S.P.Garg, J
1. The present suit for recovery of Rs. 2,12,33,972/- has been preferred by M/s.Goyal Fashions Ltd. (hereinafter referred to as ‘the plaintiff’)
against the defendants. Defendant No.2 (Manoj Godha) is stated to be the proprietor of M/s. Shanti Vijay Jewellers (defendant No.1).
2. Briefly stated, the facts as pleaded in the plaint are that in early 1992 Mukund Sharan Goyal, Director of plaintiff company came in contact with the
defendants claimed to be an export organisation. At the request of defendant No.2, the plaintiff and another proprietorship firm M/s.Goyal Modes
through Mukund Sharan Goyal were persuaded to place a certain sum of money as a deposit with defendant No.1 whose business was of procuring
and manufacturing of jewellery. The defendants had initially requested that an amount of Rs. 1.50 crores be placed with them as a deposit on a
monthly rate of interest i.e. 18%. It is averred that the plaintiff paid as a deposit an amount of Rs. 1 crore to the defendant No.1 on 04.06.1992; it was
telegraphically transferred in the defendant No.1’s account with United Bank of India, Hotel Oberoi International Branch, Dr.Zakir Hussain Marg,
New Delhi against cheque No.072508. The amount was duly received and was credited in the Current Account No.737 maintained by defendant
No.1 with the said branch. It is further averred that M/s.Goyal Modes also paid a sum of Rs. 50 lacs to defendant No.1 firm on 24.06.1992 in similar
circumstances. The present suit, however, pertains to the deposit of Rs. 1 crore with the defendant No.1. It is informed that for recovery of the
balance of Rs. 50 lacs another suit i.e. CS(OS) No.1854/1998 was also filed. However, it has been transferred to District Court due to change in
pecuniary jurisdiction on 22.11.2016. Subsequently, Rs. 35 lacs in all were returned out of Rs. 50 lacs paid by M/s. Goyal Modes on various dates.
When the defendants failed to return the amount of Rs. 1 crore despite various reminders, in March / April, 1994, the defendants assured to refund the
amount with interest in near future. A cheque bearing No.776501 dated 27.10.1994 was issued in favour of the plaintiff for a sum of Rs. 1 crore.
However, on presentation, the said cheque was dishonoured with the remarks that the account had been closed. On 12.01.1996, the defendants
forwarded a cheque No.346948 for a sum of Rs. 5 lacs as part payment vide a covering letter dated 12.01.1996 assuring to arrange the balance
payment. This cheque too was dishonoured due to stoppage of payment by the drawer. Proceedings under Section 138 Negotiable Instruments Act
were initiated against the defendants. The defendants failed to make the payment despite several reminders.
Hence, the suit.
3. The suit is contested by the defendants. Besides taking preliminary objections regarding the plaintiff’s locus standi to file the present suit; lack
of privity of contract between the parties etc., on merits, it was contended that the claim raised by the plaintiff was false. In April, 1992 Mukund
Sharan Goyal was introduced to defendant No.2 by one Subhash Barjatya who had commercial relationship with it (defendant No.2) regarding sale
and purchase of his jewellery. Prior to that, the defendant No.2 had no relationship whatsoever with Mukund Sharan Goyal or his company. Mukund
Sharan Goyal at the instance and behest of Subhash Barjatya transferred a sum of Rs. 1.5 crores telegraphically in the bank account of the defendant
No.1. Mukund Sharan Goyal had some commercial interest and relationship with Subhash Barjatya as a result of which he (Mukund Sharan Goyal)
unhesitantly agreed to pay Rs. 1.5 crores by cheque as security and finance for the Jewellery intended to be taken by Subhash Barjatya from
defendant No.2. Subhash Barjatya took Jewellery worth Rs. 8.25 crores from the defendant No.2 on approval basis in pursuance of a clear
understanding that as and when he (Subhash Barjatya) would sell those jewellery to a third party, he would deposit the sale price with the defendant
No.2 and an equivalent amount would be disbursed to Mukund Sharan Goyal through Subhash Barjatya who had floated Rs. 1.5 crores as security
amount. The commercial relationship which existed between Subhash Barjatya and Mukund Sharan Goyal was unknown to the defendants.
