Allowed

M/S Sindh Ispat v. Shri Rupanadham Steel Private Limited

Chhattisgarh HC3 Oct 2024FA/184/2018

Case brief

AI extract

What is this about?

The High Court allowed the appeal, setting aside a trial court decree for recovery. The Court held the plaintiff failed to prove an order was placed for the goods supply and that the trial Court erred in shifting the burden of proof to the defendant, distinguishing prior authority.

What did the court decide?

The judgment and decree dated 15.12.2017 in Civil Suit B/186/2012 are set aside and the appeal is allowed.

M/S Sindh Ispat Vs Shri Rupanadham Steel Private… — Company and Corporate | Chhattisgarh HC (2024)

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Digitally signed by NADIM MOHLE

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2024:CGHC:39397--DB

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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FA No. 184 of 2018

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1 - M/s Sindh Ispat, Through Partner (Wrongly Mentioned In Impugned Judgment as through Owner/Director) Omprakash Agrawal, Near Hira Steel Industrial Area, Rawanbhata, Raipur, District Raipur, Chhattisgarh.

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2 - Omprakash Agrawal, S/o Late Thaneswar Prasad Agrawal, Aged About 51 Years, Partner Sindh Ispat (Wrongly Mentioned In Impugned Judgment As Partner Sindh Ispat) Near Hira Steel, Industrial Area, Rawabhata, Raipur, District Raipur, Chhattisgarh (Defendants) ----Appellants

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Versus

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Shri Rupanadham Steel Private Limited, Through Director, Harivilas Agrawal, S/o Bholaprasad Agrawal, Aged About 48 Years, R/o House No. 29 Friends Colony, Raigarh, District Raigarh, Chhattisgarh. (Plaintiff) ----- Respondent

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For Appellants : Mr. Sudeep Johari, Advocate along with Mr. B. D. Yadav, Advocate For Respondent : Mr. Ankit Singhal, Advocate along with Mr. Ayush Mahishwar, Advocate

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Hon'ble Shri Justice Rakesh Mohan Pandey

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Judgment on Board

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04.10.2024

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1. The appellants/defendants have assailed the judgment and decree passed by the learned II^nd Additional District Judge, Raigarh in Civil Suit No. B/186/2012, dated 15.12.2017, whereby the civil suit filed by the respondent/plaintiff for recovery of Rs. 11,06,368/- was decreed.

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1. The respondent/plaintiff filed a civil suit inter alia on the ground that the plaintiff is a private limited company having its factory at Saraipali, Raigarh, indulged in

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the manufacturing and sale of M.S. Ingot. The plaintiff pleaded that an oral order was placed on 04.12.2010 for the supply of 34.460 metric tonnes of iron ingots to the defendants by the plaintiff company worth Rs. 9,10,268/- and invoice no. 358 was generated in this regard.

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1. The goods were supplied by the transporter, namely, Bhawani Road Carrier through a Truck bearing registration No. CG-04-J-5201 and it was delivered on 06.12.2010. In this regard, a receipt of the weighbridge of the defendants dated 06.12.2010 has been placed on record as Ex.P/17. It is further alleged that in spite of the supply of goods, the defendants failed to make payment, therefore, a registered notice was issued to the defendants on 26.09.2010 and the same was replied to on 26.09.2011. It is also pleaded that the defendants denied the allegations and demand made in the notice and specifically stated that the defendants' company does not recognize the plaintiff company. On the stated premises, the plaintiff claimed the amount from the defendants by filing a civil suit.

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1. The defendants filed a written statement and denied plaint averments. It is specifically pleaded that no order was placed by the defendants for the supply of M. S. Ingot to the plaintiff on 04.12.2010. It is also stated that the defendants are not liable to make payment of the outstanding amount i.e. Rs. 9,10,268/-.

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1. The plaintiff examined one of the Directors, namely, Harvilash Agrawal as PW/1, and Manoj Kumar Agrawal as PW/2 and exhibited 17 documents from Ex.P/1 to Ex.P/17, whereas the defendants examined Omprakash Agrawal as DW/1 and exhibited 2 documents.

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1. The learned trial Court framed issues and after appreciation of oral and documentary evidence, held that the defendants had purchased M.S. Ingot worth Rs. 9,10,268/-; and the defendants failed to make payment to plaintiff No.

