Satya Sai Chemicals and Seeds Company and Another vs Modern Proteins Ltd. Company

P.S. Narayana, J.

Introduction

The unsuccessful defendants, aggrieved by the judgment and decree dated 7-7-1994 made in O.S. No. 28 of 1992 on the file of the Additional Subordinate Judge, Kurnool, had preferred the present appeal.

The respondent/plaintiff instituted the suit specified supra against the appellants/defendants for recovery of Rs. 2,18,490-60 ps. due on business dealings with future interest and costs of the suit. The trial Court, on the strength of the evidence of P.Ws.1 and 2 D.W.1 and Exs.A-1 to A-37 and Exs.B-1 to B-12, ultimately came to the conclusion that respondent/plaintiff is entitled to a decree for Rs. 1,26,187-35 ps. less Rs. 25,133-80 ps, (paid after filing of the suit) with proportionate costs and with interest at 24% per annum from the date of suit to the date of decree and thereafter at 6% per annum till the date of realization.

Submissions of learned Counsel for appellants

Sri R.V. Prasad, the learned Counsel representing the appellants/defendants would submit that the mere fact that there was no reply given to Ex.A-3 cannot be taken as though respondent/plaintiff had established the suit claim. The learned Counsel also had taken this Court through the evidence of P.W.1 and had pointed out that by his evidence it cannot be said that respondent/plaintiff had established supply of goods and receipt thereof by the appellants/defendants. The learned Counsel also would point out that the evidence of P.W.2 may not, in any way, further improve the case, even otherwise the Counsel would maintain that Exs.A-13 and A-14 are self-serving documents. At any rate these were not addressed by the appellants/defendants. The mere fact that P.W.2 was examined would not in any way improve the case of respondent/plaintiff. The learned Counsel also had taken this Court through the evidence of D.W.1 and Exs.B1 to B-12 in general and Ex.B-5 the purchase register in particular. The learned Counsel also would comment that the fact that these were not entered in the purchase register would definitely belie the stand taken by the respondent/plaintiff.

Submissions of learned Counsel for respondent

Per contra, Sri Lakshmi Narayana Reddy, learned Counsel representing the respondent/plaintiff had taken this Court through the pleadings of the respective parties and would maintain that the commission agency of P.W.2 is not in controversy, since the same was admitted even in the written statement and this fact was never seriously controverted even by D.W.1. The learned Counsel also would submit that Ex.A-3 dated 7-1-1992 the registered legal notice was in fact served on the appellants/defendants and they had not chosen to give any reply. Apart from the evidence of P.W.1, the evidence of P.W.2 also is available on record. The learned Counsel also would maintain that it is not as though P.W.2 is an interested witness in respondent/plaintiff alone. The learned Counsel would point out that P.W.2 deposed that he had acted as a commission agent for defendants also. In this view of the matter the evidence of P.W.2 would assume importance, which had well supported the evidence of P.W.1 in this regard. The learned Counsel also pointed out to Exs.A-13 and A-14 and had taken this Court through the findings recorded by the trial Court in this regard.

Heard both the Counsel.

For the purpose of convenience, the parties would be referred to as plaintiff and defendants hereinafter.

