Jayabarath Fabric Mills Ltd. vs Unitex Exports

N.V. Balasubramanian, J.—This appeal is directed against the judgment and decree passed in a suit for recovery of money in O.S.No.

8355 of 1996 dated 17.6.1987 on the file of the II Additional City Civil Judge at Chennai.

The appellant before us is the defendant in the suit and the respondent herein has instituted the suit for recovery of a sum of Rs. 9, 76, 609/-

with interest at 18 per cent per annum from date of plaint till the date of payment and also for costs. For the sake of convenience, the parties are

hereinafter referred to as arrayed in the plaint. The suit was originally instituted on the file of this court as C.S.No. 261 of 1992 and it was later

transferred to the City Civil Court, Chennai under the provisions of the Tamil Nadu Civil Courts and the Madras City Civil Court (Amendment)

Act, 1995 (Act 28 of 1995) and the suit was re-numbered as O.S.No. 8355 of 1996 on the file of City Civil Court, Chennai.

The case of the plaintiff as seen from the plaint is that the plaintiff is an exporter of fabrics and based on the orders placed by the foreign buyers,

the plaintiff used to send the fabrics to the defendant for printing the fabrics. According to the plaintiff, during the course of the said business

transaction, the plaintiff sent Grey fabrics (Rayon) on 21.2.1990, 2.3.1990 and 29.3.1990 and Gray Fabric (Cotton) on 13.3.1990 to the

defendant and the consignment was acknowledged by the defendant. The plaintiff has stated that the defendant did the fabric printing and sent the

same to the plaintiff at Chennai and on taking delivery, the goods were inspected by the plaintiff and it was found that the printing done by the

defendant was of inferior quality. The plaintiff has stated that the goods were rejected by the foreign buyers and with intent to mitigate the damage,

the plaintiff has disposed of the poor quality printed stock for a sum of Rs. 6, 54, 456/- and suffered a total loss of Rs. 16, 31, 165/- being the

cost of the materials, transport charges incurred , packing charges, the extra cost incurred for obtaining soft finish and the claim made by the

foreign buyer. The plaintiff has stated that the defendant is liable to pay the plaintiff the balance amount of Rs. 9, 76, 609/- after deducting the sum

of Rs. 6, 54, 456/- realised on sale of the fabric. The plaintiff has also stated that there has been several demands made by the plaintiff to settle the

claim, but the defendant has not settled the claim and hence the suit was filed for the recovery of a sum of Rs. 9, 76, 609/- with interest and costs.

The defendant has filed a detailed written statement and according to the defendant, the plaintiff used to place orders for printing the fabrics with

the defendant. The defendant carried out the orders to the satisfaction of the plaintiff or his local representative one Dastoor at Ahmedabad and it

is not correct to state that the printing work done by the defendant was of inferior quality. The defendant has denied the allegation that the goods

were rejected by the foreign buyers and according to the defendant at no point of time any such intimation was sent to the defendant. The

defendant has also raised a plea that the plaintiff has not suffered any damage and the plea that the plaintiff was able to dispose of the fabric at Rs.

6, 54, 456/- was false and no notice of any such proposal to dispose of the goods was given to the defendant. The defendant in his written

statement has categorically stated that the claim of the plaintiff is wrong and it was stated in the written statement that the case of the plaintiff that it

suffered a loss of Rs. 6, 54, 456/- is false.

The learned II Additional Judge, City Civil Court, Madras on the above pleadings framed necessary issues for consideration. On behalf of the

plaintiff, the accountant of the plaintiff concern was examined as P.W.1. On behalf of the defendant, the director of the defendant company was

examined as D.W.1 and the learned Judge on the basis of the evidence decreed the suit as prayed for and against the judgment and decree, the

present appeal has been preferred.