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3; thus, the civil suit was decreed.

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Mr. Sudeep Johri, learned counsel appearing for the defendants would submit that the plaintiff could not produce any document to establish the fact that any order was placed by the defendants for the supply of 3.460 Metric tonnes of iron ingots. He would further submit that though there were 2 Directors, but the plaintiff authorized himself to institute a suit against the defendants for recovery of Rs.11,06,368/-. He would also submit that in the absence of any authorization by the board of directors, one of the directors was not competent to file a civil suit. It is contended that the learned trial Court has decreed the suit only on the basis of the weighbridge slip, which was undisputedly issued by the weighbridge in charge of the defendants’ company. He would further contend that the learned trial Court committed an error of law in shifting the onus of proof on the defendants whereas; it is a settled principle of law that the plaintiff cannot take the benefit of weakness of the defendants. He would also contend that in the absence of any cogent evidence and valid document, the judgment and decree passed by the learned trial Court is not sustainable in the eyes of law. He would state that the laden capacity of the truck bearing registration CG-04-J-5201 was 25 Metric tonnes only; therefore, it was not possible to transport 34.460 metric tonnes of iron ingot through that vehicle. He placed reliance on the judgments passed by the Hon’ble Supreme Court in the matters of State Bank of Travancore v. Kingston Computers (I) P. Ltd. reported in (2011) 11 SCC 524; Laxmibai (dead) through LRs & Anr. v. Bhagwantbuva (dead) through LRs & Anr. reported in (2013) 4 SCC 97, and Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal reported in (1999) 3 SCC 35, to substantiate his submissions.

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On the other hand, Mr. Ankit Singhal, learned counsel appearing for the plaintiff

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would oppose and submit that pursuant to the order placed by the defendants for 34.460 metric tonnes of M.S. Ingot was supplied on 04.12.2010. He would further submit that the owner of the transport company, who supplied the goods, has been examined as PW/2 and he has proved the fact that 3.460 metric tonnes of iron goods were supplied to the defendants' company. He would also submit that the iron ingots were supplied by a truck bearing registration No. CG04-J-5201. He would contend that the defendants failed to adduce documentary evidence to substantiate that iron ingots were not supplied or no order was placed. He would further contend that the plaintiff has filed Ex.P/3 transport receipt, P/15 - purchase details submitted to the excise department and Ex.P/17 weighment slip and thus, the plaintiff proved its case before the learned trial Court. He would also contend that the learned trial Court held that the defendants failed to rebut the evidence led by the plaintiff. He would state that earlier also iron ingots were supplied to the defendants and this fact is admitted by defendant No.1. He would further state that earlier, 34.460 metric tonnes of iron ingots were supplied in one trip by one truck and payment was also made by the defendants and this fact is admitted by defendant No.1 in his evidence. He would also state that the learned trial Court has passed a well-reasoned judgment, therefore, the appeal deserves to be dismissed.

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I have heard learned counsel for the parties and perused the record.

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1. The first submission made by Mr. Johri with regard to the authority of Harvilash

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Agrawal (PW/1) to file a civil suit, in this regard, it is not in dispute that the plaintiff was one of the Directors of the company. The plaintiff has placed Ex.P/1, which is a true copy of the resolution passed by the Board of Directors in a meeting dated 29.09.2012. This document would show that it was signed by one of the Board of Directors, namely, Harvilash Agrawal, who filed the civil suit. He

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was authorized to file a civil suit for recovery against the defendants. The defendants could not prove that there was no meeting of the Board of Directors and Harvilash Agrawal was not authorized to institute the civil suit. It is also an admitted fact that there were only two directors, one Harvilash Agrawak and one more Director. It could not be demonstrated by Mr. Johri that one of the Directors was not competent to file the civil suit; therefore, the contention made by Mr. Johri cannot be accepted.

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1. Coming to the next issue raised by Mr. Johri that in the absence of any order placed by the defendants for the supply of the goods, the defendants cannot be held liable to make payment of the outstanding amount. A perusal of the documents filed by the plaintiffs from Ex.P/1 to Ex.P/17 would demonstrate that there is no document to presume or draw any inference that any order was placed by the defendants for the supply of any goods particularly 34.460 metric tonnes of M.S. Ingots.

