Tuesday 8 March 2016

Whether court can reduce interest to be awarded to plaintiff on the ground that suit was not prosecuted with diligence?

The trial Court had granted interest at
the rate of 12% per annum, from the date of filing of the suit till
realisation. The first appellate Court in its discretion reduced
this rate at 6% per annum, for the period during which the suit
was pending. This was on a reasoning that there were
circumstances, which indicated that the suit was not prosecuted
with diligence. The first appellate Court was of the opinion that
for such a lapse, on the part of the respondent/plaintiff, the
appellant could not be burdened. Such a consideration, 
obviously would not apply, after the suit is decided. In that
view of the matter, I find that interest granted from the date of
decree till realisation, cannot be reduced, merely on the ground
that the interest pendente lite was reduced to 6% per annum.
Consequently, the point is answered in the negative.
IN THE HIGH COURT OF BOMBAY AT GOA
SECOND APPEAL NO. 46 OF 2012
 M/s Costa Pinto Associates,

V/s
M/s Ramdeo Maurya & Associates,

 CORAM:- C. V. BHADANG, J.

 PRONOUNCED ON:- 14th
 AUGUST,2015 
Citation;2016(1)MHLJ 692

By this appeal, the appellants/original defendants are
challenging the judgment and decree passed by the learned
Adhoc District Judge, Margao, in Regular Civil Appeal No.
157/2010, on 07.05.2011. The appeal filed by the appellants
challenging the judgment and decree dated 17.03.2007, passed
by the learned Civil Judge Senior Division at Margao in Special
Civil Suit No. 25/1997/III, has been dismissed, thereby
confirming the decree for Rs.2,58,976.70 alongwith interest at
the rate of 12% per annum, passed in favour of the
respondent/plaintiff.
2. The brief facts necessary for the disposal of the
appeal may be stated thus:
The respondent/plaintiff was planning to construct a
residential cum commercial complex by name “The Royal Palms”
in the property surveyed under Survey No. 398/1, in the village
Benaulim, Taluka Salcete, Goa. The respondent as a R.C.C.
Labour Contractor had entered into a contract with the
appellants to undertake the construction of the said complex.
Accordingly, an agreement was executed between the parties on 
22.11.1994 (Exhibit-20). The appellants had also engaged the
services of an Architect to design the scheme and prepare
architectural drawings. The services of a consulting Engineer
were also engaged. The respondent accordingly, undertook the
work and completed the same as per the plans and
specifications supplied and to the satisfaction of the consulting
Engineer and the Architect of the appellants. The respondent
submitted the running account bills of the work undertaken,
which were certified by the consulting Engineer and part
payment was also made towards the running account bills.
According to the respondent, the total amount payable under
the running account bills amounted to Rs.9,97,789.56/- out of
which, the appellants had paid an amount totaling to
Rs.7,38,812.86/-. Thus, an amount of Rs.2,58,976.70/- was in
balance. As the appellants failed to pay the amount, a suit
came to be filed for payment of the amount alongwith interest
at the rate of 12% per annum.
3. The appellants filed Written Statement (Exhibit-8)
and resisted the suit. It was contended that the appellants'
client, who were purchaser's of the premises, required a time S.A. No. 46 OF 2012
4
bound delivery of the premises and under the agreement
between the appellants and the purchasers, it was agreed that
appellant no. 1 would be penalised for every day of delay
beyond the scheduled date of delivery. It was contended that
Clause 12 of the agreement (Exhibit-20), specifically provided
that in the event of failure to maintain the schedule of work, the
respondent was liable to a penalty at the rate of 10% of the
value of the “scheduled work delayed”. It was contended that
the technical and supervisory staff employed by the respondent
were incompetent and they failed to carry out the preparatory
work in a standard manner. It was contended that in order to
meet the scheduled date, even the site Engineer and other
personnel from time to time, assisted the respondent to carry
out the preparatory work. It was contended that the
respondent neither carried out the work as per the schedule
agreed upon nor to the satisfaction of the consulting Engineer.
The appellants had made timely payments to the respondent as
per the running account bills submitted. It was next contended
that on account of the sub standard quality of construction, a
chajja at the ground floor level in Block S-21 caved in after
about nine months of its construction. It was contended that in S.A. No. 46 OF 2012
5
a meeting, to assess the situation, it was agreed that no balance
would be released, till the cost of damage was worked out and
deducted. It was contended that the amount of Rs.7,45,926.45
was paid to the respondent. Thus, an amount of Rs.22,350.48
was deducted as TDS Rs.99,778.95 deducted towards penalties
for delay and a sum of Rs.30,000/- been deducted as the cost of
chajja replacement, painting and waterproofing, apart from the
retention amount. It was also contended that the appellant no.
1 made payment on behalf of the respondent to the material
suppliers, which was actually to be provided by the respondent.
4. The learned trial Court framed the following issues:-
(i) Whether the plaintiffs prove that the
defendants owe him a principal
amount of Rs.2,58,976.70 ?
(ii) Whether the defendants prove that
they do not owe any money to the
plaintiffs ?
