IN THE COURT OF THE II ADDITIONAL DISTRICT JUDGE: KURNOOL AT
ADONI.
PRESENT: SRI. G.V. SUBRAHMANYAM, B.COM., LL.M., II ADDITIONAL
DISTRICT JUDGE, KURNOOL AT ADONI.
FRIDAY, THE 6TH DAY OF JULY 2012.
APPEAL SUIT NO.28/2009.
S. Riyaz Ahamed. … Appellant.
Versus.
P.K. Mallanna and brothers, Adoni, a Registered Firm
Represented by it’s partner P.Vishwanath. … Respondent.
Appeal against the Judgment and Decree passed by Senior Civil
Judge, Adoni, in O.S.No.36/05 dated 30-04-09.
P.K. Mallanna and brothers, Adoni, a Registered Firm
Represented by it’s partner P.Vishwanath. … Plaintiff.
And.
S. Riyaz Ahamed. … Defendant.
This appeal coming on 20-06-12 for final hearing before me in the presence of Sri. A. Sardar Ahamed, Advocate for the Appellant and Sri.
G. Narasimhulu, Advocate for the respondent, and after hearing both sides, having stood over for consideration till this day, this Court delivered the following:
: J U D G M E N T :
This appeal is filed against the Judgment and decree passed by the Senior Civil Judge’s Court, Adoni, in O.S.No.36/05 Dt: 30-04-09.
2. It is contended by the appellant that the trial Court ought to have dismissed the suit since it is barred by limitation. The suit is not maintainable as the partnership firm of the respondent/plaintiff is not registered on the date of filing of the suit and the person who signed the plaint is not the partner of the firm as per Ex.A.1. The conclusions arrived at by the trial Court is without reasonable discussion on the factual and legal aspects of the case. The trial Court has grossly erred 2 in believing Exs.A.1 to A.11 without giving any reasons inspite of the objections taken by the appellant/defendant.
The trial Court failed to appreciate the legal proposition on the aspect of non-maintainability of the suit. The trial Court has not considered the decision relied-on by the appellant/defendant. Instead of disbelieving the evidence of P.W.1, the trial Court has unnecessarily gave importance to the evidence of P.W.1. The principle that the plaintiff has to prove his case without depending upon the weakness of the case of the defendant has lost sight of. There is no cause of action for filing the suit. Hence, the suit ought to have been dismissed. In view of the reasons stated supra, the Judgment and decree passed by the Senior Civil Judge’s Court, Adoni, in O.S.No.36/05 dated 30-04-09.
3. The respondent/plaintiff contended that the trial Court has rightly appreciated the aspect of limitation and also considered the legal decisions submitted by both counsel by valid reasoning and documentary evidence. Therefore, the Judgment and decree deserve to be confirmed.
4. The points for consideration are:
1) Whether the plaintiff has proved the transactions under three
Bills dated 21-02-12, 16-03-12 and 19-03-12?
2) Whether the suit is within limitation?
3) Whether the finding of the trial Court is supported by valid reasoning or it deserves to be interfered by the appellate
Court?
5. POINTS NOS.1 TO 3: To answer the points for consideration, it is necessary for the appellate Court to consider the facts in its totality.
6. The gist of the plaint submitted by the respondent/plaintiff is that the Plaintiff is a Commission Agent and Merchant in Agricultural
Market Committee, Adoni, in the name and style as P.K. Mallanna and
Brothers, which is a registered firm. P. Viswanath who signed the plaint is one of the partners of the firm. The defendant is a merchant doing 3 business in Cotton, Kappas and in other agricultural commodities in the Market Committee.
The defendant purchased Cotton and Kappas from the shop of the plaintiff on credit under three bills under various dates
Sl.No. Bill No. & Date Quantity Kgs. Amount Rs.
1. 21/21-02-02. 2596 34,698-74ps
2. 85/16-03-02. 1673 21,957-07ps
3. 96/19-03-02. 965 12,046-55ps
Total 68,702-00ps
The defendant did not pay the amount inspite of the repeated requests. As per the practice of the Market Yard, the defendant has to pay the amount within one month and if he fails to pay, it would carry interest at 24% p.a. Therefore, the defendant is due a sum of
Rs.1,16,793-36ps which includes the interest up to the date of filing of the suit and incidental charges.
