Delhi District Court
Sterling Technotrade India Pvt.Ltd vs M/S Chandralekha Constitution Pvt. Ltd ... on 5 August, 2024
In the court of Ms. Anu Grover Baliga,
District Judge (Commercial Court-04), South East District,
Saket Courts, New Delhi.
CS (COMM) 386/2021
Sterling Technotrade India Pvt. Ltd. Vs. M/s Chandralekha Construction Pvt
Ltd.
In the matter of:
Sterling Technotrade India Pvt. Ltd.
Through its Managing Director Ms. S.S. Panwar
Office: C-66/2, Ground Floor
Okhla Industrial Area, Phase-II
New Delhi-110020. ...Plaintiff
Versus
M/s Chandralekha Construction Pvt. Ltd.
Through its Director Sh. Gajendra Parihar
Regd. Office: 119, Ist Floor, Sant Nagar
East of Kailash
New Delhi-110065.
Also at:
D-171, 2nd Floor, Sector-63
Noida, U.P. - 201 301. ...Defendant
ORDER
05.08.2024
1. Vide the present order, I shall decide two applications - the first application filed by the Defendant Company under Order VII Rule 11 CPC praying that the plaint be rejected and the second application filed by the Plaintiff under Order XIIIA CPC (as amended by the Schedule to the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 1 /22 Commercial Courts Act) praying that the suit be summarily decreed in favour of the Plaintiff.
2. Briefly stated, the facts necessary for deciding the aforesaid two applications are as follows:-
a. The present suit has been filed by the Plaintiff seeking recovery of Rs.12,56,303/- from the Defendant Company interalia on the assertions that on the orders placed by the Defendant, the Plaintiff had supplied concrete admixture to the Defendant and in this respect had raised invoices dated 25.07.2016 and 01.08.2016 for amounts of Rs.9,18,383/- and Rs.50,207/-
respectively. It is the assertion of the Plaintiff that the Defendant had raised certain objections regarding some of the material and therefore the Plaintiff on 31.03.2017 had issued a credit note for Rs.1,82,792/- to the Defendant and after issuance of the credit note, the Defendant was liable to pay it an amount of Rs.7,80,798/-. The grievance of the Plaintiff is that despite the Director of the Defendant Company, Sh. Gajendra Singh Parihar vide his email dated 24.04.2018 undertaking to make the said payment, no payment was received by the Plaintiff from the Defendant. The Plaintiff is therefore claiming a principal amount of Rs.7,80,798/- from the Defendant alongwith interest @18% per annum.
b. On being served with the aforementioned suit, the Defendant Company filed its written statement and also an application under Order VII Rule 11 CPC. In the said pleadings, the Defendant has interalia contended that present suit is barred by limitation for even if it is taken that the Plaintiff had supplied goods to the Defendant vide its invoices dated 25.07.2016 and 01.08.2016, the suit having been filed on 13.09.2021 is hopelessly barred by limitation. It has been further asserted that Gajendra Parihar is not a authorised CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 2 /22 representative of the Defendant Company to have given any assurance on behalf of the Defendant Company to make the payments due to the Plaintiff and the contention therefore was that the email purportedly written by this person on 24.04.2018 cannot amount to an acknowledgment of liability and that therefore the Plaintiff cannot be allowed to extend the period of limitation, on the basis of the said email. On merits, it has been asserted that the material supplied by the Plaintiff Company was found to be defective, substandard and of poor quality due to which the Defendant Company had to suffer huge losses. According to the Defendant Company, the Plaintiff admitted that the material supplied by it was defective and then issued a credit note but failed to issue a credit note for the entire defective material. It has also been contended that the Plaintiff Company has been filing petitions before different forums against the Defendant Company and that this is impermissible as per law and that therefore the suit of the Plaintiff should be dismissed.
c. During the course of arguments on the application filed by the Defendant under Order VII Rule 11 CPC, the Plaintiff preferred an application under Order XIII-A CPC averring therein that the Defendant Company is falsely asserting that Gajendra Singh Parihar was not the authorised representative of the Defendant Company and that the MCA records show him as one of the Directors and authorised representative of the Defendant Company and that therefore the email sent by him acknowledging the debt of the Plaintiff Company cannot be ignored by this Court. It was asserted therein that the Defendant Company has not placed any correspondence on record whatsoever to show that it had ever raised any objection to the entire quality of the entire material supplied by the Plaintiff and infact that after receiving the material from the Plaintiff, had used the same in its construction activities and therefore cannot deny the payment due to the Plaintiff. It was also asserted in the said CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 3 /22 application that the Defendant Company had issued Form-C in favour of the Plaintiff on 22.04.2017 with respect to the material received by it from the Plaintiff and even at the time of issuance of the said Form had not raised any objection with respect to the alleged defects in the material supplied to it. In the said application it has been therefore contended that the Plaintiff is entitled to a summary judgment.
d. In reply to the aforementioned application, the assertions made by the Defendant in its written statement and in its application under Order VII Rule 11 CPC have been reiterated.