4. It is further averred that Subhash Barjatya paid a sum of Rs. 2.25 crores through pay orders as advance for the jewellery taken by him. As and
when Subhash Barjatya used to advance the security amount from third party having sold certain jewellery, the defendant No.2 used to pay back the
equivalent amount through Subhash Barjatya to the plaintiff after making necessary adjustment. A sum of Rs. 1,74,40,000/- had already been paid to
Subhash Barjatya by defendant No.2 towards the amount of Rs. 2.25 crores paid by him. Subhash Barjatya, however, did not return the jewellery
taken by him. It prompted the defendant No.2 to institute suit No.2396/1997 against Subhash Barjatya, Mukund Sharan Goyal and the plaintiff.
5. It is further averred that two cheques for a sum of Rs. 5 lacs each in the name of M/s.Goyal Fashion (P) Ltd. and M/s.Goyal Modes, Jaipur were
obtained under misrepresentation by Mukund Sharan Goyal.
6. In the replication, the plaintiff denied the averments in the written statement.
7. On the basis of the pleadings of the parties and the documents on record following issues were framed by an order dated 21.09.2004 :
“1. Whether the amount of rupees one crore paid by the plaintiff to the defendant no.1 on 4.6.1992 was an interest bearing deposit or
was by way of security deposit as contended by the defendants? OPP
2. Whether the plaintiff is entitled to interest on the above amount of rupees one crore from the defendants and if so at what rate? OPP
3. Whether the present suit is bad for non-joinder of necessary parties? OPD
4. Whether the plaintiff is entitled to recover the suit amount of Rs.2,12,33,972/- from the defendants? OPP
5. Whether the plaintiff is entitled to an interest? OPP
6. Relief.â€
8. By an order dated 06.11.2007, following additional issue was framed :
“Whether the suit of the plaintiff is barred by time? OPDâ€
9. To establish its case, the plaintiff examined PW-1 (Mukund Sharan Goyal) and other witnesses - PW-2 (Arun Jain), PW-3 (Naresh Taneja) and
PW-4 (Vivek Kishore Saxena). Defendant No.2 examined himself as DW-1 (Manoj Godha) and witnesses - DW-2 (Anil Kumar Sharma) & DW-3
(Tejender Singh Datta).
10. When the case was fixed for final disposal, none appeared on behalf of the defendants to address arguments. After hearing arguments addressed
by learned counsel for the plaintiff, the judgment was reserved. Subsequently, learned defence counsel appeared and placed on record written
submissions. Issue-wise findings are as under :
Issues No.1 & 4
11. On perusal of the pleadings of the parties and the documents on record, it stands established that Rs. 1 crore were telegraphically transferred by
the plaintiff in the bank account of the defendant No.1 on 04.06.1992. In the written statement, the defendants have categorically admitted the receipt
of payment of Rs. 1.5 crore by cheque from the plaintiff. Their only plea is that this payment of Rs. 1.5 crore was received as a security and finance
for the jewellery intended to be taken by Subhash Barjatya from defendant No.2. This fact has been denied by the plaintiff. No worthwhile evidence
has come on record to substantiate the defendants’ plea that Rs. 1.5 crore were received as security and finance for the jewellery intended to be
taken by Subhash Barjatya. No such document has been placed on record by the defendants to show if any jewellery was taken for any specific value
by Subhash Barjatya. Subhash Barjatya is not a party in the present proceedings. It is relevant to note that the defendants had instituted civil
proceedings bearing No.2396/1997 i.e. suit for injunction against Subhash Barjatya, proprietor, Precious Arts & Jewels, Hotel Maurya, New Delhi;
Mukund Goyal, Goyal Fashions Pvt. Ltd. through its Director Mukund Goyal and M/s.Goyal Modes through its proprietor, Ashish Goyal on
11.11.1997. Copy of the plaint in the said suit No.2396/1997 (New No.312/2003) is on record. The said suit was contested by Subhash Barjatya and
defendants No.2 to 4 therein. The written statements filed by the said defendants are on record. The said suit was dismissed by a judgment and
decree dated 04.04.2005. It was challenged in RFA 674/2005. This Court by an order dated 22.09.2008 ordered to delete defendants No.2 to 4 therein
from the array of parties as there was no privity of contract between the plaintiff and defendants No.2 to 4 therein. The suit dismissed vide order
dated 04.04.2005 was restored and the Trial Court was requested to grant an opportunity to the plaintiff therein to file adequate Court fee and to
amend para 27 of the plaint pertaining to valuation of the suit for the purpose of court fee and jurisdiction. Undisputedly, the plaintiff therein did not
take any steps in terms of the said order dated 22.09.2008. He did not opt to amend the suit or to file Court fee. No plausible explanation has been
offered by the defendants as to why the contentions raised in the said suit were not taken to logical conclusions.
