Joseph Emmanuel v John Varghese and K.N. Prince Kumar

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 3RD DAY OF JULY 2013/12TH ASHADHA, 1935 AS.No. 696 of 1996 ( ) ----------------------- AGAINST THE JUDGMENT AND DECREE IN OS 138/1994 of SUB COURT, PALA DATED 01-01-1996 APPELLANT: ------------ JOSEPH EMMANUEL, S/O. JOSEPH NOW AGED 37, THEDAKAYIL HOUSE MAVEDAARA, MEENACHIL VILLAGE MEENACHIL TALUK, KOTTAYAM BY ADV. SRI.BECHU KURIAN THOMAS RESPONDENTS/PLAINTIFF/1ST DEFENDANT: ----------------------------------- 1. JOHN VARGHESE, S/O. VARGHESE, NOW AGED 54 THOTTUPARAM HOUSE, KOOTHATTUKULAM MOOVATTUPUZHA TALUK ERNAKULAM DISTRICT 2. K.N.PRINCE KUMAR, S/O. NARAYANAN NOW AGED 35, KARIPPURATHU VEEDU ERUMPAYAMKARA VELLOOR VILLAGE, VAIKOM TALUK KOTTAYAM R2 BY ADV. SRI.B.GOPAKUMAR, CHINCY GOPAKUMAR R1 BY ADV. SRI.T.P.VARGHESE,PHILIP T.VARGHESE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 25.6.2013, THE COURT ON 03-07-2013, DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO: 4400 OF 1996 IN A.S.NO: 696 OF 1996 DISMISSED: 3.7.2013 SD/- K.SURENDRA MOHAN, JUDGE JJ /TRUE COPY/ P.S.TO JUDGE ## **K. SURENDRA MOHAN, J.** **-----------------------------------------------------------A.S. NO: 696 OF 1996 ----------------------------------------------------------Dated this the 3[rd] July, 2013.** ## **JUDGMENT** This is an appeal filed by the second defendant in O.S.138/1994 of the Sub Court, Pala challenging the judgment and decree dated 1.1.1996 in the said suit. The plaintiff is the first respondent and the second defendant is the second respondent in the appeal. The plaitiff had filed the suit for the realisation of an amount of Rs.47,500/- out of which, a decree for Rs.17,500/- was sought against the first defendant, while a decree for Rs.30,000/- was sought against defendants 1 and 2. The suit was filed in the following facts and circumstances:- 2. According to the plaintiff, the first defendant had purchased timber from him and had issued two cheques for Rs.35,000/- and Rs.34,250/- both dated 26.11.1988 drawn on the Cherthala branch of the Vijaya Bank, towards the price of timber so purchased. When the cheques were presented for encashment by the plaintiff from the Federal Bank Ltd., Cherthala, they were returned dishonoured for insufficiency of funds in the account. The first defendant was immediately informed of the dishonour of the cheque by issuing a registered notice on 31.1.1989, which was accepted by him on 3.2.1989. But he did not pay the amount due. A.S.696/1996 2 Subsequently, the first defendant paid an amount of Rs.21,500/- and thus the balance amount outstanding is Rs.47,500/-. 3. When the plaintiff demanded the amount from the defendant he was told that the first defendant had purchased some logs of timber at Kumali from one Scariah, Thakadipuram house, Kumali, that the trees had been cut and stocked in his compound, that he had sold the timber to the second defendant and that he would arrange payment of the amounts due to the plaintiff directly from the second defendant. Accordingly the plaintiff and the first defendant met the second defendant at his house at Mevada . The second defendant then agreed to pay Rs.30,000/- to the plaintiff and the first defendant agreed to pay the balance amount of Rs.17,500/-. Accordingly, a statement was prepared containing the details of the transaction and the said document was signed by the plaintiff as well as the defendants. One C.A. Kumaran who was present at the time also signed the statement. The said transaction was on 5.7.1989 and the statement so signed was handed over to the plaintiff by the first defendant. Another letter by which the second defendant agreed to pay Rs.30,000/- to the plaintiff was also signed and handed over to him. As per the said documents, defendants are liable to pay a sum Rs.17,500/- to the plaintiff. 4. Subsequently, the major portion of the timber was removed by the defendants. The suit was filed when the plaintiff learnt that the A.S.696/1996 3 defendants were making preparations to remove even the balance timber remaining in the property of Scariah, Thakadipuram House, Kumali without paying the amount due to the plaintiff. Therefore, he filed the suit for recovery of the amount due to him and also sought for an order of prohibitory injunction restraining defendants 1 and 2 from removing the logs of timber that they had stocked in Scariah's property comprised in survey No: 222 of Kumali village to any other place. 