#suit Archives - lexpeeps

-Report by Arunima Jain

The Delhi High Court on Friday carefully examined Order XIV Rule 5 & Order XI of the Civil Procedure Code, 1908 while adjudicating the present case. Herein, it has been made amply clear by the court that when filing additional documents in a commercial lawsuit, the plaintiff cannot claim that these are in response to the arguments made by the defendant in the written statement. Order XI of the CPC as it relates to commercial lawsuits would be completely disregarded if it allowed a party to file supplementary papers at any point.

FACTS

In the matter at hand, the plaintiff had pre-existent issues already filed in front of the Hon’bleCourt in the current matter. The present application was filed on behalf of the plaintiff toinclude an additional issue faced by the plaintiff. It was submitted before the court that anissue regarding the rendition of accounts by the defendant had not been framed while preparing for the evidence, in the issues provided. A Local Commissioner was appointed on December 16th, 2022, to record the testimony in the case. The plaintiff has submittedaffidavit-based evidence, but the testimony has not yet been entered into the record.

CONTENTIONS

Petitioner

The petitioner’s learned counsel has submitted before the High Court that while preparing forthe evidence in the case, the plaintiff accidentally became aware that the problem surroundingthe defendant’s rendition of accounts had not been framed. The averments contained in

paragraph 15 of the plaint about the defendant’s rendition of accounts was drawn attention.The defendant has refuted the information in this very paragraph in a written statement. Moreover, the plaintiff asserts that the Licence Agreement between the parties was terminatedon December 30, 2016, that there is no longer an active contract between the parties, and that the defendant is only making payments to the plaintiff in accordance with temporary ordersissued by this Court.

Respondent

Contrary to the petitioner’s counsel, the respondent’s learned counsel submits that onNovember 28, 2019, when the problems in the lawsuit were being framed, the Court did notframe any such issue regarding the rendering of accounts. This was due to the fact that theLicence Agreement that governed the plaintiff and defendant’s relationship required thedefendant to pay the plaintiff an annual licence fee. As a result, it was unnecessary to framethe problem of the defendant producing a statement of finances. In addition to that, theplaintiff should have provided the aforementioned documents with the plaint because it washis responsibility to prove his ownership of the works that are the subject of the current lawsuit when he filed it. Furthermore, it is claimed that the current application was submitted more than three years after the issues were first framed. The plaintiff has been unable toprovide any justification for failing to include the papers with the replication.

JUDGEMENT

Upon giving due regard to the facts and law in the above-mentioned case, it is contended bythe Hon’ble Court that it is clear from the contentions by both the parties and the precedentsthat the plaintiff has clearly argued that the documents are being presented to refute theposition put up by the defendant and, as a result, could not have been filed at the time the complaint was filed. However, the plaintiff has not explained why the aforementioned documents were not filed with the replication. Moreover, the plaintiff has also missed from providing just cause as to failing to provide reasonable cause for untimely filing. If a party isallowed to file additional documents at any point throughout the suit, the entire purpose of the CPC regulations relevant to commercial lawsuits would be negated. Accordingly, the present application in the High Court of Delhi has been dismissed.

READ FULL JUDGEMENT: https://bit.ly/3LCJzb1

-Report by Harshit Gupta

In the case of “The Chairman & Managing Director City Union Bank Ltd. & Anr. V. R, Chandramohan“, the apex court held that the burden of proving the deficiency in service is on the aggrieved party, and in the present case, the respondent-aggrieved was not able to prove that there was any deficiency in service.

FACTS:

The present appeal was from the order dated 01.02.2007 passed by National Consumer Disputes Redressal Commission, Circuit Bench at Chennai hereinafter “National Commission.” The National Commission confirmed the judgment and order dated 23.12.2004 of the State Consumer Disputes Redressal Commission, Chennai “State Commission.” The facts behind the case are that the respondent here was a complainant against the appellants before the State Commission for a deficiency in service on the side of banks. The respondent is a Managing Director of “D-Cube Constructions (P) Ltd” and has its office in Chennai. Shri R. Thulasiram and Shri R. Murali were the other directors of the same company. An NRI named Ravindra sent two drafts one for 5 lakhs and another one for 3 lakhs INR. On checking out, the respondent found that the drafts have not been credited to his account. Later the respondent came to know that appellant No. 2 was presented and the same was paid to the City Union Bank, Ram Nagar Branch. The respondent requested that appellant No. 2 to re-credit the amount to his account. Respondent found that another account in the name of “D-Cube Construction” is being operated and the drafts were credited into that account. He thereafter filed a complaint in the State Commission and was decided in the favour of the complainant by granting him rupees 8 lakhs along with one lakh as compensation. Being aggrieved by the order of the State Commission, the appeal was filed in the National Commission and was dismissed by the National Commission.

