Allowed

M/S. Sugam Packaging Industries v. M/S S N Enterprises

Karnataka HC13 Aug 2024CRP/21/2023

Case brief

AI extract

What is this about?

In a civil revision petition challenging a money recovery decree, the High Court held that the plaintiff failed to prove a 30-day credit facility or that the defendant executed the relevant invoices. The evidence regarding signatures was insufficient, leading the court to quash the lower court's decree.

What did the court decide?

The Civil Revision Petition is allowed; the impugned judgment and decree dated 18.02.2020 are set aside and the suit stands dismissed.

M/S. Sugam Packaging Industries Vs M/S S… — Contract and Commercial Disputes | Karnataka HC (2024)

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1 - NC: 2024:KHC:35723 CRP No. 21 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF AUGUST, 2024

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CIVIL REVISION PETITION NO. 21 OF 2023 (SC)

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BETWEEN:

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M/S. SUGAM PACKAGING INDUSTRIES, NO.5, SRI. MANJUNATHA INDUSTRIAL ESTATE, HOROHALLI CROSS, MAGADI ROAD, BENGALURU – 560 091. (REPRESENTED BY ITS PROPRIETOR SMT. SUMA, THROUGH HER GPA HOLDER MR. M.K. MAHADEVASWAMY),

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Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA

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RESIDENCE ADDRESS: SMT. SUMA, W/O MAHADEVA, AGED ABOUT 42 YEARS, "OMKAR", R/AT NO.7, N.K.SANKIRANA, ABOVE SPARTAN FITNESS, MUDDINAPALYA MAIN ROAD, NAGARABHAVI, LAND MARK: RELIANCE FRESH, BENGALURU – 560 091. ALSO R/AT SMT. SUMA, W/O MAHADEVA, AGED ABOUT 42 YEARS, R/A NO.48, RAGHAVENDRA NILAYA, IST CROSS ROAD, NAGARABHAVI 2^ND STAGE, BENGALURU – 560 091. …PETITIONER (BY SRI.SAGAR B.B., ADVOCATE)

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NC: 2024:KHC:35723 CRP No. 21 of 2023

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AND:

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M/S. S.N. ENTERPRISES, OFFICE AT NO.6, NADAKERAPPA INDUSTRIAL ESTATE, HEGGANAHALLI ROAD, NEAR PEENYA 2^ND STAGE, BENGALURU – 560 091. (REPRESENTED BY ITS PARTNER MR. NAIMESH JARIWALA).

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…RESPONDENT

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(RESPONDENT - SERVED)

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THIS CRP IS FILED UNDER SECTION 18 OF COURT SMALL CAUSES ACT, AGAINST THE ORDER DATED 18.02.2020 PASSED IN SC.NO.508/2018 ON THE FILE OF THE JUDGE, COURT OF SMALL CAUSES, BENGALURU, DECREEING THE SUIT FOR RECOVERY OF MONEY.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

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ORAL ORDER

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The sole defendant is before this Court challenging the judgment and decree passed by the Trial Court, which entitles the plaintiff to recover Rs.1,36,058/- with interest at 6% per annum from the defendant.

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The plaintiff filed a suit stating that it is a wholesale distributor dealing in all kinds of papers, boards, adhesives, machines, and stitching coils, supplying to customers in and around Bengaluru and beyond. The defendant is one such customer who used to place oral purchase orders for these materials. The plaintiff would supply the materials to the defendant, raising invoices in the name of the defendant’s company. However,

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NC: 2024:KHC:35723 CRP No. 21 of 2023

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the defendant failed to make payments on the invoices listed in the plaint, amounting to Rs.1,36,058/-. Despite several requests, the defendant did not settle the amount, leading to the filing of this suit.

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The defendant appeared in court and contended that all purchases were made on a cash-and-carry basis, not on a 30-day credit facility as claimed by the plaintiff. The defendant also denied the signature and seal on the invoices marked as Ex.P1 to P3. The Trial Court, after considering the pleadings of both parties, framed issues and allowed the plaintiff to present evidence. The plaintiff examined P.W.1 and marked documents as Ex.P1 to P21, while the defendant was examined as D.W.1 and marked a document as Ex.D1. After evaluating the evidence, the Trial Court decreed the suit in favor of the plaintiff, prompting the defendant to file this appeal.