(iii) Whether the plaintiffs prove that the
defendants are liable to pay interest
at the rate of 22% from 13.03.1995
till the filing of the suit (i.e. the S.A. No. 46 OF 2012
6
defendants owe him Rs.1,15,380.63
as interest) ?
(iv) What relief ? What order ?
5. At the trial, Mr. Dhananjay Maurya alias Dhananjay
Maurya Kuswaha, examined himself on behalf of the respondent
while, Mr. Joseph Alfred D'Costa examined himself as DW-1 and
Mr. Olavo Carvalho, the consulting Engineer as DW-2.
6. The learned trial Court found that admittedly, an
agreement dated 22.11.1994(Exhibit-20) was executed between
the parties. It was also found that the running account bills,
certified by the consulting Engineer (Exhibits 21 to 27) worked
out to a total of Rs.9,97,789.56/-. It was further found that the
respondent in para 9 of the plaint had admitted that an amount
of Rs.7,38,812.86 was already paid by the appellant no. 1 to the
respondent. The learned trial Court also noted that the
appellants had admitted that, as per Exhibit-47,the total amount
of the bills, as per final bill was Rs.9,97,789.56. It was further
found that although, the appellants had contended that they
had paid a sum of Rs.7,45,926.45, the respondent claimed that
an amount of Rs.7,38,812.86 was paid by the appellant no. 1. S.A. No. 46 OF 2012
7
7. On the basis of the admitted position, the learned
trial Court went upon examining, whether the appellants were
justified in not paying to the respondent, the balance of amount
of Rs.2,58,976.70 alongwith interest as claimed. The learned
trial Court has noticed that as per the appellants' claim, they
had deducted a sum of Rs.1,02,456/- towards delay in
completion of the work, Rs.30,000/- towards chajja
replacement, painting and waterproofing, Rs.49,899/- by way of
security and the sum of Rs.20,000/- to Rs.25,000/- as TDS.
The learned trial Court has proceeded to examine each of the
heads under which, the amount has been deducted/retained, to
find out whether the appellants were justified in doing so. The
learned trial Court has also found that the appellants had failed
to prove that any material was supplied to the respondent and
as such, no deduction towards the material, allegedly supplied
could have been made. Lastly, it was found that if, any such
claim for deduction towards damage to chajja/painting/
waterproofing and towards material supplied were to be raised,
the same should have been by way of set off/counter claim.
The learned trial Court answered the issue no. 1 in the S.A. No. 46 OF 2012
8
affirmative and issue no. 2 in the negative. On the issue as
regards interest, it was found that the respondent were entitled
to interest at the rate of 12% per annum, from the date of the
suit i.e. 29.01.1997 till realisation. Feeling aggrieved the
appellants, challenged the same before the learned District
Judge.
8. The first appellate Court framed the following points
for determination:
1. Whether the appellants have proved
before the trial Court that they are
entitled to retain/withhold a sum of
Rs.1,02,456.00 towards penalties for
delay in completion of works on the
part of the plaintiff ?
2. Whether the appellants have proved
before the trial Court that they are
entitled to retain/withhold a sum of
Rs.49,899.00 as the retention
amount ?
3. Whether the appellants have proved
before the trial Court that they are S.A. No. 46 OF 2012
9
entitled to retain/withhold a sum of
Rs.30,000/- as cost of chajja
replacement, painting and
waterproofing ?
4. Whether the appellants have proved
before the trial Court that they are
entitled to withhold amount towards
the payments made by the defendants
to material suppliers on behalf of the
plaintiff ?
5. Whether the rate of interest of 12%
per annum awarded by the learned
trial Judge from the date of the suit till
the date of realisation needs
modification ?
9. The first appellate Court answered point nos. 1 to 4
in the negative, while the point no. 5 as regards interest in
the affirmative. The impugned judgment passed by the learned
trial Court has been modified, to the extent of interest. Thus,
the first appellate Court decreed the suit with interest at the
rate of 6% per annum, from the date of the suit i.e.
29.01.1997, till the date of the judgment and decree i.e. S.A. No. 46 OF 2012
10
17.03.2007 and thereafter, at the rate of 12% per annum till
realisation. The interest pendente lite was reduced to 6% per
annum, on the ground that the suit remained pending for ten
years, when PW-1 was absent for three consecutive years and
another four years elapsed, when the case was adjourned sine
die. The first appellate Court found it not justified to burden the
appellants with interest for no fault of theirs.
10. Ordinarily, this would have been the end of narration
of facts, but for a circumstance which surfaced during the
pendency of the appeal and has taken precedence over rest of
the issues on merits. It so happened that the suit was filed in
the name of M/s Ramdeo Maurya and Associates, a proprietory
concern, through the sole proprietor “Mr. Ramdeo Anganu
Maurya”. Ramdeo Anganu Maurya is the father of Dhananjay R.
