bank of Hyderabad that the respondent issued the letter

dated 29-9-2015 (demand Letter) to the Bank invoking the Bank

guarantee claiming that “As M/s.Meenakshi Energy private

Limited failed in meeting its payment obligations to them. The

Krishnapatnam Port company Limited invoke the Bank Guarantee and requesting to credit the Bank Guarantee amount of

Rs.10,00,000/- in their account. That on receiving information of the demand letter, the petitioner immediately issued a letter

dated 29-9-2015 to the Bank stating that the condition for

invocation of the Bank guarantee has not been met and thus requested the bank to immediately and on an out right basis reject the respondent's demand letter. The bank acknowledged receipt of the petitioners letter dated 29-9-2015. That in view of the above the petitioner sought immediate expert advice on the legality of the actions of the respondent and was advised that the same will not stand the scrutiny of law. Accordingly, on 30-9- 2015 the petitioner prepared to move the Court seeking injunction relief restraining the respondent and the bank from taking any action pursuant to the invocation of the bank guarantee by the respondent. The petitioner through its counsel informed the bank of the same by way of notice dated 30-9-2015.

However to the petitioner shock and dismay, shortly after receipt -10- O.P.No. 2181/2015 of the petitioner's counsel's notice on 30-9-2015 by the bank, the petitioner was informed that the bank had remitted the bank guarantee amount of Rs.10,00,00,000/- to the respondent on 30- 9-2015. That the bank also confirmed the same to the petitioner by way of its letter dated 8-10-2015. That the contrary to clause 4.3.2, the respondent invoked and encashed the bank guarantee, despite the fact that the facilities (including the conveyor) have not been commissioned by the respondent and therefore there was no failure of the petitioner in using the facilities commissioned. That the invocation and encashment of the bank guarantee by the respondent is illegal, wrongful and fraudulent. That according to the demand letter shows that respondent did not even claim or allege that the petitioner has failed to use the facilities as contemplated by the bank guarantee. That the respondent cannot make a claim that the petitioner has failed to use the facilities as the respondent itself has not commissioned the facilities contemplated in the bank guarantee. The petitioner did not fail to meet its payments obligations toward the respondent, as the petitioner's obligation to make the payment for compensation on account of shortfall in meeting the minimum guaranteed tonnage only arises from the beginning of the 34th month from the NTP onwards, and in any event only once the facilities (including the conveyor) have been commissioned by the respondent. That without prejudice to the contentions passed in the petition. (a) the petitioner pays to the respondent charges under the Port Services Agreement, -11- O.P.No. 2181/2015 notwithstanding the fact that the facilities are to be commissioned, (b) the petitioner pays additional charges under the coal transport services agreement for delivery of the coal until such time that the facilities are commissioned. That the parties are working in accordance with this arrangement for the period since the execution of the port services agreement on 1-6- 2012 and the respondent had never before raised any contention or claim regarding payment of any compensation charges until the debit invoice dated 16-6-2015. That after keeping silent for a period of over two years, the respondent suddenly made a claim for the payment of a sum of Rs.16,17,43,000/- towards an alleged shortfall in the minimum guaranteed tonnage for the period from 1-7-2012 to 31-3-2015. That the issuance of the debit invoice was an afterthought and a ruse by which to invoke the bank guarantee. That the dispute between respondent and the petitioner regarding the liability of the petitioner to make the payment of the compensation charges can only be the subject matter of independent proceedings by the respondent and not cause for invoking and encashing the bank guarantee. That the manner in which the bank guarantee was originally obtained int he underlying transaction, and the manner in which it was invoked and encashed by the respondent (i.e. in relation to circumstances falling outside the scope of the Bank guarantee itself) clearly reveals the fraudulent intention of the respondent,

(a) firstly, in inducing the petitioner into furnishing the Bank

Guarantee on the false representation that the bank guarantee -12- O.P.No. 2181/2015 shall be only for the purpose set out in clause 4.3.2 of the port services agreement, i.e. that the bank guarantee amount shall stand forfeited in the event the petitioner failed to use the facilities commissioned by the respondent, and (b) secondly, in gaining a fraudulent benefit by making a wrongful invocation of the bank guarantee. That the bank guarantee was not unconditional or unequivocal in terms such that the respondent had an unfettered right to invoke the bank guarantee and demand immediate payment thereof from the bank. Thus (a) the invocation of the Bank Guarantee itself was bad and in the nature of a fraud upon the petitioner, and (b) the subsequent encashment of the bank Guarantee is in violation of the terms of the port services agreement and the bank guarantee, and has resulted in the unjust enrichment of the respondent. That the respondent had kept silent for over two years, and on 16-6-2015, which is suspiciously close to the date on which the petitioner furnished the fresh bank guarantee dated 10-6-2015 for

Rs.10,00,00,000/-, the respondent out of nowhere made a claim for compensation charges allegedly payable by the petitioner for the period, and proceeded to unlawfully invoke the bank guarantee for the amount of Rs.10,00,00,000/-. That the bank guarantee was invoked and encashed by the respondent has also caused huge detriment to the finances, reputation, corporate standing and credibility of the petitioner in the market, and the petitioner has suffered tremendously in this regard. That the wrongful invocation of the bank guarantee will have a material -13- O.P.No. 2181/2015 adverse effect on the position of the petitioner in respect of the loans taken by it from its lenders and has resulted in huge losses to the petitioner's reputation, for which the petitioner should be rightfully compensated by the respondent. That through information available in the public domain, the petitioner is aware that the respondent is undergoing financial stress. That the petitioner believes that the respondent resorted to wrongfully and fraudulently invoking and encashing the bank guarantee in order to alleviate its financial stress while completely disregarding the position of law as well as its express and contractually agreed terms with the petitioner. The respondent on 16-10-2015 requested the petitioner to provide a proposal addressing pending issues in order to arrive at a settlement. The petitioner under the bonafide impression that the respondent was inclined to arrive at an amicable settlement was evaluating the response to be given to the respondent. However without giving any real chance for the parties to arrive at a settlement, soon thereafter on 21-10-2015, the respondent issued a letter to the petitioner, in which the respondent claimed once again that the petitioner is liable to make a payment of the above mentioned debit invoice amount of Rs.16,76,43,000/- towards compensation charges for failure to meet the minimum guaranteed tonnage. That it was only able to recover Rs.10,00,000/- by invoking the bank guarantee and called upon the petitioner to make the payment of the balance amount of Rs.6,76,43,000/- (excluding service tax and also revenue share payable to Government of Andhra -14- O.P.No. 2181/2015

Pradesh) (balance amount) without further delay. That subsequent to the encashment of the bank guarantee by the respondent, the petitioner is in breach of clause 2.2 of the Port

Services Agreement since the petitioner is required to furnish a non-interest bearing deposit or a bank guarantee for an amount of Rs.10,00,00,000/- thereunder. The respondent was called upon on 21-10-2015 the petitioner to deposit the said amount of

Rs.10,00,00,000/- as a non interest bearing deposit or provide an unconditional bank guarantee in favour of the respondent for the same value, at an early date and to cure the alleged default.

That the respondent also further stated that “please also note that clause 2.3 (sic, clause 2.2.1) of the PSA provides for automatic cancellation of the PSA, should be Bank guarantee or deposit as detailed in clause 2.2, not be furnished by MEPL (i.e the petitioner) within 7 days.” That the said letter dated 21-10- 2015 is entirely without basis under the Port Services Agreement and the respondent has made misplaced and unlawful claims which are contrary to the Port Services Agreement. That on 28- 10-2015 the petitioner sent a letter to the respondent stating that it is considering the demands of the respondent and that the petitioner will revert to the respondent at the earliest. However the petitioner apprehends that the respondent will take steps pursuant to the purported cancellation of the Port Services

Agreement or take steps to terminate the port services agreement and stop performing its obligations thereunder. Such an action by the respondent will cause huge and irreparable -15- O.P.No. 2181/2015 losses to the petitioner. That the respondent is the only entity providing port management services at Krishnapatnam, Nellore, and the respondent is well aware that if it stops providing services to the petitioner. The petitioner activities at the project will come to a standstill. That the petitioner has invested thousands of crores into the ongoing project and in the event the respondent stops provides its services, or if the petitioner has to approach other ports, closest of which are located around 150- 200 kms away from the project site, the project becomes inviable

for the petitioner which will result in a loss of thousands of crores.

The respondent is aware of the above and also aware that due to its dominant position in Krishnapatnam, Nellore, the respondent can cripple and paralyze the activities of the petitioner by withdrawing the provision of its services to the petitioner. It is the respondent threat that the Port Services Agreement stands cancelled or its purported termination by the respondent is a means to arm-twist the petitioner into making the payment of the alleged balance amount, which cannot be permitted. That while the parties had been exchanging communications as above on the alleged liability of the petitioner to make the payment of the debit invoice amount to the respondent, the parties have in paralled been in discussion to agree on and finalise the terms of renewal of the coal transport services agreement. That the coal transport services agreement flows from the port services agreement itself, and thus this also shows that the respondent's threat that the port services agreement stands cancelled, or that -16- O.P.No. 2181/2015 it may take steps to cancel the same, are with a malafide intention to arm twist the petitioner into giving into the unreasonable and unlawful demands of the respondent. In the circumstances set out above, the petitioner is constrained to approach the court seeking inter alia (a) a direction for the respondent to return to the petitioner the amount of

Rs.10,00,00,000/- received by it on a wrongful and unjust invocation and encashment of the Bank guarantee, or in the alternative, to deposit the said amount in the court or secure the amount in the manner directed by and to the satisfaction of this

Court. (b) restraining the respondent from terminating the Port

Services Agreement or treating the Port Services Agreement as cancelled or taking any actions pursuant to or in pursuance of any purported termination of the port services agreement, (b) staying the respondent's letter dated 21-10-2015 including its demands therein for the petitioner to provide a non interest bearing deposit of Rs.10,00,00,000/- and to provide an unconditional bank guarantee in favour of the respondent for the same value, (c) restraining the respondent from taking any coercive action under the port services agreement in respect of the petitioner's alleged liability in paying compensation charges, being the debit invoice amount, or the alleged balance amount to the respondent for the petitioner's alleged failure to meet the minimum guaranteed tonnage prescribed under the port services agreement among other reliefs as prayed for herein. That the petitioner was thus constrained to initiate arbitration under the -17- O.P.No. 2181/2015 port services agreement by way of its notice of arbitration dated 31-10-2015. That the present petition is being filed to seek interim relief from the court to preserve the rights of the petitioner, pending resolution of the disputes through arbitration.

That the petitioner has established a strong prima facie case for grant of the reliefs as prayed for, in the premises aforesaid. It bears emphasis that the conditional bank guarantee which was wrongfully invoked by the respondent has already resulted in unjust enrichment of the respondent, and has caused great financial stress to the petitioner, to the tune of Rs.10,00,00,000/-.

That the balance of convenience for the grant of the injunction is overwhelmingly in favour of the petitioner as the termination of the port services agreement by the respondent and any actions taken by the respondent in pursuance of its demands for the payment of the alleged balance amount of Rs.6,76,43,000/- and a deposit bank guarantee from the petitioner for the amount of

Rs.10,00,00,000/- would result in huge losses to the petitioner and gravely prejudice the petitioner vis-a-vis its rights under the port services agreement, apart from causing financial stress and financial hardship to the petitioner, Or pursuant to the port services agreement dated 1-6-2012, including in pursuance of or pursuant to the respondent's letter dated 21-10-2015, whether in respect of claims regarding the petitioner's alleged liability in paying compensation charges of the amount of Rs.16,76,43,000/- or the alleged balance amount of Rs.6,76,43,000/- to the respondent for the petitioners alleged failure to meet the -18- O.P.No. 2181/2015 minimum guaranteed tonnage prescribed under the port services agreement or its demand for the petitioner to provide a non- interest bearing deposit of Rs.10,00,00,000/- or an unconditional bank guarantee in favour of the respondent for the same value and to grant an injunction restraining the respondent, its officers agents, employees, representatives, directors, etc., or anyone claiming through or under it, from terminating the post services agreement dated 1-6-2012 and if injunction is not granted irreparable loss to the petitioner and prayed the court to grant injunction as prayed for.

3.Counter-affidavit filed on behalf of the respondent denying all the allegations made in the petition, and submitted that the respondent is a public limited company incorporated under the Companies Act, 1956 and it won the mandate from the

Government of Andhra Pradesh to develop a deep water sea port at Krishnapatnam in Muthukuru mandal of Sri Potti Sriramulu

Nelldore District on Building, operate, share, transver (BOST) basis with a concession period of 50 years, after completion of first phase of construction, it commenced it's commercial operations on 17th July,2008, that the petitioner in order to meet the fuel requirements for phase-I and phase-II of the project imports coal from Indonesia, South Africa, Australia and other countries as well as from the domestic sources, through cargo vessel(s), and that the petitioner proposes to import coal at

KPCL's Krishnapatnam Port and approached KPCL to handle at the port premises and the respondent/KPCL has agreed to handle -19- O.P.No. 2181/2015 imported coal by entering into a Port Services Agreement dated 01-6-2012 (amended on 26-6-2012) as per it's terms and conditions. The respondent submitted that as per the Port

Services Agreement dated 01-6-2012 (amended on 26-6-2012), the petitioner should utilize a minimum guaranteed tonnage for the perio9d from 01-7-2012 to 31-3-2015 as per clauses 1.17 and 6.5 of the Agreement, that the petitioner commits minimum volumes as specified under clause 6.5 of the PSA from the date of

NTP, that due to the expected commencement of the commercial operation of unit-I of phase-I of the project by August, 2012, the petitioner vide it's letter dated 30-6-2012 sought for the required port facilities by July, 2012 and also requested the respondent to make necessary arrangements for unloading and delivery of coal to south common stock yard and requested that the letter by treated as 'Notice to Proceed' as per Clause 2.2 of the Port

Services Agreement. As a corollary 01-7-2012 is the effective/specified date of 'NTP'. As per Clause 4.3.2 of the PSA, if the petitioner fails to use the facilities so commissioned from the date specified above, i.e. the date in NTP viz. 01-7-2012, read with Clause 6.5 of the PSA, the deposit provided by the petitioner as per clause 2.2. shall stand forfeited, in addition to incurring the liability of compensation charge for the under-utilization. Due to the advanced stage of the petitioner's power plant, the respondent agreed to make available temporary arrangements for unloading and delivery of coal as per paras 1 and 2 of clause 6.5. The petitioner failed to utilize the facilities commissioned by -20- O.P.No. 2181/2015 the respondent as stipulated in the Port Service Agreement dated 01-06-2012 i.e. for the period from 01-7-2012 to the end of 31-3- 2013 and from 01-4-2014 to the end of 31-3-2015, as per Clause 6.5 of the Port Services Agreement, for which it is liable to pay a compensation charge of Rs.100/- per metric tonne for the differential shortfall of quantity of the above said minimum guaranteed tonnage. The petitioner has to utilize a minimum guaranteed tonnage of 3,50,000 tonnes for the period from 01-7- 2012 to 31-3-2013. In fact, it utilized only 2,93,115 metric tonnes.

Hence, it is liable to pay the compensation of Rs.100/- per metric tonne for the shortfall of 56,885 metric tonnes (3,50,000- 2,93,115=56,885x100) which comes to Rs.56,88,500/-. The petitioner should utilize a minimum guaranteed tonnage of 27,00,000 metric tonnes for the period from 01-4-2014 to 31-3- 2015. But, in fact, it utilized only 10,80,455 metric tonnes.

Hence, it is liable to pay compensation of Rs.100/- per metric tonne for the shortfall of 16,19,545 metric tonnes (27,00,000- 10,80,455 =1619545x100) which amounts to Rs.16,19,54,500/-.

Hence, the petitioner is liable to pay a total compensation of

Rs.16,76,43,000/- (56,88,500+16,19,54,500). The purpose for including the minimum guaranteed tonnage and providing compensation for the shortfall in Clauses 1.17 and 6.5 of the Port

Services Agreement were to ensure that a minimum quantity of coal would be offloaded at the port, using the port facilities, to ensure a financial guarantee to the respondent for the provision of the extensive services sought by the petitioner. The entire -21- O.P.No. 2181/2015 object of defining minimum guaranteed tonnage in Clause 1.17 and repeating the figures for the different stages of the Port

Services Agreement in Clause 6.5 specifically was to provide for a compensation for not meeting the minimum criteria. If there was no compensation linked to the tonnage of coal offloaded, the concept of 'guarantee' would be rendered otiose. The minimum guaranteed tonnage and compensation for shortfall of the same are included in the Port Services Agreement so as to ensure that the respondent is not put to loss or sufferance for a shorter quantity of offloaded material at the port. The respondent submits that the quantities specified in Clauses 1.17 and 6.5, as minimum guaranteed tonnage for the specific stages were set by the petitioner. Moreover, the inclusion of the condition of paying compensation per metric tonne of shortfall would not have served any purpose, if no compensation was paid to the minimum guaranteed tonnage shortfall for the months prior to 01-4-2015. The petitioner's interpretation of the same and it's refusal to pay compensation for the shortfall in minimum guaranteed tonnage as guaranteed and agreed by the petitioner is in breach of the Port Services Agreement. The respondent is automatically entitled to claim damages for breach, in the nature of cause for the services as detailed in Clause 6.5. From the factual facts and after delving deep into the clauses of the Port

Services Agreement, it becomes amply clear that the petitioner shall pay compensation at the rate of Rs.100/- per M.T. in addition to the forfeiture of bank guarantee as it fails to commit volumes -22- O.P.No. 2181/2015 as specified under clause 6.5 of the Port Services Agreement from the specified date of 'NTP' i.e. from 01-7-2012. Hence, the respondent is justified in demanding compensation at the rate of

Rs.100/- per metric tonne for the difference (shortfall) of the quantity, amounting to Rs.16,76,43,000/- and is also justified in encashing the bank guarantee due to the failure on petitioner's part. As the petitioner failed to fulfill it's obligations as stipulated in clauses 1.17 and 6.5 of the Port Services Agreement by utilizing the services provided by the KPCL, the respondent issued a debit note dated 31-3-2015 to pay the compensation amount. It also made a reminder dated 6-8-2015 to make the payment. A final reminder dated 22-9-2015 was also issued demanding the petitioner to pay the amount within a period of three days, failing which the respondent will initiate following steps. (a) invocation of bank guarantee, (b) termination of Port Services Agreement for breach, and (c) initiation of arbitration for recovery of balance amount. Despite the said notice and reminders, the petitioner except issuing reply notices dated 22-6-2015 and 7-9-2015 by contending that it is not liable to pay any compensation for shortfall in the minimum guaranteed tonnage for the period between 1-7-2012 and 31-3-2015 and the petitioner's liability for any shortfall in the minimum guaranteed tonnage for the period commencing from 1-4-2015 will trigger in accordance with clause 4.3.2 read with Clauses 6.5 of the Port Services Agreement, only when the respondent meets and fulfills it's obligations to construct and commission the facilities. The respondent -23- O.P.No. 2181/2015 submitted that breach of any covenant of an agreement is remedied by the payment of damages by the person in breach of the agreement. If the interpretation of the petitioner is to be accepted, it would leave it open to pay damages for the breach in accordance with law, which would be calculated in terms of the charges for services according to Schedule 2 of the Port Services

Agreement. Considering the base handling charges as per Port

Services Agreement, at Rs.242.30 per tonne + escalation based on CERC Index. The quantum of penalty to be paid, as damages, for this breach by the petitioner will amount to a staggering

Rs.40,61,98,989(56885+1619545=1676430x242.30= 40,61,98,989). In the present case on hand, the Port Services

Agreement has detailed an amount to be paid as damages for failure to meet the minimum guaranteed tonnage as Rs.100/- per metric tonne excluding the service tax and revenue share payable to the Government of Andhra Pradesh. The contention of the petitioner that the compensation charges as detailed in

Clause 6.5 of the Port Services Agreement will not be applicable to the time period prior to the 34th month lacks merit as the petitioner deliberately intends to evade the payment of compensation by turning a blind eye to Clauses 6.5 and 1.17 of the Port Services Agreement. If the intention of the parties were to charge 'compensation charge' on minimum guaranteed tonnage from the 34th month onwards, the reference of minimum guaranteed tonnage for the period prior thereof would not have been made in clauses 1.17 and 6.5 of the agreement. As per -24- O.P.No. 2181/2015 clause 2.2 of the Port Services Agreement, the petitioner furnished bank guarantee dated 16.6.2012 bearing No.13260 obtained from the State Bank of Hyderabad to the respondent and the same was renewed before it's expiry with a fresh bank guarantee dated 10-6-2015 bearing No.15232 executed by the

State Bank of Hyderabad for an amount of Rs.10.00 crores. As per unnumbered 2nd paragraph in 2nd page of the bank guarantee, it is stated that 'the guarantor bank hereby acknowledges that

KPCL is entitled to encash the bank guarantee provided by MEPL in case MEPL fails to use the facilities commissioned by KPCL from the time stipulated in the Port Services Agreement dated 01-6-2012. Since the petitioner failed to meet it's payment obligation, the respondent written a letter dated 29-9-2015 to the

State Bank of Hyderabad for the invocation of bank guarantee provided by the petitioner and requested to credit the bank guarantee amount of Rs.10.00 crores in it's account, by

honouring the respondent's request, the State Bank of Hyderabad

credited the bank guarantee amount of Rs.10.00 crores to it's account on 30-9-2015, as it agreed unequivocally, irrevocably and unconditionally to pay to the respondent on demand in writing from the respondent company or any officer authorized by it in this behalf. The contention that the said bank guarantee is conditional and could be invoked by the respondent only in the event of petitioner's failure to use the facilities commissioned by the respondent under the Port Services Agreement is far from the truth. The guarantor bank acknowledges the respondent -25- O.P.No. 2181/2015 company that it is entitled to encash the bank guarantee provided by MEPL in case it fails to use the facilities commissioned by KPCL from the time stipulated in the Port

Services Agreement dated 01-6-2012 specifically under clause 6.5 read with Clause 1.17. The respondent company has issued a letter dated 21-10-2015 to the CEO of the petitioner company requesting to pay the balance amount of Rs.6,76,43,000/-, and that as per clause 2.2. of the Port Services Agreement, the petitioner is required to furnish the respondent with either a non- interest bearing deposit or bank guarantee for Rs.10.00 crores.

Subsequent to the encashment of the earlier bank guarantee, the petitioner is in default of Clause 2.2 of the Port Services

Agreement and requested the petitioner to deposit Rs.10.00 crores as non-interest bearing deposit or provide unconditional bank guarantee to respondent for the same value at an early date and cure the default. It is also stated that if the bank guarantee or deposit is not furnished by the petitioner within a period of seven days, it would not have any option other than to cancel the Port Services Agreement as per Clause 2.2.1, which provides for automatic cancellation of the agreement. Thereafter, the petitioner addressed a letter stating that it is in the process of considering the demand before 23-11-2015. It also dashed off another letter dated 31-10-2015 stating that in exercise of right under Clause 14 of the Port Services Agreement, it is taking recourse to arbitration proceedings for resolution of the disputes and differences between them and stated that it has also -26- O.P.No. 2181/2015 nominated a retired Justice as it's Arbitrator, in accordance with the arbitration clause and requested the respondent to appoint the second arbitrator in accordance with the Arbitration and

Conciliation Act, 1996. To the respondent's utter utter surprise and dismay, the petitioner filed the present petition. The respondent further submitted that according to clause 10(c) of the Port Services Agreement, if either party fails to perform or observe any of the obligations, terms of the agreement and does not remedy, such failure within 30 days after receipt of return notice from the other party to remedy the same, the parties are at liberty to terminate the contract and then the other party shall thereafter take up the matter under Arbitration. According to 10.2 of the agreement, upon termination (a) no party shall have any claim against the other party and (b) the parties shall be relieved from future performance of their rights and obligations under this agreement, other than those rights or obligations, which have accrued on the date of termination. As per Clause 14 of the Port Services Agreement, any dispute or difference arising at any time between the parties touching or relating to the agreement shall unless settled amicably be referred to arbitration of 3 arbitrators, one appointed by KPCL, one by MEPL and the third jointly appointed by both arbitrators in accordance with the

Arbitration and Conciliation Act, 1996, or any statutory enactment on modification thereof for the time being in force.

