IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 01.12.2010 CORAM THE HONOURABLE MR. JUSTICE M. VENUGOPAL A.S.No.169 of 2003 Om Prakash Hundia Prop. M/s.Hrinkar Exports carrying on business as P.B.No.173, 21-3-54 S.K.P. Temple Street, Guntur 522 3. Andhra Pradesh. ... Appellant/Defendant Vs M/s.Sanco Trans Limited, represented by its Managing Director, Sri.V.Upendran, registered office at No.90, Moore Street, Chennai-1. ... Respondent/Plaintiff PRAYER: Appeal filed under Section 96 of Civil Procedure Code as against the Judgement and Decree dated 15.04.2002 in O.S.No.351 of 1997 passed by the Learned IV Additional Judge, City Civil Court, Chennai. For Appellant : Mr.C.Chandra Bose For Respondent : Mr.V.Bhiman for M/s.Sampath Kumar & Associates JUDGMENT
The Appellant/Defendant has preferred the present Appeal before this Court as against the Judgment and Decree dated 15.04.2002 in O.S.No.351 of 1997 of the trial Court viz., the Learned IV Additional Judge, City Civil Court, Chennai.
2.On an appreciation of oral and documentary evidence available on record the trial Court viz., Learned IV Additional Judge, City Civil Court, Chennai, while passing Judgment in O.S.No.351 of 1997 has among other things observed that ‘the Appellant/Defendant is liable to pay interest @ 12% on Rs.4,36,070/- from 25.03.1994 till date of realisation and resultantly decreed the suit with proportionate costs’.
3.Before the trial Court in the main suit 1 to 3 Issues have been framed for adjudication.
4.On the side of the Respondent/Plaintiff witness PW1 has been examined and Ex.A.1 to Ex.A.14 have been marked. On the side of the Appellant/Defendant witness DW1 has been marked and no document has been marked.
5.Being dissatisfied with the Judgment and Decree of the trial Court in O.S.No.351 of 1997 dated 15.04.2002, the Appellant/Defendant as an aggrieved person has filed the present Appeal before this Court.
6.The point that arises for consideration in this Appeal is
(1)Whether the Appellant/Defendant is liable to pay the suit amount of Rs.6,93,371/- together with interest @ 24% per annum on Rs.4,57,877/- from the date of Plaint till the date of realisation in full with costs?.
7.The contentions, discussions and findings on Point:
According to the Learned Counsel for the Appellant/Defendant, the trial Court has not appreciated of the fact that the suit is for recovery of an amount as per the running account for the services rendered to the Appellant/Defendant by the Respondent/Plaintiff by way of clearing agent and further that the Respondent/Plaintiff has deliberately preferred the statement of account omitting the 5% Freight Brokerage extended to the Appellant/Defendant by Shipping line by Patvolk and other companies for a period from the year 1992 to 25.02.1994.
8.The Learned Counsel for the Appellant/Defendant urges before this Court that the trial Court in Para 9 of its Judgment has observed that the correctness of accounts as per Ex.A.14 Statement of Accounts, dated 31.05.1994, has not been proved by the Respondent/Plaintiff because the person, who is returned the entries in the Account Books has not been examined as witness on the side of the Respondent/Plaintiff and in view of the said observation, the suit ought to have been dismissed.
9.Advancing his arguments, it is the contention of the Learned Counsel for the Appellant/Defendant that the trial Court has erroneously considered Ex.A.2 Letter dated 25.03.1994 obtained by the Manager, Guntur Branch at the time of closing the Guntur Branch of the Respondent/Plaintiff which is only for accounting purpose and the same does not reflect the exact transaction and further that the trial Court as per Section 34 of Code of Civil Procedure can not award more than 6% interest on the Principle amount, but in the instant case, it has awarded 12% interest per annum.
10.In short, the submission of the Learned Counsel for the Appellant/Defendant is that the trial Court has not adverted to the factual aspects of the matter in a proper perspective, which has resulted in serious miscarriage of justice.
