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Judgment
Deepak Gupta, J.—The plaintiff No. 1 M/s. Rakesh Kumar Dinesh Kumar claiming itself to be a Hindu Family Trading Firm has filed the present suit for recovery of Rs. 12,23,250/- on account of principal and interest from the defendants. The suit was filed through Rakesh Kumar who is stated to be Karta of HUE Rakesh Kumar was also joined as plaintiff No. 2. Dinesh Kumar is plaintiff No. 3 who is stated to be a member of the plaintiff No. ] (HUF). Originally the suit was filed against three defendants. However, names of defendants No. 2 and 3 were deleted and presently the only defendant is M/s. U.G. Hotels and Resorts Limited.
In a nutshell the case of the plaintiff is that plaintiff No. 1 is a Hindu Undivided Family Trading firm of which plaintiff No. 2 is the Karta and member and plaintiff No. 3 is the member. This firm deals in Haryana business at Lakkar Bazar, Shimla. The defendant which is running the hotel in Shilon Bag on the Kufri Chail road had been purchasing goods on credit from the plaintiffs and accounts in this behalf were being maintained. According to the plaintiffs the defendant failed to pay the amounts due on account of supply of goods made to it and defaulted in making the payments. Thereafter the accounts between the parties were settled and the defendant after settling the accounts agreed to pay a sum of Rs. 14,00,000/- to the plaintiffs in respect of the goods supplied by the plaintiffs to the defendant vide writing dated 22.9.2000. The case of the plaintiffs further is that thereafter defendant only paid Rs. 1,00,000/- on 4.1.2001, Rs. 1,00,000/- on 22.5.2001 and Rs. 1,50,000/- on 30.6..2001 and as such the defendant still owed a sum of Rs. 10,50,000/- to the plaintiffs. Interest). at the rate of 18% was also claimed on this amount. Interest upto the date of fume; of the suit was worked out to Rs. l,73,250/~ and total amount of Rs. 12,23,250/- was claimed. Future interest at the same rate has also been claimed.
The defendants filed written statement taking up various pleas. According to the defendants the plaintiff No. 1 was not a HUF firm and that the suit filed was by an unregistered firm was not maintainable. It was also pleaded that the suit was hopelessly time barred The writing dated 22.9.2000 relied upon by the plaintiff was denied and it was further stated that even if it is found that this writing has been executed then also the suit was time barred It was also averred that the payments of Rs. 10,000/- on 5.10.2000, Rs. 25,000/- on 9.11.2000 and Rs, 40,000./- on 25.11.2001 made by the defendant to the plaintiff had not been taken into consideration. Basically the defendant denied their liability on all grounds. Replication was filed by the plaintiffs in which the facts stated in the plaint were reiterated. with regard to the amount of Rs. 75,000/-, which according to the defendant had not been credited, the stand of the plaintiffs was that this amount was received by it in respect of the goods supplied after the writing was executed on 22.9.2000 and was not towards the payment of Rs. 14,00,000/- payable as per the settlement of accounts on the said date.
On the pleading of the parties the following issues were framed on 2.7.2004:
Whether the suit in the present form is not maintainable, as alleged, in preliminary objections 1 and 2, if so its effect ? OPD
Whether the suit is barred by limitation, as alleged, if so its effect? OPD
Whether the suit is bad for multi fariousness, as alleged, if so its effect ? OPD
Whether the defendants are entitled for the adjustment of the amounts mentioned in preliminary objection No. 5, if so to what extent? OPD
Whether the defendants purchased goods on credit from the plaintiff, as alleged ? OPP
Whether the defendants settled the accounts with the plaintiffs acknowledged their liability to pay a sum of Rs. 14,00,000.00, through writing dated 22nd September, 2000, as alleged, if so its effect ? OPP
Whether the plaintiff is entitled to recover any amount from the defendants, if so, to what extent ? OPP
Whether the plaintiff is entitled to interest on the amount found due, if so to what rate ?
Relief.
