Case Note & Summary
These three first appeals under Section 96 of the Code of Civil Procedure, 1908 arise from a common judgment dated 11-10-1999 by the 4th Joint Civil Judge (Senior Division), Aurangabad. The dispute involves two companies: Kumar's Liquors and Beers Pvt. Ltd. (Kumar Liquors) and BDA Limited. Kumar Liquors filed Special Civil Suit No. 183/1997 (originally Original Suit No. 427/1994 in Secunderabad, later transferred) seeking refund of a security deposit of Rs. 1,00,00,000/- from BDA Limited. BDA Limited filed Special Civil Suit No. 375/1995 against Kumar Liquors, claiming recovery of Rs. 2,93,73,919.46 with 18% interest for liquor and wine supplied between February and April 1993. The trial court partly decreed BDA's suit, ordering Kumar Liquors to pay Rs. 1,03,29,717.40 with 12% interest from the suit date, and dismissed Kumar's suit, holding that the security deposit stood adjusted towards BDA's claim. In the appeals, Kumar Liquors contended that BDA's claim was not proved, as accounts were not produced and the person verifying the plaint was unauthorized; it argued that the legal notice and plaint did not mention adjustment of the security deposit, and that BDA suppressed payments. BDA Limited argued that its claim was made after adjusting the security deposit, that Kumar Liquors advanced inconsistent defenses, and that no proof of payments or debits was shown by Kumar. The appeals were heard by a Division Bench comprising B.P. Dharmadhikari and A.M. Badar, JJ., with arguments advanced by Senior Advocate P.V. Mandlik for Kumar Liquors and Advocate P.K. Joshi for BDA Limited. The judgment text provided does not contain the court's decision, ratio, or operative directions; it ends during the submissions of the respondent’s counsel. Therefore, the final outcome is not available from the supplied material.
Headnote
A) Civil Procedure - Appeals under Section 96 CPC - First Appeals against common judgment dated 11-10-1999 in Special Civil Suit No. 375/1995 and 183/1997 - The appeals challenge partial decree granting recovery of Rs.1,03,29,717.40 with 12% interest to BDA Limited and dismissal of Kumar Liquors' suit for refund of Rs.1 crore security deposit - Arguments center on adjustment of security deposit, failure to produce accounts, and burden of proof - (Paras 1-12)
B) Evidence - Burden of Proof and Adverse Inference - Contract Act, 1872, Section 213 - Kumar Liquors argued that BDA Limited failed to produce account books and that adverse inference should be drawn against it; trial court noted suppression of payment of Rs.1,88,59,832 - BDA contended that Kumar Liquors did not prove its debits or payments - (Paras 7-11)
C) Company Law - Due Authorization and Competency to Institute Suit - Companies Act, 1956 - Kumar Liquors challenged competency of Mr. Sudhirkumar Sinha to present plaint and verify suit on behalf of BDA Limited, asserting lack of board resolution and employment by BDA - BDA defended through power of attorney executed later - (Paras 10-11)
D) Contract - Adjustment of Security Deposit - Letter dated 28-11-1990 - Kumar Liquors claimed entitlement to refund of Rs.1 crore security deposit and disputed BDA's unilateral adjustment towards alleged dues - BDA argued that its claim in suit notice and plaint was after adjusting security deposit, while Kumar argued lack of prior notice of adjustment - (Paras 5, 12)
Issue of Consideration
First Appeal No. 282 of 2000
Law Points
- Section 96
- Code of Civil Procedure
- 1908
- Section 213
- Contract Act
- 1872
- Adjustment of security deposit
- Burden of proof
- Adverse inference for non-production of accounts
- Competency of person to institute suit
- Proof of accounts
Case Details
2015 LawText (BOM) (02) 13
First Appeal No. 282 of 2000, First Appeal No. 283 of 2000, First Appeal No. 421 of 2000
B.P. Dharmadhikari, A.M. Badar
P.V. Mandlik, Senior Advocate, with A.S. Gandhi for Kumar's Liquors and Beers Pvt. Ltd.; P.K. Joshi for BDA Limited
Kumar's Liquors and Beers Pvt. Ltd. (in FA 282/2000 and 283/2000); BDA Limited (in FA 421/2000)
BDA Limited (in FA 282/2000 and 283/2000); Kumar's Liquors & Beers Private Limited (in FA 421/2000)
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Nature of Litigation
Two cross-suits: one for recovery of price of liquor supplied (Special Civil Suit No. 375/1995 by BDA Limited) and the other for refund of security deposit (Special Civil Suit No. 183/1997 by Kumar Liquors). First appeals under Section 96 CPC challenge the common judgment and decree.
