JUDGMENT
Pradeep Nandrajog, J.
1. Vide order dated 13.8.2004, on the pleadings of the parties, following issues were framed:
1. Whether the suit has been filed within the period of limitation?
2. Whether the Plaint is signed, verified and the suit instituted by a duly authorised and competent person?
3. What amount, if any, is due to the plaintiff?
4. Whether the plaintiff is entitled to interest? If so, at what rate and for what period?
5. Relief.
2. Parties led evidence by way of affidavit. One witness was tendered by each party. The witnesses were cross-examined.
3. In a nutshell, case of the plaintiff is that it is a public sector enterprise wholly owned by the Government of India. Shri B.R.Raghunandan, the Secretary of the plaintiff is competent to institute the suit by virtue of powers delegated to him to institute the suit.
4. That on 11.3.1985 a Commission Agency Agreement was entered into between plaintiff and defendant as per which defendant was appointed as a commission agent up to 31.3.1986. The agreement envisaged that monthly indent would be placed by the defendant for material which it required and based on the indent, material was to be supplied. That on year to year basis agreement was extended. Last extension was when defendant acknowledged extension of the Commission Agency Agreement on 7.5.1990. Therefore, defendant functioned as an agent for the financial year 1990-91. That as per the original agreement, a sum of Rs. 3 lacs was deposited by the defendant as security deposit which was to carry interest @ 12% p.a. Bank guarantee in sum of Rs. 4 lacs was furnished by defendant to secure payment to the plaintiff. That defendant was entitled to receive goods on credit up to Rs. 25 lacs. That defendant was entitled to discount between 2.5% to 3.5% on extrusion, 2% to 3% on rolled products and 2% on foils. In addition thereto, if payment was made for the goods dispatched by road, within 10 days of dispatch additional 2% discount was to be granted by the plaintiff to the defendant. In case of goods sent by road, if payment was made within 20 days of dispatch, 2% discount was to be given by the plaintiff to the defendant. That payment had to be made within 40 days of dispatch of goods by road and 50 days if dispatched by train. That from year to year, plaintiff was taking policy decisions pertaining to the terms and conditions under which business was to be transacted. That in the year 1990 a policy decision was taken wherein plaintiff decided that for the years 1984-85 to 1986-87, if commission agent made payments due and payable till 31st March, 1989, it would get a discount on the accumulated interest, i.e. only 25% of the accumulated interest to be paid. It is stated that defendant paid 25% of the interest but not by the stipulated date. Thus, full interest was payable.
5. That defendant did not pay for the goods lifted and ran an over draft. That last transaction was transacted in the month of November 1990. That in respect of the dues, after adjusting the security deposit and recovering sum of Rs. 4 lacs under the bank guarantee, a sum of Rs. 39,34,884/- remained due and payable to the plaintiff. Amount not being paid, suit was filed.
6. It may be noted at the outset that the sum of Rs. 39,34,884/- is the suit amount together with interest. Amount payable by close of financial year 31.3.1991 is stated to be Rs. 18,90,844/-. This sum of Rs. 18,90,844/- has three components. The first is amount due towards price of goods, the second is the discount not given for timely payment and the third is interest.
7. defense is that the suit is barred by limitation for the reason agency agreement came to an end on 31.3.1990. That on 22.8.1991 full and final payment was made by the defendant. That after November, 1990 no consignment was received by the defendant. Authority of Shri B.R.Raghunandan to institute the suit, sign and verify the pleadings has been denied.
8. Further defense is that many times goods supplied by the plaintiff were in excess of the indent and defendant did not accept delivery. Sometimes goods supplied were not as per the indent. Since bills were raised for full value of these goods, debit notes were sent by the defendant for which plaintiff had not given any credit.
9. Mohan Singh Parmar, Associate Manager of the plaintiff is the only witness of the plaintiff. The witness has proved Commission Agent Guidelines dated 1.2.1985, Ex.PW1/3. Commission Agent Guidelines for the subsequent years ending for the period 1990-1991 have been proved as Ex.PW1/4 collectively.
10. The witness has deposed about the discounts which were available to the defendant, which I may note are in conformity with the pleadings of the plaintiff. He has proved Ex.PW1/5, being decision dated 2nd March, 1989 informing that consignment agents who clear payments by 31st March, 1989 were liable to pay only 25% of the accumulated interest and those who paid by 31st December, 1989 were liable to pay only 30% of the accumulated interest. That is to say, 75% or 70% as the case may be of the accumulated interest was liable to be waived. He deposed that Ex.PW1/6, being a letter received from the defendant on 29.11.1990 stating that defendant had been raising debit notes between 12.12.1985 to 31.10.1990 was rebutted by the plaintiff vide letter dated 10.12.1994 being Ex.PW1/7 informing that the debit notes were never received and that the defendant could not unilaterally raise debit notes. Witness has deposed that a sum of Rs. 4 lacs was received by the plaintiff from the bank issuing the bank guarantee. Witness has deposed that after plaintiff received 7 cheques totalling Rs. 13,11,103/-, vide Ex.PW1/10 being plaintiff’s letter dated 5.9.1991, balance sum of Rs. 20,38,674/- was claimed.
11. Witness has further proved a few other letters written thereafter, but the same are not being noted by me for the reason there was a stalemate between the parties. The letters record a stalemate. Whereas plaintiff stuck to its stand, so did the defendant.
12. Statement of accounts maintained by Korba Branch of the plaintiff pertaining to the defendant has been proved as Ex.PW1/20 and statement of account maintained by Bidhanbagh unit of the plaintiff pertaining to the defendant has been proved as Ex.PW1/21.
13. It would be relevant to note that witness has not deposed a word pertaining to authority of Shri B.R.Raghunandan to institute the suit as also sign and verify the pleadings.