The parties led evidence. Plaintiff No. 2, Rakesh Kumar, appeared as the plaintiff''s sole witness. The defendant only examined one witness i.e. Harmit Ghai. In view of the statement of Harmit Ghai it would not be necessary to refer to the entire statement of the plaintiff. Though the writing Ex. PW-1 / A dated 22.9.2000 was not admitted in the written statement, while appearing in the witness box, this witness clearly admitted that they had been receiving the goods from the plaintiffs till 31.3.1998 on credit basis and that the accounts were settled and that this settlement took place vide document Ex.PW-1/A. He acknowledges that this document bears his signatures. According to this witness the writing was in respect of the supplies which were made upto 31.3.1998. While appearing in the witness box, this witness admitted that the defendants may be liable to pay approximately Rs. 4.5 to 5 lacs to the plaintiffs.
At the time of the arguments in view of the statement of Harmit Singh, Mr. Kuldip Singh, learned Senior Advocate appearing on behalf of the defendant, very fairly did not raise the other contentions and limited his arguments to a few points. According to him the suit was not maintainable since the plaintiffs have failed to show that the plaintiff No. 1 is a HUF firm and according to him the suit is hopelessly time barred. Some arguments have also been raised with regard to the adjustment of the amount of Rs. 75,000/- aforesaid and with regard to the liability, if any of the defendants, to pay interest.
At the outset I may decide the question of limitation. This would be covered under issues No. 2 and 6. Both these issues are decided together. The contention of Mr. Kuldip Singh, learned Senior Advocate, is that the suit filed on the basis of Ex. PW-l/A pertains to the accounts which started in the year 1994 and ended in the year 1998. He submits that as the plaintiffs have failed to produce the accounts and show that the amounts are due for transactions which took place within 3 years prior to the filing of the suit, the suit is not within limitation. He also contends that the writing Ex. PW-l/A cannot be termed as a fresh contract for payment of time barred debt since there is no acceptance of the same by the plaintiffs. On the other hand Mr. Bhupender Gupta, learned Senior Advocate, contends that a time barred debt can be a valid consideration for a fresh agreement. The defendant has admitted that he had signed the said agreement and he submits that this promise of the defendant has been accepted by the plaintiffs and as such the suit is within time.
To appreciate the contention raised by the parties if would be necessary to refer to the writing dated 22nd September, 2000 which is Ex. PW-1/A and stands admitted by both the sides. The same reads as follows:
TO, DATED: 22nd September'' 00 Ms. RAKESH KUMAR DINESH KUMAR LAKKAR BAZAAR SHIMLA
Sub : FULL & FINAL SETTLEMENT UPTO 22nd September, 2000
Sir,
As per the accounts reconciliation in your presence it has been finalized and agreed by yourself and us that the full and final amount of the arrears till date in all respects has been settled at Rs. 14,00,000 NET (Fourteen Lac). Fifty percent of the Total amount shall be paid to you before 31st December, 2000 and the remaining fifty percent of the amount shall be paid to you before 30th June, 2001 which is also accepted to you. Kindly acknowledge this letter and receipt. We shall be highly obliged.
Thanking you,
Sincerely Yours Sd/- Harmeet Ghai.
A perusal of this document shows that the defendant through Harmit Ghai after reconciliation and settlement of accounts had agreed to pay a sum of Rs. 14,00,000/- in full and final settlement. 50% of the amount was to be paid before 31st December, 2000 and the remaining 50% by 30th June, 2001. The letter itself mentions that this fact has been accepted by M/s. Rakesh Kumar Dinesh Kumar. The contention raised by Mr. Kuldip Singh, learned Senior Advocate, is that there is nothing on record to show that the plaintiffs ever accepted this offer of the defendants. He further submits that even in the plaint there is no averment that this offer was accepted by the plaintiffs.
Section 25 of the Contract Act in so far as it is relevant for the present case reads thus:
Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law.-An agreement made without consideration is void, unless-
(1) xxxxxxxxxxxxxxxxxxxx
(2) xxxxxxxxxxxxxxxxxxxx
(3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
The contention of the defendants is that though a promise may have been made in terms of Ex. PW-l/A, there is nothing to show that this promise had been accepted by the plaintiffs and, therefore, there is no concluded agreement between the parties.
Mr. Kanwar has relied upon the judgment of the Apex Court report in Sri Tarsem Singh Vs. Sri Sukhminder Singh, The Apex Court in this judgment held as follows:
''Contract'' is a bilateral transaction between two or more than two parties. Every contract has to pass through several stages beginning with the stage of negotiation during which the parties discuss and negotiate proposals and counter-proposals as also the consideration resulting finally in the acceptance of proposals.