11.In response, it is the contention of the Learned Counsel for the Respondent/Plaintiff that the Respondent/Plaintiff has filed a suit against the Appellant/Defendant for a recovery of suit amount together with interest @24% per annum on Rs.4,57,877/- and that the trial Court after full contest on scrutiny of oral and available evidence on record has come to a clear conclusion that the Appellant/Defendant is liable to pay a sum of Rs.4,36,070/- only along with the proportionate costs and the same may not be interfered with by this Court at this distance of time.
12.This Court has heard the Learned Counsel appearing for the Parties on either side and noticed their contentions.
13.In the Plaint, the Respondent has averred that the Appellant/Defendant wanted to export Chillies from Guntur to be shipped at Madras to various countries and as per the terms of contract between the Respondent/Plaintiff and the Appellant/Defendant, the Respondent/Plaintiff will have to handle the goods of the Appellant/Defendant for loading the same at Madras in certain ships and for the services rendered by the Respondent/Plaintiff to the Appellant/Defendant on various dates from the month of September 1992 to 24.03.1994, the Appellant/Defendant owes a sum of Rs.4,57,877/- to the Respondent/Plaintiff etc.’
14.The principle contention raised on behalf of the Respondent/Plaintiff is that the Appellant/Defendant is liable to pay a sum of Rs.4,57,877/- owes an amount of Rs.6,93,371/- (Rs.4,57,877/- towards Principal and Rs.2,35,494/- towards interest) to the Respondent/Plaintiff together with interest @ 24% per annum and that the Appellant/Defendant has failed and neglected the said amount in spite of several demands made in this regard.
15.It is the submission of the Learned Counsel for the Respondent/Plaintiff that on 21.03.1994, the Appellant/Defendant has made a last payment and on 24.03.1994, the Respondent/Plaintiff has rendered service to the Appellant/Defendant and on 25.03.1994, the Appellant/Defendant has confirmed the balance amount due.
16.The evidence of PW1 (Manager of Respondent/Plaintiff’s Company) is to the effect that the Appellant/Defendant company is at Guntur in Andra Pradesh and the Appellant/Defendant’s Company used to export Chillies to Foreign Countries through Ships, through their Company and the expenditure incurred in this regard will have to be paid by the Appellant/Defendant and that the Appellant/Defendant has been keeping with the Respondent/Plaintiff a running account and on 25.03.1994, the Appellant/Defendant has confirmed the amount due to be paid to the Respondent/Plaintiff as per Ex.A.1 Letter dated 25.03.1994 and Ex.A.3 Letter dated 01.08.1994 has been addressed to the DGM of the Respondent/Plaintiff for which the Respondent/Plaintiff has not given a reply.
17.PW1 in his further evidence goes on to add that the Respondent/Plaintiff has issued a reply dated 05.08.1994 and as per Ex.A.5, the Respondent/Plaintiff’s Company has addressed a letter to the Appellant/Defendant requesting the Appellant/Defendant to settle the outstanding sum of Rs.4,57,877/- and on 22.02.1995 and 23.05.1995, the Respondent/Plaintiff has sent a reminder letter to the Appellant/Defendant and also Ex.A.9 Letter, dated 05.08.1995, a reminder has been sent to the Appellant/Defendant and Ex.A.11 dated 16.05.1995 is the copy of the Lawyer’s notice issued on behalf of the Respondent/Plaintiff addressed to the Appellant/Defendant and Ex.A.14 is the Statement of Account pertaining to the Appellant/ Defendant in and by which the Appellant/Defendant is due and liable to pay a sum of Rs.4,57,877/-
18.It is the evidence of PW1 (in his cross examination) that the Respondent/Plaintiff’s Company used to collect 5% service charges and in Ex.A.14 Statement of Account as on 31.08.1993 a sum of Rs.4,31,614/- is mentioned as amount due to be paid and Ex.A.2 Letter has been written on 25.03.1994 and as on 31.03.1994 a sum of Rs.4,36,070/- is due to be paid and after 25.03.1994, the Respondent/Plaintiff has not done any business with the Appellant/Defendant.
