- 1 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 25TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR REGULAR FIRST APPEAL NO.100198 OF 2019 (MON) BETWEEN: SRI SRINIVAS S/O. MUTHU, AGED ABOUT 45 YEARS, OFFICE AT PROPRIETOR, M/S. SRINIVAS EARTH MOVERS, NO.15/19, OPP. MAREMMA TEMPLE, NEAR VALMIKI CIRCLE, DAM ROAD, HOSAPETE-583201. …APPELLANT (BY SRI M. VENKATARAMAN, ADVOCATE FOR SMT. S.M. USHA, ADVOCATE) AND: SRI B. PRASAD KUMAR S/O. B. BHARMAPPA, AGED ABOUT 30 YEARS, OFFICE AT PROPRIETOR, M/S. SHREYAS LOGISTICS, R/O: AZAD NAGARA, 2ND CROSS, 22ND WARD, HOSAPETE-583201, BALLARY DISTRICT. …RESPONDENT (NOTICE TO RESPONDENT IS SERVED) THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 OF THE CODE OF CIVIL PROCEDURE, 1908, PRAYING TO ALLOW THE APPEAL AND DISMISS THE SUIT O.S.NO.24/2013 FILED BY THE PLAINTIFF/RESPONDENT BY SETTING ASIDE THE IMPUGNED JUDGMENT AND DECREE DATED 13.10.2015 PASSED BY THE PRINCIPAL SENIOR CIVIL JUDGE AND JMFC AT HOSPET, WITH COSTS AND THROUGHOUT AND ETC.,. Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 THIS REGULAR FIRST APPEAL COMING ON FOR DISMISSAL THIS DAY, THE COURT DELIVERED THE FOLLOWING: ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) This appeal is filed by the defendant challenging the judgment and decree dated 13.10.2015, passed by the Principal Senior Civil Judge and JMFC, Hosapete, in O.S.No.24/2013, thereby the suit filed for recovery of money is decreed. 2. For the purpose of convenience and easy reference, ranking of the parties is referred to as per their status before the trial Court. 3. It is the case of the plaintiff that the plaintiff and defendant are known to each other. The plaintiff is doing transport business in the name and style as “Shreyas Logistics” at Hosapete. The defendant is a mining trader and has been doing business in the name and style as “Shrinivas Earth Movers” in Hosapete town and used to transport iron ore material through transport office of the plaintiff for long time. The defendant has transported goods and materials - 3 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 through transport office of the plaintiff on various dates on credit basis under various credit bills, which are kept and maintained by the plaintiff in the regular course of business. The defendant has made certain payments, but later on has not paid full amount. Therefore the defendant is still due to pay an amount of Rs.10,07,682/- and therefore the plaintiff has prayed to clear the balance amount. Ultimately the defendant for making part payment has issued cheque for Rs.5,00,000/- but the said cheque was bounced for the reason of ‘insufficient funds’. Thereafter the plaintiff got issued a legal notice, but the defendant has replied with untenable words. Therefore, the plaintiff filed suit for recovery of money of Rs.11,94,062/- with interest at the rate of 18% p.a. Hence, prayed to decree the suit as prayed. 4. The defendant has engaged service of an advocate and filed the written statement and denied all the averments made in the plaint. It is the contention of the defendant that the defendant has nothing to do with “Shrinivas Exporters” and he has never conducted any mining trading business. There is no agreement between the - 4 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 plaintiff and defendant in this regard. Further, if the plaintiff is exporting goods and materials, then the plaintiff had to collect indent, but that is not done by the plaintiff. Further, the plaintiff has not produced any documents to show that the plaintiff has offered credit facilities for transportation of goods and materials. So, whatever the documents the plaintiff is having, are all created and concocted one just for the purpose of the case. Further it is the contention that the defendant has issued cheque for security purpose. The plaintiff has misused the said cheque. Further, the plaintiff has filed a criminal case against the defendant in C.C.No.953/2012, which is pending before the Magistrate Court. Therefore, parallel proceedings are not maintainable. On all these grounds the defendant prays to dismiss the suit. 5. Based on the pleadings of the parties, the Trial Court has framed the following issues: 1. Whether the plaintiff proves that, the defendant has transported the goods and materials through the plaintiff transport office on various dates between - 5 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 23.09.2009 and 23.10.2009 on credit basis? 2. Does plaintiff proves that, the defendant is found due of Rs.10,07,682/- to the plaintiff transport company? 3. Does plaintiff proves that, the cheque issued by the defendant towards the part satisfaction of dues returned bounced for want of enough funds in the bank account of defendant? 4. Does plaintiff is entitled for recovery the principal due amount of Rs.10,07,682/-? 5. Does plaintiff is entitled for interest at the rate of 18% p.a., on Rs.10,07,682/- from 23.10.2009 to 23.01.2013? 6. What order or decree? 6. The plaintiff is examined as PW.1 and got marked documentary evidence as Ex.P1 to Ex.P154. The defendant is examined as DW.1 and got marked documentary evidence as Ex.D1. 