Contentions of Ld. Counsels:
3. With respect to the application under Order VII Rule 11 CPC, it is the submission of Ld. Counsel for the Defendant, Sh. Mukesh Rana that since the invoices vide which the material was assertedly supplied by the Plaintiff are dated 25.07.2016 and 01.08.2016, the present suit filed on 13.09.2021 is barred by limitation. On the other hand, Ld. Counsel for Plaintiff, Sh. Ajai Kumar has submitted that the acknowledgment of debt issued by one of the Directors of the Defendant Company, Sh. Gajendra Singh Parihar on 24.04.2018 extends the period of limitation for another three years and that therefore the suit has been filed within the prescribed period of limitation. In support of his contention that an email does amount to a written acknowledgment within the meaning of Section 18 of the Limitation Act, Ld.Counsel for Plaintiff has relied upon a judgment of Hon'ble Karnataka High Court pronounced in the case titled and reported as Sudarshan Cargo Pvt Ltd. Vs. M/s Techvac Engineering Pvt. Ltd.
ILR 2013 KAR 3941.
4. In rebuttal, it is the stand of the Defendant Company that the said Director CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 4 /22 was not authorised to issue any such acknowledgment and that it was another Director Sh. Joginder Singh who was dealing with the Plaintiff Company and that he vide his mail dated 19.03.2018 had categorically informed the Plaintiff that the Defendant Company is not liable to make any payment to it. It is therefore the contention of Ld. Counsel for the Defendant that the Plaintiff cannot rely upon the mail dated 24.04.2018 to extend the period of limitation. He has further submitted that even otherwise the said mail does not amount to an acknowledgment of debt. He has sought to rely upon an order of the Hon'ble NCLAT dated 06.06.2022 in the case titled as Company Appeal No.846 of 2022 in the matter of M/s G L Shoes Vs. M/s Action Udyog Pvt. Ltd. to contend that an email is not a written acknowledgment within the meaning of Section 18 of the Limitation Act.
5. As regards the application filed by the Plaintiff under Order XIIIA CPC, Ld. Counsel for the Defendant has sought to contend that the Defendant has raised many triable issues in the present case and that therefore this Court must not exercise its jurisdiction under Order XIIIA CPC to pass a summary judgment. In the written submissions filed, Ld. Counsel for the Defendant has contended that the following triable issues have been raised by the Defendant in its written statement which require trial:
i) Whether the present suit is barred by limitation?
ii) Whether there is any unambiguous, unequivocal, unconditional admission by
the Defendant Company having any jurial relationship in consonance with provision of section 18(b) of limitation act to extend the limitation? and whether any such admission is pleaded ?
iii) Whether concerned authorized official Mr. Joginder Parihar defendant company and its directors has specifically rejected ALL the claims of the plaintiff on behalf of defendant company and its directors admitted vide its e-mail dated 19.03.2018 ? Whether plaintiff has lied and concealed about rejection of all the any or all alleged claims by Defendant Company and its director in its plaint and statement of truth is defected ? and whether any relief can be granted to a party who has mislead the court and not come with clean hand?
CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 5 /22
iv) Whether the plaintiff has previously filed a case pertaining to same matter between the same parties before MSME and the same is simultaneously pending before MSME ?
v) Whether the suit is maintainable under the provision of commercial court act, in absence of any contract and alleged time barred invoices ?
vi) Whether the Defendant Company is liable to pay for entirely defective material.
6. Ld. Counsel for the Defendant has submitted that in view of the aforementioned issues raised by the Defendant, this court must not exercise its powers under Order XIIIA CPC to give a summary judgment.