Bare reading of Section 9 of the Act, shows that no substantial relief could be granted under it. The relief sought for by the -27- O.P.No. 2181/2015 petitioner is that, he wants to return of the bank guarantee amount of Rs.10 crores encashed by the respondent, to restrain the respondent from making any further demands regarding the payment of compensation charges, to restrain the respondent and its officers, agents and employees from taking coercive action in pursuance of the Port Services Agreement, to grant injunction restraining the respondent from terminating th4e Port

Services Agreement. The object of Section 9 of the Arbitration and Conciliation Act, 1996, is to grant only an interim measure, pending commencement of proceedings or in the course of proceedings and the relief becomes executable only after the award. It is intended to protect the subject matter of the proceedings and to secure the interest of the party claiming such relief. It is not to give substantial relief, because such relief can be allowed only as a decree or final relief. There is no whisper in the petition filed before the Court. How the enachment of bank guarantee would result in irretrievable loss or injury to the petitioner. No case of fraud let alone of egregious nature has been made out and also failed to plead that there is no possibility whatsoever of the recovery of the amount from the respondent/beneficiary by way of restitution. In any application filed under Sec. 9 of the Act, no orders of permanent in nature can be passed. The interim relief sought for by a party or granted by the Court shall fall within the meaning of expression, an interim measure of protection and the orders passed therein being temporary in nature would remain as temporary and -28- O.P.No. 2181/2015 whither away by lapse of time if it is unreasonable. The arbitration proceedings have already been commenced between the arbitral tribunal comprising of Justice M.Jagannadha Rao (Retd), Justice S.K.Mahajan (Retd) and Justice C.V.Ramulu in which the petitioner filed it's statement of claim and the respondent filed it's statement of defence for the same cause of action. As per Section 17 of the Act as amended by the Arbitration and

Conciliation (Amendment) Ordinance, 2015, the petitioner can claim for an interim injunction before the arbitral tribunal and obtain the same to avoid the multiplicity proceedings as the relief claimed is one and the same and any order issued by the arbitral tribunal under Sec. 17 of the Act shall be deemed to be an order of the Court for all purposes and shall be enforceable under the

CPC in the same manner as if it were an order of the Court. It is apparent from mere perusal of the Port Services Agreement that the respondent is entitled to invoke the bank guarantee and terminate the contract for breach, as per Clause 2.2, if there is any forfeiture of bank guarantee. No grounds are made out by the petitioner warranting the interference of this Court. Hence, the parties shall be left to have their disputes resolved in terms of the Arbitration between the parties by dismissing the petition.

While granting injunction under Sec. 9 of the Arbitration and

Conciliation Act, the Court has to look into the prima facie case, balance of convenience in favour of the petitioner and irreparable loss and injury that would be caused to it. The bank guarantee has been already encashed which shows that it has neither the -29- O.P.No. 2181/2015 prim facie case nor balance of convenience in it's favour. The return of bank guarantee amount encashed by the respondent as sought for by the petitioner is a relief of substantive nature, which cannot be granted in an application filed under Sec.9 of the

Act. The arbitral tribunal has the jurisdiction to decide the reliefs of restraining the respondent from making further demands regarding the payment of compensation charges, to restrain the respondent from taking steps in pursuance of the port service agreement and to restrain the respondent from terminating the port services agreement as sought for by the petitioner, if it causes greater harm, undue hardship and grave injury to the petitioner and prayed to dismiss the petition with exemplary costs.

4.The petitioner filed rejoinder reiterating the averments made in the petition and further submitted that Clause 1.20 defines NTP to mean “the written notice to the KPCL [i.e. the

Respondent] specifying the date on which the Facilities need to be commissioned and be available for provision of Services to

MEPL [i.e. the Petitioner]”, that Clause 4.3.2 of the Port Services

Agreement clearly provides that “At any time after signing of this

Agreement but not later than 1 month from the effective date,

MEPL shall provide NTP to the KPCL, provided such NTP shall always provide a minimum time period of not less than thirty three (33) months for the commissioning of the Facilities, provided further that at its own discretion, the KPCL shall have the right to commence construction and commissioning of the -30- O.P.No. 2181/2015

Facilities prior to the date specified in the NTP.” A combined reading of the above shows that the effective date of commissioning of the Facilities under the Port Services

Agreement shall be the date at least thirty three (33) months from the date on which the NTP is issued. It is undisputed that the Petitioner had issued to the Respondent the NTP on 30.06.2012, and thus, the date specified for the commissioning of the Facilities shall be at least thirty three (33) months from the date of the NTP, i.e. 31.03.2015. Clause 4.3.2 of the Port Services

Agreement further states that “If MEPL fails to use the facilities so commissioned from the date specified here above, read with

Clause 6.5, the deposit provided by MEPL as per Clause 2.2 shall stand forfeited, in addition to incurring the liability of compensation charge for the under- utilisation.” The ‘date specified’ as referred to in this Clause 4.3.2 is the date specified for the commissioning of the Facilities, which is at least thirty three (33) months from the date of the NTP, i.e. 31.03.2015, as mentioned above. The Respondent is attempting to create a sham defence by putting forth its baseless interpretation of the relevant clauses of the Port Services Agreement to the effect and averment that the words ‘date specified’ in Clause 4.3.2 of the

Port Services Agreement shall mean 01.07.2012, to suit its own needs. That the date specified in the NTP in the present case is 31.03.2015, by which date the Respondent was mandated under the Port Services Agreement to commission the Facilities including but not limited to building and commissioning of a berth -31- O.P.No. 2181/2015 and conveyer upto the port boundary for direct transfer of coal

for the Petitioner’s use as per the terms thereof. The Respondent

having failed to do so cannot be allowed to misinterpret the provisions of the Port Services Agreement to unjustly enrich itself at the cost of the Petitioner. The petitioner denied that the

Respondent made available the Facilities to the Petitioner from

July 2012 and it is submitted that in view of the advance stage of the Petitioner’s Project, the parties to the Port Services

Agreement decided to employ an interim arrangement for transfer of coal to the Petitioner’s site pending the building and commissioning of the conveyor. That the Port Services

Agreement mandates the Petitioner to commit to a Minimum

Guaranteed Tonnage (MGT) of coal to the Respondent and provides that in case of failure of Petitioner to maintain the MGT, the Petitioner will be liable to pay compensation in terms of

Clause 4.3.2 read with Clause 6.5 of the Port Services Agreement, which provide that the Petitioner will only be liable to pay the compensation in case of shortage in MGT after the 34th month from the date of NTP. The significance of the 34th month as mentioned in Clause 6.5 is that it marks the commissioning of the

Facilities by the Respondent, and clearly shows that the Petitioner is not liable to pay the compensation set out in Clause 6.5 before such date. Hence, it is denied that the Petitioner is liable to pay the compensation of Rs.100/- per metric tonne for the shortfall in the volume of coal for the period from 01.07.2012 to 31.03.2015.

The petitioner further submitted that the purpose for including -32- O.P.No. 2181/2015 the MGT is providing compensation for the shortfall as provided in

Clauses 1.17 and 6.5 of the Port Services Agreement, was to ensure that a minimum quantity of coal would be offloaded at the port, using the port facilities, to ensure a financial guarantee to the Respondent for the provision of the extensive services sought by the Petitioner, the Petitioner submits that the purpose of including provisions relating to MGT was to ensure financial guarantee to the Respondent for making available the Facilities i.e. building and commissioning a conveyor for direct transfer of coal. As such, the liability to pay compensation for shortfall will trigger from the date of commissioning of the conveyor by the

Respondent so that the Respondent is not put to any loss on account of building of the conveyor. In the current scenario, when the Respondent has not even started building the conveyor, it would be eminently wrong, in contravention of the provisions of the Port Services Agreement and unjust to make the Petitioner pay any compensation for a non-existent facility. That the parties expressly and unequivocally agreed under Clauses 4.3.2 and 6.5 of the Port Services Agreement that the liability to pay the compensation charge shall trigger once the facilities are commissioned by the Respondent as per the terms of the Port

Services Agreement and not before. Even if the Respondent’s version is believed that the MGT was prescribed in the Port

Services Agreement as a financial guarantee to the Respondent for the services / Facilities to be provided by it to the Petitioner, then it is necessary for the Respondent to show the extent of -33- O.P.No. 2181/2015 investment made by the Respondent in providing the services / setting up the Facilities required by the Petitioner, in order for it to make the claim for compensation. That the Respondent failed to commission the Facilities as required under the Port Services

Agreement, i.e. while the Respondent has constructed the ‘south berth’ forming part of the Facilities, the Respondent has failed to set up the conveyor required by the Petitioner forming part of the

Facilities as agreed under the Port Services Agreement. It is thus clear that the Respondent has not made the alleged corresponding investment to expand the port services to include the services required by the Petitioner, and as such, even on this ground, the Respondent cannot claim any compensation from the

Petitioner for a failure to discharge the Minimum Guaranteed

Tonnage of coal. Rest of the contents of the paragraphs under reply are denied as incorrect. That the Respondent had first raised a Debit Note dated 31.03.2013 towards shortfall in quantity of coal discharged by the Petitioner for the period 2012- 2013. The Petitioner protested the Debit Note by way of its letter

dated 15.04.2013 that in terms of Clauses 4.3.2 and 6.5 of the

Port Services Agreement, the Petitioner would be liable to pay compensation for any shortfall in the MGT only in the final stage i.e. 34th month onwards. Pursuant to the issuance of the said letter by the Petitioner, the Respondent reversed the entry in relation to the abovementioned Debit Note. The Respondent issued a Reconciliation Statement for the period from 1.04.2012 to 31.03.2013, the last entry of which shows a Credit Note issued -34- O.P.No. 2181/2015 by Respondent bearing No. 03/12-13/103 issued towards ‘cancellation of Debit Note dated 31 March 2013 for penalty collection on shortfall commitment quantity for period up to 31

March 2013, cancellation due to applicability from 34th month onwards’ [emphasis added] (“Reconciliation Statement”). The above facts regarding the Debit Note could not be pleaded earlier by the Petitioner on account of such facts not being in direct knowledge of the present controlling entity of the Petitioner, which facts were discovered after further investigation, and hence pleaded herein. The Respondent did not raise any claim for compensation towards shortfall of coal thereafter (until belatedly and as an after-thought raising the Debit Invoice dated 16.06.2015 presently disputed). The Respondent had thus acted in consonance with the express and agreed terms under the Port

Services Agreement and reversed the entry in relation to the abovementioned Debit Note since the Petitioner is not under any liability to make the payment of compensation until the commissioning of the Facilities, however, the Respondent is now back-tracking and making the claim for compensation for the period prior to the commissioning of the Facilities, while having previously concurred and acted on the intention of the parties under the Port Services Agreement that the Petitioner is not under any obligation to pay such compensation to the

Respondent for the period prior to the commissioning of the

Facilities. The petitioner denied that the Respondent is justified in encashing the Bank Guarantee bearing No. 15232 dated -35- O.P.No. 2181/2015 10.06.2015 (“Bank Guarantee”)and it is submitted that the

Respondent’s act of encashing the Bank Guarantee is tainted with malafide intentions and in contravention of the provisions of the Port Services Agreement. That the Petitioner has no liability to pay any compensation to the Respondent as per the terms of the Port Services Agreement. The petitioner denied that it in breach of the terms of the Port Services Agreement.

Consequently, the question of damages for breach of contract as per Schedule 2 of the Port Services Agreement by the Petitioner does not arise at all, and it is absolutely false and denied that the

Petitioner is liable to pay damages for failure to meet the minimum guaranteed tonnage. It is a settled principle of law that the party claiming damages has to establish the loss suffered by it as well as the extent of loss and cannot claim damages for any remote or indirect loss suffered by it by way of the alleged breach of contract. That in terms of Clauses 4.3.2 and 6.5 of the Port

Services Agreement, the Petitioner would be liable to pay compensation for any shortfall in the MGT only in the final stage i.e. 34thmonth onwards. The Respondent itself had concurred and acted in consonance with the intention of the parties under the

Port Services Agreement that the payment of compensation shall trigger once the Facilities are commissioned, i.e. from the 34th month onwards, as evidenced by the abovementioned

Reconciliation Statement issued by the Respondent. That the

Petitioner has established a strong prima facie case for grant of the reliefs as prayed for. That the conditional Bank Guarantee -36- O.P.No. 2181/2015 which was wrongfully invoked by the Respondent has already resulted in unjust enrichment of the Respondent, and has caused great financial stress to the Petitioner, to the tune of

Rs.10,00,00,000/-.

5.No oral or documentary evidence is adduced on behalf of either side.

6.Now the points for determination are:

1. Whether the petitioner is entitled for a direction to the respondent to return to the petitioner the amount of

Rs.10,00,00,000/- (Rupees ten crores only) received by it on the wrongful, fraudulent and unjust invocation and encashment of the bank guarantee, or in the alternative, to deposit the said amount of Rs. 10 crores in the Court or secure the amount in the manner directed by and to the satisfaction of this Court?

2. Whether the petitioner is entitled for grant of injunction restraining the respondent, its officers, agents, employees, representatives, directors etc. or any one claiming through or under it, from making any further demands in respect of the petitioner's alleged liability in paying compensation charges for failure to meet the minimum guaranteed tonnage prescribed under the Port Services Agreement?

3. Whether the petitioner is entitled for grant of injunction restraining the respondent, it's officers, agents, employees, representatives, directors etc., or any one claiming through or under it, from taking any coercive action in pursuance of -37- O.P.No. 2181/2015 or pursuant to the Port Services Agreement dated 01-6- 2012, including in pursuance of or pursuant to the respondent's letter dated 21-10-2015, whether in respect of claims regarding the petitioner's alleged liability in paying compensation charges of the amount of Rs.16,76,43,000/-, or the alleged balance amount of Rs.6,76,43,000/- to the respondent for the petitioner's alleged failure to meet the minimum guaranteed tonnage prescribed under the Port

Services Agreement, or it's demands for the petitioner to provide a non-interest bearing deposit of Rs.10 crores or an unconditional bank guarantee in favour of the respondent for the same value, or otherwise?

4. Whether the petitioner is entitled for grant of injunction restraining the respondent, it's officers, agents, employees, representatives, directors, etc. or any one claiming through or under it, from terminating the Port Services Agreement

dated 01-06-2012 or treating the Port Services Agreement

as automatically cancelled/terminated, or from acting upon and pursuant to or in pursuance of any purported termination or cancellation of the Port Services Agreement

dated 01-06-2012 whether vide the respondent's letter

dated 21-10-2015?

7.POINTS 1 to 4

The learned counsel for petitioner argued that the petitioner is setting up the thermal power station (project) of a capacity of 1000 MV at Thamminapatnam and Mommidi Villages, -38- O.P.No. 2181/2015

Near Krishnapatnam Port. SPSR Nellore District, A.P.-524003. that in order to meet the fuel requirement for phases I and II of the project, the petitioner procures imported/indigenous coal through cargo vessel(s), and thus approached the respondent for its services in connection with unloading and handling the coal procured by the petitioner at the Krishnapatnam Port and for dispatch and delivery of such coal from the berth to delivery point by a coal conveyor, that on 01-6-2012, the petitioner and respondent entered into a Port Services Agreement (amended on 26-6-2012) (port Services Agreement), whereby the petitioner engaged the respondent for providing the above mentioned port services, subject to the terms and conditions set out therein, that under the port services Agreement, the respondent agreed to build, commission and make available the service of a berth and conveyor up to the port boundary for direct transfer of coal onto the petitioner’s power plaint’s conveyor on unloading from the ships to the petitioner as set out in schedule 4 and schedule 5 to the port services agreement, the respondent is required to commission the facilities and make the same available for the petitioner’s use on the date specified in the written notice issued by the petitioner (NTP), provided that the notice period for the commissioning of the facilities shall be not less than 33 months from the date of NTP, that under clause 4.3.3 of the port services agreement, the respondent shall make available temporary arrangements for unloading and delivery of coal until the commissioning of the facilities, that under clause 2.2 of the Port -39- O.P.No. 2181/2015

Services Agreement, the petitioner agreed to furnish to the respondent a non-interest bearing deposit of Rs.10 crores or alternatively a bank guarantee for the said amount in favour of the respondent, within seven days from the date of signing of the

Port Services Agreement being 16-6-2012 bearing No.13260 is executed by the state Bank of Hyderabad in favour of the respondent for the amount of Rs.5 crores that the parties had discussed and agreed that a bank guarantee for the amount of

Rs.5 crores would be sufficient discharge of the petitioner’s obligation under clause 2.2 and accordingly, the parties have been acting on the Port Services Agreement, that the said bank guarantee was to expire on 15-6-2015, that before the expiry thereof on 10-6-2015, the petitioner furnished a fresh Bank

Guarantee dated 10-6-2015 bearing No.15232 executed by the

State Bank of Hyderabad in favour of the respondent, for the amount of Rs.10 crores (Bank Guarantee), that the said Bank guarantee was valid until 9-6-2016, that the petitioner issued the

NTP to the respondent on 30-6-2012, that while the petitioner stated in the NTP that the facilities shall be required from 1-7- 2012, in light of the minimum notice period of 33 months contemplated in clause 4.3.2 of the Port Services agreement, the respondent was required to commission the facilities for the petitioners use on or before 31-3-2015 (being 33 month from the date of the NTP, i.e. 30-6-2012), that the respondent has not yet commissioned the facilities for the petitioner in accordance with the port services agreement, however that in accordance with -40- O.P.No. 2181/2015 clause 4.3.3 of the port services agreement, for the interim period, the respondent has made available to the petitioner temporary arrangements for unloading and delivery of coal at the

Krishnapatnam Port, that for this purpose, the petitioner and respondent entered into a separate coal transport services agreement dated 7 November 2013, under which the petitioner pays to the respondent charges for transportation and delivery of the coal, that since the facilities have not been constructed and commissioned by the respondent, the interim arrangements made by the respondent under the coal transport Services agreement are to deliver the coal from the port to the petitioner’s site by trucks, for which charges are separately paid by the petitioner as mentioned above, in addition to the charges payable under the Port Services Agreement (which include the cost of the conveyor over the term), that the said coal transport services agreement expired on 31-8-2015, that the respondent continued to provide the coal transport services after the expiration and in the interim discussed and negotiated the terms of a fresh agreement, that the petitioner and the respondent entered into a coal transport services agreement dated 29-10-21015 (coal transport services agreement) to replace the agreement that expired on 31-8-2015, that there are some disputes between the petitioner and respondent, that contrary to clause 4.3.2, the respondent invoked and encashed the bank guarantee, despite the fact that the facilities (including the conveyor) have not been commissioned by the respondent and therefore there was no -41- O.P.No. 2181/2015 failure of the petitioner in using the facilities commissioned, that the invocation and encashment of the bank guarantee by the respondent is illegal, wrongful and fraudulent, that according to the demand letter shows that respondent did not even claim or allege that the petitioner has failed to use the facilities as contemplated by the bank guarantee, that the respondent cannot make a claim that the petitioner has failed to use the facilities as the respondent itself has not commissioned the facilities contemplated in the bank guarantee, that the petitioner did not fail to meet it's payments obligations toward the respondent, as the petitioner's obligation to make the payment for compensation on account of shortfall in meeting the minimum guaranteed tonnage only arises from the beginning of the 34th month from the NTP onwards, and in any event only once the facilities (including the conveyor) have been commissioned by the respondent, that the parties are working in accordance with this arrangement for the period since the execution of the port services agreement on 1-6-2012 and the respondent had never

before raised any contention or claim regarding payment of any

compensation charges until the debit invoice dated 16-6-2015, that after keeping silent for a period of over two years, the respondent suddenly made a claim for the payment of a sum of

Rs.16,17,43,000/- towards an alleged shortfall in the minimum guaranteed tonnage for the period from 1-7-2012 to 31-3-2015, that the issuance of the debit invoice was an afterthought and a ruse by which to invoke the bank guarantee, that the dispute -42- O.P.No. 2181/2015 between respondent and the petitioner regarding the liability of the petitioner to make the payment of the compensation charges can only be the subject matter of independent proceedings by the respondent and not cause for invoking and encashing the bank guarantee. That the manner in which the bank guarantee was originally obtained in the underlying transaction, and the manner in which it was invoked and encashed by the respondent (i.e. in relation to circumstances falling outside the scope of the

Bank guarantee itself) clearly reveals the fraudulent intention of the respondent, (a) firstly, in inducing the petitioner into furnishing the Bank Guarantee on the false representation that the bank guarantee shall be only for the purpose set out in clause 4.3.2 of the port services agreement, i.e. that the bank guarantee amount shall stand forfeited in the event the petitioner failed to use the facilities commissioned by the respondent, and (b) secondly, in gaining a fraudulent benefit by making a wrongful invocation of the bank guarantee, that the bank guarantee was not unconditional or unequivocal in terms such that the respondent had an unfettered right to invoke the bank guarantee and demand immediate payment thereof from the bank,and thus

(a) the invocation of the Bank Guarantee itself was bad and in the nature of a fraud upon the petitioner, and (b) the subsequent encashment of the bank Guarantee is in violation of the terms of the port services agreement and the bank guarantee, and has resulted in the unjust enrichment of the respondent, that the respondent had kept silent for over two years, and on 16-6-2015, -43- O.P.No. 2181/2015 which is suspiciously close to the date on which the petitioner furnished the fresh bank guarantee dated 10-6-2015 for

Rs.10,00,00,000/-, the respondent out of nowhere made a claim for compensation charges allegedly payable by the petitioner for the period, and proceeded to unlawfully invoke the bank guarantee for the amount of Rs.10,00,00,000/-, that the bank guarantee was invoked and encashed by the respondent has also caused huge detriment to the finances, reputation, corporate standing and credibility of the petitioner in the market, and the petitioner has suffered tremendously in this regard. without giving any real chance for the parties to arrive at a settlement, soon thereafter on 21-10-2015, the respondent issued a letter to the petitioner, in which the respondent claimed once again that the petitioner is liable to make a payment of the above mentioned debit invoice amount of Rs.16,76,43,000/- towards compensation charges for failure to meet the minimum guaranteed tonnage, that it was only able to recover

Rs.10,00,000/- by invoking the bank guarantee and called upon the petitioner to make the payment of the balance amount of

Rs.6,76,43,000/- (excluding service tax and also revenue share payable to government of Andhra Pradesh) (balance amount) without further delay, that subsequent to the encashment of the bank guarantee by the respondent, the petitioner is in breach of clause 2.2 of the Port Services Agreement since the petitioner is required to furnish a non-interest bearing deposit or a bank guarantee for an amount of Rs.10,00,00,000/- thereunder, that -44- O.P.No. 2181/2015 the respondent was called upon on 21-10-2015 the petitioner to deposit the said amount of Rs.10,00,00,000/- as a non interest bearing deposit or provide an unconditional bank guarantee in favour of the respondent for the same value, at an early date and to cure the alleged default, that the respondent also further stated that “please also note that clause 2.3 (sic, clause 2.2.1) of the PSA provides for automatic cancellation of the PSA, should te

Bank guarantee or deposit as detailed in clause 2.2, not be furnished by MEPL (i.e the petitioner) within 7 days.” that on 28- 10-2015 the petitioner sent a letter to the respondent stating that it is considering the demands of the respondent and that the petitioner will revert to the respondent at the earliest, however the petitioner apprehends that the respondent will take steps pursuant to the purported cancellation of the Port Services

Agreement or take steps to terminate the port services agreement and stop performing its obligations thereunder, such an action by the respondent will cause huge and irreparable losses to the petitioner, that the respondent is the only entity providing port management services at Krishnapatnam, Nellore, and the respondent is well aware that if it stops providing services to the petitioner, that the petitioner has invested thousands of crores into the ongoing project and in the event the respondent stops providing it's services, or if the petitioner has to approach other ports, closest of which are located around 150- 200 kms away from the project site, the project becomes inviable

for the petitioner which will result in a loss of thousands of crores,

-45- O.P.No. 2181/2015 that while the parties had been exchanging communications as above on the alleged liability of the petitioner to make the payment of the debit invoice amount to the respondent, the parties have been in discussion to agree on and finalise the terms of renewal of the coal transport services agreement, that the coal transport services agreement flows from the port services agreement itself, and thus this also shows that the respondent's threat that the port services agreement stands cancelled, or that it may take steps to cancel the same, are with a malafide intention to arm twist the petitioner into giving into the unreasonable and unlawful demands of the respondent, that the petitioner was thus constrained to initiate arbitration under the port services agreement by way of its notice of arbitration dated 31-10-2015, that the present petition is being filed to seek interim relief from the court to preserve the rights of the petitioner, pending resolution of the disputes through arbitration, that the petitioner has established a strong prima facie case for grant of the reliefs as prayed for, in the premises aforesaid, that the conditional bank guarantee which was wrongfully invoked by the respondent has already resulted in unjust enrichment of the respondent, and has caused great financial stress to the petitioner, to the tune of Rs.10,00,00,000/-, that the balance of convenience for the grant of the injunction is overwhelmingly in favour of the petitioner as the termination of the port services agreement by the respondent and any actions taken by the respondent in pursuance of its demands for the payment of the -46- O.P.No. 2181/2015 alleged balance amount of Rs.6,76,43,000/- and a deposit bank guarantee from the petitioner for the amount of

Rs.10,00,00,000/- would result in huge losses to the petitioner and gravely prejudice the petitioner vis-a-vis its rights under the port services agreement, apart from causing financial stress and financial hardship to the petitioner, that pursuant to the port services agreement dated 1-6-2012, including in pursuance of or pursuant to the respondent's letter dated 21-10-2015, whether in respect of claims regarding the petitioner's alleged liability in paying compensation charges of the amount of Rs.16,76,43,000/- or the alleged balance amount of Rs.6,76,43,000/- to the respondent for the petitioners alleged failure to meet the minimum guaranteed tonnage prescribed under the port services agreement or its demand for the petitioner to provide a non- interest bearing deposit of Rs.10,00,00,000/- or an unconditional bank guarantee in favour of the respondent for the same value and to grant an injunction restraining the respondent, its officers agents, employees, representatives, directors, etc., or anyone claiming through or under it, from terminating the post services agreement dated 1-6-2012 and if injunction is not granted irreparable loss to the petitioner and prayed the court to grant injunction as prayed for.

