TaxTMI 
TaxTMI 
2012 (11) TMI 1318
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....oration and thereafter let out said equipment to it i.e. Mohta Industries Ltd. On May 29, 1984 the respondent company purchased the equipment from M/s. Punjab Machinery Manufacturing Corporation for a sum of Rs. 13,20,000/-. After several discussions, on May 31, 1984 the parties entered into a lease agreement whereby the respondent company agreed to let out the equipment to Mohta Industries Ltd. The term of the lease was 96 months. The rental payable was Rs. 33,000/- per month for the period from May 31, 1984 to May 30, 1989 and Rs. 660/- per month for the period from May 31, 1989 to May 30, 1992. Due to substantial cost involved in the transportation of the equipment, M/s. Punjab Machinery Manufacturing Corporation directly delivered the equipment at the premises of M/s. Mohta Industries Ltd. On October 18, 1986 Mohta Industries Ltd. sent a certificate to the respondent company, which certificate recorded that M/s. Punjab Machinery Manufacturing Corporation had installed the equipment in the premises of Mohta Industries Ltd. on May 29, 1984. Mohta Industries Ltd. regularly paid the rental till September 30, 1986 but thereafter stopped paying rent despite several demands raised by ....
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.... 4. In its replication, the respondent company reiterated the averments made by it in its plaint. Additionally, it was contended that on May 31, 1984 a buy back agreement was entered into between Mohta Industries Ltd., the respondent company and K.P. Traders whereby K.P. Traders agreed to purchase the equipment from the respondent company after the expiry of the period of lease agreement dated May 31, 1984. 5. In view of pleadings of the parties, following issues were settled:- 1. Whether the suit is barred by limitation? 2. Whether this Court has territorial jurisdiction to try and decide the suit? 3. Whether the plaint discloses any cause of action? 4. Whether the plaintiff entered into a lease agreement dated 30.5.1984 with Mohta Industries Ltd., in pursuance of a request raised by the plaintiff under letter dated 23.5.1984 for leasing out one Hydraulic Bricketting Press? 5. Whether the Hydraulic Bricketting Press was delivered and supplied to the defendant Company by the plaintiff? 6. Whether the plaintiff is entitled to a decree for Rs. 23,04,199/- from the defendant and also for recovery of possession of Hydraulic Brick....
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....10.1986 Ex. PW-1/9 written by Mohta Industries Ltd. to the respondent company recording that it has tendered the payment of Rs. 33,000/- towards lease rental of the equipment for the month of September 1986. 8. Before proceeding further, we note the following clauses of the lease agreement dated May 31, 1984 entered between the respondent company and Mohta Industries Ltd.:- 2. TERM OF LEASE: 2.1 The Lessor hereby gives on lease and Lessee hereby takes on lease, the Equipment, for 96 months from the commencement date, subject to the terms and conditions, covenant and stipulations contained therein and in the Schedule. It is hereby expressly agreed that the Lessee shall not have the right of sooner determination of the lease. 2.2 The Lessee shall pay to the Lessor/Lessor's designated bankers by way of demand draft payable at par at Delhi from the commencement date, lease rentals specified in the Schedule, regularly and punctually, without any deduction or abatement, irrespective whether the equipment is in use by the lessee or working for one or more shifts or not or is under repairs or maintenance or replacement for any period whatsoever. Arrears of....
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....ote the following portion of the cross-examination of Mr. M.L. Sharma, DW-1:- I was not responsible for preparation of list of inventory for raw materials, works in process, finished goods and plant and Machinery. It is correct that we have not attached the detailed list of plant and machinery alongwith my affidavit by way of affidavit Ex. D-1...It is correct that as per the Companies Act, 1956 every Co. is required to maintain register of Plant and Machinery. I have not filed alongwith my affidavit Ex. D-1 the extracts of Register of Assets/Plant and machinery in support of my contention that the possession of bricketting plant was not given to us....It is also correct that I have not seen the Register of assets/Plant and machinery of M/s MIL for the year 1984, 85 and 86....It is also correct that I have not seen the Books of Account, records, papers and documents of M/s. MIL for the period 1984, 85 and 86. (Emphasis Supplied) 11. We need not note the documentary evidence proved by the appellant company for nothing much turns thereon. 12. On August 27, 2008 the aforesaid suit came up for final hearing before a learned Single Judge of this Court, on which date non....
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....erritorial jurisdiction to try the present suit; (iii) the 11 documents proved by the respondent company (noted in para 8 above) establish that the respondent company had leased out the equipment to M/s. Mohta Industries pursuant to a request received by M/s. Mohta Industries Ltd. in said regards on May 23, 1984 and that the equipment was delivered and installed at the premises of M/s. Mohta Industries Ltd; and (iv) in view of the admissions made by the witness of the appellant company, M.L. Sharma DW-1, that the appellant company has not attached the detailed list of its plant and machinery as also the extract of Register of its plant and machinery together with his affidavit and that he had not seen the register of assets/plants and machinery of Mohta Industries Ltd. for the years 1984-1986, the stand of the appellant company that the equipment was never delivered in the premises of Mohta Industries Ltd is unacceptable. 16. Thereafter the appellant company filed an application under Order IX Rule 13 CPC seeking setting aside of the judgment and decree dated August 27, 2008. Vide order dated August 30, 2010 a learned Single Judge of this Court dismissed the aforesaid applicatio....