From the perusal of the aforesaid judgments of the Apex Court it is clear that to constitute a valid agreement or contract it is not necessary that the same should always be in writing. It is, however, a bilateral transaction and the proposal whether unmodified or modified during negotiation should have been accepted by the second party. To constitute a valid contract the agreement must have been mutually accepted by both the parties. The parties should be ad idem. The contention of Mr. Kanwar is that since in the document Ex. PW-l/A there is no acceptance given by the plaintiffs nor there is any acceptance thereafter, this was only a proposal made by the defendant which was not accepted by the other side. Mr. Kanwar has placed reliance on Shyam Sundar Misra Vs. Municipal Chairman, and Score Soore Venkatappayya Vs. Yalavarthi Venkatappayya and Others, As far as these judgments are concerned, they are not applicable to the facts of the present case. In the case before the Orissa High Court a conditional offer had been made which was rejected by the other party. In that case the municipality which was the debtor had made an offer. The appellant did not accept the offer and instead filed a suit for recovery. The case is distinguishable on facts alone. As far as the judgment of the Madras High Court is concerned, there an offer was made by the debtor to pay time barred debts of ''A'' by paying him seven annas in a rupee. This offer was not accepted by him. The creditor filed a suit claiming the whole amount and in the alternative be claimed seven annas in a rupee on the basis of the offer made by the debtor. It is dear that the creditor had not accepted this offer and, therefore, this authority is also not applicable,
In the present case from a perusal of the statement of PW-1 it is apparent that after the execution of Ex.PW-1/A the goods were again supplied by the plaintiffs to the defendant. These supplies were to be made against cash payment. This indicates that the plaintiff had accepted the offer of the defendant. In Ex.PN-1 /A itself the defendant has mentioned that the plaintiff No. 1 had accepted the proposal. In terms of the offer the defendant also paid a sum of Rs. 3,50,000/- by three cheques of Rs. 1,00,000/-, 1,00,000/- and 1,50,000/- respectively to the plaintiff who accepted the same. The receipt of this amount itself amounted to an acceptance of the offer. The acceptance of a promise can be in express terms and can also be in implied terms. In the present case from the conduct of the parties it is clear that the plaintiffs had accepted the offer of the defendant to pay a sum of Rs. 14,00,000/- in full and final settlement of its dues. This contention is accordingly rejected and issues No. 2 and 6 are decided in favour of the plaintiff and against the defendant.
ISSUE NO. 1
The next major plea raised by the defendant is that the suit as filed is not properly- constituted.
In the plaint the plaintiffs had .clearly stated that plaintiff No. 1 is a HUF trading firm and plaintiffs No. 2 and 3 are its members and that plaintiff No. 2 is also die Karta of the said firm. This fact was denied by the defendant in written statement and a plea was taken that the suit filed on behalf of the unregistered firm of Rakesh Kumar Dinesh Kumar is not maintainable. The onus of this issue was on the defendant. The plaintiff No. 2 when he appeared in the witness box stated that plaintiff No. 1 is Joint Hindu Family firm of which he- is the Karta. He also stated that plaintiff No. 3 is his younger brother who is also a member of the said Joint Hindu Family firm. In cross examination he stated that plaintiff firm started its business as Joint Hindu Family firm in 1970. He also states that besides him his two brothers Dinesh Kumar and Vishal Kumar are members of the family. He states that he is the eldest brother. According to him all the three brothers are still members of the Joint Hindu Family. He further states that the plaintiff firm is assessed to income tax and that .the profit and loss of the business is distributed between the three brothers in equal shares. He also stated in cross examination that plaintiff No. 1 firm is registered with sales tax department and income tax department, but it is not registered with the Registrar of firms. He has denied the suggestion that plaintiff No. 1 firm is not joint Hindu Family Firm.
Harmeet Singh, witness of the defendant, who is whole time Director of defendant No. 1, in his statement has made a bald statement that Rakesh Kumar Dinesh Kumar plaintiffs do not constitute a HUE In cross examination he admits that Rakesh Kumar Dinesh Kumar plaintiffs are brothers and are having a joint business and are running one shop. When questioned further, he states that his earlier statement that the plaintiffs do not constitute a HUF is based on the fact that in none of the bills received by the defendant from the plaintiffs there was any mention about HUF firm. According to him plaintiffs No. 2 and 3 used to address each other as partners.