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The plaintiff/respondent, despite being served with notice, has chosen not to appear in person or through counsel.

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The learned counsel for the petitioner argued that during cross-examination, P.W.1 admitted that the signatures on Ex.P1 and P3 do not belong to the defendant but were signed by the defendant's husband or manager. Therefore, in the absence of substantial evidence showing that the invoices were executed by the defendant in favor of the plaintiff, the impugned judgment and decree passed by the Trial Court are not legally sustainable.

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After carefully considering the arguments of the learned counsel for the petitioner and reviewing the Trial Court records, the following points are noted:

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NC: 2024:KHC:35723 CRP No. 21 of 2023

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a. It is undisputed that there were transactions between the plaintiff and the defendant, with the defendant purchasing materials from the plaintiff. The plaintiff specifically claims that a 30-day credit facility was provided for these purchases, and the defendant, after receiving the materials, executed the invoices marked as Ex.P1 to P3, agreeing to pay the amounts stated therein within 30 days. However, the defendant categorically denied executing these invoices. In cross-examination, P.W.1 admitted that the signatures on Ex.P1 to P3 do not belong to the defendant but to her husband or manager.

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b. P.W.1 further admitted in cross-examination that after the execution of Ex.P1 to P3, there were subsequent transactions between the plaintiff and the defendant, and payments made toward these transactions were adjusted against the amount due under Ex.P1 to P3. He also admitted that Ex.P14, the balance sheet dated 31.03.2017, does not reference the amount due under Ex.P1 to P3, and that Ex.P14 and P15 were prepared by the plaintiff's chartered accountant. Moreover, P.W.1 admitted that the signatures on Ex.P1 to P3 are those of Mahadevaswamy, though he claimed ignorance about his role in the defendant’s company. He identified Mahadevaswamy’s signature based on prior interactions, including checks issued by him. P.W.1, however, did not state that Mahadevaswamy received or acknowledged the materials supplied.

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NC: 2024:KHC:35723 CRP No. 21 of 2023

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c. The defendant, to support the claim that the signatures on Ex.P1 to P3 were not those of Mahadevaswamy, produced a power of attorney document, marked as Ex.D1. Mahadevaswamy, examined as D.W.1, testified as the defendant's general power of attorney holder. There was no suggestion during cross-examination that the signatures on Ex.P1 to P3 were his. In fact, D.W.1’s testimony indicated that the seal and signature of the defendant’s proprietary firm found on the vakalathnama should be compared with those on the invoices to arrive at a fair conclusion. Additionally, the plaint does not assert that the defendant's husband executed the invoices on her behalf. D.W.1 admitted that the signatures on Ex.P1 to P3 and Ex.D1 do not match.

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d. Therefore, the plaintiff failed to provide substantial evidence proving that the invoices marked as Ex.P1 to P3 were executed by the defendant’s husband, admitting liability for payment under the alleged 30-day credit facility. The Trial Court, in contradiction to the evidence on record, erred in holding that the plaintiff had proved the existence of a 30-day credit facility extended to the defendant.

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In light of the above, I am of the opinion that the plaintiff has failed to prove that a credit facility was extended to the defendant. Consequently, the judgment and decree of the Trial Court cannot be sustained. Accordingly I pass the following

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ORDER

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i. The Civil Revision Petition is Allowed.

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NC: 2024:KHC:35723 CRP No. 21 of 2023

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ii. The impugned judgment and decree dated 18.02.2020 passed by the court of Small causes (SCCH-09), Bengaluru in SC.No.508/2018 is set aside and consequently suit stands dismissed.

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Sd/(HEMANT CHANDANGOUDAR) JUDGE

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RKA

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List No.: 1 Sl No.: 142

M/S. Sugam Packaging Industries v. M/S S N Enterprises

Case brief

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M/S. Sugam Packaging Industries v. M/S S N Enterprises

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