8.The learned counsel for respondent argued that the respondent is a public limited company incorporated under the

Companies Act, 1956 , that the petitioner proposes to import coal at KPCL's Krishnapatnam Port and approached KPCL to handle at -47- O.P.No. 2181/2015 the port premises and the respondent/KPCL has agreed to handle imported coal by entering into a Port Services Agreement dated 01-6-2012 (amended on 26-6-2012) as per it's terms and conditions, that as per the Port Services Agreement dated 01-6- 2012 (amended on 26-6-2012), the petitioner should utilize a minimum guaranteed tonnage for the perio9d from 01-7-2012 to 31-3-2015 as per clauses 1.17 and 6.5 of the Agreement, that the petitioner commits minimum volumes as specified under clause 6.5 of the PSA from the date of NTP, that due to the expected commencement of the commercial operation of unit-I of phase-I of the project by August, 2012, the petitioner vide it's letter dated 30-6-2012 sought for the required port facilities by July, 2012 and also requested the respondent to make necessary arrangements for unloading and delivery of coal to south common stock yard and requested that the letter by treated as 'Notice to Proceed' as per Clause 2.2 of the Port Services Agreement, that as per Clause 4.3.2 of the PSA, if the petitioner fails to use the facilities so commissioned from the date specified above, i.e. the date in NTP viz. 01-7-2012, read with Clause 6.5 of the PSA, the deposit provided by the petitioner as per clause 2.2. shall stand forfeited, in addition to incurring the liability of compensation charge for the under-utilization, that due to the advanced stage of the petitioner's power plant, the respondent agreed to make available temporary arrangements for unloading and delivery of coal as per paras 1 and 2 of clause 6.5, that the petitioner failed to utilize the facilities commissioned by the respondent as -48- O.P.No. 2181/2015 stipulated in the Port Service Agreement dated 01-06-2012 i.e.

for the period from 01-7-2012 to the end of 31-3-2013 and from 01-4-2014 to the end of 31-3-2015, as per Clause 6.5 of the Port

Services Agreement, for which it is liable to pay a compensation charge of Rs.100/- per metric tonne for the differential shortfall of quantity of the above said minimum guaranteed tonnage, that the petitioner has to utilize a minimum guaranteed tonnage of 3,50,000 tonnes for the period from 01-7-2012 to 31-3-2013, and in fact, it utilized only 2,93,115 metric tonnes, and hence, it is liable to pay the compensation of Rs.100/- per metric tonne for the shortfall of 56,885 metric tonnes (3,50,000- 2,93,115=56,885x100) which comes to Rs.56,88,500/-, that the petitioner should utilize a minimum guaranteed tonnage of 27,00,000 metric tonnes for the period from 01-4-2014 to 31-3- 2015, but, in fact, it utilized only 10,80,455 metric tonnes, and hence, it is liable to pay compensation of Rs.100/- per metric tonne for the shortfall of 16,19,545 metric tonnes (27,00,000- 10,80,455 =1619545x100) which amounts to Rs.16,19,54,500/- and hence, the petitioner is liable to pay a total compensation of

Rs.16,76,43,000/- (56,88,500+16,19,54,500), that the minimum guaranteed tonnage and compensation for shortfall of the same are included in the Port Services Agreement so as to ensure that the respondent is not put to loss or sufferance for a shorter quantity of offloaded material at the port, that the quantities specified in Clauses 1.17 and 6.5, as minimum guaranteed tonnage for the specific stages were set by the petitioner and -49- O.P.No. 2181/2015 moreover, the inclusion of the condition of paying compensation per metric tonne of shortfall would not have served any purpose, if no compensation was paid to the minimum guaranteed tonnage shortfall for the months prior to 01-4-2015, that the respondent is automatically entitled to claim damages for breach, in the nature of cause for the services as detailed in Clause 6.5.

and hence, the respondent is justified in demanding compensation at the rate of Rs.100/- per metric tonne for the difference (shortfall) of the quantity, amounting to

Rs.16,76,43,000/- and is also justified in encashing the bank guarantee due to the failure on petitioner's part, and as the petitioner failed to fulfill it's obligations as stipulated in clauses 1.17 and 6.5 of the Port Services Agreement by utilizing the services provided by the KPCL, the respondent issued a debit note dated 31-3-2015 to pay the compensation amount, that a final reminder dated 22-9-2015 was also issued demanding the petitioner to pay the amount within a period of three days, failing which the respondent will initiate following steps. (a) invocation of bank guarantee, (b) termination of Port Services Agreement for breach, and (c) initiation of arbitration for recovery of balance amount. Despite the said notice and reminders, the petitioner except issuing reply notices dated 22-6-2015 and 7-9-2015 by contending that it is not liable to pay any compensation for shortfall in the minimum guaranteed tonnage for the period between 1-7-2012 and 31-3-2015 and the petitioner's liability for any shortfall in the minimum guaranteed tonnage for the period -50- O.P.No. 2181/2015 commencing from 1-4-2015 will trigger in accordance with clause 4.3.2 read with Clauses 6.5 of the Port Services Agreement, only when the respondent meets and fulfills it's obligations to construct and commission the facilities, that as per clause 2.2 of the Port Services Agreement, the petitioner furnished bank guarantee dated 16.6.2012 bearing No.13260 obtained from the

State Bank of Hyderabad to the respondent and the same was renewed before it's expiry with a fresh bank guarantee dated 10- 6-2015 bearing No.15232 executed by the State Bank of

Hyderabad for an amount of Rs.10.00 crores, and as per unnumbered 2nd paragraph in 2nd page of the bank guarantee, it is stated that 'the guarantor bank hereby acknowledges that

KPCL is entitled to encash the bank guarantee provided by MEPL in case MEPL fails to use the facilities commissioned by KPCL from the time stipulated in the Port Services Agreement dated 01-6-2012, that since the petitioner failed to meet it's payment obligation, the respondent written a letter dated 29-9-2015 to the

State Bank of Hyderabad for the invocation of bank guarantee provided by the petitioner and requested to credit the bank guarantee amount of Rs.10.00 crores in it's account, by

honouring the respondent's request, the State Bank of Hyderabad

credited the bank guarantee amount of Rs.10.00 crores to it's account on 30-9-2015, as it agreed unequivocally, irrevocably and unconditionally to pay to the respondent on demand in writing from the respondent company or any officer authorized by it in this behalf, that the contention that the said bank guarantee -51- O.P.No. 2181/2015 is conditional and could be invoked by the respondent only in the event of petitioner's failure to use the facilities commissioned by the respondent under the Port Services Agreement is far from the truth, that the guarantor bank acknowledges the respondent company that it is entitled to encash the bank guarantee provided by MEPL in case it fails to use the facilities commissioned by KPCL from the time stipulated in the Port

Services Agreement dated 01-6-2012 specifically under clause 6.5 read with Clause 1.17, that the respondent company has issued a letter dated 21-10-2015 to the CEO of the petitioner company requesting to pay the balance amount of

Rs.6,76,43,000/-, and that as per clause 2.2. of the Port Services

Agreement, the petitioner is required to furnish the respondent with either a non-interest bearing deposit or bank guarantee for

Rs.10.00 crores. Subsequent to the encashment of the earlier bank guarantee, the petitioner is in default of Clause 2.2 of the

Port Services Agreement and requested the petitioner to deposit

Rs.10.00 crores as non-interest bearing deposit or provide unconditional bank guarantee to respondent for the same value at an early date and cure the default, that according to clause 10(c) of the Port Services Agreement, if either party fails to perform or observe any of the obligations, terms of the agreement and does not remedy, such failure within 30 days after receipt of return notice from the other party to remedy the same, the parties are at liberty to terminate the contract and then the other party shall thereafter take up the matter under -52- O.P.No. 2181/2015

Arbitration, that according to 10.2 of the agreement, upon termination (a) no party shall have any claim against the other party and (b) the parties shall be relieved from future performance of their rights and obligations under the agreement, other than those rights or obligations, which have accrued on the date of termination, that as per Clause 14 of the Port Services

Agreement, any dispute or difference arising at any time between the parties touching or relating to the agreement shall unless settled amicably be referred to arbitration of 3 arbitrators, one appointed by KPCL, one by MEPL and the third jointly appointed by both arbitrators in accordance with the Arbitration and

Conciliation Act, 1996, or any statutory enactment on modification thereof for the time being in force. Bare reading of

Section 9 of the Act, shows that no substantial relief could be granted under it, that the object of Section 9 of the Arbitration and Conciliation Act, 1996, is to grant only an interim measure, pending commencement of proceedings or in the course of proceedings and the relief becomes executable only after the award. that in an application filed under Sec. 9 of the Act, no orders of permanent in nature can be passed, that the interim relief sought for by a party or granted by the Court shall fall within the meaning of expression, an interim measure of protection and the orders passed therein being temporary in nature would remain as temporary and whither away by lapse of time if it is unreasonable, that the arbitration proceedings have already been commenced, that as per Section 17 of the Act as -53- O.P.No. 2181/2015 amended by the Arbitration and Conciliation (Amendment)

Ordinance, 2015, the petitioner can claim for an interim injunction before the arbitral tribunal and obtain the same to avoid the multiplicity proceedings as the relief claimed is one and the same and any order issued by the arbitral tribunal under Sec.

17 of the Act shall be deemed to be an order of the Court for all purposes and shall be enforceable under the CPC in the same manner as if it were an order of the Court, that it is apparent from mere perusal of the Port Services Agreement that the respondent is entitled to invoke the bank guarantee and terminate the contract for breach, as per Clause 2.2, if there is any forfeiture of bank guarantee, that while granting injunction under Sec. 9 of the Arbitration and Conciliation Act, the Court has to look into the prima facie case, balance of convenience in favour of the petitioner and irreparable loss and injury that would be caused to it, that the bank guarantee has been already encashed which shows that it has neither the prim facie case nor balance of convenience in it's favour, that the return of bank guarantee amount encashed by the respondent as sought for by the petitioner is a relief of substantive nature, which cannot be granted in an application filed under Sec.9 of the Act and prayed to dismiss the petition with exemplary costs.

9.In the instant case, admittedly, the bank guarantee was already invoked. The petitioner apart from seeking interim injunction sought for direction to the respondent to return the amount of Rs.10,00,00,000/- received by the respondent by -54- O.P.No. 2181/2015 invoking the bank guarantee or in the alternative to deposit the said amount in the Court or secure the amount in the manner directed by and to the satisfaction of this Court. The contention of the petitioner is that the respondent received the said amount by invoking the bank guarantee in a wrongful and fraudulent manner. The main contention of the petitioner is that the bank guarantee was a conditional one and could only have been invoked in the circumstances referred to in the unnumbered 2nd paragraph on the second page thereof, whereunder the guarantee amount becomes payable only if the petitioner fails to use the facilities commissioned by the respondent, that the bank guarantee was furnished by the petitioner pursuant to the terms agreed by the parties and set out in Clauses 2.2 and 4.3.2 of the

Port Services Agreement, that the Respondent invoked and encashed the Bank Guarantee, completely disregarding the same, that in terms of Clauses 4.2 and 6.5 of the Port Services

Agreement, the petitioner would be liable to pay compensation for any shortfall in the minimum guaranteed tonnage only in the final stage i.e. 34th month onwards, and that the respondent itself had concurred and acted in consonance with the intention of the parties under the Port Services Agreement that the payment of compensation shall trigger once the Facilities are commissioned, i.e. from the 34th month onwards. The contention the respondent is that there is no whisper in the petition how the encashment of bank guarantee would result in irretrievable loss or injury to the petitioner, that no case of fraud let alone of egregious nature has -55- O.P.No. 2181/2015 been made out and also failed to plead that there is no possibility whatsoever of the recovery of the amount from the respondent/beneficiary by way of restitution, that under Sec. 9 of the Act, no orders of permanent in nature can be passed, that the interim relief sought for by a party or granted by the Court shall fall within the meaning of expression, an interim measure of protection and the orders passed therein being temporary in nature would remain as temporary and whither away by lapse of time if it is unreasonable, and that the arbitration proceedings have already been commenced between the parties before the arbitral tribunal.

10.In the instant case, admittedly, the arbitration proceedings were already commenced before the arbitral tribunal. The contention of the respondent is that the petitioner failed to fulfill it's obligations as stipulated in Clauses 1.17 and 6.5 of the Port Services Agreement by utilizing the services provided by the KPCL, the respondent issued a debit note dated 31-3-2015 to pay the compensation amount, that it also made a reminder dated 6-8-2015 to pay the compensation amount, that a final reminder dated 22-9-2015 was also issued demanding the petitioner to pay the amount within a period of three days, failing which the respondent will initiate the following steps i.e. (a) invocation of bank guarantee, (b) termination of Port Services

Agreement for breach and © initiation of arbitration for recovery of balance amount, that despite the said notice and reminders, the petitioner, except issuing reply notices dated 22-6-2015 and -56- O.P.No. 2181/2015 07-9-2015 by contending that it is not liable to pay any compensation for shortfall in the minimum guaranteed tonnage for the period between 1-7-2012 and 31-3-2015 and the petitioner's liability for any shortfall in the minimum guaranteed tonnage for the period commencing from 1-4-2015 will trigger in accordance with Clause 4.3.2 read with Clause 6.5 of the Port

Services Agreement, only when the respondent meets and fulfill it's obligations to construct and commission the facilities, and that if the interpretation of the petitioner is to be accepted, it would leave it open to pay damages for the breach in accordance with law, which would be calculated in terms of the charges for services according to Schedule 2 of the Port Services Agreement, and considering the base handling charges as per Port Services

Agreement, at Rs.242.30 per tonne + escalation based on CERC

Index, the quantum of penalty to be paid, as damages, for this breach by the petitioner will amount to a staggering

Rs.40,61,98,989(56885+1619545=1676430x242.30= 40,61,98,989), that in the present case on hand, the Port

Services Agreement has detailed an amount to be paid as damages for failure to meet the minimum guaranteed tonnage as

Rs.100/- per metric tonne excluding the service tax and revenue share payable to the Government of Andhra Pradesh, that the contention of the petitioner that the compensation charges as detailed in Clause 6.5 of the Port Services Agreement will not be applicable to the time period prior to the 34th month lacks merit as the petitioner deliberately intends to evade the payment of -57- O.P.No. 2181/2015 compensation by turning a blind eye to Clauses 6.5 and 1.17 of the Port Services Agreement, that if the intention of the parties were to charge 'compensation charge' on minimum guaranteed tonnage from the 34th month onwards, the reference of minimum guaranteed tonnage for the period prior thereof would not have been made in clauses 1.17 and 6.5 of the agreement, that as per unnumbered 2nd paragraph in 2nd page of the bank guarantee, it is stated that 'the guarantor bank hereby acknowledges that

KPCL is entitled to encash the bank guarantee provided by MEPL in case MEPL fails to use the facilities commissioned by KPCL from the time stipulated in the Port Services Agreement dated 01-6-2012, that the guarantor bank acknowledges the respondent company that it is entitled to encash the bank guarantee provided by MEPL in case it fails to use the facilities commissioned by KPCL from the time stipulated in the Port

Services Agreement dated 01-6-2012 specifically under clause 6.5 read with Clause 1.17.

11.In the case of M/s. BSES Ltd. (now Reliance Energy

Ltd.) Vs. M/s. Fenner India Ltd. and another, reported in AIR 2006

SUPREME COURT 1148, it is held as follows:- ''The satisfactory performance of agreement also has not been proved it was the case of the appellant that there was no satisfactory performance of the contract, as a result of which, the appellant was justified in encashing the concerned bank guarantee. Arbitral proceedings are pending between the parties. One of the disputes referred to arbitration is whether the -58- O.P.No. 2181/2015 bank guarantees are null and void. Further, one of the substantive prayers in the arbitration made on behalf of the respondent is to make an award declaring the four bank guarantees unenforceable, illegal, void and liable to be discharged. Further, there is also a prayer for permanent injunction to restrain the appellant from encashing the bank guarantees. Therefore, since this prayer is already pending before the arbitral tribunal it cannot be said that it was a situation of 'irretrievable injustice'. Grant of injunction against encashment was therefore improper.''

12.Admittedly, the dispute between the parties is pending

before the arbitral tribunal. The petitioner has come up with this

application to grant the relief directing the respondent to return the amount of Rs.10,00,00,000/- received by it by invocation and encashment of bank guarantee, or in the alternative, to deposit the said amount of Rs. 10 crores in the Court or secure the amount in the manner directed by and to the satisfaction of this

Court, apart from seeking the reliefs of injunctions.

13.In the instant case, the bank guarantee was already invoked and encashed by the respondent. The dispute between the parties is pending before the arbitral tribunal. The petitioner has prima facie failed to establish that the invocation and encashment of bank guarantee by the respondent by committing egregious fraud. Moreover, the relief sought in the prayer (a) of the petition appears to be a substantive nature which cannot be granted under Section 9 of the Arbitration and Conciliation Act.

-59- O.P.No. 2181/2015

The above ruling is clearly applies to the instant case.

14.In the case of Ansal Engineering Projects Ltd. Vs. Tehri

Hydro Development Corporation Ltd. and another, reported in (1996) 5 SCC 450, it is held as follows:- ''In terms of the bank guarantee the beneficiary is entitled to invoke the bank guarantee and seek encashment of the amount specified in the bank guarantee. It does not depend upon the result of the decision in the dispute between the parties, in case of the breach. Bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given and the beneficiary. The underlying object is that an irrevocable commitment either in the form of bank guarantee or letters of credit solemnly given by the bank must be honoured. The court exercising its power cannot interfere with enforcement of bank guarantee/letters of credit except only in cases where fraud or special equity is prima facie made out in the case as triable issue by strong evidence so as to prevent irretrievable injustice to the parties. Otherwise the beneficiary cannot be restrained from encashing the bank guarantee even if dispute between the beneficiary and the person at whose instance the bank guarantee was given by the bank, had arisen in performance of the contract or execution of the works undertaken in furtherance thereof. The trading operation would not be jettisoned and faith of the people in the efficacy of banking transactions would not be eroded or brought to disbelief. The question, therefore, is whether the petitioner had made out any case of irreparable injury by proof of special -60- O.P.No. 2181/2015 equity or fraud so as to invoke the jurisdiction of the Court by way of injunction to restrain the respondent from encashing the bank guarantee.''

15.In the instant case, the petitioner has also failed to establish that irreparable injury is caused to the petitioner by proof of special equity or fraud.

16.As per Section 9 of the Act, an application for interim measure can be made either before or during the arbitration proceedings or at the time after making arbitral award. Section 16 (1) of the Act speaks that the arbitral tribunal is competent to decide the objection or validity of the arbitration agreement. The object Section 9(ii) of the Act is similar to those contained in

Section 94 read with Orders 38 to 40 of the Code of Civil

Procedure as would appear from the language employed therein which is quoted below.

9. Interim measures, etc. by Court – (1) A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but

before it is enforced in accordance with the Section

36, apply to a Court:-

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely---

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any -61- O.P.No. 2181/2015 observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the Court to be just and convenient.'' and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub- section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.

(3)Once the arbitral tribunal has been constituted, the court shall not entertain an application under sub-section (1), unless the court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious.

17.In the instant case, the petitioner also sought the relief of injunction to restrain the respondent, its officers, agents, employees, representatives, directors etc. or any one claiming through or under it, from making any further demands in respect of the petitioner's alleged liability in paying compensation charges for failure to meet the minimum guaranteed tonnage prescribed under the Port Services Agreement; and to grant an injunction restraining the respondent, it's officers, agents, employees, representatives, directors etc., or any one claiming through or under it, from taking any coercive action in pursuance of or pursuant to the Port Services Agreement dated 01-6-2012, including in pursuance of or pursuant to the respondent's letter

dated 21-10-2015, whether in respect of claims regarding the

-62- O.P.No. 2181/2015 petitioner's alleged liability in paying compensation charges of the amount of Rs.16,76,43,000/-, or the alleged balance amount of Rs.6,76,43,000/- to the respondent for the petitioner's alleged failure to meet the minimum guaranteed tonnage prescribed under the Port Services Agreement, or it's demands for the petitioner to provide a non-interest bearing deposit of Rs.10 crores or an unconditional bank guarantee in favour of the respondent for the same value, or otherwise, and to grant an injunction restraining the respondent, it's officers, agents, employees, representatives, directors, etc. or any one claiming through or under it, from terminating the Port Services

Agreement dated 01-06-2012 or treating the Port Services

Agreement as automatically cancelled/terminated, or from acting upon and pursuant to or in pursuance of any purported termination or cancellation of the Port Services Agreement dated 01-06-2012 whether vide the respondent's letter dated 21-10- 2015 or otherwise, apart from the relief to direct the respondent to return the amount of Rs. 10 crores received by it by invocation and encashment of bank guarantee. In the instant case, the petitioner has failed to establish that irreparable injury will be caused to the petitioner so as to invoke the jurisdiction of this

Court by way of injunction. On consideration of the totality of the facts and circumstances of the case and upon perusing the documents filed by the petitioner in support of the petition, it can be said that the petitioner has not made out prima facie case to grant interim reliefs sought for. The balance of convenience is -63- O.P.No. 2181/2015 also not in favour of the petitioner. The petitioner has also failed to establish that if interim relief is not granted, it will suffer irreparable loss and injury. There are no reasonable grounds and merits in the present case.

18.In the result, the petition is dismissed without costs.

Dictated to the Superintendent, transcribed by him,

corrected and pronounced by me in open court on this the 1st day of June, 2016.

XXIV ADDL.CHIEF JUDGE

CITY CIVIL COURT: HYDERABAD

APPENDIX OF EVIDENCE

-NIL-

XXIV ADDL.CHIEF JUDGE

CITY CIVIL COURT: HYDERABAD

IN THE COURT OF THE XXIV ADDITIONAL CHIEF JUDGE:

CITY CIVIL COURTS: AT HYDERABAD

Wednesday the 8 th day of March, 2017

PRESENT: SRI N. JAYA RAJA

XXIV ADDL.CHIEF JUDGE

O.S.No. 227 of 2014

Between:- M/s. Sri. Rajhans Sport rep.by its Partner

Sri. Raj Kumar Khatri ...PLAINTIFF.

And

Sri. Baba Sports, rep.by its Proprietrix Kandikatu Bhavani

...DEFENDANT.

This suit coming on for final disposal before me in the presence of Sri A. Mahender Kumar, Advocate for plaintiff and of Sri. Nageshwara Rao, Advocate for the defendant and the matter having stood over for consideration till this day this Court delivered the following:- : J U D G M E N T:

This is a suit filed for recovery of money amounting to

Rs.15,47,450/- with interest and costs.

2.The case of the plaintiff, in brief, is as follows:-

On placement of purchase orders made by the defendant to the plaintiff, the plaintiff had supplied the sport material total worth of Rs.12,71,290/- to the defendant vide various invoices bills Nos. IC/140/2011-2012 dt. 9-12-2011 for Rs.65,000/-, invoice bill No. IC 156/2011-2012 dt. 4-1-2012 for Rs.1,51,000/- invoice bill No. IC/163/IC/163/2011-2012 dt. 12-1-2012 for Rs.24,500/- invoice bill No.IC/165/2011-2-2012 dt.21-1-2012 for Rs.25,400/-, <<2>>

OS 227/14

invoice bill No. IC/174/2011-2012 for Rs.56,500/-, invoice bill No.

