GA No. 401 of 2011
GA NO. 100 of 2011
CS No. 295 of 2010
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
RAVI UDYOG PRIVATE LIMITED
Versus
JAI MANGALA COAL PVT LTD.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEEDate : 18th May, 2011.
APPEARANCE:
Mr. Jayanta Mitra, Sr. Adv.
Mr. Dhruba Ghosh, Adv.
Mr. K. Banerjee, Adv.
Mr. R. Munsi, Adv.
Ms. Debjani Chatterjee, Adv.
Mr. Samit Talukdar, Sr. Adv.
Ms. Hasnuhana Chakraborty, Adv.
The Court : In support of the money claim in the suit, these two
applications have been carried by the plaintiff : GA No.100 of 2011 for
judgment on admission and GA No.401 of 2011 for orders in the
nature of attachment before judgment. The short claim in the plaint
is that between April and July, 2003 the plaintiff granted loan of
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divers sums to the defendant amounting to Rs.1 crore. The plaint
says that the defendant has admitted and unequivocally
acknowledged receipt of the inter-corporate deposits. The admission
is said to have been in the balance-sheets filed by the defendant
through the years upto the year ended March 31, 2009. The plaint
claims that only in April, 2010, the plaintiff requested the defendant
(surprisingly paragraph 6 of the plaint refers to the first defendant) to
repay the amount of Rs.1 crore “along with interest accrued thereon at
the rate of 18 per cent per annum.” The claim on account of interest
is the first jarring note in the plaint since the inter-corporate deposits
and the averments relating thereto at paragraph 2 of the plaint do not
speak of any interest. Paragraph 8 of the plaint proceeds to record the
issuance of a notice by advocate representing the plaintiff on
September 14, 2010 where the claim was made for Rs.1 crore together
with interest at the rate of 18 per cent per annum.
The plaintiff has not really pressed the application for
attachment before judgment. The plaintiff has insisted on the decree
for Rs.1 crore on the basis of the admission contained in the
successive balance-sheets of the defendant, less an amount of Rs.37
lakh and odd which the plaintiff has received subsequent to the
institution of the suit. The plaintiff says that once the defendant has
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admitted the transaction and has admitted the quantum in successive
balance-sheets, the plaintiff is not called upon to either establish the
circumstances surrounding the original transaction or any other
matter in support of its claim. The plaintiff refers to Order XII Rule 6
of the Code and says that the principle recognised therein is to ensure
that matters over which there can be no difference between the parties
are not stretched and carried to a protracted trial.
The plaintiff refers to the affidavit filed on behalf of the
defendant and the averments in paragraph 4 thereof and the sub-
paragraphs thereunder. The plaintiff says that it is evident that the
defendant has acknowledged receipt of a sum of Rs.1 crore and
several other sums and the defence is that such amount was repaid
by the defendant or adjusted against accounts relating to sister
concerns of the parties. The plaintiff relies, in particular, on
paragraph 4 (vii) of the affidavit where the defendant refers to errors
having crept into the balance-sheets of the defendant. The plaintiff
says that such “errors” could not have continued for nearly a decade
without the defendant or its auditors noticing the same and without
there being any basis therefor. The plaintiff also insists that against
the admission evident in the defendant’s affidavit that the plaintiff has
made the payment that it claims, the defendant has alleged such
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repayments to have been made though it is evident that the
repayments, even if made, were not by cheques.
The defendant refers to the association of the parties in course of
their business relating to coal-mines. The defendant also refers to
other transactions and some kind of arrangement between the two
groups of persons who were then at the helm of the parties. The
defendant says that a mere admission on the defendant’s part without
the plaintiff attempting to otherwise assert or establish its claim
should not be accepted. It is the defendant’s contention that an
admission should be seen by way of corroboration of the plaintiff’s
claim and not as a total substitute for the plaintiff’s obligation to
assert and establish its claim.
The defendant refers to the balance-sheets of the plaintiff
between the financial years ending March 31, 2003 and March 31,
2008. It is the defendant’s endeavour to demonstrate that it would be
evident from the figures appearing in the balance-sheets pertaining to
the relevant financial years and those pertaining to the previous
financial years that in most cases the difference between the two
figures was not in excess of Rs.1 crore. Such argument of the
defendant does not appeal since the two final figures that appear
under the heading “Loans to others” in the plaintiff’s balance-sheets
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for the financial years ending March 31, 2003 to March 31, 2007 club
all payments and receipts under such head and save in respect of
financial year ended March 31, 2007, where the total amount
outstanding under such head is to the tune of Rs.14 lakh, the amount
outstanding in every other financial year is in excess of Rs.1 crore and
it was quite possible that the sums indicated in the plaintiff’s
balance- sheets were after taking into account receipts obtained from
other parties to whom loans had been given. However, what strikes
out is the figure relating to the head “Loans to others” in respect of the
financial year ended March 31, 2007. If the total quantum of loan
given by the plaintiff to others that remained outstanding in course of
such financial year was to the tune of Rs.14 lakh, it would imply that
the defendant did not owe the plaintiff a sum of Rs.1 crore or, at the
very least, that the plaintiff was not aware that the defendant owed
the plaintiff a sum of Rs.1 crore.
