KUSHALBHAI MAHOJIBHAI PATEL v. FIRM OF MOHMADHUSSAIN RAHIMBUX

Citation: [1980] 3 S.C.R. 22

Court: Supreme Court of India

Bench: S. MURTAZA FAZAL ALI, A.D. KOSHAL

Case summary

On the pleadings of the parties the main question which arose for determination was whether a privity of contract existed between them in relation to the sale and purchase of the goods in dispute in regard to which no document was admittedly executed.

Judgment text

A KUSHALBHAI MAHOJIBHAI PATEL v. A FIRM OF MOHMADHUSSAIN RAHIMBUX March 11, 1980 B [S. MURTAZA FAZAL ALI AND A. D. KOSHAL, JJ. ] Prlvity of Contract-Supply made by appellant Plaintiff to respondent de}eti· dant of 268 Bengali Maunds of Tobacco and accepted by the larrer-Pour cheques issued by the latter covering th£ value bumped-No document was executed to evidence the contract-Whether suit for recovery of n1oney is main· tainable, for want of privity of contract ? -Onus of proof is on the defendant in such cases by producing best evidence like Books of Accounts. In the money suit filed by the appellant-plaintiff to recover the value of tobacoo, sold to respondent-defendant after the four cheques covering the· value of tobacco and issued by latter bumpe initial , ' -G onus Which lay on him to prove> the privity of contract between the parties . / and it \Vas for the defendant to rebut the presumption which the fact raised.

[27 G-H, 28 Al T (ii) Tue books of account maintained by the defendant being the best evidence available in proof of the stand of the defendant firm that no order had been placed by it with the plaintiff the failure of the defendant to place on record those books is a clincher. Non production of these books by the defendant raises a presumption against it that if such evidence had been produced, the same would have gone against the case propounded by it, more K. M. PATEL v. FIRM OF MOHAMAD l! USS~IN (Koshal, J. ) 23 1 ••o when the defendant fail• to bring witnesses to the transactions set up, by it foto witness-box and examine them. l28 A-C, 29 A-El CVllL APPELLATE JURISDICTION : Civil Appeal No. 1376 of 1970. From the Judgment and Decree dated 29th/30th October, 1969 of the Gujarat High Court in Appeal No. 795/61. D. V. Patel, T. U. Mehta and M. V. Goswami for the Appellant. Dr. W. S. Barlingay and A. G. Ratnaparkhi for the Respondent.

The Judgment of the Court was delivered by -} KosHAL, J -This appeal by certificate granted by the High Court ·ofGujarat under sub-clause (a) of clause (I) ofArticle 133 of the Consti- 1ution of India is directed against its judgment dated the 29th/30th October, 1969, accepting a first appeal preferred by the defendant firm 10 it and dismissing the plaintiff's suit which had been decreed by the >trial court. 2. The said suit was filed on the 24th November, 1958, in the ·court of the Civil Judge, Senior Division, Nadiad, by one K. M. Patel for the recovery of Rs. 38,718/- from the defendant firm on account of ·the price of 225 bags of tobacco weighing 268 Bengali matmds at the irate of Rs. 112/- per such maund and interest thereon. The case set ·<>Ut in the plaint was that the tobacco in question had been purchased 1>y the defendant firm on the 28th of November, 1955, that the same was despatched to the defendant firm by train from Anklav railway station on the !

st of December, 1955, on which date a bill for Rs. 30,523/- covering the price of the goods and incidental expenses was ·sent to the defendant firm, that the goods were received by the defen- · r the supply of the goods with the plaintif! by the defen- ,dant firm; and it was immaterial whether the person actually placing the order was a partner of the defer,dant firm or a person authorised by it. The plaintiff could thus bar,k on the said fact for the purpose of . discharging the initial onus which lay on him to prove privity of 'A contract between the parties and it wa~for the defendant firm to rebut the presumption which the fact_ raised as stated above. In rejecting the first ofthe two main contentions raised before thejHigh;Cour(on behalf of the plaintiff, therefore, the High Court fell into a serious error. [ The same is true of the second main contention which was raised by learned counsel for the; plaintiff and was turned down by the High· Court.

In the circumstances of the case it was the duty of the defendant firm to place its books of account on record, those books being the best evidence available in proof of the stand of the defendant firm that no order had been placed by it with the plaintiff. The:production of letters exhibits 119, 124 and 125 and bill exhibit 126[does not serve + the purpose sought to be achieved. In the absence of such production they are loose documents which could have come into existence even ·after the suit was filed, if Chhotabhai chose to oblige the defendant firm and colluded with it. And there is intrinsic evidence ava1labk Tn letter exhibit 119 that such was the case. That letter purports tojiave come into existeuce on the 14th of September, 1958, i. e. , about threC: months and a half after the defendant firm had been informed of the plaintiff's claim through a notice dated the 27th of May, 1958, and that claim had been repudiated by the defendant firm.

