TaxTMI 
TaxTMI 
2026 (6) TMI 1146
X X X X Extracts X X X X
X X X X Extracts X X X X
....eal suit is directed as against the judgment and decree passed in O.S.No.481 of 2004 dated 29.11.2008 on the file of the learned Additional District and Sessions Judge, Fast Track Court-III, Coimbatore, thereby allowing the suit and directed the defendants to pay a sum of Rs. 7,25,468/- with interest at the rate of 12% per annum from the filing of the suit till the date of judgment and thereafter at the rate of 9% till realisation in favour of the plaintiff. 2. The respondent is the plaintiff and the appellants are the defendants 5 & 1 to 4 respectively in the suit. For the sake of convenience, the parties are referred to as per their ranking in the trial Court. 3. The case of the plaintiff is that it is a company that is involved in manufacturing knitted garments, dyeing, compacting and exporting the same to abroad. The foreign buyers had been entrusting their requirements of knitted garments with the plaintiff and they are having continuous export orders. Therefore, the plaintiff was looking for a suitable company having required infrastructure facilities for manufacturing knitted fabrics into garments as per the specification and requirement of the plaintiff for carrying o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dyeing and compacting on the aforesaid dates. Therefore, the defendants were in due towards knitting, dyeing and compacting charges to the tune of Rs. 8,64,826.68 as on 31.01.2000, as per the credit invoices and ledger account of the plaintiff. Thereafter, the defendants failed to deliver the entire knitted garments entrusted to them as per the order Nos.9102 and 9103 for exporting the same to foreign buyers within the stipulated time. Therefore, the plaintiff suffered loss. Hence, the defendants are liable to pay a sum of Rs. 8,17,452/- as damages. After deducting the amount payable by the plaintiff from the amount due from the defendants, the plaintiff filed suit for recovery of Rs. 17,58,426.68. 4. Per contra, the fourth defendant filed written statement on behalf of the defendants 1 to 4 stating that defendants 2 to 4 are the partners of the first defendant partnership firm and the fifth defendant is a proprietary concern. But they are not joint business associates and are not doing business jointly. They were not entrusted with any order and they are not liable to pay any amount. They had no knowledge about the liability of the fifth defendant and discharge of the liability....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h defendant never agreed to pay or adjust a sum of Rs. 8,64,826.68/- out of the making charges for the order Nos.9102 and 9103. The liability under the Catholic Syrian Bank for a sum of Rs. 17,25,295/- was not discharged by the plaintiff. There is no such arrangement between defendants 1 to 4 and the fifth defendant had never agreed to pay a sum of Rs. 6,78,093/- or any other amount to the plaintiff. 5.1. The plaintiff fabricated the valuable security and entered an imaginary sum, committed material alternations and presented into service for illegal and unlawful enrichment. The alleged Canara Bank cheque does not carry any liability at all and the plaintiff has utilised the same for illegal gains with ulterior motives. The fifth defendant was not entrusted with the orders bearing Nos.9102 and 9103 dated 12.11.1999. Therefore, there is no contract between the fifth defendant and the plaintiff and as such, there is no question of breach of contract on the part of the fifth defendant. The cheque for a sum of Rs. 17,25,295/- was not honoured and as such the plaintiff is facing prosecution for the offence punishable under Section 138 of NI Act in CC.No.171 of 2000 on the file of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a fabricated forged document. It is alleged that an agreement between the plaintiff and the fourth defendant representing the first defendant was executed on 14.10.1999. However, the stamp paper was purchased only on 15.10.1999. Therefore, the execution of agreement dated 14.10.1999 is impossible and the document marked in Ex.A.3 is liable to be rejected. Further, the signature of the fifth defendant was also forged in the said document. 8.2. Further, the fifth defendant was no way connected with the defendants 1 to 4 herein. He was neither the Managing Director nor a partner of the first defendant. It is also proved by the bank manager's evidence which was marked as Ex.A.139. He categorically admitted that the fifth defendant was not a partner of the first defendant firm. They never had done their business jointly. Further insofar as Ex.A.6, the letter which was marked as if it was issued by the fifth defendant is concerned, the fifth defendant is in no way connected with the document and his signature was forged and the letter pad of the fifth defendant was fabricated. 