Pleadings of the parties

The plaintiff filed O.S. No. 28 of 1992 on the file of the Additional Subordinate Judge, Kurnool for recovery of Rs. 2,18,490-60ps. due on the business dealings with future interest and costs of the suit. The plaintiff pleaded in the plaint that the second defendant is running the business in the name and style "Satya Sai Chemicals and Seeds Company" and he is the Managing Director of the said concern. The defendants are the customers of the plaintiff''s company purchasing on credit extracted groundnut cakes and extracted sunflower cakes from the year 1987. The business transaction was arranged by the brokers Sri Lakshmi Venkateswara Commission Agents, Brodipet, Guntur. According to the business usage and the contract agreed between the parties the defendants have to pay interest at 24% per annum on the goods supplied by the plaintiff to the defendants, if the amount is not paid within 30 days of the delivery of the goods to the defendant. The defendants are not regular in paying the amounts to the plaintiff on the material supplied to them from 14-1-1990. The defendants are having the account with the plaintiff''s company. The defendants are due to the company Rs. 1,26,187,35 ps. as on 5-12-1991. The last payment made by the defendant is Rs. 24,820-05 ps. on 5-12-1991. The ledger extract, which is maintained in the regular course of business by the plaintiff, and the interest due by the defendants, is calculated in the extract filed along with the plaint. The interest due to the plaintiff''s company is Rs. 92,303-25 ps. as on 5-12-1991. In spite of the repeated demands by the plaintiff''s company through its broker mentioned above and telephone messages, the defendants failed to pay the amount to the plaintiff''s company. Finally on 7-1-1992 the plaintiff had issued a registered notice to the defendants for the payment of the money due to the company. There is no reply from the defendants. The defendants are not agriculturists and are not entitled for the benefits of any Agricultural Debt Relief Act. The defendants are the businessmen and they are Income Tax Assessees.

The first defendant filed written statement, which was adopted by the second defendant. It was pleaded in the written statement of the first defendant as hereunder:

The allegations made in Para 3 of the plaint are not fully correct. It is true that this defendant is the customer of the plaintiff''s company purchasing extracted groundnut cakes and extracted sunflower case from 11-7-1987 onwards. It is also true to say that the business transaction was arranged by the brokers Sri Lakshmi Venkateswara Commission Agents, Guntur. It is false to say that according to the business usage and the contract agreed between the parties, the defendant has to pay the interest at 24% per annum on the goods supplied by the plaintiff to the defendant if the amount is not paid within 30 days of the delivery of the goods to the defendants. It is false to say that the defendant is not regular in paying the amounts to the plaintiff on the material supplied to them from 14-1-1990. It is false to say that the defendant is due to the plaintiff-company Rs. 1,26,187-35 ps. on 5-12-1991. It is submitted that apart from the payment of Rs. 24,820-05 ps. under D.D.No. 321768 dated 4-12-1991 which was alleged to have recorded by the plaintiff on 5-12-1991, this defendant paid Rs. 25,198-80ps. by D.D. No. 321968 dated 27-2-1991 on 27-2-1992. So he is not due any amount to the plaintiff for the transactions made by the defendant with the plaintiff''s company. The ledger extract filed by the plaintiff claiming interest is not correct. It is humbly submitted that this defendant never agreed to pay any interest on the goods supplied by the plaintiff to the defendant. It is false to say that the interest due to the plaintiff''s company is Rs. 92,303-25 ps. as on 5-12-1991. It is humbly submitted that this defendant has not received the goods under bill numbers shown below and their amounts.

This defendant has not received any goods worth Rs. 93,588-76 ps. as stated above under the above bills. Hence, this defendant specifically denies the above said four transactions and the plaintiff is put to strict proof of supplying the goods under the above bills to this defendant. It is false to say that in spite of the repeated demands by the plaintiff''s company and through its broker and telephone messages, the defendants failed to pay the amounts to the plaintiff''s company. It is humbly submitted that these defendants used to give suitable notices and reply notices to the plaintiff company as and when required. The plaintiff has not issued any legal notice before filing suit.

It is humbly submitted that right from the beginning of the business transactions of this defendant with the plaintiff''s company, this defendant is paying the amounts due under the bills of the plaintiff as per the weighments made at Hyderabad at the time of receiving the goods by this defendant and the payments are making under covering letters informing the weighments and the particulars of amounts made in full and final settlement of the bills concerned and plaintiff is receiving the said amount accordingly without any protest at any time and by accepting the same. Further, this defendant is used to inform to the plaintiff whenever there is much difference weighments.