The defendant failed to pay the amount inspite of repeated demands. Therefore, the suit.
7. The defendant submitted the written statement contending that the Plaintiff is called-upon to the strict proof of the allegations made in the plaint. The suit is barred by limitation. The very contents of the plaint would show that the suit is beyond limitation. There is no custom as pleaded in the plaint to pay interest for the delayed payments. The limitation would start from the date of delivery and purchase of the goods.
It is further submitted by the defendant that the transactions under the bills mentioned in the plaint are not genuine. All those bills have not been signed by the defendant. The account extract filed along with the plaint does not disclose the correct particulars. There are inclusions, additions and corrections in the said account extract. The said account extract is confusing one. The plaintiff is called-upon to prove the debt through the accounts particularly.
4 It is not made out from the plaint allegations whether there were continuous transactions of business of the defendant with the plaintiff firm or it is first and new transaction. The material suppression will entail the plaintiff’s suit to be dismissed. The plaintiff firm is not a registered firm. Its partnership deed suffers from legal infirmities.
Therefore the suit may be dismissed.
8. Basing on these pleadings, the trial Court as framed the following issues:
1) Whether the plaintiff is entitled to the suit amount?
2) Whether the suit claim is barred by time?
3) Whether the plaintiff firm is not duly registered?
4) To what relief?
9. To prove the case of the plaintiff, he is examined as P.W.1. He submitted the chief-examination affidavit asserting the averments made in the plaint. In his evidence the Firm Registration Certificate is marked as Ex.A.1, the Cheque issued by the defendant is marked as Ex.A.2, the sale bills are marked as Exs.A.3 to A.5, Day Book is marked as Ex.A.6, the relevant entries are marked as Exs.A.7 to A.9, Ledger Book for the year 2001-02 is marked as ex.A.10 and the relevant entry in the Ledger
Book at Page 79 is marked as Ex.A.11. During course of cross- examination he stated that the plaintiff firm has got three partners, which is duly registered under Ex.A.1. As per Ex.A.1 the Firm was registered on 16-04-07, whereas, the suit was filed in the year 2005.
He denied the suggestion that the Firm is not registered as on the date of filing of the suit. He has not filed any certificate of registration which relates to the old firm. He did not submit the partnership deed. But he could not give the date of partnership deed.
He admitted that the bills do not contain the signature of the defendant. But he had added by saying that Clerk will sign on behalf of the defendant. The debts under Exs.A.3 to A.5 are reflected in the Day
Book and Ledger. He stated that apart from the suit transactions there were earlier transactions with the defendant and those debts were cleared. He admitted that on the basis of bills and corresponding 5 entries in the Day Book and Ledger, legal notice was not issued to the defendant. He denied the suggestion that the suit is barred in the light of Exs.A.3 to A.5. He categorically admitted that entries with regard to Ex.A.2 are not available in the day book. He added by saying that if the cheque is presented for encashment, the entries will be made in the day book. He also admitted that there is no reference with regard to the Cheque Ex.A.2 in the plaint. He denied the suggestion that the cheque under Ex.A.2 was not issued by the defendant.
10. On closure of the plaintiff’s evidence, the defendant is examined as D.W.1. In his chief-examination he reiterated the averments made in the written statement. In the cross-examination he stated that Sanakari Riyaz Ahamed is a Firm. He denied the suggestion that he is the sole proprietor of the said firm. But he admitted that he was carrying on the business under the name and style as Sanakari
Riyaz Ahamed. He admitted that he has been doing cotton business for the last 4 or 5 years. Again he stated that he is attending to the said business since 1975. Therefore, he has got acquaintance with the plaintiff also. He admitted that he used to put tender with the plaintiff also. But he does not know whether there is grace period 30 days in the market business and after that interest will be charged. He does not know the rate of interest also. He categorically admitted that in the year 2002, he purchased cotton from the plaintiff firm. But the witness added by saying that it was a cash and carry transaction. In the year 2003 also he purchased cotton from the plaintiff firm by paying cash.