Kushwaha. As noticed earlier, the suit was filed on 29.01.1997,
while Ramdeo Anganu Maurya died during the pendency of the
suit i.e. on 14.09.2004. It needs to be mentioned that prior to
that, Dhananjay R. Kushwaha had filed an affidavit in lieu of
evidence (Exhibit-19) on 02.11.2002. However, the affiant
therein was shown as Ramdeo Anganu Maurya. Dhananjay R. S.A. No. 46 OF 2012
11
Kushwaha accordingly, entered into the witness box and was
cross examined. None of the parties noticed or pointed out to
the Court that the name of the affiant in the affidavit (Exhibit-
19) is shown as Ramdeo Anganu Maurya, though the person
who had sworn the affidavit and had entered the witness box
and was also cross examined was Dhananjay R. Kushwaha, son
of Ramdeo Anganu Maurya.
11. The suit was eventually decreed. Even in the appeal,
none of the parties noticed this aspect, nor it was brought to the
notice of the first appellate Court. In the second appeal, when
the respondent was shown as represented by Ramdeo Anganu
Maurya (as was done all along in the Courts below) and when,
Ramdeo Anganu Maurya was sought to be served, as per the
Bailiff report, it transpired that Ramdeo Anganu Maurya had
died on 14.09.2004. In that view of the matter, two separate
civil applications came to be filed, one each by respondent and
the appellants in the appeal. Civil Application No. 743/2012 is
filed by the appellants, for bringing the names of the legal
representatives of Ramdeo Anganu Maurya, which included
Dhananjay R. Kushwaha, on record. S.A. No. 46 OF 2012
12
Civil Application (Stamp) No. 31/2014 is filed by the
respondent under Order 6, Rule 17 and Order 1 Rule 10 of the
Code of Civil Procedure (C.P.C., for short), to amend the cause
title of the plaint and verification of the plaint as under:
In the cause title of the plaint:
Substitute name “Mr. Ramdeo Anganu
Maurya” with the name of “Dhananjay R.
Kushwaha” and “SF4, Gramilo Apartments,
Taleigao, Caranzalem, Goa” with “F-9, Karim
Mansion Building, Behind Pharmacy College,
Panaji, Goa”.
In the verification clause of the plaint:
Substitute name “Mr. Ramdeo Anganu
Maurya” with the name of “Dhananjay R.
Kushwaha” and “SF4, Gramilo Apartments,
Taleigao, Caranzalem, Goa” with “F-9, Karim
Mansion Building, Behind Pharmacy College,
Panaji, Goa”.
12. The appellants have filed a reply opposing the same.
It is contended that there are misrepresentations and
suppression of material facts done by Dhananjay R. Kushwaha,
which has the effect of playing fraud on the Court. It is
contended that the suit was filed in the name of M/s Ramdeo S.A. No. 46 OF 2012
13
Maurya and Associates, a proprietory concern through proprietor
Mr. Ramdeo Anganu Maurya. The affidavit in evidence also
showed the name of the affiant as Ramdeo Anganu Maurya,
when it was in fact, signed by Dhananjay R. Kushwaha.
Dhananjay R. Kushwaha entered the witness box impersonating
Ramdeo Anganu Maurya on 02.11.2002, 13.02.2003,
12.04.2005 and 01.08.2006. Thus, at the stage of second
appeal, the respondent cannot seek amendment of the plaint,
more so, in a second appeal filed by the defendants. It was
contended that the suit is liable to be dismissed, as the suit
stood abated, since the sole proprietor died on 14.09.2004,
without bringing the legal representatives on record. I would
revert to this aspect a little later.
13. The second appeal was originally filed on the
following substantial questions of law:
1. When the burden of proof under Section
103 of the Indian Evidence Act, 1872
lay on the respondents/plaintiffs to
prove that a sum of Rs.2,58,976.70 as
on 13.03.1995 was due to the
respondents from the appellants/
defendants under the agreement dated S.A. No. 46 OF 2012
14
22.11.1994, Exhibit 20 colly whereby
the respondents were engaged as
R.C.C. Labour Contractor to carry out
and execute the various items of work
as described in the agreement as per
the terms and conditions therein, the
learned Courts below were legally right
in proceeding to decide the issues as if
the burden lay on the appellants to
prove that they did not owe the sum of
Rs.2,58,970.70 to the respondents ?
2. Whether the findings of the learned
Courts below are perverse being based
on non-considering and/or improper
consideration of the agreement dated
21.11.1994, Exhibit-20 colly, appellants'
statement of account, Exhibit-47 not
controverted by the respondents,
appellants' letter dated 01.12.1994,
Exhibit-35 not objected to by the
respondent, appellants' letters dated
15.01.1196, Exhibit-43 and 10.12.1996,
Exhibit 44 and the replies of the
consulting Engineer dated 18.01.1996,
Exhibit-52/C and 16.12.1996, Exhibit-
45, running account bills, Exhibit-21/C
and Exhibit 22/C to 27/C and oral S.A. No. 46 OF 2012
15
evidence especially of the consulting
Engineer DW-2 on record ?
3. Considering the pleadings of the
respondents/plaintiffs, admissions made
by the respondents' sole witness PW-1,
Ramdeo A. Maurya in his evidence and
in the absence of production in evidence
of any statement of account by the
respondents which would have been
relevant piece of evidence under Section
34 of the Indian Evidence Act, 1872, the
learned Courts below were legally right
in holding that the respondents had
proved that the appellants owed them a
sum of Rs.2,58,976.70 ?