12. The plaintiff has also proved on record that cheque bearing No. 776501 dated 27.10.1994 in the sum of Rs. 1 crore (Ex.P1) was issued in favour
of the M/s.Goyal Fashions Pvt. Ltd. Signatures on Ex.P1 have been admitted by the defendants, its contents, however, have been denied. It was not
disclosed by the defendants as to how and under what circumstances, cheque (Ex.P1) was issued to the plaintiff. This cheque on presentation was
dishonoured and the bank memo is mark ‘B’ as per which the account stood already ‘closed’. The plaintiff has also filed on record letter
dated 01.11.1994 (Ex.P2) received from the defendants informing that the cheque book bearing cheques No.826634, 826635, 826636 and 776501 was
misplaced. Request was made to the plaintiff to divulge as to from where the cheque (Ex.P1) was procured to enable them to find out the
whereabouts of the other cheques. No evidence has, however, emerged on record if any chequebook was ever misplaced by the defendants; no
report to the bank or to the police was ever made in this regard. Apparently, the defendants though initially intended to return the amount of Rs. 1
crore vide cheque Ex.P1 changed their mind and on presentation the cheque was dishonoured.
13. The plaintiff has further proved on record letter (Ex.P5) received from defendant No.1 on its letterhead. This is a covering letter enclosing cheque
No.346948 in favour of the M/s.Goyal Fashions Pvt. Ltd. for a sum of Rs. 5 lacs as part payment of the amount given by the plaintiff. There is
specific acknowledgement that after this payment, the balance amount payable stood Rs. 95 lacs. Assurance was given to arrange the repayment of
the balance at the earliest. Signatures on Ex.P5 at appoint ‘B’ have not been denied though its contents have been challenged. Again, no
credible evidence has emerged on record to infer as to how this letter came into existence falsely. It is a typed letter and bears signatures of
defendant No.2 on behalf of the defendant No.1. Again, this cheque (Ex.P6) on presentation was dishonoured with the remark “payment stopped
by the drawerâ€. Signatures on the cheque Ex.P6 is not denied and feeble attempt was made by the defendant in evidence to show that this cheque
was obtained by false misrepresentation to be shown to Subhash Barjatya. This explanation simply does not appeal to mind and cannot be believed.
14. PW-1 (Mukund Sharan Goyal) in his evidence by way of affidavit (Ex.PW-1/A) fully proved the contents of the plaint; he also proved various
documents (Ex.P1 to Ex.P7). He was cross-examined at length, however, material facts deposed by him remained unchallenged and uncontroverted.
No suggestion was put to the witness if Rs. 1.5 crore were paid by him at the behest of Subhash Barjatya as security and finance for the jewellery
intended to be taken by him (Subhash Barjatya) from defendant No.2. Conflicting and entirely inconsistent suggestion has been put to the witness
stating that his son along with Subhash Barjatya had taken the jewellery worth Rs. 1 crore from the defendants against the amount which was
transferred in the account of the defendant. No plea was taken by the defendants in the written statement if any jewellery had been purchased by
Mukund Sharan Goyal’s son, and if so, for what value and on which date. In the cross-examination, PW-1 categorically stated that he did not
know Subhash Barjatya. He denied if he came into contact with defendant No.2 through him. The witness denied if Ex.P5 was a forged and
fabricated document. He denied if Ex.P1 was stolen by the plaintiff or its employee from the office of the defendant and misused it by filling up of the
figure of Rs. 1 crore. The witness categorically denied that since the plaintiff had already taken the jewellery against the amount of Rs. 1 crore in
question, the amount was not reflected in the books of accounts of the plaintiff’s company. No evidence has come either oral or documentary to
show if at any time any jewellery was purchased for any consideration either by the plaintiff or his son from the defendant No.2 and the amount of
Rs. 1 crore or Rs. 1.5 crores (in two cases) was adjusted towards the same.