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.... dispute has to be decided on the preponderance of probabilities and the evidence led by the parties has to be considered and probablized with reference to how a prudent person ought, under the circumstances of the particular case, to act on the supposition that a fact should be believed to exist or not to exist. As per Section 3 of the Evidence Act, 1872 a fact is disproved, when after considering the matters before it, the court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. 20. Keeping afore-noted legal position in mind, we proceed to determine whether the finding returned by the learned Single Judge that the respondent company has been successful in establishing that the equipment was delivered and installed at the premises of M/s. Mohta Industries Ltd. is correct or not. 21. On an analysis of the documents proved by the respondent company (brief description whereof have been given by us in para 8 above) in the light of the evidence of the witnesses of the respondent company, any prudent man would reach to the co....
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....nths immediately preceding alleged date of termination. Respondents requested the appellant to produce certain documents in its custody namely Attendance Register, Payment of Bonus Register and various other documents relating to the engagement of the respondents as workmen under it. Appellant failed to produce afore-noted documents. The Tribunal did not lay any importance to the non-production of the documents on the ground that the appellant did not keep such record relating to the temporary hands and relied on the documents that had been produced to reach a finding that the workmen had not put in 240 days service in a calendar year preceding the termination of their services. Respondents assailed the awards by way of filing writ petitions in the High Court. Drawing an adverse inference against the appellants for non-production of the documents in its possession and holding that the appellant had failed to discharge the onus and disprove the respondent's claim, the High Court held that under the circumstances the Tribunal should have drawn an adverse presumption under Section 114 Illustration (g) of the Indian Evidence Act, 1872 against the appellant. Taking further note of t....
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....s no difference in view of Ex. PW-1/8 issued by Mohta Industries on May 29, 1984 acknowledging the delivery and installation of the equipment at its factory premises. 29. We note and reject the argument relating to collusion between the respondent company and erstwhile management of Mohta Industries Ltd. advanced by the appellant company for the reason no such plea was taken by the appellant company in the written statement filed by it and no evidence led: no issue was settled and the learned Single Judge has not therefore penned on said subject. 30. Whether the suit in question was filed within the prescribed limitation period? 31. To find an answer to the aforesaid question, we look to the various provisions of the Limitation Act, 1963. 32. Section 22 of the Limitation Act, 1963 reads as under:- 22. Continuing breaches and torts-In the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort, as the case may be, continues. 33. Section 22 deals with the question as to when period of limitation commences for a suit or other proceedin....
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....0th of each month causes an injury to the respondent company which is complete on the date fixed for nonpayment of lease rental i.e. 30th of each month and is thus not a continuing wrong. As a necessary corollary to the aforesaid, it has to be held that Section 22 of the Limitation Act, 1963 has no application in the present case. 39. Looking further at the provisions of the Limitation Act, 1963 we find Articles 36 and 37 contained in the Schedule to the Limitation Act, which reads as under:- 40. As is evident from the aforesaid, Articles 36 and 37 apply to the promissory notes and bonds. 41. Section 4 of the Negotiable Instruments Act, 1881 defines 'promissory note' as under:- A "promissory note" is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. 42. Section 2(5) of the Indian Stamps Act, 1899 defines 'bond' as under:- (5) "bond" includes (a) any instrument whereby a person obliges himself to pay any money to another, on condition that ....
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....erein dealing with the suit filed in the present case. (We clarify here that Article 52 would not apply in the instant case for said Article applies to suits to recover arrears of rent in respect of only immovable property). Such being the position, the residual Article i.e. Article 113 will apply in the present case. Article 113 reads as under:- 49. When does the 'right to sue' accrue in the instant case? In other words, when does the cause of action for filing the instant suit arise? 50. In the instant case, as per the lease agreement dated May 31, 1984 entered into between Mohta Industries Ltd. and the respondent company, Mohta Industries Ltd./appellant company was under an obligation to pay lease rental to the respondent company on 30th of each month during the period of lease agreement. Mohta Industries Ltd./appellant company did not pay lease rental to the respondent company after September, 1986. 51. In view of the guidance offered to us by Section 22 and Articles 36, 37 and 55 we have no hesitation in holding that the cause of action for filing suit for the non-payment of lease rental for a particular month arose on the due date of the lease rental for such....
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....apply in the case and the petitioner could make a claim for the amounts due over the period of agreement within 3 years of the expiry of the agreement. 53. From the aforesaid, it is clearly evident that the facts of Chrome's case (supra) are clearly distinguishable from the facts of the present case and thus the learned Single Judge erred in relying upon the decision in Pulver's case (supra) which is based upon the reasoning contained in Chrome's case (supra). 54. In the instant case, the term of the lease agreement dated May 31, 1984 was 96 months i.e. 8 years thus the agreement expired on May 30, 1992. Mohta Industries Ltd./appellant company did not pay lease rental to the respondent company after September, 1986. The lease rental payable was Rs. 33,000/- per month for the period from per month for the period from May 31, 1984 to 30.05.1989 and Rs. 660/- per month for the period from May 31, 1989 to May 30, 1992. The suit in question was filed on May 29, 1992. The suit in question pertaining to non-payment of lease rental for the period from October, 1986 to April, 1989 is barred by limitation inasmuch as the suit was filed after the expiry of 3 years from the d....