7. In rebuttal, Ld. Counsel for the Plaintiff, Sh. Ajai Kumar has contended that present is a fit case for this Court to exercise its jurisdiction under Order XIIIA CPC and pronounce a summary judgment in favour of the Plaintiff. He has pointed out that the Defendant Company in the written statement has admitted the receipt of material supplied to it by the Plaintiff and has only taken a vague and evasive stand in the written statement to deny the claim of the Plaintiff. It is his contention that in view of the acknowledgment of debt issued by one of its Directors, the Defendant Company cannot be heard to state that the material supplied by the Plaintiff was defective, more so when they admittedly had utilized the entire material supplied by the Plaintiff. He has submitted that the Plaintiff was under no duty to find out if or not Sh. Gajendra Parihar was not authorised to deal with the Plaintiff Company, for such facts were within the knowledge of the Defendant Company only and pertained to its internal management. In support of this contention, Ld. Counsel has relied upon the judgment of Hon'ble Punjab and Haryana High Court pronounced in the case titled and reported as Dewan Singh Hira Singh Vs. Minerva Films Ltd. AIR 1959 P & H 106.
CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 6 /22 Findings of the Court:
8. I have carefully gone through the judicial dicta referred to by both the Ld. Counsels and the records of the present case. This Court will first examine the plea of limitation taken by the Defendant in its application under Order VII Rule 11 CPC. As discussed in paras 3 and 4 hereinabove, the submission of Ld. Counsel for the Defendant is that in view of the judicial dicta laid down by the Hon'ble NCLAT in G.L. Shoes's case (supra), the email dated 24.04.2018 sent by one of the Directors of the Defendant Company Sh. Gajendra Parihar, cannot be taken as an acknowledgment of debt in terms of Section 18 of the Limitation Act, for the purpose of extending the period of limitation in favour of the Plaintiff. According to Ld. Counsel, the email even otherwise does not contain any unambiguous acknowledgment of the Plaintiff's debt, by the Defendant Company. To appreciate the email being referred to by the Ld. Counsel for the Defendant, it will be relevant to reproduce the same;
Dear Mr. Kumar, This is related to mails and follows ups done by your team for the outstanding payment of 7,80,798.00. Kindly find the below payment schedule and approve it so that we can process it as soon as you accept it.
Date Amount Total Paid Total Balance
On or before 260,266.00 260,266.00 520,532.00
30/04/18
On or before 260,266.00 520,532.00 260,266.00
31/05/18
On or before 260,266.00 780,798.00 -
30/06/18
Total 780,798.00
Please revert back on this
Thanks & Regards
Gajendra Parihar
Chandralekha Constructions Pvt. Ltd.
CS (COMM) 386/2021
Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 7 /22
9. In the considered opinion of this Court, the aforementioned email contains an unambiguous acknowledgment by Gajendra Parihar, on behalf of the Defendant Company that the Defendant Company owes an amount of Rs.7,80,798/- to the Plaintiff. This Court is unable to accept the contention of Ld. Counsel for the Defendant that since there was a schedule of payment offered by the Defendant Company and the Plaintiff has not asserted that it accepted the same, the contents of the email do not constitute an acknowledgment. It will be relevant herein to reproduce Explanation (a) to Section 18 of the Limitation Act;
Explanation: For the purposes of this section,-
(a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;
The aforementioned provision therefore makes it clear that for the purposes of Section 18 an acknowledgment may be sufficient though it omits to specify the exact nature of right or avers that the time for payment, delivery, performance or enjoyment has not yet come. In such view the mere fact that in the email dated 24.04.2018, the Defendant Company chose to give a payment schedule to clear the outstanding amount due to the Plaintiff or that the Plaintiff did not accept the said schedule, does not lead to an inference that the same does not constitute an acknowledgment within the meaning of Section 18 of the Limitation Act. Further the mere fact that the Plaintiff apart from the principal amount of Rs.7,80,798/- also demanded interest @18% per annum in its mail dated 10.03.2018 and the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 8 /22 Defendant Company in its mail dated 24.04.2018 only agreed to pay the principal amount, also does not make any difference to the acknowledgment of debt made by the Defendant Company. The reliance of Ld. Counsel for the Defendant in this respect on the judgment of Hon'ble Kerala High Court in the case titled and reported as G.S. Panicker Vs. K. Prabhakaran 1993 SCC OnLine Ker 170, is completely misplaced. Infact in the said case, the Hon'ble Kerala High Court has specifically held that the limitation period for as much of the debt which is acknowledged by a debtor, will be extended by the provisions of Section 18 of the Limitation Act. In such view, the period of limitation will get extended in favour of the Plaintiff with respect to the principal amount of Rs.7,80,798/- acknowledged by the Defendant Company in its mail dated 24.04.2018.