IC/191/2011-2012 dt. 1-3-2012 for Rs.2,36,000, invoice bill No.

IC/195/2011-2012 dt. 5-3-2012 for Rs.61,000/-, invoice bill No.

AC/201/2011-2012 dt. 16-3-2012 for Rs.18,600/-, invoice bill No.

IC/022/2012-2013 dt. 26-4-2012 for Rs.1,68,240/-, invoice bill No.

IC/025/2012-2013 dt. 12-5-2012 for Rs.94,500/- , invoice bill No.

IC/040/2012-2013 dt. 7-6-2012 for Rs.76,000/-, invoice bill No.

IC/065/2012-2013 dt. 21-9-2012 for Rs.30,600/-, invoice bill No.

IC/078/2012-2013 dt. 19-1-2013 for Rs.87,100/-, invoice bill No.

IC/110/2012-2013 dt. 20-3-2013 for Rs.41,000/- and invoice bill

No. IC/020/2013-2014 dt. 30-4-2013 for Rs.80,750/- respectively which also includes VAT tax and the said material received by the defendant. That the defendant after receipt of the above sports material had paid a sum of Rs.41,290/- to the plaintiff and failed to pay the balance due of Rs.12,30,000/- and that on the plaintiff several requests and demands made to the defendant, the defendant issued two cheque bearing No.637305 and 657306 dt.

20-7-2012 drawn on Andhra Bank, Kulapet Branch, Nellore

District in favour of the plaintiff towards the discharge of the liability of balance due payable by the defendant to the plaintiff with part interest. That the plaintiff deposited the two cheques into its account on 20-7-2013 with Karur Vysya Bank, Osmangunj,

Hyderabad for realization but to the surprise of the plaintiff the said two cheques were returned as dishonoured by the defendant banker with a memo dt. 22-7-2013 showing the reasons “funds <<3>>

OS 227/14

insufficient” to the plaintiff banker who in turn intimated the same to the plaintiff. That the plaintiff got issued a legal notice

dt. 29-7-2013 to the defendant demanding to pay the balance

due of Rs.12,50,000/- to the plaintiff with interest @21% per annum as per business custom from 9-12-2011 to up to date within ten days from the date of receipt of legal notice and sent the same on 30-7-2013 by registered post acknowledgment due.

That the defendant received the legal notice on 1-8-2013 but failed to comply the same and on the other hand gave a vague reply notice dt. 12-8-2013 denying the transaction. That the plaintiff also got issued a legal notice dt. 29-7-2013 to the defendant under Section 138 of N.I.Act demanding for payment of amount in lieu of two dishonored cheques and sent the same by registered post acknowledgment due on 30-7-2013 to the defendant. That the defendant received the legal notice on 1-8- 2013 but failed to pay, comply the same but got issued a reply notice dt. 12-8-2013 denying the same as such the plaintiff filed a criminal case in C.C.No.452 of 2013 on the file of XX Additional

Chief Metropolitan Magistrate, Nampally, Hyderabad against the defendant and the same is pending disposal. That as the defendant failed to pay the balance due the plaintiff has been deprived of using the said amount in furtherance of its business activities and as such the plaintiff is entitled to claim interest @ 21% per annum on due amount as per the business custom and the defendant is liable to pay the interest but however the <<4>>

OS 227/14

plaintiff is confined to claim nominal interest @12% per annum on total due amount. That as on the date the defendant is liable to pay a sum of Rs.15,47,450/- to the plaintiff. That as the defendant failed to pay balance due of Rs.15,47,450/- to the plaintiff, the plaintiff has no other alternative except to file the suit for recovery of the said amount from the defendant.

3. The defendant in his written statement denied all the material allegations mentioned in the plaint. The defendant submitted that after receipt of the sports materials has paid a sum of Rs.41,290/- to the plaintiff and has never paid the said amount of Rs.41,290/- to the plaintiff and the plaintiff never request and demand for payment of any amount much less of Rs.12,30,000/-. That the defendant did not gave the two cheques bearing Nos.657305 and 657306 dt. 20-7-2013 to the plaintiff. That the protrietorix was shocked when she had received the legal notice dt. 29-7-2013 got issued by the plaintiff and thereafter she got issued reply notice denying the contents of the notice and subsequently she came to know from the brother that he had given the said two cheques as they were without mentioning the name of the payee, date and the amount in words to one Jatin Kumar Khatri, who is the brother of Raj Kumar Khatri, at Nellore towards discharge of some old outstanding bill. That after receipt of the said cheques each for Rs.25,000/- the plaintiff to get wrongful gain suffixed the numerical 6 before the figure Rs.25,000/- in both the cheques apart from filling out the other blank column in the cheques. The <<5>>

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plaintiff is guilty of forgery of prefixing the numerical 6 which is offence punishable under law. That the cheques are void of the material alterations made by the plaintiff therein. That the defendant was not aware before she received the notice dt. 29-7- 2013 about the handing over of inchoate cheques by her brother tot he plaintiff and also about misuse of the cheques by the plaintiff . That as the defendant did not owe any amount to the plaintiff there was no need for her to agree to any amount as interest to the plaintiff and she is constrained to contest

C.C.No.452 of 2013 foisted against her with false claim of the plaintiff as the same is fabricated bill and the plaintiff is liable to be non-suited and there is no cause of action to file the suit and prayed to dismiss the suit with exemplary costs.

4. Basing on the above pleading the following issues are settled for considerations.

1) Whether the plaintiff's is entitled for suit claim amounting to Rs.15,47,450/- as prayed for ?

2) Whether the plaintiff's is entitled for subsequent interest @ 12% per annum as prayed for ?

3) Whether the cheques bearing Nos. 657305 and 657306 are void and material alterationed documents as pleaded in written statement ?

4) Whether there is cause of action to file the suit ?

5) To what relief ?

5. On behalf of the plaintiff PW1 is examined, Ex.A1 to A62 are marked. In her chief examination Ex.A63 and A64 are marked in the cross examination of DW1. On behalf of defendants Dws1 <<6>>

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and 2 are examined. No documents are marked on behalf of defendant.

6. ISSUE NOS.1 to 3:

These issues are grouped up together for the sake of brevity and convenience.

The learned counsel for the plaintiff argued that PW1 in his chief examination chief examination deposed that he is owner of the plaintiff firm duly registered with the Registrar of Firms,

Hyderabad and represented by its partner Sri. Raj Kumar Khatri and dealing in the business of sports material and its accessories in whole sale and retail having good reputation in the market.

That Ex.A61 issued by the Registrar of firm with Form-A and

Ex.A62 is the original partnership deed. From the documents marked as Ex.A61 dt.19-10-2006 with Form-A registration certificate clearly shows that the plaintiff is a partnership firm duly registered with the registrar of firm and the names of the existing partners shown therein as per the documents Ex.A62 partnership deed dt. 7-3-2005 as per the clause 6 of the said the partnership deed the business of the partnership shall b e managed by the second, third and fourth partners namely Raj

Kumar Khatri, Hitesh Kumar Khatri and Jatin Kumar Khatri by filing of the suit by one of the partner Raj Kumar Khatri is maintainable under law under Order 30 Rule 1 of CPC. That on placement of purchase orders made by the defendant to the plaintiff, the plaintiff had supplied the total worth of <<7>>

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Rs.12,71,290/- to the defendant vide various invoices bill Nos.

IC/140/2011-2012 dt. 9-12-2011 for Rs.65,000/- invoice bill No. IC 156/2011-2012 dt. 4-1-2012 for Rs.1,51,000/- invoice bill No.

IC/163/IC/163/2011-2012 dt. 12-1-2012 for Rs.24,500/- invoice bill

No.IC/165/2011-2-2012 dt.21-1-2012 for Rs.25,400/-, invoice bill

No. IC/174/2011-2012 for Rs.56,500/-, invoice bill No.

IC/191/2011-2012 dt. 1-3-2012 for Rs.2,36,000, invoice bill No.

IC/195/2011-2012 dt. 5-3-2012 for Rs.61,000/-, invoice bill No.

AC/201/2011-2012 dt. 16-3-2012 for Rs.18,600/-, invoice bill No.

IC/022/2012-2013 dt. 26-4-2012 for Rs.1,68,240/-, invoice bill No.

IC/025/2012-2013 dt. 12-5-2012 for Rs.94,500/- , invoice bill No.

IC/040/2012-2013 dt. 7-6-2012 for Rs.76,000/-, invoice bill No.

IC/065/2012-2013 dt. 21-9-2012 for Rs.30,600/-, invoice bill No.

IC/078/2012-2013 dt. 19-1-2013 for Rs.87,100/-, invoice bill No.

IC/110/2012-2013 dt. 20-3-2013 for Rs.41,000/- and invoice bill

No. IC/020/2013-2014 dt. 30-4-2013 for Rs.80,750/- respectively which also includes VAT tax and the said material received by the defendant. That Ex.A1 to A16 are the said invoice bills . That the defendant received the said sports material and paid a sum of

Rs.41,290/- to the plaintiff and failed to pay the balance due of

Rs.12,30,000/-, and on the plaintiff several requests and demands made to the defendant, the defendant issued two cheque under Ex.A51 and A53 bearing Nos.657305 and 657306

dt. 20-7-2013 for Rs.6,25,000/- each drawn on Andhra Bank,

Mulapet Branch, Nellore District in favour of plaintiff firm towards <<8>>

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discharge of the liability of balance due payable by the defendant to the plaintiff firm with part interest of Rs.20,000/-. That it is an admitted fact that the plaintiff is registered dealer with

Commercial Tax Department vide its TIN.No. Tax identification

No.28860131245 with CST.No.CHM/07/12132/05-05 office at 5-2- 871, Risala Abdullah, Osmangunj, Hyderabad. That the defendant is also a registered dealer with the Commercial Tax

Department vide its TIN No. NER/07/0/1675 having shop at 16-1- 33, Trunk Road, near A.C.Statue, Nellore. That the same was admitted and elicited in the cross examination of the DW1 the proprietorix of the defendant, at 6th line of first page . It is elicited at 9th line that she cannot give the TIN number. That the plaintiff confronted computer generated copy of APVAT of

Commercial Tax Department and whether the Tin number mentioned in the same is belongs to defendant firm. DW1 admitted that the TIN No. NRA/07/0/1675 belongs to the defendant firm. That the documents marked as Ex.A1 to A16 are the certified copies of invoice bills and the documents marked as

Exs.A17 to A32 are the certified copies of e-way bills related to

Ex.A1 to A16 invoice bills and the documents marked as Ex.A33 to A48 are the certified copies of the lorry receipts related to the

Exs.A1 to A16 invoice bills respectively are received under which the plaintiff had supplied he material sports goods to the defendant. That Ex.A1 contains the details and particular at the top the plaintiff registered TIN No.28860131245 with CTD No.

<<9>>

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CHM/07/12132/04-05 with phone and mobile number, bank name and its account number, the invoice bill No.IC/140/2011-2012 and its dt.9-12-2011, way bill No.VAT03101112001218 dt. 9-12-2011,

Type of sale Credit, GR.No. Lorry receipt No.11176 dt. 9-12-2011 and Transporters name Sri Sai Durga Lorry Service and number of packages 4 and the name and address of the defendant M/s. Sri

Baba Sports, 16-1-33, Trunk Road, near A.C.Statue, Nellore with its registered Tin ( Tax identification Number) No.NER/07/0/1675 with phone number. That Ex.A17 e-way bill issued in triplicate, related to Ex.A1 invoice bill, form X or form 600 duly issued by the government of Andhra Pradesh with its seal contain the details and particulars of way bill No. VAT03101112001218, and at column No.1 office of issue CTD on line service, date of issue, name and address of the dealer to whom way bill issued by the

CTD Sri RajHans Sports, theplalintiff, 5-2-871 to 878/1, Risala

Abdullah, Osmangunj, Hyderabad to which consigned, Nellore, if the consignor is transporting the goods Sri Baba Sports the defendants, Trunk Road, Nellore, Tin No.NRE/07/0/1675 and at column No.6 the description, quantity and value of the goods i.e., commodity Sports goods, invoice No. date:IC/140/2011-2012 dt.

9-12-2011 quantity and value and at column No.7 transporter name Sri. Sai Durga Lorry Service related lorry receipt marked as

Ex.A33 contain the details of the consignor name Sri. Rajhans

Sports and consignee name Sri Baba Sports, receipt No.11176 and its date and number of articles in packages. Similarly Ex.A17 <<10>>

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to A32 invoice bill contain the details and particulars at the top the plaintiff registered TIN No.28860131245 with CST

No.CHM/07/12132/04-05 with phone and mobile number, bank name and its account number, the invoice bill number and its date, way bill No. VAT number and dated, type of sale, credit, GR

No. Lorry receipt number and date and transporters name Sri Sai

Durga Lorry Service and number of packages and the name and address of the defendant M/s. Sri. Baba Sports, 16-1-33, Trunk

Road, near A.C Statue, Nellore, with its registered Tin no.

NRE/07/0/1675 with phone number. That Ex.A17 to A32 e-way bill related to Ex.A2 to A16 invoice bill form number issued by the

Government of Andhra Pradesh in triplicate with its seal contain the details and particulars and details of way bill No. VAT and at column No.1, 2. date of issue and time, 3. the name and address of the dealer to whom way bill issued by the CTD Sri RajHans

Sports, the plaintiff, 5-2-871 to 878/1, Risala Abdullah,

Osmangunj, Hyderabad, TIN No.28860131245 State Andhra

Pradesh , Place from which consigned, if the consignor is transporting the goods, Tin number and at column number, the description, quantity and value of the goods i.e., commodity

Sports Goods, invoice number, date, quantity numbers and value and at column No.7 transporter name. That Ex.A34 to A48 contain the details of the consignor name and consignee name, receipt number and its date and number of articles in packages respectively. That the entire aforesaid transaction shall be <<11>>

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recorded at the Commercial Tax Office at Osmangunj Circle

Hyderabad and at Nellore respectively and the same is endorsed number the Ex.A50 certificate dt. 18-7-2014 issued by the Deputy

Commercial Tax Officer, Osmangunj Circle,Hyderabad. That the plaintiff supplied the sports goods through defendant preferred transportation Sri Sai Durga Lorry Service, and used to hand over the invoice bill, original and duplicate online e-way bill to them so as to enable them to tender to the officer-in-charge of the check post through which the goods vehicle first passes on its way.

That with regard to its RC TIN.No.NER/07/0/1675 and shop address as 16-1-33, Trunk Road, Near A.C.Statue, Nellore and the same is admitted and elicited in the cross examination of the

DW1. It is elicited in the cross examination of DW1 that the plaintiff use to supply sports material to transport in lorry. That the plaintiff used to send the material through Sri Sai Durga Lorry

Service. On next page at 5th line it is elicited that they use to pay transport charges directly to the lorry service and used to take the delivery of the material by putting signature. That DW2 in his cross examination of DW2 who is none other than elder brother of

DW1 it is elicited at 5th line of first page, the sports material used to supplied by the plaintiff firm to the defendant sports shop by transportation through Sri Sai Durga Lorry Service. That the said

Sri Sai Durga Lorry Service is having branches at Hyderabad and

Nellore. That sister Bhavani used to go to the said lorry service office at Nellore and used to take delivery of the sports material.

<<12>>

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That the plaintiff proved that the plaintiff used to supply the sports material to the defendant through their preferred transport

Sri Sai Durga Lorry Service and the defendant used to take delivery of the sports material at lorry office Nellore and used to pay the charges directly to them. That the said lorry receipts are marked as Exs.A33 to A48. That as per Section 39 of Sale of

Goods Act delivery of carrier or what finger it envisages that where in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether name or not for the purpose of transmission to the buyer, or delivery of the goods to a what finger for safe custody, is prima facie deemed to delivery of the goods to the buyer. That nothing elicited in the cross examination of PW1 by the defendant with regard to the two cheques issued in question which is marked as Ex.A51 to A53 and questioned the witness whether those documents bear her signatures witness gave answer in affirmative. She also admitted that the said cheques were dishonored due to insufficient funds under Ex.A52 and A54 witness adds she gave two cheques for Rs.25,000/- each but the plaintiff added the figure 6 before 20,000 in both the cheques.

That plaintiff firm got issued a legal notice under Ex.A55 to the defendant demanding for payment of due sum of Rs.12,50,000/- the defendant in receipt of said legal notice got issued a reply notice dt. 12-8-2013 under Ex.A58 denying the allegations complained in the notice and taken a pleas that she has not <<13>>

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issued any cheque in favour of the plaintiff and that she is not liable to pay amount to the plaintiff. In the written statement also filed by the defendant at para No.3 on 2nd page at 9th line as a matter of fact the proprietorix of the defendant gave the two said cheques to her elder brother Siva Kumar who examined as

DW2 after signing the same without mentioning any amount either in figure or works and without mentioning the name of payee and the date much prior to 20-7-2013 as he asked her

Rs.50,000/- as hand loan and immediately after receipt of the same her brother wrote the figures Rs.25,000/- on each cheque and she never though her brother would give the said two cheques to the plaintiff. That the proprietorix of the defendant was shocked when she had received the legal notice dt. 29-7- 2013 under Ex.A55 got issued by the plaintiff and thereafter she got issued a reply notice under Ex.A58 denying the contents of the notice and subsequently she came to know from her brother that he had given the said two cheques as they were without mentioning the name of the payee date and the amount in words to one Jatin Kumar Khatri who is the brother of Sri Raj Kumar

Khatri at Nellore towards discharge of some old outstanding bill.

That in cross examination of DW1 at last page 4th line it is stated that she does not know about Ex.A55 legal notice she added that her brother might had received the same. She does not know about the reply notice given under Ex.A58 to the legal notice

Ex.A55. She further deposed that her brother might have sent the <<14>>

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same and the question she put her signature on the same. That she known the contents of written statement. From the evidence of the DW1 Siva Kumar elder brother of DW1 during his cross examination at fist page un-numbered para No.2 it is elicited that she had not taken any acknowledgment for giving cheques under

Ex.A51 and A53 for Jatheen who is one of the partner of the plaintiff firm. She does not know whether the statement of account filed in the Court. She does not know whether the plaintiff got issued any legal notice to the defendant, and at last un-numbered para he stated that she do not know whether his sister Bhavani pleaded in the written statement that she gave two cheques Ex.A51 and A53 towards hand loan that apart from the said two cheques the defendant had issued another two cheques under Ex.A63 and A64 and when the counsel confronted two cheques bearing No.072258 dt. 8-2-2012 for an amount of

Rs.80,000/- and cheque bearing No.238801 dt. 26-4-2012 for an amount of Rs.50,000/- drawn on ING Vysya Bank Limited, Nellore

Branch and questioned whether those two cheques bear her signature. She gave answer in affirmative and she does not having account in ING Vysya Bank of Nellore branch and they lost both the said cheques which were blank. Exs.A63 and A64 today i.e., on the date of cross examination but she denied she gave the said two cheques towards part payment of outstanding dues payable to them. From the above it is crystal clear that the defendant changing her version from time to time according to <<15>>

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her need and hence the same is unbelievable. That in the absence of any evidence on part of the defendant it is conclusively proved that the said two cheques under Ex.A51 and

A53 were issued by the defendant in favour of the plaintiff firm towards the discharge of the outstanding due payable by them to the plaintiff. From the evidence affidavit of the DW1 it is an admitted fact that she is the proprietorix of the Sri Baba Sports and they had few transactions with the plaintiff. They use to purchase sports material from the plaintiff by placing written purchase orders but no documentary evidence was placed before the court in support of the said content. Further DW1 stated that actually there was only a very small amount liable to be paid towards the outstanding dues to the plaintiff. But there is no proper explanation on the part of the defendant with regard to the cheques issued under Ex.A63 and A64 dt.8-2-2012 and 26-4- 2012 respectively specially when they stopped purchasing materials from the plaintiff in the year 2011. That the invoice bills marked as Ex.A1 to A16 on the down at left it is clearly mentioned that interest @ 21% per annum will be charged if bill not paid on or before due date but the plaintiff restricted itself to claim the interest @12% per annum and prayed for the same even though entitled to claim interest @21% per annum.

7. The learned counsel for the defendant argued that the defendant has never paid the amount of Rs.41,290/- to the plaintiff and the plaintiff never made any demand for payment of <<16>>

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any amount much less of Rs.12,30,000/-. That the defendant did not gave the two cheques bearing Nos.657305 and 657306 dt.

20-7-2013 to the plaintiff. That the protrietorix of the defendant gave the said two cheques to her elder brother Siva

Kumar, after signing the same and without mentioning any amount either in figures or words and without mentioning the name of the payee and the date much prior to 20-7-2013 as he asked her Rs.50,000/- as hand loan and immediately after receipt of the same her brother wrote the figures Rs.25,000/- on each cheque and she never though her brother would give the said cheques to the plaintiff. That the proprietorix of the defendant was shocked when she had received the legal notice dt. 29-7- 2013 got issued by the plaintiff and thereafter she got issued reply notice denying the contents of the notice and subsequently she came to know from the brother that he had given the said two cheques as they were without mentioning the name of the payee, date and the amount in words to one Jatin Kumar Khatri, who is the brother of Raj Kumar Khatri, at Nellore towards discharge of some old outstanding bill. That after receipt of the said cheques each for Rs.25,000/- the plaintiff to get wrongful gain suffixed the numerical 6 before the figure Rs.25,000/- in both the cheques apart from filling out the other blank column in the cheques. The plaintiff is guilty of forgery of prefixing the numerical 6 which is offence punishable under law. That the cheques are void of the material alterations made by the plaintiff <<17>>

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therein. That the defendant was not aware before she received the notice dt. 29-7-2013 about the handing over of inchoate cheques by her brother tot he plaintiff and also about misuse of the cheques by the plaintiff . That as the defendant did not owe any amount to the plaintiff there was no need for her to agree to any amount as interest to the plaintiff and she is constrained to contest C.C.No.452 of 2013 foisted against her with false claim of the plaintiff as the same is fabricated bill and the plaintiff is liable to be non-suited and there is no cause of action to file the suit.

8. That the defendant produced Dws1 and 2 to substantiate the version of the defendant and prayed to dismiss the suit with exemplary costs.

9. PW1 in his affidavit in lieu of chief examination reiterated the averments mentioned in the plaint . He further deposed that

Ex.A1 is the certified copy of invoice No. IC/140/2011-2012 dt.9- 12-2011 for Rs.65,000/-., that Ex.A2 is the certified copy of invoice No. IC/156/2011-2012 dt.4-1-2012 for Rs.1,51,000/-, that

Ex.A3 is the certified copy of invoice No. IC/163/2011-2012 dt.12- 1-2012 for Rs.25,400/-. Ex.A4 is the certified copy of invoice No.

IC/165/2011-2012 dt.21-1-2012 for Rs.25,400/- that, Ex.A5 is the certified copy of invoice No. IC/174/2011-2012 dt.24-1-2012 for

Rs.56,500/- that, Ex.A6 is the certified copy of invoice No.

IC/191/2011-2012 dt.1-3-2012 for Rs.2,36,000/-, that Ex.A7 is the certified copy of invoice No. IC/195/2011-2012 dt.5-3-2012 for <<18>>

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Rs.61,000/-. Ex.A8 is the certified copy of invoice No.

IC/201/2011-2012 dt.16-3-2012 for Rs.18,600/-, that Ex.A9 is the certified copy of invoice No. IC/022/2012-2013 dt.26-4-2012 for

Rs.1,68,240/-. Ex.A10 is the certified copy of invoice No.

IC/025/2012-2013 dt.12-5-2012 for Rs.94,500/-, that Ex.A11 is the certified copy of invoice No. IC/040/2012-2013 dt.7-6-2012 for

Rs.76,000/-, that Ex.A12 is the certified copy of invoice No.

IC/065/2012-2013 dt.21-9-2012 for Rs.30,600/-, that Ex.A13 is the certified copy of invoice No. IC/078/2012-2013 dt.17-11-2012 for

Rs.30,600/- , that Ex.A14 is the certified copy of invoice No.

IC/092/2012-2013 dt.19-1-2013 for Rs.87,100/-,, that Ex.A15 is the certified copy of invoice No. IC/110/2012-2013 dt.20-3-2013 for Rs.41,000/-, that Ex.A16 is the certified copy of invoice No.

