{"id":45622,"date":"2001-12-19T00:00:00","date_gmt":"2001-12-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mahinder-kumar-chaudhary-and-anr-vs-balsara-hygiene-products-ltd-on-19-december-2001"},"modified":"2017-04-18T20:22:47","modified_gmt":"2017-04-18T14:52:47","slug":"mahinder-kumar-chaudhary-and-anr-vs-balsara-hygiene-products-ltd-on-19-december-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mahinder-kumar-chaudhary-and-anr-vs-balsara-hygiene-products-ltd-on-19-december-2001","title":{"rendered":"Mahinder Kumar Chaudhary And Anr. vs Balsara Hygiene Products Ltd. on 19 December, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Delhi High Court<\/div>\n<div class=\"doc_title\">Mahinder Kumar Chaudhary And Anr. vs Balsara Hygiene Products Ltd. on 19 December, 2001<\/div>\n<div class=\"doc_author\">Author: V Aggarwal<\/div>\n<div class=\"doc_bench\">Bench: V Aggarwal<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p>  V.S. Aggarwal, J.   <\/p>\n<p> 1. Mahinder Kumar Chaudhary and Mrs. Dharam Devi<br \/>\nChaudhary, plaintiffs have filed a suit for<br \/>\ndeclaration and for recovery of Rs. 13,39,088\/-. A<br \/>\ndeclaration is prayed to the effect that the bank<br \/>\ncheques No. 147524 to 147523 drawn on Syndicate Bank<br \/>\nand procured by the defendants and null and void.\n<\/p>\n<p> 2. The facts alleged are that plaintiffs were<br \/>\nappointed as stockists on 18th June, 1980 by the<br \/>\ndefendants vide agreement dated 18th June, 1980.<br \/>\nDefendants were a partnership firm. The plaintiff<br \/>\npaid Rs. 25,000\/- as security deposit. Thereafter the<br \/>\npartnership firm of the defendant was converted into a<br \/>\ncompany incorporated under the Companies Act, 1956.<br \/>\nup to September, 1984 defendants were supplying the<br \/>\ngoods to the plaintiff on documents through bank<br \/>\nsystem. The plaintiffs used to pay the value of the<br \/>\nsupplies into the bank and obtain the lorry receipts<br \/>\nfor release of the goods. The defendants from October<br \/>\n1984 stopped the system and adopted the cheque system<br \/>\nunder which the defendants collected blank cheques in<br \/>\nadvance from the plaintiffs and the defendants filled<br \/>\nin those cheques for the amount of supplies made by<br \/>\nthem and they presented the cheques to their bankers<br \/>\nfor collection. Under this system the plaintiffs from<br \/>\ntime to time handed over sufficient number of blank<br \/>\ncheques to the defendants. The defendants reimbursed<br \/>\nto the stockists for the value of the damaged stocks,<br \/>\nadditional discounts given to the retailers and<br \/>\ndiscrepancies in the invoices etc.  <\/p>\n<p> 3. It has further been pleaded that defendants had<br \/>\nsimilar disputes over the sales tax rates on its<br \/>\nproduct ODOMOS with Delhi Sales Tax authorities. The<br \/>\nrevenue claimed that product was taxable at 7% while<br \/>\nthe defendants disputed that it was taxable at 5%. In<br \/>\norder to cover the possible tax liability of 2% the<br \/>\ndefendants collected the additional 2% from the<br \/>\nstockists as security tax. In this process defendants<br \/>\nhad collected from the plaintiffs Rs. 6,15,000\/- from<br \/>\nApril 1986 to February 1991. The plaintiffs came to<br \/>\nknow that this issue was decided in favor of the<br \/>\ndefendants. The plaintiffs requested the defendants<br \/>\nfor refund of the amount. But it was put off on one<br \/>\npretext or the other. Defendants further collected a<br \/>\nsum of Rs. 2,52,000\/- by way of octroi, transport and<br \/>\nfreight charges which they were not entitled to<br \/>\ncharge. Furthermore, defendants are claimed to be<br \/>\ndestroying the damaged, soiled stocks lying with the<br \/>\nstockists. The stocks collected from the market were<br \/>\nto be destroyed by the officials of the defendant.