- 1 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 19TH DAY OF FEBRUARY, 2025 PRESENT THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA REGULAR FIRST APPEAL NO. 100184 OF 2018 (MON) BETWEEN: 1. M/S. INDUS MINES & MINERALS PRIVATE LIMITED, REGISTERED OFFICE, PLOT NO.205, JANIKIRAMA APARTMENTS, RTC CROSS ROADS, CHIKKADAPALLY, HYDERABAD, STATE ANDRA PRADESH. REP. BY ITS DIRECTOR, SRI. J. KANNAIAH CHOWDARY, S/O. J.V.R. SATHYA NARAYAN MURTHY, AGE 41 YEARS, OCC: BUSINESS, R/O. DOOR NO.2, DARA BENDRE NAGAR, V. NAGAPPA LAYOUT, HOSPET ROAD, BALLARI-583103. 2. M/S. INDUS MINES & MINERALS PRIVATE LIMITED, ADMINISTRATIVE OFFICE, DOOR NO.2, DARA BENDRE NAGAR, V. NAGAPPA LAYOUT, HOSPET ROAD, BALLARI. REP. BY ITS DIRECTOR & IN CHARGE OF BALLARI SRI. J. KANNAIAH CHOWDARY, S/O. J.V.R. SATHYA NARAYAN MURTHY, AGE 41 YEARS, OCC: BUSINESS, R/O. DOOR NO.2, DARA BENDRE NAGAR, V. NAGAPPA LAYOUT, HOSPET ROAD, BALLARI-583103. Digitally signed by VISHAL NINGAPPA PATTIHAL Location: High Court of Karnataka, Dharwad Bench - 2 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 3. J. KANNAIAH CHOWDARY S/O. J.V.R. SATHYA NARAYAN MURTHY, AGE 41 YEARS, OCC: DIRCTOR OF M/S INDUS MINES & MINERALS PRIVATE LIMITED, R/O. DOOR NO.2, DARA BENDRE NAGAR, V. NAGAPPA LAYOUT, HOSPET ROAD, BALLARI-583103. … APPELLANTS (BY SRI. GIRISH S. HULMANI, ADVOCATE) AND: SREENIDHI TRADING COMPANY, REPRESENTED BY IS PROPRIETOR, SRI. BADARINARAYANA S/O. NANDAKISHOR LADDA, AGE 50 YEARS, OCC: BUSINESS, R/O. DOOR NO.345, KIRAN NIVAS, OPP TO ALL INDIA RADIO STATION, HOSPETE-583201. … RESPONDENT (BY SRI. K. C. PATIL, ADV. FOR SOLE RESPONDENT) THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 OF CPC, 1908, PRAYING TO SET ASIDE JUDGMENT AND DECREE PASSED BY THE LEARNED ADDL. SENIOR CIVIL JUDGE & JMFC, HOSAPETE IN O.S. NO.59/2008 DTD 22TH FEBRUARY 2018 AND DISMISS THE SUIT OF THE PLAINTIFF AND ETC. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA - 3 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE UMESH M ADIGA) 1. This is defendants’ appeal against the judgment and decree dated 22.02.2018, passed in O.S. No.59/2008 by the Addl. Senior Civil Judge and JMFC at Hosapete. The plaintiff has filed the suit for recovery of the amount from the defendant Nos.1 to 3. The said suit was decreed by the impugned judgment. The same is challenged by defendant Nos.1 to 3 in the present appeal. 2. For the sake of convenience, the parties are referred to as per their ranking before the Trial Court. 3. Brief facts of the case of both the parties before the trial Court are as under: It is the case of the plaintiff that, he is the Proprietor of the Business concern by name of “Sreenidhi Trading Company” and the defendants’ Firm has contacts with mine owners and sellers of iron ore. Defendant No.3 being ostensibly authorised as a Director to enter into a contract on behalf of defendant Nos.1 and 2. - 4 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 4. Defendant Nos.1 and 2 agreed to supply ten thousand metric tons of iron ore and allied products @ the rate of Rs.1,742/- per ton including the tax. The second defendant through the third defendant, requested for advance payment against the aforesaid orders of ore of Rs.1,74,20,000/-. As per the request of defendants, the plaintiff had paid the said amount from time to time, through cheques as well as cash. The plaintiff has maintained running account of the defendants, since they were supplying ore on piecemeal quantity from time to time. Similarly plaintiff was also advancing the amount from time to time. 5. The defendants started supplying the iron ore as per the orders of the plaintiff, from 06.10.2006 till 13.03.2007. Defendant No.3 used to issue invoices for the supply made to the plaintiff. Defendants gave statements under their letter head and signed by the defendant No.3 dated 15.03.2007, and 17.08.2007, wherein the defendants have confirmed that the defendants have yet to supply - 5 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 1,490.133 metric tons towards the total advance amount received and defendants acknowledged dues to the extent of Rs.27,50,787/-. Defendants also agreed in the said letter that they would complete the aforesaid deficit supply within seven days, failing which they will return the said amount along with interest at the rate of 2% per mensum. 