* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : 9th November, 2011
+ RFA(OS)73/2011
HINDUSTAN PHOTOFILMS MANUFACTURING CO. LTD.
....Appellant.
Through : Mr. Dileep Poolakkot, Advocate
versus
M/S ANU ENTERPRISE AND ORS. ...RespondentS
Through: Mr.J.K. Bhola, Advocate
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE S.P.GARG
1. Whether the Reporters of local papers may be allowed
to see the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be reported in the Digest?
S.P.GARG, J. (Oral)
1. Appellant Hindustan Photofilms Manufacturing Co.
Ltd has preferred the present appeal against the judgment
dated 2nd August, 2010 passed by the learned Single Judge
whereby the suit filed by the appellant seeking decree for a
sum of `2,39,47,194.27 against the respondents, was
dismissed.
2. In the plaint, the appellant averred that it was
carrying on a business of manufacture and sale of photo
sensitized products including still photo products and graphics
arts photo produces. On 30th July, 1984 and 1st August, 1984,
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the appellant constituted respondent M/s Anu Enterprises as
its stockiest in respect of two types of products and entered
into an agreement which was initially for five years and later
renewed in 1989 for a further period of five years. In terms of
the agreement, dealings between the parties were on a
principal-to-principal basis. M/s Anu Enterprises, as stockiest,
was entitled to a credit period as well as a trade discount on
the product value and additionally to an agreed commission.
As stockiest, M/s Anu Enterprises has to furnish bank
guarantees/revolving letter of credit/insurance guarantee to
secure the overall credit facility. It is stated that consequently,
the respondent initially issued some bank guarantees upon
which the appellant started supplying the goods. During the
course of dealings, respondent approached it for enhanced
credit facilities against bills of exchange as they anticipated
greater volume of business and that purchases would be made
against hundies to be accepted for payment of supplying of
goods.
3. As per the appellants, the City Bank was operating a
bill discounting scheme under which hundies could be
discounted forthwith by presentation before the date of
maturity and the acceptors to such hundies would make
payment to the bank on the date of maturity for the value
along with interest charges etc. The appellants accepted the
proposal of the respondents and started selling goods to it
against hundies duly accepted by the latter for payment. The
hundies would be presented to the City Bank which discounted
them or paid or credited to the appellant’s account. However,
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the respondent did not honour the hundies accepted by them
and consequently failed to pay the amount on the due dates,
as a result, City Bank debited the appellant’s account to the
extent of such dishonored hundies. The respondents were
informed about the dishonor of hundies as well as
consequential embarrassment and loss.
4. Further case of the appellant is that the respondent
promised to clear the entire amount outstanding but failed to
do so despite repeated reminders. Under these circumstances,
the appellant was constrained to invoke bank guarantees to
the tune `6.5 lacs, `1,06,58,723/- including the bank charges
levied by the City Bank became due and payable to it.
5. The appellant relied upon acknowledgment dated
24/05/1993 of debt of `1,06,58,723.43 stating that they were
liable to pay a sum of `1,53,57,289.54. The appellant further
claimed interest @ 21 per cent per annum from the date of
payment till 31st March, 1996.
6. The respondents pleaded before the learned Single
Judge that they never approached the appellant for credit
facilities against hundies. Supplies to stockists for credit period
ranging from 45 to 60 days were routine as the appellant was
facing cash liquidity. Due to liquidity problem, it started
practice of receiving bills of exchange. The blank hundy
papers were signed at the behest of the appellant by
respondent no.2 and that 30 stamp papers were sent on three
occasions i.e., 24th June, 1989, 11th December, 1989 and 6th
March, 1990. It was the appellant who was in arrangement for
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bill discounting with City Bank and they were unaware whether
hundies were prepared and whether amounts were paid under
it.
7. The respondents further claimed that the appellant
was in the habit of issuing bogus bills and debit notes even
when no goods were supplied for the window dressing of its
account. No acknowledgment dated 24th May, 1993 was ever
issued by them. A sum of `195.90 lac was payable by the
appellant to them.
8. Number of issues were framed during the trial. The
appellant examined PW1 Sh.N.Shivan, its Manager to prove
the issues. The respondent examined respondent no.2. After
an appraisal of the evidence adduced on record and
considering the contentions of the learned counsel for the
parties, the learned Single Judge came to the conclusion that
the appellant was entitled to a decree for `46,58,727.43
however having regard to the finding on issue No.2, regarding
limitation, the appellant could not succeed as the suit was not
filed within limitation and was time barred.
9. Aggrieved by the said orders, the appellant has
come in appeal.
10. Short question which arises is, “whether the suit
filed by the appellant before the learned Single Judge was
within limitation or the prescribed period of limitation got
extended due to alleged acknowledgment dated 24 th May,
1993?”
RFA(OS)73/2011 Page 4 of 9
11. In the plaint, the appellant in para no. 16, averred
that the cause of action arose on all dates when the
respondents acknowledged and promised to pay all the
outstanding amounts, especially and more specifically on 24 th
May, 1993 when the respondent acknowledged an amount of
`1,53,57,289.54 as being the amount outstanding and payable
by them to the appellant.