<br \/>\nThe plaintiffs had accumulated the soiled\/damaged<br \/>\nstock of Rs. 1,50,000\/- and is entitled for<br \/>\nreimbursement of the same. In addition to that it has<br \/>\nbeen pleaded that in 1992-93 the defendant appointed<br \/>\nsub-stockist in the territory allotted to the<br \/>\nplaintiff. The understanding between the parties for<br \/>\nthe appointment of sub-stockist was that plaintiffs<br \/>\nwere to get 2% additional discount. The plaintiffs<br \/>\nthus were entitled to Rs. 34,838\/-. It has been<br \/>\nasserted that it was a usual practice of the<br \/>\ndefendants to operate various market scheme through<br \/>\ntheir stockists. These scheme include consumer offer,<br \/>\nrebate, free issue gifts. The plaintiffs had incurred<br \/>\nan expenditure to the tune of Rs. 1 lakh on this count<br \/>\nand are entitled to the refund of the same. Lastly it<br \/>\nis claimed that defendants introduced scheme called<br \/>\nEx-godown on BABOOL tooth paste. As per this scheme<br \/>\nstockists were given additional discount on the sale of<br \/>\nBABOOL Toothpaste and plaintiffs are entitled to a<br \/>\ndiscount of Rs. 10,000\/-.\n<\/p>\n<p> 4. Plea has been raised that believing the<br \/>\ndefendants the plaintiffs handed over 10 signed blank<br \/>\ncheques and defendants supplied goods worth<br \/>\nRs. 9,83,180 to the plaintiff. The above supplies to<br \/>\nthe plaintiff were very much in excess of their normal<br \/>\npurchase. The plaintiffs received the invoice on<br \/>\n1.11.1994 but to their dismay found that only a small<br \/>\nsum of Rs. 59,107.81 had been adjusted against the<br \/>\ninvoice. Plaintiff wrote to the defendants in this<br \/>\nregard. It is claimed that in this process<br \/>\nRs. 13,39,088\/- was due to the plaintiff and<br \/>\ndeclaration with respect to cheques referred to above<br \/>\nthat they were null and void was also claimed.\n<\/p>\n<p> 5. An application under Order 7 Rule 11 has been<br \/>\nfiled on behalf of the defendant for rejection of the<br \/>\nplaint. It has been pleaded that the suite has been<br \/>\nfiled for recovery of the amount referred to above.<br \/>\nThe claim has been made by the plaintiff on behalf of<br \/>\nthe partnership firm M\/s Emkay Agencies. It was this<br \/>\nfirm which was the stockist\/distributors. The claim<br \/>\nincludes refund of security tax, octroi, transport and<br \/>\nfreight charges and value of damaged goods. The<br \/>\nplaintiff had no independent privity of contract with<br \/>\nthe defendants except as a partner of the firm. The<br \/>\nfirm is not registered and therefore the suit is<br \/>\nbarred. It is also claimed that it is barred<br \/>\nby time and therefore the plaint should be<br \/>\nrejected.\n<\/p>\n<p> 6. The application as such has been opposed. It is<br \/>\ndenied that the suit is barred by time or that Section<br \/>\n69 of the Indian Partnership Act bars further filing<br \/>\nof the suit.\n<\/p>\n<p> 7. Sub-section (2) to Section 69 of the Partnership<br \/>\nAct reads as under:-\n<\/p>\n<p> (2) No suit to enforce a right arising from<br \/>\na contract shall be instituted in any Court<br \/>\nby or on behalf of a firm against any third<br \/>\nparty unless the firm is registered and the<br \/>\npersons suing and or have been shown in the<br \/>\nRegistered firms as partners in the firm.\n<\/p>\n<p>x x x x x x x x x x   <\/p>\n<p> 8. Perusal of the relevant provision referred to<br \/>\nabove clearly show that if a person is to enforce a<br \/>\nright arising from a contract then if the firm is<br \/>\nunregistered as a partnership firm then under<br \/>\nSub-section (2) to Section 69 the firm is debarred and<br \/>\neven partners are debarred from suing with respect to<br \/>\nthe said right.\n<\/p>\n<p> 9. On behalf of the defendant it is pointed that<br \/>\nplaintiffs are the partners of the firm and the firm<br \/>\nis unregistered and therefore plaint as such must be<br \/>\nrejected.\n<\/p>\n<p> 10. As already pointed above, the claim of the<br \/>\nplaintiff is basically is alleging that it was a<br \/>\nstockist\/distributor of the defendant. It relates to<br \/>\nthe goods supplied by the defendant. The plaintiff<br \/>\nclaims refund of the security tax, octroi, transport<br \/>\nand freight charges and value of the damaged goods.