6. It is further contented by the plaintiff that the defendants failed to supply the materials or repaid the advance amount in a sum of Rs.27,50,787 along with the interest with these reasons prayed to decree the suit. 7. Defendant No.3 has filed the written statement and it was adopted by defendant Nos.1 and 2. Defendants admitted the transaction between plaintiff with them. They also admitted about the supply of certain quantity of iron ore to the plaintiff. They have specifically contended that the defendants have supplied crushed calibrated iron ore as per the requirement of the plaintiff in a total quantity of 5,941 metric tons at the rate as quoted in the invoice price plus transportation charges of Rs.120/- per ton from 06.10.2006 - 6 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 to 13.03.2007 as against the payments made through cheques. The defendants denied receipt of the amount through cash. They further contended that the defendants have received Rs.1,10,56,275/- from the plaintiff through different cheques and they have supplied iron ore as per the required specifications of the plaintiff on FOR basis at Cantonment Railway station, against the payment of the amount through cheques. The supply of iron were as stated by the defendants from 06.10.2006 to 13.03.2007 tallied with amount paid by the plaintiff through cheques. 8. It is further contended by the defendants that the plaintiff has also agreed to pay transportation charges of Rs.120/- per metric ton. The plaintiff intelligently has not calculated the transportation charges of Rs.120/- per metric ton. The materials of 5,940.03 metric ton iron ore supplied till 13.03.2007 would costs Rs.1,10,78,087/-. 9. Defendants further contended that plaintiff persuaded the defendants to give him a signed letter head of the defendants firm, to produce certain statement before the - 7 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 Commercial Tax Office to obtain the particulars of supply from various departments, including the Commercial Tax Office and the Bank. The defendants reposing faith and confidence on the plaintiff, the third defendant handed over four signed and blank letterhead. To the utter dismay of the defendants, those papers have been misused by the plaintiff and created a document Ex.P10 & 12. 10. The Plaintiff has fabricated the letters and filed a false criminal case in C.C. No.2147 of 2008, on the file of Addl. Civil Judge and JMFC, Hosapete. Therefore, as on the date of the filing suit, there were no dues payable to plaintiff and the defendants have not received any excess advance from the plaintiff to be repaid to him. The required quantity of iron ore were supplied subject to the orders placed by the plaintiff, and payment of the amount. 11. It is further contended that the plaintiff himself was liable to pay Rs.21,812/- to the defendants. The plaintiff to cheat the defendants, created a document and filed the false suit. With these reasons, prayed to dismiss the suit. - 8 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 12. The trial Court framed the following: ISSUES (i) Whether the plaintiff proves that the defendants are due to a sum of Rs.36,31,037/- to him? (ii) Whether the defendants prove that he is not liable to pay same to the plaintiff in the circumstances pleaded in the written statement? (iii) Whether the plaintiff is entitled to recover the said amount from the defendants? (iv) Whether the plaintiff is entitled for the current and future interest? If so, at what rate? (v) What order or decree? ADDITIONAL ISSUES (i) Whether the plaintiff proves that the defendant No.3 has executed letter / acknowledgements dated 15.03.2007 and 17.08.2007 on behalf of defendant Nos.1 and 2 in favour of the plaintiff? 13. The plaintiff to prove his case, examined himself as PW1 and got marked documents at Ex.P1 to Ex.P40. Defendant No.3 got himself examined as DW1 and got marked two documents as per Exs.D1 and D2. 14. Learned trial Judge after hearing the arguments on both side and on appreciating the pleadings and evidence on record, answered issue Nos.1, 3 and additional issue No.1 - 9 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 in the affirmative; issue No.4 partly in the affirmative; and issue No.2 in the negative and partly decreed the suit. 15. We have heard the arguments of learned advocates appearing for both the parties and perused the materials on record. 