10. Now the question is whether or not the said acknowledgment sent through an email can be held to be an acknowledgment under Section 18 of the Limitation Act. In the considered opinion of this Court the dicta referred to by Ld. Counsel namely the order of the Hon'ble NCLAT in G.L.Shoes's case (supra) does not apply to the facts of the present case. The facts before the Hon'ble NCLAT was that an unsigned and unstamped account statement of a company annexed with a mail was being relied as an acknowledgment in terms of Section 18 of the Limitation Act for extending the period of limitation. In the present case the acknowledgment being relied upon by the Plaintiff is in the main body of the mail itself. In the considered opinion of this Court, it is the judicial dicta laid down by the Hon'ble Karnataka High Court in Sudarshan Cargo's case (supra - the judgment relied upon by Ld. Counsel for the Plaintiff) which is applicable to the facts of the present case. Before the Hon'ble Karnataka High Court also the acknowledgment of debt was made in the body of the email itself and after taking into consideration the provisions of Section 4 CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 9 /22 of the Information Technology Act, the Hon'ble High Court held that the said acknowledgment constitutes a valid acknowledgment under Section 18 of the Limitation Act. Section 4 of The IT Act, 2000 provides that if information or any other matter is to be in writing or in the typewritten or printed form, then, not withstanding anything contained in such law, the requirement is deemed to have been satisfied if such information or matter is rendered or made available in an 'electronic form' and same is accessible to be used for a subsequent reference. Taking into consideration the said provisions, the Hon'ble Court made the following material observations in para 17 and 22 of its judgment;
17. The word "sign"or "signed" employed in explanation (b) to Section 18(2) has not been defined under the Limitation Act, 1963. Explanation merely says "signed" means either personally or by a agent duly authorised in this behalf. it requires to be noticed that even under Section 3(56) of the General Clauses Act, 1897 the word "sign" has not been defined but has its extended meaning with reference to a person who is unable to write his name to include mark with its gramatical variation and cognate expressions. Undisputedly, an e-mail is a communication addressed to a definite person and it means a person who is intended by originator' to receive such electronic record as per Section 2(b) of IT Act, 2000 and the originator" would mean a person who sends or transmits any electronic message to any other person as defined under Section 2(za) of IT Act, 2000. Thus, if an acknowledgement is sent by a 'originator' to the 'addressee' by e-mail, without any intermediary, it amounts to electronic communication by e-mail which is an alternative to the paper based method of communication. This mode of transaction is legally recognised under Section 4 of the IT Act, 2000.
22. For the reasons aforestated and in view of the discussion made herein above, I am of the considered view that point formulated herein above requires to be answered by holding that an acknowledgement of debt by e-mail originating from a person who intends to send or transmit such electronic message to any other person who would be the 'addressee' would constitute a valid acknowledgement of debt and it would satisfy the requirement of Section 18 of the Limitation Act, 1963 when the originator disputes having sent the e-mail to the recipient.
11. The aforementioned judicial dicta is even referred to by the Hon'ble NCLAT in its order pronounced in G.L.Shoes's case and the same was distinguished by holding as follows;
CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 10 /22
19. It may be pertinent to observe here that the facts of Sudarshan supra are dissimilar to the present case in that in Sudarshan supra there was a commitment given to clear and settle all dues which was clearly expressed in the body of main email while in the present case there is no trace of any such element of unconditional acceptance or admission of liability in the main body of the email.
The aforementioned observation makes it clear that even the Hon'ble NCLAT was of the view that where the acknowledgment of debt is made in the main body of the email, the same does constitute a valid acknowledgment of debt and satisfies the requirement of Section 18 of the Limitation Act.
12. In view of the discussion hereinabove, it is hereby held that the email dated 24.04.2018 does extend the period of limitation in favour of the Plaintiff and therefore the Plaintiff Company could have filed the present suit for recovery till 23.04.2021. The Hon'ble Supreme Court in the case titled as Suo Moto Writ Petition (C) No. 03/2020 has held that in cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. The present suit filed on 13.09.2021 in view of the aforementioned observations of the Hon'ble Supreme Court is clearly within the prescribed period of limitation.