CONTENTIONS:

Appellants:

The counsel for the appellants contended that both the Commissions had erred while giving Judgement and Order in this case as there was no fault or imperfection from the side of the Bank and there was no deficiency in service under section 2(1)(g) of Consumer Protection Act, 1986. He relied on cases “Ravneet Singh Bagga V. KLM Royal Dutch Airlines and Anr. ” and “Branch Manager, Indigo Airlines Kolkata and Anr. V. Kalpana Rani Debbarma and Ors” that the complaint was not even maintainable before the State Commission and the respondent had failed to prove any deficiency in service on the part of the appellants. He also contended that drafts were issued in the name of “D-Cube Construction” only.

Respondent:

The counsel for the respondent contended that two forums had consistently held the appellants liable for the deficiency in service. He further added that the banks are vicariously liable for the actions of their employees. He further relied on the cases “Kerala State Cooperative Marketing Federation V. State Bank of India and Ors.” and “Indian Overseas Bank V. Industrial Chain Concern.”

JUDGEMENT:

In the current case, the main issue was that was there any deficiency in service as required by the provisions of the Consumer Protection Act, 1986 and in answer to this question the Court held that there was any willful neglect in deficiency in service or imperfection or shortcoming. The Court relied on the appellants’ case of Bagga. The court said that since some disputes were among the director, therefore, the bank cannot hold them liable if they acted bona fide and followed the due procedure. The Court further added that the burden to prove is on the aggrieved party and here the respondent was unable to prove that there was any deficiency in service on the part of the bank. Hence the order of the National Commission and State Commission was set aside.

READ FULL JUDGMENT: https://bit.ly/3KAnvxg

Case Number:

Civil Appeal No. 3717 of 1982, arising out of SLP (Civil) No. 8056 of 1981

Case Citation:

(1983) 1 SCC 22 : 1983 ALJ 488 : AIR 1983 SC 523

Bench:

D.A. Desai and R.B. Misra

Decided On:

18 November 1982

Section:

Section 32(1)(b) of the Indian Partnership Act, 1932

Section 32 of the Indian Partnership Act, 1932 deals with the retirement of a partner. Section 32(1)(b) has provided for the retirement of a partner in accordance with an agreement. According to this, a partner may retire if there is an express agreement between the parties for the same.

Facts of the Case

The plaintiff-appellant had filed a suit in the Trial Court for the dissolution of the partnership firm and also for the rendition of the accounts of “Shyam Bricketing Udyog”. The firm was situated in Etah in the state of Uttar Pradesh. which was also the principal place of business of the firm. The trial court granted the relief of dissolution effective from 23 November 1976 and also passed the decision in favor of rendition of accounts. The respondents-defendants were not pleased by this and approached the High Court. The High Court allowed the suit and set aside the concurrent findings. The High Court dismissed the suit of the plaintiff along with the costs. Thus this appeal is by special leave.

The plaintiff had filed a suit for the dissolution of the firm and rendition of accounts. He alleged that the partnership was at will and that the firm had been dissolved on 23 November 1976 by notice. The respondents argued that the partnership wasn’t, in fact, a partnership at will.

Issues before the High Court

Whether the partnership was a partnership at will
Whether the respondent (now appellant) was entitled to retirement or dissolution of the firm itself.

After listening to the arguments of both sides and after a thorough discussion, the High Court held that the partnership wasn’t a partnership at will. This court shall not take up the first contention and only take up the second contention.

The present issue before the Court

Whether the appellant is entitled to retirement or the dissolution of the partnership itself.