4. Whether the learned lower appellate
Court after finding that the appellants
could not be held liable to pay interest
at the rate of 12% per annum and
receding the said rate to 6% per annum
for the period from the date of the suit
i.e. 17.03.2007 could hold them liable
to the rate of 12% per annum from the
date of the trial Court's decree till its
final realisation ? S.A. No. 46 OF 2012
16
14. According to the appellants, the following additional
substantial questions of law arise in the appeal:
1. Whether the suit filed by “M/s Ramdeo
Maurya & Associates” represented by its
sole proprietor Mr. Ramdeo Anganu
Maurya was not maintainable and
assuming that the suit is taken to have
been filed by Mr. Ramdeo Anganu
Maurya as its sole proprietor, the same
abated on 14.12.2004 as no legal
representatives of the said sole
proprietor were brought on record upon
his death on 14.09.2004 and therefore
the decree dated 17.03.2007 passed by
the trial Court and modified by the
decree dated 07.05.2011 by the lower
appellate Court is null and void ?
2. Whether the suit filed by “M/s Ramdeo
Maurya & Associates” represented by its
sole proprietor Mr. Ramdeo Anganu
Maurya as the plaintiff abated on the
extinguishment of the said firm upon
the death of its sole proprietor Mr.
Ramdeo Anganu Maurya on 14.09.2004
and no legal representatives of the said
sole proprietor having been brought on
record ? S.A. No. 46 OF 2012
17
3. Whether the decree dated 17.03.2007
passed by the trial Court and modified
by the decree dated 07.05.2011 by the
lower appellate Court is vitiated by
fraud on account of the evidence of the
plaintiff's sole witness who
impersonated as Mr. Ramdeo Anganu
Maurya in witness box before and after
14.09.2004 (i.e. the date of his death)
and is consequently based on false
evidence and also on account of the
appeal being defended by concealment
before the lower appellate Court by
someone as though the plaintiff firm
was existing ?
15. I have heard Shri Ramani, the learned Counsel for
the appellants and Shri Kantak, the learned Senior Counsel for
the respondent, at length. By consent of the parties, the Civil
Application No. 743/2012 and Civil Application (Stamp) No.
31/2014 are heard alongwith the second appeal, and the same
are being disposed of by separate orders. S.A. No. 46 OF 2012
18
16. On hearing the learned Counsel for the parties, I find
that the following substantial questions of law arise in the
second appeal:-
1. What is the effect of the suit being filed in
the name of “M/s Ramdeo Maurya and
Associates”, represented by its sole
proprietor, Mr. Ramdeo Anganu Maurya,
when the plaint was signed and verified
by Dhananjay R. Kushwaha ?
2. Whether the impugned judgment and
decree would be vitiated, on account of
any fraud/impersonation by Dhananjay R.
Kushwaha ?
3. Whether the first appellate Court erred in
placing burden on the appellants to prove
that they did not owe the amount as
claimed, under Section 103 of the Indian
Evidence Act, when the burden of proof
to establish the amount due and payable,
lay on the respondent/plaintiff ?
4. Whether the findings recorded by the
Courts below are perverse, being based
on incorrect appreciation of agreement
(Exhibit-20) and the evidence of S.A. No. 46 OF 2012
19
consulting Engineer (DW-2) ?
5. Whether the first appellate Court was
justified in granting interest at the rate of
12% per annum, from the date of decree
till realisation, in the face of reduction of
the rate of interest to 6% per annum, for
the period during the pendency of the
suit ?
17. The parties were specifically put to notice on the
aforesaid substantial questions and have been heard on the
same, and the appeal is accordingly, being disposed of.
18. It is submitted by Shri Ramani, the learned Counsel
for the appellants that the institution of the suit itself was illegal,
when the suit was instituted in the name of M/s Ramdeo Maurya
and Associates, through the sole proprietor, Mr. Ramdeo Anganu
Maurya, when the plaint was signed and verified by Dhananjay
R. Kushwaha. It is submitted that the said infirmity persisted
when, Dhananjay R. Kushwaha filed affidavit in evidence
(Exhibit-19), where the name of the affiant was shown as
Ramdeo Anganu Maurya. It is further contended that S.A. No. 46 OF 2012
20
Dhananjay R. Kushwaha entered into the witness box and
impersonated as Ramdeo Anganu Maurya. It is submitted that
the suit could not have been continued after the death of
Ramdeo Anganu Maurya on 14.09.2004, without bringing his
legal representatives on record. It is submitted that at the
stage of second appeal, the respondent cannot be permitted to
correct the cause title and the affirmation and that too in an
appeal filled by the appellants/defendants. It is submitted that
the impugned judgment and decree is vitiated on account of
fraud/impersonation by Dhananjay R. Kushwaha.
19. Insofar as merits are concerned, it is contended that
the first appellate Court, wrongly placed burden on the
appellants to prove that they are entitled to retain/withhold the
amount of penalty towards delay in completion of the work
amounting to Rs.1,02,456/-, Rs.30,000/- towards cost of chajja
replacement, painting and waterproofing, Rs.49,899/- towards
retention amount and towards the payment made by the
appellants to the material suppliers on behalf of the respondent.