Remedy Sought
Kumar Liquors sought refund of Rs. 1 crore security deposit with interest; BDA Limited sought recovery of Rs. 2,93,73,919.46 with 18% interest for goods supplied. In appeals, both sides challenge the trial court's partial decree and dismissal.
Filing Reason
Kumar Liquors claimed that BDA Limited failed to refund the security deposit despite demand; BDA Limited claimed that Kumar Liquors failed to pay for liquor supplied between February and April 1993.
Previous Decisions
Trial court (4th Joint Civil Judge, Senior Division, Aurangabad) by judgment dated 11-10-1999 partly decreed Special Civil Suit No. 375/1995 in favour of BDA Limited for Rs.1,03,29,717.40 with 12% interest and dismissed Special Civil Suit No. 183/1997 filed by Kumar Liquors, holding that the security deposit was adjusted towards BDA's claim.
Issues
Whether the adjustment of the security deposit of Rs.1 crore against BDA Limited's claim was properly pleaded and proved?
Whether BDA Limited discharged its burden of proving the outstanding dues of Rs.2,93,73,919.46 without producing original account books?
Whether Kumar Liquors proved its payments and debits to BDA Limited’s account, including amounts collected by Cruikshank?
Whether the trial court correctly applied principles of adverse inference for non-production of accounts by BDA Limited?
Whether the suit filed by BDA Limited was duly authorized and verified by a competent person?
Submissions/Arguments
Senior Advocate Mr. Mandlik for Kumar Liquors argued: (a) BDA’s claim was limited to supplies made between specific dates in 1993, and its legal notice and plaint did not mention adjustment of the security deposit; (b) the relationship was governed by letter dated 28-11-1990, and Cruikshank, a BDA subsidiary, collected amounts from indentors but did not credit them; (c) Kumar Liquors had debited a total of Rs.3,37,02,235.50 to BDA’s account for amounts due from indentors, Cruikshank, and Vinedale Distilleries; (d) trial court suppressed the fact that BDA suppressed receipt of Rs.1,88,59,832; (e) BDA failed to produce account books and its witness was a mere clerk; (f) affidavit of Chartered Accountant Indapurkar was not proved and his cross-examination was not allowed; (g) certified copy of balance sheet from ROC was not supported by oral evidence; (h) Mr. Sudhirkumar Sinha, who verified the plaint and deposed, was not authorized and later obtained a power of attorney; (i) Excise Inspector from Kumar’s godown was not examined; (j) trial court’s reconciliation of accounts was illegal; and (k) suit of BDA should have been dismissed for want of proof.
Advocate Mr. Joshi for BDA Limited contended: (a) the amount claimed in the suit notice and plaint was already after adjusting the security deposit; (b) Kumar Liquors took inconsistent defenses, first denying liability and later alleging payments/debits; (c) Kumar Liquors failed to produce any accounts to prove such debits or payments
Judgment Excerpts
Special Civil Suit No. 183/1997 filed by Kumar Liquors is dismissed because of adjustment or appropriation of security deposit of Rs. 1,00,00,000/ towards money claim of BDA Limited. (Para 2)
We have heard Senior Adv. Mr. P.V. Mandlik with Adv. Mr. A.S. Gandhi for the Kumar Liquors and Adv. Mr. P.K. Joshi for BDA Limited, in these matters. (Para 4)
He submitted that Kumar Liquors had debited amount of Rs. 1,45,00,000/ to the account of BDA Limited as it was outstanding from indentors and Cruikshank Similarly, Cruikshank was liable to pay Rs. 1,12,60,780.50 to Kumar Liquors and one Company, by name, Vinedale Distilleries was also liable to pay amount of Rs. 80,01,455/ to Kumar Liquors. Thus, total amount of Rs. 3,37,02,235.50 was debited to the account of BDA Limited by Kumar Liquors. (Para 6)
Procedural History
Special Civil Suit No. 183/1997 was initially filed as Original Suit No. 427/1994 in the Secunderabad City Civil Court and was later transferred to Aurangabad for joint trial with Special Civil Suit No. 375/1995. The 4th Joint Civil Judge (Senior Division), Aurangabad, delivered a common judgment on 11-10-1999, partly decreeing Special Civil Suit No. 375/1995 and dismissing Special Civil Suit No. 183/1997. Aggrieved, Kumar Liquors filed First Appeals No. 282 and 283 of 2000, and BDA Limited filed First Appeal No. 421 of 2000. The appeals were heard together.
Acts & Sections
- Code of Civil Procedure, 1908: Section 96
- Contract Act, 1872: Section 213
- Companies Act, 1956:
