Allowed

K.A.HARIKRISHNAN,D/NO.2, v. M/S.Asian Electronics by Its

Madras HC10 Apr 2018SA/971/2004

Case brief

AI extract

What is this about?

In this second appeal regarding a money suit for a TV purchase, the High Court held that the plaintiff failed to prove privity of contract between themselves and the defendant. The court found no valid purchase order or authorization for the agent to act on the defendant's behalf.

What did the court decide?

The judgment and decree of the first appellate court were set aside, the judgment and decree of the trial court were confirmed, and costs were awarded.

K.A.HARIKRISHNAN,D/NO.2, Vs M/S.Asian… — Contract and Commercial Disputes | Madras HC (2018)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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RESERVED ON : 04.04.2018

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PRONOUNCED ON : 10.04.2018

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CORAM

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THE HONOURABLE MR. JUSTICE T.RAVINDRAN

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S. A.No.971 of 2004

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K.A.Harikrishnan ...Appellant/1^st Defendant/1^st Respondent

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Vs. 1. M/s.Asian Electronics, By its Partner Yacoob, Son of M.Madhar Sahib, KPR Complex 80/7 Cherry Road, Salem – 7. ...1^st Respondent/Plaintiff/Appellant 2. P.Kannan, Assistant Prestige Finance and Leasing (P) Ltd., 2, Thammanna Chetty road, Salem – 9. ...2^nd Respondent/2^nd Defendant/ 2^nd Respondent

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Prayer: Second Appeal filed under Section 100 of Civil Procedure Code, against the judgment and decree dated 15.12.1999 made by the first Additional District Judge cum Chief Judicial Magistrate, Salem in A.S.No.137 of 1999 reversing the judgment and decree dated 18.01.1999 made in O.S. No.740 of 1996 by the first Additional District Munsif, Salem.

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For Appellant : Mr.K.Kalyanaraman

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For R1 : Mr.Haja Naziruddeen, Senior Counsel for M/s. A.Prabakaran For R2 : Given up

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JUDGMENT

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This second appeal is directed against the judgment and decree dated 15.12.1999, passed in A.S.No.137 of 1999, on the file of the first Additional District Judge cum Chief Judicial Magistrate Court, Salem, reversing the judgment and decree dated 18.01.1999, passed in O.S. No.740 of 1996, on the file of the first Additional District Munsif, Salem.

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Parties are referred to as per their rankings in the trial Court.

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Suit for recovery of money.

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The case of the plaintiff, in brief, is that it is a partnership firm duly registered under the Indian Partnership Act 1939 and dealing in the sales of electronic goods such as T.V. set etc.,. The first defendant purchased one BPL colour TV for a sum of Rs.16,250/- under invoice No.2248, on credit and the second defendant who is the staff of the first defendant took delivery of the TV on behalf of the first defendant thereby signing the delivery note and invoice and inspite of repeated demands made, the first defendant did not pay the amount due to the plaintiff in respect of the purchase of the T.V. as above stated and on 31.8.94, the plaintiff issued a legal notice against the first defendant calling upon him to pay the abovesaid amount and to the same, the first defendant sent a reply on 04.09.94 denying in toto the case of the plaintiff, as if he had not purchased the TV and not authorised the second defendant to purchase the TV set on his behalf and take delivery of the same and the averments contained in the reply notice are false and denied and it is false to state that the partner of the plaintiff's firm stood guarantee for the repayment of the financial facilities sanctioned by the first defendant's company to the third parties and the present claim of the plaintiff is only a counter blast to the insistence made by the first defendant to clear the outstanding due by the debtors and the partner of the plaintiff is in no way associated with the finance sanctioned by the first defendant to their debtors and inasmuch as the first defendant has denied the entire transaction, the second defendant is also added as a party to the suit proceedings and thus, the defendants are liable to pay the suit amount as prayed for.

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The case of the first defendant, in brief, is that the suit laid by the plaintiff is not maintainable either in law or on facts and the allegations that the first defendant purchased one BPL colour TV for a sum of Rs.16,250/- from the plaintiff is false and it is false to state that the second defendant is the staff of the first defendant and took delivery of the TV set on

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behalf of the first defendant by signing in the delivery note and invoice. The first defendant has not given any authorisation to the second defendant to purchase the TV set on his behalf on credit basis from the plaintiff and the plaintiff's proprietor gave personal guarantee for some of the hirers for purchasing TV sets. As the hirers has not discharged the loan amount, the first defendant finance company requested the plaintiff's proprietor to discharge the loan amount, as he gave guarantee for the same and to escape from the guarantee, the present suit has been laid creating a false invoice so as to blackmail the first defendant and the plaintiff has never made any demand prior to the legal notice for paying the amount in connection with the purchase of the TV set and to the notice sent by the plaintiff, a suitable reply containing true facts had been sent by the first defendant and there is no cause of action for the suit and the suit is liable to be dismissed.