Mr. K.Doraisamy, the learned senior counsel appearing for the appellant submitted that the judgment of the learned Additional Judge, City Civil

Court is not sustainable either in law or on the facts of the case and the plaintiff has failed to prove that the printing work done by the defendant on

the fabrics was of inferior quality and the learned Additional Judge, City Civil Court was not correct in placing reliance on Ex.A.2. Learned senior

counsel also submitted that there is nothing to link the goods mentioned in Ex.A.2 with the goods despatched by the defendant after printing of the

fabrics and that the alleged rejection of the goods done by the Textile Committee has no connection with the goods sent by the defendant after

printing. Learned senior counsel also submitted that even after the rejection of the goods by the Textile Committee, the plaintiff has forwarded the

statement of the accounts in Ex.B.18 and in the statement of the accounts the plaintiff has not mentioned anything about the rejection of the goods

by the Textile Committee and there was also no reference of the alleged inferior printing work done by the defendant in Ex.B.18, which was issued

after the order of rejection by the Textile Committee. Learned senior counsel submitted that the plaintiff has miserably failed to prove that the

goods sent by the defendant were actually sold for a lesser price and the debit notes issued by the plaintiff himself in favour of two other firms in

Exs. A8 and A9 dated 27.11.1990 and 7.12.1990 are made up documents and they do not establish that the plaintiff had actually sold the goods

to the said firms and suffered the loss. Learned senior counsel submitted that the suit has been instituted as a counter blast to the suit filed by the

defendant in Summary Suit No. 1211 of 1991 on the file of City Civil Court at Ahmedabad, claiming a sum of Rs. 8, 67, 119.22 being outstanding

amount due by the plaintiff to the defendant. Learned senior counsel further referred to the evidence of P.W.1 in extenso and submitted that even

on the basis of the evidence of P.W.1, the plaintiff has not established his case and he therefore submitted that the learned Additional Judge, City

Civil Court, Madras was not correct in decreeing the suit. He further submitted that the learned Additional Judge has wrongly placed onus on the

defendant in coming to the conclusion that the defendant is liable to pay the money.

Mr. S.Sampathkumar, learned senior counsel appearing for the respondent submitted that the claim of the defendant that the suit instituted by

the plaintiff is a counter blast to the suit instituted by the defendant in Ahmedabad is not correct as the present suit was instituted much prior to the

suit instituted by the defendant in Ahmedabad. Learned counsel also referred Ex.A.10, dated 24.12.1990 which is a notice issued by the

defendant to the plaintiff showing the acknowledgment of the notice issued by the plaintiff and submitted that the defendant has acknowledged the

letter dated 27.11.1990 sent by the plaintiff demanding the payment of Rs. 16, 31, 165/-.

The points that arise for consideration are:-

Whether the plaintiff has established that the printing work done by the defendant on the fabrics sent by the plaintiff was of inferior quality?

Whether the plaintiff has established that it suffered a loss in that process and entitled to claim the suit amount?

The plaintiff in support of its plea has examined one P.S.Sheela as P.W.1 and according to her, she is an accountant in the firm. She has fairly

admitted in her cross-examination that there is a Quality Control Division in the plaintiff concern and she has no connection with the Quality Control

Division of the plaintiff firm. She has also stated that it is the duty of the Quality Control Division to check the quality of the goods either when the

cloths were purchased or when the goods were received after printing to satisfy whether the printing was done to the satisfaction of the plaintiff.

She has admitted that she was not aware when the cloth which are the subject matter of the suit were purchased and when the quality was tested

by the Quality Control Department. It is also interesting to note that she has also admitted the signature of Dastoor, the agent of the plaintiff in

Exs.B1 to B.15 at Ahmedabad who certified regarding the quality of the printing done by the defendant and quantity of the articles sent by the

defendant and also admitted that there was a notice by the defendant for the production of the account books as evident from Exs.B.16 and 17

and in spite of the same, the account books were not produced. She has also admitted that the plaintiff in the letter dated 30.5.1990, Ex.B.18 has

furnished the statement of the accounts from 14.4.1990 and she has also stated that according to the statement, the plaintiff was liable to pay a sum

of Rs. 6, 44, 043.10. It is interesting to note that in Ex.B.18 the plaintiff has not raised any dispute that the printing work done by the defendant

was of inferior quality though the Textile Committee has rejected the goods as seen from Ex.A.2 as early as on 8.5.1990 and also on 30.5.1990.