Mr. Kanwar submits that the plaintiffs admit that plaintiff No. 1 is registered with the income tax and sales tax authorities. According to him the plaintiffs should have led positive evidence to show that it is HUF (Trading Firm). He has relied upon the observations of the Apex Court in Gopal Krishnaji Ketkar Vs. Mahomed Haji Latif and Others, . The Apex Court in that case held as follows:
xxxxxxxxxxxxxx. Even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof.
These observations have been made in the context of the dispute raised before the Apex Court. In that case the dispute was whether the land comprised in survey plot No. 134 was the property of the Dargah or the appellant. Both the sides had led oral evidence and had produced a large number of documents in support of their respective claims. After dealing with all the other documents the Apex Court also held that the appellant despite producing other documents had not produced accounts of the Dargah income. He had claimed that he was enjoying the income of plot No. 134 and was maintaining separate accounts in this regard, but did not produce any accounts to substantiate his contention. It is in this context that the observations of the Apex Court were made that even if the burden of proof did not lie on a party, the Court can draw an adverse inference if the said party withholds important documents in its possession which can throw light on the facts at issue. In my view this judgment is not applicable to the, facts of the present case.
In the present case the onus was on the defendant to prove that plaintiff No. 1 did not constitute a HUF trading firm. The defendant could have discharged at least the initial portion of his burden by leading some evidence. It led no evidence in this behalf. The defendant did not even call upon the plaintiffs to produce any documents. Even when the plaintiff No. 2 was being cross examined, he was not asked to produce the record from the sales tax or income tax authorities. In case the defendant had discharged the initial burden it could have been said that now it was for the plaintiff to bring on record certain documents. All that the defendant said was that his assertion that plaintiff No. 1 was not KUF firm was based only on the fact that in the bills the firm was not shown to be HUE In my opinion this was not sufficient to discharge this onus.
Mr. Kanwar also argues that there is no presumption that a business of a Hindu Family is a joint business. In this regard he has first of all cited Chattanatha Karayalar Vs. Ramachandra Iyer and Another, . In my opinion this judgment is not applicable since in that case the business stood in the name of one member only and it is in this context that the Apex Court observed-
Under the Hindu Law, there is no presumption that a business standing in the name of any member is a joint family one even when that member is a manager of the family.
He has also relied upon G. Narayana Raju Vs. G. Chamaraju and Others, where the Apex Court has held as follows:
It is well established that there is no presumption under Hindu Law that a business standing in the name of any member of the joint family is a joint family business even if that member is the manager of the joint family.
Again the Apex Court was dealing with a case where the business was standing in the name of a member of the joint family and not in the name of the joint family. He has also relied upon Nanchand Gangaram Shetji Vs. Mallappa Mahalingappa Sadalge and Others, , and contends that in a Joint Hindu Family business no member of the family can say that he is entitled to a particular share of the profits. He contends that plaintiff No. 2 has admitted in cross examination that the profits of plaintiff No. 1 firm are shared equally between the three brothers. The contention of Mr. Kanwar, therefore, is that the firm is a partnership firm and not HUF firm. No doubt it is true that in a HUF firm no member as a right can claim that he is entitled to a particular share in the profits of the firm. However, how the profit is distributed is for the members to decide and the mere fact that the profits are equitably distributed is not sufficient to hold that the firm is a partnership firm and is not HUF trading firm. Mr. Kanwar also relied upon the judgment of the Punjab High Court reported in Mangat Ram Shiv Nath Vs. Mange Lal Om Parkash, In that case a specific defence had been taken that the plaintiff firm was not a registered firm and could not constitute the suit. In that case the frame of the issue was as follows:
Is the plaintiff firm a joint Hindu family firm and entitled to institute the suit without registration?
The frame of issue clearly shows that the burden'' was on the plaintiff to show that it was Hindu Family firm and entitled to institute a suit without registration. The plaintiff had led no evidence and observations made by the Division Bench were in the particular facts that no evidence had been led by the plaintiff.
On the other hand, Mr. Bhupender Gupta, learned Senior Advocate, submits that there is no pleading or suggestion to the plaintiff that plaintiff No. 1 firm is a partnership firm. He submits that a stranger cannot dispute the status of the firm and since the onus was on the defendant and the defendant led no evidence, this issue should be decided against the defendant. Mr. Gupta relied upon the law laid down by the Apex Court in Bhagwan Dayal (since deceased) and thereafter his heirs and legal representatives Bhagwan Dayal Vs. Mst. Reoti Devi, and Ram Gopal Vs. L. Mohan Lal and Others, and states that under the Hindu Law there is a presumption that every family is joint unless the contrary is proved.