The plaintiff has sought to rely on statements in support of the
particulars pertaining to loans given to others during the relevant
financial years. It is the admitted position that such statements,
which form part of the plaintiff’s affidavit-in-reply and its
supplementary affidavit, did not form part of the balance-sheets and
were subsequently obtained. However, the statement for the relevant
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financial year and the manner in which the same has been prepared,
arouse suspicion. Till the financial year ended March 31, 2007, the
plaintiff’s balance-sheets contain two headings under the same
schedule : “Loans to others” and “Advances.” It was only beginning the
financial year ended March 31, 2008 that loans and advances were
clubbed together. In the statements in support of the particulars on
account of “Loans to others” for financial years 2003-04, 2004-05 and
2005-06, the details furnished may be accepted. However, the figures
furnished and appearing at page 48 of the affidavit-in-reply detailing
the various parties to whom loans made available by the plaintiff were
outstanding, prima facie, cannot be accepted. The total at page 48 is
about Rs.9.6 crore. The total corresponds to the total indicated in the
balance sheet (the relevant page in the same affidavit is page 64)
under the heading “Advances.” If there was a distinction made in the
balance-sheet between “Advances” and “Loans to others,” there is
clearly an attempt to deceive in the plaintiff furnishing particulars in
respect of “Advances” and attempting to pass off the same as
particulars relating to “Loans to others.”
There are even greater difficulties that stand in the plaintiff’s
way. To begin with, it is difficult to accept that an inter-corporate
deposit (or a number of inter-corporate deposits) is made without
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documents exchanged in support thereof. Even more surprisingly, the
inter-corporate deposit is made or several inter-corporate deposits are
made, without there being any agreement as to interest. Paragraph 2
of the plaint does not plead any agreement on account of interest. It is
only a couple of paragraphs later that the first verbal demand made
early in 2010 is mentioned that records a claim on account of interest.
The plaintiff has referred to a judgment reported at AIR 1962
Cal. 115 (Bengal Silk’s case). The plaintiff has also relied on
judgments reported at 45 Comp. Cases 67 and 47 Comp. Cases 15.
In the Bengal Silk’s case, the question that arose before the
Division Bench was as to whether a particular entry or a particular
writing amounted to an acknowledgement within the meaning of
Section 19 of the Limitation Act, 1908 that corresponds to Section 18
of the present Limitation Act of 1963. The issue was not as to
admission but as to acknowledgement for the purpose of saving
limitation. Qualitatively, an admission is quite far removed from an
acknowledgement within the meaning of Section 18 of the 1963 Act.
The two other decisions cited by the plaintiff cover a creditor’s
winding-up petition, the second report being the appellate order
arising out of the first. Again, in such case the Bengal Silk’s
proposition has been relied upon for the purpose of assessing whether
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the petitioning-creditor’s claim was barred by the laws of limitation.
Section 18 of the 1963 Act was at the heart of these judgments.
The defendant has placed a judgment reported at AIR 1958 SC
886. A part of paragraph 9 of the report has been placed where the
Supreme Court, in the context of Order XII Rule 6 of the Code, has
referred to Order VIII Rule 5 of the Code and the proviso to the first
sub-rule therein. In similar vein, the plaintiff has referred to a
judgment reported at (1999) 8 SCC 396. The discussion at paragraphs
21 to 29 of the report refers to Order XII Rule 6 of the Code, Order VIII
Rule 5 thereof and the fundamental principle behind Section 58 of the
Evidence Act. These judgments instruct that notwithstanding there
being an admission, the Court is not bound to blindly pass a decree
on the basis of the admission without taking into account any
explanation or justification that may have been proffered by the
defendant. In fact, in dealing with Order VIII Rule 5 of the Code,
paragraph 29 of the report in the most recent judgment requires a
Court to be cautious and not recklessly allow the claim only on the
rule of pleading that an allegation made had to be specifically denied.
In the more conservative sense, Order XII Rule 6 of the Code has
been read in certain cases to give the Court the authority to rely on an
admission made after the institution of the suit and dispose of a part
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of the claim. The word “otherwise” appearing in the rule has been read
ejusdem generis with the preceding part of the rule. Though it is not
necessary to restrict the operation of Order XII Rule 6 of the Code to
admissions made after the institution of the suit, there has to be a
distinction between admissions made after disputes have arisen
between parties and admissions made prior thereto. While it is true
that an admission has to be taken as a whole and the conditions
attached to the admission cannot be divorced from the admission
while accepting the same, even the plainest of admissions require the
person making the admission to be afforded an opportunity to explain
the same. An admission, at the end of the day, is the best form of
evidence but it is only a piece of evidence and not the fact itself. In
view of the sketchy claim made by the plaintiff and its inability to
demonstrate anything in support thereof – not even a letter of demand
from the year 2003 till the verbal demand of early 2010 – there are
several gaps that need to be filled before the plaintiff is entitled to the
decree that it claims.
There is a further anomaly which the defendant has pointed out.
The defendant says that it is the plaintiff’s case in this suit and in a
suit filed contemporaneously with this one that the claim here is Rs.1
crore and the claim in the other one is about Rs.4.26 crore. The
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plaintiff refers to the balance-sheets of the plaintiff for the last several
years to demonstrate that in almost all of the years, the total amount
outstanding on account of loans to others is less than the combined
principal claim in these two suits of Rs.5.26 crore.
On facts and on the law governing the facts, G.A. No. 100 of
2011 is liable to be dismissed, but since the defendant has offered to
put in the balance principal sum claimed by the plaintiff to show the
defendant’s bona fides, the defendant is permitted four weeks’ time to
furnish an amount of Rs.64 lakh with the Registrar, Original Side. The
Registrar will invest the money in a short-term fixed deposit with any
nationalized bank within the vicinity of this Court, pending further
orders in this suit.
Since the defendant has, of its own accord, offered to make the
deposit, in default of the deposit being made within the time
permitted, there will be a decree in the sum of Rs.64 lakh in favour of
the plaintiff. Such decree will carry interest at the rate of 8% per
annum from today till payment.
G.A. No. 100 of 2011 and G.A. No. 401 of 2011 stand disposed
of without any order as to costs.
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Urgent certified photocopies of this order, if applied for, be
supplied to the parties subject to compliance with all requisite
formalities.
(SANJIB BANERJEE, J.)
kc./sg.