SCOPE VINCOM INDUSTRIES PRIVATE LIMITED vs SITARAM SULTANIA

The appeal and the cross-objection arise out of an order dated September 20, 2017 for judgment on admission to the extent of Rs.1,67,45,446/-.

The claim of the respondent-plaintiff was on account of balance price of goods sold and delivered. For obtaining a judgment on admission, the plaintiff relied on two cheques of September, 2016 of a total value of Rs.2,26,02,396/-. In addition, the plaintiff relied on the confirmation of accounts, inter alia, for the financial year ended March 31, 2016 and for the period April 1, 2016 to August 1, 2016. According to the accounts confirmed by the appellant herein, a sum of Rs.2,32,77,237/- was apparently due to the plaintiff as at March 31, 2016 and such amount stood reduced to Rs.2,26,02,396/- as at August 1, 2016 after taking into account certain subsequent supplies effected by the plaintiff and the payments made in the interregnum by the appellant herein. The endeavour of the plaintiff, by relying on the accounts for the aforesaid two periods, was to demonstrate that the figure of Rs.2,26,02,396/-, tallied with the total value of the two cheques issued to it by the appellant on a subsequent date.

It appears that prior to the two cheques being issued by the appellant to the plaintiff, a letter was issued to the plaintiff on August 13, 2016 wherein the appellant claimed that some of its executives had colluded with its suppliers and committed acts of financial impropriety. Though no specific allegations were levelled against the plaintiff, the appellant requested the plaintiff to furnish a statement of accounts with supporting documents in respect of the entire transactions between the parties for the previous three years.

The appellant suggests that since such letter of August 13, 2016 was issued to and received by the plaintiff prior to the deposit of the two cheques by the plaintiff, it was incumbent on the plaintiff to either counter the contents of such letter or furnish the fullest accounts before purporting to deposit the cheques for encashment. The appellant claims that there was an executive at the Bangalore office of the appellant who had played ball with the plaintiff to facilitate an undeserving claim being made by the plaintiff. It is the further case of the appellant that on the instructions of such recalcitrant former executive of the appellant, a lesser employee confirmed the accounts and issued blank, signed cheques and made over the same to the plaintiff.

The application that was filed by the plaintiff was for judgment on admission and the interlocutory Court recognised it as such. The interlocutory Court noticed that the value of the two cheques was in excess of Rs.2.26 crore but a contemporaneous notice of demand issued by the plaintiff referred to a figure of Rs.1,67,45,446/- and passed a decree on admission for such lesser amount.

A judgment is passed on admission on the basis of the clear, unequivocal and unambiguous admission of the party against whom such judgment is made.

There was a doubt as to the veracity of the figure of Rs.2,32,77,237/- in the confirmed accounts for the year ended March 31, 2016 that had been raised by the plaintiff in the plaintiff''s mail of April 4, 2016 when the plaintiff only indicated that the outstanding amount was to the extent of Rs.1,67,45,446/-. On the plaintiff''s showing, the admission apparent from the document dated August 2, 2016 stood discredited since the opening figure therein could no longer be accepted to be Rs.2,32,77,237/-. A judgment on admission could no longer be passed on the basis of the accounts confirmed by the appellant on August 2, 2016 or on the basis of the figures reflected in the two cheques which corresponded to the exact amount indicated in the confirmed accounts of August 2, 2016.

It is elementary that when a suitor seeks a judgment on admission, there is no real adjudication that is undertaken by the Court. There has to be a clear admission to begin with, which the defendant has a chance to explain away. The extent of the adjudicatory exercise undertaken by a Court is to assess whether the explanation is good enough for the admission to be doubted or displaced. However, the admission has to be evident from a document or the like issued by the person against whom the judgment is sought.

In the present case, paragraphs 6 and 14 of the petition carried to the interlocutory Court merely relied on the cheques and the confirmed accounts and sought judgment on admission on the basis thereof. Once the amount admitted to be due by the appellant herein in such documents stood discredited by a contemporaneous or subsequent document of the plaintiff, nothing else could have been looked into for the purpose of considering whether a judgment on admission could be passed.

The plaintiff says that if a certain amount is admitted to be due and if a part of such amount is shown to have been paid off later, the original admission will still hold good less the amount adjusted on account of the subsequent payment.

This is not a case of any payment being made after an admission was made by the appellant. The appellant acknowledged a sum in excess of Rs.2.32 crore to be apparently due to the plaintiff as at March 31, 2016, but the plaintiff''s document of April 4, 2016 shows that the plaintiff claimed that the dues were to the extent of Rs.1.67 crore. Thus, the admission contained in the document of April 1, 2016 pertaining to the accounts till March 31, 2016 was destroyed.

Again, the acknowledgement of the amount due of Rs.2,26,02,396/- in the document of August 2, 2016 also stands discredited by the plaintiff''s demand only for about Rs.1.67 crore by the mail of April 4, 2016. The figure of Rs.2,26,02,396/- in the document of August 2, 2016 is arrived at on the basis of the opening balance at the end of March, 2016 and the figure pertaining to the opening balance at the end of March, 2016 stood discredited by the plaintiff''s mail of April 4, 2016.

Whatever may be the other rights of the plaintiff, on the basis of the documents and the case that it carried to the interlocutory Court, no judgment on admission could have been passed. Accordingly, the judgment and decree dated September 20, 2017 impugned herein is set aside and the plaintiff is left free to pursue the plaintiff''s remedies in accordance with law.

APD No.3 of 2017 and GA No. 3872 of 2017 along with the cross-objection, OCO No.10 of 2017, stand disposed of as above.

There will be no order as to costs.