13. Ld. Counsel for the Defendant has however then sought to contend that the defence of the Defendant Company namely that Sh. Gajendra Parihar was not authorised to give any such acknowledgment on behalf of the Defendant Company, be considered by this Court. In the considered opinion of this Court, the said asserted defence of the Defendant Company cannot be considered to decide an application under Order VII Rule 11 CPC. At the stage of deciding an application under Order VII Rule 11 CPC, it is only the averments made in the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 11 /22 plaint that can be considered by a Court. In view of the fact that as per the averments made in the plaint, the suit appears to have been filed within the period of limitation, the application filed under Order VII Rule 11 CPC by the Defendant therefore hereby stands dismissed.
14. However, having held so, this Court does agree with the Ld. Counsel for the Defendant that the aforementioned defence being taken by the Defendant can be considered in reply to the application filed by the Plaintiff under Order XIIIA CPC. Coming now to the said application, it would be relevant herein to consider under what circumstances is a Court entitled to pronounce a summary judgment under the provisions of the said Order. In this respect, it would be relevant to refer to the judicial dicta laid down by the Hon'ble Delhi High Court in its recent judgment pronounced in the case titled Sukam Power Systems Limited vs. Kunwer Sachdev & Anr. (2019) SCC Online, Delhi 10764 . In para 49 and 52 of the said judgment, the Hon'ble Delhi High Court has observed as follows:
"49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra)....
52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is proportionate, more expeditious and less expensive means to achieve a fair and just result."
The aforementioned succinct enunciation of law by the Hon'ble Delhi High Court, makes it clear that in case this Court is able to determine the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 12 /22 necessary facts in dispute between the parties and is able to apply the relevant legal principles to the said facts so as to resolve the disputes between the parties, this Court will be justified in exercising its powers under Order XIIIA CPC.
15. Now, the dispute between the parties in the present case is with respect to an amount of Rs.7,80,798/-. According to the case put forward by the Plaintiff, it had supplied to the Defendant Company goods worth Rs.9,68,590/- and had raised two invoices for amounts of Rs.9,18,383/- and Rs.50,207/-. The originals of the aforementioned two invoices have been filed on record and bear the stamp of the Defendant Company showing thereby that the Defendant Company had received the material mentioned therein. Now in the written statement, the Defendant Company does not dispute that he has received the aforementioned material. Its contention is that much of the material was found defective and that therefore it is not liable to make any payment to the Plaintiff. As narrated hereinabove, it has also been contended that Sh. Gajendra Parihar was not authorised by the Defendant Company to send the email dated 24.04.2018 to the Plaintiff.
16. To examine whether or not the Defendant has any real prospect of successfully defending the claim of the Plaintiff on the aforementioned grounds, it will be relevant herein to first discuss the admitted documentary evidence available on record. The Defendant Company has itself placed on record the email dated 10.03.2018 sent by the Plaintiff Company to all the Directors of the Defendant Company and the email dated 19.03.2018 sent by Sh. Joginder Singh, one of the Directors of the Defendant Company, in reply to the email dated 10.03.2018 of the Plaintiff Company. Now in its email dated 10.03.2018, the Plaintiff had addressed all the Directors of the Defendant Company and had CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 13 /22 demanded that since the Plaintiff Company had supplied all the goods with respect to which orders had been placed upon it by the Defendant Company, it should immediately be paid the outstanding amount of Rs.7,80,798/-, by the Defendant Company. It will be relevant at this stage to reproduce the email dated 19.03.2018 sent by Sh. Joginder Singh in reply to the aforementioned demand:
Sir, We reject all your claims please send us proper communication done from our side for your material. Please send us the purchase order given to you for the delivery of goods first then we will go ahead with all your claims and payments.
17. The said email makes it clear that Sh. Joginder Singh informed the Plaintiff Company that the Defendant would make the payment to the Plaintiff only after the Plaintiff shares the purchase orders placed upon it by the Defendant Company. Now as per record, this email was sent at 1:45 P.M. and the Plaintiff Company on the same day at 2:59 P.M. replied to Sh. Joginder Singh as follows:
Dear Sir, As you are fully aware that since you were in hurry of getting material and the order was finalized with you in ordination of our Principals M/s BAS India Ltd.'s concern Personals after getting several physicals trials of their products at your site.
Since our Principal M/s BAS was Involve for getting their products approved for your site at M/s Wave City, Noida from Clients and consultants of M/s Wave and yourself as well.