15. DW-1(Manoj Godha) in his affidavit (Ex.DW-1/A) did not claim if any jewellery was purchased by the plaintiff or his son and Rs. 1 crore was
adjusted towards it. In the affidavit again the plea of the defendants was that Rs. 1.5 crore were paid by the plaintiff at the instance of Subhash
Barjatya as a security for the jewellery intended to be taken by him (Subhash Barjatya). In the cross-examination, DW-1 (Manoj Godha) admitted that
till date he had not taken the steps to comply with the directions of this Court in RFA No. 674/2005. He further admitted that there was no dispute to
the fact that Rs. 1 crore was paid to M/s. Shanti Vijay Jewellers by plaintiff somewhere in 1992. He volunteered to add that it was on the instructions
of Subhash Barjatya. The defendants, however, did not bother to examine Subhash Barjatya as a witness to substantiate their plea. The defendants
further admitted that Mukund Goyal met them for the first time in 1992. DW-1 further admitted his signatures on Ex.P5 at point ‘B’. It was
further admitted that this letter was given by him to Mukund Goyal. ‘Stoppage of payment’ of the cheque Ex.P6 is not denied. In the cross-
examination, the witness further admitted his signatures on Ex.P1 though he claimed that this cheque was not issued to M/s.Goyal Fashions Pvt. Ltd.
He admitted that he was aware that the cheque (Ex.P1) on presentation was dishonoured.
16. From the above discussion, there is not an iota of doubt that Rs. 1 crore were given to the defendants by the plaintiff on 04.06.1992. The cheque
(Ex.P1) given by the defendants to return the amount, however, on presentation was dishonoured. Subsequent payment of Rs. 5 lacs by way of Ex.P6
also did not yield any result. Consequently, the entire payment of Rs. 1 crore has remained unpaid till date. The defence taken by the defendants that
the said payment was given as a security has remained unproved and cannot be believed. The plaintiff is thus entitled for the sum of Rs. 1 crore from
the defendants.
Issues No.2 & 5
17. Learned counsel for the plaintiff fairly admitted that there was no agreement in writing to pay any specific rate of interest over the payment of Rs.
1 crore given to the defendants on 04.06.1992. No evidence has come on record whatsoever if there was any agreement oral or in writing between
the parties to pay interest on Rs. 1 crore taken from the plaintiff. The documents on record proved by the plaintiff do not reflect if any time the
defendants had agreed to pay any interest to the plaintiff for the amount of Rs. 1 crore received. It is fairly admitted by the learned counsel for the
plaintiff that the plaintiff can be denied of interest calculated before the filing of the present suit. Accordingly, the plaintiff is not entitled for any
interest prior to the institution of the suit.
18. However, he shall be entitled to a reasonable rate of interest from the date of filing of the suit till its realisation. These issues are decided in favour
of the defendants and against the plaintiff.
Issue No.3
19. It has not been explained as to how the suit is bad for non-joinder of necessary party. In the plaint, the plaintiff did not aver if Subhash Barjatya
was privy to the contract. His presence was not required. The issue is decided in favour of the plaintiff and against the defendants.
Additional Issue
20. Rs. 1 crore were paid to the defendants on 04.06.1992. The plaintiff has proved on record issuance of cheque (Ex.P1) by the defendants in the
sum of Rs. 1 crore to clear the liability. This cheque in the name of the plaintiff is dated 27.10.1994 and on presentation, it was dishonoured. By
issuance of this cheque, the defendants clearly acknowledged the liability to pay Rs. 1 crore to the plaintiff. Crucial document is Ex.P5 where there is
specific acknowledgement on 12.01.1996 of the liability to pay Rs. 1 crore. A cheque for a sum of Rs. 5 lacs (Ex.P6) was issued in favour of
M/s.Goyal Fashions Pvt. Ltd. as part payment. Again, it was dishonoured on presentation. No payment subsequent to that was made. Since there was
clear admission / acknowledgment of the debt / liability, the present suit filed by the plaintiff is within limitation. The defendants have not produced on
record any cogent evidence to prove if the suit filed by the plaintiff is barred by limitation. The issue is decided in favour of the plaintiff and against the
defendants.
Relief
21. In the light of above discussion, the suit of the plaintiff is decreed in the sum of Rs. 1 crore with proportionate costs. The plaintiff shall be entitled
to interest @ 6% per annum on the decreetal amount from the date of filing of the suit till its realisation. Decree-sheet be prepared accordingly.