IC/020/2013-2014 dt.30-4-2013 for Rs.80,750/-, that Ex.A17 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A1, that Ex.A18 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A2, that Ex.A19 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A3, that Ex.A20 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A4, that Ex.A21 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A5, that Ex.A22 is the certified copy of way bill issued by Commercial Tax Department, <<19>>

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Government of A.P relating to Ex.A6, that Ex.A23 Certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A7, that Ex.A24 Certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A8, that Ex.A25 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A9, that Ex.A26 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A10, that Ex.A27 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A11, that Ex.A28 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A12, that Ex.A29 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A13, that Ex.A30 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A14, that Ex.A31 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A15, that Ex.A32 is the certified copy of way bill issued by Commercial Tax Department,

Government of A.P relating to Ex.A16, that Ex.A33 is the certified copy of carbon copy of lorry receipt issued by Sri Sai

Durga Lorry Service, Osmangunj, Hyderabad, relating to

Ex.A1 invoice, that Ex.A34 is the Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, <<20>>

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Hyderabad, relating to Ex.A2 invoice, that Ex.A35 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry

Service, Osmangunj, Hyderabad, relating to Ex.A3 invoice, that Ex.A36 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A4 invoice, that Ex.A37 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service,

Osmangunj, Hyderabad, relating to Ex.A5 invoice, that

Ex.A38 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A6 invoice, that Ex.A39 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj,

Hyderabad, relating to Ex.A7 invoice, that Ex.A40 is the certified copy of carbon copy of lorry receipt issued by Sri Sai

Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A8 invoice, that Ex.A41 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj,

Hyderabad, relating to Ex.A9 invoice, that Ex.A42 is the certified copy of carbon copy of lorry receipt issued by Sri Sai

Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A10 invoice, that Ex.A43 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj,

Hyderabad, relating to Ex.A11 invoice, that Ex.A44 is the certified copy of carbon copy of lorry receipt issued by Sri Sai

Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A12 <<21>>

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invoice, that Ex.A45 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj,

Hyderabad, relating to Ex.A13 invoice, that Ex.A46 is the certified copy of carbon copy of lorry receipt issued by Sri Sai

Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A14 invoice, that

Ex.A47 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A15 invoice, that Ex.A48 is the certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj,

Hyderabad, relating to Ex.A16 invoice, that Ex.A49 is the certified copy of letter dt. 18-7-2014 addressed to the commercial Tax Officer, Osmangunj Circle, Charminar

Division, Hyderabad, that Ex.A50 is the certified copy of certificate dt. 18-7-2014 issued by Deputy Commercial Tax

Officer, Osmangunj Circle, Charminar Division, Hyderabad, that

Ex.A51 is the certified coy of cheque No.657305 dt. 20-7-2013 for

Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch,

Nellore, A.P.issued by the defendant in favour of the plaintiff, that Ex.A52 is the certified copy of return memo dt.22-7- 2013 issued by the Karur Vysya Bank Limited, Himayatnagar,

Hyderabad, showing the reason as ' funds insufficient', that

Ex.A53 is the certified copy of cheque No.657306 dt. 20-7-2013 for Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch, Nellore,

A.P issued by the defendant in favour of the plaintiff, that Ex.A54 <<22>>

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is the certified copy of return memo dt. 22-7-2013 issued by the

Karur Vysya Bank Limited, Himayatnagar, Hyderabad, showing the reason as 'funds insufficient', that Ex.A55 is the office copy of legal notice dt. 29-7-2013 got issued by the plaintiff to the defendant demanding for payment of outstanding due, that

Ex.A56 is the postal receipt dt. 30-7-2013, that Ex.A57 is the postal acknowledgment dt.1-8-2013 of the defendant that

Ex.A58 is the certified copy of reply notice dt. 12-8-2013 got issued by the defendant through its advocate, that Ex.A59 is the certified copy of postal cover of the list of documents of Ex.A58 that, Ex.A60 is the certified copy of true extract of statement of account of the transaction, that Ex.A61 is the certified copy of plaintiff firm registration certificate dt. 19-10-2006 with Form-A, that Ex.A62 is the certified copy of the original deed of partnership dt.7-3-2005 of the plaintiff firm, that

Ex.A63: Cheque bearing No.072258 dt.8-2-2012 for Rs.80,000/-, and Ex.A64 is the cheque bearing No.238801 dt.26-4-2012 for

Rs.50,000/-.

10. As against the above evidence, DW1 in her affidavit in lieu of chief examination reiterated the averments mention in the written statement of defendant. In cross examination of DW1

Ex.A63 and A64 are marked cheque bearing No. 072258 dt.8-2- 2012 for Rs.80,000/-. Ex.A64 is the cheque bearing No.238801 dt.26-4-2012 for Rs.50,000/- are marked on confrontation. DW2 deposed that his sister Kandikatu Bhavani is the proprietorix of <<23>>

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defendant sports shop. That he know Raj Khatri who is the partner of plaintiff firm. He admitted that the sports material used to supplied by the plaintiff firm to defendant sports shop by transportation through Sri Sai Durga Lorry Service is having branches at Hyderabad and Nellore. But his sister Bhavani used to go to the said lorry service office at Nellore and used to take delivery of the sports material. That he used to assist her frequently that he is an agriculturist . That his sister Bhavani is sole proprietor of defendant sports shop. That he has not taken any acknowledgment for giving cheques under Ex.A51 and A53 from Jatheen who is one of the partner of the plaintiff firm. He does not know whether plaintiff got issued any legal notice to the defendant. He does not know whether his sister Bhavani pleaded in her written statement that she gave two cheques Ex.A51 and

A53 towards hand loan that he does not know whether his sister

Bhavani is having saving account in ING Vysya Bank. That he accompanied by sister Bhavani twice to the Court . He denied the suggestion that on 19-7-1013 himself along with his sister

Bhavani went to the plaintiff firm and gave two cheques Ex.A51 and A53 towards repayment of outstanding balance amount.

11. DW1 in her chief examination deposed that she is the proprietorix of Sri Baba Sports and they had few transactions with the plaintiff wherein they used to purchase sports material from the plaintiff by placing written purchase orders and that some times they use to get materials on credit basis and actually there <<24>>

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was only a very small amount liable to be pay towards outstanding due amount. That they have never fallen in any big amount as due to the plaintiff. DW1 in her cross examination on behalf of plaintiff deposed that she has not filed any documentary evidence to show the acknowledgment of written purchase order.

She further deposed that they use to purchase sports material on credit bases upto Rs.50,000/- per month from plaintiff. That they never used to maintain accounts for the credit purchase.

DW1 admitted that she has not filed any document to show that only very small amount is liable to be paid by the defendant firm.

That the plaintiff used to supply sports material in lorry. DW1 in her chief examination deposed that stopped purchasing materials from the plaintiff in the year 2011 and they did not place any order for purchase of materials shown in invoices filed by the plaintiff and the plaintiff did not supply any such material and she did not paid the amount of Rs.41,290/- towards part payment .

DW1 in her cross examination deposed that she does not know whether the plaintiff used to hand over online e-way bills of

Commercial Department together with invoice bill to the defendant. She does not know about the sale tax check post established by the Commercial Tax Department. They used to pay transport charges directly to the lorry service and used to take the delivery of the material by putting signature. That she does not know the details contained in E-way bill and invoices bills with be recorded in the Commercial Tax Department. That <<25>>

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she does not know Ex.A50 is issued by Deputy Commissioner of

Commercial Tax Department, Osmangunj, Hyderabad. She denied the suggestion that Ex.A1 to A16 invoices are not fabricated documents and that Ex.A17 to A32 online e-way bills are not fabricated documents and that Ex.A33 to A48 transport receipts are not fabricated documents. DW1 on confronted on

Ex.A51 and A53 by the counsel for plaintiff admitted her signature on Ex.A51 and A53. She denied that Ex.A51 and A53 are given by the defendant towards outstanding debts including to pay part interest of Rs.20,000/-. She admitted the said two cheques were dishonour of cheques Ex.A52 and A54. She further deposed that she gave two cheque for Rs.25,000/- each but the plaintiff added the figure 6 before in both the cheques.

DW1 admitted her signatures on two cheques bearing No.072258

dt. 8-2-2012 for an amount of Rs.80,000/- ( Ex.A63) and cheque

bearing No.238801 dt. 26-4-2012 for an amount of Rs.50,000/- (Ex.,A64). She denied the suggestion that she gave cheques towards part payment of outstanding dues . She further deposed that she is not having account in ING Viysa Bank of Nellore branch and they lost both the said cheques which were blank and that she does not have prior knowledge of loosing of the cheques.

DW1 in her chief examination deposed that her brother Siva

Kumar gave the said cheques carelessly for Rs.25,000/- without mentioning the payee name, date and the amount in words and taking undue advantage of the same the plaintiff has tampered <<26>>

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with the two cheques for Rs.6,25,000/- and filed criminal case and the present suit against her to get wrongful gain. It is pertinent to note DW2 in his cross examination deposed that he does not know whether his sister Bhavani pleaded in the written statement that she gave Ex.A51 and A53 to him towards hand loan. He further deposed that his sister K. Bhavani is proprietorix of defendant sports shop and he used to assist her.

His sister K. Bhavani is the proprietorix of defendants sports shop. That he had not taken any acknowledgment under Ex.A51 and A53 from Jatheen who is one of the partner of the plaintiff firm. That he does not known whether the statement of account filed in the Court that the plaintiff got issued any legal notice to the defendant that he does not whether she is having account in

ING Vysya Bank. That he denied the suggestion that on 19-7- 2013 himself and along with his sister wen to the plaintiff firm and gave two cheques Ex.A51 and A53 towards payment of outstanding balance amount.

12. Whereas PW1 in his chief examination categorically deposed that the defendant after receipt of the sports material under

Ex.A1 to A16 has paid a sum of Rs.41,290/- to the plaintiff and failed to pay the balance due amount of Rs.12,30,000/- and that on plaintiff several request and demands made to the defendant, the defendant issued two cheques bearing No. 657305 and 657306 dt. 20-7-2013 for Rs.6,25,000/- each (Ex.A51 and A53) respectively drawn on Andhra Bank, Mulapet Branch, Nellore <<27>>

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District in favour of the plaintiff firm towards discharge of the liability of balance due payable by the defendant to the plaintiff firm that part interest. That the plaintiff firm deposited two cheque into its account on 20-7-2013 with Karur Vysya Bank

Limited, Osmangunj, Hyderabad for realization but to the surprise of the plaintiff the said two cheques were returned as dishonoured by the defendant banker with a memo dt. 22-7-2013 showing the reason 'funds insufficient' to the plaintiff banker who in turn intimated the same to the plaintiff. That the plaintiff had got issued a legal notice dt. 29-7-2013 (Ex.A55) to the defendant demanding to pay the balance due of Rs.12,50,000/- to the plaintiff with interest @ 21% per annum as per business custom from 9-12-2011 to upto date within ten days from the date of receipt of legal notice and sent the same on 30-7-2013 by registered post acknowledgment due. That the defendant received legal notice on 1-8-2013 but failed to pay comply the same. On the other hand gave vague reply dt. 12-8-2013 (Ex.A58) denying the transaction. PW1 in his cross examination deposed that they have supplied material according to their preferred transport Sri Sai Durga Lorry Services and they filed e- way bills and invoices bills and the same has been recorded as

Commercial Tax Department with TIN numbers. Since the time they have been supplying material to the defendant through above said lorry transport only according to the oral information.

That they really supplied the material supplied under the <<28>>

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invoices to the defendant would be noted in the rough daily maintained by defendant as well as recorded in commercial Tax

Department by e-way bills filed into the Court. That the defendant used to maintain a dairy when they made payment towards goods supplied , they used to get their goods endorsement in the dairy. PW1 denied that much prior to 19-7- 2013 the brother of DW1 gave signed two cheques of DW1 each for Rs.25,000/- after mentioning the said amount in figures in own hand writing towards due payable inrespect of old transactions and that subsequently they filled up the other columns in the cheques to show that the defendant issued the said cheques each for Rs.6,25,000/- by adding numerical '6' before the figure 25,000/- in both the cheques and that they brought into existence two cheques for Rs.6,25,000/- each by altering the cheques and by misusing in the blank singed cheques of the defendant and that they filed a criminal complaint and the present suit to get wrongful gain taking undue advantage of the said incomplete gain cheques handover by the defendants brother Siva Kumar.

Upon perusal of Ex.A1 to A16 invoices and Ex.A60 the amounts are tallying. PW1 in his cross examination on behalf of defendant deposed that they did not maintain manual ledger except computer account system. PW1 clearly deposed that Ex.A1 to

A16 are the various invoice bills for the supply of sports material total worth of Rs.12,71,290/- on placing of purchase order made by the defendant to the plaintiff . That Ex.A17 to A32 are the <<29>>

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respective copies of e-way bills issued by Commercial Tax

Department, Government of A.P. Ex.A33 to A48 are the respective copies of carbon copies of of lorry receipts issued by

Sri Sai Durga Lorry Service, Osmangunj, Hyderabad relating to

Ex.A1 to A16. That Ex.A49 certified copy of letter dt. 18-7-2014 addressed to the commercial Tax Officer, Osmangunj Circle,

Charminar Division, Hyderabad. Ex.A50 is the certified copy of certificate dt. 18-7-2014 issued by Deputy Commercial Tax

Officer, Osmangunj Circle, Charminar Division, Hyderabad.

Ex.A51 is the certified coy of cheque No.657305 dt. 20-7-2013 for

Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch,

Nellore, A.P.issued by the defendant in favour of the plaintiff. Ex.A52 is the certified copy of return memo dt.22-7- 2013 issued by the Karur Vysya Bank Limited, Himayatnagar,

Hyderabad, showing the reason as ' funds insufficient'. Ex.A53 is the certified copy of cheque No.657306 dt. 20-7-2013 for

Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch, Nellore,

A.P issued by the defendant in favour of the plaintiff. Ex.A54 is the certified copy of return memo dt. 22-7-2013 issued by the

Karur Vysya Bank Limited, Himayatnagar, Hyderabad, showing the reason as 'funds insufficient'. Ex.A55 is the office copy of legal notice dt. 29-7-2013 got issued by the plaintiff to the defendant demanding for payment of outstanding due. Ex.A56 is the postal receipt dt. 30-7-2013. Ex.A57 is the postal acknowledgment dt.1-8-2013 of the defendant. Ex.A58 is the <<30>>

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certified copy of reply notice dt. 12-8-2013 got issued by the defendant through its advocate. Ex.A59 is the certified copy of postal cover of the list of documents of Ex.A58. Ex.A60 is the certified copy of true extract of statement of account of the transaction. Ex.A61 is the certified copy of plaintiff firm registration certificate dt. 19-10-2006 with Form-A. Ex.A62 is the certified copy of the original deed of partnership dt.7-3-2005 of the plaintiff firm. DW1 in her cross examination clearly admitted that Ex.A63 is the and Ex.A64 are the Cheques bearing

No.072258 dt.8-2-2012 for Rs.80,000/- and Cheque bearing

No.238801 dt.26-4-2012 for Rs.50,000/-. Which bear her signaturess. The evidence of PW1 is trustworthy . The plaintiff by examining PW1 and marking Ex.A1 to A64 clearly established that the plaintiff is entitled for the suit claim amounting to

Rs.15,47,450/-. The defendant failed to establish by adducing cogent and convincing ocular evident or any other ocular evidence that the cheques beairng No.657305 (Ex.A51 ) and cheque bearing No.657306 (Ex.A53) are void and material alterationed documents. The plaintiff is also entitled for future interest @6% per annum from the date of filing the suit till the date of realization of the entire decretal amount. The issues 1 to 3 are answered accordingly.

13. ISSUE NO.4:

According to the plaintiff the cause of action of the suit arose on various date when the plaintiff has supplied the material <<31>>

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of sports of worth of Rs.12,71,290/- and when the defendant paid part payemnt of Rs.41,290/- and on 20-7-2013 when the defendant issued two cheque for Rs.6,25,000/- each in favour of plaintiff towards discharge of liability and on various dates when the defendant failed to repay the same in spite of several requests and demands made and on 29-7-2013 the plaintiff got issued legal notice to the defendant demanding for repayment of balance due and when failed to pay the same and got issued a vague reply notice dt. 12-8-2013 denying the transaction and the cause of action is still continuing as the defendant failed to repay the due amount. PW1 in his deposition categorically deposed with regard to the cause of action to file the suit. Therefore, it can be said that there is cause of action to file the suit. The issue

No.4 is answered accordingly.

14. ISSUE NO.5:

In view of findings given to issues 1 to 4 it can be said that the plaintiff is entitled for the suit claim amounting to

Rs.15,47,450/- with costs and with future interest @6% per annum from the date of filing the suit till the date of realization.

The issue is answered accordingly.

15. RESULT:

In the result, the suit is decreed with costs for an amount of

Rs.15,47,450/- with future interest @6% per annum from the date of filing the suit till the date of realization.

<<32>>

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Dictated to the Personal Assistant transcribed and typed by

her, corrected and pronounced by me in open court on this the 8 th day of March, 2017.

XXIV ADDL.CHIEF JUDGE

CITY CIVIL COURT: HYDERABAD

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR PLAINTIFF: FOR DEFENDANTS:

PW1: Raj Kumar Khatri DW1: K.Bhavani DW2: K. Siva Kumar

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR PLAINTIFF: FOR DEFENDANT:

PW1: Raj Kumar Khatri DW1: K. Bhavani

DOCUMENTS MARKED FOR PLAINTIFF

Ex.A1: Certified copy of invoice No. IC/140/2011-2012 dt.9-12- 2011 for Rs.65,000/-.

Ex.A2: Certified copy of invoice No. IC/156/2011-2012 dt.4-1- 2012 for Rs.1,51,000/-.

Ex.A3: Certified copy of invoice No. IC/163/2011-2012 dt.12-1- 2012 for Rs.25,400/-.

Ex.A4: Certified copy of invoice No. IC/165/2011-2012 dt.21-1- 2012 for Rs.25,400/-.

Ex.A5: Certified copy of invoice No. IC/174/2011-2012 dt.24-1- 2012 for Rs.56,500/-.

Ex.A6: Certified copy of invoice No. IC/191/2011-2012 dt.1-3- 2012 for Rs.2,36,000/-.

Ex.A7: Certified copy of invoice No. IC/195/2011-2012 dt.5-3- 2012 for Rs.61,000/-.

Ex.A8: Certified copy of invoice No. IC/201/2011-2012 dt.16-3- 2012 for Rs.18,600/-.

Ex.A9: Certified copy of invoice No. IC/022/2012-2013 dt.26-4- <<33>>

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2012 for Rs.1,68,240/-.

Ex.A10: Certified copy of invoice No. IC/025/2012-2013 dt.12-5- 2012 for Rs.94,500/-.

Ex.A11: Certified copy of invoice No. IC/040/2012-2013 dt.7-6- 2012 for Rs.76,000/-.

Ex.A12: Certified copy of invoice No. IC/065/2012-2013 dt.21-9- 2012 for Rs.30,600/-.

Ex.A13: Certified copy of invoice No. IC/078/2012-2013 dt.17- 11-2012 for Rs.30,600/- .

Ex.A14: Certified copy of invoice No. IC/092/2012-2013 dt.19- 1-2013 for Rs.87,100/- .

Ex.A15: Certified copy of invoice No. IC/110/2012-2013 dt.20- 3-2013 for Rs.41,000/- .

Ex.A16: Certified copy of invoice No. IC/020/2013-2014 dt.30- 4-2013 for Rs.80,750/- .

Ex.A17: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A1.

Ex.A18: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A2.

Ex.A19: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A3.

Ex.A20: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A4.

Ex.A21: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A5.

Ex.A22: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A6. Ex.A23: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A7.

Ex.A24: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A8.

Ex.A25: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A9.

<<34>>

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Ex.A26: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A10.

Ex.A27: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A11.

Ex.A28: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A12.

Ex.A29: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A13.

Ex.A30: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A14.

Ex.A31: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A15.

Ex.A32: Certified copy of way bill issued by Commercial Tax Department, Government of A.P relating to Ex.A16.

Ex.A33: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A1 invoice.

Ex.A34: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A2 invoice.

Ex.A35: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A3 invoice.

Ex.A36: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A4 invoice.

Ex.A37: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A5 invoice.

Ex.A38: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A6 invoice.

Ex.A39: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A7 invoice.

<<35>>

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Ex.A40: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A8 invoice.

Ex.A41: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A9 invoice.

Ex.A42: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A10 invoice.

Ex.A43: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A11 invoice.

Ex.A44: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A12 invoice.

Ex.A45: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A13 invoice.

Ex.A46: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A14 invoice.

Ex.A47: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A15 invoice.

Ex.A48: Certified copy of carbon copy of lorry receipt issued by Sri Sai Durga Lorry Service, Osmangunj, Hyderabad, relating to Ex.A16 invoice.

Ex.A49: Certified copy of letter dt. 18-7-2014 addressed to the commercial Tax Officer, Osmangunj Circle, Charminar Division, Hyderabad.

Ex.A50: Certified copy of certificate dt. 18-7-2014 issued by Deputy Commercial Tax Officer, Osmangunj Circle, Charminar Division, Hyderabad.

Ex.A51: Certified coy of cheque No.657305 dt. 20-7-2013 for Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch, Nellore, A.P.issued by the defendant in favour of the plaintiff.

<<36>>

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Ex.A52: Certified copy of return memo dt.22-7-2013 issued by the Karur Vysya Bank Limited, Himayatnagar, Hyderabad, showing the reason as ' funds insufficient'.

Ex.A53: Certified copy of cheque No.657306 dt. 20-7-2013 for Rs.6,25,000/- drawn on Andhra Bank, Mulapet Branch, Nellore, A.P issued by the defendant in favour of the plaintiff.

Ex.A54: Certified copy of return memo dt. 22-7-2013 issued by the Karur Vysya Bank Limited, Himayatnagar, Hyderabad, showing the reason as 'funds insufficient'.

Ex.A55: Office copy of legal notice dt. 29-7-2013 got issued by the plaintiff to the defendant demanding for payment of outstanding due.

Ex.A56: Postal receipt dt. 30-7-2013.

Ex.A57: Postal acknowledgment dt.1-8-2013 of the defendant.

Ex.A58: Certified copy of reply notice dt. 12-8-2013 got issued by the defendant through its advocate.

Ex.A59: Certified copy of postal cover of the list of documents of Ex.A58.

Ex.A60: Certified copy of true extract of statement of account of the transaction.

Ex.A61: Certified copy of plaintiff firm registration certificate dt.19-10-2006 with Form-A.

Ex.A62: Certified copy of the original deed of partnership dt.7-3-2005 of the plaintiff firm.

Ex.A63: Cheque bearing No.072258 dt.8-2-2012 for Rs.80,000/-.

Ex.A64: Cheque bearing No.238801 dt.26-4-2012 for Rs.50,000/-.

DOCUMENTS MARKED FOR DEFENDANTS

-NIL-

Sd/ Sri. N. Jaya Raj

XXIV ADDL.CHIEF JUDGE

<<37>>

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Page No.1MVOP 1800/14

BEFORE THE MOTOR ACCIDENT CLAIMS TRIBUNAL: CUM:

XXIV ADDITIONAL CHIEF JUDGE: CITY CIVIL COURTS: AT

HYDERABAD.

WEDNESDAY, this the 12 th day of April, 2017.

PRESENT: SRI N. JAYA RAJ,

XXIV ADDL.CHIEF JUDGE

M.V.O.P.No. 1800/2014..

Between:- 1- V. Ponnamma w/o late V. Appa Rao,45 years, 2- V. Naresh Rao @ Naresh V. Appa Rao,24 years, 3- V. Priyanka d/o V. Appa Rao,, 19 years,

...PETITIONERS

And

1- N. Anantha Reddy s/o N. Papi Reddy, 2- Bajaj Allianz Genl. Insurance Co.Ltd., rep. By it’s Manager.

...RESPONDENTS

This petition coming on for final disposal before me in the presence of Sri U. Praveen Kumar , Advocate for petitioners and of Sri B. Papaa Reddy, Advocate for respondent No.2 and the respondent No.1 having called absent and set exparte and the matter having stood over for consideration till this day, this Tribunal made the following:- : O R D E R :

This petition is filed by the petitioners under Sec. 166 of M.V.Act ,1989 claiming a compensation of Rs.10,00,000/- together with interest and costs for the death of deceased V. Appa Rao in a motor vehicle accident.

2-The case of the petitioners, in brief, is as follows:--

On 25-06-2014 at about 1.00 hours, the deceased along with his worker returning home after completion of catering work from Falaknuma

Contd.....