5. The suit was contested by the defendants. The first defendant filed written statement admitting execution of the agreement on 5.7.1989. He further admitted that he had issued two cheques for Rs.35,000/- and for Rs.34,250/- on 26.11.1988 drawn on the Cherthala Branch of the Vijaya Bank, towards the price of timber purchased by him from the plaintiff. But, according to the first defendant, the agreement between himself and the plaintiff was that he would make payment of the amounts due to the plaintiff before 31.1.1989 and as collateral security the second defendant had issued the cheques to the plaintiff which were not dated at the time of issue. The understanding was that the cheques would be presented only after 31.1.1989. But in violation of the said understanding, the plaintiff presented the cheques and got them dishonoured. The first defendant has admitted receipt of the notice issued by the plaintiff through his lawyer. According to him, on receipt of notice, he met the plaintiff in person and A.S.696/1996 4 assured him that the matter would be settled by the end of June 1989. Therefore, no reply was issued by him. Subsequently, he paid an amount of Rs.21,500/- to the plaintiff. 6. The second defendant had agreed to pay a sum of Rs.30,000/and the first defendant had agreed to pay the balance amount of Rs.17,500/- to the plaintiff. Out of the said amount of Rs.17,500/- , the first defendant paid an amount of Rs.8,000/- to the plaintiff on 30.1.1989. Therefore, he contended that he was liable to pay only the balance amount of Rs.9,500/-. He also contended that because of the order of interim injunction obtained by the plaintiff, he was not able to transport his timber from Kumali and, therefore, he had sustained heavy loss. Therefore, he prayed for dismissal of the suit. The plaint was amended on 6.10.1994 as per order in I.A.615/94 and prayer (a) was substituted by a new prayer. As per the amended prayer, a decree was sought for realisation of the amount of Rs.17,500/- from the first defendant and Rs.30,000/- from defendants 1 and 2 and from their assets, with interest. An additional written statement was filed by the first defendant after the amendment refuting his liability to pay the amount of Rs.30,000/- which was agreed to be paid by the second defendant. 7. The second defendant filed written statement contending that the agreement between the plaintiff and himself had become frustrated for A.S.696/1996 5 reasons beyond the control of the second defendant and also due to unforeseen events. He alleged that the first defendant had not entrusted him with the necessary passes for the transport of teak wood and that the first defendant had in collusion with the neighbours obstructed the removal of the logs. According to the second defendant he is bound to discharge the liability of paying the amount of Rs.30,000/- to the plaintiff only on removal of the last load of teak wood from the premises of Shri. T.C.Chacko and Joseph who are the children of Scariah, Thakadipuram. The fact that the first defendant had purchased loads of teak wood from the plaintiff and that the same was sold by the first defendant to one Kumaran son of Ayyappan, Chullikkattu, Uzhavoor Village as per an agreement dated 4.6.1989 is admitted. Since the first defendant and the said Kumaran could not lift the load within a stipulated period, the agreement was terminated and the second defendant purchased the timber from the children of Schariah with the knowledge and consent of the first defendant and Kumaran. Except for two lorry loads of timber purchased as stated above, the rest of the timber could not be lifted by the second defendant. Therefore, he has sustained a huge loss. The first respondent was responsible for the loss since he did not obtain the necessary passes from the forest department. Therefore, the second defendant obtained passes for two lorry loads and paid a sum of Rs.40,000/- to the owner of A.S.696/1996 6 the timber logs and Rs.35,000/- was paid to another debtor of the first defendant at Thodupuzha. He contended that he could never have foreseen that, the neighbours would create a blockade against removal of the logs of timber. The first defendant alone is responsible for the amount of Rs.30,000/- due to the plaintiff. According to the second defendant, the first defendant in collusion with one C.A.Kumaran and T.C.Chacko had lifted and removed all the logs in the property. No demand was made by the plaintiff for payment of any amount from the second defendant. He also contended that the plaintiff was not entitled to seek any relief against him. Therefore, he prayed for dismissal of the suit. 8. The court below framed five issues on the above pleadings and tried the suit. The evidence in the case consists of Exts.A1 to A3 and Exts.B1 to B5 documents, apart from the oral evidence of P.W.1 and D.Ws 1 to 4. 