12. In the written statement, the respondents
categorically denied this assertion of the appellant and stated
that the suit was barred by limitation. No acknowledgment
was made on 24th May, 1993.
13. The burden to prove that the suit was within
limitation or that there was valid acknowledgment dated 24 th
May, 1993 by the respondents or that the prescribed period of
limitation got extended due to that acknowledgment was
heavily upon the appellant. Scanning the evidence adduced on
record, it stands established that the appellant miserably
failed to prove before the court if there was any
acknowledgment made by the respondents vide letter dated
24th May, 1993 Ex.PW1/245.
14. In the affidavit Ex.P-1 tendered in evidence, PW1
Mr.N.Shivan himself put exhibit mark to this acknowledgment
letter as Ex.PW1/245. Learned counsel for the respondents at
that time objected to the documents being exhibited on the
ground of admissibility, relevance and mode of proof. It was
specifically pointed out by the learned counsel for the
respondents at that time that the documents were
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photocopies of the original ones. At that time, the appellant
did not bother to place on record the original document, the
photocopy of which had been marked as Ex.PW1/245. The
appellant did not give any plausible explanation at that time
for not filing the original document to be exhibited in evidence
before the Court. PW1 Mr.N.Shivan was cross-examined. In the
cross examination, he admitted that Ex.PW1/245 was not
signed or executed in his presence. It was signed at the office
of the respondent. Specific suggestion was put to this witness
in the cross examination that document PW1/245 was later on
fabricated to bring the claim within limitation.
15. The respondents examined Sh.Ram Khanna
respondent no.2 who filed his evidence by way of affidavit
Ex.DW1/A. In the affidavit it was specifically pleaded that the
suit was barred by limitation and the alleged acknowledgment
dated 24th May, 1993 is a crude forgery and does not bear the
signature of the deponent. The acknowledgment appeared to
have been manufactured to bring the suit within limitation. In
the cross examination, no suggestion was put to the witness if
Ex.PW1/245 was a genuine document or that it was executed
by the respondents and contained the signatures of
respondent no.2. The plea taken by the respondents in the
affidavit remained unchallenged and uncontroverted in the
cross-examination.
16. During the long pendency of the suit before the
learned trial court, at no stage, the appellant produced on
record the original acknowledgment dated 24 th May, 1993. No
explanation was offered by the appellant about the
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whereabouts of the original of Ex.PW1/245. The appellant put
exhibit mark suo motu on the document at the time of
tendering evidence by way of affidavit. No permission was
obtained to lead secondary evidence.
17. Perusal of the document Ex.PW1/245 reveals that it
is a photocopy of the attested notarized copy of the original
one. Even the original of Ex.PW1/245 i.e., the document
attested by the Notary Public has not been produced before
the Court. No efforts were made by the appellant to summon
Mr.K.C.Sharma, Notary Public who had allegedly attested the
original of Ex.PW1/245 to throw light as to how and under what
circumstances, he had attested the document. The
acknowledgment is alleged to be dated 24th May, 1993.
Ex.PW1/245 a photocopy of attested document is dated 24 th
January, 1994. The appellant has not explained as to how and
under what circumstances the original of Ex.PW1/245 was got
attested from Notary Public at a belated stage after about 7-8
months. There is nothing on record to show if Notary Public
had seen the original acknowledgment at the time of attesting
the photocopy of Ex.PW1/245.
18. From the document Ex.PW1/245 nothing is manifest
as to under what circumstances this alleged acknowledgment
came into existence. It is also not clear as to by which mode
this alleged original acknowledgment was sent by the
respondents to the appellant or who had received it in their
office. The appellant did not produce on record any register
showing receipt of original of Ex.PW1/245.
RFA(OS)73/2011 Page 7 of 9
19. The learned Single Judge specifically dealt with this
contention of the appellant and observed that the appellant
blandly sought to introduce secondary evidence at the stage
of examination of its witnesses. Even the original copy of the
attested one was not produced and what was placed on record
was a photocopy. The learned Single Judge was justified that
Ex.PW1/245 could not be taken on record as it was not
adduced in evidence in the manner prescribed to prove the
document. The onus lies on the creditor to prove that the
acknowledge relied on to save limitation was made within
time.
20. At the fag end of his arguments, learned counsel for
the appellant brought our attention towards one application
moved under Section 151 CPC to file and place on record the
documents annexed thereto as Annexure-1. In our view, this
application which was never brought on judicial record, does
not change the fate of the case. Learned counsel for the
appellant fairly admitted that original acknowledgment was
never brought on record before the learned Single Judge. Since
the entire case of the appellant was based upon the
acknowledgment dated 24th May, 1993 to bring the suit within
limitation, it was legal duty cast upon the appellant to prove
the alleged acknowledgment dated 24th May, 1993 for
extension of prescribed period of limitation which the
appellant, for the reasons stated above, miserably failed.
Learned Single Judge was completely justified in dismissing
the claim of the appellant being barred by limitation. The
legislature has cast a duty upon the court to examine on the
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touchstone of the case put forth by the parties and to decide
whether the suit is within limitation or not.
21. We find no merits in the appeal and the same is
dismissed. No order as to costs.
(S.P.GARG)
JUDGE
(PRADEEP NANDRAJOG)
JUDGE
November 09, 2011
‘raj’
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