7. The Trial Court has decreed the suit and thereby directed the defendant to pay a sum of Rs.11,94,062/- to the - 6 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 plaintiff along with interest at the rate of 18% p.a., on Rs.10,07,682/- from 23.10.2009, till the entire amount is paid. 8. The Trial Court has answered issues that defendant has admitted in cross-examination that defendant and plaintiff are friends to each other. Upon believing the documentary evidence Ex.P1 to Ex.P154, which are goods consignment note, Gate pass and Shafia Minerals Cash/Credit bill along with other documentary evidence, proved that Shrinivas Exporters transported goods and materials through plaintiff’s transport office, whereas the defendant was doing mining trading business. Further, accepted the contention of plaintiff that “Shrinivas Earth Movers” and “Shrinivas Exporters” are one and the same and are belonging to defendant. Further it is observed that both plaintiff and defendant have regular course of business. Therefore, defendant had issued a cheque for a sum of Rs.5,00,000/- as per Ex.P137, which proved the fact that defendant has paid the said amount towards hiring a transportation services through plaintiff and disbelieved the - 7 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 defendant’s evidence that the said cheque was issued for security purpose. Therefore, in this way, came to conclusion that plaintiff had proved that its firm was having regular course of business of transportation service on behalf of defendant and defendant had supplied the materials of iron ore to the consignee. Hence, believing the case of plaintiff, the Trial Court has decreed the suit. Further it is observed that defendant has not proved that “Shrinivasa Earth Movers” and “Shrinivasa Exporters” are two different firms and Shrinivasa Exporters is nothing to do with the defendant. In this regard, defendant has failed to prove the same. Therefore, the Trial Court believed that plaintiff is having more probability and he proved the case and accordingly, decreed the suit filed by the plaintiff. 9. Being aggrieved by the judgment and decree passed by the Trial Court, defendant has preferred this appeal by raising various grounds and learned counsel for the defendant, in support of grounds raised, has argued that parallel proceedings of criminal case for the offence punishable under Section 138 of the Negotiable Instruments - 8 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 Act, 1881 (for short, ‘N.I Act), of cheque bounce and recovery of amount through cheque are not maintainable. Therefore, it is argued that two parallel proceedings in civil and criminal are not maintainable. Further argued that “Shrinivasa Exporters” and “Shrinivasa Earth Movers” are two difference firms and defendant has nothing to do with Shrinivasa Exporters. Further stated that when the plaintiff is claiming that goods were consigned on behalf of Shrinivasa Exporters and it has nothing to do with defendant, as the defendant is doing business in the name and style of “Shrinivasa Enterprises”, therefore, the transportation of iron ore and other materials by the plaintiff from his transportation office has nothing to do with defendant and this fact is not correctly appreciated by the Trial Court. Further, the cheque issued as per Ex.P147, is only for security purpose and has nothing to do with the transportation of iron ore from plaintiff’s office. But the Trial Court has made wrong connection with the said cheque to the Shrinivasa Exporters. Hence, it resulted into erroneous judgment and decree. Therefore, on all these grounds, - 9 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 learned counsel for the appellant prayed to set aside the judgment and decree passed by the Trial Court by allowing the appeal. 10. Initially the respondent is represented by an advocate, but later on, advocate has filed a memo for retirement from the case on behalf of respondent. The respondent/plaintiff though served with notice, but has not appeared and not made any representation through advocate. 11. Upon hearing the learned counsel for the appellant/defendant and perusing of Trial Court records, the points that arise for my consideration are as under: i) Whether, under the facts and circumstances involved in the case, plaintiff proved that defendant has transported goods and materials through the plaintiff’s transport office and defendant is due for Rs.10,07,682/, thus, the plaintiff is entitled for recovery of an amount of Rs.10,07,682/-? - 10 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 ii) Whether, under the facts and circumstances involved in the case, it is proved that plaintiff is entitled to recovery of amount above stated, then what would be the rate of interest leviable? iii) Whether, the judgment and decree passed by the Trial Court requires any interference? 12. It is the case of defendant that plaintiff is doing transportation business under the name and style as “Shreyas Logistics” at Hosapete. It is the case of defendant that defendant is doing business in the name and style of “Shrinivasa Earth Movers” and “Shrinivasa Exporters”. The defendant was transporting goods and materials through transport office of plaintiff. But defendant has not paid transportation service charges to plaintiff. The defendant has issued a cheque for a sum of Rs.5,00,000/- to plaintiff, but the said cheque is returned unpaid with an endorsement of “Insufficient Funds”. Hence, plaintiff has filed the suit for recovery of money. Ex.P1 to Ex.P138 are Goods Consignment Note, Gate pass and Shafia Minerals - 11 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 Cash/Credit bill and tax invoice for having purchased commodities. The defendant has not disputed that plaintiff is carrying transport service business in Hosapete under the name and style of “Shreyas