It is humbly submitted that the plaintiff has not supplied the goods to this defendant properly and timely and because of the delayed supply, this defendant sustained huge loss. It is humbly submitted that the plaintiff agreed to pay 7% discount on the purchase made by this defendant. Whenever this defendant demanded for the payment of the 7% discount on the purchases, the plaintiff used to say that the amount will be credited to your account at the time of settlement of accounts. Hence, this defendant was under the impression that the 7% of discount will be credited to his account. This defendant demanded the plaintiff in the first week of January 1992 to settle the 7% discount amount as agreed and the rate difference amount for irregular supplies made for the years the transactions made. For that the plaintiff gave evasive reply and filed the suit to harass this defendant on bogus statement of accounts. This defendant reserved his right to file separate suit for recovery of the 7% discount amount payable by the plaintiff for the purchases made by this defendant.

Issues settled by trial Court

On the strength of the respective pleadings of the parties, the trial Court settled the following issues:

Whether the defendants have not received the goods under bill Nos. 27, 20, 34 and 37 from the plaintiff''s company which is to the tune of Rs. 93,588-76 ps?

Whether the defendants have not agreed to pay interest at 24% p.a. on the goods supplied by the plaintiff''s company, if the amount is not paid within 30 days of the delivery of the goods to the defendants?

Whether the plaintiff company agreed to give 7% discount on the goods supplied to the defendants?

To what relief ?

Subsequent thereto on 12-8-1993 the 1st issue was re-casted as hereunder:

Whether the defendants have not received the goods under bill Nos. 427, 429, 434 and 437 from the plaintiff company to the tune of Rs. 93,588.76 ps?

Evidence available on record

P.Ws.1 and 2 were examined and Exs.A-1 to A-37 were marked on behalf of the plaintiff. D.W.1 was examined and Exs.B1 to B-12 were marked on behalf of the defendants.

Findings recorded by trial Court in nutshell

The trial Court, on appreciation of the evidence available on record, had recorded a finding that the defendants received the goods under the bills 427,429, 434 and 437 and thus answered the point in favour of the plaintiff while answering issue No. 1. However, the trial Court while answering issue No. 2 came to the conclusion that in view of the fact that there is no mention regarding the interest, the plaintiff is not entitled to claim interest and thus answered the said issue against the plaintiff. The trial Court also answered issue No. 3 holding that there is no agreement to pay discount of 7% to the defendants on the purchases made by them from the plaintiff and thus the same was answered against the defendants and ultimately partly decreed the suit as specified supra.

Points which arise for consideration in this appeal

In the light of the findings, which had been recorded by the trial Court, and also the grounds of appeal and the submissions made by both the Counsel at length, the following points arise for consideration in this appeal.

Whether the findings recorded by the trial Court that the defendants in fact received the goods under the bills 427, 429, 434 and 437 from the plaintiff-company to be confirmed or liable to be set aside in the light of the oral and documentary evidence available on record?

If so, to what relief the parties are entitled to?

Point No. 1:

PW1, is the Marketing Manager of the plaintiff-company who had narrated all the details relating to the suit transaction. P.W.2 is the commission agent. Reliance was also placed on Exs.A-1 to A-37, the documentary evidence produced by the plaintiff. As against this evidence, the evidence of D.W.1 is available on record and Exs.B-1 to B-12 also had been marked on behalf of the defendants. P.W.1 deposed that they were supplying groundnut extract cake and Sunflower cake to D-1 on credit basis and the transactions will be made through brokers and Sri Lakshmi Venkateswara Commission Agent, Guntur is the broker to D-1. P.W.1 also deposed that they supplied the goods whenever they received confirmation of offer from the broker of D-1. D-1 company has to pay the price of the goods within 30 days from the date of receipt of goods. The delivery of goods will be made at their factory. If the defendants fail to pay the price of goods within 30 days from the date of receipt of goods, they will charge interest at 24% per annum from the date of expiry of 30 days time. D-1 had dealings with their company since 1985. They maintained the accounts pertaining to the transactions between the plaintiff-company and D-1 Company. D-1 became irregular in payment of the price of the goods from 1991. The ledger extract showing transactions from 14-1-1990 had been filed. D-1 became due to a sum of Rs. 1,26,187-35 ps. as on 5-12-1991. Ex.A-1 is the ledger extract, which was signed by the Managing Director of the plaintiff-company. Ex.A-2 is the statement of interest calculation. P.W.1 also further deposed that they issued registered notice to D-1 on 7-1-1992. Ex.A-3 is the office copy of the notice and Ex.A-4 is the postal acknowledgment of D-1. The last payment made by D-1 was on 5-12-1991. Subsequent to the filing of the suit, D-1 paid Rs. 25,133-80 ps. by way of D.D. dated 28-2-1992. P.W.1 also deposed that the first defendant did not give any reply to the notice issued by the plaintiff. The payment made through D.D. has to be deducted from the suit amount. P.W.1 further deposed that they sent registered letters dated 20-7-1991 and 25-7-1991 to D-2 in his capacity as Managing Director of D-1 company demanding the payment of amounts due. Exs.A-5 and A-6 are the office copies of letters. Exs.A-7 and A-8 are the postal acknowledgements. P.W.1 further deposed that they sent original invoice and waybills along with goods. The duplicates of the invoice and waybills are with them and they produced duplicates relating to the invoice Nos. 427, 429, 434 and 437. Exs.A-9 to A-12 are the duplicates. The total amount under Exs.A-9 to A-12 is Rs. 93,588-76 ps. The suggestions relating to non-supply of goods had been specifically denied. Exs.A-13 and A-14 are the confirmation contract and letter from the broker of D-1. P.W.1 further deposed that he is producing 23 covering letters Exs.A-15 to A-37 sent by the defendants with demand drafts.

This witness was cross-examined at length. No doubt, this witness admitted in cross-examination that there is no written agreement for payment of interest if the sale consideration is not paid within 30 days from the date of supply of goods. In Exs.A-15 to A-37 defendant mentioned that the amount was paid towards full and final settlement of the bills therein. There is document to show that the plaintiff-company received the drafts sent along with Exs.A-15 to A-37 with protest as the interest was not sent. This witness also admitted that there was no written contract for payment of interest and this witness also was cross-examined in relation to Exs.A-13 and A-14. This witness deposed that Ex.B-2 dated 2-8-1988 is addressed by the plaintiff-company along with statement of account and Ex.B-3 is the letter along with statement of account sent by the plaintiff-company on 12-11-1998. Ex.B-4 is the office copy of the said letter along with the statement of account. Most of the cross-examination of P.W.1 related to the interest and the conditions relating to the payment of interest. Several other suggestions had been denied.

P.W.2 who is the commission agent deposed that they acted as commission agent for plaintiff-company and also for the defendants. Hence, it cannot be said that P.W.2 is interested in plaintiff-company only. This witness further deposed that they receive the order of requirement from buyer and place orders for supply of goods with the seller on phone followed by letters. Similarly, on receipt of the goods by buyer confirm the receipt of goods to the seller on phone and it will be followed by letter. Exs.A-13 and A-14 were sent by him to the plaintiff for receipt of the goods by the defendants from the plaintiff-company. In the cross-examination P.W.2 stated that he sent Exs.A-13 and A-14 by post. Some comment was made on this aspect. This witness was cross-examined at length and the suggestions put in relation to Exs.A-13 and A-14 had been specifically denied.