She has also admitted the fabrics concerned were printed by the defendant and also by another firm Mittal Textiles during the period from

14.4.1990 within 7.5.1990, but Mittal Textiles was not made a party in the suit. She has also admitted that the plaintiff has received the fabrics

after printing even prior to the issue of Ex.B.18 and the bills for that work were received by the plaintiff from the defendant. Her evidence is also

clear that she was not able to inform when the plaintiff received the export order and she has categorically admitted that the foreign buyers have not

rejected the fabrics. In this connection, it is relevant to notice the stand taken by the plaintiff in the plaint to the effect that the goods were rejected

by the plaintiff''s foreign buyers and she has further admitted that the plaint averment that the goods were sent back by the foreign agent of the

plaintiff is incorrect. Her evidence also shows that the plaintiff used to check the quality of the fabrics on the same day of the receipt of the fabrics

from the defendant and she was not able to state which lot was rejected by the plaintiff. Another interesting aspect of her evidence is that she also

referred to Ex.A.3, which is an invoice of purchase of 37 bales by the plaintiff dated 2.3.1990. In Ex.A.3 the width of the cloth is shown as 47

inches, but in Ex.A.2, which is the inspection report issued by the Textile Committee, the width of the cloth is shown as 44 or 43 inches and there

is no correlation between the goods covered in Exs.A.2 with the goods covered in Ex. A.3. She has gone even to the extent of deposing that the

width of the cloth is not mentioned in Exs.A.3 and the above answer is given only to cover up the fact that in Ex.A.2 the width of the cloth is 43 or

44 inches. It is also admitted that she did not know the reason why the plaintiff has not enclosed the documents along with the plaint when the

plaint was filed in the court and she has also not produced the books of account of the plaintiff in support of the documents, Exs.A.3 to A.6.

Another important aspect is she has admitted that there was no bill or delivery order for having sold the fabrics to any third party and no evidence

is available to establish as to when the goods were sold and also the amount realised. Ex.B.8 is the debit note and there was no acknowledgment

for the document Ex.A.8. She has also admitted that there was no endorsement in Ex.A.8 that the defective materials were sold and she was not

able to correlate the fabrics covered in Ex.A.8 to the goods sent by the defendant and she has admitted that it cannot be said that Ex.A.8 related

to the fabrics sent by the defendant. Almost similar answer was given with reference to Ex.A.9, which is another debit note issued by the plaintiff in

favour of another concern G.G.Fabrics and she has admitted in more than one place that the fabrics mentioned in Ex.A.9 do not relate to the

fabrics sent by the defendant. Another interesting aspect is the goods were not sent back to the defendant either before or after the order of

rejection by Textile Committee and no intimation of rejection was given to the defendant. The reading of her evidence clearly shows that there was

another concern called Mittal Textiles also which is the sister concern of the defendant which also did the printing work during the same period and

the said concern was not impleaded as a party. A careful reading of the evidence of P.W.1 clearly shows that she was not aware of the sale by the

plaintiff firm to two other firms, which resulted in a loss to the plaintiff concern and no reliance can be placed on her oral evidence. If that is the

position of oral evidence, the documentary evidence are more revealing. The documentary evidence produced by the plaintiff, Exs.A.1 to A.10 do

not support the case of the plaintiff in any manner and the document Ex.A.1 does not establish the inferior quality of the printing done by the

defendant and most of the documents relate to Mittal Textiles and not to the plaintiff. Further Ex.A.1 deals with the goods sent by the plaintiff to

the defendant. We will deal with Ex.A.2 later. As far as Exs.A.3 to A6 concerned, they are the bills for the purchase of the goods by the plaintiff

but the documents Exs.A.3 to A.6 do not establish that the printing work done by the defendant was with reference to the clothes purchased under