The contents of the: letter are tell-tale and may be reproduced in extenso : "To "Bhai Mohammad Hussain Rahim Bux of Mahiar written, from Jabalpur by R. K. Patel of Jabalpur whose salutations. to you be pleased to accept. Further it is learnt that [on the date 13-9-58 the account is made by the partner of our firm Shri Chhotabhai Patel upto the date 12-9-58 by taking into account the balance of Rs. 75/- seventy five at the end of 1954-55 and balance of Rs. 340-2-0 are found due by us. The same is agreed. The price of 225 bags of tobacco-- . J.. _ of Kbusbalbbai Mahijibbai Patel of Joshikuva (Anklav). is also included in the said account and so Rs. 340-2-0 are found balance payable by us including the said amount and if any dispute arises subsequently in the said account ·: we shall be responsible in every way about the same. , _,. "It is respectfully to be stated that this note is written_ while in sound state of mind so that it may remain as.

authority and may become useful when required. r "C::bbotabbai Kbusbalbhai Pate) "Partner R. K. Patel "Jabalpur "Date 14-9-58. '" ·K. M. PATEL v. FIRM OF MOHAMAD HUSSAIN (Koshal, !. ) 29 Had the accounts been really settled as the letter claimed, there is no reason at all why a copy of the settlement, which must, in the very nature of things, have contained a statement of all the transactions ··covered by it was not furnished to the court. Such a statement must :have been provided by firm R. K. Patel to the defendant firm who was ·entitled to scrutinize the correctness of the settlement and point out \. -. ·any inaccuracies therein to firm R. K. Patel. Besides, we fail to under- . stand why the transaction disputed before us came in for special ·mention in letter exhibit 119 when no other transaction covered by the ·settlement found a place therein. The conclusion is irresistible that the 'Jetter had been procured merely to serve as evidence in rebuttal of the .

plaintiff's case and not because any settlement really took place. 10. lf the case propounded by the defendant firm at the trial is ·correct, its account books must be containing entries to the effect that the agreement ofpurchase of 225 bags oftobacco was entered into with firm R. K. Patel and not with the plaintiff and that some time in Decem- 'ber, 1955, the account offirm R. K. Patel was credited with the amount ·of the price of the goods. Entries would further be available therein indicating unmistakably the periods for which Khudabux was admittedly employed with the defendant firm. The non-production of those ·books by the defendant firm and the production by it of stray letters 0and a bill constitute failure on its part to produce the best evidence and a presumption has therefore to be raised against it that if such evidence had been produced, the same would have gone against the case propounded by it. The matter does not end there.

The failure of the defendant firm to bring Chhotabhai and Khudabux into the witnessbox and the fact that it made no attempt to have the account books of 1irm R. K. Patel (the entries in which account would perhaps have ·clinched the matter in dispute) must be similarly construed and a ·presumption drawn that this evidence also would have gone against the defendant firm. II. The view we have just above taken of the approach of the High Court is sufficient to dislodge its judgment and for a restoration of the decree passed by the trial court. We may add, however, that \ . apart therefrom the impugned judgment suffers from another serious defect and that is that the appreciation of the evidence of the parties is based more on conjectures than logic. We may give a few instan- , ·ces. The absence ofthe name of Khudabux from the plaint is immaterial pecause pleadings are required merely to state facts and not the evidence through which they are to be proved.

The relevant fact was that an agreement for the purchase of goods had been entered into by Jhe defendant firm with the plaintiff. The manner in which that A. contract came into being was a matter of evidence which need not have -~. formed part of the plaint. Again, the circumstances that the agreement of purchase was not reduced to writing, that Khudabux was not T shown to have acted as the agent of the defendant firm on any other occasion and that the name of Khudabux does not appear in entries exhibits 54 and 55 do not disclose any abnormality when it is borne in mind that goods were actually supplied by the plaintiff to the defendant firm and were received by the latter. The other reasons given by the High Court in disbelieving the plaintiff's word that the order for the supply of goods had been placed with him by Khudabux are equally untenable.

Jn this connection it is to be noted that no plausible reason can be found for the plaintiff recording in his books the name of the defendant firm as the purchaser ifthe goods had really been sold to· firm R. K. Patel. We may point out that the name of the defendant firm as the purchaser is entered in the cash book maintained by the plaintiff and it is no reason at all for that book to be rejected as un-· reliable that it is maintained on a fortnightly a~d not daily basis. The failure of the plaintiff to demand advance payment or earnest money and to keep quiet for a long period oftime are also not relevant matters in view of the admitted fact of the supply of the goods by the plaintiff to the defendant firm and its failnre to produce on record its own books of account and those of firm R. K. Patel. 12. The four cheques issued by the defendant firm in favour of the plaintiff furnish another very important circumstance in derogation of the claim made by the former.

The explanation furnished by its solitary witness that they were issued at the instance of Chhotabhai to whom they were delivered does not inspire confidence in us, the main reason therefor being again the non-prcduction of the account books of the two firms-a reason which makes us repel as untenable the inference drawn by the High Court (from the plaintiff's failure to act immediately after the dishonour ofthe cheques) that "the cheques must have· reached the plaintiff not directly from the defendant but through some. other ronte". ' 13. ·There is no reason whatsoever for us to believe that ifthe caseof the defendant firm was true the plaintiff would have made out the story given by him in the plaint, absolved the real debtor of the responsibility to pay and claimed his dues from some one not at all r Hable for them. Firm R. K.

Patel being the party liable to the plaintiff, according to the case set np by the defendant firm, the plaintiff could not be expected to make false entries in this account books and. file. _a suit not against firm R. K. Patel but against the defendant firm~ K. M. PATEL v. FIRM OF MOHAMAD HUSSAIN (Koshal, l. ) 31 14 For the reasons stated we have no hesitation in accepting this A appeal, setting aside the impngned judgment and restoring the decree passed by the trial court with a direction thRt the plaintiffwill be entitled to his costs throughout. S. R. Appeal allowed. I . _;___