TaxTMI 
TaxTMI 
2019 (10) TMI 883
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....pt of goods. Plaintiff in good faith agreed to Defendants' request and commenced supplies. Against each supply, it raised invoices in the name of Defendant No.1, setting out description of the goods, rate and the sale price. The goods were supplied in accordance with the prerequisite documents for vending liquor viz Form L-32 issued to Defendant No. 1, and transport permit L-34 issued by the Excise Department. However, contrary to the assurances extended by Defendant No.1, except for making some part-payments, it failed and neglected to make complete payment of the invoices. As a result, over a period of time, huge amounts became outstanding and due towards the Plaintiff. Requests for liquidation were ignored. On Plaintiff's persistence, Defendant No.1 issued a balance confirmation letter dated 19th April, 2010 and acknowledged principal outstanding amount of Rs. 2,04,71,000/- (Rupees two crore four lakhs seventy one thousand only). Plaintiff asserts that it regularly maintains books of accounts of its dealings with Defendant No.1 and the same is categorized as running account. In terms thereof, a principal sum of Rs. 2,11,92,940 (Rupees Two Crores Eleven Lacs Ninety Two Thousand N....
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.... the balance confirmation letter dated 19th April 2010. Defendants have no outstanding liability, as claimed in the suit. 5. On the basis of the pleadings of the parties, vide order dated 18th July 2012, the following issues were framed: i. Whether Mr. Satish Chandra Pandey is duly authorised to sign, file and institute the present suit on behalf of the plaintiff company? OPP ii. Whether the Plaintiff is entitled to recover the amount of Rs. 2,50,96,591.44 from the Defendants? OPP iii. Whether the Plaintiff is entitled to the award of pendente lite and future interest @24% per annum and if not at the same rate, then at what rate and for what period? OPP iv. Whether the Plaintiff did not supply the quantity of beverages in accordance with the invoices in question? OPD v. Relief. Evidence in the Case- 6. Plaintiff has examined 2 witnesses namely Mr. Satish Chandra Pandey (PW-1), Assistant Company Secretary of the Plaintiff company and Shri Ram Vohra (PW-2). Defendants examined Shri Rajeev Garg, Defendant No. 4, (DW-1) to depose for them. Issue 1: Whether Mr. Satish Chandra Pandey is duly authorised to sign, file and institute t....
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....r and on behalf of Plaintiff and the same is tendered in evidence. The signatures of the deponent in the plaint are at place marked A and B." 9. There is no effective cross-examination by the Defendants on this issue and they have sought to advance an argument that since the Minute Book produced by Mr. Satish Chandra Pandey (PW-1) did not contain the seal of the company and was not signed by the other members of the Board, the filing of the suit is without proper authorization. The relevant portion of the cross examination of Mr. Satish Chandra Pandey to this effect is reproduced hereunder: "I am working as an Assistant Company Secretary with the plaintiff. I am looking after legal compliances as well as legal matters of the plaintiff.... ... I have been authorized by means of resolution dated 27.07.2010. (Vol.). I have brought the original minutes book today and a copy has already been on record as Ex PW-1/1. It is correct that the same do not bear the seal of the company. (Vol.). The seal was not required to be affixed and the documents It is correct that the same are signed by the Chair Person. (Vol.). As the signatures of others members of board are not req....
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.... go to the root of the matter, should not be permitted to defeat a just cause. There is sufficient power in the Courts, under Code of Civil Procedure, to ensure that injustice is not done to any party who has a just cause. We may herein quote from the said judgment: 9... Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. 10.. .A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after takin....
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....document has not been proved as per Section 65-B of the Evidence Act, 1872. The invoices (Ex PW1/37 - Ex 1/71) are also not proved as per the law, since Plaintiff did not call any witness from the accounts department to prove the same. Plaintiff has failed to produce the monthly sales statement, the statutory document that evidences the actual supply and have therefore failed to prove that the quantity of liquor mentioned in the invoice was actually supplied. The balance confirmation letter dated 19th April 2010 is also denied. 15. On the basis of the aforenoted contentions, it emerges that Defendant No. 1 admits having business transactions with the Plaintiff. In fact, during the course of arguments, learned counsels informed the Court that till date, the parties are transacting with each other and the Plaintiff is making supply of goods to Defendant No. 1. Be that as it may, since the onus of this crucial issue is on the Plaintiff, let us examine and scrutinize the evidence led by the parties to see if the Plaintiff has successfully proved the same. In order to establish the liability, Plaintiff has sought to rely upon a) Invoices along with Form L-32 and L-34. b) Balance conf....
