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Kedar Nath Parsottamdas and Co. Private Ltd. Vs. AmIn Chand Payarelal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberLiquidated Claim Suit No. 1854 of 1960
Judge
Reported inAIR1965Cal246
ActsSale of Goods Act
AppellantKedar Nath Parsottamdas and Co. Private Ltd.
RespondentAmIn Chand Payarelal
Cases ReferredMontosh Kumar Chatterjee v. Central Calcutta Bank Ltd.
Excerpt:
- .....conditions of the transactions between the plaintiff and the defendant and whether there was any open mutual and current account. in the plaint it is alleged that for galvanising work the plaintiff would be entitled to usual charges and that an open current mutual running account would be maintained and interest at the rate of nine per cent would be payable. the terms as to sales-tax declarations are not relevant by reason of abandonment of the plaintiff's claim for sales-tax 7. the oral evidence of murulidhar jhunjhunwalla is that in the year 1952 the witness had a talk with one jitpaul a partner of amin chand pyarilal the talk was that the defendant would deliver to the plaintiff iron pipes for galvanising and the defendant asked for rates. the plaintiff quoted the rates and it is.....
Judgment:
ORDER

A.N. Ray, J.

1. This is a suit tor the recovery of Rs. 54,847.25 nP. The plaintiffs claim consists of three heads. First the amount of Rs. 79,430.00 nP. as alleged in paragraph 4 of the plaint, secondly an amount of Rs. 16,435.31 nP. as alleged in paragraph 7 of the plaint and thirdly interest amounting to Rs. 20,886/-. The plaintiff gives credit for the sum of Rs. 61,904.06 nP. received by the plaintiff from the defendant as alleged in paragraph 5 of the plaint. The total claim is Rs. 54,847.25 Np

2. The claim for Rs. 79,430/- is because the plaintiff galvanised divers quantities of steel pipes supplied by the defendant to the plaintiff. The claim for Rs. 16,435.81 nP. is on account of sheetcutting scraps delivered by the plaintiff to the defendant

3. The defendant contested the plaintiff's claim. The main grounds of denial of the plaintiffs claim are to be found from the issues raised by the defendant at the trial. The principal grounds of the defendant's opposition to the plaintiffs claim are that the plaintiff is not entitled to claim at the rates alleged and secondly that part of the plaintiffs claim is barred by limitation and thirdly that the plaintiff is not entitled to any interest

4. The following issues were framed at the trial:

Was there an agreement between the plaintiff and the defendant on the terms and condition alleged in paragraph 1 of the plaint or at all?

Was any open, mutual and current account maintained between the parties as alleged in paragraph 3 of the plaint?

3. (a) At what rates were steel pipes agreed to be galvanised by the plaintiff?

(b) What sum became due from the defendant to the plaintiff in respect of galvanised work?

4. (a) At what rate is the defendant liable to pay for sheet cutting scraps?

(b) What sum has become due from the defendant to the plaintiff in respect of the supply of sheet cutting scraps?

5. Is the defendant liable to pay interest as claimed in the plaint?

6. Is the suit barred by limitation?

7 To what reliefs, if any, is the plaintiff entitled.

5. On behalf of the plaintiff there is oral evidence of Muralidhar Jhunjhunwalla. He is the Governing Director of the plaintiff company. On behalf of the defendant there is oral evidence of Chandra Prokash Sethi who has been working as an Assistant with Amin Chand Pyarilal since 1952

6. The first two issues relate to the terms and conditions of the transactions between the plaintiff and the defendant and whether there was any open mutual and current account. In the plaint it is alleged that for galvanising work the plaintiff would be entitled to usual charges and that an open current mutual running account would be maintained and interest at the rate of nine per cent would be payable. The terms as to sales-tax declarations are not relevant by reason of abandonment of the plaintiff's claim for sales-tax

7. The oral evidence of Murulidhar Jhunjhunwalla is that in the year 1952 the witness had a talk with one Jitpaul a partner of Amin Chand Pyarilal The talk was that the defendant would deliver to the plaintiff iron pipes for galvanising and the defendant asked for rates. The plaintiff quoted the rates and it is the evidence of the plaintiffs witness that Jitpaul agreed that whatever expenses were incurred the defendant would have the galvanising work done by the plaintiff. In Q. 11 the plaintiff's witness said:

'Was there any other talk?--They will send iron pipes to our factory; we will galvanise it and they will take back those pipes. That we will calculate according to the rates and we will debit that amount to their account That we will settle the account during the year closing and we will take or refund whatever happens during the closing year. That if you would get something from me I will payor if I would get he will pay and on top of it there was 9 per cent interest.'