9. After an evaluation of the evidence on record, in the light of the contentions advanced by the rival parties, the court below found that there was no evidence to support the plea of discharge put forward by the first defendant. Therefore, it has been found that there is no evidence to support the contention of the first defendant that an amount of Rs.8,000/had been paid by him to the plaintiff on 30.7.1989 towards the price of timber purchased by him. The court below also has found that the plaintiff A.S.696/1996 7 was entitled to realise an amount of Rs.17,500/- from the first defendant and an amount of Rs.30,000/- from the second defendant with 12% interest. The said judgment and decree of the trial court is under challenge in the above appeal. 10. According to the counsel for the appellant, the contract between the plaintiff, first defendant and second defendant is a contingent contract under Section 31 of the Contract Act. The liability of the second defendant to pay any amount to the plaintiff could arise only on the removal of the logs of timber by him. According to the counsel since the second defendant could not remove the logs, he was not liable to pay any amount to the plaintiff. It is further pointed out that the suit is premature. The plaintiff should have waited till the second defendant removed the entire quantity of timber except the last two loads before demanding payment of the amount. Apart from the above, the second defendant does not owe any money to the plaintiff as per the decree. Therefore injustice is caused to the second defendant because he is made liable to pay an amount of Rs.30,000/- to the plaintiff though he does not owe any money to the plaintiff, the first defendant being the purchaser of timber from him. Therefore, it is contended that the suit is not maintainable against the second defendant. It is further pointed out that the contract between the plaintiff and the second defendant had become frustrated. According to A.S.696/1996 8 the counsel, there were obstructions to the removal of the logs, one caused by the neighbours and the other by the washing away of the bridge. The finding of the trial court that the obstruction was only for 2-3 hours is wrong and baseless, it is pointed out. According to the counsel, the bridge was restored only in December 1989. 11. Counsel for the first respondent-plaintiff contends that the contract in the present case was not contingent upon the happening or non-happening of an uncertain event. Since the agreement was not a contingent contract, the suit is not premature. According to the counsel the said contentions are put forward only for evading the payment that was legitimately due to the plaintiff. According to the counsel the allegation that the bridge was washed away is not pleaded by the second defendant. Therefore, it is pointed out that the said contention is absolutely without any bonafides or substance. The counsel further points out that the first defendant has not filed any appeal against the judgment and decree of the court below and therefore, the decree has become final as against the first defendant. Since the defendants do not seriously dispute that amounts are due from them to the plaintiff, the court below was right in decreeing the suit. Therefore, it is contended that the appeal is liable to be dismissed. A.S.696/1996 9 12. I have heard the counsel for the contesting parties. I have also perused the records of the case in detail. 13. The question that arises for determination in the above case is:- Whether the first respondent as plaintiff is entitled to realise the amount of Rs.30,000/- from the appellantsecond defendant, as found by the court below? 