14. DW-1 was extensively cross-examined. He stated that he was employed with the plaintiff company since 1998. He admitted that he could not throw any light on the issue whether any resolution was passed prior to the institution of the present suit and that he could not say who was the Secretary of the plaintiff in the year 1994. He admitted that agreement between the parties was not extended in writing after 31.3.1990, but stated that as per standard procedure, plaintiff had signed an agreement pertaining to the year 1990-1991 and had sent the same to the defendant for signatures of the defendant to acknowledge continuation of the agreement, but defendant did not do so. Witness admitted that the 7 cheques referred to in Ex.PW1/9, being defendant’s letter dated 22.8.1991 were received but denied that the same were accepted in full and final settlement of accounts.
15. Cross-examined on the 12 debit notes which were referred to in defendant’s letter dated 29.11.1990, Ex.PW1/6, he stated that he had no personal knowledge of the same and that there was no proof of verification of the debit notes. He stated that position was clarified to the defendant vide plaintiff’s letter dated 10.12.1990, Ex.PW1/7.
16. In cross-examination he admitted that for different periods and at different point of time interest had been claimed and debited to the account of the defendant sometimes @18% per annum and sometimes @21% p.a. However, he admitted that neither in commission agency agreement nor yearly extensions thereof a reference was made to any interest being payable, i.e. the agreement did not stipulate any agreed rate of interest.
17. Witness was questioned in respect of 6 cheques totalling Rs. 10,29,919/-, stated to have been delivered by the defendant to the plaintiff and encashed by the plaintiff, no reference whereof was to be found in the statement of accounts relied upon by the plaintiff. He stated that the said cheques were received, but explained that they were not reflected in the statement of accounts for the reason the cheques were not realised. Details of the seven cheques are as recorded in the documents filed by the plaintiff at page 141 of plaintiff’s documents. As it would be relevant, I may extract the question and the answer:
Q. I put it to you that the cheques shown in Schedule- ‘3’ on page 141 of the Plaintiff’s documents were received and encashed by you but have not been reflected in the Statement of A/c filed by you?
Ans. After seeing the statement of account the witness says that these cheques totalling to Rs. 10,29,919/- are not reflected in our accounts and it means the said cheques were not realized.
18. Defendant examined one witness, namley, Shri V.K.D. Mehta, a partner of the firm.
19. DW-1, Shri V.K.D. Mehta deposed that no document was executed by the defendant extending the agreement beyond 31.3.1990 and therefore relationship between the plaintiff and defendant as principal and agent came to an end on 31.3.1990. That on 22.8.1991, in full and final settlement of dues of the plaintiff all payments were made. That vide telegram dated 29.11.1990 defendant requested plaintiff to stop all supplies and after November 1990 no consignment was received. That debit note detailed in Ex.PW-1/6 were sent by the defendant to the plaintiff. That plaintiff was supplying goods in excess of the indent placed. That many a times goods were supplied late. That many a times wrong goods were supplied. That there was no term in the agreement that any interest would be charged.
20. Since most of defendant’s documents were proved as per para 19 of his affidavit by way of evidence, I feel it would be useful to note the entire contents of para 19. It reads as follows:
19. I say that the copies of our letters regarding our complaints to the plaintiff regarding the backlog and other complaints have been filed by us. Copy of advice of plaintiff dated May 27, 1985 to dispatch material be exhibited as Ex.DW-1/1. Original Letter of Plaintiff dated July 8, 1985 to Examine Backlog Quantity and Dispatch Material be exhibited as Ex.DW-1/2. Carbon Copy of Debit Note dated July 6, 1985 be exhibited as Ex.DW-1/3. Carbon Copy of Express UPC Telegram No. 2021 dated August 19, 1985 of defendant for Inspection and Settle Claim be exhibited as Ex.DW-1/4. Original UPC Receipt be exhibited as Ex.DW-1/5. Original UPC receipt be exhibited as Ex.DW-1/6. Carbon Copy of UPC Express Telegram No. 2020 dated August 19, 1985 by defendant to plaintiff for inspection and Settle Claim be exhibited as Ex.DW-1/7. Carbon Copy of letter dated September 30, 1985 of defendant for issuance of Credit Note. Along with original registry receipt be exhibited as Ex.DW-1/8. Carbon Copy of Regd. Express No. 3132, 3133 dated October 3, 1985 of defendant to suspend further supplies be exhibited as Ex.DW-1/9. Original Registry receipts No. 3189, 3190, 9 (back) be exhibited as Ex.DW-1/10. Carbon Copy of letter by Registered Post to plaintiff dated October 12, 1985 for lifting of Excessive Material other than indents be exhibited as Ex.DW-1/11. Carbon Copy of letter dated November 25, 1985 of defendant for not to accept material without indent be exhibited as Ex.DW-1/12. Carbon Copy of registered letter of defendant dated November 30, 1985 requesting to withdraw invoice be exhibited as Ex.DW-1/13. Original registry receipts No. 0933, 0934 be exhibited as Ex.DW-1/14. Carbon cop of registered letter dated December 2, 1985 of defendant requesting to withdraw invoice be exhibited as Ex.DW-1/15. Original registered receipts No. 4066, 4067 AD card be exhibited as Ex.DW-1/16. Carbon copy of letter dated December 14, 1985 of defendant remittance of invoice be exhibited as Ex.DW-1/17. Original registered receipts No. 2968, 2969 be exhibited as Ex.DW-1/18. Copy of invoice wrongly mailed be exhibited as Ex.DW-1/19. Original letter dated January 6, 1986 of plaintiff regarding under consideration debit note be exhibited as Ex.DW-1/20. Carbon copy of letter dated January 13, 1986 of defendant be exhibited as Ex.DW-1/21. Copy of letter dated January 24, 1986 of defendant for inspection be exhibited as Ex.DW-1/22. Original letter dated January 