Exs.A.3 to A.6 and further they do not establish that the work done by the defendant was of inferior quality and there is absolutely no correlation

between Exs.A.3 to A.6 with Ex.A.2. As far as Ex.A.7 is concerned, it is a letter dated 27.11.1990 sent by the plaintiff firm to the defendant

company claiming a sum of Rs. 13, 33, 505.l00 and the plaintiff has not produced any letter prior to the letter dated 27.11.1990 to show that the

plaintiff has claimed any such amount. Though the letter was acknowledged in Ex.A.10, which is the reply sent by the defendant, the

acknowledgment of Ex.A.7 does not prove that the work done by the defendant was of inferior quality in any manner whatsoever. As far as

Ex.A.2 is concerned, we are really surprised to notice that a xerox copy was allowed to be marked as an exhibit in the case. The document in

question is the rejection order passed by the Textile Committee. The counsel for the defendant by letter dated 5.3.1997 Ex.B.17 has requested the

counsel for the plaintiff to produce the original of Ex.A.2 at the time of the hearing of the suit on 10.3.1997. It was not produced on 10.3.1997

which necessitated the issuance of another letter dated 26.3.1997 Ex.B.16 to the counsel for the plaintiff by the counsel for the defendant, stating

that Ex.A.2 is an unauthenticated xerox copy and he has requested the counsel for the plaintiff to produce the original of the document Ex.A.2

before the court. In the same letter, the plaintiff was also called upon to produce the account books for the period from 1.1.1990 to 31.12.1990

along with original of Ex.A.2. In spite of the two letters issued by the counsel for the defendant to the counsel for the plaintiff, calling upon the

plaintiff to produce the original of Ex.A.2, the original of Ex.A.2 was not produced and Ex.A.2 is only a xerox copy and it is an unauthenticated

document and it is a matter of serious concern as to how a xerox copy of a document was allowed to be marked without producing the original of

the same. Another interesting aspect is that the reason for rejection of the goods by the Textile Committee is not that the printing work done on the

fabrics was of inferior quality but for other reasons. In one report the reason is stated to be that there is a cut and also hole and hence the lot was

not acceptable. We hold that Ex.A.2 has to be ignored for more than one reason. It is an unauthenticated xerox copy. There is no signature found

in Ex.A.2 and in spite of the request made by the counsel for the defendant, the plaintiff has not produced the original and there is absolutely no

correlation between Ex.A.2 with the fabrics sent by the defendant after the printing work was done. We have already seen that the plaintiff has not

produced any books of accounts in support of the bills Exs.A.3 to A6. Now let us come to debit notes and the debit notes were issued by the

plaintiff one in favour of India Fabrics and another in favour of G.G.Fabrics. We have already seen that P.W.1 in her evidence has admitted that

the goods were sold at a cheap rate, but she was not able to state the rate at which the goods were sold by the plaintiff in favour of the two firMs.

The plaintiff''s witness has admitted that there are no sale bills and there are no delivery orders and which lot of the fabrics was rejected by the

plaintiff and she has also stated that for the sale of the goods by the plaintiff to the two concern, there was no acknowledgment for receipt of the

money from the two firms mentioned in Exs.A.8 and A.9. Exs.A.8 and A.9 are only debit notes and the person who issued the debit notes on

behalf of the plaintiff was also not examined. The documents were not produced along with the plaint. Considering all the circumstances, we are of

the view that the documents Exs.A.8 and A.9 were prepared and produced before the court at the time of examination of the witnesses for the

purpose of the case. It is highly unfortunate that the learned Additional Judge, City Civil Court, Madras has not gone into the question of the