14. It is an admitted fact that the first defendant had purchased teak wood logs from the plaintiff. Towards the sale price, he had issued two cheques which are Exts. A1 and A1(a) for Rs.35,000/- and Rs.34,250/respectively dated 26.11.1988 drawn on the Vijaya Bank, Cherthala branch. The only dispute raised by the first defendant is that according to him, the cheques were handed over on the specific understanding that they would be retained as security by the plaintiff, that he would make the payment before 31.1.1989 and that in violation of the said understanding, the cheques were presented for collection by the plaintiff before 31.1.1989. Though the first defendant had further contended that he had paid an amount of Rs.8,000/- to the plaintiff on 30.7.1989 and that the balance amount payable by him was only Rs.9,500/-, there is no evidence for payment of the said amount. Therefore, the court below has held that the first defendant is liable to pay the amount of Rs.17,500/-, as claimed in the plaint. The first defendant has not filed any appeal and, therefore, the said finding of the court below has become final. A.S.696/1996 10 15. The contention of the appellant/second defendant is that his liability to pay the amount of Rs.30,000/- would arise only after the last load of teak wood was removed by him from the premises of T.C.Chacko and Joseph who are the children of Scariah. According to him, he could lift only two lorry loads of teak wood. The other lorry loads could not be lifted by him because the first defendant did not obtain passes from the various departments as agreed by him. Further, along with the neighbours, the first defendant also obstructed the removal of the timber by him. Consequently, he suffered huge loss. Therefore, it is contended that the agreement Ext.A3 had become frustrated, for reasons beyond his control. According to him a sum of Rs.40,000/- was paid by him to the owner of the logs of teak wood and Rs.30,000/- was paid to another debtor of the first defendant at Thodupuzha. However, it is worth noticing that the second defendant has not adduced any evidence in support of the above contentions put forward by him. 16. The plaintiff was examined himself as P.W.1 and has proved Exts.A1, A1(a), A3 & A3(a). Exts.A1 & A1(a) are the cheques issued by the first defendant in favour of the plaintiff on 26.11.1988. Exts.A3 is the agreement executed on 5.7.1989 between plaintiff, the first and second defendants. As per Ext.A3 agreement, the plaintiff is entitled to receive a sum of Rs.47,500/-. Out of the above, the first defendant undertook to pay A.S.696/1996 11 the amount of Rs.17,500/- while the second defendant was to pay the balance amount of Rs.30,000/-. In the event of default on the part of the second defendant to pay the amount, the plaintiff is given the liberty to realise the said amount. Though it is mentioned in Ext.A3 that it is the first defendant who is entitled to realise the amount on such default, the same appears to be a mistake and the reference is certainly to the plaintiff and not to the first defendant. On the same day, the second defendant has executed Ext.A3(a) document undertaking to pay the amount of Rs.30,000/- due to the plaintiff in two instalments upon transportation of the teak wood logs by him. The above document is a unilateral document and can only be described as an undertaking. It is in the above document that the second defendant has undertaken to pay off the entire amount due to the plaintiff before he sells off the entire quantity of teak wood logs, the expression used being that he would pay off the entire amount before the last load was removed by him. 17. The counsel for the appellant has strenuously argued that Ext.A3(a) was a contingent contract under Section 31 of the Contract Act. The said contention is not sustainable for more reasons than one. First of all, a reading of Ext.A3(a) shows that the payment of Rs.30,000/- stipulated therein is not made conditional upon the lifting of the last load of timber by the second defendant, as contended. The wording of the said document A.S.696/1996 12 shows that the expression has been used only to indicate an outer time limit for payment of the amount that is due and payable to the plaintiff. Further Ext.A3(a) is not a contract but a unilaterial undertaking executed by the second defendant, to which the plaintiff was not a party. Therefore, the contention that the amount of Rs.30,000/- need not be paid by the second defendant since he could not lift the entire quantity of timber as stipulated, is not sustainable. It is also worth noticing that there is absolutely no evidence in the present case to show that the second defendant was not able to remove the timber as contended by him. 18. The court below has considered the oral evidence available in the case and has found that the evidence does not inspire confidence. I have also been taken through the oral evidence and I have also found that the evidence is not reliable. 