20, 1986 of the plaintiff be exhibited as Ex.DW-1/23. Original letter dated January 30, 1986 of the defendant be exhibited as Ex.DW-1/24. Carbon copy of letter dated February 17, 1986 of defendant regarding payment to plaintiff be exhibited as Ex.DW-1/25. Carbon copy of UPC, express telegram dated February 26, 1986, original UPC receipt be exhibited as Ex.DW-1/26. Carbon copy of letter dated March 5, 1986 of the defendant regarding supply of excessive material be exhibited as Ex.DW-1/27. Carbon copy of express telegram dated March 5, 1986 of the defendant be exhibited as Ex.DW-1/28. Copy of letter dated March 12, 1986 of plaintiff allowing the defendant for discount be exhibited as Ex.DW-1/29. Carbon copy of UPC telegram dated May 26, 1986 be exhibited as Ex.DW-1/30. Copy of UPC dated May 10, 1986 be exhibited as Ex.DW-1/31. Carbon copy of indent for the month of March 87 dated March 12, 1987 of the defendant be exhibited as Ex.DW-1/32. Carbon copy of offer dated March 11, 1986 of the defendant for receipt of excess material be exhibited as Ex.DW-1/33. Carbon copy of letter dated June 14, 1986 of the defendant for receipt of excess material be exhibited as Ex.DW-1/34. Carbon copy of letter dated March 14, 1987 of the defendant to ensure regular supplies to settle account along with original registry receipt be exhibited as Ex.DW-1/35. Carbon copy of statement of dispatch dated March 14, 1987 of the defendant be exhibited as Ex.DW-1/36. Express telegram dated March 17, 1986 of the plaintiff be exhibited as Ex.DW-1/37. Carbon copy of reply dated March 30, 1987 of defendant to the letter of plaintiff dated March 3, 1987 and for debit note be exhibited as Ex.DW-1/38. Carbon copy of statement of backlog dated May 10, 1986 be exhibited as Ex.DW-1/39. Original registry receipt No. 5621 be exhibited as Ex.DW-1/40. Carbon copy of registered telegram dated May 17, 1986 to release backlog be exhibited as Ex.DW-1/41. Original registry receipts be exhibited as Ex.DW-1/42. Carbon copy of registered indent dated May 27, 1987 be exhibited as Ex.DW-1/43. Original registry receipt be exhibited as Ex.DW-1/44. Carbon copy of UPC telegram dated June 4, 1986 for immediate delivery be exhibited as Ex.DW-1/45. Original UPC receipt be exhibited as Ex.DW-1/46. Carbon copy of statement of backlog on June 4, 1986 be exhibited as Ex.DW-1/47. Original letter dated June 15, 1987 of plaintiff for cancellation of indent be exhibited as Ex.DW-1/48. Carbon copy of registered letter dated July 30, 1986 of defendant for backlog from January to July along with original registry receipt be exhibited as Ex.DW-1/49. Carbon copy of statement of backlog as on July 1, 1986 be exhibited as Ex.DW-1/50. Carbon copy of statement of backlog as on July 4, 1986 be exhibited as Ex.DW-1/51. Express telegram dated July 10, 1986 for immediate supply be exhibited as Ex.DW-1/52. Original UPC receipt be exhibited as Ex.DW-1/53. Carbon copy of statement of backlog as on July 10, 1986 be exhibited as Ex.DW-1/54. Original registry receipt be exhibited as Ex.DW-1/55. Carbon copy of UPC telegraph No. 1146 dated October 20, 1986 of the defendant for immediate dispatch be exhibited as Ex.DW-1/56. Carbon copy of UPC telegram No. 1145 dated October 20, 1986 of the defendant for immediate dispatch be exhibited as Ex.DW-1/57. Original UPC receipt be exhibited as Ex.DW-1/58. Statement of backlog as on October 31, 1986 be exhibited as Ex.DW-1/59. Original UPC receipt be exhibited as Ex.DW-1/60. Original reply dated September 22, 1987 of plaintiff to the letter of defendant dated August 7, 1987 regarding claims be exhibited as Ex.DW-1/61. Carbon copy of reply dated July 13, 1987 of the defendant to the letter of the plaintiff dated June 16, 1987 and July 6, 1987 regarding to suggestion of plaintiff to lodge claim with the insurance company be exhibited as Ex.DW-1/62. Original registry and AD card be exhibited as Ex.DW-1/63. Original reply of plaintiff dated July 6, 1987 to the debit note dated June 23, 1987 of the defendant be exhibited as Ex.DW-1/64. Express telegram dated June 15, 1987 of the defendant for replacement being goods found badly water damage be exhibited as Ex.DW1/65. Original reply dated June 16, 1987 of the plaintiff to the telegram dated June 15, 1987 of the defendant regarding claims be exhibited as Ex.DW-1/66. Carbon copy of reply of defendant dated October 31, 1987 sent by registered post to the letter dated October 27, 1987 of the plaintiff regarding cancellation of intend No. 57 along with original registry receipt with copies of annexures be exhibited as Ex.DW-1/67. AD card be exhibited as Ex.DW-1/68. Carbon copy of submission of backlog statement dated February 9, 1988 of the defendant be exhibited as Ex.DW-1/69. Original letter dated April 22, 1988 of the plaintiff to defendant showing the difficulty to supply aluminum sheets be exhibited as Ex.DW-1/70. Carbon copy of express telegram dated May 26, 1988 of defendant for immediate dispatch of sheets be exhibited as Ex.DW-1/71. Carbon copy of reply dated July 5, 1988 by registered post to the plaintiff of their letter dated June 24, 1988 regarding delay in dispatch of sheets be exhibited as Ex.DW-1/72. Carbon copy of express telegram No. 3416, 3417 dated September 23, 1988 of the defendant to supply indents be exhibited as Ex.DW-1/73. Carbon copy of express telegram No. 3418 dated September 23, 1988 of defendant to supply indents be exhibited as Ex.DW-1/74. Carbon copy of express telegram No. 3472 dated September 30, 1988 of defendant to supply indents be exhibited as Ex.DW-1/75. Carbon copy of letter dated September 30, 1988 of the plaintiff for dispatch of very less quantity be exhibited as Ex.DW-1/76. Original letter dated March 4, 1999 of the plaintiff for 25% payment be exhibited as Ex.DW-1/77. Carbon copy of letter dated March 17, 1989 of the defendant regarding non-consideration of claims be exhibited as Ex.DW-1/78. Carbon copy of letter dated March 18, 1989 of the defendant for supply against indent be exhibited as Ex.DW-1/79. Carbon copy of letter dated April 24, 1989 of the defendant regarding non-consideration of claims be exhibited as Ex.DW-1/80. Carbon copy