Unsigned Receipts and Silent Records Cannot Prove a Contract: Punjab & Haryana High Court

In the absence of an agreement, there was no legal basis to allege breach or recover dues” — Punjab and Haryana High Court has dismissed an appeal filed by the Punjab State Cooperative Supply and Marketing Federation Ltd. (Markfed), seeking recovery of ₹2,73,065 from a rice miller for alleged shortfall and delay in milling paddy, firmly holding that “a claim for recovery cannot survive without proof of the foundational contract.”

Justice Nidhi Gupta upheld concurrent findings of the trial and appellate courts, observing that Markfed had failed to produce the mandatory milling agreement and that its suit was hopelessly barred by limitation and arbitration clause.

“PW1 himself admitted that execution of an agreement was a must before supply. Without proving such agreement, Markfed could not have established any breach,” the Court emphasized.

“Unsigned Receipts and Silent Records Cannot Prove a Contract”

The litigation arose out of an arrangement for custom milling of paddy, wherein Markfed claimed that M/s Raj Kumar Ashok Kumar Rice Sheller had defaulted in returning milled rice in time and quantity. In support, it relied on receipts marked Ex.P6 to Ex.P10, supposedly signed by the defendants acknowledging the paddy received.

However, the Court found the receipts were “not executed in presence of witnesses” and “signatures of the executant were not admitted,” rendering them legally inadmissible. Justice Gupta noted: “The said receipts were not proven in accordance with law. Mere production of documents, without proof of execution, does not satisfy evidentiary standards under CPC.”

Further, the Court pointed out that no calculation sheet or document was filed to explain how the alleged recovery amount was arrived at — another fatal flaw in Markfed’s case.

“When Arbitration Is Agreed, Civil Court Jurisdiction Is Ousted”

Another compelling reason for rejection was the admission by PW1 that the milling policy included an arbitration clause — a clause which Markfed chose to bypass entirely.

The Court held: “Once it is admitted that the parties agreed to refer disputes to arbitration, the present civil suit was not maintainable.”

“Suit Filed Beyond Limitation – A Delay of Over Three Years”

Compounding Markfed’s legal hurdles was the fact that the suit was filed on 24 December 1999, while the last due date for delivery of rice was 31 August 1996. The Court unequivocally held: “The suit is barred by limitation as well. The plaintiff’s own pleadings and admissions prove the delay.”

“No Substantial Question of Law, No Interference Warranted”

Upholding the judgments of the lower courts, Justice Nidhi Gupta concluded: “In view of the above, no ground is made out to interfere in the concurrent judgments and decrees of the learned courts below.”

The second appeal was accordingly dismissed in totality.

Date of Decision: 22 May 2025