The plaintiff witness thereafter stated that from time to time the plaintiff delivered bills to the defendant and that the bills were made at correct rates and the defendant made payment from time to time. The plaintiffs witness further proved the books of account.

8. On behalf of the defendant, Chandra Prokash Sethi said that the transaction for steel scraps took place in the year 1058 and that the agreed rate for steel scrap was Rs. 58/- per ton. The defendant's witness was asked as to galvanising work and the answer of the witness was that the defendant paid bills at the rates agreed by both parties. In Q. 14 the defendant's witness said that they were agreed and settled between Rajaram and Jagadish Sarma. Defendant's witness further said that Rajaram was the General Manager.

9. On this oral evidence I am unable to accept the defendant's version as to agreement. When the plaintiffs Governing Director was under examination it was put to him that bills were settled by Rajaram and Chandra Prokash Sethi (see Q. 126) and the witness said that he was hearing the news for the first time. The plaintiffs witness was never given an opportunity of identifying Chandra Prokash Sethi. The plaintiffs witness said that the entire talk was with Jitpaul. In Q. 98 plaintiffs witness said:

'If Jitpaul comes to the court and says that there was no such agreement I will forgo the entire amount (witness shows his books). All the bills have been countersigned by Jitpaul. If he is a true man why then he has not produced them in Court--bills of 1953/54.'

In Q. 102 it was put to the plaintiffs witness that all the discussions and transactions between the plaintiff and the defendant firm took place through Jagadish Sarma of the plaintiff firm and Rajaram and Chandra Prokash of the defendant. The plaintiffs witness denied the same and further said that Jagadish Sharma was a discharged employee of the plaintiff and at present an employee or director of the defendant's companies.

10. The question is how much of the plaintiffs case has been proved as to the terms alleged by the plaintiff. As to rates I am of opinion that the plaintiffs evidence oral and documentary establishes beyond any measure of doubt that the rates quoted by the plaintiff were agreed to by the defendant. The plaintiffs Governing Director stated that the bills sent by the plaintiff to the defendant in the year 1952 would snow that such bills were accepted. The plaintiff challenged the defendant to produce the original bills. They were not produced. The defendant's witness stated that the bills were in existence. The irresistible inference drawn from non-production of bills is that the same if produced would go against the plaintiff. That inference is corroborated by the direct challenge given by plaintiff's witness to the defendant. The fact that Jitpaul on behalf of the defendant kept himself away from the witness box should in my opinion go against the defendant's case. Further, the plaintiff's bills were never disputed. There is nothing in writing to show such dispute. On the contrary payments were made after bills had been submitted. The plaintiff's letter of demand wasanswered by the defendant's solicitor but there was no dispute as to rates. I am therefore of opinion that the plaintiff's case as to rates is established.

11. The next question is whether there was any agreement as to mutual open and current account It is primarily a matter of agreement. It may sometimes arise by implication as a result of contract between the parties. It is not the case here that there was any implied agreement to mutual open and current account The oral testimony as to mutual open and current account is very slender and is not acceptable to me. Counsel on behalf of the defendant relied on three reasons as to why the plaintiffs case of mutual open current account should not be believed. First that if there was any case of mutual open and current account and it was agreed between the parties that interest would be payable at nine per cent per annum the absence of any entry as to interest in the accounts kept by the plaintiff would nullify the plaintiffs case. The documents corroborate the defendant's reasons. The accounts do not show that any interest has been charged as alleged by the plaintiff. It is natural and probable that if mutual opea and current accounts were to be maintained and interest was an item in such account interest would find place in such account maintained. The absence of any entry as to interest in the accounts maintained by the plaintiff in my opinion destroys the plaintiffs case as to accounts being mutual open and current. The second reason advanced by the defendant was that if accounts had been kept on the basis of mutual open and current account the defendant would not pay me specified bills in full payment thereof nor would the plaintiff accept the same as full payment of bill Counsel for me plaintiff contended that the payment of one or two bills in full would not militate against mutual open current account. No hard and fast rule can be laid down but in the present case the facts and circumstances taken in their entirety lend support to the defendant's case that there was no agreement as to accounts being kept on the basis of mutual open and current accounts. The third reason advanced by the defendant was that in the correspondence or in the letters of demand there was never any allegation that accounts were maintained between the parties on the basis of mutual open and current account. In my view that contention is devoid of substance.

