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2011 Supreme(Del) 648
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG & S.P.GARG
PAAM ANTIBIOTICS LTD. ..... Appellant
versus
SUDESH MADHOK .....Respondent
RFA(OS) 16/2011
Decided on : 22ndNovember,2011
Mr.Ravi Gupta. Sr.Advocate with Mr.Mohit D.Ram, Ms.Poli Kataki and Mr.Rahul Bakshi, Advocates
Mr.P.D.Gupta with Mr.Kamal Gupta and Mr.Abhishek Gupta, Advocates
The main legal point established in the judgment is the significance of admissions, documentary evidence, and the principles of privity of contract and consideration in determining entitlement to a decree.
Headnote:
Decree - Admission - Companies Act - [Section 138 of the Negotiable Instruments Act, 1881] - [Section 138 of the Negotiable Instruments Act, 1881] - The court allowed the plaintiff's decree on admission for a sum of `71,30,822/- with interest against the first defendant. The court heavily relied on the statement made by the Director of the first defendant. The defendant refuted its liability, but the court found the promissory note and receipts admitted by the defendant, leading to the dismissal of the appeal. The court also emphasized the importance of privity of contract and consideration in creating a jural relationship.
Fact of the Case:
The plaintiff advanced a loan to the first defendant, which was allegedly transferred to the second defendant. The plaintiff filed a suit for the outstanding loan amount, and the court allowed the decree on admission based on the defendant's admission of receiving the loan.
Finding of the Court:
The court found that the defendant's admission of receiving the loan, coupled with the promissory note and receipts, established the plaintiff's entitlement to the decree. The court dismissed the appeal and left the parties to bear their own costs.
Issues: The main issues revolved around the loan advanced by the plaintiff, the transfer of the loan amount to the second defendant, and the defendant's refutation of liability.
Ratio Decidendi: The court emphasized the importance of admissions and documentary evidence in establishing entitlement to a decree. It also highlighted the significance of privity of contract and consideration in creating a jural relationship.
Final Decision: The appeal was dismissed, and the parties were left to bear their own costs.
PRADEEP NANDRAJOG, J.
1. Vide impugned judgment dated 25.10.2010, IA No.5733/2010 filed by the plaintiff Smt.Sudesh Madhok, praying for a decree on admission has been allowed. Suit has been decreed in sum of `71,30,822/-with pendente lite and future interest @ 15% per annum against the first defendant which has been further burdened with counsel’s fee, payable to the plaintiff, in sum of `75,000/-.
2. At the outset we may note that prior to the impugned order, decreeing the suit on admission being passed, issues were settled on 10.9.2009; being 5 in number as under:-
“1. Does the plaintiff prove entitlement to the decree for `71,30,822/-(Rs.Seventy one lakh thirty thousand eight hundred twenty two); OPP
2. Does the plaintiff prove entitlement to sell 2,50,000 shares registered in the name of M/s.Pushkar Trading Company Limited of the second defendant, allegedly pledged with it? OPP
3. Does the defendant prove that it had discharged its liability to repay the claim of the plaintiff by issuing cheques and/or that other amounts had been or were offered to be repaid by defendant No.2 in discharge of such liability? OPD
4. Does the defendant prove that plaintiff failed to mitigate its losses, if any? OPD
5. Relief”
3. It may strike the reader as to how come after issues were settled, decree on admission could be passed; for the reason : Issues are settled on questions of fact and law which need adjudication.
4. But, since we would be dismissing the appeal, to lessen the impact of the strike to the reader of our decision, we may point out that after the issues were settled, statement of Shri Mukesh Bhargava, Director of the first defendant, was recorded on oath by the learned Single Judge on 27.7.2010.
The statement reads as under:-
“STATEMENT OF SH.MUKESH BHARGAVA, S/O SH.P.N.BHARGAVA, AGED 56 YEARS, R/O 26, BHARGAVA LANE, CIVIL LINES, DELHI-54 (ON S.A.)
1. I am Director in M/s.Paam Antibiotics Limited, the first defendant in this suit. It is a closely held group company. Earlier the main shareholders in the group were myself and my brothers. We later separated, in 1997. I am authorized to depose in this case on behalf of the first defendant, M/s.Paam antibiotics Limited.
Q. Are you aware that the plaintiff advanced `2.20 crores?
A. Not exactly.
Q. What are you aware of?
A. I am aware that a sum of `50 lakh was advanced to M/s.Paam antibiotics Ltd. by the plaintiff.
Q. Was there an agreement between the plaintiff and your company that the amounts paid to Defendant No.1 was to be paid over to Defendant No.2?
A. I am not aware.
Q. When did the division between your company and the second defendant take place?
A. The division between M/s.Paam Antibiotics Ltd. and M/s.Paam Pharmaceuticals (Delhi) Ltd. took place sometime in September 1997.
Q. You have mentioned that you have signed the written statement.
A. Yes.
Q. Have you seen the statement in para 1(ii) of the written statement?
A. I have seen the statement in para 1(ii) of the written statement.
Q. How are you familiar with this agreement? Were you present?
A. (The witness is unable to answer the question).
Q. What is the basis for your statement in 2(iii) of the written statement?
A. These cheques were first received by the Accounts Department of M/s.Paam Antibiotics Ltd. and then transferred to M/s.Paam Pharmaceuticals (Delhi) Ltd. the very next date.
Q. Were the amounts received from the plaintiff by M/s.Paam Antibiotics Ltd.?
A. Yes. (The witness volunteers) Not even one rupee out of it was utilized by M/s.Paam Antibiotics Ltd., who transferred it to M/s.Paam Pharmaceuticals (Delhi) Ltd. This is within the knowledge of the plaintiff.
Q. What is the basis of knowledge about the alleged transaction, as alleged by you?
A. This is because later on, they have accepted the cheques of M/s.Paam Pharmaceuticals (Delhi) Ltd.
Q. Was there ever a written agreement between M/s.Paam Antibiotics Ltd., M/s.Paam Pharmaceuticals (Delhi) Ltd. and the plaintiff that the amounts received by y