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In support of the plaintiff's case PW1 was examined, Exs.A1 to A8 were marked. On the side of the first defendant DW1 was examined, no document has been marked.

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On a consideration of the oral and documentary evidence adduced by the respective parties and the submissions made, the trial Court was pleased to dismiss the suit laid by the plaintiff. The first appellate Court, on an appreciation of the materials placed on record, was pleased to set aside the judgment and decree of the trial Court and by way of allowing the appeal preferred by the plaintiff, decreed the suit as prayed for. Impugning the same, the present second appeal has been laid.

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At the time of admission of the second appeal, the following substantial question of law was formulated for consideration:

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In the absence of privity of contract between the plaintiff and the first defendant (appellant herein), can any Court of law legally pass a personal decree for money against the said contesting defendant?

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The suit has been levied by the plaintiff for recovery of money, being the value of the TV set said to have been purchased by the first defendant from the plaintiff's firm through the second defendant. Now, according to the plaint averments, the first defendant purchased the TV set for a sum of Rs.16,250/- on credit basis under invoice No.2248, through the second defendant and it is further stated that the second defendant took the delivery of the TV set on behalf of the first defendant by signing the delivery note and invoice and

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thereafter, as the defendants failed to pay the same in connection with the abovesaid purchase, according to the plaintiff, it has been necessitated to lay the suit for recovery of the same, as the first defendant has failed to comply with the demand made by the plaintiff through the legal notice and as the first defendant had repudiated the plaintiff's claim by sending the reply notice.

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The first defendant, in toto, has denied the case of the plaintiff and contended that he had not purchased the TV set from the plaintiff as pleaded and he has also not authorised the second defendant to purchase the TV set on his behalf from the plaintiff and also not authorised him to take the delivery of the TV set on his behalf from the plaintiff and further, according to the first defendant, the second defendant is not an employee under him and therefore, it is contended that the plaintiff is not entitled to recover the suit amount and the suit is therefore liable to be dismissed.

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At the outset, the plaintiff in the plaint has not even stated as to when the order had been placed by the first defendant to purchase the TV set. Very vaguely it has been averred in the plaint that the plaintiff has purchased one TV set for a sum of RS.16,250/- on credit basis. Neither the date of the purchase order made by the first defendant as regards the same nor any averments as regards the acceptance of the purchases order had been spelt out in the plaint. However, in the pre-suit notice marked as Ex.A6, it is found that the plaintiff had made a claim as if the first defendant had purchased the TV set from the plaintiff on 18.2.93. However, as regards the above case putforth by the plaintiff in Ex.A6, other than the interested ipse dixit evidence of PW1, there is no other acceptable and reliable materials placed. It is not been averred as well as established by the plaintiff as to under what mode the first defendant has placed the order for the purchase of the TV set, whether the same had been made by him orally or by way of a written communication and further, it has also not been averred by the plaintiff as to whether the abovesaid purchase order placed by the first defendant either orally or in writing had been accepted by the plaintiff and thereafter, the TV set had been handed over to the second defendant on behalf of the plaintiff. With reference to the abovesaid facts, there is no plea nor any proof placed by the plaintiff. For the first time, during the course of cross examination, PW1 would endeavour by alleging that the purchase order had been placed by the first defendant through telephone. However, it has not been explained as to how the purchase order made through telephone had come to be accepted by the plaintiff straightaway without any proof with reference to the same at least subsequent to the alleged purchase order made through telephone. That apart,

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there is no material placed by the plaintiff to establish that the first defendant had authorised the second defendant to purchase/take delivery of the TV set on his behalf from the plaintiff. It is the specific case of the first defendant that the second defendant is not working under him. However, materials placed on record would go to show that the second defendant was employed in the Prestige Finance Leasing Company private limited, wherein, the first defendant is one of the Directors. However, the fact remains that the second defendant is not directly under the employment of the first defendant. In any event, when the first defendant has disputed the claim of the plaintiff that the second defendant had taken the delivery of the TV set on his behalf by signing in the delivery note and receipt, it is for the plaintiff to establish the same by acceptable and reliable materials. In so far as this case is concerned, it is found that the second defendant has conveniently remained ex-parte.

