Alkem Laboratories Pvt.Ltd vs Amar Chemicals

This appeal is directed against the judgment and order passed by learned Judge, City Civil Court, Court No. 26, Ahmedabad in Regular Civil Suit No.

5653 of 1987 dated 30.10.1998. By an order dated 30.10.1998, learned Judge has directed that the plaintiff do recover a sum of Rs. 89,131/-from the

defendant along with running interest @12% per annum on the sum of Rs. 81,120/- from the date of suit, till realization and cost in proportionate of its

success in the suit. The suit for rest of the amount was dismissed.

Short facts of the present case may be emerged from the record, as under:

Present respondent was the original plaintiff and the present appellant was the original defendant before the trial Court. For the sake of brevity,

hereinafter, they would be referred as the plaintiff and defendant.

The plaintiff, being a partnership firm, was running its business of Drugs and Chemicals etc., in the city of Ahmedabad. The defendant was a

registered Private Limited Company and its office was situated at Bombay. That, the defendant company used to purchase Drugs and Chemicals

from the plaintiff on credit by placing orders at Ahmedabad. Details of the goods and the amount along with date of purchase etc were described in

the plaint. As per the averments made in the suit, the amount of bill No. 3390 ie., Rs. 81,120/- was not paid by the defendant, though frequently

demanded. That, a notice of demand dated 3rd September 1987 was also issued by the plaintiff, but proper reply was not given by the defendant.

Therefore, it was prayed in the suit by the plaintiff to direct the defendant to pay Rs. 82,892/-; including cost and interest @ 24% per annum from the

date of filing of the suit till its realization.

As the suit was filed under Order 37 of the Code of Civil Procedure 1973 (“CPC†for brevity) the defendant appeared through its advocate and

filed an application for leave to defend vide Ex. 18. Thereafter, written statement was filed by\ the defendant vide Ex. 29 and contentions raised in the

suit were not specifically admitted by the defendant. In Para 3 of the written statement, the defendant contended as under:

“Without prejudice, the defendants call upon the plaintiffs to produce the analytical report of the product Dioloxamide Furoate (I.P.)(material that

was supplied to the defendants) together with the purchase document of the raw material and its analytical report which will prove it to the hilt that the

subject good were not upto the standard and quality as required by the defendants. The defendants say and submit that unless the plaintiffs produce

the analytical report of Dioloxamide Furoate (I.P.) and the relevant purchase documents of the raw material together with its analytical report, the

plaintiffs’ contention that the goods in question were upto the mark and standard could not be and should not be accepted. The defendants say and

submit that in the even the plaintiffs fil in producing this record and/or information adverse inference will have to be drawn against the plaintiffs and

the suit will have to be dismissed on this count itself.â€​

It was further contended that the goods supplied by the plaintiff were not of standard quality, and therefore, the same were returned back to the

plaintiff and the suit was liable to be dismissed. It was further submitted that the goods in respect of bill No. 3390 were returned because of inferior

and sub- standard quality, and therefore, there is no question of making any payment in respect thereof to the plaintiff. That, under the defendant’s

challan No. 302/87 dated 11th July 1987, the goods in question have been returned to the plaintiff, as the same was of sub-standard quality and

defective. That, the plaintiff’s representative issued acknowledgment of having received the goods back on or about 11th July 1987. That,

signature was put by the representative of the plaintiff on the delivery challan. That, suit was based on no foundation and the same was false and

frivolous. That, the defendant immediately, within limitation of time, has recorded their protest by recording that the goods in question were not up-to-

the-mark and standard, and ultimately, had returned the same on 11th July 1987. That, samples of the goods/materials were taken and test was

conducted in the defendant's laboratory at Taloja, when it was noticed that the goods/materials were of sub standard and same were returned to the

plaintiff. Ultimately, it was requested to dismiss the suit with costs. The learned Judge, City Civil Court, Ahmedabad framed issues vide Exh. 31 on

2nd April 1987, and thereafter, amended on 11th September 1987. After examining witnesses of the plaintiff as well as defendants, and having

analyzed the evidence, the learned Judge was pleased to allow the suit in part, as per the order dated 30th October 1998, which is ipugned herein.

Being aggrieved by the impugned judgment and order passed by the learned Judge, City Civil Court, Ahmedabad, the present Appeal is preferred by

the present appellant-original defendant.

Heard learned advocate Mr. N. S. Sheth for the appellant and learned advocate Mr. GM Joshi for the respondent-plaintiff.

It was submitted by learned advocate for the appellant that the judgment and order passed by the trial Court is against the evidence on record both

oral as well as documentary. That, defendant was not permitted to produce and/or file analytical report on record vide Exh. 80. It was open for the

plaintiff to recall his own witness upon production of analytical report by the defendant and also would have got an opportunity to cross examine the

defendant’s witness on the said analytical report. That, in an application Exh.47 for production of the documents, which were necessary to

produce on record by the plaintiff and as they were in custody of the plaintiff and objections were raised by the plaintiff vide Exh. 48. This application

was never decided by the Court below. That, no proper opportunity was given to the defendant to place its case before the Court. That, documents

sought under Order 13 CPC were absolutely necessary for deciding the issue in dispute between the parties. That, without deciding Application Exh.