Page No.2MVOP 1800/14 towards Karmanghat on XL Super Vehicle bearing No.AP29 A 4571 and when they reached in front of Vikash High School, one driver of DCM bearing

No.AP 04 U 5672 came with high speed in a rash and negligent manner and gave dash to the motor cycle of the deceased, as a result, the deceased along with pillion rider fell down. That the deceased fell underneath the DCM van’s tires and sustained bleeding injuries and died on the spot. That the deceased was immediately shifted to Osmania General Hospital where the Doctors conducted postmortem examination and handed over the dead body of the deceased to the petitioners to perform the final rites. That the Police

Chandrayangutta registered a case in Cr.No. 166/2014 U/sec. 304-A IPC against the driver of the DCM bearing No.AP 04 U 5672 . That the accident occurred only due to the rash and negligent driving of the Driver of the

DMC . That the deceased was aged 48 years at the time of accident and used to earn Rs.15,000/- per month as professional Cook and on catering business.

That the deceased used to take the orders for all types of functions and serve better and used to get double the income depending on the high catering orders also. That due to the death of the deceased, the petitioners lost their love and affection, apart from the future earnings. That the first petitioner , wife of the deceased and the 2nd petitioner , the son and the 3rd petitioner, unmarried daughter of the deceased are the legal heirs and dependants of the deceased. That the respondent No.1 is the owner of the DCM bearing No.AP 04 U 5672 and the 2nd respondent is the insurer of the crime vehicle. That the respondents l and 2 are jointly and severally liable to pay compensation to the petitioners for a sum of Rs.10,00,000/- with costs and interest.

Contd.....

Page No.3MVOP 1800/14 3-The respondent No.1 remained exparte.

4-Counter filed on behalf of the 2nd respondent denying the material allegations made in the petition. The respondent No.2 contended that the driver of DCM bearing No.AP 04 U 5672 was not holding a valid and effective driving license at the time of accident and that he as not qualified for holding or obtaining such driver license and that he has not satisfied the requirements of the Rule-3 of Central Motor Vehicles Rules, 1989. That the respondent No.1 willfully handed over the possession of the ensured vehicle to the said driver knowing that he was not having valid driving license and therefore, has contravened the proviso of the Motor Vehicle Act and the Rules framed thereunder and has committed the breach of the terms and conditions of the Policy. That the respondent No.1 is alone liable to pay the compensation to the claim petitioners and the 2nd respondent is not liable to pay any compensation to the claim petitioners. That as per Sec. 134(1) of the

Motor Vehicle Act, 1988 it is mandatory duty of the insured/respondent No.1 herein to furnish the particulars of the policy, date, time and place of accident, particulars of deceased and the name of the driver and particulars of the driving license but the insured/respondent No.1 herein has not complied the statutory demand. That as per Sec. 158(6) of M.V. Act, 1988 it is mandatory duty of concerned Police to forward all the relevant documents to the concerned insurer within 30 days form the date of information but the

Chanbdrayangutta Police failed to forward the documents and they have not complied with the statutory demand. The petitioners claimed interest @ 18% per annum which is highly excessive and the same is contrary to Sec. 3 of

Contd.....

Page No.4MVOP 1800/14

Interest Act, 1978 and the observations of the various Judgments of the

Hon’ble Apex Court. That the petitioners are not entitled to any claim , any

interest on non pecuniary damages as per the observations of the judgments of the Hon’ble Apex Court. The respondent No.2 denied the allegations regarding the manner in which the alleged accident said to have occurred and the age of the deceased at the time of occurrence and the deceased earning a sum of Rs.15,000/.- per month as a professional cook and catering business.

5-Respondent No.2 further submitted that the accident occurred only due to the negligence of rider of XL Super Vehicle bearing No.AP29 A 4571 who without observing or following the traffic rules or without taking minimum precautionary measures ride the vehicle in the middle of the road and caused accident. That the amount of Rs.10,00,000/- with costs and interests claimed by the petitioners is excessive, exorbitant and exaggerated and the petitioner are not entitled for the same and prayed to dismiss the petition with costs against the respondent No.2.

6-Basing on the above pleadings, the following issues are settled for consideration:-- 1-Whether the accident took place due to rash and negligent driving of the DCM bearing No. AP 04 U 5672 causing death of the deceased?

2-Whether the petitioners are entitled for compensation. If so, to what extent and from whom?

3-To what relief?

7- On behalf of the petitioners, Pws. 1 and 2 are examined and Exs.Al to

Contd.....

Page No.5MVOP 1800/14

A5 are marked. On behalf of 2nd respondent, RWs.l to 4 are examined and

Exs.Bl to B10 are marked.

8-ISSUE No.1:-- The learned counsel for the petitioner with regard to this issue argued that on 25-6-2014 at about 1.00 hours the deceased along his worker returning home after completion of catering at one function from Falaknuma towards

Karmanghat on XL Super Vehicle bearing No.AP29 A 4571 and that when they reached in front of Vikas School, the driver of the DCM bearing No.AP 04 U 5672 drove the same in high speed in a rash and negligent manner and gave dash to the vehicle of the deceased, as a result, the deceased fell underneath the DCM van tires and sustained bleeding injury and died on the spot. That the accident occurred due to rash and negligent driving on the part of the driver of the offending vehicle. That there is no negligence on the part of the deceased.

9-That on behalf of the petitioners, the eye witness to the occurrence

PW2 is examined, apart from examining PW1. That the evidence of PW2 coupled with Exs.Al to A5 are sufficient to prove that there is rash and negligent driving on the part of the driver of the offending vehicle.

10-The learned counsel for the respondent No.2 argued with regard to this issue that the 2nd respondent in it’s counter denied the manner in which the accident lodged to have been taken place. That the accident occurred only due to the negligence of the rider of XL Super Vehicle bearing No.AP29 A 4571 who, without observing/following the traffic rules and without taking minimum precautionary measures, rode the vehicle on the middle of the road

Contd.....

Page No.6MVOP 1800/14 and caused the accident.

11-PW1 in her affidavit in lieu of chief examination reiterated the averments of the petition. She further deposed that Ex.A1 is the certified copy of the FIR with complaint, Ex.A2 is the certified copy of the charge sheet,

Ex.A3 is the certified copy of the inquest report, Ex.A4 is the certified copy of the Postmortem report and Ex.A5 is the certified copy of the Motor

Vehicle Inspector’s report.

12-PW2 deposed that on 25-6-2014 at about 1.00 hours he along with his master Cook V. Appa Rao were returning home i.e., towards Karmanghat on

XL Super Vehicle bearing No.AP29 A 4571 on the way and when they reached in front of Vikas High School , one driver of the DCM bearing No.AP 04 U 5672 drove the vehicle with high speed in a rash and negligent manner and dashed to their vehicle, as a result of which the rider and he fell down on the road and the rider fell down underneath the DCM tire and the said DCM passed on the hed of the deceased and he died on the spot. That the deceased was shifted to Osmania General Hospital for PME. That the accident occurred only due to the rash and negligent driving of the driver of the DCM.

That he lodged a complaint to the Police and he was examined by the Police.

13-PW1 in her cross examination denied that her deceased husband does not know the driving skills and that the driver without observing and following traffic rules and without taking minimum precautions to drove the vehicle drove the vehicle in the middle of the road and caused the accident.

Contd.....

Page No.7MVOP 1800/14 14-PW2 in his cross examination on behalf of 2nd respondent denied that at the time of accident, the deceased was driving the vehicle in the middle of the road without observing traffic rules in a high speed. He also denied that as he was a pillion rider on the date of accident, he could not noticed which vehicle dashed into their vehicle and that the accident occurred due to the negligence of the deceased who drove the vehicle in the middle of the road without observing and following rules and caused the accident.

15-Ex.A1 reveals that a case is registered in Cr.No.166/2014 for the offence U/s.304-A, 337 IPC against the driver of DCM bearing No.AP 04 U 5672 . According to Ex.A2, the investigation reveals that on 25-6-2014 at 1.00 hours, the deceased and M. Venkatesh PW2 were returning from Falaknuma on XL Super Vehicle bearing No.AP29 A 4571 after completing the catering work and when they reached opposite to Vikas High School,

Chandrayangutta , in the meantime the DCM bearing No.AP 04 U 5672 driving by it’s driver in a rash and negligent manner with high speed in the same direction and dashed to the XL super two wheeler due to which both of them fell down on the road and the DCM tires passed on the head of the deceased and the head of the deceased crushed underneath the vehicle and the deceased died on the spot and that PW2 also received blood clot injuries.

That the evidence on record will establish that the driver of the DCM bearing

No.AP 04 U 5672 has committed an offence punishable U/s.304-A, 337 IPC.

16-According to Ex.A3 inquest panchanama conducted over the dead body of the deceased on 25-6-2014 at 10.00 hours at Osmania General Hospital.

Contd.....

Page No.8MVOP 1800/14

Ex.A4 reveals the cause of death of the deceased is due to multiple injuries.

According to Ex.A5 the accident occurred not due to any mechanical effects of the crime vehicle.

17-The evidence of PW2 coupled with Exs.Al to A5 are sufficient to say that the petitioners established the rash and negligent driving on the part of the driver of the crime vehicle and causing death of the deceased. The issue

No.1 is answered accordingly.

18-ISSUE No.2:-- The learned counsel for the petitioner with regard to this issue argued that the deceased was 48 years old at the time of occurrence and he was hale and healthy and he was a professional cook, doing catering business and getting monthly income of Rs.15,000/- and was contributing the same to the members of his family. The deceased used to take all types of functional orders and used to get double income, depending upon the high catering orders also. That due to the death of the deceased, the 1st petitioner being his wife became widow, that the petitioners 2 and 3 lost love and affection of the deceased. The petitioners, apart from love and affection lost the future earnings due to the death of the deceased.

19-The learned counsel for the respondent No.2 argued that the driver of offending vehicle not holding valid and effective driving license at the time of accident. That the respondent No.1 being the owner of the offending vehicle willfully handed over the possession of the insured vehicle to the said driver, knowing that he was not having valid driving license and thereby, contravened

Contd.....

Page No.9MVOP 1800/14 the provisions of the Motor Vehicle Act and Rules and committed breach of the terms and conditions of the policy. That the respondent No.1 alone is liable to pay any compensation to the claimants. That as per Sec. 134(C) of the M.V.Act, the respondent No.1 insured has to furnish the particulars of the policy, date, time and place of accident, particulars of deceased and name of the driver and particulars of the driving license. That as per sec. 158(6) of the

Motor Vehicle Act, it is mandatory duty of the concerned Police to forward all the relevant documents to the concerned insurer within 30 days from the date of the information but the Police Chandrayangutta failed to forward the documents and not complied with the statutory demand. That the petitioner failed to establish that the offending vehicle was involved in the accident and the said vehicle is being run without any breach of permit, fitness and traffic rules as per Motor Vehicle Rules. The petitioners failed to establish the sage, profession and income of the deceased by adducing any documentary evidence. That the petitioners also failed to establish that they are legal heirs of the deceased by producing any documentary evidence.

20-PW1 deposed that her deceased husband was aged 48 years at the time of accident. That the deceased was hale and healthy and used to earn

Rs.15,000/- p.m., by doing catering business as he was a professional cook since child hood by taking all types of functional orders etc., That if the deceased would have been alive, he used to earn double the amount and look after them. That they are suffering with mental agony and financial problem after the death of her husband and he was the only earning member in their family and they are all dependants on his earnings. That they lost his entire

Contd.....

Page No.10MVOP 1800/14 future earnings, apart from love and affection. That the respondent No.1, being the owner of the offending vehicle and respondent No.2, being the insurer of the offending vehicle, both are jointly and severally liable to pay compensation to them. That they are claiming an amount of Rs.10,00,000/- with interest and costs.

21-As against the above evidence , RW1 deposed that the 2nd respondent has issued a policy bearing NO. OG-14-1801-1831-00000790 for DCM bearing No.AP 04 U 5672 . That the policy is valid from 9-7-2013 to 8-7-2014 and was enforce as on the date of accident i.e., 26-6-2014 subject to terms and conditions etc., exceptions, limitations and liability of the policy. That the respondent No.1 owner allowed the driver of DCM bearing No.AP 04 U 5672 to drove the said vehicle without having the valid driving license which is violation of the policy issued by the respondent and also violation of Motor

Vehicle act and Rules. That as per the registration certificate of the DCM bearing No.AP 04 U 5672, it is registered as goods carriage (Medium Motor

Vehicle) but as per driving license extract issued by Addl. Licensing Authority,

RTA Hyderabad, South Zone, the driver was authorised to drive only light motor vehicle, non transport and motor transport vehicle only, as such, the driver was not having valid driving license to drive the vehicle and it is violation of the policy issued by the 2nd respondent and also violation of Motor

Vehicle Act and Rules. That as per the family enrollment certificate of the deceased, age of the deceased comes to 65 years as on the date of alleged accident. That as per Sec. 158(6) it is mandatory duty of the insured , the respondent No.1 herein to furnish particulars of policy, date, time and place of

Contd.....

Page No.11MVOP 1800/14 accident , particulars of injured and the name of the driver of DCM bearing

No.AP 04 U 5672 and particulars of driving license but the insured respondent No.1 herein has not complied with the statutory demand . That

Ex.B1 is the true copy of policy along with terms and conditions, dt.8-7-2013,

Ex.B2 is the notice sent to the respondent No.1 for production of vehicle documents including the driving license of the driver with postal receipt, dt.24-11-2014, Ex.B3 is the acknowledgment for the notice, Ex.B4 is the driving license abstract issued by Addl. Licensing Authority, RTA Hyderabad,

East Zone,dt.22-12-2014.

22-RW2 deposed that he is working as Junior Assistant in RTA

Ibrahimpatnam since nine months. Ex.B5 is the authorisation letter, dt.6-6- 2016 issued to him by RTA, Ibrahimpatnam, Rana Reddy District. That

Ex.B6 is the attested copy of RC extract of vehicle DCM bearing No.AP 04 U 5672 That the said vehicle is registered as transport goods carriage MMV.

Ex.B7 is the attested copy of F.C., history of the above said vehicle. That the driver of the said vehicle should possess transport license to drive the same along with batch number.

23-RW3 deposed that he is authorised by the Commissioner of Civil

Supplies under Ex.B8. That they are unable to produce UID enrollment receipt No.2151501400A0298, dt.15-6-2011 as the said information is with

MSP, UIDAI, My Home Hub, Hitech City, Hyderabad. That Ex.B8 is the letter issued by the Commissioner of Civil Supplies, dt.14-12-2016.

Contd.....

Page No.12MVOP 1800/14 24-RW4 deposed that he is working as Assistant Section Officer, Unique

Identification Authority of India at Regional office, Hyderabad from 2013.

That the Assistant Director General, Unique Identification Authority of India authorised him to give evidence in this matter. That Ex.B10 is the said authorisation. Ex.B11 is the enrollment details of V. Appa Rao s/o V. Venkat

Rao bearing UID Enrollment No. 11901155501678, dt.15-6-2011. That the date of birth of said V. Appa Rao according to Ex.B11 is 12-5-1949. That

Ex.B11 is prepared by Unique Identification Authority of India . I am deposing as per the particulars given by the resident.

25-PW1 in her cross examination on behalf of respondent No.2 admitted that she has not filed any document to show the age of the deceased husband and herself and that she has not filed any document to show that her deceased husband was earning Rs.15,000/- p.m., by doing catering business.

She denied the suggestion that her deceased husband’s motor cycle is not having any insurance coverage at the time of accident and they lodged complaint against the driver of the DCM bearing No.AP 04 U 5672 for claiming compensation and that the DCM van falsely implicated in collusion with respondent No.1 and falsely lodged complaint against the driver of the

DCM without claiming compensation., and that the driver of the DCM is not having any valid or effective driving license at the time of accident and that the respondent No.2 is not liable to pay compensation and that the DCM van is not having fitness at the time of accident.

26-RW1 in his cross examination on behalf of the petitioners admitted that

Contd.....

Page No.13MVOP 1800/14

Ex.B1 policy was enforce as the date of accident, subject to terms and conditions and that the respondent No.2 insurance company collected third period premium in the said policy and that the 3rd party to the said policy is the deceased.

27- RW2 in his cross examination deposed that the fitness certificate of the above said offending vehicle is given for a period from 4-2-2014 to 3-2-2015.

He admitted that the said vehicle is having fitness certificate as on the date of occurrence.

28- RW4 in his cross examination on behalf of the petitioner admitted that he does not have any personal knowledge about V. Appa Rao and his enrollment. He further deposed that the DMS operators are having personal knowledge about V. Appa Rao and his enrollment. He admitted that he cannot say the name of resident who gave details mentioned in Ex.B11. He further deposed that the Aadhar Card establishes the identity of the person and his address but it is not the proof of his date of birth and that Ex.B11 is not in proof of date of birth.

29-The petitioners have not filed any documentary evidence in proof of the age of the deceased. PW1 in her evidence deposed that the deceased was 48 years old at the time of accident. Upon perusal of Ex.A3 C.C. Of inquest panchanama and Ex.A4 C.C. Of Postmortem Examination, the age of the deceased appears to be 48 years . PW1 admitted that no documentary evidence is filed to show that the deceased was aged 48 years at the time of occurrence. RW4 deposed that the Aadhar Card establishes the identify of the

Contd.....

Page No.14MVOP 1800/14 person and his addressed but it is not the proof of his date f birth. He admitted that Ex.B11 is not in proof of date of birth of the deceased.

30-Taking into consideration Exs.A3 and A4 and the oral evidence of

PW1, the age of the deceased is taken as 48 years while computing the loss of earnings. The petitioners have not produced any other ocular or documentary evidence in proof of income of the deceased except the sole testimony of

PW1. PW1 in her cross examination clearly admitted that she has not filed any documentary evidence in proof of income of the deceased. The petitioners failed to establish that the deceased was getting income of

Rs.15,000/- p.m., by adducing any other cogent and convincing, ocular or documentary evidence. Therefor,e it can be said that by doing some work , the deceased who is a able bodied person would have got a sum of Rs.4000/- p.m., as income and hence the income of the deceased is taken as Rs.4000/- p.m., Admittedly, the respondent No.l is the owner of the offending vehicle.

There is no dispute with regard to the same. There is also no dispute with regard to the fact that Ex.B1 policy was enforce as on the date of the accident.

The contention of the respondent No.2 is that the driver of the offending vehicle was not having valid driving license as on the date of the accident and that the owner of the offending vehicle , respondent No.1 gave the offending vehicle to the driver who is not having proper and valid driving license and committed breach of terms and conditions of the policy, as such, the respondent No.2 insurance company is not liable to pay the compensation. It is well settled principle of law that the burden lies on the insurance company to prove that the driver was not having valid driving license at the time of the

Contd.....

Page No.15MVOP 1800/14 occurrence.

31-In the case of National Insurance Company Limited Vs. Swaran Singh and others reported in 2003(2) ALD 36, SC wherein it is held that:-- "...Even where the insurer is able to prove the breach on the part of the insured concerning the policy condition regarding holding of a valid license by the driver or his qualification to drive during the relevant period , the insurer would not be allowed to avoid it’s liability towards the insured , unless the said breach or breaches on the condition of driving license is/are so fundamental as are found to have contributed to the cause of accident, the tribunals in interpreting the policy conditions would apply, ‘’the rule of main purpose, and the concept of ‘’fundamental breach’’ to all defense available to the insured U/sec. 149(2) of MV Act, 1988...’’ 32-The respondent No.2 in the instant case relied upon Ex.B4 driving license extract issued by Addl. Licensing Authority, RTA Hyderabad East

Zone, dt.22-12-2014. No doubt, as seen from Ex.B4 the driver of the offending vehicle possessed driving license of light motor vehicle , non transport and mother transport vehicle only. Whereas; the crime vehicle is a transport vehicle. The respondent No.2 cannot escape from it’s liability even though there is no valid driving license to the driver of the offending vehicle and thereby, the policy conditions are violated. The insurance company can recover the compensation from the owner of the offending vehicle . The insurer will not be allowed to avoid it’s liability , merely on technical breach of conditions concerning the driving license. Admittedly, the policy Ex.B1 was enforce as on the date of occurrence and that the respondent No.1 is

Contd.....

Page No.16MVOP 1800/14 owner of the offending vehicle and the respondent No.2 is the insurance company who are insurer and insured are jointly and severally liable to pay then compensation. But the respondent No.2 is entitled to recover the amount from the respondent No.1 in a ruling reported in 2004 ACJ, page No.1, it is held that:--..

".... Merely, on technical breach of conditions concerning the driving license, the insurer will not be allowed to avoid it’s liability. ..’’

In a decision reported in 2006 ACJ , page 1336 SC, it is held that:-- ‘’.... The liability is to be fastened on the owner of not taking responsible care in employing the driver possesses valid driving license and the insurance company cannot be made liable to pay the compensation. But as a special case the insurance company which paid the amount was directed to recover the amount from the owner of the offending vehicle in order to avoid second round of litigation. ..’’ 33-In the light of the above decision, it can be said that when there is no valid driving license to the driver of the offending vehicle and thereby the policy conditions are violate, it is for the insurance company to recover the compensation from the owner of the offending vehicle but it cannot be escape from it’s liability.

34-The age of the deceased is taken as 48 years. Therefore, the deceased falls in the age group of 46 to 50 years and the same shall be taken into consideration for applying the multiplier . As per the ruling of the Hon’ble

Supreme Court reported in 2009 ACJ 1298 in Sarala Verma and others Vs.

Delhi Transport corporation and another, the suitable multiplier is 13 for the

Contd.....

Page No.17MVOP 1800/14 persons age group of 46 to 50 years is to be taken into consideration. That the monthly income of the deceased is taken into consideration as Rs.4000/- at the time of accident. Therefore, it can be said that the deceased by doing some work was getting monthly income of Rs.4000/- which is equivalent to

Rs.48,000/- per annum (4000 X 12 = Rs.48,000/- ) by deducting 1/3rd towards personal expenses of the deceased , had he been alive, the dependency of the petitioners arrives at Rs.48,000/ X 2/3rd = the dependency of the petitioners arrives at Rs.32,000/- per annum i.e., (48,000/- X 2/3) and by applying the multiplier 13 applicable for the age group of 46 to 50 years, the petitioners are entitle to a sum of Rs.32,000/- X 13 = Rs.4,16,000/- The petitioners are entitled to a sum of Rs.4,16,000/- (Rs.32,000/- X 13) towards compensation for the death of the deceased in the accident. Further, the petitioners are entitled to a sum of Rs.25,000/- towards funeral expenses and further a sum of

Rs.25,000/- towards loss of state. Further, the petitioner No.1 being the wife of the deceased is entitled for a sum of Rs.1,00,000/- towards loss of consortions. The petitioners 2 and 3 who are son and daughter have lost the love and affection and moral support of their deceased father, they are entitle for a sum of Rs.1,00,000/- under the head of loss of care and guidance.

Thus, the petitioners are totally entitled for a compensation of Rs.6,66,000/- i.e., (4,16,000/- + 25,000/- + 25,000/- 1,00,000/- + 1,00,000/- = Rs.6,66,000/-) payable by the respondents l and 2 jointly and severally.

35-Considering the facts and circumstances of the instant case as the driver of the offending vehicle was not having valid driving license as on the date of

Contd.....

Page No.18MVOP 1800/14 occurrence, the pay and recoveries allowed in the present case , as there is a breach of violation of terms and conditions of the policy by the insured.

Hence, the respondents l and 2 are held to be jointly and severally liable to pay the compensation to the petitioners with liberty to the insurer/ 2nd respondent to recover the said amount from the insured respondent No.1 in the same petition. This issue is answered accordingly.

36-ISSUE No.3:--

IN THE RESULT; the petition is partly allowed with costs and an amount of Rs.6,66,000/- (Six lakhs sixty six thousand) is awarded as compensation in favour of the petitioners and against the respondents l and 2 jointly and severally with interest @ 7.5 % per annum from the date of petition till the date of deposit of the amount. The rest of the claim is dismissed without costs.

The respondent No.2 can deposit the entire awarded sum into the Court, within one month from the date of the Award and recover the same from the respondent No.1 in the same proceedings by making necessary application for execution. Out of the total compensation amount, the first petitioner is entitled to a sum of Rs.5,16,000/- The petitioners 2 and 3 are entitled to a sum of Rs.75,000/- each together with accrued interest and proportionate costs.

On deposit, the petitioner No.1 is permitted to withdraw a sum of

Rs.4,00,000/- and the balance amount shall be kept in any Nationalised Bank

Contd.....

Page No.19MVOP 1800/14 for a period of three years. The petitioners 2 and 3 are permitted to withdraw their entire share of compensation. Advocate’s fee is fixed at Rs.1000/-

Dictated to Personal Assistant, transcribed by him, corrected and

pronounced by me in the open Court, on this the 12th day of April, 2017.

