Nu Tech Security Printers vs Santhi Agency and Others

V.K. Jain, J.—This is a suit for recovery of Rs. 20,29,634.55. Defendant No. 2 is a partner of Defendant No. 1, whereas Defendants No. 5 and 6 are partners of Defendants No. 3 and 4. Defendants No. 3 and 4 are also alleged to be the unit of Defendant No. 7, wholly owned by it. It is alleged in the plaint that Government of Nagaland appointed Defendant No. 3 as the Organizing Agent of its State sponsored lotteries and Defendants No. 3 to 7 were appointed as the selling agents for Defendants No. 3 for such lotteries. It is further alleged that Defendants No. 3 to 7, in the name of Defendant No. 3, negotiated with the plaintiff for printing of lottery tickets and as per instructions of the sponsorer of the lotteries, Defendant No. 3 got the tickets printed from the plaintiff. On the request of Defendant No. 3, tickets were delivered by the plaintiff to Defendant No. 1 at its Delhi office and the bills for printing were also raised in the name of Defendant No. 1. Payments against the bills, however, were received by the plaintiff from Defendant No. 1 as also from Defendants No. 3 and 4. It is alleged that a sum of Rs. 14,58,250/- is due to the plaintiff from the Defendants towards printing of the tickets. The plaintiff has claimed that amount along with interest thereon at the rate of 18% per annum which comes to Rs. 5,71,384.55, making a total of Rs. 20,29,634.55.

Defendants No. 1 and 2 filed written statement contesting the suit and took a preliminary objection that there is privity of contract between them and the plaintiff since it were Defendants No. 3 to 7 who had negotiated with the plaintiff for printing of lottery tickets and had placed orders for that purpose. On merits, it has been admitted that Defendant No. 3 had appointed Defendant No. 1 as its sole selling agent for the State sponsored lottery of the Government of Nagaland. It is also alleged that since Defendants No. 1 and 2 are outside Delhi, they had asked Defendants No. 3 to 7 to get the tickets printed in Delhi at their own risk and responsibility and the cost of printing was to be adjusted from the discount and commission, etc., which were payable to Defendant No. 1. It is also claimed in the written statement of Defendants No. 1 and 2 that it was Defendant No. 5 who had negotiated with the plaintiff and placed orders for printing of lottery tickets and had asked the plaintiff to raise the bills in the name of Defendant No. 1. It is also alleged in the written statement that Defendants No. 3 to 7 have already debited the entire bill amount of the plaintiff in their account and, therefore, they alone are liable to make payment to the plaintiff. It has, however, been admitted that the bills for printing of bills were raised in the name of Defendant No. 1 though it is claimed that the bills used to be sent to Defendant No. 3 and they used to forward it to Defendant No. 1 along with the printed lottery tickets.

In their written statement, Defendants No. 3 to 7 have claimed that they had no dealing with the plaintiff at any point of time. It is further alleged that Defendant No. 4 had dealings with the plaintiff only to the extent that certain payments were made by it on behalf of Defendant No. 1. On merits, it has been admitted that Defendant No. 3 was appointed as the Organizing Agent for State sponsored lotteries of Government of Nagaland and it had appointed Defendant No. 1 as its sole selling agent. It is further alleged that it was the responsibility of Defendant No. 1 to have the lottery tickets printed and sold and there was no privity of contract between any of the Defendants out of Defendants No. 3 to 7 and the plaintiff.

The following issues were framed on the pleadings of the parties :

(i) Whether the suit has been properly instituted in the name of the plaintiff? OPP

(ii) Is the suit bad for mis-joinder of parties? OPD

(iii) To what amount is the plaintiff entitled and from which Defendant? OPP

(iv) Is the plaintiff entitled to interest. If so, at what rate and for what period? OPP

(v) Relief.

ISSUE No. 1

The affidavit of PW-1 Mr. Ashok Shroff shows that the plaintiff is a registered partnership firm and he is its registered partner. Ex. PW1/1 is the certified copy of form ''B'' issued by Registrar of Firms, Delhi which shows that the plaintiff is a registered partnership firm since 3rd October 1986. The certified copy of form ''A'' is also available on the judicial file. Form ''A'' being a public document, it can be proved by filing its certified copy and hence the certified copy of form ''A'' filed by the plaintiff is admissible in evidence. A perusal of form ''A'' shows that Mr. Ashok Shroff is one of the four partners of M/s Nu-Tech Security Printers. There is no evidence to rebut the deposition of Mr. Ashok Shroff in this regard. The issue is decided against the Defendants and in favour of the plaintiff.