19.The evidence of DW1 (Owner of Appellant/Defendant’s Company) is that from the year 1992, he is conducting the business and at the time, when he has conducted the business, the Respondent/Plaintiff had a branch office at Guntur and Ex.A.14 is the Respondent/Plaintiff’s Statement of Account and till 31.08.1993 through the Respondent/Plaintiff he has conducted export business and as on 31.08.1993 he has to pay a sum of Rs.4,31,640/- to the Respondent/Plaintiff and in Ex.A.14 Statement of Account as on 31.03.1994 it is mentioned as a sum of Rs.4,57,000/- is due.
20.DW1 in his evidence goes on to add that there is no agreement to pay interest between the parties and that the Appellant/Defendant has paid entire amount and he is not liable to pay any amount to the Respondent/Plaintiff and further that the Respondent/Plaintiff is not given the commission to the Appellant/Defendant’s Company.
21.It transpires from the evidence of DW1 that the Respondent/Plaintiff has to deduct the commission due to be paid to the Appellant/Defendant from the suit amount claimed in the Plaint. But, the Respondent/Plaintiff has not deducted the commission due to be paid to the Appellant/Defendant.
22.It is not out of place for this Court to make a significant mention that DW1 in his evidence has categorically stated (in Chief Examination) that till 31.08.1993, the Appellant/Defendant is liable to pay to the Respondent/Plaintiff a sum of Rs.4,31,640/-. However DW1 in his cross examination has deposed that he has paid of the amount due to the Respondent/Plaintiff and that the Appellant/Defendant is not liable to pay any amount to the Respondent/Plaintiff. Ex.A.14 is the true copy of the statement of running account maintained by the Respondent/Plaintiff’s Company in relation to the Appellant/ Defendant’s Company.
23.As a matter of fact, Section 34 of the Indian Evidence Act, 1872, speaks of ‘entries in books of account’ when relevant. Indeed, Section 34 specifies two things. (1)All entries in books of accounts regularly kept in the course of business or relevant and admissible whenever they referred to a matter into which the Court as to enquire notwithstanding in corroboration. (2)Such entries though admissible are not by themselves sufficient to charge a person with liability as per decision S. v. Ganes Waroa AIR 1963 Supreme Court 1850.
24.It is to be borne in mind that there cannot be any particular form of Books of Account. However it is accepted that those books which are kept in the form of Daily Entries, Debits and Credits in a Day Book or Journal are more satisfactory. The Books of Account must be held to have been proved in the absence of its writer on proof of its proper maintaining and keeping as per decision Ramjanki v. Juggilal AIR 1971 SC 2551.
25.What is required is that the entries in Accounts should, in order to be relevant regularly kept in the course of business. It is just and necessary where reliance is placed upon the Books of Accounts to prove that they have been regularly kept in the course of business. If the Books of Accounts are kept in pursuance of some continuous and uniform practice in the current business routine of an individual to whom it belongs then, they are regularly kept in the course of business within the meaning of Section 34 of the Indian Evidence Act, 1872.
26.As far as the present case is concerned, the witness DW1 in his Chief Examination has categorically stated that as on 31.08.1993, the Appellant/Defendant’s Company is liable and due to pay a sum of Rs.4,31,640/-. Only in the cross examination, DW1 has stated that he has paid entire amount due to the Respondent/Plaintiff. Though Ex.A.14 is a computer true copy of Statement of Accounts produced by the Respondent/Plaintiff’s Company in relation to the Appellant/Plaintiff’s Company even in the absence of its writer since the said statement of account is a one taken from the book regularly kept in the course of business of the Respondent/Plaintiff and more so, when it is a Running Account the same is worthy of acceptane and Ex.A.14 Statement of Accounts true copy clearly comes within the ambit of Section 34 of the Indian Evidence Act, 1872, and consequently, this Court holds that the non examination of the writer who has written Ex.A.14 Statement of Accounts is not a fatal one to the present case on hand, in the considered opinion of this Court.