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The plaintiff Witness No.1, namely, Harvilash Agrawal has stated in para-2 that an oral order (telephonically) was placed by the defendants. A bill voucher No. 667 dated 12.02.2010 was issued by the plaintiff and goods were supplied through Bhawani road carriers. It is an admitted fact that the company makes entries with regard to the sale in its computer system. In cross-examination, this witness has admitted that oral order was placed by the defendants and he could not submit documentary evidence to prove that any order was placed by the defendants. He further admitted that though there was talk between the defendants and the plaintiff, in this regard, there is no document. It is also admitted that details of the sale were given to the excise department. This witness has further stated that the previous balance was paid by the defendants against the supply of Iron Ingots.

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Manoj Kumar Agrawal (PW/2) has stated in evidence that on 04.12.2010, 34.460 metric tonnes of iron ingots were supplied to the defendants. This witness further stated that he did not remember the loading capacity of the vehicle. The challan-cum-tax invoice was generated on 04.10.2010. Ex.P/3 is a receipt issued by Bhawani Road Carriers dated 04.12.2010 and the name of the consignor is the plaintiff and the name of the consignee is the defendants. The transportation charge was payable by the defendants. Ex.P/5 is a notice issued to the defendants to make payment of the outstanding amount. Ex.P/9 is a legal notice issued by the plaintiff to the defendants. Ex.P/14 is a copy of the statement submitted to the Central Board of Excise and Customs showing details of manufacturing and sale. Ex.P/15 would show that on 04.12.2010, 34.640 metric tonnes of iron ingots were supplied to the defendants through Bhavani Road Carrier through a truck bearing registration No. CG-04-J-5201. Ex.P/17 is a weighment slip which was issued from the defendants' weighbridge. The defendants filed a reply to the legal notice vide Ex.D/1 on 09.10.2012 and Ex.D/2 is vehicle status.

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1. In the matter of Kingston Computers (I) P. Ltd. (supra) , while dealing with the authority of the Board of Directors to appoint a Director to pursue a case, the Hon’ble Supreme Court set aside the judgment only on the ground that no evidence could be led to prove that Shri Ashok K. Shukla was appointed as a Director of the company and a resolution was passed by the Board of Directors of the company to file suit against the appellant. The relevant para No.11 & 14 read thus:-

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“11. The trial Court analyzed the pleadings and evaluated the evidence produced by the parties, referred to authority letter dated 2.1.2003 issued by Shri Raj K.Shukla in favour of Shri Ashok K.Shukla and observed:

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"A perusal of the aforesaid authority letter shows that Shri Raj K.Shukla in his capacity as CEO of the

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plaintiff company had authorised Shri A.K. Shukla to sign, verify and file the present suit. Apart from this authority letter, the plaintiff company has not filed on record any board resolution authorising Sh. A.K. Shukla to sign, verify and institute the present suit. The plaintiff has also not filed on record its memorandum/articles to show that Shri Raj Kumar Shukla had been vested with the powers or had been given a general power of attorney on behalf of the company to sign, verify and institute the suit on behalf of the company. The present suit, therefore, has been filed merely on the strength of the authority letter Ex.PW1/A............ "

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14. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K.Shukla was appointed as a Director of the company and a resolution was passed by the Board of Directors of the company to file suit against the appellant and authorised Shri Ashok K.Shukla to do so. The letter of authority issued by Shri Raj K.Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K.Shukla to authorise another person to file suit on behalf of the company. ”

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1. In the present case, the Board of Directors passed a resolution and only a copy of the decision taken in that meeting has been placed as Ex.P/1. As per pleadings and evidence, there were only two Directors and one of them was authorized to file a civil suit. Thus, the facts of the present case are entirely different from the facts of the case of Kingston Computers (supra) as in that case, the Chief Executive Officer of Kingston Computers Pvt. Ltd. filed a money suit and there was no authorization by the Board of Directors.

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1. In the matter of Laxmibai (supra) , the Hon’ble Supreme Court held that the appellate Court can re-appreciate evidence, where compelling and substantial reasons exist. It is further held that the statement of the witnesses must be read as a whole and reliance on a mere line in a statement of a witness is not permissible. The relevant para-46 is reproduced as under:-

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“46. There is no prohibition in law for the appellate court to reappreciate the evidence where compelling and substantial reasons exist. The findings can also be reversed, in case convincing material has been unnecessarily and unjustifiably stood eliminated from consideration. However, the evidence is to be viewed collectively.