As against this evidence D.W.1 the second defendant had deposed about the oral contract between the plaintiff and the defendants and this witness also deposed about 7% concession on total purchase to be given by the plaintiff. This witness also further deposed about the commercial practice. D.W.1 further deposed about Ex.B-5 the purchasing register maintained by him for the financial year 1991-92 and as per Ex.B-5 the last receipt of goods from the plaintiff-company was on 14-4-1991. In the month of April 1991 he received five consignments from the plaintiff-company under bill Nos. 137, 138, 139, 141 and 142. D.W.1 also deposed that after 14-4-1991 he did not place orders either with the plaintiff-company or with the broker for supply of any goods. This witness specifically deposed that the defendants had not received any consignments from the plaintiff-company in the month of June 1991 under bill Nos. 429, 434 and 437 and he did not receive any phone call either from the plaintiff-company or from P.W.2 in the month of June 1991. This witness also deposed about Exs.B-2 and B-3. D.W.1 admitted relating to Exs.A-15 to A-37 covering letters sent by him. Exs.B-6 to B-9 are the copies of covering letters written to the plaintiff. This witness also deposed about Exs.B-10, B-11 and B-12 and further deposed that there is no agreement to claim interest by the plaintiff-company. D.W.1 further deposed that he is not due any amount to the plaintiff. In cross-examination D.W.1 deposed that his dispute is only with regard to four bills bearing Nos. 427, 429, 434 and 437. This witness further deposed that except Ex.B-6 all the payments under other bills are covered by Ex.A-1 and he was not aware of the filing of the suit by the date he made the payment under Ex.B-6. Ex.A-3 original was received by them. Ex.A-4 is the acknowledgement for having received the original of Ex.A-3 and Ex.A-3 is dated 7-1-1992 and Ex.A-4 is dated 10-1-1992. This witness also further deposed that broker is a middleman between the two parties of contract and it is true that P.W.2 was a broker between defendants and plaintiff, but he is not aware of the transaction between P.W.2 and the plaintiff. D.W.1 also deposed that he received number of invoices like Exs.A-9 to A-12, but he cannot say whether all the invoices bear the counter signatures. This witness further deposed that the business transactions by D.W.1 with the plaintiff-company were in lakhs of rupees. Ex.B-11 was written by him to the plaintiff-company on 7-3-1992. He did not settle the account with the plaintiff-company at the end of every financial year, but he settled the accounts bill wise.

This witness was also cross-examined in relation to Exs.B-3, B-5, B-10 and B-11 and the suggestions put to this witness in relation to bill Nos. 427, 429, 434 and 437 had been specifically denied by this witness. It is true that the trial Court recorded a finding in relation to Ex.A-3 and the non-reply relating thereto. It is true merely because there was no reply, at all times, it cannot be taken that the plaintiff had automatically proved the case. But, that is not the only ground on which findings had been recorded by the trial Court. There is other evidence also available on record. Apart from this aspect of the matter, the non-reply to the notice of demand made by a party also can be taken into consideration as one of the factors while appreciating the other evidence available on record. Hence, the findings recorded by trial Court on the strength of non-reply to the notice of demand also cannot be found fault by this Court.

The evidence of P.Ws.1 and 2 is clear and categorical. P.W.2 is a commission agent. It is pertinent to note that he is a commission agent for both the plaintiff-company and defendants-company as well. Hence, it cannot be said that P.W.2 deposed in relation to Exs.A-13 and A-14 only with a view to help the plaintiff. Hence, apart from the evidence of the Marketing Manager P.W.1, the evidence of P.W.2 also is available on record. P.W.1 in fact deposed in detail about Exs.A-1 to A-37. D.W.1 also admitted about the receipt of Ex.A-3 and non-reply in relation thereto. P.W.2 deposed about Exs.A-13 and A-14 the confirmation of contract and the letter. Submissions at length were made by the Counsel representing the appellants relating to Ex.B-5 and the non-mention of the bills in controversy in Ex.B-5 and absence of relevant entries. Hence it was stated that it should be taken that the stand taken by the defendants is correct that they have not received these goods. It is needless to say that Ex.B-5 is a self-serving document maintained by the defendants. No doubt, there is some controversy relating to the debts also in this regard. In the light of the clear evidence of P.Ws.1 and 2 and also the other documents Exs.A-13 and A-14 and the prior series of transactions in between the plaintiff and defendant companies, the findings recorded by the trial Court in relation to the receipt of goods by the defendant-company in relation to the bills in controversy cannot be found fault in any way and accordingly, the said findings are hereby confirmed. It is needless to say that as far as the claim of interest covered by issue No. 2 is concerned, the same had been negatived by the trial Court and the same had not been seriously agitated even before this Court.

Point No. 2:

In the light of the findings recorded supra, this Court is of the considered opinion that the findings recorded by the trial Court and the decree made in pursuance thereof by the trial Court do not suffer from any legal infirmity and accordingly the appeal shall stand dismissed with costs.