Sd/-

XXIV ADDL. CHIEF JUDGE,

CITY CIVIL COURT, HYDERABAD.

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR PETITIONERS FOR RESPONDENT No.2

P.W-1: Smt.V. Poonamma, RW-1 V. Nagaraju, P.W-2: M. Venkataiah, RW-2 M. Ramesh Kumar, RW-3 K. Kashi Vishwanatham, RW-4 Sridhar.,

DOCUMENTS MARKED FOR PETITIONERS

Ex.A1 C.C.of FIR with complaint, Ex.A2 is the certified copy of the charge sheet, Ex.A3 is the certified copy of the inquest report, Ex.A4 is the certified copy of the Postmortem report and Ex.A5 is the certified copy of the Motor Vehicle Inspector’s report.

DOCUMENTS MARKED FOR RESPONDENT No.2

Ex.B1 True copy of policy along with terms and conditions, dt.8-7-2013, Ex.B2 Notice sent to respondent No.1 for production of vehicle documents Ex.B3 is the acknowledgment for the notice, Ex.B4 is the driving license abstract , Ex.B5 Authorisation letter, dt.6-6-2016 issued by RTA, Ibrahimpatnam, Ex.B6 Attested copy of RC extract of vehicle DCM No.AP 04 U 5672, Ex.B7 is the attested copy of F.C., history of the offending vehicle Ex.B8 Letter issued by the Commissioner of Civil Supplies, dt.14-12-2016. Ex.B9 Attested copy of Letter dt.14-12-2016 from Commissioner of Civil Supplies, Ex.B10 Letter, dt.8-3-2017 from Asst. Director General, Unique Identification Authority of India, Ex.B11 Enrollment details of V. Appa Rao,.

Sd/-

XXIV ADDL.CHIEF JUDGE

CITY CIVIL COURT: HYDERABAD.

Contd.....

IN THE COURT OF XXIV ADDL. CHIEF JUDGE,

CITY CIVIL COURT, HYDERABAD.

WEDNESDAY, this the 1st day of June, 2016.

PRESENT: SRI N. JAYARAJ, B.Com.,LL.B., XXIV Addl. Chief Judge,

O.S. No.388/2007.

Between:--

Mohd. Fareeduddin s/o Mohd. Raheemuddin.

..PLAINTIFF

AND

1. Smt. Qamar Banu (Died, per L.Rs.,)

2. Syed Nizamuddin,

3. Syed Shahabuddin Mahdavi,

4. Syed Nusrath Shahabuddin Mahdavi. (defendants 2 and 3 amended as per order

dated 17-6-2910 in I.A.No. 4421/10)

..DEFENDANTS

This suit coming on 28-4-2016 before me for hearing and disposal in the presence of Sri Wasim Ahmed Khan,

Advocate for the plaintiff and that of Sri B. Dhananjaya, Advocate for the defendant No.3 and that defendant No.1 died and the defendants 2 and 4 remained exparte, and the matter having stood over for consideration till this day, this Court passed the following:-- : J U D G M E N T:

1-This suit is filed U/or.7 Rule 1 CPC R/w.Sec. 26 CPC for specific performance of contract, perpetual injunction, in alternative to pay a sum of Rs.8,65,000/- together with interest @ 18% per annum from the date of receipt of the amount till realisation and to award cost.

2-The case of the plaintiff in nutshell is that the defendant contacted to sell the plain tiff the house property bearing No.16-3-551 adm., 197.5 sq. yards situated at

Page No.2OS 388/07

Chanchalguda, Hyderabad (Hereinafter called as ''Suit schedule property'') That the total sale consideration agreed to be paid in respect of the suit schedule property is Rs.21,50,000/- The plaintiff paid an amount of Rs.8,05,000/- as advance sale consideration, out of the said amount and the balance amount was agreed to be paid on or before 4-8-2007, apart from the usual covenants, such as, the vendors there are no other persons to claim title and share in the suit house etc., were also included.

That one Syed Attan Saheb Mehadavi filed a suit in OS

No.33/1991 seeking partition of various properties including the suit schedule property on the file of II Addl. Judge, City Civil

Court, Hyderabad against the husband of the defendant and others. Pending the suit the matter was settled and compromise memo was filed in to the Court, wherein the suit property was allotted to the share of the husband of the defendant. The husband of defendant under a registered gift settlement deed, dt.26-11-2004 gifted the suit property in favour of the defendant vide document No.4086/2004. That the defendant is a absolute owner agreed to sell the suit schedule property under the agreement referred supra in favour of the plaintiff. That the xerox copies of the documents referred above were furnished by the defendant to the plaintiff while entering into the suit contract.

That the plain tiff was always ready and willing to perform his part of contract. The plaintiff has been representing to the defendant through his brother and other family members to execute the sale deed by receiving the balance amount. That it

Page No.3OS 388/07 was the defendant who was been giving time. The defendant has represented that on account of misunderstanding in her family, she may be compelled to rescind the suit contract. In the said process, the defendant got issued a cheque for an amount of

Rs.8,65,000/- (which includes damages of Rs.50,000/- and

Rs.10,000/- collected by her son on her behalf) Later, the defendant has pleaded that in view of reconciliation amongst her family members, the said cheque was got dishonoured and accordingly the suit contract stood revived. That the plaintiff did not exercise the remedies available to him under the law in the above circumstances. That the plaintiff has been persuaded the defendant to execute the sale deed by receiving the balance sale consideration. The transaction could not be completed on account of the vindictive attitude adopted by the defendant.

3-It is further contended that on account of the defendant's failure to convey the suit schedule property as agreed, the plaintiff caused a legal notice, dt.28-6-2007 requesting the defendant to convey the suit schedule property in favour of the plain tiff in compliance to the suit contract. The said legal notice was served on the defendant, yet the defendant not chosen to cause the reply or convey the suit schedule property. That in view of escalation of prices, the defendant is contemplating to create third party interest over the suit schedule property. In the said design, the family members of the plaintiff found the defendant negotiating with a middle man for marking the suit schedule property on 7-7-2007. that after return

Page No.4OS 388/07 of the cheque and in view of the defendant acceptance to convey the suit schedule property in compliance to suit contract, the plaintiff caused a public notice in Siasat Urdu daily on 20-5- 2007 requiring the objections from the general public. The defendant and her family members are aware of the same. That all the above clearly indicate the attitude of the defendant and their attempts to rescind from the contract. The defendant having received with the substantial part of sale consideration, is under obligation to honour the suit contract. In the present , the plain tiff is left with no other alternative except to file the present suit for specific performance and injunction and prayed to direct the defendant to execute a sale deed in respect of the suit schedule property in case the defendant's failure the Court may execute the sale deed in respect of the suit schedule property in favour of the plain tiff. In alternative, if the Court feels that the plaintiff is not entitled for specific performance, the defendant be directed to pay to plaintiff a sum of Rs.8,65,000/- together with interest @ 18% per annum from the date of receipt of the amount till it's realisation and to grant perpetual injunction in favour of the plaintiff and against the defendant restraining the defendant, her agents, servants, nominees or any other person claiming through and acting under her from alienating the suit schedule property by way of creating third party interest ,either by way of sale, lease, mortgage or otherwise in any manner whatsoever and to award cost.

4-During the pendency of the suit, after filing the written

Page No.5OS 388/07 statement, the defendant No.1 died. The contents of the written statement filed by the defendant No.1 are that she is not agreed to sell the suit schedule property to anybody, much less, to the plaintiff and that she has not entered into an agreement of sale with the plaintiff on 4-8-2006. That the alleged agreement of sale is fabricated one and brought into existence for the purpose of the suit. In view of the same, the question of defendant receiving advance sale consideration of Rs.8,05,000/- and agreed to receive the balance sale consideration on or before 4- 7-2007 does not arise. That the defendant does not know the plaintiff . That the defendant has not entered into agreement with the plaintiff consequently the question of plaintiff being ready and willing to perform his part of contract and that the defendant is not in a position to execute the sale deed due to misunderstanding with the family members does not arise. The plaintiff has not come to the Court with clean hands and the relief of specific performance being equitable relief cannot be granted to him. That the defendant has not issued any cheque, as such, the question of getting the cheque dishonoured as there was reconciliation, does not arise. That the defendant has not received any notice from the plaintiff, much less, the notice, dt.20-6-2007. That neither the defendant nor her neighbours ever contemplated to sell the suit schedule property to any third parties. That the plaintiff has not given the name of the middle man nor has given the details of as to how he got the alleged information. That the defendant No.1 is not aware of any paper

Page No.6OS 388/07 publication said to have been published by the plaintiff . That the defendant No.1 has not executed any agreement with the plaintiff , as such, the question of defendant avoiding to execute the sale deed does not arise. That no cause of action arose for filing the present suit. The plaintiff is not entitled to any relief against the defendants.

5-The defendant in the alternative submits that presuming without admitting the alleged fact of execution of agreement of sale that the defendant is illiterate and does not know the contents of the alleged agreement of sale. That the defendant No.1 has not seen the plaintiff, and as such, the defendant No.1 executing the agreement of sale and receiving sale consideration from the plaintiff and thereafter issuing the cheque for the said sum does not arise. That on perusal of clause

Nos.7 and 8 of the agreement of sale goes to show that in case of non executing the sale deed within the stipulated time of one year, the defaulting party shall pay a sum of Rs.50,000/- Thus, even presuming the agreement of sale is validly executed by the defendant, the plaintiff is entitled to get Rs.50,000/- towards damages, apart from the alleged advance sale consideration alleged to have been paid by him. That presuming without admitting the alleged execution of agreement of sale and also issuance of cheque by the defendant to the plaintiff, it is manifestly clear from the said fact that the issuance of cheque and acceptance thereof amounts to cancellation of agreement of sale by mutual consent, as such, the plaintiff has left only to

Page No.7OS 388/07 recover the amount mentioned in the cheque from the person who has issued the cheque. That the suit for specific performance is not maintainable and the same is liable to be dismissed. That the plaintiff has not come to the Court with clean hands and has put forth a false case, in as much as, defendant has not issued any cheque to the plaintiff or to her son. Thus, the said allegation is made falsely , consequently the plaintiff is not entitled to equitable relief and prayed to dismiss the suit.

6-Defendants 2 and 4 remained exparte.

7-Defendant No.3 in his written statement stated that the written statement of deceased defendant No.1 is adopted and the same may be made part of the record. He further submitted that a perusal of para No.4 lof the plaint, it is manifestly clear that the plaintiff having accepted the cheque alleged to have been issued by the deceased defendant No.1, the plaintiff has consented for cancellation of the suit agreement and the said agreement is mutually cancelled by the parties to the alleged agreement. Thus, there is no subsisting agreement after issuance and acceptance of the same, as such, the suit based upon the cancelled agreement is not maintainable and the same is liable to be dismissed. That the only remedy available for the plaintiff is to seek appropriate relief as against the said cheque and that he cannot seek enforcement of the agreement which is, as stated above was mutually cancelled. The defendant No.3 denied the allegations of para No.4 of the plaint. though the defendant has informed the family members for reconciled and

Page No.8OS 388/07 that the agreement is revived. That the plaintiff has not stated as to when the defendant has informed the same and no dates have been mentioned in the plaint in that regard which itself goes to show that the said allegation as vague and incorrect and the same is made for the purpose of the suit and prayed to dismiss the suit.

8-Basing on the above pleadings, the following issues are settled for consideration:-- 1-Whether the suit agreement of sale is true, valid and binding on the defendants? 2-Whether the plaintiff is entitled for specific performance as prayed for? 3-To what relief?

9-On behalf of the plaintiff , PW1 is examined and Exs.Al to A11 are marked. On behalf of defendant No.3, DW1 is examined no documents are marked on behalf of defendant

No.3.

10-Heard both sides.

11-ISSUES 1 & 2:--

The counsel for the plaintiff argued that the deceased defendant No.1 entered into an agreement of sale with the plaintiff pertaining to the suit schedule property on 4-8-2006 and received advance sale consideration of Rs.8,05,000/- out of the total sale consideration of Rs.21,50,000/- He further argued that one Syed Attan Saheb Mehdavi filed a suit in OS No.33/1991 seeking partition of various properties including the suit schedule property on the file of II Addl. Civil Judge, City Civil

Court, Hyderabad against the husband of the deceased

Page No.9OS 388/07 defendant No.1 and others and during the pendency of the said suit, the matter was settled and compromise memo filed in the

Court wherein the suit property was allotted to the share of the husband of the deceased defendant No.1. That the husband of deceased defendant No.1 under a registered gift settlement deed, dt.26-11-2004 gifted the suit schedule property in favour of the deceased defendant No.1 vide document No.4086/2004.

That the deceased defendant No.1, being an absolute owner agreed to sell the suit schedule property under agreement of sale, dt.4-8-2006 in favour of the plaintiff. That the plaintiff was always ready and willing to perform his part of contract. That the plaintiff represented to the deceased defendant No.1 through his brothers and other family members to execute the sale deed by receiving the balance sale consideration. That the deceased defendant No.1 gained time and represented that on account of misunderstanding in her family, she may be compelled to rescind the suit contract and in that process, the deceased defendant

No.1 got issued a cheque for Rs.8,65,000/- including damages of

Rs.50,000/-, and Rs.10,000/- collected by her son on her behalf.

Later, the deceased defendant No.1 pleaded that in view of reconciliation amongst her family members, the said cheque was got dishonoured and accordingly the suit contract revived. That the plaintiff persuaded the deceased defendant No.1 to execute the sale deed by receiving balance sale consideration and the transaction could not be completed on account of vindictive attitude adopted by the deceased defendant No.1. That the

Page No.10OS 388/07 plaintiff got issued a legal notice, dt.28-6-2007 requiring the deceased defendant No.1 to convey the suit schedule property in favour of the plaintiff in compliance of the suit contract. The deceased defendant No.1 has not chosen to give reply or convey the suit schedule property. That in view of the escalation of prices, the deceased defendant No.1 contemplated to create third party interest over the suit schedule property and the plaintiff found the deceased defendant No.1 negotiating with the middle man for marketing the suit schedule property on 7-7-2007. That the plaintiff caused public notice in Urdu daily Siasat on 20-5- 2007 requiring objections from the general public and the family members of the deceased defendant No.1 are aware of the same. That the deceased defendant No.1 during pendency of the suit died and her legal representatives i.e., defendants 2 to 4 are brought on record as per orders in IA No.4421/2009, dt.17-6- 2010. That during the pendency of the suit, defendant No.2 also died on 5-3-2011 and a Memo filed on behalf of plaintiff stating that defendants 3 and 4 who are already on record are the legal representatives of defendant No.2. That in the present case, defendants 2 and 4 remained exparte.

12-That on behalf of plaintiff, PW1 is examined and Exs.Al to A11 are got marked. On behalf of defendant No.3, DW1 is examined and no documents are marked.

13-The contention of the defendant No.3 is that the deceased defendant No.1 according to the plaintiff consented for cancellation of the suit agreement and the said agreement is

Page No.11OS 388/07 mutually cancelled by the parties to the alleged agreement of sale. Therefore, there is no subsisting agreement after issuance and acceptance of the alleged cheque given by the deceased defendant No.1. That the only remedy available to the plaintiff is to seek appropriate relief as against the said alleged cheque and the plaintiff can not seek enforcement of the agreement which is said to have been mutually cancelled. The plaintiff has not stated as to when the deceased defendant No.1 has informed that her family members have reconciled and the agreement revived.

14-PW1 in his affidavit in lieu of chief examination reiterated the averments mentioned in the plaint. He further deposed that Ex.A1 is the original agreement of sale executed by the deceased defendant No.1 in favour of the plaintiff, dt.4-8- 2006. Ex.A2 is the original cheque bearing No.211101, dt.5-4- 2007, Ex.A3 is the original cheque return memo issued by Bank of Baroda, dt.7-4-2007, Ex.A4 is the office copy of legal notice issued by plaintiff, dt.28-6-2007, Ex.A5 is the original postal receipt, dt.28-6-2007, Ex.A6 is the receipt of ''Under Certificate of

Posting'', Ex.A7 is the General Power of Attorney, dt.2-8-2010,

Ex.A8 is the marked value certificate. In his cross examination on behalf of defendant No.3, PW1 admitted that Ex.A9 is the earlier

GPA in favour of Mohd. Asadullah, dt.23-6-2007 on confrontation by the counsel for the defendant, Ex.A10 is the Gift Settlement

Deed, and Ex.A11 is the Reconveyance of Mortgage Deed between Sanmukh Chand Jain and Qamer Banu. He denied the

Page No.12OS 388/07 suggestion that he is not authorised to negotiate under agreement of sale on behalf of plaintiff as per Ex.A9 and as well as Ex.A7 GPA, dt.2-8-2007. He further deposed that there is no other GPA except Ex.A7 in his favour. He further deposed that the GPA late Asadullah signed in the plaint. PW1 further deposed that the deceased defendant No.1 issued a cheque for

Rs.8,65,000/- in his favour after seven months of execution of

Ex.A1. That he does not have any receipt for payment of

Rs.8,05,000/-to deceased defendant No.1 and that he is having receipt for payment of Rs.10,000/-. He does not know whether he filed the same before this Court. That he does not remember the exact date and month when the said amount of Rs.8,05,000/- given towards part sale consideration. He further deposed that later he gave a sum of Rs.10,000/- to the son of the deceased defendant No.1, namely, Syed Shanabuddin. PW1 admitted that the said cheque was given under Ex.A2 for cancellation of Ex.A1 agreement of sale and that the cheque was accepted by him and the same was presented in the Bank of Baroda at Chanchalguda branch and the same was dishonoured on the ground of ''Insufficient funds''. He further deposed that the said cheque is not issued by the deceased defendant No.1 and that the same is given by Shahbuddin son of deceased defendant No.1 on her behalf. He admitted that there is no contract between the said

Shahbuddin and the plaintiff and that there is no document to show that the said cheque was issued for cancellation of Ex.A1.

He denied the suggestion that as no consideration has been paid

Page No.13OS 388/07 to deceased defendant No.1, there is no question of issuing of cheque under Ex.A2 for payment of the amount to the plaintiff, does not arise and that no agreement of sale executed and the defendants are liable to execute the sale deed and that the defendants have voluntarily not executed the sale deed.

15-As against the above evidence, DW1 deposed that the deceased D1 has not entered into agreement to sell the suit schedule property to the plaintiff and that the alleged agreement of sale dt.4-8-2006 is fabricated one. That the plaintiff has not paid any amount to his mother under the said non existent agreement of sale, that his mother was uneducated , Parda nasheen lady and does not know English language. That his mother has not executed the suit agreement of sale, the question of invoking the clauses of agreement of sale does not arise. The contention that the balance amount shall be paid on or before 4- 8-2007 does not arise. Likewise, the question of alleged misunderstanding or reconciliation does not arise. That his mother has not given any cheque to the plaintiff and that they have nothing to do with the issuance of cheque by defendant

No.3 but the same is not under the alleged agreement of sale.

That neither himself nor any of the defendants have received notice alleged to have been issued by the plaintiff , dt. 20-6- 2007, that he has no knowledge of issuance of paper publication got issued by the plaintiff and that it is unilateral action of the plaintiff and that might have been issued to create documents for claiming the suit schedule property and that without considering

Page No.14OS 388/07 as per clause 8 of the agreement of sale, in case of breach of contract by either of the party, agreement stands cancelled and the parties are entitled for damages of Rs.50,000/- as the case may be. Thus, the agreement of sale is unenforceable, if any of the party to the agreement breaches the agreement and that they are entitled only for damages. That the suit as filed is not maintainable and the same is filed with an intention to harass them and to coerce them to sell the suit schedule property .

16-In his cross examination on behalf of the plaintiff , the defendant as DW1 admitted that his deceased father Syed

Nizamuddin executed the gift settlement deed, dt.26-11-2004 in favour of his mother , namely, Smt. Qamar Banu pertaining to the suit schedule property . Ex.A10 is the registered gift settlement deed , dt.26-11-2004 and that Ex.A10 bears the signature of his father and as well as his mother. DW1 on confrontation of document pertaining to reconveyance of mortgage deed (without possession, dt.5-8-2006) by the counsel for the plaintiff , DW1 admitted that the suit schedule property was mortgaged with

Sri Shanmukhchand Jain. That Ex.A11 is the reconveyance of mortgage deed without possession, dt.5-8-2006. He also admitted that under Ex.A11 the mortgage amount is

Rs.8,00,000/- He denied the suggestion that to clear of the mortgage amount under Ex.A11, they entered into an agreement of sale Ex.A1 , dt.4-8-2006 with the plaintiff . He further denied the suggestion that immediately after one day of execution of agreement of sale, Ex.A1 they cleared of the loan under Ex.A11.

Page No.15OS 388/07

DW1 denied that after execution of Ex.A1 as deceased defendant

No.1 was not in a position to execute the sale deed, his mother requested time for settlement. DW1 further deposed that as there was no agreement of sale, the question of his mother asking for time for settlement does not arise. DW1 further denied the suggestion that his smother , in view of the settlement got issued a cheque through his elder brother Syed

Shahbuddin bearing No.211101 drawn on Bank of Baroda,

Chanchalguda Branch, Hyderabad for an amount of Rs.8,65,000/-, dt.5-4-2007. He further deposed that he does not know the particulars of the account of his brother that he does not know whether he issued the above cheque or not and that he cannot say whether the signature on Ex.A2 cheque is of his brother Syed

Shahbuddin. He further deposed that he does not know whether the said cheque Ex.A2 is dishonoured due to insufficient funds.

That he does not inquire with his brother whether he has issued

Ex.A1 cheque in favour of the plaintiff. That he cannot produce his brother Syed Shansuddin as a witness on behalf of the defendant. DW1 admitted that Ex.A4 notice was received by them. He further deposed that on showing the said notice, his smother stated that she has not entered into agreement of sale with the plaintiff. He further deposed that he does not know whether his mother gave any reply to the said notice and that he does not know about the same, even after himself coming on record as legal representative of his deceased mother. He further denied the suggestion that his mother entered into an agreement

Page No.16OS 388/07 of sale Ex.A1 with the plaintiff.

17-PW1 in his cross examination on behalf of the defendant deposed that at the time of execution of Ex.A1, plaintiff was in abroad and that Ex.A1 bears his signature. He further deposed that his mother, his brother Mohd. Zailuddin and himself negotiated on behalf of plaintiff and entered into agreement of sale Ex.A1. On perusal of Ex.A1, it appears that there is no signature of vendee in Ex.A1 and the same is kept blank. The deceased defendant No.1 in her written statement contended that she has not executed Ex.A1 agreement of sale in favour of the plaintiff . The defendant No.3 adopted the written statement of deceased defendant No.1. DW1 in his cross examination on behalf of plain tiff denied the suggestion that his mother executed the agreement of sale, dt.4-8-2006 in favour of the plaintiff. He further denied the suggestion that his mother received the part of sale consideration amount as an advance of

Rs.8,05,000/- under Ex.A1. Admittedly, the father of DW1 executed the gift settlement deed in favour of his mother with regard to the suit schedule property. DW1 denied the suggestion that to clear of mortgage amount under Ex.A11 they entered into an agreement of sale, dt.4-8-2006 with the plaintiff and that immediately after one day of execution of agreement of sale, they cleared off the loan under Ex.A11 and that after execution of

Ex.A1 as the deceased defendant No.1 was not in a position to execute the sale deed, his mother requested time for settlement.

DW1 further deposed that as there was no agreement of sale, the

Page No.17OS 388/07 question of his mother asking time for settlement does not arise.