The ratio of the Bench

The two-judge bench of the Supreme Court did a thorough reading of Clauses 18 and 20 of the instrument of Partnership. The bench also discussed Section 32(1) of the same. Upon reading Clauses 18 and 20 the court observed that a partner can in fact disassociate from the firm. In the same way, Section 32(1)(b) provides for the retirement of a partner in accordance with the terms of the partnership The bench held that the High Court made an error and did not view the plaintiff’s contention from the correct angle. The High Court went into the appreciation of the contention as a breach of contract and did not go into the absolute right to retire from a partnership conferred by Clause 18.

The court upon a combined reading of the Clauses 18 and 20 observed that there was no bar on the right to the retirement of a partner within one year of the commencement of the partnership and that there was only a consequence to such an action. The consequence is that the capital shall not be refunded until the expiry of the period of one year.

The decision of the Court

The two-judge bench of the Supreme Court decided that the plaintiff had retired from the partnership and that such retirement is effective from the day of the institution of the suit.

They held that the partnership is not dissolved and that the accounts shall be taken up to and inclusive of the day which precedes the institution of the suit.

The case analysis has been done by Om Gupta, a first-year law student pursuing BBA-LLB from the University School of Law and Legal Studies.

The case analysis has been edited by Shubham Yadav, a 4th year Law student at Banasthali Vidyapith, Jaipur.

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This case brief is written by Sanskriti Goel, a 1st year law student from Chanderprabhu Jain College of Higher Studies and School of law, GGSIPU.

Citation

(1913) 11 ALJ 489

Relevant Act/Sections

The Indian Contract Act, 1872 :

Section 2(a): When one person signifies to another his willingness to do or to abstain from doing anything, to obtain the assent of that other to such act or abstinence, he is said to make a proposal.

Section 2(b): When a person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.

Section 2(d): When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

Section 8: Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.

Brief Facts

The nephew of the defendant had absconded from home. He was nowhere to be found. The defendant sent his servants to various places in search of his nephew.
The plaintiff was one of the servants of the defendant and he was sent to Haridwar in search of the boy. He was given money for his travel fare and other expenses.
While the search for the boy was still going on, the defendant issued handbills offering a reward of ₹501 to anyone who might find his nephew and bring the boy back home.
The plaintiff succeeded in tracing the boy and brought him back to the defendant. As the plaintiff was unaware of the reward offered, he did not ask for it and continued working for the defendant.
After about 6 months, due to some disputes, the defendant dismissed the plaintiff from the job.
Afterward, the plaintiff filed a suit against the defendant claiming the reward of ₹501 that was due to him.

Contentions of the Parties

Plaintiff

The plaintiff contended that the very performance of the task assigned to him was sufficient consideration for the defendant’s promise since the plaintiff had successfully traced the boy and brought him back home and thus fulfilling the defendant’s conditions.

He affirmed that neither motive nor knowledge of the offer was not essential and hence, he was entitled to the reward.

Defendant

The defendant argued that there was no contract between the parties as there was no acceptance of the offer.

He also argued that the plaintiff, being his servant, was under an obligation to perform the task assigned to him, and therefore, such performance cannot be regarded as sufficient consideration for the defendant’s promise.

Legal Issues

Was there a valid acceptance to constitute a legally binding contract?
Was the plaintiff entitled to the reward that was offered by the defendant for tracing the boy?
Did tracing of the boy by the plaintiff can be regarded as sufficient consideration for the defendant’s promise?

Ratio of the Case

In the case of Lalman Shukla v. Gauri Dutt, it was held that there can be no acceptance unless there is knowledge of the offer.

Although in the present case, the offer was a general offer where merely fulfilling the conditions of the offer itself is treated as an acceptance to create a contract but, fulfilling the conditions under the present case cannot be regarded as acceptance of the offer due to lack of knowledge of the offer.

Decision of the Allahabad High Court

The High Court observed that “A suit like the present can only be found on a contract. To constitute a contract, there must be an acceptance of the offer and there can be no acceptance unless there is knowledge of the offer. Motive is not essential but knowledge and intention are. Moreover, there was already a subsisting and therefore, the performance of the act cannot be regarded as a consideration for the defendant’s promise.”

Consequently, the suit was dismissed and the defendant was held not liable to pay the reward to the plaintiff.