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....ssued to the plaintiff for sale of the same by the concerned authorities (Excise Department)." PW-1 in his cross examination has maintained his stand to this effect. The relevant portion of the statement is reproduced hereunder: "L-32 is an excise format /permit, granted to L1 License holders for the purpose of placing orders for purchasing of liquor/wine. It is in respect of Indian made foreign liquor. It is correct that the form L-32 is a permit for distributors, allowing them to purchase a particular quantity of liquor and it is not an actual purchase order. (Vol.). No purchase order can be placed in the absence of L-32. Q. Please see the records and tell whether any purchase orders are placed on record? A. Yes. (Vol.). As L-32 is the document which contains the requisite quantity of liquor to be supplied by the plaintiff to the defendants. XXX I can tell from the record as to which invoice has been issued in respect of any particular purchase order/L-32/L-34. L-34 is issued by the Department in the name of the manufacturer. It is correct that L-34 is issue for the purpose of permission to the manufacturer to sell the liquor (Vol.)....
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....in L-32, the only document maintained in this regard is L-34. All the licensees are required to submit their monthly sales statement to the department. Plaintiff also submits monthly sales statement to the department. I have not brought the record pertaining to monthly sales statement. (Volunteered. Since the same was not summoned). The quantity of liquor mentioned in L-32 may vary sometimes from L-34. It is correct that vehicle number is compulsorily required to be noted on L-34. Question: Is it correct that L-34 and sales invoice are required to be drawn simultaneously? Answer: The department has nothing to do with sales invoice. It is correct that sales invoice is never submitted to the department. I cannot say if the sale invoice should also bear the vehicle number. (Volunteered, since the department has nothing to do with sales invoice). The record of transportation of the liquor to the godown of licensee is maintained by the licensee under the supervision of department. Plaintiff alsomaintains this record. (Volunteered, it is compulsory). The record of bilty of the transport is not maintained by the Excise Department. The liquor from the godown of the plaint....
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....hould have instead produced the Monthly sales statement. 21. They rely on the cross examination of the Excise Officer (PW-4) who has stated that the Plaintiff is required to submit monthly sales statement to the Excise Department. Defendants argue that the said document alone can conclusively prove delivery of the goods and since the same has not been brought on record, Plaintiff has not proved supply of goods. This contention of the Defendant is misconceived. Plaintiff has produced sufficient oral and documentary evidence on record whereby it can be inferred that the goods have indeed been delivered. The Defendants have admitted Form(s) L-32 [Ex. P-1 to Ex. P-35]. The admission of the said documents exhibits the intention of the Defendant to purchase from the Plaintiff, the quantity of liquor specified therein. This intention is translated into actual sale purchase by virtue Form(s) L-34. 22. It is also a vital fact that all the three documents i.e. L-32, L-34 and the invoices have correlation with each other. Each L-34 contains the particulars of the goods, the relevant L-32 and the name of the beneficiary. The invoice contains all the above particulars, the price, CST and ....
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....er not confirm if the transporters bilty for the liquor supplied by the Plaintiff were in their possession. The ostensible reason for his inability to do so was the Income Tax scrutiny, which is not convincing and requires the Court to draw inference against the Defendants that vital evidence has been withheld from Court. The relevant extract of the statement is reproduced hereunder: "It is correct that Transporter cannot move liquor without L-34. (Volunteered. However, it is not mandatory that the material has actually been supplied as L-34 is mere permission obtained to transport the liquor). It is correct that the Transporter while delivering the liquor gives the copy of L-34 to us. It is correct that we received the copy of L-34 for each and every delivery made by the Transporter of the liquor supplied by the plaintiff. I cannot say if all the transporters bilty are in our possession of the liquor supplied from the plaintiff. (Volunteered- Because of income tax scrutiny). I do not remember if we made all the entries in our books of account of all the bilties received from the Transporters. I do not remember if the entries of the bilties thereafter are entered to the co....
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.... "The accounts were maintained for the purchases by us as per bills and for the payments received as per the bank statement and the rebates/discounts on the basis of our dealing with the customers and all the entries of the materials actually received by us. I have to check my records to ascertain if we are in possession of all the bills of the material purchased and supplied by us as some must have been submitted with Income Tax Department at the time of scrutiny. We were not given any receipt by the income tax office of the document submitted with them during scrutiny. The Income Tax Department gave a notice to us for scrutiny. That notice is available with us. The documents submitted by us to Income Tax during scrutiny were checked and verified by us before submitting. I do not know if any list was prepared by us of the documents submitted with Income Tax Authorities. We were receiving invoices from the Plaintiff. We made respective entries as per invoices as and when received in our account books. Most of the books of accounts of us are still with income tax authorities as the scrutiny is still pending. Scrutiny started most probably in the financial year 2011-12. The ....