Under Ex.A.5 he purchased Rs.12,000/- worth cotton and the amount was paid. He denied the suggestion that in a series of transactions with the Plaintiff Firm he fell down the amount mentioned in the plaint. He denied the suggestion that towards the discharge of debt he has issued the cheque under Ex.A.2. He denied the suggestion that he did not pay cash to the plaintiff, she he did not file receipts to show the same. This is the evidence available on record to answer the points for consideration.
11. The substance of the contention of the plaintiff is that the defendant used to purchase cotton from his shop on credit basis and he is supposed to repay the amount within one month and if he fails to pay 6 the amount within one month, he is supposed to pay interest at 24% p.a. He stressed that such practice is in vogue in the Market
Committee. Except the evidence of the plaintiff himself, he did not choose to examine any other business man who has been doing such business in the Market Yard to substantiate that there is a custom or practice to give margin of one month and the non-payment would tax the other side with interest. The Court cannot assume the things.
Certainly when a person purchases something on credit some margin of time will be given. But such knowledge is not sufficient. The plaintiff must establish with some oral evidence of similar businessman to prove the said practice. But the plaintiff could not examine any independent witness. So the practice of giving margin of 30 days cannot be accepted as true.
12. It is the contention of the plaintiff that the defendant purchased 2596 Kgs. Of Cotton vide Bill No.2`1 dated 21-02-02 amounting to Rs.34,698.74ps, 1673 Kgs. of cotton vide bill No.85 dated 16-03-02 for Rs.21,957-07ps; and 965 Kgs. of cotton vide bill No.96
dated 19-03-02 for Rs.12,046-55ps. Over the said amounts the
defendant is supposed to pay interest at the rate of 24% p.a. since he did not make payment within 30 days. The defendant contended that each transaction is an independent transaction and the limitation for such transactions would commence the day on which the sale took place. Therefore, the suit is barred by limitation. The learned trial
Court Judge answering the said issue stated that the suit is filed before the Court on 18-03-05. The transactions between the plaintiff and the defendant being series of transactions, after taking into account the transactions between the parties and in the light of the cheque issued by the defendant under Ex.A.2 dated 30-05-02 the matter is within limitation. This finding of the trial Court is not supported by valid reasons. The learned counsel for the appellant/defendant relied-on a case law reported in A.I.R. 1984 Orissa 226 between ATTADI
VENKETI VS. M/S. BHARATAM RAMULU AND SONS. In the said decision the Hon’ble High Court of Orissa relying-on the Judgment of the Hon’ble Supreme Court reported in A.I.R. 1965 S.C.1711
between KESHERICHAND JAISUKHALAL VS. SHILLONG BANKING
CORPORATION LIMITED, held as follows:
7
“Suit for price of goods sold and delivered where no fixed
period of credit was agreed upon, Article 14 is applicable but not
Article 1. The dealings should indicate independent obligation to both
sides and not merely obligations on one site. The test of mutuality is
that the dealings between the parties should be such that the balance
is sometimes in favour of one party and sometimes in favour of the
other.”
The plaintiff has chosen to file the account books and ledger books which would show the only entries made by the plaintiff in connection with the bills raised by him. In none of the entries the signature of defendant is appearing acknowledging that he is liable to pay the said amount. So the ratio of test of mutuality is not made out by the plaintiff. When the case of the plaintiff does not stand to the said test, it is Article 14 that is applicable. When Article 14 is applicable to the case on hand, the suit for recovery of the Bill No.21 dated 21-02-02 is supposed to be filed within 3 years i.e., on or before 20-02-05. With regard to second bill No.85 dated 16-03-02, the suit ought to have filed by the plaintiff on or before 15-03-05. But it is borne by record that the suit is filed on 18-03-05. So in respect of these two transactions the suit is barred by limitation.