27.In Ex.A.2 Letter dated 25.03.1994 of the Appellant/Defendant addressed to the Respondent/Plaintiff’s Managing Director the outstanding payment as on 31.03.1994 due to be paid is mentioned as Rs.4,36,070/- and this has been confirmed by the Proprietor of the Appellant/Defendant viz., witness DW1. An acknowledgment of liability under the Limitation Act, by an individual not only says period of limitation but also gives cause of action to the Respondent/Plaintiff to rest its claim.
28.It is well settled principle in law that in case of loan recovery if an acknowledgment of debt in writing is made the limitation period well start from the date of signing of the acknowledgment and not from any other date subsequent to the singing of the acknowledgment, as opined by this Court. Once the period of limitation commences that does not stop and while calculating the limitation period equitable consideration is out of question as per decision of Boota Mal v. Union of India, AIR 1962 S.C. 1716.
29.At this stage, this Court aptly points out that in the decision Bengal Credit Corporation v. Central Bank of India AIR 1978 Calcutta 567, wherein it is held that
‘Confirmation by a letter amounts to an Admission.’
30.Further, a cause of action in a suit arises on the date when a letter is issued admitting the liability to pay the amount of compensation, as opined by this Court.
31.In the instant case on hand, the Appellant/defendant’s Proprietor witness DW1 has written a confirmation letter dated 25.03.1994 confirming the amount of Rs.4,36,070/- due to the Respondent/Plaintiff as Freight Bills as on 31.03.1994. Added further, in Ex.A.2 Confirmation Letter dated 25.03.1994, the Appellant/Defendant namely DW1 has assured the Respondent/Plaintiff that they will settle a part of amount before 15th March, 1994. Therefore, it is quite clear that Ex.A.2 Confirmation Letter dated 25.03.1994 has been written by the Appellant/Defendant’s Proprietor namely DW1 to the Respondent/Plaintiff’s Company and it is a valid one and on any account it is not open to the Appellant/Defendant to get out of the Ex.A.2 letter and in fact Ex.A.2 Letter dated 25.03.1994 is a clear Acknowledgment of Appellant/Defendant’s liability towards the Respondent/Plaintiff and accordingly, the point is answered by this Court against the Appellant/Defendant.
32.As regards the fact that though the Appellant/Defendant has claimed that the Respondent/Plaintiff has agreed to give 5% Brokerage commission received from the Ship Owners, there is no evidence to prove the same and as such the contention of the Appellant/Defendant that the Respondent/Plaintiff is due to pay Freight Brokerage commission to it is not accepted by this Court. However, inasmuch as the Appellant/Defendant by means of Ex.A.2 Confirmation Letter dated 25.03.1994 has accepted due amount of Rs.4,36,070/-, then the Appellant/Defendant is liable to pay the said sum of Rs.4,36,070/- to the Respondent/Plaintiff. Since the suit transaction between the Appellant/Defendant and the Respondent/Plaintiff is a business transaction even in the absence of an agreement to pay interest by the Appellant/Plaintiff to the Respondent/Plaintiff, this Court exercising its discretion awards 9% per annum to the due amount of Rs.4,36,070/- and this rate of interest at 9% per annum for Rs.4,36,070/- is directed to be paid by the Appellant/Defendant to the Respondent/Plaintiff from Ex.A.2 Letter dated 25.03.1994 till date of realisation together with proportionate costs and the point is answered accordingly. Resultantly, the Appeal succeeds in part.
33.In the result, the Appeal is allowed in part leaving the parties to bear their own costs. The Appellant/Defendant is directed to pay a sum of Rs.4,36,070/- along with interest @ 9% per annum from Ex.A.2 Letter dated 25.03.1994 till realisation together with proportionate costs to the Respondent/Plaintiff. Accordingly, the Judgment and Decree of the trial Court dated 15.04.2002 in O.S.No.351 of 1997 stands modified. Two months time is granted to the Appellant/Defendant to pay the amount due.
01.12.2010
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mps
To
The IV Additional Judge,
City Civil Court, Chennai.
M.VENUGOPAL.J.,
mps
PRE-DELIVERY JUDGMENT in
A.S.No.169 of 2003
01.12.2010