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The statement of a witness must be read as a whole as reliance on a mere line in a statement of a witness is not permissible. The judgment of a court can be tested on “touchstone of dispassionate judicial scrutiny based on a complete and comprehensive appreciation of all views of the case, as well as on the quality and credibility of the evidence brought on record”. The judgment must not be clouded by the facts of the case. ”

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In the matter of Amin Chand Payrelal (supra) , the Hon’ble Supreme Court held that the obligation upon the plaintiff to lead evidence for the purposes of "to prove his case", could not have been insisted upon because the defendant has prima facie or initially not discharged his onus of proof by showing directly or probabilising the non-existence of consideration. The relevant para 14 is reproduced as under:-

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“14. A perusal of the written statement of the defendant would clearly and unambiguously show that to disprove the consideration of the Promissory Note, he had brought certain circumstances to the notice of the Court which he wanted to probabilising by leading evidence. The evidence led by the defendant in that regard was not accepted by any of the judges dealing with the case as noticed herein earlier. In the absence of disproving the existence of the consideration, the onus of proof of the legal presumption in favour of the plaintiff could not be shifted. It is true that the plaintiff had produced evidence in the case and the evidence was in fact the evidence in rebuttal, of the evidence produced by the defendant in the case. After holding issue No.1 to have not been proved, the High Court was not justified in holding that the defendant had discharged the onus of proof of issue No. 2. In fact both the issues were required to be decided together which was not done with the result that miscarriage of justice crept into the proceedings depriving the plaintiff of its rights on account of the pendency of this litigation in the courts for a period of about now four decades. The technicalities of law and procedural wrangles deprived the plaintiff of its due entitlement. The justice claimed by the plaintiff was buried under the heaps of divergent legal pronouncements on the subject conveyed and communicated in sweetly coated articulate language and the oratory of the persons which is shown to have been resorted to present the rival claims. The approach adopted by the majority of the Judges in dealing with the case was contrary to the basic principles governing the law relating to negotiable instruments. Faith of business community dealing in mercantile and trade cannot be permitted to be shaken by resort to technicalities of law and the procedural wrangles as appears to have been done in the instant case. Even though it is true that the plaintiff's evidence was not believed yet we are of the opinion that the same could not be made basis for rejecting its claim because obligation upon the plaintiff to lead evidence for the purposes of "to prove his case", could not have been insisted upon because the defendant has prima facie or initially not discharged his onus of proof by showing directly or probabilising the non existence of consideration. ”

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1. In the present case, the plaintiff failed to produce any document to substantiate that the order was placed by the defendants for the supply of 34.460 metric tones of M.S. Ingot; though the plaintiff has placed certain documents to demonstrate that the details were submitted before the Office of Central Excise and invoice was also generated, but on the basis of these documents, it cannot be concluded that 34.460 metric tonnes of iron ingots were supplied pursuant to the order placed by defendants. The weighment slip issued from the company of the defendants alone would not come to the rescue of the plaintiff because other vehicles had the liberty to approach the weighbridge for the measurement of weight.

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1. Even, the plaintiff could not produce any document to demonstrate that the vehicle entered into the company premises of the defendants and receipt was issued in its favour. It is also not established that the transportation charge was paid by the defendants to the Transporter.

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1. The learned trial Court shifted the onus on the defendants and decreed the suit, whereas, it is a well-settled principle of law that the plaintiff cannot take benefit of the weakness of the defendant.

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1. On the basis of the above-discussed facts and law, in the opinion of this Court, the learned trial Court has committed an error of law in decreeing the suit of the plaintiff. Consequently, the judgment and decree dated 15.12.2017 passed by the learned II^nd Additional District Judge, Raigarh, in Civil Suit B/186/2012 is hereby set aside . The appeal is allowed.

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1. No order as to cost.

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1. A decree be drawn accordingly. Sd/-

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(Rakesh Mohan Pandey) Judge

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Nadim

M/S Sindh Ispat v. Shri Rupanadham Steel Private Limited

Case brief

What is this about?

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M/S Sindh Ispat v. Shri Rupanadham Steel Private Limited

Case brief

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