It is submitted that the first appellate Court was patently in
error in placing such burden, wrongly on the appellants, which S.A. No. 46 OF 2012
21
would vitiate the impugned judgment. The learned Counsel
would submit that even otherwise, the finding by the Courts
below would be perverse, as they are based on incorrect
appreciation of the terms of the agreement (Exhibit-20) and
the evidence of the consulting Engineer (DW-2) and other
documentary evidence on record. It is submitted that there was
no justification to grant interest at the rate of 12% per annum,
from the date of decree till its realisation. It is submitted that
when, the suit is to be brought by a person, as a proprietor of a
proprietorship concern, it should be in the name of the
proprietor, who should appear as plaintiff, in the capacity of the
proprietor of the firm. The learned Counsel has placed reliance
on the provisions of Order 30, Rule 1 of the C.P.C. and judgment
of this Court, in the case of Samrathrai Khetsidas Vs.
Kasturbhai Jagabhai, reported in A.I.R. 1930 Bombay 216,
in this regard.
20. On the contrary, it is submitted by Shri Kantak, the
learned Senior Counsel for the respondent that under Order 30,
Rule 1 of the C.P.C., the suit can be brought in the name of the
firm, through the proprietor. The learned Senior Counsel has S.A. No. 46 OF 2012
22
relied upon the decision of the Hon'ble Supreme Court, in the
case of Jai Jai Ram Manohar Lal Vs. National Building
Material Supply, reported in AIR 1969 SC 1267, in order to
submit that in case, where there is misdescription of the parties,
the same can be allowed to be corrected at any stage of the
proceedings. The learned Senior Counsel would submit that the
appellants were all along aware that the agreement (Exhibit-20)
was entered into by Dhananjay R. Kushwaha. There were no
dealings between the appellants and Ramdeo Anganu Maurya,
the father of Dhananjay R. Kushwaha. The appellants were all
along aware that it is Dhananjay R. Kushwaha, (who was a party
to the agreement), had filed the suit and had entered into the
witness box. It is submitted that none of the parties realised
that in the cause title of the plaint, the proprietory concern is
shown to be represented by Ramdeo Anganu Maurya. The
learned Senior Counsel would submit that the plaint is signed
and verified by Dhananjay R. Kushwaha. The affidavit in
evidence (Exhibit-19) is also signed and affirmed by Dhananjay
R. Kushwaha and as such, it was a matter of pure mistake of
fact, which was bonafide in nature. The learned Senior Counsel
was at pains to point out that Dhananjay R. Kushwaha (PW-1) S.A. No. 46 OF 2012
23
had no reasons to practice such impersonation. It is neither
alleged nor shown that Dhananjay R. Kushwaha (PW-1) has
derived any benefit, out of such impersonation or the appellants
are prejudiced thereby. It is submitted that although, an
unfortunate mistake of fact persisted throughout the trial and
during the pendency of the first appeal, the same was noticed in
the second appeal and there is no reason, not to allow the
correction of such a mistake. The learned Senior Counsel has
relied upon the decision of the Hon'ble Supreme Court in the
case of, Bakshish Singh Vs. Prithi Pal Singh and Others,
reported in 1995 Supp(3) SCC 577, in order to submit that at
the stage of second appeal, the plaintiff/ respondent can be
permitted to amend the plaint. Reliance is then placed on a
Division Bench decision of this Court in the case of, All India
Reporter Ltd. and Another Vs. Ramchandra Dhondo Datar,
reported in AIR 1961 Bombay 292, to submit that the defect
in presenting and signing the plaint can be cured at any stage.
He submitted that the appellants are trying to take undue
advantage of a bonafide mistake of fact, as the appellants have
no case on merits.  S.A. No. 46 OF 2012
24
21. Insofar as merits are concerned, it is submitted that
para 10 of the written statement would show that the appellants
had never disputed the amount of Rs.7,45,926.45 as per the
running bills. It was also not in dispute that an amount of
Rs.2,58,976.70 is due and outstanding. Thus, the first appellate
Court has rightly proceeded to consider, whether the appellants
were justified in withholding/retaining the amount. It is
submitted that in view of the admission, the onus stood shifted
to the appellants to show justification to retain/withhold the
amount. The learned Senior Counsel has taken me through the
judgment of the trial Court and also the appellate Court, in
order to submit that the Courts below have rightly considered
the oral and documentary evidence on record and decreed the
suit, which does not require any interference.
22. Point Nos. 1 and 2: It is not in dispute that
Dhananjay R. Kushwaha (PW-1) is the son of Ramdeo Anganu
Maurya. According to the respondent, the sole proprietorship
concern, M/s Ramdeo Maurya and Associates was started by
Dhananjay R. Kushwaha, somewhere in the year 1991 or
thereabout. Dhananjay R. Kushwaha had opened a current S.A. No. 46 OF 2012
25
account with Indian Bank at Panaji Branch, in the name of M/s
Ramdeo Maurya and Associates, with its sole proprietor,
Dhananjay R. Kushwaha. A copy of the letter dated 08.10.2012
from the Chief Manager, Indian Bank, Panaji is produced to show
that the proprietorship concern is having an account no.