8.3. Similarly, Ex.A.8 & Ex.A.9 were also fabricated by the plaintiff for the purpose of the suit and it c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cords to show to when the plaintiff was called upon to supply the goods to the defendants 1 to 4. The orders dated 12.11.1999 was issued much prior to the issuance of cheque by the plaintiff. Further if at all, any money transaction was pending between the plaintiff and the fifth defendant, it would have been referred immediately after the dishonouring of the cheque. 8.5. In fact, the cheque was presented on 04.11.1999 and it was returned for the reason "fund insufficient". Once again, the plaintiff directed the fifth defendant to represent the same in other account. Thereafter, the cheque was returned dishonoured for the reasons "payment stopped". Initially the cheque was presented on 04.11.1999 and the transaction referred by the plaintiff with the fifth defendant was on 12.11.1999. Further the plaintiff had transactions with the defendants 1 to 4 during the period 23.12.1999 to 29.12.1999. If at all any transactions were pending between the plaintiff and the defendants, the plaintiff would have in the first place sought for return of the cheque and would not have stopped payment without assigning any reason. In fact, the plaintiff also failed to disclose why they issued stop ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vital to the suit but the same were not considered by the Trial Court. Hence, the suit itself is liable to be dismissed. 9. The learned counsel appearing for the defendants 1 to 4 submits that the defendants 1 to 4 never had joint business with the fifth defendant. The plaintiff failed to produce any piece of evidence to show that the defendants 1 to 4 and the fifth defendant had carried out their business jointly with the plaintiff. Without any iota of evidence, the Trial Court concluded that the yarn alleged to have been purchased by the plaintiff was supplied to the first defendant by the cotton mills directly as per the instruction of the fifth defendant. In fact, no one was examined from the cotton mills, who had allegedly supplied yarn to the first defendant. Further, the trial Court failed to consider the evidence of D.W.2 and the documents which were marked through D.W.2 ie., Ex.D.25 to Ex.D.35. There is absolutely no reference about those documents anywhere in the judgment. Further the Trial Court passed a decree as against the defendants 1 to 4 as if they failed to appear and they were set ex-parte. However, the fourth defendant had deposed as D.W.1 and marked documen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The appellant/complainant is the fifth defendant and the respondent/accused is the plaintiff in the suit in O.S.No.481 of 2004. 12. The respondent is the accused in the complaint lodged by the appellant alleging that the accused owed to pay towards purchase of knitted cloths to the tune of Rs. 27,57,631.32 and also towards selling of dyed cloths to the tune of Rs. 1,45,744.60 as on 10.09.1999. In course of partial settlement, the accused paid a sum of Rs. 10,00,000/- by way of cheque and the same was honoured. For the balance amount, the accused issued cheque dated 26.10.1999 to the tune of Rs. 17,25,293/-. It was presented for collection on 04.11.1999 and the same was returned dishonoured for the reason "funds insufficient". Once again on the instruction of the accused, it was re-presented for collection on 18.02.2000. Once again it was returned dishonoured for the reason "payment stopped by the drawer". It was informed to the accused by the statutory notice dated 03.03.2000. On receipt of the same, the accused issued reply notice and the second and third accused refused to receive the statutory notice issued by the complainant. Hence the complaniant lodged complaint and on rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s initial burden of proof as contemplated under Section 138 of the NI Act. 14.1 Further the accused never disputed the signature or the issuance of the cheque and failed to rebut the presumption. In fact, the accused, by the reply notice dated 13.03.2000, admitted his liability of Rs. 17,25,293/- and pleaded that he would discharge his liability by supplying yarn and other services amounting to Rs. 15,85,935/- to one Aarias Knit Faab in which the complainant is a partner. Therefore, the accused owed to pay a sum of Rs. 1,39,358/-. This amount was also adjusted towards the damages claimed in the suit to the tune of Rs. 8,17,452/- for breach of contract and mental agony suffered by the accused. In order to overcome the proceeding under Section 138 of the NI Act, the accused filed vexatious suit in O.S.No.481 of 2004 as against the M/s.Aarias Knit Faab and it's partners and the complainant. In fact, the said suit was filed after a period of three years from the initiation of the proceedings under Section 138 of the NI Act as against the accused. 