ISSUES No. 2 and 3

These issues are interconnected and can be conveniently decided together. There is no dispute that plaintiff had printed tickets for State sponsored lotteries of the Government of Nagaland. The dispute is as to whether the plaintiff is entitled to recover the charges for printing of the lottery tickets from Defendant No. 1 or from one or more Defendants out of Defendants No. 3 to 7. The case of the plaintiff as set out in the plaint is that the order for printing of the tickets was placed by Defendant No. 3 and tickets were printed on its instructions and supplied to Defendant No. 1 at its Delhi office. There is no documentary evidence of the order for printing of tickets having been placed by Defendant No. 3. Though it has been stated in para 5 of the affidavit of Mr. Ashok Shroff that as per instructions of sponsorer of the lotteries, Defendant No. 3 got the tickets printed from the plaintiff firm, the affidavit does not disclose the name of the person who placed order with the plaintiff for printing of tickets. Defendant No. 3 being a partnership firm could have acted either through any of its partners or though any of its employees. The failure of the plaintiff to disclose the name of the person, who placed the order with it for printing of tickets, becomes important in view of the stand taken by Defendants No. 3 to 7, that none of them had anything to do with the printing of lottery tickets, which was the sole responsibility of Defendant No. 1. Though Defendants No. 1 and 2 have claimed in their written statement that the orders were placed with the plaintiff by Defendant No. 5, there is no evidence to prove this allegation.

Admittedly, the invoices towards charges for printing of lottery tickets were raised by the plaintiff in the name of Defendant No. 1 Santhi Agency. Ex.PW1/2 to Ex.PW1/23 are the invoices. None of the invoices contains any endorsement to the effect that the order for printing of tickets was placed by Defendant No. 3. The copies of the invoices do not purport to have been endorsed to Defendant No. 3. The learned Counsel for the plaintiff has pointed out that one invoice, Ex. PW1/24 has been raised in the name of Defendant No. 3 M/s. Amrit and Company. However, it does not bear signature of any person for and on behalf of Defendant No. 3 M/s. Amrit and Company. In any case, there is no explanation as to why out of 23 invoices filed by the plaintiff, 22 have been raised in the name of Defendant No. 1 Santhi Agency.

Ex.PW1/25 is a letter dated 30th July 1987 written by the plaintiff to Defendant No. 1. A perusal of this document would show that during the discussions in the presence of Mr. Amrit Chopra and Mr. Suri of Defendant No. 3, it was agreed by Defendant No. 1 that it would make payment of Rs. 3Lacs to the plaintiff by way of three demand drafts of Rs. 1Lac each payable by 20th August 1987, 31st August 1987 and 10th September 1987, respectively and the schedule for the balance payment would be sent by 10th September 1987. This document clearly shows an admission of liability on the part of Defendant No. 1 Santhi Agency with respect of the charges for printing of lottery tickets. Ex.PW1/26 is the letter dated 29th March 1988 sent by the plaintiff to Defendant No. 1 enclosing therewith the statement of accounts as on 30th March 1988 and requesting Defendant No. 1 to let the plaintiff know how soon they had intended to clear the outstanding amount of Rs. 14,58,250/-. This document is yet another proof that the transaction for printing of tickets was between the plaintiff and Defendant No. 1. Had that not been the case, there could be no occasion for the plaintiff to demand the outstanding amount from Defendant No. 1. Though the copies of this letter purport to be endorsed to Defendant No. 3 Amrit and Company, no demand was raised with Defendant No. 3 for payment of the amount shows as outstanding in this letter. It is an admitted case that some payment to the plaintiff was made by Defendant No. 1.

This Defendant No. 1''s own case in the written statement is that charges for printing of tickets were adjusted against the commission etc. payable to it by Defendant No. 3. This is also their case that the invoices used to be transmitted to them by Defendant No. 3. This averment also indicates that it was Defendant No. 1 who was liable to pay charges of printing of tickets. Had the liability for paying the charges for printing of tickets been that of Defendant No. 3, there could be no question of those charges been adjusted against the commission which was payable by Defendant No. 3 to Defendant No. 1. Ex.PW1/27 is the letter sent by Defendant No. 1 to the plaintiff stating therein that the charges for printing of tickets have already been paid by it to Defendant No. 3. This to my mind is another admission of liability on the part of Defendant No. 1 since there could have been no reason for it to make payment of those charges to Defendant No. 3, had it not been liable to pay for the printing of lottery tickets.

For the reasons given in the preceding paragraphs, I am of the view that there was no privity of contract between the plaintiff and any of the Defendants out of Defendants No. 3 to 7. The issues are decided accordingly.

ISSUE No. 4

It has been stated in the affidavit of Mr. Ashok Shroff, partner of the plaintiff firm that the Defendants had agreed to pay interest at the rate of 18% per annum in case there was default in payment of the bills from the date of drawl. Defendants No. 1 and 2 have not come forward to contest the suit and have not produced any evidence. I, therefore, see no reason to disbelieve the deposition of Mr. Ashok Shroff in this regard and accordingly hold that the plaintiff is entitled to interest at the rate of 18% per annum on the outstanding principal amount though only from Defendants No. 1 and 2. The issue is decided accordingly.

ISSUE No. 5

In view of my finding on the issues, the plaintiff is entitled to recovery of Rs. 14,58,250/- as principal sum and Rs. 5,71,384.55 towards interest from Defendants No. 1 and 2.

A decree for recovery of Rs. 20,29,634.55 with pendente lite and future interest at the rate of 12% per annum is hereby passed in favour of the plaintiff and only against Defendants No. 1 and 2.

The suit against Defendants No. 3 to 7 is dismissed with no order as to cost. Decree sheet be drawn accordingly.