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The plaintiff relies upon the alleged signature of the second defendant in the ledger for taking the delivery of the TV set and thereby, the plaintiff seeks to fasten the liability on the first defendant. However, when, at the foremost, there is no material placed by the plaintiff to show that the first defendant had authorised the second defendant to purchase/take the delivery of the TV set on his behalf, it does not stand to reason, as to how without any record or material, the plaintiff has chosen to deliver the TV set to the second defendant by obtaining his signature in the ledger etc., That apart, the first defendant has also disputed the said signature of the second defendant found in the ledger maintained by the plaintiff. Even as regards the same, there is no material placed by the plaintiff to establish as per law that the signature available in the ledger etc., is that of the second defendant and that the second defendant, on the strength of the same, had taken the delivery of the TV set on behalf of the first defendant. As above seen, at the foremost, the plaintiff has failed to establish that the first defendant had placed order for the purchase of the TV set and accordingly, it is seen that the plaintiff has not whispered anything as to under what mode, the purchase order had come from the first defendant and whether the same had been accepted by the plaintiff.

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The plaintiff in his legal notice would claim that the purchase order was made on 18.02.93 and the TV set was delivered to the second defendant on behalf of the first defendant. The purchase is said to be made on credit basis. If that be so, at least, if the above said transaction has any element of truth, immediately thereafter, at the shortest possible time, the plaintiff should have called upon the defendants reminding them the purchase of the TV on credit basis and directing them to pay

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the value of the same. However, it is found that though the plaintiff has been claiming that he had been making repeated demands to the first defendant to pay the amount due since the date of the purchase, as regards the same, there is no proof forth coming. For the first time, it is seen that the plaintiff has chosen to issue legal notice marked as Ex.A6 on 31.08.94. It is thus found that nearly 16 months after the alleged purchase, for the first time, a claim had been made by the plaintiff directing the first defendant to pay the value of the TV set. This attitude of the plaintiff by itself would go to show that inasmuch as the first defendant had not purchased any TV set on 18.02.93 as claimed in the legal notice, it is found that the plaintiff has not endeavoured to make any demand of the same immediately after the purchase of the alleged TV set and on the other hand, leisurely had made a claim nearly 16 months after the alleged purchase. It is further noted that the legal notice has not been cleverly sent to the second defendant. No reason has been adduced for the same. If really, the second defendant had taken the delivery of the TV set on behalf of the plaintiff and had signed in the records of the plaintiff, as a prudent person, the plaintiff should have issued the legal notice even to the second defendant inviting his attention to the abovesaid facts so as to seek his response with reference to the same. However, the legal notice has not been sent to the second defendant. As above seen, the first defendant has stoutly repudiated all the claims of the plaintiff made in the legal notice marked as Ex.A6 by sending a reply, which has come to be marked as Ex.A8. The above aspects of the matter would clearly establish that as no purchase order had been made by the first defendant with the plaintiff in any mode, even through telephone, as testified by PW1, on 18.02.93, it is found that accordingly, the plaintiff is unable to place acceptable materials to sustain the claim.

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The plaintiff would however rely upon Exs.A4 and A5 pertaining to the transactions made by the Prestige Finance Leasing Company private limited with the plaintiff. No doubt, the first defendant is one of the Director of the abovesaid concern. The documents marked as Exs.A4 and A5 relate to the transactions made by the abovesaid concern with the plaintiff. On that basis, we cannot conclude that the first defendant had made the purchase order for the subject TV set with the plaintiff on 18.02.93. As rightly determined by the trial Court, the suit has been laid by the plaintiff against the first defendant only in his individual capacity and not in his capacity as the Director of Prestige Finance Leasing Company private limited. In such view of the matter, Exs.A4 and A5 would not in any manner advance the case of the plaintiff.

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In the light of the above reasons, it is found that all that the plaintiff could rely upon for the establishment of the suit transaction are only Exs.A2 and A3, the ledger book and bill book, in which, it is alleged that the second defendant has signed for the delivery of the TV set. However, the first defendant has seriously challenged the same by putting a suggestion that the signature in the record is not that of the second defendant. Despite the same, the plaintiff has not endeavoured to establish that the signature available in the record is that of the second defendant so as to fasten the liability on the first defendant. That apart, when there is no material placed by the plaintiff at least prima facie to establish that the first defendant had authorised the second defendant to purchase/take delivery of the TV set on his behalf, it is found that reliance placed by the plaintiff upon Exs.A2 and A3 baldly contending that the alleged signatures of the second defendant are that of the second defendant by itself would not entitle the plaintiff to fasten the liability on the first defendant, particularly, when the same has been stoutly disputed by the first defendant in all aspects.