Logistrics”. The plaintiff has produced Goods Consignment Note under the name and style as “Shreyas Logistics”. The goods transporters are mentioned as “Shrinivasa Exporters” to one Zann Commodities Private Limited, Mangalore and Manipal and also to others. There are Gate Pass issued by the Krishnapathnam Port Company Limited. There are cash/credit and tax invoice having purchased material from Shafia Minerals and Sri.Manjunatheswara Minerals and also from other minerals. This documentary evidence Ex.P1 to Ex.P138 proved the fact that Shrinivasa Exporters is a trading company, which has purchased materials from many companies such as Shafia Minerals and Sri.Manjunatheswara Minerals and iron ore were transported to consignee as mentioned in the said goods consignment note through truck. The truck numbers were mentioned in the gate pass and also in the cash/credit bills. All these documentary - 12 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 evidence proved the fact that Shrinivas Exporters was transporting iron ore materials by hiring service through transport office of plaintiff to various consignee and some of which, through ports. The gate pass issued by port authorities proved the fact that iron ores were transported through various trucks as mentioned in cash/credit bills of mining company and in the gate pass issued by port authorities. But the plaintiff is contending that defendant was transporting iron ores under the name and style of “Shrinivasa Enterprises”, but defendant has not made any attempt that “Shrinivasa Enterprises” is not belonging to him. The dispute of defendant is only denying averments in the plaint. The plaintiff and defendants are known to each other, which is borne out from the evidence of DW.1 in the cross-examination. Further, it is the evidence of defendant that defendant used to pay some amount to plaintiff in the regular course of business. This fortifies the fact as pleaded by the plaintiff and produced by the evidence that plaintiff’s firm was having regular course of business of transportation service on behalf of defendant and defendant had supplied - 13 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 the materials of iron ore to the consignee and defendant was hiring transport service business through plaintiff. 13. Further, defendant has admitted that he had issued a cheque-Ex.D1 to plaintiff for a sum of Rs.5,00,000/- and the said cheque was returned unpaid with an endorsement “Insufficient Funds”. The defendant has contended that cheque is issued towards security purpose. What security purpose the said cheque is issued, is not demonstrated by defendant by leading evidence. It is an attempt made by defendant that in the reply given to the legal notice issued by the plaintiff as per Ex.P15 to Ex.P152 that the said cheque was issued just to show the debt is not believable. But the fact is proved that defendant has issued cheque for a sum of Rs.5,00,000/- as per Ex.D1 to plaintiff and plaintiff also noted that the said cheque is bounced and plaintiff has filed a criminal case against defendant for the offence of cheque bounce under Section 138 of N.I Act. These evidence proved the fact that there was regular business transaction between the plaintiff and defendant that defendant was hiring services through plaintiff’s business - 14 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 transportation service for transportation of goods and materials to various consignee. Further, upon considering the evidence of DW.1, except denial of the case of plaintiff, there is no positive evidence to negate the case of plaintiff. Therefore, upon considering all the evidence, the Trial Court has correctly assessed evidence and decreed the suit that the plaintiff is entitled to recovery of money from defendant. Accordingly, the judgment and decree passed by the Trial Court requires no interference except amount and rate of interest is concerned. 14. The plaintiff has contended that defendant is still in due of payment of Rs.10,07,682/-, but decreeing the suit for Rs.11,94,062/- is not correct. Therefore, accepting the plaintiff’s contention that defendant is having still balance of payment of Rs.10,07,682/-, the suit is liable to be decreed to this amount. Further, the rate of interest put at 18% is to be scaled down to 12% per annum from 23.10.2009, till the entire amount is paid. To this extent, the appeal filed by the appellant is liable to be allowed in part. - 15 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 15. Accordingly, answered point No.1 in the ‘affirmative’, point No.2 is answered holding that the plaintiff is entitled to receive interest at the rate of 12% per annum from 23.10.2009, till the entire amount is paid. Therefore, the interference with the judgment and decree is only with regard to the amount above stated and accordingly, answered point No.3 in the ‘partly affirmative’. 16. Hence, I proceed to pass the following: ORDER i) The appeal is allowed in part. ii) The judgment and decree dated 13.10.2015, passed in O.S No.24/2013, by the Court of Principal Senior Civil Judge, JMFC, Hospet, is modified holding that the plaintiff is entitled to recover an amount of Rs.10,07,682/- along with interest at the rate of 12% p.a. from 23.10.2009, till the entire amount is paid. iii) No order as to cost. - 16 - NC: 2025:KHC-D:3802 RFA No. 100198 of 2019 iv) Draw award accordingly. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE MRK-para 1 to 4. PMP-para 5 to end. CT: UMD. List No.: 1 Sl No.: 10