of summary statement of the defendant be exhibited as Ex.DW-1/81. Carbon copy of material received in excess of indents be exhibited as Ex.DW-1/82. Carbon copy of material received in excess of indents be exhibited as Ex.DW-1/83. Carbon copy of statement of claim of the defendant be exhibited as Ex.DW-1/84. Carbon copy of letter dated July 20, 1989 of the defendant regarding payment of penal interest be exhibited as Ex.DW-1/85. Carbon copy of letter dated July 20, 1989 of the defendant regarding penal interest be exhibited as Ex.DW-1/86. Carbon copy of debit note dated October 31, 1990 of the defendant be exhibited as Ex.DW-1/87. Carbon copy of debit note dated September 14, 1990 of the defendant be exhibited as Ex.DW-1/88. Carbon copy of list of claims of defendant with Annexures be exhibited as Ex.DW-1/89. Carbon copy of debit note dated September 14, 1990 of the defendant be exhibited as Ex.DW-1/90. Carbon copy of summary statement of claim of the defendant be exhibited as Ex.DW-1/91. Carbon copy of UPC letter dated February 16, 1990 of defendant for payment of interest be exhibited as Ex.DW-1/92. Original letter dated April 6, 1990 of the plaintiff for payment of balance payment be exhibited as Ex.DW-1/93. Carbon copy of reply to the letter of plaintiff dated April 6, 1990 along with registry receipt be exhibited as Ex.DW-1/94. Carbon copy of letter dated May 4, 1990 requesting plaintiff to send sales invoice against D.A. No. 08/3334 dated March 17, 1990 be exhibited as Ex.DW-1/95. Carbon copy of UPC letter dated June 7, 1990 requesting plaintiff to issue credit note be exhibited as Ex.DW-1/96. Original letter dated September 4, 1990 of the plaintiff regarding award be exhibited as Ex.DW-1/97. Original letter dated September 18, 1990 of the plaintiff for outstanding amount of Rs. 6413.00 be exhibited as Ex.DW-1/98. Carbon copy of registered letter dated October 31, 1990 of defendant regarding payment against letter dated September 18, 1990 along with registry receipt be exhibited as Ex.DW-1/99. Carbon copy of letter dated November 29, 1990 of defendant for debit notes be exhibited as Ex.DW-1/100. Carbon copy of letter dated March 27, 1991 of the defendant regarding payment for installment for the month of March 1991 be exhibited as Ex.DW-1/101. Original letter dated November 1, 1991 of the plaintiff regarding outstanding payment be exhibited as Ex.DW-1/102. Original letter dated September 5, 1991 of the plaintiff regarding payment of outstanding amount be exhibited as Ex.DW-1/103. Carbon copy of reply dated November 28, 1991 of the defendant to the letter of plaintiff dated November 1, 1991 along with original registry receipt be exhibited as Ex.DW-1/104. Carbon copy of registered reply dated June 23, 1992 of the defendant to the letter of plaintiff dated June 20, 1992 along with original registry receipt be exhibited as Ex.DW-1/105. Carbon copy of express telegram dated October 13, 1992 regarding full and final settlement be exhibited as Ex.DW-1/106. Original registry receipt be exhibited as Ex.DW-1/107. Original letter dated December 29, 1992 of plaintiff to defendant regarding confirmation that CDA No. 99/13290 dated June 16, 1990 for Rs. 6,58,386.00 wrongly shown in the name of defendant be exhibited as Ex.DW-1/108. Original bank certificate dated April 30, 1994 be exhibited as Ex.DW-1/109. Original acknowledgment card of delivery of letter No. DAC/BALCO/3120 dated September 30, 1995 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/110. Original acknowledgment card of delivery of letter No. DAC/BALCO/3186 dated November 7, 1985 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/111. Original acknowledgment card of delivery of letter No. DAC/BALCO/3291 dated November 7, 1985 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/112. Original acknowledgment card of delivery of letter No. DAC/BALCO/3378 dated November 30,1985 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/113. Original acknowledgment card of delivery of letter of May 10, 1986 upon the plaintiff at J.K.Nagar be exhibited as Ex.DW-1/114. Original acknowledgment card of delivery of letter No. DAC/TEG/211 dated May 17, 1986 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/115. Original acknowledgment card of delivery of letter No. DAC/TEG/212 dated May 17, 1986 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/116. Original acknowledgment card of delivery of letter No. DAC/BALCO/641 dated July 30, 1986 upon the plaintiff at New Delhi (ED) be exhibited as Ex.DW-1/117. Original acknowledgment card of delivery of letter No. BACKLOG ST. DT. September 10, 1996 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/118. Original acknowledgment card of delivery of letter No. DAC/B-42/4657 dated May 1, 1989 upon the plaintiff at (CMD) New Delhi be exhibited as Ex.DW-1/119. Original acknowledgment card of delivery of letter No. DAC-B-47/4658 dated May 1, 1989 upon the plaintiff at (ED) New Delhi be exhibited as Ex.DW-1/120. Original acknowledgment card of delivery of letter No. DAC/B-43/6585 dated April 21, 1990 upon the plaintiff at KORBA be exhibited as Ex.DW-1/121. Original acknowledgment card of delivery of letter No. DAC/B-43/6586 dated April 21, 1990 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/122. Original acknowledgment card of delivery of letter No. DAC/B-1/6603 dated April 27, 1990 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/123. Original acknowledgment card of delivery of letter No. DAC/BALCO/6937 dated July 19, 1990 upon the plaintiff at KORBA be exhibited as Ex.DW-/124. Original acknowledgment card of delivery of letter No. DAC/TEG/7012 dated August 8, 1990 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/125. Original acknowledgment card of delivery of letter No. DAC/ BALCO/7121 dated September 1, 1990 upon the plaintiff at New Delhi be exhibited as Ex.DW-1/126. Original acknowledgment card of delivery of letter No. DAC/BALCO/2414 dated June 23, 1992 upon the plaintiff at KORBA be exhibited as Ex.DW-1/127. Original acknow-ledgment card of delivery of letter No. DAC/TEG/2942 dated July 19, 1990 upon the plaintiff at KORBA be exhibited as Ex.DW-1/128.