genuineness of the documents. It is evident that the learned Additional Judge seems to have been carried away by the two documents, which are of

doubtful authentic and further, it is also curious to note that he has attached much importance to those documents as well. Another interesting

aspect is that the evidence let in on behalf of the plaintiff clearly show that the plaintiff has not proved that the work done by the defendant of

printing the fabrics was of inferior quality and we have already made reference to the evidence of P.W.1 and the evidence of P.W.1 clearly

discloses that there is absolutely no evidence to show that the work done by the defendant on the fabrics was of inferior quality nor there is

evidence to show that the goods were returned to the defendant. There is no evidence to show that the plaintiff has informed the defendant about

the poor quality of work done on the fabrics either before or after the order of Textile Committee. There is also no evidence for rejection of the

goods by the plaintiff or by foreign buyers and the case pleaded by the plaintiff in the plaint that the goods were rejected by the foreign buyers is

not correct even on the own showing of plaintiff''s witness. Further there is absolutely no evidence to show that the plaintiff has sold the goods to

the two firms mentioned in Exs.A.8 and A.9 and suffered a loss and there is no correlation between the goods mentioned in Ex.A.2 with the fabrics

received from the defendant. We are really surprised to see that the learned Additional Judge, City Civil Court, Madras has not analysed the

evidence in proper perspective and he has omitted to take into account the glaring defects in the evidence and own admission by P.W.1 in her

evidence that there was no proof of the sale of the goods and there was no correlation between the goods received from the defendant with the

goods mentioned in Ex.A.2. What is more disturbing is the learned Additional Judge, City Civil Court, Madras has placed the burden of proof on

the defendant and found fault with the defendant for not producing the documentary evidence in support of its defence. We have gone through the

reasonings of the learned Additional Judge for coming to the conclusion that the plaintiff is entitled to a decree and we find that none of the

reasoning given by him is sustainable on the facts of the case or in law. The learned Additional Judge, has completely overlooked that there is no

evidence in support of the plaintiff''s case that the printing work done by the defendant was of inferior quality and the goods were returned to the

defendant and there is complete lack of evidence to the effect that the said fabrics were also sold by the plaintiff to the two firms and further, there

is also no evidence to show that the plaintiff has suffered any loss on account of such sale. We find that the learned Additional Judge has drawn

upon his own imagination for his view that the plaintiff is entitled to the amount and he has based his conclusion on mere surmises and conjectures

and his finding is inconsistent with the evidence on record. The finding of the learned Additional Judge in our view to say the least is a perverse one

and it is not based on any evidence and as a matter of fact against the evidence on record. We therefore hold that the judgment and decree of the

learned Additional Judge challenged in appeal are liable to be set aside.

As far as the submission of Mr. Sampathkumar, learned senior counsel for the respondent that the present suit is a not a counter blast to the

suit instituted by the defendant in Ahemadabad is concerned, though the suit in Chennai was instituted prior to the suit instituted at Ahemadabad,

the suit was instituted in Chennai by the plaintiff after the receipt of the notice Ex.A.10 dated 24.12.1990 from the defendant, calling upon the

plaintiff to make payment of Rs. 8, 93, 744.95 for which the suit has been instituted at Ahemadabad and the plaintiff has filed the suit on

25.1.1991. The other submission of Mr. Sampathkumar, learned senior counsel for the respondent is that the defendant has acknowledged the

receipt of the notice Ex.A.7 dated 27.11.1990 issued by the plaintiff to the defendant, demanding a sum of Rs. 13, 33, 505.00. He referred to

Ex.A.10 wherein there is a reference to the receipt of the notice dated 27.11.1990. Though the notice was acknowledged, but that does not

advance the case of the plaintiff any further in any manner whatsoever.

In the result, the appeal stands allowed and the judgment and decree of the trial court are set aside. The defendant/appellant is entitled to the

costs throughout. Consequently, connected C.M.Ps are closed.