Disposed

Goculdas Dossa and Company v. Kirtikumar M. Thakkar

Bombay HC24 Aug 2012SJ/71/2011

Case brief

AI extract

What is this about?

In a summary suit based on a conducting agreement, the court held that the defendant's plea of non-joinder of a manager and vicarious liability for his assurances lacked substance, granting the plaintiff leave to defend upon deposit.

What did the court decide?

Defendant granted conditional leave to defend on deposit of Rs. 6,50,000; suit transferred to commercial causes list.

Goculdas Dossa and Company Vs Kirtikumar M… — Contract and Commercial Disputes | Bombay HC (2012)

kvm

SJ71_11

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶5

SUMMONS FOR JUDGMENT NO. 71 OF 2011 IN

¶6

SUMMARY SUIT NO. 2731 OF 2010

¶7

Goculdas Dossa & Company, ) a registered partnership firm registered ) under the Indian Partnership Act, 1932 ) having its principal place of business at ) East & West Insurance Building, 2^nd Floor,) Mumbai Samachar Marg, Mumbai 400 023) ..... Plaintiffs

¶8

VERSUS

¶9

Kirtikumar Mulji Thakkar, ) Sole Proprietor of Viram Ladha & Co. ) having its address at 702, Jasmin ) Apartment, Dadasaheb Phalke Road, ) Dadar (East), Mumbai – 400 014 ) ..... Defendant

¶10

Mr.S.R.Tejpal, i/b. Tejpal & Co. for the Plaintiffs.

¶11

Mr.Devendra Sharma for Defendant.

¶12

CORAM : R.D. DHANUKA, J.

¶13

DATE : 24th AUGUST, 2012.

¶14

ORAL JUDGMENT :

¶15

By this Summons for Judgment, the Plaintiff seeks to recover a sum of Rs. 8,53,757/- with interest at the rate of 14% per annum. The suit is filed on the basis of Conducting Agreement dated 15^th October, 2009. On 15^th October, 2009

kvm

SJ71_11

the Plaintiffs and Defendant have entered into a Conducting Agreement to run Plaintiffs’ factory at Yavatmal during the period 1^st November, 2009 to 31^st May, 2010 on the terms and conditions mentioned in the said agreement. The Defendant agreed to execute a bank guarantee for Rs. 10 lacs of a nationalised bank in favour of the Plaintiffs as and by way of security. Clause (17) of the said Agreement provided that the Defendant was to pay by way of royalty of Rs. 6,50,500/- for a period of seven months from 15^th November 2009 to 31^st May, 2010. The said clause records that seven postdated cheques of various amounts were issued by the Defendant to the Plaintiffs totaling to Rs.6,50,500/-.

¶20

According to the Plaintiffs, a cheque of Rs.10 lacs dated 1^st November, 2009 given by the Defendant towards security deposit came to be dishonoured. It is the case of the Plaintiffs that since Defendant could not start the conducting Business of the Plaintiffs in time, the Defendant requested the Plaintiffs that the first payment of royalty of Rs.50,000/- due and payable to the Plaintiffs on 1^st November, 2009 would be paid alongwith last installment due on 31^st May, 2010. It is the case of the Plaintiffs that a cheque of Rs. 1 lac dated 31^st December, 2009 was presented by the Plaintiffs and was returned by the bank with remark ‘No Balance’. The Plaintiffs thereafter by letters dated 27^th January, 2010, 15^th February, 2010 and 29^th March, 2010 called upon the Defendant to pay the said amount of Rs. 1 lac. It is the case of the Plaintiffs that though the Defendant

kvm

SJ71_11

received the said three letters, neither any reply was given by the Defendant nor demand was met with. The Plaintiffs thereafter issued notice of demand through its advocate on 17^th June, 2010 alleging that various cheques including cheque of Rs.6,50,500/- was dishonoured. The Learned Counsel appearing for the Plaintiffs inform that the said notice dated 17^th June, 2010 was returned by the courier with the remark ‘Company Closed’ on 31^st March, 2010 and 1^st April, 2010.

¶25

The Defendant has filed affidavit in reply.

¶26

The Learned Counsel appearing for the Plaintiffs submit as under :-

¶27

(a) The suit is based on Conducting Agreement dated 15^th October, 2009. Eight cheques issued by the Defendant in favour of the Plaintiffs pursuant to such Conducting Agreement came to be dishonoured. On expiry of Conducting Agreement, Defendant has handed over possession of the premises alongwith business to the Plaintiffs. The Defendant was liable to pay the Plaintiffs towards royalty amount at the rate agreed upon in the said Conducting Agreement.

kvm

SJ71_11

(b) The execution of the agreement is not in dispute. Various cheques were issued by the Defendant to the Plaintiff is not in dispute.