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....tted, stood settled and nothing was outstanding. Defendants have failed to discharge the onus and in the absence thereof, the burden of proof, never shifted back and thus on the basis of high degree of probability established by the Plaintiff it can be said that Plaintiff has discharged the onus. On the basis of the documents and the evidence led, it emerges that the defense of the Defendants was only with the intent to avoid liability, without any substance and that Plaintiff's case is proved through preponderance of probability. 28. Thus, considering the overall circumstances in the case, I am unable to accept the plea of the Defendants that the goods in question had not been supplied by the Plaintiff. B. Balance confirmation letter. 29. Defendants' liability is also proved by way of written acknowledgement of debt of Rs. 2,04,71,000/- vide letter dated 19th April 2010 [Balance Confirmation Letter- Ex. Pw 1/72]. It is submitted by the Plaintiff that the said letter is on the letter head of Defendant No. 1 firm and is signed by Mr. Mahesh Kumar. Defendants have taken a completely contradictory plea and have contended that the balance confirmation letter is a forged docume....
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.... year). We did not ask Mr. Mahesh Kumar of his authority when he signed the confirmation letter Ex. PWl/72. (Volunteered. We were dealing with him for the entire year and as such there was no requirement for asking for the authority letter). It is wrong to suggest that Mr. Mahesh Kumar was never authorized to sign any confirmation letter and he has colluded with us for signing this letter Ex. PWl/72. Our invoices are computer generated copies. It is wrong to suggest that Ex. PWl/72 is not on the letter head of defendant no.l and is only a computer generated copy. It is wrong to suggest that the presence of Excise Inspector is must at the time vehicle leave our Go-down/depot. It is wrong to suggest that all the documents filed by the plaintiff are forged and fabricated. It is wrong to suggest that plaintiff has received the amount of all the supplies made to the defendants. One Excise Inspector is deputed for every Go-down but in case of some urgency with Excise Inspector, he may ask his colleague to attend his particular Go-down. The said deputation is neither official nor in writing. It is correct that L-34 on record does not bear the stamp of the Excise Inspector. It is wrong to ....
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....] that records sale transactions with the Defendants. This document has been refuted on the ground that the same is not maintained in the regular course of business and is just an extract of the Statement of Account. On this aspect, the Defendants have sought to place reliance on the statement of the Plaintiff to the effect that it maintains the Statement of Account in SAP Software and Ex. PW 1/73 is printout from the software in excel format. Defendants have also contended that the document has not been proved as per the mandate of Section 65-B of Evidence Act. 35. Plaintiff has sought to prove the aforementioned Statement of Account [Ex. PW 1/73] by a certificate under Section 65-B, marked as Ex. PW1/126. The aforesaid books of account are maintained in electronic form and a copy thereof has been proved by way of a certificate under Section 65B of the Evidence Act. The extract of statement of Mr. Satish Chandra Pandey from evidence by way of affidavit is reproduced hereunder: "I say that the Plaintiff maintains, in its ordinary and regular course of business, a running account of the Defendant No. 1. As per the accounts of the Plaintiff, a principal sum of Rs. 2,11,92....
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....ts have also not taken any objection with respect to the proof of the aforesaid document. There is no effective cross examination of the witness who proved the statement of account with respect to the entries reflected therein. Defendants were not able to discredit the witness. The relevant extract of the cross examination is reproduced hereunder: "I do not recollect the exact figure of which the material was supplied to the defendant and the payment made by the defendant. (Vol. it is since 2009 and the statement of account Ex.PWl/73 is already on record). It is correct that as per the invoice filed by the plaintiff the last transaction with the defendant was vide invoice dated 27.2.2010 Ex.PW-1/71. (Vol. pertaining to this suit amount)." 39. Defendants have not been able to produce any testimony to contradict the stand taken by PW-1, either by way of evidence or examination/cross examination of witnesses. On the contrary, the evidence in the form of invoices which were in their possession have been kept back by the Defendants and accordingly adverse inference ought to be drawn against the Defendants on this aspect. Thus, having regard to the fact that Defendants have n....