21. DW-1 was cross-examined but only in relation to Ex.PW-1/4, PW-1/6, PW-1/7, PW-1/9, DW-1/23, DW-1/101, DW-1/90, DW-1/91, DW-1/93, DW-1/77, DW-1/94 and DW-1/85.
22. Cross-examination centered around the last date till business was transacted and on interest paid on late payment. On the debit note relied upon by the defendant and as reflected in PW-1/6. No cross-examination has been directed qua the various letters proved by the defendant as having been sent raising grievance qua short supply, excess supply, invoices raised for goods not delivered, defective supply etc.
23. Parties filed over 250 documents of which about 150 have been proved. I note only a few relevant ones. Same are as under:
Ex.DW-1/3
DAC/BALCO/DR N/1810 DATE : 1985 : 07 : 06
The Accounts Officer
Bharat Aluminium Co. Ltd.
Punj House,
18, Nehru Place,
NEW DELHI.
Sub : DEBIT NOTES
We have debited your accounts as following:
Dr. Note No. Date Particulars Amount
DAC/DR N/0101 03.04.85 Cash Discounts Rs. 10,406.00
DAC/DR N/0102 30.04.85 Being short Rs. 11,126.00
receipt of
materials.
DAC/DR N/0103 17.05.85 Cash Discount Rs. 5,523.25
DAC/DR N/0104 18.05.85 Freight paid by Rs. 9,760.00
us to A.G.
Carriers on
your behalf.
(against BBU Consignment) Rs. 36,815.25
Please find enclosed the above debit notes in duplicate and make necessary entries in your records. Kindly credit the same in our account with confirmation to us.
Thanking You
For DEVIDAYAL ALUMINIUM CORPORATION.
* * * * * * *
Ex.DW-1/7 U.P.C.
E X P R E S S
2020
1985 : 08 : 19
G-1445
RATNAKORBA
NEW DELHI
REYOUR POLICY OPL/00021 favorING BALCO (.) SEVENTEENTH PACKETS CRP RECEIVED ADVICE NUMBER 08/0876 OF JULY 27TH THROUGH WESTERN CARRIERS ITS TRUCK NUMBER DEL 1414 (.) EIGHT PACKET 1799 KILOS WORE WATER MARK HENCE DAMAGED (.) PLEASE ENSURE IMMEDIATE INSPECTION AT 4954 BARA HINDU RAO DELHI AND SETTLE CLAIM (.) REGARDS
– D E V I D A Y A L –
xx MARKETING MANAGER (NZ)
C.C. : MARKETING MANAGER,
BHARAT ALUMINIUM CO. LTD.
BHARAT ALUMINIUM CO. LTD.,
PUNJ HOUSE, 18 NEHRU PLACE,
P.O. BALCO TOWNSHIP,
NEW DELHI 110024.
KORBA * * * * * * * Ex.DW-1/11 DAC/BALCO/3186 1985 : 10 : 12 The Chief Marketing Manager, Bharat Aluminium Co. Ltd. Punj House, 18, Nehru Place, NEW DELHI-110024 Re: Lifting of excessive material other than our indents. Dear Sir,
This has reference to your visit to our office on 9th October, 1985, during the meeting besides other points your good-self suggested to lift the remaining 20.4. M.T. Material and also your good-self assured that in future there will be no excessive supplies other then the actual indents. Keeping in view your kind suggestion and our commitment towards maintaining long-term good business relationship with your esteem company, we are accepting the same in lieu of October Indent, and shall request you to consider sympathetically following points.
a) That the payment terms of this consignment should be considering the supplies as made during October, preferably from the day of actual lifting of the materials and not the date of dispatch.
b) The material in question is badly water damaged therefore we shall request your good-self to use your influence in settling the Insurance claim at the earliest in order to enable us to consume the materials.
c) Kindly refer to our letter No. DAC/BALCO/31450 dated 7th Oct. 1985 where in we have narrated certain problems faced by us due to erratic trend of supplies. We have to request you to please accept payment of these consignments in accordance to concessions offered to your Bombay consignment Agents.
We are sure that your goodself would consider our request favorably and which may kindly be communicated to us at your earliest in order to enable us to accept the materials.
Thanking you and assuring you of our best co-operation at all times.
With Regards,
Yours very truly,
For DEVIDAYAL ALUMINIUM CORPORATION.
(M K MEHTA) PARTNER * * * * * * * * Ex.DW-1/12 Ref. No. DAC/85-86/N-128 Dated :25.11.1985 The Dy. Marketing Manager (NR), Bharat Aluminium Co.Ltd., Punj House, 18, Nehru Place, NEW DELHI -110 019 Dear Sir,
Please refer to your letter No. NZ/Mkt/J-4502(89) dated 21.11.1985, the material in question has been dispatched to us without our indent. The details of the indents pending with you of the Rolled Product is as under:
Indent for the month Indent No. Date C.R. Sheets C.R. Coils N.R.P. November 1985 70 10.10.85 10.00 MT 4.5 MT 2.00 MT December 81 8.11.85 12.00 MT 4.5 MT - (To be dispatched after 18.11.1985) 22.00 MT 9.00 MT 2.00 MT
Previously also we have been dispatched material without our indent and we have accepted the same and you may recall that only for one particular consignment we have been given payment relaxation i.e. 45 days from the date of receipt.
This type of dispatches upsets all our marketing and financial calculation. This time we are unable to accept the material without our indent.
Thanking You,
Yours truly,
for DEVIDAYAL ALUMINIUM CORPN.
Sd/-
Partner Ex.DW-1/13 DAC/BALCO/3378 1985 : 11 : 30 The Regional Manager (NR) Bharat Aluminium Co. Ltd., Punj House, 18 Nehru Place, NEW DELHI-110 019 Sub: Request to with-draw your Invoice No. 99/1195 and 1197 dated 22nd October 1985 and accord necessary credit. Dear Sir,
As you are aware that consignments pertaining to subject invoices were not delivered to us for the reason being excessive supply than our indents.