After going through the aforesaid judgments by both the parties I am of the view that the law as settled is that though there is presumption with regard to the jointness of a Hindu family unless separation is proved, there is no such presumption as far as the business of a firm is produced. However, in the present case, in my opinion, there is sufficient material on record in the shape of the statement of the plaintiff to support the view that the plaintiff is a HUF firm. The defendant has led no evidence whatsoever to discharge the burden which was placed upon him. The defendant did not even think it proper to call upon the plaintiff to produce any document. It may be true that better evidence may have been led by the plaintiff, but keeping in view the fact that the defendant virtually led no evidence in this regard this issue is decided against the defendant and in favour of the plaintiffs. Keeping in view the above discussion it is held that the plaintiff No. I is a HUF trading firm.
Issues No. 4, 5 and 7
Next comes the question of the amount due to the plaintiffs from the defendant and this entails the decision of these issues.
As discussed above, the defendant has admitted that he executed Ex. PW-l/A agreeing to pay a sum of Rs. 14,00,000/- in full and final settlement. According to the plaintiffs, the defendant only paid Rs. 3,50,000 / - consequent, to this settlement. The plaintiffs issued notice Ex. PW-1/ B to the defendant in this regard. No reply to this notice was given. Thus, it is clear that Rs. 10,50,000/- was to be paid. The defendant has taken the plea that it had paid another sum of Rs. 75,000/- which has not been adjusted. The plaintiffs have produced on record various bills Ex.PW-1/ E1 to Ex.PW-l/E30 to show that various supplies were made after the execution of Ex. PW-l/A. The plaintiffs do not dispute the fact with regard to the payment of various amounts, but according to the plaintiffs these accounts were credited in the account of the defendant for the supplies made after 22.9.2000. The defendant has not denied the fact that it was supplied goods even after the agreement in question and this fact has been admitted by DW--1. The defendant has also admitted that such bills used to be received by the plaintiffs. It is thus clear that out of the amount of Rs. 14,00,000/- agreed to be paid, only Rs. 3,50,000/- was actually paid by the defendant to the plaintiffs. Therefore, the plaintiffs, in my view, have proved that a principal sum of Rs. 10,50,000/- is due to them from the defendant. Issues No. 4, 5 and 7 are decided accordingly.
Issue No. 3.
Not pressed.
Issue No. 8
With regard to interest the plaintiff in his statement has stated that as per the usage and trade custom, interest(r) 18% is to be charged on the amount due. However, the plaintiff has failed to prove or lead any evidence to prove such custom or usage. It is then contended that the plaintiff is entitled to interest at the rate of 15% since in the carbon copy of the bills which have been exhibited as Ex.PW-1/El to Ex.PW-1/E30 there is an endorsement that interest (c) 15% will be charged, if payment is not made within 15 days. In my view this also cannot come to the aid of the plaintiff. The present suit has been filed with regard to supply of goods made prior to September, 2000. None of the bills with regard to such transactions have been proved on record. Whether the said bills contained such a stipulation has not been proved. Even in the document Ex.PW-1/A there is no stipulation with regard to the interest payable in case of the default on the part of the defendant. However, there can be no doubt that the amount was payable by the defendant to the plaintiffs on account of the price of goods. It was a commercial transaction between the parties. Keeping in view the bank rate as existing in 2000 and as existing today, I deem it fit and proper to award simple interest at the rate of 12% per annum only. As per document Ex. PW-1/A the defendant had agreed to extinguish its entire liability by 30th June, 2001. Therefore, in my opinion the plaintiff is entitled to interest on the unpaid amount of Rs. 10,50,000/- at (he rate of 12% per annum from 1st July, 2001 till this amount is paid.
In view of the above discussion the suit of the plaintiffs is decreed and a decree is passed in favour of the plaintiffs and against the defendant for a sum of Rs. 10,50,000/- with simple interest at the rate of 12% per annum w.e.f. 1st July, 2001 till date of payment of the entire amount. The plaintiff is also entitled to costs of the litigation. Decree sheet be drawn accordingly.