13. The learned trial Court Judge has given undue weightage to the alleged cheque issued by the defendant marked as Ex.A.2 dated 30-05-02. The defendant categorically denied the said cheque. When the defendant denies the said cheque, the plaintiff must prove that it is the cheque issued by the defendant himself. It is also must be proved that the cheque could not be encashed because of lack of funds or for any other reason. When the outstanding amount is Rs.68,000/- and odd, how the plaintiff has accepted the Cheque for Rs.34,003,62ps on 30-05-02 is a question which merits appreciation and for which there should be reasonable answer from the plaintiff. But the plaintiff could not explain as to why the said cheque was taken for so much of money on 30-05-02. One significant aspect that missed the attention of the trial Court Judge is that there is no reference of the said Cheque in the original plaint. Added to that, the date over the cheque appears to have been over-written to suit the convenience. If the cheque would have been presented to the Bank and could not be realized, then the 8 plaintiff should have issued a legal notice to the defendant asking him to pay the cheque amount, else the defendant is liable for prosecution
U/Sec.138 of Negotiable Instruments Act. When such whip is available to the plaintiff without adopting such recourse, filing the suit on the date of expiry of limitation would speak volumes about the attitude of the plaintiff ingenuinety of the suit transactions.
14. In another case law relied-on by the learned counsel for the appellant/defendant reported in 2011 (6) A.L.D. 241 between
KARSHAKA ENTERPRISES, CHILAKALURIPET VS. SRI GANESH
TRADERS, INKOLLU AND ANOTHER, it is laid down by his Lordship as follows:
“Suit for recovery of money on the basis of accounts maintained
by the plaintiff – Statement of account standardized up to 03-02-
99 did not contain the signature of the defendant – Plaintiff, held, not
entitled to base any claim upon it – Dismissal of the suit justified.”
The facts of the said case and the ratio laid down in the said decision are similar to the case on hand. In the present case also even though the plaintiff contends that the clerk of the defendant would sign on the account acknowledging the debt, he could not establish the said contention and the signature of neither the clerk nor the defendant were proved. So, when there is no acknowledgement of the debt by the defendant basing on time barred debts and basing on accounts, the plaintiff cannot maintain the suit. These aspects were not rightly considered by the trial Court. Hence, on these counts, the suit of the plaintiff is liable to be dismissed and the appeal deserves to be allowed.
15. With regard to whether the plaintiff can maintain the suit when the Firm is not registered, the trial Court placed its reliance on the case law reported in 2004 (5) A.L.T. 534 between SAMYUIKTHA
COTTON TRADING COMPANY VS. BHEEMINENI VENKATA
SUBBAIAH AND OTHERS, and said that because the registration of the Firm has taken place during pendency of the suit, it is maintainable.
When I thoroughly gone through the said Judgment, there are observations made by the Hon’ble Supreme Court. Relying on the ratio 9 laid down in the various decisions the Hon’ble Supreme Court for example A.I.R. 1989 SC 1769 between M/S. SHREERAM FINANCE
CORPORATION VS. YASINKHAN; 1999 (3) S.C.C. 476, held that subsequent registration of Firm would not serve the purpose of Sec.69 of Partnership Act. However, to avoid delayed disposal an observation was made by the Hon’ble Supreme Court in that particular case that as the Firm was registered by the time of presentation of the claim, it can be considered. It is not the ratio decidendi but it is only an obiter dicta, which is observed by the Hon’ble Supreme Court. Therefore, I am of the view that the ratio laid down in the case relied-on by the plaintiff is not applicable to the facts on hand, and therefore, the suit filed by the plaintiff Firm without getting it registered as on the date of filing of the suit is also not maintainable.
16. In view of the discussion made supra, I am of the view that the trial Court erred in finding that the suit is to be decreed is not correct and in my opinion, the Judgment and decree of the Senior Civil
Judge’s Court, Adoni, in O.S.No.36/05 dated 30-04-09 are liable to be
set aside by allowing this appeal. Accordingly the points are answered.
17. In the result, the appeal is allowed setting aside the Judgment and decree passed by the Senior Civil Judge’s Court, Adoni, in O.S.
No.36/05 dated 30-04-09. Consequently the suit in O.S.No.36/05 on the file of Senior Civil Judge’s Court, Adoni, is dismissed. No order as to costs.
Dictated to the Personal Assistant, transcribed by him, corrected
and pronounced by me in open Court, this the 6th day of July 2012.
II ADDITIONAL DISTRICT JUDGE,
KURNOOL AT ADONI.
10