<br \/>\nPlaintiff claims that defendants were liable to pay<br \/>\nback the said amount. It is abundantly clear from the<br \/>\nfacts which have already been enumerated above that<br \/>\nclaim arises from a contract between the parties.<br \/>\nOnce the claim arises from a contract between the<br \/>\nparties Sub-section (2) to Section 69 will apply with<br \/>\nall its rigours.\n<\/p>\n<p> 11. On behalf of the plaintiff reliance was<br \/>\nstrongly been placed on the decision of the Supreme<br \/>\nCourt in the case of   <a href=\"\/doc\/1664373\/\">Raptakos Brett &amp; Co. Ltd.<br \/>\nv. Ganesh Property<\/a>   . Therein too<br \/>\nthe Supreme Court held that suit based on cause of<br \/>\naction, based on breach of covenant would be barred<br \/>\nunder Sub-section 2 to Section 69. Learned counsel<br \/>\nfor the plaintiff urged that the Supreme Court has<br \/>\nfurther held that if there is a cause of action based<br \/>\non breach of statutory obligation then Sub-section (2)<br \/>\nto Section 69 will not bar the filing of the suit.\n<\/p>\n<p> 12. Indeed the legal position as argued is not<br \/>\ndisputed but herein it is not the plaintiff&#8217;s case<br \/>\nthat his cause of action is on breach of statutory<br \/>\nobligation. As referred to above the plaintiff claims<br \/>\nrefund and the payments based on a contract that was<br \/>\nbetween the parties. The plaintiff was the stockist<br \/>\nof the defendant and indeed this was the contract and<br \/>\nfor whatever reasons the plaintiff seek the refund or<br \/>\nthe payment, it must be stated that it was arising<br \/>\nfrom the contract between the parties. Thus<br \/>\nSub-section (2) to Section 69 would clearly bar the<br \/>\nfiling of the suit.\n<\/p>\n<p> 13. In that event it was contended that suit for<br \/>\ndeclaration in any case would be maintainable whereby<br \/>\nthe plaintiff seeks that the cheques purported to be<br \/>\nprocured by the defendants are null and void. But in<br \/>\nthis connection Section 30 of the Specific Relief Act<br \/>\nclearly provides the answer and negatives the<br \/>\narguments of the plaintiffs learned counsel. No suit<br \/>\nfor declaration is maintainable where an alternative<br \/>\nrelief is available. The cheques so given had been<br \/>\nencashed and therefore alternative relief for recovery<br \/>\nof the amount would be maintainable, if any. The<br \/>\nsimple suit for declaration as such consequently<br \/>\nkeeping in view the facts referred to above, will not<br \/>\nbe maintainable.\n<\/p>\n<p> 14. In fact of the aforesaid it is patent that in<br \/>\nthe present form the suit would be barred by law and<br \/>\ntherefore it is the plaintiff&#8217;s plaint is rejected<br \/>\nunder Order 7 Rule 11 CPC. However, by way of<br \/>\nabundant caution it is added that nothing said herein<br \/>\nshould be taken as an expression of opinion on the<br \/>\nmerits of the matter.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi High Court Mahinder Kumar Chaudhary And Anr. vs Balsara Hygiene Products Ltd. on 19 December, 2001 Author: V Aggarwal Bench: V Aggarwal JUDGMENT V.S. Aggarwal, J. 1. Mahinder Kumar Chaudhary and Mrs. Dharam Devi Chaudhary, plaintiffs have filed a suit for declaration and for recovery of Rs. 13,39,088\/-. A declaration is prayed to the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-45622","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mahinder Kumar Chaudhary And Anr. vs Balsara Hygiene Products Ltd. on 19 December, 2001 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/mahinder-kumar-chaudhary-and-anr-vs-balsara-hygiene-products-ltd-on-19-december-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mahinder Kumar Chaudhary And Anr. vs Balsara Hygiene Products Ltd. on 19 December, 2001 - Free Judgements of Supreme Court &amp; 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