14.2. That apart, the accused filed another complaint in C.C.No.153 of 2001 under Section 138 of the NI Act, as against the complainant....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... out the said job work, the plaintiff had purchased yarn for the value of Rs. 9,69,450/- from M/s. Chamber Cotton Fabrics, Tirupur, during 03.12.1999 to 09.12.1999 and entrusted the same with the fifth defendant. Further on the instruction of the fifth defendant, the plaintiff had also purchased Melange yarn from M/s.Tiruppur Cotton Spinning and Weaving Mills for a sum of Rs. 4,44,015/- during the period between 25.12.1999 to 29.12.1999. It was directly entrusted with the first defendant as instructed by the fifth defendant. That apart, the plaintiff purchased yarn from Sulochana Cotton and Spinning Mills from 23.12.1999 to 29.12.1999 for the value of Rs. 1,72,470/- and directly entrusted the same to the first defendant as instructed by the fifth defendant. Those goods were said to have been delivered by the mills directly to the defendants. Therefore, the yarn to the value of Rs. 15,85,935/- was alleged to have been entrusted with the defendants. Thereafter, the fifth defendant also agreed to adjust the same towards the due of Rs. 17,25,293/-payable by the plaintiff to the fifth defendant. After adjusting the same, there was a balance amount of Rs. 1,39,358/- due to the fifth defe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n order to prove that the plaintiff had entered into agreement with the first defendant. On the strength of the agreement, the plaintiff placed two orders dated 12.09.1999 by the order Nos.9102 & 9103. On perusal of the Ex.A.3, it is revealed that it was dated 14.10.1999. However, the stamp paper was purchased on 15.10.1999. Therefore, on 14.10.1999, the agreement could not have been entered into by the plaintiff and the defendants 1 to 4 herein. In fact, the plaintiff categorically admitted that the date in the stamp paper was corrected as 14.10.1999 from 15.10.1999. The date on the stamp paper was mentioned as 15.10.1999 and subsequently, it was corrected as 14.10.1999. Once the stamp paper was issued on 15.10.1999, the same ought to have been entered in the ledger account maintained by the stamp vendor. The stamp vendors are accountable to each and every stamp paper that they sell and they have to maintain a proper ledger account in this regard. After closing such account at the end of the day, it cannot be corrected or altered easily. Therefore, the plaintiff failed to prove that Ex.A.3 was entered into, in order to place orders with the defendants 1 to 4 herein. 22. Further....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s very unfortunate to see that the Trial Court did not even whisper about the evidence of D.W.2 and Ex.B.25 to Ex.B.35. There is no reference as to those documents any where in the judgment so as to accept or deny the same. One step ahead, the Trial Court held that the defendants 1 to 4 had failed to appear before the Trial Court and they were set ex-parte. However, as per the records, the fourth defendant had deposed as D.W.1 and marked documents in Ex.B.1 to Ex.B.24. He also filed written statement and it was mentioned in the judgment. In fact, the Trial Court categorically mentioned the marking of documents and evidence from D.W.1. Further D.W.1 was fully cross examined by the plaintiff. Even then, the Trial Court concluded that the defendants 1 to 4 failed to appear before the Trial Court and they were set ex-parte. 25. Further, on entrustment of job work of knitting, dyeing and compacting, the plaintiff did not deliver back the finished goods to the first defendant. Therefore, the fourth defendant had written a letter dated 07.01.1999 and the same was marked as Ex.B.12. However, it was returned by the plaintiff and as such the fourth defendant had sent a fax message on 10.