Considering a company of repute we have supplied you material on your verbal telecom since you have assured that hard copy of the Purchase order will be given later to us as it has to come signed from your Head office. But till date you have not raised the P.O for the same every tire you assured to us that all the payment will be released this week, than next week and so on whenever you are contacted on telecom you have been making excuses of "Finical Crises".
We have cooperated with you as much as possible even we have requested you to return the material to us if you are not consuming it but neither had you paid the outstanding nor you returned the material.
We are attaching herewith copy of our Tax Invoices, Waybill & C-form issued by you against Purchase of above Invoice.
CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 14 /22
18. The aforementioned reply makes it clear that the Plaintiff Company had immediately responded to the email of Joginder Singh and informed him that since the Defendant Company was in a hurry and had telephonically requested the Plaintiff to immediately supply the goods required by it, the Plaintiff, believing the assurances of the Defendant Company, that the written purchase orders would follow soon had supplied the material to the Defendant on the basis of oral telephonic orders. After the said mail of the Plaintiff admittedly no further communication was sent by Sh. Joginder Singh to the Plaintiff Company and it was Sh. Gajendra Parihar, one of the other Directors of the Defendant Company who then sent the email dated 24.04.2018 to the Plaintiff acknowledging the debt of the Plaintiff Company and undertaking to clear the outstanding of Rs.7,80,798/- by 30.06.2018 in three instalments. As noted hereinabove, it is the stand of the Defendant Company that Sh. Gajendra Parihar was not authorised by it to give any such acknowledgment or undertaking and Ld. Counsel for Defendant has relied upon the following judicial dicta to contend that the Defendant Company cannot be bound by the aforementioned email of Sh. Gajendra Parihar.
i. Supreme Telecommunication 2015 SCC OnLine Guj. 6594. ii. State Bank of Travancore Vs. Kingston Computers (I) P. Ltd.
(2011) 11 SCC 524.
iii. Parasuraman and Others Vs. Purushothaman and Company and Others AIR 1977 Ker 132.
iv. Union Bank of India, Ernakulam Vs. T. J. Stephen and Others AIR 1990 Ker 180.
19. I have gone through all the aforementioned judicial dicta and none of it comes to the aid of the Defendant Company. In Parasuraman's case (supra - the judgment relied upon by Ld. Counsel for the Defendant), the acknowledgment purportedly made under Section 18 of the Limitation Act was made by one of the co-heirs of the immovable property. It was in such circumstances that it was CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 15 /22 held that one of the co - heirs /co owners of an immovable property has no authority to enlarge the period of limitation, as against the other co-owners. In Union Bank's case (supra - the judgment relied upon by Ld. Counsel for the Defendant), it was an acknowledgment by a guarantor that was being relied upon to extend the period of limitation. The Hon'ble Court held that the same will not bind the principal borrower.
20. In the considered opinion of this Court, the judicial dicta in both these cases will not be applicable to the facts of the present case, for it is the Defendant Company who is debtor in the present case and the acknowledgment has been made on behalf of the Defendant Company only. The email reproduced hereinabove clearly shows that Sh. Gajendra Parihar had written the same on behalf of the Defendant Company only. In Supreme Communication's case, it was only a Manager of the debtor company who had acknowledged the debt on its behalf. The creditor/petitioner had also failed to show any document to the Hon'ble Court on the basis of which it could be inferred that the said Manager had been authorised by the debtor company to make any such acknowledgment. In State Bank of Travancore's case (supra - the judgment relied upon by Ld. Counsel for the Defendant), the Hon'ble Supreme Court held that only a person authorised by the Board of Directors of a company can file a suit on its behalf. It was noted by the Hon'ble Supreme Court that though the person, who had filed the suit on behalf of the company, had averred that he is one of the Directors of the Company and had been aurhorised by a resolution passed by the Board of Directors of the Company authorising him to file the suit, no such Board Resolution was placed on record before the trial Court or the High Court. It was also taken note of that the Plaintiff Company had not summoned any records from the Registrar of Companies to prove that the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 16 /22 person who had filed the suit on behalf of the Company was infact one of its Directors. It is in such facts that the Hon'ble Supreme Court held that the suit filed was not filed by an authorised person. In the present case, the Defendant Company is not disputing that Gajendra Parihar is one of its Directors and that in its records submitted with Ministry of Company Affairs, he is shown to be one of the authorised representatives of the Defendant Company. They have also chosen not to file any Board Resolution to show that it was only Joginder Singh who had been authorised on behalf of the Defendant Company to deal with the Plaintiff Company. Their only assertion in this respect is that the Plaintiff Company had been dealing only with Joginder Singh and that therefore they should have assumed that no other Director is authorised to deal with them. In the considered opinion of this Court, the said contention has no merits, for as pointed out by Ld. Counsel for the Plaintiff the email dated 10.03.2018 was addressed by the Plaintiff to all the Directors of the Defendant Company and in the said email, they were all called upon to make the payment of the Defendant Company. It is also to be noted that Sh. Gajendra Parihar had also marked a CC of this mail dated 24.04.2018 to Sh. Joginder Singh. In other words, Sh. Joginder Singh was aware on 24.04.2018 itself that Sh. Gajendra Parihar had undertaken to make the payment of Rs.7,80,798/- to the Plaintiff. Admittedly, he did not take any steps to inform the Plaintiff Company that Sh. Parihar had no authority to write the said mail to the Plaintiff. Ld. Counsel for the Defendant was at pains to explain the said conduct of Sh. Joginder Singh.