47, judgment delivered by the learned Judge is ex-facie, illegal and perverse. Thereafter, after application Exh. 80, defendant requested to permit him

to produce test report of the disputed goods, but it was refused by the learned Judge. That, great injustice is caused to the defendant by not deciding

Application Exh. 47, or not passing any order below application and denying the defendant to produce its report of the disputed goods. Hence, it was

requested by learned advocate for the appellant-defendant to quash and set aside the impugned judgment and order. In the alternative, it was

requested to remand the matter back to the learned Judge of the City Civil Court permitting the defendant to produce necessary documents and

directing the plaintiff to produce document, as sought for, by the defendant in its application Exh. 47. As the decreetal amount is deposited by the

defendant before the concerned trial Court, there is no dispute as regard remand of the matter.

Per contra, Mr. GM Joshi, learned advocate for the respondent has strongly opposed the submissions made by learned advocate for the appellant and

argued that the learned Judge has considered all the oral as well as documentary evidence, while passing the impugned judgment and order. That,

witness from the plaintiff was also examined, so also of the defendant. After closing the evidence of plaintiff, application Exh. 80 was given by the

defendant requesting to produce test report which was though under its custody. That, the order passed below Exh. 80 was challenged by the

defendant before the High Court and it was confirmed by this Court of the order passed by City Civil Court below Exh. 80. That, all the aspects were

considered rightly by the Court below. That, the goods purchased by the defendant were never returned back to the plaintiff. That, alleged witness

Mr. Chandrakant was never examined by the defendant, who had allegedly accepted the goods returned back on behalf of the plaintiff. Hence, it was

requested by learned advocate for the respondent-plaintiff to dismiss the appeal.

Having perused the record and submissions made by learned advocates for the respective parties, it appears that in the written statement Exh. 29 filed

by the defendant, specific contention was raised calling the plaintiff to produce analytical report of the product “Dioloxamide Furoate (I.P.)â€

(material that was supplied to the defendant) together with purchase document of the raw material and its analytical report which is proved it to the

hilt that the subject goods were not up to the standard and quality, as required by the defendant. It was further submitted that unless the plaintiff

produce the analytical report of “Diloxamide Furoate (I.P.)†and the relevant purchase documents of the raw material together with its analytical

report, the plaintiff’s contention that the goods in question were up to the mark and standard could not be, and should not be accepted. That, in that

event, the plaintiff failed in producing record and/or information and adverse inference will have to be drawn on this count.

If we consider deposition of plaintiff’s witness vide Ex. 52, he has admitted in his cross-examination that whatever goods were sold in the market

would be supplied after its proper testing in laboratory under the Drugs laws. After completing tests in the laboratory, it would be sealed and the date

of testing entered on the seal as well as its batch number also. It was further submitted that in the present case, the witness was not in a position to

say that when the goods were supplied to the defendant, were sent for testing in the laboratory and on which date its batch number was noted. He

further accepted that whatever goods were supplied to the defendant, the test report of the same was placed in the file. He was not in a position to

produce record, as every three years, it was destroyed. He also accepts that the test report of goods supplied to the defendant was lying in the file and

thereafter, he tried to amend his statement, saying that every three years, the record was to be destroyed. It was contention of the defendant from the

beginning in the written statement that the test report was material evidence to decide the issue raised in the suit.

On the defendant’s side, Mr. Sadanand Shankar Valajanu was examined vide Ex. 79. He has stated that whatever disputed goods were supplied

by the plaintiff, were tested in laboratory owned by the defendant. The goods found as such was Talcum powder which cannot be used for

manufacturing human medicine, and therefore, immediately a letter was written to the plaintiff. The plaintiff informed that Shri Chandrakant would

conduct from the plaintiff’s side and the goods in dispute be returned back to him. The test report of laboratory dated 15th June 1987 was shown

to this witness. The material question would be of not deciding the application, or passing any order below Exh. 47, wherein, three documents were

sought by the defendant ie., Analytical report of the product “Dioloxamide Furoate (I.P.)†together with purchase documents of the raw materials

and its trial report; test report prepared by the defendant and two letters dated 15th June 1987 and 24th June 1987. The test report prepared by the

defendant and leave to defend application Exh. 80 were dismissed. The documents sought for by the defendant were important material to decide the

suit and therefore a request was made in its application Exh. 47.

Considering the fact that the Application Exh. 47 was not decided and no order was passed by the Court below, this Court is of the view that the

impugned judgment and order passed by the Court below are required to be quashed and set aside and the matter is required to be remanded back for

fresh decision, after giving sufficient opportunity to either side to lead evidence-both oral as well as documentary. Hence, the present appeal is hereby

allowed.

The matter is remanded back to the City Civil Court, Ahmedabad for fresh decision on merits. The concerned learned Judge shall give sufficient

opportunity to either side to lead their evidence-oral as well as documentary and to decide application Exh.47. Considering the fact that the dispute is

pending between the parties since 1987. Learned Judge shall decide the suit within four months from the date of receipt of this order.

Record and proceedings be sent to the concerned trial Court immediately by the registry.