Disposed

Harshad Vora v. Jainal Shah

Bombay HC11 Jul 2013SJ/366/2012

Case brief

AI extract

What is this about?

The High Court held that the defendant’s defence was not bona fide given his issuance of ‘C’ Forms and partial payments. The court refused unconditional leave to defend unless the defendant deposited the principal amount into court.

What did the court decide?

Defendant granted conditional leave to defend the suit contingent upon depositing Rs. 1,25,37,591/- with the Prothonotary and Sr. Master within eight weeks.

Harshad Vora Vs Jainal Shah — Contract and Commercial Disputes | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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SUMMONS FOR JUDGMENT NO. 366 OF 2012 IN

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SUMMARY SUIT NO. 2004 OF 2012

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Harshad Vora Applicants In the matter between: Harshad Vora … Plaintiff

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vs.

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Jainal Shah ...Defendant

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Mr. Tushar Goradia along with Ms. Nisha Parmar for the Plaintiff. Mr. Prashant J. Pandit for the Defendant.

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CORAM : S.J. KATHAWALLA, J. DATE: 11 thJULY, 2013

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P.C.

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By the above Summons for Judgment, the Plaintiff has prayed that the judgment be entered for the Plaintiff in the Suit against the Defendant for Rs. 1,64,53,529.07/-, as set out in the Plaint and for interest and costs.

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According to the Plaintiff, pursuant to the orders and instructions of the Defendant, the Plaintiff sold, supplied and delivered to the Defendant goods under various invoices/bills, details of which are as set out in paragraph 2 of the Plaint. The Defendant has made part payment to the Plaintiff in respect of 2 of the 18 invoices being Invoice Nos. 26 and 28 both dated 4^th April, 2011. The

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Defendant has also issued “C” Forms in connection with the said invoices/bills. The invoices/bills are annexed and marked as Exhibits-A to R to the Plaint and the “C” Form issued by the Defendant is annexed and marked as Exhibit-S to the Plaint.

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According to the Plaintiff, despite his repeated requests and demands, the Defendant failed to make any payment. However, he admitted that he was unable to pay the dues of the Plaintiff due to financial difficulties. The Plaintiff ultimately by his Advocate's letter dated 2^nd April, 2012, placed on record the above facts and called upon the Defendant to pay the said amount of Rs. 1,25,37,591/- and the interest accrued thereon. The said letter dated 2^nd April, 2012, is responded to by the Defendant by his Advocate's letter dated 21^st April, 2012. In the said reply, the Defendant through his Advocate denied his liability to pay any amount to the Plaintiff and recorded that in fact, according to the accounts maintained by the Defendant, the Plaintiff is required to pay an amount of Rs. 1,02,02,295/- with interest and expenses aggregating to Rs. 1,50,00,000/-. It is further alleged in the letter that the Plaintiff's Agent Shri Arunbhai Gandhi has been dealing with the Defendant from time to time and he has to make payments to the Defendant . The Defendant by the said letter also relied on the accounts maintained at his end and the entries recorded in his books of accounts and with the Naroda Nagrik Co-operative Bank Ltd., Saraspur Branch, Ahmedabad. The Defendant also denied that the goods had been

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supplied as alleged by the Plaintiff and that the same have been used by him. It is pertinent to note that the Defendant has, in the said letter, neither disputed his having tendered the “C” Form in connection with the said invoices/bills, nor has he denied having made part payments in respect of the two invoices out of the 18 invoices, despite these facts being specifically set out in paragraph 1 of the notice dated 2^nd April, 2012, sent by the Plaintiff's Advocate.

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The Plaintiff therefore, once again by his Advocate's letter dated 14^th May, 2012, reiterated what was stated in his Advocate's earlier letter dated 2^nd April, 2012, addressed to the Defendant and denied and disputed all that was stated by the Defendant through his Advocate's letter dated 21^st April, 2012. It was, inter alia, recorded on behalf of the Plaintiff that in view of the “C” Form being issued by the Defendant in respect of the goods received by him under the said 18 invoices/bills, the Defendant cannot be heard to say that he has not received the goods supplied to him by the Plaintiff. The Defendant was also called upon to furnish copies of the alleged accounts maintained by the Defendant and/or the alleged entries recorded in the client's account with Naroda Nagrik Co-operative Bank Ltd., Saraspur Branch, Ahmedabad. The Plaintiff also recorded through his Advocate that the said Arunbhai Gandhi was never his Agent and had only acted as a broker qua the sale of goods. The Plaintiff therefore is not at all concerned as to whether the said Arunbhai Gandhi had to make any alleged payments of the net amount to the Defendant or otherwise. The Defendant did not respond