¶32

On the other hand, the Learned Counsel appearing for the Defendant submits as under :-

¶33

(a) Suit is bad for non-joinder of Mr.Umesh Jugalkishor Shukla who was working as a Manager of the Plaintiff Company since last 30 years and had lured Defendant to enter into the Agreement dated 15^th October, 2009 and was necessary and proper party to the suit. Mr.Umesh Jugalkishor Shukla was instrumental in execution of Agreement dated 15^th October, 2009. Payments have been made by the Defendant to said Mr.Umesh Jugalkishor Shukla in the sum of Rs. 2,25,000/- by various cheques and in the sum of Rs.70,000/- in cash.

¶34

(b) The Plaintiff is vicariously liable for the acts of his agent Mr.U.J.Shukla. The suit agreement is

kvm

SJ71_11

never acted upon.

by the Plaintiffs as Mr.Umesh Jugalkishor Shukla assured that since suit agreement was not acted upon, the Defendant would not be liable to pay any amount to the Plaintiffs.

¶41

(d) The Plaintiff has not produced copies of the dishonoured cheques in the sum of Rs.6,50,500/-. Summary Suit is liable to be dismissed on this ground alone.

¶42

Considering the averment in the plaint, it is clear that the suit is not based

¶43

on dishonoured cheque but is filed on the basis of the Conducting Agreement. In my view, thus there is no substance in the defence raised by the Defendant that the non-production of cheques alongwith the plaint is in any manner fatal to the suit.

¶44

It is common ground that Mr.Umesh Jugalkishor Shukla was not party to

¶45

the Conducting Agreement. There is no material produced on record to show that

kvm

SJ71_11

Mr.Umesh Jugalkishor Shukla was authorised to make any commitment or to give any assurance on behalf of the Plaintiff. There is no dispute that Defendant had executed the Conducting Agreement. There is also no dispute that the Defendant

¶50

has executed eight cheques in favour of the Plaintiff as recorded in the Conducting Agreement. The amount if any paid by the Defendant to Mr.Umesh Jugalkishor Shukla was not with consent of the Plaintiff. The Defendant has not applied for cancellation of the Conducting Agreement or for return of the cheques. No material has been produced on record by the Defendant that any steps are taken by the Defendant against Mr.Umesh Jugalkishor Shukla for making alleged false assurances on behalf of the Plaintiff. There is no substance in the submission that Mr.Umesh J.Shukla is necessary or proper party to the suit or that the suit is bad for non-joinder of Mr.Umesh J.Shukla.

¶51

In my opinion, there is no substance in the plea raised by the Defendant

¶52

that the Plaintiff was vicariously liable for the assurance alleged to have been given by the Manager.

¶53

In my view, there is no substance in the plea raised by the Defendant that Agreement was not acted upon. If that was so, the Defendant would have called upon the Plaintiff to comply with their part of obligation under the said Conducting Agreement or for cancellation of the said Agreement.

kvm

SJ71_11

In my view, the plea raised by the Defendant does not raise any triable issue and is not substantial and is moon shine.

¶58

11. I, therefore, pass the following order :-

¶59

(a) The Defendant is granted conditional leave

¶60

to defend the suit on deposit of Rs. 6,50,000/in this Court within a period of eight weeks from

¶61

today.

¶62

(b) Defendant is directed to file Written

¶63

Statement within a period of four weeks after such deposit is made by the Defendant.

¶64

¶65

said amount in this Court as directed, the Prothonotary & Senior Master is directed to invest the same in a Fixed Deposit of a nationalised bank initially for a period of two years and thereafter

¶66

for a like period after obtaining further order from this Court.

kvm

SJ71_11

(d) In the event of Defendant committing default in making payment, the Plaintiffs would be at liberty to obtain further order from this Court.

¶71

(e) Suit is transferred to the list of commercial causes.

¶72

(f) Office is directed to place the matter on Board for framing issues after two weeks of completion of pleadings.

¶73

(g) Summons for Judgment is accordingly

¶74

disposed of.

¶75

(h) There shall be no order as to cost.

Goculdas Dossa and Company v. Kirtikumar M. Thakkar

Case brief

What is this about?

What did the court decide?

Goculdas Dossa and Company v. Kirtikumar M. Thakkar

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Coram

Case details

Similar cases

Icici Ltd. Vs Baroda Rayon Corpn. Ltd. and Ors.

icici bank Ltd. Vs the baroda rayon corporation Ltd. and Ors.

Mohammed Arif Akbar H. Khatri Vs M/S A.R. Enterprises and 2 Ors.

Dena Bank Vs Nilesh Karunakar Shetty and 3 Ors.

Emu Lines Pvt. Ltd. Vs Blue Ocean Lines Pvt. Ltd. and 2 Ors.

State Bank of India Vs Sandeep v. Sawant