CHIRANJILAL SUSHIL KUMAR Vs. RAMCHANDRA KANHAIYALAL

JUDGEMENT

(1.) This is a suit for recovery of Rs. 3,79,608/- together with interest and other reliefs.

(2.) Shortly put, the plaintiff's case is that between 30.07.85 and 14.08.85 the plaintiff firm lent a sum of Rs. 49,600/- to defendant No.1 by draft and cheque, repayable after three months with interest @ 20% p.a. thereon, and thus a sum of Rs. 80,802/- including interest upto 30.09.88 fell due which defendant No. 1 failed to pay despite demands. Defendant No.2 lent a sum of Rs. 40,000/- by a cheque dated 24.12.85 drawn on New Bank of India, Clive Row Branch, to defendant No. 1 on 30,12.85, repayable after two months with interest @ 20% p.a. thereon, and thus a sum of Rs.61,998/- including interest upto September, 1988, fell due which defendant No. 1 failed to pay despite demands. Defendant No. 3 advanced a sum of Rs.50,000/- by a cheque dated 24.12.85 drawn on Allahabad Bank, repayable after two months and a further sum of Rs. 1,04,000/- by a cheque dated 25.01.86 drawn on the same Bank, repayable after one month, to defendant No.1 with interest @ 20% p. a. thereon and thus a sum of Rs. 2,36,808/- including interest upto September, 1988 fell due which defendant No.1 failed to pay despite demands. On 01.09.88 defendant Nos. 2 and 3 assigned their rights over the said sum of Rs.40,000/- and Rs.1,54,000/- respectively including right to realize interest to the plaintiff which has duly given notice of such assignments to defendant No.1. The plaintiff has thus become entitled to recover the said sum of Rs.3,79,608/- with further interest @ 20% as agreed upon, from defendant No.1 who has failed to pay the sum despite demands. Hence the suit.

(3.) The suit is contested by defendant No.1 by filing a written statement inter alia denying the material allegations made in the plaint and contending that it was a supplier of Sisil Yarn and Sisil Fibre Cord to Shalimar Rope Works, hereinafter referred to as Shalimar, of which Chiranjilal Jhunjhunwala and his son Sushil Kumar Jhunjhunwala were Director and Constituted Attorney respectively. The said Sushil Kumar who is the father of defendant No. 2 and a Director of defendant No. 3, is a partner of plaintiff firm. The plaintiff as a Material Handling Agent of Shalimar used to purchase and obtain delivery of various raw materials on behalf of Shalimar and on several occasions made payments to diverse suppliers including defendant No.1. Due to labour trouble, there was a lock out in the factory of Shalimar in October, 1985. In December, 1985 Sushil Kumar as Constituted Attorney of Shalimar and partner of plaintiff approached defendant No.1 for supply of various quantities of Sisil Yarn and Sisil Fibre Cord representing that such purchase was in the Interest of Shalimar as the prices of goods had fallen and that steps were being taken to reopen the mill of Shalimar shortly. It was further informed that as Shalimar was lying closed, it would be difficult to arrange for entire payment from Shalimar, and so he would arrange for certain advance payment or part payment from his relatives and associates which would be treated as loan for income tax purpose and immediately after reopening of the mill the entire transaction would be regularized by Shalimar on making payment of price of the goods sold, to defendant No. 1 which will refund the loan to the relatives and associates of Sushil Kumar only after payment by Shalimar. In terms of the said agreement, Sushil Kumar gave a cheque for Rs.50,000/- drawn by defendant No. 3 in favour of defendant No.1 and another cheque for Rs.40,000/- drawn by defendant No. 2 in favour of defendant No. 1 as advance towards supply of goods by defendant No.1 to Shalimar. On the basis of said representation made by Sushil Kumar and on good faith defendant No. 1 executed certain confirmations for income tax purpose. On 13.01.86 Sushil Kumar handed over a bankers cheque or Pay Order for Rs.75,000/- to defendant No. 1 representing that it was on behalf of Shalimar by way of advance payment against supply of the said goods, thus the total receipt of defendant No. 1 was Rs. 1,65,OOO/-. On the request of Sushil Kumar, between 15.01.86 and 18.01.86 defendant No. 1 delivered 240 bales of Sisil Fibre Cord and 100 bundles of Sisil Fibre Yarn in one of the godowns of the plaintiff within the factory premises of Imperial Jute Press, Bandhaghat, Salkia, as Shalimar was lying closed, and 100 bundles of Sisil Fibre Yarn in the factory of Shalimar at Poochakal, Kerala, the total price of which was Rs.2,69,587.22. The manufacturers of the said Cord and Yarn were M/s. Balaji Ropes Manufacturing Co. and M/s. Utkal Rope Works which had endorsed their bills in favour of defendant No. 1. As against the said price, defendant No. 1 received Rs.1,65,000/- as aforesaid and the balance sum of Rs.1,04,587.22 is still due. On the request of defendant No.1 for payment of the said due sum, Sushil Kumar agreed to make payment of Rs.1,04,000/- in full and final settlement of the price of goods sold and sent a letter dated 25.01.86 from defendant No. 3 to defendant. No. 1 together with a cheque for Rs.1,04,000/- and informed that the said letter was for income tax purpose and confirmed that defendant No. 3 would not insist for repayment of the loan so long defendant No.1 did not receive payment from Shalimar. The Jute Mill of Shalimar which was due to reopen in January/February, 1986 did not reopen due to some disputes between Bangurs and Jhunjhunwalas. In violation of the terms defendant Nos.2 and 3 purported to make demands from defendant No. 1 which were duly replied by the latter by its letters dated 29.01.86, 16.04.86 and 27.07.87. After receiving the said notices, defendant No.1 took up the matter with Shalimar which informed that since the goods were delivered to the plaintiff as Handling Agent of Shalimar which did not make over the goods to it and payment was arranged by the Handling Agent, defendant No.1 should get the matter regularized with the Handling Agent. In such circumstances, defendant No.1 disputes the locus standi of defendant Nos. 2 and 3 to recover any amount from defendant No.1.The plaintiff has filed the suit for saving limitation and for income tax purposes only which is wholly vexatious and speculative. Hence, the suit merits dismissal.