We are therefore returning herewith your subject bills in order to enable you to withdraw the same thus raised in our name. Necessary credit may please be accorded to us immediately in your books of Account.
Thanking You,
Truly yours,
For DEVIDAYAL ALUMINIUM CORPORATION
(PARTNER)
* * * * * * *
Ex.DW-1/15 "DAC/BALCO/DR N/3386 1985 : 12 : 02
The Regional Manager (NR)
Bharat Aluminium Co. Ltd.
Punj House, 18 Nehru Place,
New Delhi-110 019.
Sub: Request to withdraw your Invoice No. 99/1198 dated 22.10.85 & 99/1244, 1245 dated 31.10.85 and to accord necessary credit.
Dear Sir,
As you are aware that consignments pertaining to subject invoices were not delivered to us for the reason being excessive supply than our indents
We are therefore returning herewith your subject bills in order to enable you to withdraw the same thus raised in our name. Necessary credit may please be accorded to us immediately in your books of account.
Truly Yours, For DEVIDAYAL ALUMINIUM CORPORATION * * * * * * * Ex.DW-1/23 No.HO/MKT/J-4520 Dt. 20.1.86 M/s. Devidayal Aluminium Corpn. Devidayal Bhavan, 4956, Bara Hindu Rao, DELHI -110 006. Dear Sir,
In the preceding months a few cases have come to our notice when the consignment agents refused to accept the material on reaching destinations on the ground that supplies were either not against the indents or were in excess of their requirement. We would request all our Consignment Agents not to refuse acceptance of material, which invariably leads to consequential problems at both the ends. Consignments reaching your godown should always be accepted as per the terms of our agency agreement.
We, however, appreciate the difficulties that you may have to go through in such instances, to eliminate which, we are making all our efforts to streamline the entire procedure of order execution and dispatch by our Plants. In fact, considerable improvement has recently been achieved in this regard about which many of you confirmed. We are, however, not relenting our efforts to achieve still better results. May we, therefore, request you to kindly ensure that in no case material should be refused by you and in case of discrepancy, it should be immediately brought to the notice of the concerned Regional Office, which we assure, would receive our prompt attention and be resolved to our mutual satisfaction.
In case of damage of material in transit, you are requested to lodge your claim with the Insurance Company as per procedure already laid down and circulated by us.
Thanking you for your continued cooperation in this regard.
Hindi version will follow separately.
Yours faithfully,
For Bharat Aluminium Company Limited.
Sd/-
(D. MUKHERJEE) CHIEF MARKETING MANAGER * * * * * * * Ex.DW-1/24 DAC/BALCO/DR N/3800 DATE : 1985 : 01 : 00 The Regional Manager (NR) Bharat Aluminium Co.Ltd. Punj House, 18 Nehru Place, New Delhi-110 019. Re.: Our indents pertaining to December 1985 & January 1986. (Copies enclosed). Dear Sir,
May we draw your kind attention towards the past supplies -trend maintenance by you. It has been observed that you are very frequently supplying materials excessive to our indents. It is lamented to point out that your supply rate is as higher as 4.5 times in few of the cases than the actual requirement indented for. We give hereunder our actual requirement for .056 mm 1270 mm for your kind perusal.
INDENT NO. DATE MONTH QTY.
NZ/MKT/DAC/CRP/85-86/81 08.11.85 December 85 1.00 M.T.
-do- 18.12.85 January 86 -Nil-
-do- 26.12.85 January 86 -Nil-
Total : 1.00 M.T.
You have supplied 5.568 M.T. material * as against our indent of just 1.00 M.T. thus making it excessive by 4.568 M.T.
The delivery of this material and of .056 x 1220 vide your DA No. 08/2288 dated 18.12.85 was taken with a view to maintain cordial business relationship as well as to avoid hardship and damage of material at transporters end. You would appreciate that we have always responded to your suggestion and have accepted any material excessive to our indents.
At present aforesaid excessive material supplied to us is lying in our godown for which we have no requirement at all and nor do we expect in near future. Under the circumstances it would be better course of action to follow, if you could kindly ask for the payment after 45 days from the actual date of sale of the above consignment or in the alternative you may direct this material to any other party desirous of the material.
Thanking you & assuring you of our best co-operation at all times.
Truly yours,
For DEVIDAYAL ALUMINIUM CORPORATION
Sd/-
PARTNER Encl : Five * of size .056 x 1270 supplied vide DA No.08/2365 dt. 3.01.86 & DA No.08/2390 dt. 7.01.86 (copies enclosed) * * * * * * * Ex.DW-1/27 Regd. A/D DAC/85-86/M- DATED : 1986 : 03 : 05 The Regional Manager (NR) Bharat Aluminium Co. Ltd. Punj House, 18 Nehru Place, New Delhi-110 019 Re : Supply of excessive material of size 0.56 x 1270 mm Dear Sir,
Please refer to our letter No. DAC/BALCO/3800 dated 30th January 1986. Copy enclosed. This is to bring to your kind notice that inspite of our many requests we have been once again flooded with the CRP of 0.56 X 1270 mm weighing 5.552 M.T. The latest position of our indent and your supplies is as under:
INDENT POSITION
Indent No. Date Month Qty.
NZ/MKT/DAC/CRP/85-86/81 08.11.85 Dec. 85 1.00 M.T.
NZ/MKT/DAC/CRP/85-86/91 10.12.85 Jan. 86 1.00 M.T.
NZ/MKT/DAC/CRP/85-86/94 18.12.85 Jan. 86 Nil
NZ/MKT/DAC/CRP/85-86/96 26.12.85 Jan. 86 Nil
NZ/MKT/DAC/CRP/85-86/107 08.01.86 Feb. 86 Nil
NZ/MKT/DAC/CRP/85-86/117 05.02.86 Feb. 86 Nil
NZ/MKT/DAC/CRP/85-86/128 19.02.86 Feb./Mar. 86 Nil 2.00 M.T.
SUPPLY POSITION
dispatch Advice No. Date Qty.
08/2365 03.01.86 2774
08/2390 07.01.86 2794
08/2618 30.01.86 2896
08/2635 01.02.86 2656
11120 M.T.
As above you have supplied us 9.120 M.T. excess to our indent. As earlier requested that excessive material supplied to us is lying in our godown for which we have no requirement at all and nor do we expect in near future. Under the circumstances we have to suggest you to divert this material to any other party desirous of the material and issue us credit note for the same. Please treat it most urgent as our financial year is coming to a close.
Thanking you,
Truly yours,
For DEVIDAYAL ALUMINIUM CORPORATION
M K MEHTA
Encl : As above.
* * * * * * Ex.DW-1/49 Regd. A/D./DAC/BALCO/641 1986: 07: 30 The Executive Director (C). Bharat Aluminium Co. Ltd. Punj House, 18 Nehru Place, New Delhi-110 019. Sub : Our backlog of HRP/CRP/EXT. from January to July. Dear Sir,
Your kind attention is invited towards our various pending indents placed between January & July details enclosed. Due to non-execution of our orders we had to loose repeat orders and customers as well.
You are requested to arrange clearance of entire backlog without any further delay. A line of confirmation in regard to dispatch schedule will be highly appreciated.
Thanking you,
Truly yours,
For DEVIDAYAL ALUMINIUM CORPORATION
sd/-
S K D MEHTA PARTNER * * * * * * * Ex.DW-1/69 DAC/B-19/2033 1988 : 02 : 09 The Regional Manager (NR) Bharat Aluminium Co.Ltd. Punj House, 18 Nehru Place, New Delhi-110 019. Sub : Submission of Backlog statements Dear Sir, Kindly find enclosed herewith the backlog statements and indent for Feb-March'88 for the Korba Unit. CRP/HRP Extruded Section Backlog 96.25 M.T. 58.70 M.T. Indent Feb.Mar.'88 81.00 M.T. Being sent - shortly- 177.25 M.T. 58.70 M.T
We would request you to kindly clear off the entire backlog and indent for Feb.-Mar.’88 up to 31st March, 1988. The supplies may positively commence w.e.f 15th February, 1988, so as to reach us a minimum of 20.0 M.T. material of Rolled products per week.
Thanking you and assuring you of our best co-operation at all times.
Truly yours,
For DEVIDAYAL ALUMINIUM CORPORATION
Sd/-
MANAGER-ACCOUNTS
Encl: As above.
* * * * * * * Ex.DW-1/76 NR/MKT/J-4502/CA 30th Sep 1988 RM (NR) NEW DELHI MANAGER (CPPC)
We note from dispatch details that very meagre quantity has been dispatched to M/s. Devidayal Aluminium Corporation, Delhi, against their pending indents of rolled and extruded products in the month of September 88. Party is in dire need of material and is constantly reminding us for expediting dispatches. Accordingly, they are deputing their representative to Korba for expediting dispatches. You are requested to kindly provide necessary assistance and arrange to dispatch two truck load of rolled products i.e. 30 tonnes either against their pending indents or out of material selected by them from ex-stock.
Extrusions lying produced in their account can also be dispatched.
Sd/-
M.K. SINGHAL
REGIONAL MANAGER
* * * * * * *
Ex.DW-1/109
TO WHOM IT MAY CONCERN
Cheque No. Amount Cleared on
447863 1,46,814.00 29.03.1988
707742 1,36,024.00 14.07.1988
712773 1,92,946.00 30.01.1989
712869 1,79,533.00 04.03.1989
664335 1,87,301.00 06.03.1991
664363 1,87,301.00 03.05.1991
TOTAL 10,29,919.00
It is certified that cheques enumerated above are passed for payment in clearing on respective dates, as shown against each cheque, to the debit of M/S DEVIDAYAL ALUMINIUM CORPORATION, 4956 Bara Hindu Rao, New Delhi-110006 and paid to M/S Bharat Aluminium Co. Ltd.
Sd/-
MANAGER
24. Besides aforesaid documents, Ex.DW-1/19 may also be noted. It is an invoice dated 23.11.1985 raised against the defendant in sum of Rs. 75,100/- showing goods dispatched to Ghaziabad, a place where defendant had no officer or sub-office in respect whereof DW-1 has deposed that it was wrongly mailed to the defendant and amount wrongly debited. I may note that the witness has not been cross-examined qua Ex.DW-1/19 and his deposition that the invoice was wrongly mailed to the defendant has gone unrebutted.
25. In light of the facts above noted, issues framed may now be dealt with.
26. Issue No. 1 : Whether the suit has been filed within the period of limitation?
27. The controversy whether post 31.3.1990 an agreement was executed between the parties to extend the original agreement is irrelevant for the reason defendant has admitted that:
….no consignments were accepted by defendant after November, 1990 and no part payments were made after the date referred to hereinabove. The suit seems to have been filed on or about 25.3.1994. The suit is hopelessly barred by limitation.
28. Evidence establishes that parties were maintaining a mutual, open and current account. Limitation would be governed by Article 1 of the 1st Schedule to the Limitation Act, 1963 which reads as under:
1. For the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties.
Three years
The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account.
Admitting last payment was sent by the defendant on 22.8.1991. The suit filed on 25.3.1994 is clearly within limitation.
29. Issue No. 2 : Whether the plaint is signed, verified and the suit instituted by a duly authorized and competent person?
30. No evidence has been led to prove authorization in favor of Shri B.R.Raghunandan, the alleged Secretary of the plaintiff to institute the suit and sign and verify the plaint. Conceding so, counsel for the plaintiff relied upon AIR 1997 SC 3, United Bank of India v. Naresh Kumar and Ors.
31. Before concluding on issue No. 2 and the authority cited, I propose to deal with issue No. 3, for the reason, discussion thereof might be relevant for issue No. 2.
32. Issue No. 3 : What amount, if any, is due to the plaintiff?
33. Suit seeks recovery of Rs. 39,34,884/-. As per para 7 of the plaint:
7. …That as per the accounts of the plaintiff, a sum of Rs. 18,90,844/- as principal and interest of Rs. 20,44,040/- up to date, in all a sum of Rs. 39,34,884/- is due from the defendant which they have failed to pay in spite of reminder.
34. Claim is based on an unsettled account and, therefore, plaintiff was obliged to prove the entries which were not admitted and defendant was to prove payment not shown as received by the plaintiff. Debit notes had to be proved by the defendant.
35. As noted in para 17 above, PW-1 admitted that 6 cheques in sum of Rs. 10,29,919/- were received from the defendant, but stated that credit thereof was not given by the plaintiff because money was not realized by the plaintiff under said cheques. Nothing can be further from truth. Ex.DW-1/109 is a certificate dated 30.4.1994 issued by UCO Bank, Model Basti Branch. Its contents are noted in para 23 above. Ex.DW-1/109 proves that plaintiff received Rs. 10,29,919/- when the 6 cheques were duly encashed. I may note that DW-1 was not cross-examined qua Ex.DW-1/109.
36. So off goes a principal sum of Rs. 10,29,919/-. That leaves Rs. 18,90,844/- less Rs. 10,29,919/- = Rs. 8,60,925/- to be explained.
37. As noted in para 24, defendant stated that Ex.DW-1/9, an invoice dated 23.11.1985 was sent to it and its account was debited in sum of Rs. 75,100/- (value of the consignment) but goods were not received as they were sent to Ghaziabad, a place where defendant had no office or sub-office. Plaintiff has not proved delivery of said goods or that defendant had an officer or a store in Ghaziabad. Thus, this amount has also to be deducted from the principal amount.
38. Credit noted in respect whereof the defendant has laid a claim for adjustment are 10 in number totaling Rs. 2,99,242/-. Dates are between 12.12.1985 and 31.10.1990.
39. DW-1/3 establishes that on 6.7.1985 defendant wrote that goods worth Rs. 11,126/- were short received. DW-1/7 establishes that on 19.8.1985, defendant informed that 1799 kg material received had water marks, hence damaged. Settlement of claim was requested. Ex.DW-1/11 and Ex.DW-1/12 dated 12.10.985 and 25.11.1985 respectively establish that defendant informed the plaintiff that goods in excess of the indent were being sent and were being accepted to maintain cordial relations (for if excess quantity was not accepted, transport would claim demmurage and the plaintiff may have problems in receiving back the goods). Since plaintiff persisted in sending excess goods, vide Ex.DW-1/13 (dated 30.11.1985) defendant refused to accept excess goods as per invoice No. 99/1195 and stated that for the goods indented and hence delivery accepted, fresh invoice be raised. Similar is the position under Ex.DW-1/15.
40. Case of the plaintiff is that it was a term of the agreement that defendant had to place an indent and on acceptance, plaintiff had to make supply as per the indent. Thus, defendant was fully justified in not accepting excess goods over and above the quantity stipulated in it’s indent. Plaintiff has led no evidence that it corrected the invoice. It is obvious that the principal sum claim includes cost of excess material not lifted by the defendant.
41. Ex.DW-1/23 is plaintiff’s letter dated 20.1.1986 admitting that it was sending excess material but requested that defendant should accept the same.
42. Why should defendant accept excess material. It is obvious that plaintiff was dumping excess goods. Ex.DW-1/24 and DW-1/27 establish that plaintiff continued to dump excessive goods not indented for.
43. Not only that, some goods indented for were not being sent evidenced by Ex.DW-1/49, DW-1/69 and DW-1/76.
44. Defendants witness has proved that the debit notes were received by the plaintiff. (By proving the letters under cover of which the debit notes were sent as also postal receipts showing dispatch and acknowledgment cards showing receipt of letters by the plaintiff). DW-1 has not been cross examined on these letters. Since plaintiff has led no evidence on the issue except a bare denial of having received debit notes, I hold that defendant has proved entitlement to a credit in sum of Rs. 2,99,242/- being the sum of the ten credit noted.
45. Thus defendant would be entitled to further adjustment of Rs. 75,100/- + Rs. 2,99,242/- = Rs. 3,74,342/-.
46. Sum of Rs. 18,90,844/- is not the sum due for goods supplied. It includes interest till 31.3.1990. I have held that principal due for goods supplied has to be reduced by Rs. 14,01,261/- being the sum total of cheques received and encashed but not credited for, plus the amount covered by invoice Ex.DW-1/9 plus the amount covered by 10 debit noted.
47. Interest charged on Rs. 14,07,261/- is thus not payable.
48. Defendant did not appear at the hearing. Counsel for the plaintiff could not throw light on what was the sum debited towards interest on said sum of Rs. 14,07,261/-.
49. Plaintiff admits charging interest @18% per annum for some period and @21% per annum for some.
50. If sum of Rs. 14,07,261/- is credited to the account of the defendant, interest gets reduced by nearly Rs. 4 lacs.
51. Thus nothing is due to the plaintiff. I note that sum of Rs. 18,90,844/- includes interest till 31.3.1990.
52. I accordingly hold that no amount is due and payable by the defendant to the plaintiff.
53. Reverting back to issue No. 2, as noted, authority of B.R.Raghunandan to file the suit has not been established. It has not been proved that he was the secretary of the plaintiff. Reliance is placed upon United Bank of India’s case (supra).
54. Plaintiff’s account stands falsified. Even amount received have not been credited. When suit was filed, plaintiff was a public sector undertaking. Losses incurred by Balco (the plaintiff) and it’s privatization are reflected in decision of the Supreme Court reported as 2002 (2) SCC, Balco Employees Union v. UOI. Challenge to disinvestment failed.
55. Is there a possibility that some employees, who did not want the accounts scrutinized, filed the suit without any board resolution? The doubt is not without a basis.
56. In United Bank of India’s case (supra) decision it was not disputed that Shri L.K. Rohatgi was the manager of the relevant branch of the bank.
57. I decide issue No. 2 against the plaintiff and in favor of the defendant.
58. Issue No. 4 : Whether the plaintiff is entitled to interest? If so, at what rate and for what period?
59. In view of decision on issue No. 3, on issue No. 4 I hold that question of payment of any interest does not arise.
60. The suit is dismissed.
61. Since defendant rendered no assistance at the hearing, no costs.