Case Note & Summary
The appellant, M/s Star Paper Mills Limited, filed a suit for recovery of Rs.96,41,765.31 against the respondents, M/s Beharilal Madanlal Jaipuria Ltd. and others, for unpaid price of paper supplied between November 1985 and January 1986. The appellant claimed that the respondents, as wholesale dealers, lifted goods worth Rs.72,27,079/- through 189 consignments, but defaulted in payment. The respondents filed a written statement alleging that the transactions were fictitious and fraudulent, and that the appellant had not rendered true accounts. They also claimed that a sum of Rs.45 lakhs was due from the appellant. The trial court framed an issue whether the bills were based on fictitious and fraudulent transactions. The appellant produced 976 documents including invoices, debit notes, delivery challans, ST-1 Forms, and statement of accounts, all bearing the signatures and stamps of the respondents. The respondents' witness admitted his signatures on invoices and ST-1 Forms but denied signatures on delivery challans and alleged duress. The learned Single Judge decreed the suit. On appeal, the Division Bench of the Delhi High Court set aside the decree, holding that the appellant failed to prove it was a registered dealer in Delhi and that the transactions were fictitious. The Supreme Court allowed the appeal, holding that the High Court erred in making out a new case not pleaded, and that the documentary evidence sufficiently proved the transactions. The Court restored the decree of the Single Judge with interest at 15% per annum from the date of suit till payment.
Headnote
A) Civil Procedure - Pleadings and Proof - New Case in Appeal - The High Court cannot make out a new case for the respondent which was not pleaded in the written statement or framed as an issue - The finding that the appellant failed to prove registration as a dealer in Delhi was not an issue and was not pleaded, hence the High Court erred in dismissing the suit on that ground (Paras 9-10). B) Evidence Act, 1872 - Sections 61, 62, 63 - Proof of Documents - Best Evidence Rule - When a large number of documents are sought to be proved, it is not necessary to call the person who issued each document if the documents bear the signatures and stamps of the opposite party and are admitted by the witness - The High Court erred in holding that the documents were not proved because the person who issued them was not summoned (Paras 5, 12-13). C) Sales Tax - Registration - Dealer - Delhi Sales Tax Act, 1975 - Section 14 - The appellant produced a registration certificate as a reseller dealer in Delhi, which was not disputed by the respondents - The High Court's finding that the appellant failed to prove registration is contrary to the record (Para 10). D) Contract Act, 1872 - Sections 15, 16, 17 - Fraud, Undue Influence, Coercion - The respondents alleged that documents were signed under duress and undue influence, but failed to lead any evidence to prove such allegations - The mere assertion of fraud or duress without proof does not vitiate the transactions (Paras 7, 13). E) Evidence Act, 1872 - Section 34 - Books of Account - The appellant produced extracts of books of account and the respondents did not produce their books of account - The High Court's reliance on Ishwar Dass Jain v. Sohan Lal was misplaced as the facts were different (Paras 11, 13).
Issue of Consideration
Whether the High Court was justified in dismissing the suit for recovery on the ground that the appellant failed to prove its registration as a dealer in Delhi and that the transactions were fictitious, when such issues were not raised in the pleadings and the documentary evidence proved the transactions.
Final Decision
The Supreme Court allowed the appeal, set aside the judgment of the Division Bench of the Delhi High Court, and restored the decree passed by the learned Single Judge for recovery of Rs.96,41,765.31 with simple interest at 15% per annum from the date of institution of the suit (5.10.1987) till the date of payment, on the principal amount of Rs.71,82,266/-.
Law Points
- Burden of proof
- Onus of proof
- Admissibility of documents
- Pleadings and proof
- Sales tax registration
- Fictitious transactions
- Fraud
- Undue influence
- Duress
- Best evidence rule
- Secondary evidence