He also denied that his mother, in view of settlement got issued a cheque through his elder brother Syed Shahbuddin bearing

No.211101 drawn on Bank of Baroda for an amount of

Rs.8,65,000/-, dt.5-4-2007. The contention of the defendant No.3 is that according to para No.4 of the plaint, it is clearly mentiond that the plaintiff having accepted the cheque alleged to have been issued by the deceased defendant No.1, the plaintiff has consented for cancellation of the suit agreement and the said agreement is mutually cancelled by the parties to the alleged agreement. The main contention of the defendant No.3 is that when there is no subsisting agreement after issuance and acceptance of the said cheque, the suit based upon the cancelled agreement, is not maintainable and the same is liable to be dismissed. According to clause No.7 of Ex.A1 agreement of sale, if the vendor fails to perform her part of contract of execution and registration of sale deed by receiving the balance sale consideration within stipulated time, she shall return the amount received and shall also pay forthwith an amount of Rs.50,000/- to the vendee as damages. According to clause No.8 that if the vendee fails to perform his part of contract of payment of balance sale consideration within the stipulated time, the vendor shall forfeit the amount of Rs.50,000/- and shall refund the amount of Rs.7,55,000/- to the vendee and in both the events of clauses 7 and 8, the agreement shall stand cancelled automatically. Apparently, there is no signature of vendee in

Page No.18OS 388/07

Ex.A1. Moreover, the plaintiff has not produced any other witness whose names are mentioned as witnesses in Ex.A1, to establish that PW1, his father, his brother Mohd. Zailuddin negotiated on behalf of plaintiff. The plaintiff has not produced any other cogent and convincing ocular and documentary evidence to show that himself and the deceased defendant No.1 entered into agreement of sale Ex.A1. The plaintiff has not proved that there is a privity of contract between himself and the deceased defendant No.1 and on perusal of Ex.A1, it shows that there is no signature of vendee anywhere in the entire document, as such, it cannot be said that the terms and conditions as detailed in Ex.A1 are binding on both the parties, and as such, the plaintiff cannot enforce the agreement of sale on the defendants. In view of the reasons mentioned above, the plaintiff failed to prove the execution of Ex.A1 by the deceased defendant No.1 in favour of plaintiff . Therefore, it can be said that the suit agreement of sale is not true, valid and binding on the defendants and the plaintiff is not entitled for specific performance as prayed for. These issues are answered accordingly.

18-ISSUE No.3:-- to what relief?

In view of the findings given in issues l and 2, the suit is not maintainable and the same is deserves to be dismissed.

19.IN THE RESULT; the suit is dismissed, but no costs.

Dictated to Personal Assistant, transcribed by him,

corrected and pronounced by me in the open Court on this the 1st

Page No.19OS 388/07 day of June, 2016.

XXIV Addl. Chief Judge, City Civil Court, Hyderabad.

APPENDIX OF EVIDENCE

Witnesses examined on behalf of

PLAINTIFF DEFENDANTS

PW1 Mohd. Kareemuddin. DW1 Syed Nusrath

Documents marked on behalf of plaintiff

Ex.A1 is the original agreement of sale executed by the deceased defendant No.1 in favour of the plaintiff , dt.4-8-2006. Ex.A2 is the original cheque bearing No.211101, dt.5-4-2007, Ex.A3 is the original cheque return memo issued by Bank of Baroda, dt.7-4-2007, Ex.A4 is the office copy of legal notice issued by plaintiff, dt.28-6- 2007, Ex.A5 is the original postal receipt , dt.28-6-2007, Ex.A6 is the receipt of ''Under Certificate of Posting'', Ex.A7 is the General Power of Attorney, dt.2-8-2010, Ex.A8 is the marked value certificate. Ex.A9 is the earlier GPA in favour of Mohd. Asadullah, dt.23-6- 2007 Ex.A10 is the Gift Settlement Deed, Ex.A11 is the Reconveyance of Mortgage Deed between Sanmukh Chand Jain and Qamer Banu.

Documents marked on behalf of the defendant -Nil-

XXIV Addl. Chief Judge, City Civil Court, Hyderabad.

IN THE COURT OF XXV ADDITIONAL CHIEF JUDGE CITY CIVIL COURT: AT

HYDERABAD

MONDAY, THE 31ST DAY OF OCTOBER, 2016

PRESENT: SRI P.KASI VISWESWARA RAO,

XXV ADDITIONAL CHIEF JUDGE

Appeal Suit No.187 of 2012

Between:-

K.Vijayakumar S/o K.Raghaveswara Rao, aged 62 years, Occ: Business, R/o 007, Phase II, Amrit Apartments, Somajiguda, Hyderabad ….Appellant/Plaintiff AND

1. Ch.Bhupal Goud S/o Late Ayodhya, aged about 55 years, Occ: Business, R/o Flat No.302, Odean Enclave, Domalguda, Hyderabad.

2. Ahmed Abdul Waheed S/o Sayeed Abdul Aziz, aged 59 years, Occ: Business, R/o H.No.3-5-20, Vittal Vadi, Narayanguda, Hyderabad.

....Respondents/Defendants

This appeal suit is coming on 29.09.2016 before me for final hearing in the presence of Sri Shyam Sunder Muthy, Counsel for the appellant/plaintiff and of Sri Gopal G Naik, Counsel for the respondents/defendants and upon hearing both the counsel and on perusing the material available on record and the matter having stood over for consideration till this day, the Court delivered the following:-

J U D G M E N T

This is an appeal preferred by the plaintiff in O.S.No.1313/2007 on the file of I

Additional Rent Controller-cum-XIII Junior Civil Judge, Hyderabad, against the

decree and judgment dated 29.06.2012, dismissing the suit filed by the plaintiff, seeking the relief of declaration that the decree dated 07.05.1999, passed in

O.S.No.1241/1999 on the file of XIX Junior Civil Judge, City Civil Court, Hyderabad,

as void and to cancel the same.

2.The plaint averments, in brief, are as follows: The suit schedule property was purchased by the father of plaintiff Late K.Raghaveswar Rao under a registered sale deed vide document No.1432/1964, dated 02.08.1964, he was in possession and enjoyment of the said property and after his demise in the year 1986, his family 2 A.S.No.187 of 2012 members are in possession of the said property. The father of the plaintiff has purchased the said property from Satyanarayana Reddy and Qutubuddin Baig. The said Qutubuddin Baig has purchased the said property from Zaheeruddin, who is one of the allottee of the sarfakhs and his name has been mutated in relation to the suit schedule property. After demise of the said K.Raghaveswara Rao, defendant No.1 herein had approached the plaintiff and his mother and pressurized them to enter into agreement of sale on 31.08.1987. There was a claim made by the Government by issuing G.O.Ms.No.942, the same was questioned by the plaintiff and his mother

before the Hon'ble High Court by filing W.P.No.15548/1987. Defendant No.1 herein

has also joined in the said writ petition as petitioner No.3, as an agreement of sale was subsisting in his favour for the said property. But, defendant No.1 did not disclose about his having agreement of sale from defendant No.2 in respect of the said property. The said writ petition was allowed, Writ Appeal No.859/1991 was preferred by the Government and defendant No.1 has asserted the title of Late

K.Raghaveswara Rao in the said property and he never disputed the same.

3.The father of the plaintiff stood as guarantor to a loan availed by one Omkar

Rao from Andhra Bank, the said Omkar Rao committed default in discharge of the said loan, the Andhra Bank has filed O.S.No.226/1973 and obtained a mortgage decree. E.P.No.49/1990 was filed in that suit in the Court of I Senior Civil Judge,

City Civil Court, Hyderabad, defendant No.1 herein has filed a claim application in

E.A.No.97/1999, admitting the title of Late K.Raghaveswara Rao. Subsequently defendant No.1 got executed an assignment deed on 30.04.2004 for Andhra Bank and took away the documents.

4.The family members of Late K.Raghaveswara Rao including the plaintiff, have cancelled the agreement of sale executed in favour of defendant No.1 on 10.12.1996, 3 A.S.No.187 of 2012 a notice was issued to that effect and a public notice was also issued in Eenadu,

dated 19.04.1999 to that effect. At that stage, due to some differences, defendant

No.1 herein has filed a suit in O.S.No.1241/1999 on the file XIX Junior Civil Judge,

City Civil Court, Hyderabad, creating fictitious rights and documents. Till the date of filing of the said suit, defendant No.1 did not dispute the title of the father of the plaintiff, before any Court or authority. The alleged agreement was said to have been executed on 21.01.1974 between late father of defendant No.1, defendant No.1 and defendant No.2. If really defendant No.2 was the owner of the said property he should have known about the claim of the Government with regard to the said land.

The said suit was filed on 23.03.1999, seeking the relief of specific performance of agreement of sale, dated 21.01.1974, the plaint does not disclose as to what the plaintiff did from 1974 to 1999, the suit was numbered on the same day and it was posted to 19.06.1999. Defendant No.1 has filed IA.No.752/1999, seeking advancement of the said suit to 07.05.1999, a compromise memo was filed by defendant No.1 and 2, stating that Rs.7,250/- was paid by defendant No.1 and his father to defendant No.2 from time to time under the agreement of sale dated 21.01.1974 and balance of Rs.7,250/- was paid under the said compromise memo on 07.05.1999. A perusal of notarized xerox copy of agreement of sale dated 21.01.1974 filed in that suit shows that xerox copies of documents were notarized on 14.01.1988, total sale consideration was shown as Rs.77,500/- and defendant No.1 has paid Rs.30,000/- to defendant No.2, which is contrary to the contents of compromise memo. It was also mentioned that one month time was granted for registration of document and defendant No.1 was at liberty to file E.P. Thus, the entire episode shows that the defendants in order to create fictitious documents had adopted modus operandi.

4 A.S.No.187 of 2012

5. The suit in O.S.No.1241/1999 was filed on 23.09.1999 and thereafter claim application in E.A.No.97/1999 was filed by defendant No.1 on 15.04.1999, but defendant No.1 did not state anything about filing of O.S.No.1241/1999, which shows the dubious conduct of defendant No.1. The plaint in O.S.No.1241/1999 and the plaint in O.S.No.2097/1999, which was filed by defendant No.1 herein were drafted on the same day. Though summons were served in the said suit in O.S.No.1241/1999, the plaint reflects the date of compromise, which shows the conduct of the defendants that the said suit is a collusive and fictitious one. If the decree passed in

O.S.No.1241/1999 is allowed to stand, it would affect the rights of the plaintiff and

his family members. The decree obtained in O.S.No.1241/1999 has been obtained by the defendants by playing fraud upon the Court and to create a fictitious document.

Hence, the plaintiff is entitled to get declared the decree passed in

O.S.No.1241/1999 as null and void and to cancel the same under the provisions of

Specific Relief Act.

6.Defendants 1 and 2 have contested the suit. In the written statement of defendant No.1, it is mentioned that from the copy of the plaint served on him, the plaint contains no schedule of property described and the plaint is vague without suit schedule property and it is liable to be rejected under Order 7 CPC. Either the father of the plaintiff or his family members, after his demise, were never in possession of the said property as alleged in the plaint. The alleged vendors of the father of the plaintiff Satyanarayana Reddy and Qutubuddin Baig had no right of ownership over the said property, they were never in possession of the same and Zaheeruddin was never allotted with the said property and his name was not mutated in relation to the said property. Defendant No.1 in the year 1974, has entered into agreement of sale along with his father for purchase of property from defendant No.2 comprising of 5 A.S.No.187 of 2012

Ac-12-35 gts. forming part of Sy.No.129/50/D-3, D-4, D-5 and D-6 and since the legal heirs of Late K.Raghaveswara Rao were identified for the said property as the property purchased by them, but finding defendant No.1 in possession of the said property, with good intention of purchasing piece, defendant No.1 has entered into agreement with them on 31.08.1987. He never pressurized them to enter into agreement of sale as alleged. Subsequently defendant No.1 has realized that the plaintiff and his mother have cheated him to part with money and received money without any title to any property and there is no such property in existence as described in sale deed vide document No.1432/1964 and alleged to have been purchased by Late K.Raghaveswara Rao. The W.P.No.15548/1987 was allowed,

Government preferred appeal and writ appeal was allowed setting aside the writ petition so far as it related to the title on the ground that the question of title cannot be decided under Article 226. The Government has filed a land grabbing case in

LGC.No.27/1991, against defendant No.1 as land grabber, admitting that defendant

No.1 is in possession of the property and thereafter in pursuance of the directions of the Hon'ble High Court, issued orders to regularize the possession of society promoted by defendant No.1.

7.With regard to decree obtained by Andhra Bank, it is true that the mortgage stood discharged by mortgagee by exercise of right of sale and the mortgagor extinguished the right to redemption. Defendant No.1 has never admitted the title of the plaintiff and his family members for the said property as alleged in the plaint.

Publication of notice by the plaintiff cannot cancel the agreement. The plaintiff has to establish a clear marketable title of his father to an existing property and that the defendants never made any dubious claims as alleged. The purchase of the said property by defendant No.1 is prior to the purchase from the legal heirs of Late 6 A.S.No.187 of 2012

K.Raghaveswara Rao. Unless the property is identified and proved to be in existence, the plaintiff has no voice to raise. As per the Government Revenue Records, there is no Sy.No.129/85 and sale of non sanctioned plots is hit by the provisions of HMC

Act. Hence, the claim of the plaintiff is totally bogus, fictitious and untenable. The property in O.S.No.1241/1999 is a different property than the alleged claim of the plaintiff, the property purchased by defendant No.1 from defendant No.2 is situated in different area and the present suit filed for cancellation of decree is not maintainable. The subject matter relating to right of defendant No.1 in respect of property of defendant No.2 was never before the Hon'ble High Court and hence, defendant No.2 was not made a party to the said writ petition. The decree passed in

O.S.No.1241/1999 does not affect the plaintiff in any manner.

8.The proceedings in the suit being between the parties, it cannot be permitted to be assailed as fraud by third party, who is not a party to the suit. Fraud has to be specific and proved in the plaint. The suit filed by K.Subhash Reddy and others in

O.S.No.2097/1999 was decreed granting the relief of perpetual injunction against the

plaintiff, the same was attained finality and hence, the plaintiff is estopped from contending that he is in possession of the said property. The plaintiff cannot be permitted to plead the cause of all of his family members without making them as parties and hence, the plaint as filed is not maintainable. The plaintiff has to prove that there is correlation between property claimed by him and the subject matter of

O.S.No.1241/1999. The suit filed by the plaintiff is hopelessly time barred. In these

circumstances, defendant No.1 seeks the Court to dismiss the suit with costs.

9.Defendant No.2 has filed written statement stating that it is found from the copy of the plaint served on him that the plaint does not contain schedule of property, hence, the plaint is liable to be rejected under Order 7 CPC. It is further 7 A.S.No.187 of 2012 mentioned that either the father of the plaintiff or his family members after his demise, were in possession of the said property. The alleged vendors of the father of the plaintiff by name Satyanarayana Reddy and Qutubuddin had no right of ownership over the said property and they were never in possession of the same.

The said Zaheeruddin was not allotted with the said property and he never sold any property to Qutubuddin. Defendant No.1 has entered into agreement of sale along with his late father with him in the year 1974 in respect of property comprising Ac- 12-35 gts forming part of Sy.No.129/50/D3,D4,D5 and D6. Defendant No.1 has filed detailed written statement denying the plaint averments and it is not necessary for defendant No.2 to reiterate the same. There is no collusion as alleged between him and defendant No.1, the suit in O.S.No.1241/1999 was filed rightly and the same was decreed as per the compromise entered into between him and defendant No.1. All the allegations made by the plaintiff are false and concocted for the purpose of filing the suit. The plaintiff has to establish that there is any correlation between the property claimed by him and the subject matter of O.S.No.1241/1999 and without establishing the same, he cannot maintain the present suit. The suit is hopelessly time barred.

Defendant No.2, therefore, seeks the Court to dismiss the suit with costs.

10.Before the trial Court, the plaintiff has initially examined-in-chief, his GPA holder by name K.Appa Rao, as PW1, he did not appear for cross examination and his evidence was eschewed. The plaintiff got himself examined as PW2 and got marked

Ex.A1 to A26. On behalf of defendant No.1, he got himself examined as DW1 and got marked Ex.B1 to B11. Defendant No.2 has not adduced any evidence. On consideration of the oral and documentary evidence adduced by both sides, the trial

Court has dismissed the suit, but without costs. Aggrieved by the said decree and judgment dated 29.06.2012, the plaintiff has carried the matter in this appeal.

8 A.S.No.187 of 2012

11.I have gone through the grounds of appeal, oral and documentary evidence adduced by both parties and the decree and judgment of the trial Court.

12.I have heard the arguments of both the learned counsel. I have gone through the written arguments filed by both the learned counsel.

13.It is submitted by the learned counsel for the appellant/plaintiff that the lower

Court has misdirected itself in arriving to its conclusions on the material issues relating to title, possession, documentation and locus standi and gave wrong findings though rightly decided on the fact of limitation. He further submitted that the trial

Court ought to have seen that if any person having a legal grievance, which might have deprived him of the benefit or bound by the order passed against him, such person is entitled to question the same and hence, the plaintiff has instituted the suit seeking cancellation of the decree passed in O.S.No.1241/1999, which is a decree obtained collusively and fraudulently by defendants 1 and 2. The trial Court ought to have considered that a case in LGC.No.27/1991 is pending on the file of Special

Court under A.P. Land Grabbing (Prohibition) Act at Hyderabad against the plaintiff and defendant No.1 and the same is pending and that defendant No.1 has played fraud on the Court by filing O.S.No.1241/1999. The Court below did not consider the transactions that were taken place between the plaintiff's family and defendant No.1 pertaining to the same land. He has further submitted that defendant No.1 in collusion with defendant No.2 have mischievously changed the survey numbers, suppressed various material issues pertaining to the land in question, defendant No.1 did not pay the requisite stamp duty and the sale paper is still pending for the last 12 years for registration.

14.On the other hand, it is vehemently argued by the learned counsel for the respondents/defendants that the plaint filed by the plaintiff is vague, uncertain and it 9 A.S.No.187 of 2012 does not contain the schedule of property, the plaintiff should have pleaded the ingredients of fraud with certainty and with specific allegations making out a case of fraud and the plaintiff has to establish that the defendants have played fraud on the

Court in obtaining the said decree. He has further submitted that in spite of the objections taken by the defendants, the plaintiff never mentioned nor described the suit schedule property and the defective suit filed by the plaintiff is not maintainable.

He also submitted that the property claimed and involved in O.S.No.1313/2007 and

O.S.No.1241/1999 are different, the plaintiff has not impleaded other legal heirs of

his late father and the suit is bad for non joinder of necessary parties. He has further submitted that in the LGC.No.27/1991, the Government has admitted that defendant

No.2 as land grabber and was in possession of the property. He has further submitted that in the suit filed by Andhra Bank, decree was obtained by the said bank, the plaintiff's right to redeem has been extinguished and hence, any claim on such property is illegal and void and hence, the plaintiff is not entitled to seek any relief in the suit. He also submitted that the plaintiff has been making claim to a non- existing property, the property related to O.S.No.1241/1999 is a different property and the present suit filed by the plaintiff, who is not a party to the suit, for cancellation of decree is not maintainable. Finally he has submitted that the trial

Court has properly considered the oral and documentary evidence adduced by both parties, came to right conclusion, which do not warrant any interference in this appeal and that the appeal is liable to be dismissed with costs. Finally he has submitted that as the decree obtained by defendant No.1 in O.S.No.1241/1999 was due to fraud played by defendants 1 and 2 on the Court and it would affect the rights of the plaintiff and his family members, the said decree and judgment are liable to be set aside and the appeal is to be allowed with costs.

10 A.S.No.187 of 2012

15.It is further submitted by the learned counsel for the appellant/plaintiff that the trial Court did not properly appreciate the oral and documentary evidence adduced by the plaintiff and came to a wrong conclusion. He has further submitted that the trial Court has observed that Ex.A1 to A26 are only judicial proceedings and judicial orders, though Ex.A22 is certified copy of sale deed under which the father of the plaintiff has purchased the suit schedule property, the trial Court did not consider the same and also the fact that defendant No.1 admitted the title of the father of the plaintiff and also the agreement of sale entered into between defendant No.1 and his father on one hand and the plaintiff and his mother on the other hand, but the trial

Court did not consider the documentary evidence of Ex.A1 to A26 from a proper perspective. He has also submitted that the observation of the trial Court that the plaintiff though having knowledge that defendant No.1 has taken return of the documents which were deposited by the father of the plaintiff with Andhra Bank, the plaintiff did not take any steps in that regard, is erroneous in view of the fact that the plaintiff has filed E.A.No.56/2009 and also CRP.No.1149/2013 against the dismissal of the said E.A.No.56/2009 and CRP.No.1149/2013 was allowed by Hon'ble High

Court. He has also submitted that the documents now filed as additional evidence are relevant and they are having bearing on the merits of the case and after receiving the documents as additional evidence, they are to be marked as exhibits on behalf of the plaintiff.

16.It is necessary to mention here that the appellant/plaintiff has filed

IA.No.204/2013 and 2170/2014 under Order 41 Rule 27 CPC, seeking the Court to

receive the documents now filed as additional evidence and to permit him to mark those documents by way of additional evidence at appellate stage. This Court, after hearing the arguments of both the learned counsel in appeal as well as in both the 11 A.S.No.187 of 2012 said applications, allowed both the said applications by separate order today, the documents filed by the appellant/plaintiff are received subject to proof and relevancy. Those documents received by the Court at appellate stage are to be marked as exhibits on behalf of the appellant/plaintiff and further evidence is to be recorded.

17.In view of the grounds of appeal and the arguments advanced by both the learned counsel and as the documents now filed along with the said two applications are received subject to proof and relevancy, now the points that arise for consideration in this appeal are:

1. Whether the documents now received by this Court as additional evidence can be marked as exhibits on behalf of the plaintiff in appeal itself or whether it is desirable to remand the matter to the trial Court for fresh disposal of the matter after giving opportunity to both parties to adduce further evidence with reference to the documents now received in appeal ?

2. Whether the judgment and decree passed by the trial Court warrant any interference in this appeal ?

3. To what relief ?

18.Point No.1:-

The case of the plaintiff and the defendants are narrated above. The observations made by the trial Court are also mentioned above. In the order passed in IA.Nos.204/2013 and 2170/2014, it is held that the documents now ordered to be received will have a bearing on the merits of the case. Hence, it is desirable to give an opportunity to the plaintiff to mark those documents, subject to proof and relevancy and an opportunity is to be given to the defendants also to adduce their further evidence after completion of further evidence by the plaintiff. The appellant/plaintiff has filed another application in IA.No.205/2013 under Section 65 of the Evidence Act, seeking the Court to permit the appellant to mark xerox copy of mutation order as secondary evidence. In the facts and circumstances of the case and as an opportunity is to be given to the plaintiff to mark the documents now 12 A.S.No.187 of 2012 received at appellate stage, as additional evidence and defendants are also to be given an opportunity to adduce their further evidence, I consider it just and proper to remand the matter to the trial Court for recording further evidence of both the parties and to dispose off the suit afresh in accordance with Law. The trial Court shall also consider the request of the appellant/plaintiff to permit him to lead secondary evidence in respect of mutation order, as according to the plaintiff, in spite of best efforts made by him, he could not secure certified copy of mutation order and the trial Court shall pass appropriate orders in that regard also.

19.From the above discussion, I hold on this point that the matter is to be remanded to the trial Court for the purpose of adducing further evidence of the plaintiff with reference to the documents now received in appeal as additional evidence, the trial Court shall give an opportunity to the defendants also to adduce their further evidence and the trial Court shall consider the request of the plaintiff to permit him to lead secondary evidence under Section 65 of the Evidence Act in respect of the photo stat copy of the mutation order and the trial Court shall dispose off the matter afresh in accordance with Law.

20.Point No.2:-

In view of the above finding on point No.1 remanding the matter to the trial

Court, it is not desirable to go into the merits of the case and to consider the correctness of the decree and judgment passed by the trial Court. Hence, it is desirable to set aside the decree and judgment dated 29.06.2012 passed in

O.S.No.1313/2007. Accordingly I hold on this point that the judgment and decree

dated 29.06.2012, passed by the trial Court in O.S.No.1313/2007 are liable to be set

aside and the matter is to be remanded to the trial Court for fresh disposal in accordance with law.

13 A.S.No.187 of 2012

21.Point No.3:-

In view of the above findings on points 1 and 2, the appeal is to be allowed and the matter is to be remanded to the trial Court for fresh disposal in accordance with law after giving opportunity to both parties.

22.In the result, the appeal is allowed setting aside the decree and judgment dated 29.06.2012, passed by the trial Court in O.S.No.1313/2007, the matter is remanded to the trial Court, directing the trial Court to give opportunity to both parties to adduce further evidence with reference to the documents received at appellate stage and the trial Court shall dispose off the suit as expeditiously as possible, preferably within a period of four months from the date of receipt of the copy of judgment passed in this appeal. Both parties are directed to bear their respective costs in the appeal.

Dictated to the Stenographer, transcribed and typed by her corrected and

pronounced by me in the open Court, on this the 31st day of October, 2016.

Sd/-

P.KASI VISWESWARA RAO,

XXV ADDITIONAL CHIEF JUDGE

CITY CIVIL COURT, HYDERABAD.

APPENDIX OF EVIDENCE:Nil

Sd/-

P.KASI VISWESWARA RAO,

XXV ADDITIONAL CHIEF JUDGE

CITY CIVIL COURT, HYDERABAD.