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As rightly determined by the trial Court, at the foremost, the plaintiff has to establish that there is a privity of contract between it and the first defendant as regards the purchase of the TV set. For that purpose, the plaintiff has to establish that an offer/purchase order had been made by the first defendant to purchase TV set and the said offer/purchase order had been accepted by the plaintiff and that the first defendant thereafter had communicated with the plaintiff to deliver the TV set to the second defendant on his behalf and and the same had been accepted by the plaintiff and on that footing, the plaintiff delivered the TV set to the second defendant on behalf of the first defendant. When with reference to all the above facts, sans plea in the plaint as regards the same and further when there is no proof placed by the plaintiff worth acceptance to sustain the same and when the plaintiff has not chosen to issue the legal notice to the second defendant and further, when it is seen that the plaintiff is not sure as to on what basis it had chosen to implead the second defendant as a party to the suit proceedings and according to the plaintiff, the second defendant has been added as an agent of the first defendant, then the plaintiff should establish that the first defendant had nominated the second defendant as his agent for the purchase and taking the delivery of the TV set and with reference to the same, no material at all is forth coming on the part of the plaintiff other than Exs.A2 and A3 and when the said documents are not admitted by the first defendant and challenged by contending that they are concocted documents prepared for the purpose of the case and in such view of the matter, it is found

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that as rightly determined by the trial Court, when the very basis of the suit transaction i.e., privity of contract between the plaintiff and the first defendant having not established by the plaintiff in any manner, as above discussed, it is found that the plaintiff cannot be granted the reliefs sought for due to its miserable failure to establish that a valid contract had been entered into between it and the first defendant for the purchase of the TV set. The first appellate Court seems to have based its reasonings without any material on record to sustain the same forgetting the defence taken by the first defendant completely repudiating the claim of the plaintiff and despite the same, the first appellate Court, on surmises and conjectures, appears to have accepted the plaintiff's case by presuming that Exs.A2 and A3 should only be genuine documents on the basis of the ipse dixit testimony of PW1 and as rightly contended, the plaintiff having come forward with the case for the suit claim, on the mere production of Exs.A2 and A3 by itself, would not advance the case of the plaintiff and in such view of the matter, it is found that the judgment and decree of the first appellate Court, which had emanated based on illogical and perverse findings and conclusions cannot be allowed to sustain any further. As rightly determined by the trial Court, in the absence of the privity of contract between the plaintiff and the first defendant as regards the purchase of TV set involved in the matter, the plaintiff cannot make a legal claim for the suit amount as against the first defendant and accordingly, the substantial question of law formulated in the second appeal is answered against the plaintiff and in favour of the first defendant.

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In conclusion, the judgment and decree dated 15.12.1999, passed in A.S.No.137 of 1999, on the file of the first Additional District Judge cum Chief Judicial Magistrate Court, Salem are set-aside and the judgment and decree dated 18.01.1999, passed in O.S. No.740 of 1996, on the file of the first Additional District Munsif, Salem are confirmed. Accordingly, the second appeal is allowed with costs. Consequently, connected miscellaneous petition, if any, is closed.

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Sd/Assistant Registrar(CS-VIII) //True Copy//

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Sub Assistant Registrar

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sli

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The first Additional District Judge cum Chief Judicial Magistrate Court, Salem,

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The first Additional District Munsif Court, Salem.

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The Section Officer,
V.R.Section,
High Court, Madras.(2 COPIES)
+1cc to Mr.S.KALYANARAMAN, Advocate, S.R.No. 26072
+1cc to Mr.P.HARI BABU, Advocate, S.R.No.26218
Pre-delivery Judgment in
S. A.No.971 of 2004
CNR(CO)
TR(23/05/2018)

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K.A.HARIKRISHNAN,D/NO.2, v. M/S.Asian Electronics by Its

Case brief

What is this about?

What did the court decide?

K.A.HARIKRISHNAN,D/NO.2, v. M/S.Asian Electronics by Its

Case brief

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What did the court decide?

What the court decided

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