21. In view of the discussion hereinabove, this Court is therefore of the considered opinion that Sh. Gajendra Parihar was authorised on behalf of the Defendant Company to deal with the Plaintiff Company and that therefore the Defendant Company cannot be allowed to dispute the acknowledgment of debt CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 17 /22 issued on its behalf by him. As narrated hereinabove, in the said email, it has been admitted on behalf of the Defendant Company that it owes an amount of Rs.7,80,798/- to the Plaintiff against the supply of goods to it. Ld. Counsel for the Defendant has however sought to contend that it be noted by this Court that the Defendant has categorically taken a defence that the entire material supplied by the Plaintiff was defective and that the same caused huge losses to the Defendant. Ld. Counsel has pointed out that the Plaintiff did admit that 08 drums of the construction material supplied by it was defective and had therefore issued a credit note in favour of the Defendant Company. His submission is that once the Plaintiff admitted that 08 drums of the construction material supplied by it was not up to the standard it should be assumed that even the remaining drums would have been of substandard quality since all the drums were the part of same lot. He therefore submits that the Defendant must be granted an opportunity to prove the said defence.
22. In the considered opinion of this Court, the said contention of Ld. Counsel for the Defendant also cannot be accepted because firstly, as discussed hereinabove, the Defendant has admitted its liability to pay to the Plaintiff the amount due from it on account of supply of materials and secondly, it cannot be lost sight of that the Defendant Company, apart from the said mail, is also admitting that it had utilized the entire material supplied to it by the Plaintiff. In this respect, it will be relevant herein to reproduce assertions of para 6 of the parawise reply on merits made by the Defendant in its written statement.
6. That neither the defendant company approached the plaintiff nor any purchase order was placed by the defendant Company. That defendant has suo moto supplied material to Defendant Company without any purchase order or the consent of Defendant Company and dumped the products of their company on Defendant, which were never ordered. Also, the products supplied by Plaintiff Company were defective and of very substandard in quality and hence the issue on quality was raised by Defendant Company, which was acknowledged by the CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 18 /22 Plaintiff Company. It is important to mention that our client had suffered losses and embarrassment in front of his end client due to substandard products by your alleged client company.
23. The aforementioned assertions make it clear that the Defendant has used the construction material supplied to it by the Plaintiff in its construction activities and had not asked the Plaintiff to take it back. No doubt the Defendant Company did have a right to reject the material supplied to it by the Plaintiff but it had no right to utilize the same and then not pay for it. Once the Defendant Company has utilized the material supplied to it by the Plaintiff, it could have only claimed damages on account of the asserted losses suffered by it due to the said defective material. Apart from a mere assertion that it had suffered losses and embarrassment in front of its end customers, there is no assertion whatsoever regarding the actual losses suffered by the Defendant. Even otherwise the Defendant was bound to have filed a counter claim or a separate suit in case it wanted to recover damages from the Plaintiff on account of defective material supplied to it. In the absence of the same, the Defendant Company cannot be allowed to negate the claim of the Plaintiff in the present suit on the ground that the goods supplied to it were found defective.