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to the letter dated 14^th May, 2012, received from the Plaintiff's Advocate. In view thereof, the Plaintiff has filed the above Summary Suit for a judgment and decree in favour of the Plaintiff and against the Defendant for Rs. 1,64,53,529.07/- with further interest on Rs. 1,25,37,591/- at the rate of 30 per cent per annum or at such other and further rate as this Court may deem fit and proper from the date of filing of the suit till payment and/or realization, and costs of the Suit. The Plaintiff has also taken out the above Summons for Judgment in the above Suit.

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The Defendant has filed his affidavit-in-reply dated 18^th December, 2012, wherein he has alleged that the Plaintiff and his Agent Mr.Arun Kishor Gandhi of Arun Kishor & Company have fraudulently issued the invoices in the name of the Defendant from the godown directly and sold the material, i.e. steel plates in the open market for cash, without the knowledge of the Defendant. It is further alleged that the Plaintiff had sometime in the month of March 2011, requested the Defendant that some of the material i.e. steel plates were in demand, and since the Defendant was not dealing with the same in the market, the Plaintiff requested the Defendant that he wanted to sell the said material in Gujarat to some of his dealers, and that the money received there from would be paid in cash. The Plaintiff wanted to earn illegal profits by selling the said steel plates in cash without bills. The Defendant agreed to the arrangement with the Plaintiff that his Agent Mr. Arun Kishor Gandhi will take the delivery of the steel

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plates from the godown of the Defendant where these plates are unloaded and sell the same to the merchants in Gujarat and will take the payments directly from these merchants in cash. The Defendant has produced the inward and outward entries of the Material Register maintained by the Godown Keeper and has alleged that the said Arun Gandhi has unloaded and lifted the said materials under invoices and sold it to various traders /merchants in Ahmedabad. It is submitted that Shri Arun Gandhi is a necessary party to the Suit and the Suit filed is bad for non-joinder of parties. It is alleged that the Defendant has not received the payment of the goods, sold and delivered by Shri Arun Gandhi and has no idea of the arrangement or agreement entered into between the Plaintiff and Mr. Gandhi. It is alleged that the Defendant is a small town businessman and has never ordered the materials as shown in the invoices and is unaware about its niceties and legal implications and after the service of summons of the Summary Suit and documents annexed with it, realised for the first time that the said Mr. Arun Gandhi had misappropriated and sold the goods under invoices and has not deposited the cash amount collected by him with the Plaintiff. It is alleged that the “C” Form was issued to the Plaintiff as the Defendant was also purchasing the other materials from the Plaintiff and the invoices in question were never delivered to the Defendant and only a list of invoices was sent to the Defendant and therefore the Defendant had no occasion or opportunity to check whether the invoices are in respect of the material which he ordered and received.

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The Plaintiff has filed his affidavit-in-rejoinder dated 24^th January, 2013. According to the Plaintiff, despite his Advocate having written a letter to the Advocate for the Defendant dated 20^th December,2012, requesting for inspection of documents referred to and/or relied upon by the Defendant in his affidavit-inreply, the Defendant failed and avoided to give inspection of the same. It is pointed out by the Plaintiff that issuance of the“C” Form is not denied by the Defendant. It is further pointed out that the Defendant has not denied and hence admitted that the Defendant had made part payment under the invoices/bills raised, as mentioned in the plaint. Hence the contention of the Defendant that he has never ordered goods/materials and/or never received any invoices is false and baseless. The Plaintiff has denied that Mr. Arun Kishor Gandhi was his Agent and the story of the Defendant that the invoices have been fraudulently issued is false and incorrect, more so when the Defendant has dealt with the Plaintiff in the past. The Plaintiff has also pointed out that he is not concerned and therefore denied that the said broker has taken delivery of the goods supplied in the name of the Defendant from the godown of the Defendant directly and has sold the material of the Defendant or otherwise. It is also submitted that the Plaintiff is not concerned with any alleged transaction or arrangement having taken place between the Defendant and the said Arun Gandhi.

