M/S. ARITLAL & CO., GENERAL MERCHANTS & COMMISSION AGENTS v. KERALA STATE CIVIL SUPPLIES CORPORATION

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN** **WEDNESDAY, THE 18TH DAY OF JANUARY 2017/28TH POUSHA 1938** **AS.NO. 563 OF 2000 (F) ----------------------AGAINST THE JUDGMENT IN OS.410/1993 OF PRINCIPAL SUB COURT,ERNAKULAM DATED 10-03-2000** **APPELLANT(S)/PLAINTIFF: -----------------------** **M/S.ARITLAL & CO., GENERAL MERCHANTS & COMMISSION AGENTS, AMAGAON, A PARTNERSHIP FIRM DULY REGISTERED UNDER THE INDIAN PARTNERSHIP ACT REPRESENTED BY ITS POWER OF ATTORNEY HOLDER MR.JAYAPRAKASH.** **BY ADVS.SRI.K.N.SIVASANKARAN SRI.V.V.ASOKAN** **RESPONDENT(S)/RESPONDENT: -------------------------** **KERALA STATE CIVIL SUPPLIES CORPORATION, HAVING ITS REGISTERED OFFICE AT MAVELI BHAVAN, GANDHI NAGAR, KOCHI-20, REPRESENTED BY ITS MANAGING DIRECTOR.** **BY ADV. SHRI N.D.PREMACHANDRAN,SC,SUPPLYCO** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD 13.01.2017, THE COURT ON 18.01.2017 DELIVERED THE FOLLOWING:** ## **V.CHITAMBARESH & SATHISH NINAN, JJ.** ## **==================== A.S. No.563 of 2000** **==================== Dated this the 18[th] day of January, 2017** ## **J U D G M E N T** ## **SATHISH NINAN, J.** The defeated plaintiff in a suit for recovery of money is the appellant. 2. Plaintiff was the successful tenderer for supply of boiled rice to the defendant. The subject matter of the suit relates to contracts in respect of two periods, viz., one for the period 1987-88 and the other for the period 1989-90. Out of the amounts payable to the plaintiff, a portion was deducted by the defendant alleging that the goods supplied were of inferior quality and thus imposed a 'quality cut'. The suit is for recovery of the said amount. 3. The defendant contended inter _alia_ that the **A.S. No.563 of 2000** -: 2 :- suit is barred under Section 69(2) of the Indian Partnership Act, 1932 since the plaintiff firm is not a registered one and the person who has signed and verified the plaint is not a partner. It is also contended that the suit claim is time barred. As regards the merits of the claim, it was contended that in terms of the contract entered into between the parties, the defendant is entitled to recover the costs of the inferior quality rice supplied. 4. On the issue of limitation, the court below found that the transactions in question relate to different periods and under different contracts. It was held that Article 14 of the Limitation Act, 1963 applies, under which, the period of limitation is three years from the date of delivery of the goods. Accordingly, the claim for amounts in respect of the contract for the year 1987-88 was held to be barred by limitation. Claim for the period 1989-90 ## **A.S. No.563 of 2000** -: 3 :- was held to be within the period of limitation. On the merits of the claim, the court below held that even assuming that a part of the goods supplied was of inferior quality, the defendant did not have the right to determine the compensation and unilaterally deduct damages. Accordingly, the issue was found in favour of the plaintiff. However, the suit was dismissed holding that the suit is barred under Section 69(2) of the Partnership Act since the plaintiff has not proved that it is a registered partnership firm and the person who has signed and verified the plaint was a partner of the firm at the time of institution of the suit. 5. Heard the learned counsel for the appellant and the respondent. 6. In the appeal, the appellant has produced as additional evidence the certified extract of the register of firms issued by the Assistant Registrar ## **A.S. No.563 of 2000** -: 4 :- of Firms, Nagpur dated 20.11.2002 along with I.A.No.2599 of 2014 filed under Order XLI Rule 27 of the Code of Civil Procedure. As mentioned supra, the suit has been dismissed under Section 69(2) of the Partnership Act which bars a suit on a contract by an unregistered firm against a third party. All the other issues were practically decided in favour of the appellant, except for a portion of the claim which was held to be barred by limitation. 