16. Learned advocate appearing for appellants/defendants argued in line with the grounds made out in the appeal memo. He vehemently contended that the plaintiff has not proved that he has paid the amount in cash towards the repayment of dues and value of the iron ore. The plaintiff has failed to produce material documents on record. The plaintiff has created the letters dated 15.03.2007 and 17.08.2007, i.e. Ex.P10 & 12, which were blank documents when they were given to him by the defendant No.3. The plaintiff persuaded defendant No.3 to provide signed blank documents for the purpose of production of the same before the Commercial Tax Department. Misusing the said signed blank documents, the plaintiff created Ex.P10 & Ex.P12. They are not reliable. - 10 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 The trial Court did not consider these facts properties and hence came to the wrong conclusion. The appellants, therefore, prayed to allow the appeal by setting aside the impugned judgment and decree passed by the trial court 17. Learned counsel appearing for the respondent/plaintiffs supported the impugned judgment and stated that, the plaintiff has produced all the necessary documents including invoices profit and loss account and other relevant documents, which are sufficient to prove the case of the plaintiff. Moreover, the letters given by defendant Nos.1 and 2, dated 15.03.2007 and 17.08.2007, are admissions of the transaction between plaintiff and defendants. They also acknowledge that the defendants were liable to pay the said amount, as on the date of the filing of the suit. These facts were properly considered by the trial Court and decreed suit and it does not call for any interference by this court with these reasons prayed to dismiss the appeal. - 11 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 18. The following points emerge for our determination: (i) Whether the learned trial Judge erred in holding that defendant Nos.1 to 3 have received advance amount of Rs.27,50,787/- with a assurance that they would supply the iron ore, as per the orders of the plaintiff? (ii) Whether the learned trial judge erred in not holding that the letters dated 15.03.2007 and 17.08.2007, are created by the plaintiff. (iii) Whether the learned trial judge erred in decreeing the suit and interference by this court is required? (iv) What order? Re: Point Nos.1 to 3: 19. The transactions between the plaintiff and the defendants are not in dispute. It is also not in dispute that the defendants agreed to supply certain quantity of iron ore and other raw materials to the plaintiff through cantonment railway station. It is also not in dispute that the defendants have issued invoices. The plaintiff has produced the - 12 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 statement of accounts, letters, etc. at Exs.P33 to P40. All these documents consistently show the transaction between plaintiff and defendants and payment of the amount by the plaintiff to the defendants. 20. In the cross-examination of PW1, nothing was brought out to discredit the evidence of PW1, or the disputed documents Ex.P10 & Ex.P12. The defendants disputed payment of amount in cash. To prove the said contention, relevant bank transactions are placed on record. These transactions show that the amounts were withdrawn from the bank by the plaintiff and that was said to be paid to the defendants. 21. As already stated above dispute between the parties is in respect of Rs.27,50,787/-. 22. Exs.P1 to P7 are the invoices sent by the appellants / defendants. The plaintiff has produced the statement of accounts – Exs.P8 and P9. These statements corroborates the contention of the plaintiff. Ex.P10 is the - 13 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 disputed document, which is written on a letter head of defendants dated 15.03.2007. Subject of the letter is “confirmation of supply of iron ore. The material and advance payment made.” It was addressed to the plaintiff. In detail the amounts received through cheque as well as cash and details of tax invoices are mentioned. Below the first page and on the last page, it was signed by defendant No.3. The said signature is admitted. Looking into the contents of the said documents, it does not appear that it was subsequently created on a blank signed paper. 