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as 12.02.2000, Wednesday. Whereas, the date 12.02.2000 falls on Saturday. Therefore, the alleged fax message between the plaintiff and the fifth defendant is a fabricated one. On the other hand, the plaintiff admitted their liability towards the fifth defendant to the tune of Rs. 17,25,293/-. In order to adjust the said liability, the plaintiff claimed damages from the fifth defendant due to non supply of garments to the tune of 17,18,452/-. When the plaintiff failed to prove the supply of grey fabric and yarn, the non supply of garments does not arise. Therefore, the entire suit was initiated by the plaintiff in order to escape from the proceeding initiated for the offence punishable under Section 138 of the NI Act. 29. For the admitted liability, the plaintiff issued cheque for a sum of Rs. 17,25,293/- and the same was presented for collection on 04.11.1999 itself. It was dishonoured for the reason funds insufficient. It was informed to the plaintiff and on instruction from the plaintiff, the cheque was re-presented for collection on 18.02.2000. However, once again it was returned for the reason payment stopped by the drawer. On receipt of the statutory notice, the plaintiff i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fifth defendant viz., M/s. Chambers Cotton Fabrics, Tiruppur. 32. Insofar as the fabrication or forging of signature of the fifth defendant is concerned, the fifth defendant filed complaint as against the plaintiff in C.C.No.196 of 2006 for forgery. Therefore, the plaintiff had deliberately created fake documents to deny his liability by producing fabricated documents. On perusal of the records, it is also revealed that the fifth defendant was examined as D.W.2. He categorically deposed and he was fully cross examined by the plaintiff. Thereafter, both sides evidences were closed and the suit was posted for argument. In fact, for arguments it was repeatedly adjourned on the request of the plaintiff. After a period of several months and also after completion of arguments on the side of the defence and after submitting written arguments, the plaintiff filed applications in I.A.Nos. 109 of 2006 & 110 of 2006 for reopening the evidence of D.W.2 and to send the document, for comparing signature found in Ex.A.3 with the admitted signature of the fifth defendant, to the forensic science laboratory. Both the applications were pending for years together and finally both were dismissed f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....account of other justifiable reasons, the probative value of such evidence has to be considered by the Court. Section 33 of the Evidence Act permits the evidence given by a witness in a judicial proceeding or in a later stage of the very same judicial proceeding, the truth of the facts which was elicited during such examination, when the witness was dead or cannot be found or was incapable of giving evidence or in case the witness was kept out of the way by the adverse party. However, the proviso to the said Section also provides that the adverse party in the first proceeding must have the right and opportunity to cross examine him so as to use the evidence so tendered in the subsequent proceeding or in later stage of the same proceeding. Therefore, everything depends upon the peculiar facts of the said case. If the failure to face the further cross examination was involuntary, it stands in a different footing. 28. There is no provision for eschewing the incomplete evidence of a witness. The evidentiary value or probative value of such evidence is a matter to be considered by the trail Court, Situations would arise where on account of the less favourable answers given in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parison of the signature of the fifth defendant with his admitted signature. Whereas, the Trial Court dismissed the application to send for the document for hand writing expert's opinion and as such the reopening of D.W.2's evidence does not arise, since there is no need to cross examine D.W.2 any further. Therefore, the Trial Court committed error in eschewing the entire evidence of D.W.2. In fact, the Trial Court failed to discuss anything about the evidence of D.W.2 and the documents marked through D.W.2. Therefore, the plaintiff failed to prove it's claims as alleged in the plaint and the suit itself is liable to be dismissed entirely. Conclusion :- 38. Accordingly, the judgment and decree passed in O.S.No.481 of 2004 dated 29.11.2008 on the file of the learned Additional District and Sessions Judge, Fast Track Court-III, Coimbatore, is hereby set aside and the plaint in O.S.No.481 of 2004 is hereby dismissed. Findings in Criminal Appeal :- 39. Insofar as the Criminal Appeal as against the order of acquittal is concerned, when the claim of the accused negatived by this Court in A.S.No.477 of 2011, and when the accused categorically admits his liability to the tune o....