Taparia Ltd. vs Chaganlal

This is an appeal filed by the defendant against the judgment and decree dated 27.11.1999 passed in Civil Suit No.320-B/1999 by District Judge, Indore.

Brief Facts...

The respondent (hereinafter referred to as "plaintiff") filed the suit for recovery of Rs.47423.00/- from the defendant. At the time of filling the suit the plaintiff was engaged in the business of sale and purchase of cotton bales and commission agent. The defendant company registered under the Companies Act engaged in the business of perches cotton bales having its registered office at Mumbai and branch office at Khandwa. Vide letter dated 03.08.1981, an employee of defendant informed the plaintiff that amount of Rs.3434/- has been deducted under the head of TDS and deposited with the IT department vide TDS certificate form No.19-A. He has enclosed the copy of form 19A along with above letter. As per the plaintiff, he supplied cotton bales from the period of 10.05.1988 to 28.02.1989 to the defendant and the defendant was required to make the payment within 20 days from the date of delivery, failing which, interest @ 18% p.a. was payable . As per accounts, as on 31.03.1989, amount of Rs.32709/- was due for payment to the plaintiff. Despite the letters dated 01.11.89, 13.10.89, 24.11.89 and 22.12.89, the defendant did not pay the interest amount. Vide letter dated 31.03.1989, the defendant admitted payment of the amount of Rs.32,709/- and informed that the amount of Rs.3434/- has been remitted to the Income Tax Department under the head of TDS and remaining amount of Rs.29,273/- has been mentioned in the account book, but not paid. According to the plaintiff, the defendant has wrongly deducted the TDS of Rs.3434/-, hence, he is entitled for the aforesaid amount alongwith the interest @ 24% p.a. from 01.04.1989 to 26.11.1991, hence, he filed the Civil Suit.

The defendant filed the written statement by submitting that the plaintiff is not entitled to claim the interest on the delayed payment and amount of TDS was sent to Income Tax Department by mistake of an employee. The Court is not having any territorial jurisdiction, therefore, the suit is liable to be dismissed with cost.

The plaintiff examined himself as PW-1, Brijmohan PW-2 and Ramkishan PW-3 and exhibited as many as 43 documents as Ex.P/1 to Ex.P/43. In defense, the defendant examined only Ramendra Bajaj, Clerk as DW/1.

After appreciating the evidence came on record, vide judgment dated 27.11.1999, the learned District Judge has decreed the suit directing the defendant to pay the amount of Rs.42885.45/- alongwith the interest @ 18% p.a. from the date of filing of the suit till the payment.

Being aggrieved by the aforesaid judgment and decree, the appellant has preferred the appeal.

Rival submissions....

Shri S.V. Dandwate, learned counsel for the appellant submits that the contracts between the plaintiff and defendant were of READY DELIVERY contract and the payment thereafter was to be made within a period of seven days which is not liable to be extended even by mutual consent of both the parties. The alleged contract between the parties comes within the scope of "FORWARD CONTRACT" and therefore, same is not enforceable under law. The learned trial Court has erred in holding that in order to pay the amount of interest to the plaintiff, the TDS certificate was to be issued in advance. The appellant came up with a plea that the TDS certificate was issued by mistake of an employee. There was no agreement for payment of interest and the amount of Rs.32,709/- was not paid to the plaintiff, therefore, question of deduction of TDS does not arose. He further submits that under the Cotton Control Order, 1986, the payment is liable to be made within 7 days and if the amount is not paid then the same is not the contract in the eye of law.

Shri S.C. Bagadiya, learned Senior counsel appearing for the respondent submits that the delivery of goods was received by the defendant and payment of this amount was to be made within 20 days from the date of receipt. Since the defendant did not deposit/pay the amount in time and the interest is liable to be debited in its account. Therefore, respondent/defendant calculated the amount Rs.32,709/-under the head of interest and deducted the TDS and deposited with the Income Tax Department vide form no.19-A. The defendant has failed to prove that the aforesaid TDS was deducted by mistake, hence, the appeal is liable to be dismissed.

Appreciation and conclusion ......

According to the plaintiff that from 10.05.89 to 28.08.89, he delivered the cotton bales to the defendant 's their office at Khandwa. The defendant has admitted the purchase of cotton bales in the aforesaid period, but denied the payment was to be made within 20 days failing which interest @ 18% p.a.was liable to be charged. The plaintiff in his ledger and accounts has calculated the interest payable by the defendant and sent various letters and reminders to the defendant which are on record as Ex.P/1 to Ex.P/35. All the letters were sent by registered post and duly received by the defendant, but none of them was replied by the defendant denying the payment of interest to the plaintiff. Vide letter dated 03.08.1989 Ex.P/36, accounts officer of the defendant has sent the TDS certificate in form No.19-A for the year ending on 31.03.1989 of Rs.3434. The copy of the TDS certificate is not on record, but the defendant in written statements has stated that the TDS certificate form was sent by mistake to the plaintiff and the plaintiff is not entitle to claim the interest from the defendant.

It is not in dispute that in order to pay the interest, the TDS certificate form no.19-A is liable to be sent before making the payment or at the time of making payment. The defendant examined only one witness i.e. Ramendra Bajaj, Clerk who admitted that if any interest is liable to be paid then form no.19-A is liable to be sent. He became Manager in the year 1989 and at the time of transaction between the plaintiff and the defendant one Shri Amarchand Katariya was the Manager and he has no knowledge about this transaction. Therefore, the defendant has utterly failed to prove that the form-19A was sent by mistake. The supply of the goods to the defendant is not in dispute. The plaintiff prepared the accounts, calculated the interest payable by the defendant and sent the various notices to the defendant, therefore, in these circumstances, it can not be accepted that Ex.P/36 i.e. letter dated 03.08.1989 was sent by mistake. The appellant has heavily placed reliance over the Cotton Control Order in which the payment is liable to be made within 7 days from the date of supply but if the payment is not made within 7 days, it can not be held that there is no contract between the parties. Therefore, in view of the above, the learned District Judge has rightly decreed the suit in favour of the plaintiff. Hence, I do not find any ground to interfere with the judgment and decree passed by the trial Court. Therefore, the First appeal stands dismissed.

No order as to cost .