12. The law as to mutual open and current account is laid down by Chakravartti, C. J. in Montosh Kumar Chatterjee v. Central Calcutta Bank Ltd., 57 Cal WN 852. Two propositions can be extracted from that decision to test the plaintiffs case. First where a tradesman has a bill against a party for any account in which the items are so connected together that it appears that the dealing is not intended to terminate with one contract, but to be continuous, so that one item, if not paid, shall be united with another to form due continuous demand, the whole together forms bat one cause of action and cannot be divided. Secondly, a mutual account is an account in which there are two parallel sets of dealings by which each party gives credit to the other and which therefore gives each party a right to an account against the other on the basis of his own dealings and which carry an understanding express or implied that the itemson one side would be set off against those on the other and both set of items being brought into account a balance would be produced. Applying these principles to the facts of this case it is to be found whether it was a case of one cause of action for the entire work or whether each contract was separate in the present case. It will appear that the defendant from time to time made large payments of Rs. 10,000/-. Such payments when made were entered by the plaintiff towards galvanising work as will appear at pages 41 and 42 of Ex. A. The books of account of the plaintiff and the entry will indicate that galvanising work consisted of several pieces of work. The payment of Rs. 10,000/- as and by way of lump payment does not aid the plaintiff in establishing mutual open and current accounts. It is not the plaintiff's case that galvanising work was one composite piece of work or one transaction,

13. In determining the question of limitation the transaction is to be decided on the second principle laid down by Chakravarti, C. J. It is true that in mutual open and current account there need not be a shifting balance and the absence of a shifting balance is not conclusive one way or the other. Further, reciprocal demands do not mean that actual demands for payments must have been made but only that there must be reciprocal claims arising out of the respective credits on the two sides. The deciding test is whether the dealings are such as to enable each party to say to the other that he has an account against him which means not that he has a credit balance but that he has a number of credits in the course of a running series of transactions which give him a right to an account. Payments must not be repayments of debt but payments are to be in the course of independent transactions intended to create credits against the other party. Counsel for the plaintiff extracted this principle and contended that oven if the plaintiff's case as to interest were not accepted the plaintiff's case as to mutual open and current account could be accepted stripped of the question of interest. I am unable to accede to the plaintiff's contention in the present case for the principal reason that where it is alleged that there was an agreement as to mutual open and current account and my conclusion in the present case is that there was no such agreement, it would be wrong on authority as well as principle to hold mutual open and current account by applying abstract principles of law. I am of opinion that there was no agreement as to mutual open and current account.

14. The result is that the plaintiff's claim on the first head will fail excepting three items of Rs. 860/-, Rs. 797.80 and Rs. 2413.70 as stated in the three respective bills No. C. P. 91 C page 94, T. 74 dated 10th June 1958, 16th June 1958 and 8th January 1959. The total sum is Rs. 4071.50. It was contended on behalf of the defendant that the plaintiff is not entitled to that amount because quality of goods and price will not appear in the plaint and bills were not annexed to the plaint. I am unable to accept that contention of the defendant. The amounts are fully indicated. There was no dispute at the trial as to quantities. The only dispute raised was as to rates. On the oral evidence I am of opinion that the agreement alleged by the plaintiff that the defendant is to pay the rates claimed by the plaintiff is proved.

(After discussing evidence judgment proceeded).

In my opinion the plaintiff is entitled to claim the sum of Rs. 16,435.31.

15-16. As to the plaintiffs claim for interest I am of opinion that on the oral evidence the plaintiffs claim for interest is unacceptable. He agreement is in my opinion not proved. In the correspondence the plaintiff made claim for interest at the rate of 12 per cent. The plaintiffs claim in the plaint is at the rate of nine per cent per annum. The plaintiffs witness stated that the claim at twelve per cent per annum was made when the plaintiff demanded payment and the defendant was not paying but the plaintiff actually preferred a claim at the rate of nine per cent per annum. I am unable to award any interest on the basis of that letter and further this is not in my opinion a case where interest under the Sale of Goods Act should be allowed. There is a pleading to the effect that the claim for interest at nine per cent per annum is damages under the Sale of Goods Act. I am unable to accept the pleadings in the present case as giving rise to any claim for interest. The result therefore is that there will be decree in favour of the plaintiff for Rs. 860/-, Rs. 799.80 and Rs. 2413.70 aggregating Rs. 4071.50 out of the claims mentioned in paragraph 4 and a further sum of Rs. 16,435.31 nP. and the plaintiff will be entitled to costs of bearing and general costs. General costs awarded are two-third of the taxed costs.

17. Counsel for the plaintiff submitted thatinterim interest should be awarded. Counsel forthe defendant submitted on the other hand that inview of the pleadings as to interest the same shouldnot be allowed. The defendant resisted the claimon the ground of limitation. It is a technical defencewhich has succeeded as to portion of the claim.Mr. Bachawat on behalf of the plaintiff in myview rightly submitted that the defendant's defencewas technical and not warranted by straightforwardand fair dealings between commercial people. Inmy opinion that submission is correct. I therefore award interim interest at the rate of six percent per annum. Interest on judgment at 6 percent on the principal sum. Certified for two counsel.


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