19. The second defendant has put forward two reasons for not removing the timber as stipulated in Ext.A3 agreement. The first one is that the removal of timber was obstructed by the neighbouring property owners and the first defendant also joined in the obstruction. Secondly, it is contended that a bridge was washed away and was restored only months thereafter, in December 1989. The above contentions are disputed by the plaintiff. As noted above, the second defendant has not adduced any evidence to prove that there was obstruction, as contended A.S.696/1996 13 by him. With regard to the washing away of the bridge, the evidence of D.W.4 is to the effect that though the bridge was taken away by floods, the same was restored immediately and that there was no obstruction thereafter. According to him, the bridge was restored within 2 to 3 hours and therefore, the obstruction was only for the said short period. According to D.W.4, the entire stock of teak wood was removed in November-December 1989. Therefore, in the absence of any evidence to prove any of the contentions of the appellant, all the above contentions are liable to be rejected. 20. It is further contended that since the payment was to be made only after lifting the last two loads of timber, the suit was premature and was liable to be rejected. As already noticed above, Ext.A3(a) is only an undertaking given by the second defendant. The stipulations in the said undertaking are not capable of binding the rights of the plaintiffs in any manner. There is also no evidence regarding the contention of the second defendant that he was not able to lift the timber as expected by him. Therefore, the said contention also is without substance. The counsel for the appellant has relied on the decision reported in **Vithal Bhai (P) Ltd. v. Union of India** {(2005) 4 SCC 315} as authority for the proposition that a premature suit was not maintainable and was liable to be rejected under Order VII Rule 11 of the Civil Procedure Code. However, the said decision A.S.696/1996 14 has no application to the facts of the present case since the suit here was not premature. 21. The next contention of the second defendant is that the contract has become frustrated. In the present case, the doctrine of frustration is not applicable for the reason that the money that is sought to be recovered by the plaintiff was already due from the first defendant who had purchased teak wood logs from the plaintiff. It is a portion of the said amount that was agreed to be paid by the second defendant as per Ext.A3 agreement. Since the payment was not made conditional on the performance or nonperformance of any other act, the contention of the second defendant that the contract had become frustrated has no substance. It is only in Ext.A3 (a) that the second defendant has undertaken to pay the amount before the removal of last load of timber. Though the second defendant has contended that there was obstruction against removal of the timber as found above there is no evidence for the same. Therefore, the doctrine of frustration also has no application to the facts of the present case. 22. It is further contended by the counsel for the appellant that Ext.A3 document is not supported by consideration since, the first defendant is the person who has purchased timber from the plaintiff, the second defendant has no liability to pay the said amount, it is pointed out. A reading of Ext.A3 shows that the same has been executed at the A.S.696/1996 15 intervention of certain mediators, in settlement of the disputes between the parties. In the presence of the mediators, the second defendant has made an unconditional undertaking to pay an amount of Rs.30,000/- to the plaintiff. The agreement is admitted and there is no allegation of fraud, coercion or other vitiating circumstances against the agreement. Therefore, Ext.A3 is valid and is capable of enforcement. In view of the above, the court below has rightly rejected the contentions of the second defendant and decreed the suit. I do not find any grounds to interfere with the judgment and decree of the court below. For the foregoing reasons, the appeal fails and is dismissed. No costs. Sd/K. SURENDRA MOHAN Judge jj /TRUE COPY/ A.S.696/1996 16 K. SURENDRA MOHAN, J. **--------------------------------** **A.S.NO:696 OF 1996 --------------------------------** ## **JUDGMENT** Dated:3[rd] July, 2013.