23. Ex.P11 is the statement prepared by the plaintiff mentioning the details about the supply of goods by the defendants, payments made by plaintiff, dates of payments and amounts due from the defendants. It is addressed to the defendants and it is dated 14.03.2007. The defendants written a letter dated 17.08.2007 to the plaintiff, wherein they acknowledged that they are due to the extent of Rs.27,50,787/- which is the amount claimed in the present suit. - 14 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 24. Exs.P13 to P22 are the invoices of the defendants regarding the materials sent to the plaintiff. Exs.P23 to P29 are the statement of accounts submitted to the Commercial Tax Department. The said documents referred about the transaction between the plaintiff and defendants. Exs.P26 to P40 are the statement of accounts submitted to the Commercial Tax as well as Income Tax Department etc., wherein dues of defendants are noted. Therefore, the main contention of the defendants that Exs.P10 and 12 are created by the plaintiff misusing, the blank signed letters given by defendant No.3 is not probable. 25. During the course of cross-examination of PW1, nothing was brought out to discredit the said evidence or the documents produced by the plaintiff. The contention of the defendants that the plaintiff created Exs.P10 and P12 just to harass the defendants, is not acceptable. The defendants are not rustic villagers; it is a company dealing with iron ore. There was no reason for the defendants to give a signed blank document to the plaintiff, as contended by them; if - 15 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 really they intended to give it to the plaintiff, then they could have collected the necessary information and prepared the document as requested. Hence said defence is not probable. 26. The defendants examined defendant No.3 as DW1. In his evidence, he has reiterated their contention taken in the written statement. The defendants have not produced any piece of evidence regarding the transactions between plaintiff with them. It is undisputed that the defendants were maintaining the accounts. According to their contention, these accounts were destroyed in a fire incident. It is difficult to believe the said contention. Without any records, defendants are contending that they have not received cash from the plaintiff and there was no dues from them to the plaintiff. The explanation offered by the defendants for non-production of documents is not reliable. The defendants have not properly rebutted the evidence of PW1 or documents produced by the plaintiff. 27. Learned trial Judge discussed in detail the oral and documentary evidence. Learned trial Judge rightly held - 16 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 that Ex.P10 to 12 was given by the defendants and they are not created documents. 28. The trial Court discussed the oral as well as the documentary evidence. These documents were not only private documents kept in the office of the plaintiff in the regular course of business, but also the documents submitted to Government departments such as the statement of profit and loss accounts and other bank accounts etc. They were furnished to the income tax department through his chartered accountant. Amount due from the defendants were also mentioned in the balance sheet filed before the income tax authority. Therefore, it is difficult to believe that those documents were created just to claim the amount from the defendants. Under these circumstances, the trial Court has rightly decreed the suit, and we do not find any reason to interfere with the said findings. - 17 - NC: 2025:KHC-D:4465-DB RFA No.100184 of 2018 29. For the aforesaid reasons, we answer the point Nos.1 to 3 in the negative and proceed to pass the following: ORDER (i) The appeal is dismissed. (ii) The judgment and decree dated 22.02.2018, passed in O.S. No.59/2008, by the Addl. Senior Civil Judge and JMFC, Hosapete is confirmed. Send back TCR to trial Court along with copy of this judgment. Sd/- (ASHOK S. KINAGI) JUDGE Sd/- (UMESH M ADIGA) JUDGE Vnp / CT-AN List No.: 1 Sl No.: 3