424422320 since 1991 till 07.02.2012. According to the
respondent, the proprietorship concern was named after the
father of Dhananjay R. Kushwaha. Further, according to the
respondent, Ramdeo Anganu Maurya is not concerned with the
business of Dhananjay R. Kushwaha. It was Dhananjay R.
Kushwaha, who had all along dealt with the appellants and Mr.
Ramdeo Anganu Maurya had no concern with the agreement
(Exhibit-20) between the appellants and the respondent in this
case. Thus, it is not in dispute that the agreement between the
appellants and the respondent was with Dhananjay R. Kushwaha
(PW-1). It is true that there was a misdescription of the
proprietor of the firm, when the suit came to be filed when the
proprietor was shown as Ramdeo Anganu Maurya in place of
Dhananjay R. Kushwaha. However, the fact remains that the
plaint is signed and verified by Dhananjay R. Kushwaha. The
affidavit is also sworn by Dhananjay R. Kushwaha and it is S.A. No. 46 OF 2012
26
Dhananjay R. Kushwaha, who had entered into the witness box
and was cross examined. Had it been a case, that the
appellants had entered into the agreement with Ramdeo Anganu
Maurya and the suit was prosecuted by Dhananjay R.
Kushwaha, this would have been pointed out and brought on
record, through cross examination of Dhananjay R. Kushwaha.
It would be significant to note that, not even the appellants,
noticed or pointed out to the Courts below, at any time that the
plaintiff's proprietorship concern is shown to be represented by
Ramdeo Anganu Maurya. It was also not objected to or brought
to the notice of the trial Court, during the cross examination of
Dhananjay R. Kushwaha that Dhananjay R. Kushwaha (PW-1)
was allegedly impersonating Ramdeo Anganu Maurya. From the
conduct of the proceedings before the trial Court, as also before
the first appellate Court, it is clear that, not even the appellants
had any time objected or pointed out that the plaint is
erroneously signed and verified and there is impersonation by
Dhananjay R. Kushwaha (PW-1). It was only in the second
appeal, when the Bailiff Report dated 10.05.2012 showed that
Ramdeo Anganu Maurya died on 14.09.2004, the appellants
claimed that the plaint was not properly instituted and verified S.A. No. 46 OF 2012
27
and/or the suit has abated for want of legal representatives of
Ramdeo Anganu Maurya and that fraud has been practised on
the Courts.
23. I have perused the record of the trial Court, as also
of the first appellate Court. Before the first appellate Court, the
Vakalatnama on behalf of the present respondent is signed by
Dhananjay R. Kushwaha, as proprietor of M/s Ramdeo Maurya
and Associates. I have given my anxious consideration to the
rival submissions made and I find that although, the respondent
would have done well to act with greater diligence, it was only
on account of inadvertence, and a bonafide mistake by which
the respondent/plaintiff firm, was shown to be represented by
proprietor Ramdeo Anganu Maurya and even, the affidavit
showed the name of the affiant as Ramdeo Anganu Maurya. It
may not be out of place to mention here that
impersonation/fraud would essentially require an element of
intention to defraud or practise impersonation, so as to cause
wrongful loss to the adversely and/or wrongfully gain to the
person, practising such impersonation. Such an aspect is totally
lacking in this case. To my mind, it is rightly submitted on S.A. No. 46 OF 2012
28
behalf of the respondent, that Dhananjay R. Kushwaha (PW-1)
did not stand to gain, while describing the proprietorship
concern through proprietor as Ramdeo Anganu Maurya or by
showing the name of the affiant as Ramdeo Anganu Maurya.
Secondly, I also find that because the appellants has entered
into an agreement with Dhananjay R. Kushwaha (PW-1) and had
all the dealings with respect to the agreement with Dhananjay
R. Kushwaha (PW-1), the irregularity was never noticed by the
appellants also. Thirdly, the appellants have neither claimed nor
demonstrated any prejudice being caused to them, by virtue of
such alleged impersonation. In my considered view, this was
purely a case of inadvertent mistake and misdescription of the
proprietor and the same cannot be blown out of proportion to
say that it amounts to fraud/impersonation, so as to vitiate the
impugned judgment and decree.
