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HIGH COURT OF KARNATAKA - DHARWAD BEN
Suraj Govindaraj, G Basavaraja, JJ
Hare Krishna Mettallics Private Ltd. – Appellant
Versus
A.K. Shivanagutti And Sons – Respondent
REGULAR FIRST APPEAL NO. 100240 OF 2016
For the Appellants/Petitioners: Jagadish Patil
For the Respondents: C N Harlapur
In a recovery suit, the burden of proof lies upon the plaintiff to establish the claim through cogent, consistent documentary evidence, and a court cannot decree a suit merely by inferring admission from legal notices if the underlying accounts and supporting documents provided are inconsistent or mismatched.
Headnote:(A) Code of Civil Procedure, 1908 - Order VIII Rule 5 - Suit for recovery of money - Burden of proof - Plaintiff must establish claim through cogent documentary evidence - Evasive denial by defendant insufficient to prove claim - Trial Court erred in relying solely on legal notices for admission of due amounts without verifying matching accounts - (Para 30, 31, 32)
Facts of the case:
Parties were engaged in a commercial supply of iron ore. The plaintiff sued for recovery of Rs. 13,39,720/-, claiming this represented the balance due for supplies made between 24.02.2008 and 26.09.2008. The defendants denied the claim, stating that the transaction spanned 2007-2009 and that accounts actually showed excess payment by themselves, leading them to file a counterclaim for Rs. 9,03,197/-.
Findings of Court:
The court held that the plaintiff failed to conclusively prove the specific amount claimed, as figures in pleadings, invoices, and ledger statements were inconsistent and mismatched. Mere reliance on legal notices without substantive documentary evidence to support the quantum of supply is insufficient to warrant a decree.
Issues: Whether the plaintiff sufficiently proved the supply of goods and the liability of the defendants for the claimed balance, and whether the counter-claim was sustainable.
Ratio Decidendi: In a recovery suit, the burden of proof lies squarely on the plaintiff to establish the debt through consistent documentary evidence; mismatched accounts and inconsistent pleadings prevent the court from accepting the claim solely on the basis of legal notice responses. Result : Appeal partly allowed; Trial court judgment set aside; Suit dismissed; Counter-claim rejection confirmed.
Trial court partly decreed plaintiff's suit (recovery Rs.13,39,720/- + 12% interest) relying on:
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Legal notices (Ex.P3, Ex.P6) and defendants' replies (Ex.P9, Ex.P13(a)) as admitting supplies/invoices and dues (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
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DW1's cross-exam as false denial of specific supplies (Rs.71,85,960/-) and payments (Rs.58,47,748/-) from 24.02.2008-26.09.2008, inferring dues (!) (!) (!) (!) (!) (!) (!) (!) .
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Ex.P61 as admitting Rs.22,04,382/- due as on 30.06.2008, supporting claim (!) (!) (!) .
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Defendants' "unconscionable" conduct: denying transactions despite ISO status and evidence (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Dismissed counterclaim (Rs.9,03,197/- excess) as unproven, ignoring defendants' ledgers/accounts without cogent reconciliation (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
| Table of Content |
|---|
| 1. overview of the trial court judgment and the nature of the recovery suit. (Para 1 , 2) |
| 2. summary of rival contentions regarding document production and burden of proof. (Para 3 , 4 , 5) |
| 3. detailed factual history of the transactions, notices, and correspondence between parties. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 4. observation of discrepancies and mismatches in the ledger and invoice records. (Para 14 , 15 , 16 , 17 , 18) |
| 5. analysis of evidence and the failure of the plaintiff to discharge the burden of proof. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 6. court holds that mere legal notice exchanges cannot substitute for formal evidence in a recovery suit. (Para 28 , 29 , 30 , 31 , 32 , 33) |
THIS APPEAL COMING ON FOR ORDERS, THIS DAY, SURAJ GOVINDARAJ, J., DELIVERED THE FOLLOWING:
JUDGMENT
1. The defendant in O.S.No.111/2010 is before this Court aggrieved by the judgment dated 23.06.2016 passed by the Principal Senior Civil Judge and CJM., Gadag.
2. In the said matter, by way of aforesaid judgment the said Court had partly decreed the suit with costs holding that plaintiff is entitled for the recovery of a sum of Rs.13,39,720/- from the defendants along with future interest at the rate of 12% p.a., from the date of instituting the suit till the realisation of the entire decretal amount. The Trial Court by the said judgment also dismissed the counterclaim which had been filed by the defendants for a sum of Rs.9,03,197/-.
3. Sri Jagadish Patil, learned counsel appearing for the appellant would submit that
3.1. The judgment passed by the Trial Court is not proper. The Trial Court has misapplied itself and has purely gone on legal notice which has been issued without adverting to the documents in relation thereto inasmuch as it is on the basis of the legal notice that the Trial Court has come to a conclusion that there is an admission on the part of the defendants in relation to amounts due.
3.2. The Trial Court has not considered the documents that have been produced by the defendants more particularly, the account statement which disclose that there are no amounts which are due from the defendants but there are amounts which are due from the plaintiff to the defendants.
3.3. In a suit for recovery of money, it is for the plaintiff to categorically establish by cogent evidence, the amounts due, supported by documentary evidence produced in said suit. Without necessary documents being placed on record, no claim for any amounts could be made by the plaintiff.
3.4. The Trial Court has erred by considering the contents of the legal notice in conjunction with the invoices and has come to a conclusion that the defendant had admitted the due amounts when in fact no such admission has been made.
3.5. The transaction between the plaintiff and the defendants has been going on from the year 2007. A consolidated statement of accounts having been produced by the defendants, which disclose both the credit and debit in terms of the iron ore supplied and the amounts paid, by virtue of which the total supply of iron ore made by the plaintiff was for a sum of Rs.1,38,63,016.60/- as regards which payment of a sum of Rs.1,47,66,240/- has been made. Thus, there is an excess payment made of Rs.9,03,197.40/-, that was claimed in the counter claim.
3.6. These facts not having been taken into account by the Trial Court, an error has been committed by the Trial Court in partly decreeing the suit and rejecting the counter claim.
4. Per contra, Sri C. N. Harlapur, learned counsel appearing for the respondent would support the judgment passed by the Trial Court by contending that
4.1. The due amount which has been claimed by the plaintiff is for supply of iron ore from 24.02.2008 to 26.09.2008 and as such the reference being made to the accounts statement from the year 2007 to 2009 is misplaced.
4.2. The details of the supply made and amounts received have been furnished in para 5 of the plaint. The supply is to the tune of Rs.71,