7. As regards the non-production of the certified extract of the register of firms before the court below, the appellant has a case that though there was a contention based on Section 69(2) for the defendant in the written statement and an issue was framed in that regard, before commencement of evidence, the learned counsel who was then appearing for the respondent/defendant submitted before the court that they are not disputing the ## **A.S. No.563 of 2000** -: 5 :- fact that the appellant is a registered firm and that the signatory to the plaint is a partner of the firm. Not even a single question was put to P.W.1, in the said regard. However, subsequently, there has been a change of counsel who seems to have pursued the contention. This was the circumstance under which the document in question was not produced before the court below. The said contention is disputed by the respondent/defendant who has also filed a counter affidavit. It is submitted that the version of the appellant is not correct since as is seen from the argument notes submitted before the court below, the contention regarding bar of suit under Section 69(2) of the Partnership Act was urged. 8. As regards the contention with regard to the maintainability of the suit by virtue of Section 69(2) of the Partnership Act, there is no material ## **A.S. No.563 of 2000** -: 6 :- available to enable the court to arrive at a proper conclusion. Not even a single question is seen put to PW1 regarding the said contention. The document now sought to be produced as additional evidence has a crucial bearing on the issue. The said document is essential for a proper determination on the question. Though it is true that the document ought to have been produced before the court below, the reason stated by the appellant for non-production of the same before the court below cannot be totally ruled out, especially in view of absence of any question in that regard to PW1. At any rate, we feel that in the interest of justice and for a proper determination of the issue, the said document is vital and necessary for the court. Laches on the part of the appellant in not producing the document before the court below has caused inconvenience to the respondent which is to be adequately ## **A.S. No.563 of 2000** -: 7 :- compensated. Hence, I.A. No.2599 of 2014 will stand allowed on payment of costs of Rs.25,000/- (Rupees Twenty five thousand only) to the learned counsel appearing for the respondent before this Court within one month from today. The original document produced along with I.A. No.2599 of 2014 is accepted in evidence subject to proof. 9. Assailing the finding of the court below on the issue of limitation, relying upon the judgment of the High Court of Andhra Pradesh in **Tallam Sambasivarao v. Sanisetti Bhadrayya** (1981 [1] APLJ 123), it is argued by the learned counsel for the appellant that the finding of the court below that the relevant Article that applies in the instant case is Article 14 is not correct and the correct Article is Article 113 of the Limitation Act. 10. Learned counsel for the respondent/defendant has made submissions **A.S. No.563 of 2000** -: 8 :- challenging the findings on issues against it. Even though there is no decree against the defendant, under Order XLI Rule 22 of the CPC, he is entitled to challenge the findings against him without filing a Cross Objection. Referring to the agreement between the parties and the correspondences, it is argued that finding of the court below that the respondent is not entitled to deduct value of the goods of inferior quality, is not correct. According to the learned counsel, the contract and the documents reveal that the respondent is duly authorised to make such deductions. It is further contended that when the agreement between the parties authorise such a deduction, the reasoning stated by the court below to negative the said claim is not correct. He would also contend that the interest awarded is unreasonable and excessive. 11. In the view that we have taken as regards **A.S. No.563 of 2000** -: 9 :- issue No.1, the suit necessarily has to be remanded to the court below to consider the additional document produced before this Court. In the circumstances, we feel that the trial court shall consider the entire matter afresh after affording adequate opportunity to both sides to adduce fresh evidence. The findings on the other issues are also accordingly set aside. In the result, the judgment and decree in O.S. No.410 of 1993 of the Principal Sub Court, Ernakulam are set aside. The suit is remitted to that court for fresh disposal. The court below is directed to dispose of the suit _de novo_ . In case of non-payment of the costs of Rs. 25,000/- mentioned supra, I.A. 2599 of 2014 and the appeal shall stand dismissed. The additional document produced along with I.A. No.2599 of 2014 before this Court shall also be forwarded to the court below along with the case ## **A.S. No.563 of 2000** -: 10 :- records. Parties shall appear before the Principal Sub Court, Ernakulam on 30.01.2017. **Sd/-** **V.CHITAMBARESH, JUDGE.** **Sd/SATHISH NINAN, JUDGE.** ## vsv /true copy/ P.S. To Judge