24. In the case of Samrathrai Khetsidas (supra), the
learned Single Judge of this Court held in relation to Order 30,
Rule 1 of the C.P.C. that a firm consisting of a sole proprietor
cannot bring a suit in the name of the firm, but, must sue in the
name of the proprietor. S.A. No. 46 OF 2012
29
25. In the case of Jai Jai Ram Manohar Lal (supra), the
plaintiff, who was the Manager of a joint family and was carrying
on its business, brought a suit in the business name and when
objection was taken that the firm being an unregistered firm
was incompetent to sue, had applied for amendment of the suit
stating that he himself had filed the action in the business
name. It was held that the application could not be refused on
the ground that there was no averment therein that the
misdescription was on account of bonafide mistake. It has been
held that there is no rule that unless, in an application for
amendment of the plaint, it is expressly averred that the error,
omission or misdescription is due to a bonafide mistake, the
Court has no power to grant leave to amend the plaint. The
power to grant amendment of the pleadings is intended to serve
the ends of justice and is not governed by any such narrow or
technical limitations. The description of the plaintiff by a firm
name in a case, where the Code of Civil Procedure did not
permit a suit to be brought in the firm name should properly be
considered, as a case of description of the individual partners of
the business and as such a misdescription, which in law can be S.A. No. 46 OF 2012
30
corrected. It should not be considered to amount to a
description of an non-existent person. It has been further held
that a party cannot be refused just relief, merely because of
some mistake, negligence, inadvertence or even infraction of
the rules of procedure. The Court would grant such leave to
amend the pleading, unless it is satisfied that the party applying
would be acting malafide or that by his blunder, he had caused
injury to his opponent, which may not be compensated for, by
an order of costs. It has been further held that however
negligent/careless may have been the first omission and
however late is the proposed amendment, the amendment may
be allowed, if it can be made without injustice to the other side
(see para 5 of the judgment). The Hon'ble Supreme Court has
considered the decision of this Court in the case of
Amulakchand Mewaram Vs. Babulal Kanalal, (AIR 1933
Bom 304), in which Beaumont C.J set out the principles as
under:
“...... the question whether there should be
an amendment or not really turns upon
whether the name in which the suit is
brought is the name of a non-existent
person or whether it is merely a
misdescription of existing persons. If the S.A. No. 46 OF 2012
31
former is the case, the suit is a nullity and
no amendment can cure it. If the latter is
the case, prima facie, there ought to be an
amendment because the general rule,
subject no doubt to certain exceptions, is
that the Court should always allow an
amendment where any loss to the opposing
party can be compensated for by costs.”
26. In the case of Bakshish Singh (supra), in a second
appeal filed by the defendants, the original plaintiff had sought
amendment of the plaint. On facts it was held that the
amendment application ought to have been allowed.
27. In the case of, All India Reporter Ltd. and
Another (supra), it was held that the defect in presenting,
signing and verification of the plaint are not fatal and can be
cured by amendment, even after limitation. It has been held
that the date of institution of suit is not changed thereby.
28. Albeit, these are the general principles which would
apply in context of the individual fact. As noticed earlier, the
present case is an instance, of a bonafide mistake, arising out of S.A. No. 46 OF 2012
32
inadvertence and cannot partake of the nature of
fraud/impersonation. In the result, I find that the impugned
judgment and decree cannot be vitiated on any such ground and
consequently, point nos. 1 and 2 are answered in the negative.
29. Point Nos. 3 and 4: Coming to the merits, let us now
examine, whether the first appellate Court had wrongfully cast a
burden and in fact, a negative burden on the appellants to show
that they did not owe an amount of Rs.2,58,976.70 to the
respondent. It is true that perusal of points 1 to 4 framed by
the learned appellate Court, would indicate that the first
appellate Court expects the appellants to prove the justification
of retaining/withholding of the amount, under various heads.
However, that has to be examined and appreciated in the
context of the rival pleadings, as also the evidence led and also
the issues framed by the learned trial Court. As noticed earlier,
the trial Court had framed issue no. 1, by which the burden was
rightly cast on the respondent to prove that the appellants owe
the principle amount of Rs.2,58,976.70. I have carefully gone
through the pleadings and the reasons articulated by the trial
Court. In para 10 of the written statement, the appellants have S.A. No. 46 OF 2012
33
stated thus:
“With reference to paragraph 9 of the plaint,
the defendants deny the contents thereof
and state that they had paid a sum of
Rs.7,45,926.45 as on 13.03.1995 after
deducting a sum of Rs.1,02,456/- towards
penalties for delay in completion of works,
and retaining a sum of Rs.49,899/- towards
retention. Further a sum of Rs.30,000/- was
deducted as cost of chajja replacement,
painting and waterproofing. Besides the
defendants state that they made payments
to material suppliers, such as shuttering
plywood suppliers and wood suppliers on
behalf of the plaintiff.”
30. It can thus, be seen that the appellants while stating
that they had paid a sum of Rs.7,45,946.45 as on 13.03.1995,
had claimed that they had deducted a sum of Rs.1,02,456/-
towards penalties in delay of completion of works and further
retain Rs.49,899/- as retention money (by way of security) and
further, a sum of Rs.30,000/- as cost of chajja replacement,
repainting and waterproofing. The appellants also claimed that
they had made payment to the material suppliers on behalf of
the respondent. To my mind, it has been rightly submitted on S.A. No. 46 OF 2012
34
behalf of the respondent that once the amount of
Rs.9,97,789.56 comprised in the various running bills as
certified by the consulting Engineer was not disputed and the
appellants had also paid an amount of Rs.7,38,812.86 and
retained a certain amount for various reasons/heads, it was the
appellants, who should demonstrate that they were justified in
doing so in terms of the agreement (Exhibit-20). The learned
trial Court has extensively dealt with the evidence of DW-1 and
DW-2, in order to find that the appellants had admitted that the
contractual work was completed and the running account bills
(Exhibits 21 to 27) were certified by the consulting Engineer.