24. Further, though Ld. Counsel for the Defendant has chosen to contend that since the Plaintiff has itself once approached MSME for settlement of its dues, this Court would have no jurisdiction to try the present case, it is to be noted that no document whatsoever has been filed on record by the Defendant Company in this respect. This is despite the fact that during the course of arguments the A/R of the Plaintiff had categorically stated before this Court that the subject matter of the present suit has never been referred by the Plaintiff to MSME and this Court had granted an opportunity to the Defendant Company to controvert the said statement by producing any document . Further contention of Ld. Counsel CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 19 /22 for the Defendant that since there was no written order placed by the Defendant upon the Plaintiff, the dispute raised in the present case is therefore not a commercial dispute again has no merits. The definition of commercial dispute provided in Section 2 of the Commercial Courts Act nowhere stipulates that the agreement for sale of goods has to be in writing.
25. In view of the discussion hereinabove, this Court is of the considered opinion that the Defendant has no real prospect of successfully defending the claim of the Plaintiff and there is no compelling reason as to why the suit of the Plaintiff should be fixed for any oral evidence. As such, the application filed by the Plaintiff under Order XIIIA CPC stands allowed and the suit of the Plaintiff is hereby decreed for a principal amount of Rs.7,80,798/-.
26. As regards the interest for which the Plaintiff is entitled to, Ld. Counsel for the Plaintiff has pointed out that the invoices issued by the Plaintiff Company and received by the Defendant clearly mention that the Plaintiff would be entitled to demand interest @18% per annum in case of delayed payments. Ld. Counsel for the Defendant has however pointed out that the invoices filed on record bear only the stamp of the Defendant Company and the Plaintiff has not brought any material on record at this stage to show that a mere acknowledgment of receipt of goods will amount to an agreement by the Defendant to the rate of interest mentioned in the said invoices. It has been submitted by Ld. Counsel for the Defendant that it is the own case of the Plaintiff that orders of the material were placed telephonically upon it. In such view according to Ld. Counsel for the Defendant, mere delivery challans/invoices containing the acknowledgment of receipt of goods cannot be deemed to be an agreement with respect to the rate of interest agreed between CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 20 /22 the parties. Ld.Counsel for the Plaintiff, in rebuttal, has then submitted that even in the legal notice, the Plaintiff has demanded interest @18% per annum and that therefore this Court must award interest @18% per annum atleast from the issuance of the legal notice dated 27.04.2018, if not from the date of invoices.
27. Keeping view the judicial dicta laid down by the Hon'ble Delhi High Court in the cases CS (OS) 209 / 2016 titled as Gopesh Mehta Vs Swift Initia Pvt. Ltd. and RSA No. 195 / 2004 titled as Sh. Zile Singh Vs. Sh. Mangloo Ram Bansal to the effect that even if there was no agreement between the parties with respect to the payment of interest on delayed payments, a Plaintiff is entitled to claim interest from the date of issuance of the legal notice to the Defendant, interest on the principal amount adjudged of Rs.7,80,798/- is allowed @ 10% per annum from 27.04.2018 (the date of issuance of legal notice issued by the Plaintiff) till the date of filing of the suit i.e. 13.09.2021.
28. As regards pendente lite and future interest, the proviso to Section 34 of CPC makes it clear that where the liability in relation to the sum adjudged by a Court has arisen out of a commercial transaction and there was no contractual rate of interest agreed between the parties, the Court is entitled to award pendente lite and future interest at the rate at which monies are lent or advanced by nationalized banks in relation to commercial transactions. Taking into consideration that many suits are pending in this Court wherein nationalized banks are claiming recovery of unpaid loan amounts along with interest at the rate of 10% per annum, this Court hereby awards pendente lite and future interest at the rate of 10% per annum.
CS (COMM) 386/2021 Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 21 /22
29. As such, the suit of the Plaintiff is hereby decreed against the Defendant for an amount of Rs.7,80,798/- (Rupees Seven Lakhs Eighty Thousand Seven Hundred Ninety Eight Only). Interest on the principal amount adjudged of Rs.7,80,798/- is allowed @10% per annum from 27.04.2018 till the date of filing of the present suit i.e. 13.09.2021. Pendente lite and future interest are awarded at @10% per annum, on the principal amount adjudged of Rs.7,80,798/-. Costs of the suit are also allowed. Decree Sheet be prepared accordingly.
This file be consigned to Record Room.
ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2024.08.07
BALIGA 21:41:38 +0530
Announced in the open court (Anu Grover Baliga)
on 5th August, 2024 District Judge (Commercial Court-04)
South-East/Saket Courts/New Delhi
CS (COMM) 386/2021
Sterling Technotrade India Pvt Ltd Vs. M/s Chandralekha Construction Pvt Ltd. Page 22 /22