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I have considered the submissions advanced on behalf of the parties. I have perused the invoices as well as the “C” Form admittedly issued by the Defendant himself wherein all the particulars of the said invoices are set out. “C” Form is issued by the purchasing dealer after receipt of the goods purchased. In response to the notice from the Advocate for the Plaintiff, the Advocate for the Defendant has not only not disputed having issued the “C” Form but has also not stated/alleged that the said “C” Form was issued by him by mistake, or was wrongly obtained from him. Though the Advocate for the Plaintiff by his letter dated 14^th May, 2012 responded to the reply letter of the Defendant's Advocate and pointed out that the contention of the Defendant that he has not received the goods is belied by him having issued the “C” Form, the Defendant and/or his Advocate has not responded to the same and for the first time on 18^th December,2012, in his affidavit-in-reply, alleged that the “C” Form was issued to the Plaintiff as the Defendant was also purchasing other material from the Plaintiff, and the invoices in question were never delivered to the Defendant and only a list of invoices were sent to the Defendant which excuse/explanation, apart from having come at a very belated stage, cannot be accepted from any businessman dealing in goods worth crores of rupees. In any event, the story fabricated by the Defendant is clearly belied from the fact that the Defendant has made part payments in respect of the two invoices and has not denied this fact either in his Advocate's reply letter dated 21^st April, 2012, or the affidavit- in -reply filed before this Court dated 18^th December, 2012. The Plaintiff has

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denied and disputed any arrangement entered into between him and the Defendant of selling steel plates in cash through Mr. Arun Gandhi and is correct in his submission that he is not concerned with the dealings entered into by and between Mr. Arun Gandhi and the Defendant. The so-called understanding, interestingly did not find a mention in the reply of the Defendant through his Advocate dated 21^st April, 2012, addressed to the Advocate for the Plaintiff. The Advocate for the Defendant has on behalf of the Defendant stated that in the account of the Plaintiff maintained by the Defendant, an amount of Rs. 1,50,00,000/- is payable by the Plaintiff to the Defendant and in support of this contention, the Defendant relied on the accounts maintained at his end as also the entries recorded in his accounts with the NarodaNagrik Co-op. Bank Ltd.,Saraspur branch, Ahmedabad. The Plaintiff immediately by his Advocate's letter dated 14^th May, 2002, called upon the Defendant to produce the said account along with the entries recorded in the Accounts with the NarodaNagrik Co-op. Bank Ltd.,Saraspur branch, Ahmedabad. The Defendant not only did not respond to the said letter and never gave inspection of the same to the Plaintiff, but in the affidavit-in-reply has not made even a whisper of any amount due and payable to him by the Plaintiff and has not relied on any such purported account or the entries in his account with the NarodaNagrik Co-op. Bank Ltd., Saraspur Branch, Ahmedabad. I am therefore prima facie satisfied that an amount of Rs. 1,64,53,529/- along with interest is due and payable by the Defendant to the Plaintiff for the goods sold and supplied by the Plaintiff to the Defendant under

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the invoices/bills set out in paragraph 2 of the Plaint and the defences raised by the Defendant are not bona fide and therefore moonshine. The Defendant is therefore not entitled to unconditional leave to defend the suit.

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Despite the aforesaid facts in the matter, I am giving an opportunity to the Defendant to deposit the principal amount of Rs. 1,25,37,591/- within a period of eight weeks from today with the Prothonotary and Sr. Master of this Court. If the Defendant deposits the said amount as ordered, he shall be entitled to file his written statement within a period of two weeks thereafter and the Suit shall be transferred to the list of commercial causes. In the event of the Defendant depositing the said amount as ordered, the Prothonotary and Sr. Master shall invest the same in a Fixed Deposit of a Nationalised Bank initially for a period of one year and thereafter renew the same from time to time after obtaining the orders from the Court. The hearing of the Suit is expedited. Place the suit for directions on 25^th September, 2013.

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The Summons for Judgment is accordingly disposed of.

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(S.J. KATHAWALLA, J.)

Harshad Vora v. Jainal Shah

Case brief

What is this about?

What did the court decide?

Harshad Vora v. Jainal Shah

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Coram

Case details

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