- (1.) These appeals are directed against the judgment and decree dated 25th January,2005 passed by the learned Additional District Judge in a suit for recovery of Rs. 13,50,000/- alongwith interest thereon @ 24% p.a. from March,1994 onwards filed by respondent no.1 in both the appeals, Ms.Kamini Sehgal (hereinafter to be referred as 'the plaintiff'). The decree passed was against the appellants as well as respondent no.3 in both the appeals, M/s A.V. Communications, for a sum of Rs.13,49,800/- and all the three defendants in the suit were made liable for the payment of the decretal amount jointly and severally. The appellant in RFA No.372/2005 was arrayed as defendant no.1 in the suit and reference to it shall hereinafter be made as 'defendant no.1' and the appellant in RFA No.312/2005 was arrayed as defendant no.2 and it shall be referred to in this judgment also as 'defendant no.2' while respondent no.3 in these appeals was impleaded in the suit as defendant no.3 and in this judgment also reference to it shall be made as defendant no.3. Since both the appeals were heard analogously they are being disposed of by this common judgment.
(2.) The plaintiff's case which has been noticed by the trial court in its judgment is as under: " .. the plaintiff is engaged in carrying on business of producing TV serials and in the course of its business, the plaintiff produced a TV serial in the name of Jharokha which was telecast on DD2 Channel between April,1993 and November, 1994 for which a telecast fee was paid to Doordarshan and free commercial time was given to the plaintiff by Doordarshan as producer. The plaintiff was authorised by Doordarshan for booking spots/advertisements/ sponsorships during the course of the telecast of the said serial. The defendant no.1 keenly desired for the display of their products on the telecast of said serial and the defendant no.1 through T.S.A. predecessor of defendant no.2 which is an accredited advertising company, approached the plaintiff for allotment of time/slot. The predecessor of defendant no.2 disclosed to the plaintiff that they are the booking agents of various companies including defendant no.1 and on specific instruction of defendant no.1, bookings are made with the plaintiff for and on behalf of defendant no.1.The plaintiff was informed by the predecessor of defendant no.2, that the work and management of this assignment was entrusted to defendant no.3 for and on behalf of defendants and plaintiff was given clear impression that defendant no.3 is a part and parcel of theirs as both are working as a group. The plaintiff accepted the assignment of the defendants and proceeded to telecast the advertisements/spots of the products of defendant no.1 on its said TV serial. The plaintiff accordingly raised bills for the work assigned as per internal working arrangement of the defendants. In discharge of the part payment, the defendants through defendant no.3 issued cheque of Rs.1,50,000/- dated 23.6.94 and promised to pay the balance amount but the defendants failed to pay the balance amount. Looking into the future business prospects, the plaintiff did not press strongly for release of payment. Thereafter the plaintiff prevailed over the defendants for early payment and accordingly the defendant no.3 once again handed over three cheques for Rs.50,000/-each. These cheques on presentation were returned unpaid due to insufficiency of funds. The plaintiff thereafter made repetitive requests for payment of the dues from time to time but in vain. The plaintiff vide its letter dated 6.3.95 reminded the defendant no.1 which was replied by defendant no.2 vide their letter dated 28.4.95.The defendant no.2 also informed the plaintiff that such payments were released in favour of defendant no.3 and defendant no.2 further disclosed that dealing with parties were on principal to principal basis. As per the plaintiff, the defendants have turned dishonest and with a view to secure wrongful gain, they are now disowning the liability ..."
(3.) Separate written statements were filed by defendants 1 and 2 opposing the suit claim. The relevant portions of the written statement of defendant no.1 are as under: "C. That the Nestle India Ltd., defendant no.1, is a public limited Company dealing in sale and manufacture of processed food. The Company, for promoting its product, has to hire services of professional advertising Companies. The relationship between defendant no.1 and advertising Companies is on principal to principal basis. The advertising Companies are engaged by number of other Companies. For rendering their services, the advertising Companies raise bills against defendant no1. and the defendant no.1 pays directly to the advertising Companies. The defendant no.1 neither recognizes nor have any dealing with any person other than advertising Companies. The defendant no.1 has no control over the working of the advertising Companies and are not aware of their method of working. Advertising Company may be availing services of other persons/agencies for getting their work done but the defendant no.1 has no relationship with such person/agency. D. In the present matter defendant no.2 was working as advertising Company. They undertook to provide their services for Advertising the product of defendant no.1 through various methods. One of the method is through Television. The relationship between defendant no1. and defendant no.2 were strictly on principal to principal basis. The defendant no.2 never worked as an agent of defendant no.1. the defendant no.2 worked as an independent agency with no control from defendant no.1. For providing their services, defendant no.2 had raised various bills which also included telecast of advertisement film in a programme 'Jharokha' shown on Television. The bills raised by the defendant no.2 have been paid long time back. The defendant no.1 has no dealing with either defendant no.3 or plaintiff. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 3. ..It is denied that defendant no.1 through defendant no.2, has ever approached plaintiff for allotment of time/slot for advertisement of Defendant no.1's products during telecast of T.V. Serial 'Jharokha'. The working relationship of defendant no.1 with defendant no.2 was on Principal to Principal basis. The Defendant no.2 were not the agents of defendant no.1. It is not within knowledge of defendant no.1, that defendant no.2 has approached the plaintiff .. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 7. With regard to averment as made in paragraph no.7, it is denied that there was any agreement between plaintiff and defendant no.1 for providing services to defendant no.1. The defendant no.1 has availed of, no service of plaintiff. The defendant no.1 had no dealing with plaintiff. The question of plaintiff's raising bill against defendant no.1 does not arise. It is denied that defendant no.1 was under any liability to make payment to plaintiff. It is again reiterated that there was no privity of contract between defendant no.1 and the plaintiff. It is denied that defendant no.3 issued cheque for or on behalf of defendant no.1 . It is however reiterated that defendant no.1 had made all payments of the bills raised by the defendant no.2 for providing services on principal to principal basis and nothing is due and payable to defendant no.2 and further defendant no.1 has no relation whatsoever with defendant no.3. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 10. With regard to averment as made in paragraph no.10, it is admitted that a letter written by plaintiff dt. 6.3.95 addressed to defendant no.1 was received by defendant no.1. Since the defendant no.1 had already released the payment to defendant no.2, with whom they had principal to principal relationship, the letter was handed over to defendant no.2 for reply. This, however, does not mean that defendant no.1 and defendant no.2 were having principal and agent relationship. It is denied that defendant no.1 had ever given any oral assurance to the plaintiff to compensate/pay any .";