The trial Court also found that there was a stipulation of penalty
of 10% of the amount, which was in the wake of a similar
agreement between the appellants and the purchasers, where
the appellants were required to give time bound delivery of the
premises. The learned trial Court has also noticed the evidence
of DW-1 in which, DW-1 had admitted that no penalties were
paid to the prospective purchasers, in respect of delayed
delivery of the premises referred to Annexure 'A' of the
agreement (Exhibit-20). The learned trial Court has then
referred to clause 12 of the agreement (Exhibit-20), which reads S.A. No. 46 OF 2012
35
as under:
“12. Notwithstanding any thing to the
contrary in this Contract, time is essence of
this Contract. The R.C.C. Labour Contractor
shall proceed to execute the works with
proper speed, as per the Schedule of Works
as decided by the Consultant Engineer, and
modified by him from time to time, which
copy is attached to this agreement as part
thereof. If any item of work is delayed
beyond the period as listed in the Schedule
of Works, a fine of 10% of the value of that
item of work will be levied, and the R.C.C.
Labour Contractor can not claim delay by
virtue of any earlier items of work which was
delayed and fine levied thereof, and which
item of work has caused a delay in the
present work. However, if the R.C.C. Labour
Contractor is able to come back into the
Schedule and maintain the original times,
the penalties deducted shall be refunded.
The R.C.C. Labour Contractor shall not claim
delays by virtue of not having received
drawings on time, or not having understood
details etc., except by the way of delayed
supply of cement, sand metal, steel, and
such building materials, provided that he has
given notice of this requirements a minimum S.A. No. 46 OF 2012
36
of ten days in advance of actual use.”
31. It has been found, and, to my mind rightly so, that
the penalty amount of 10% was on the value of the particular
item of the work, which is delayed. There was a further
stipulation under which, no penalty would have been leviable in
case, R.C.C. Labour Contractor was able to tune in with the next
stage of the schedule. Thus, the intention was clear that if, the
delay in completion of the premises had no cascading effect on
further stage of construction, no penalty was payable and the
penalty deducted was agreed to be refunded. DW-1 has further
admitted that there was no correspondence made with the
respondent regarding penalty in respect of the item of work
delayed and the amount of penalty. The learned trial Court after
considering the evidence at length, has concluded in para 10
that the appellants were not liable to deduct any amount
towards penalty. Even so far as the retaining amount is
concerned, it was admitted by DW-1 that the agreement
(Exhibit-20) did not contain any stipulation for deducting the
retention amount, by way of security. It was submitted by the
learned Counsel for the appellants that there is a general
custom/practice to retain such amount by way of security, S.A. No. 46 OF 2012
37
should any defect be found or subsequently noticed in the
construction. However, in the absence, of any term/stipulation
in the agreement (Exhibit-20), the finding in this regard that the
appellants were not justified in retaining the amount of
Rs.49,899/- cannot be said to be illegal. Even so far as the
deduction towards chajja replacement, painting and
waterproofing is concerned, admittedly, the chajja caved in after
nine months of casting of the same and there is nothing on
record to show that it collapsed on account of any defect in the
casting/construction. The trial Court has also found that DW-1
has not given the details of the said collapse and further, that
the agreement (Exhibit-20) did not stipulate any clause or
warranty of the work done. Even so far as the claim that the
appellants had paid the material suppliers, on behalf of the
respondent, it has been found on the basis of evidence of DW-1,
in which DW-1 has admitted that he has no documents to prove
this aspect.
32. Coming to the judgment of the learned first appellate
Court, although the points framed would indicate that the
appellate Court expected the appellants to prove the jurisdiction S.A. No. 46 OF 2012
38
for retention/withholding of various amounts, it has to be
considered in the context of the rival pleadings. The appellants
had not disputed the amount of Rs.2,58,976.70/- been
retained/withhold under various heads. If that be so, it can
justifiably be said that the onus stood shifted on the appellants
to prove their justification to withhold/retain the amount. On a
careful perusal of the impugned judgments by the Courts below,
I do not find that any exception can be taken to the finding
about the amount of Rs.2,58,976.70 being due and payable to
the respondent. Consequently, the issue nos. 3 and 4 are
answered in the negative.
33. Point No. 5: The trial Court had granted interest at
the rate of 12% per annum, from the date of filing of the suit till
realisation. The first appellate Court in its discretion reduced
this rate at 6% per annum, for the period during which the suit
was pending. This was on a reasoning that there were
circumstances, which indicated that the suit was not prosecuted
with diligence. The first appellate Court was of the opinion that
for such a lapse, on the part of the respondent/plaintiff, the
appellant could not be burdened. Such a consideration, 
obviously would not apply, after the suit is decided. In that
view of the matter, I find that interest granted from the date of
decree till realisation, cannot be reduced, merely on the ground
that the interest pendente lite was reduced to 6% per annum.
Consequently, the point is answered in the negative.
34. In the face of the findings as above, the appeal is
without any merit and the same is dismissed, with no order as
to costs.
C. V. BHADANG,J
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