Delhi District Court
M/S Perfect Advertisers vs M/S Oxigen Services Pvt. Ltd on 4 May, 2022
In the Court of Shri Dinesh Bhatt, District Judge (Commercial
Court)01, Tis Hazari Courts, West District, Delhi
CS (Com.) No.611286/2016
CNR No. DLWT010004892011
M/s Perfect Advertisers
(Prop.) Sh Sanjeev Chawla
Plot No.5, Opp. 31 Block,
Near Arya Samaj Mandir, Moti Nagar,
New Delhi110015
........Plaintiff
Versus
1. M/s Oxigen Services Pvt. Ltd.
257, Udyog Vihar, Phase1,
Gurgaon212016, Haryana
Regd. Office
G4, Community Centre,
CBlock, Nariana Vihar, Delhi
2. M/s Universal Print 'N' Pack
(Prop.) Smt. Aashu Chawla
W/o Sh Sumit Chawla
F59, 2nd Floor, Moti Nagar,
New Delhi110015 ........Defendants
Date of Institution : 14102011
Date of hearing of arguments : 26042022
Date of decision : 04052022
CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.1 of 13
JUDGMENT
This is a suit of recovery of Rs.17,50,000/ on account of unpaid dues for goods supplied to defendant no.1 alongwith pendentelite and future interest @ 18% P.A.
2. Plaintiff's case is that plaintiff is a proprietorship concern and defendant no.1 was a registered company. Defendant no.2 was the agent of defendant no.1. In April, 2008, defendant no.1 approached plaintiff for supply of material vide order dated 23.04.2008. The goods as per the directions of the defendant no.1 were delivered to defendant no.2 and invoices was raised. Defendant no.1 made part payment Rs.90,000/ and Rs.5 lacs to the plaintiff but did not clear the remaining amount. Defendants did not raise any dispute in regard to the delivery or quality of the goods. After receiving the goods defendant no.1 besides payment of Rs.5,90,000/ to the plaintiff also made payment of Rs.2,09,375/ to defendant no.2. Plaintiff requested defendant no.1 to clear the outstanding amount of Rs.17.5 lacs but the said amount was not paid. Plaintiff issued legal notice dated 08.07.2011 but neither any payment nor any reply was received. Plaintiff was entitled for the said amount alongwith interest @ 18% P.A.
3. Defendants filed written statement. Defendant no.1 stated that there was no cause of action against the defendant as defendant no.1 CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.2 of 13 had made excess payment and had to recover Rs.2,50,625/ from the plaintiff and defendant no.2.
4. Defendant no.1 stated that he had placed orders for supply of 10,000 rectangular signages and 5000 round signages from the plaintiff and after completing the sticker printing defendant no.2 had to deliver the complete signages to defendant no.1. As per agreement defendant no.1 paid advance of Rs.8,85000/ to defendant no.2. Thereafter, as per agreement defendant no.1 released payment of Rs.7,99,375/ to plaintiff and defendant no.2. They paid Rs.90,000/ and Rs.5 lacs on 21.08.2008 and 17.10.2008 to the plaintiff for rectangular signages and not towards total CST. Defendant no.2 was paid Rs.2,09,375/ on 21.07.2008. Defendant received the full ordered quantity of 10000 rectangular Signages but did not receive the round sinages. The samples of round signages were poor in quality and therefore, defendant did not grant approval for commercial supply. Since, plaintiff and defendant no.2 failed to develop the right product even after gap of one year they were left with no option and therefore, vide letter dated 30.03.2009, the order for supply of round signages was cancelled. Defendant no.1 had requested both plaintiff and defendant no.1 to send the original invoices after making necessary corrections. But none of them responded. Consequently, defendant no.1 was entitled to recover Rs.2,50.625/ from plaintiff and defendant no.2. Defendant CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.3 of 13 further pleaded that suit was not maintainable under Order XXXVII CPC there was no cause of action, plaintiff had concealed material facts.
5. On merits, contents of para no.1 to 4 relating to description of parties, placing of order dated 23.04.2008 and the conditions mentioned on them are admitted. The supply of material as per terms and conditions was denied. It is also denied that defendant had received the complete invoice but stated only unsigned copy was available which was improper and could not be accounted in the books of account. The delivery of round signages was not made and therefore, the invoice was required to be corrected and defendant was entitled for recovery of excess amount from the other two parties. Plaintiff on its own deposited the complete CST and defendant no.1 only paid payment for rectangular signages.
6. Defendant no.2 also filed written statement admitting the contents of Para no.1 to 4 of the plaint. He also admitted that defendant no.1 had made payment of Rs.90,000/ the full value of CST of all the signages to the plaintiff. He also admitted the other payments. He did not dispute any other facts and mentioned that they were matter of record. Plaintiff filed rejoinder to written statement filed by defendant no.1 denying the allegation made by defendant no.1 and reiterating the contents fo the plaint. He mentioned that defendant no.1 received supply of complete signages and only thereafter the part payment were made. In CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.4 of 13 case defendant no.1 did not receive the round signages there was no question of payment of complete CST on the total delivered goods. The entire material was supplied to defendant no.2 on their instructions and plaintiff did not deliver any material at the premises of defendant no.1. There was an interse arrangement between defendant no.1 and defendant no.2 for which plaintiff had no concern and they are not liable for any dispute between the defendants.
7. The suit was initially filed as a suit under order XXXVII CPC and the application for leave to defend was allowed vide order dated 11.09.2013.
8. From the pleadings of the parties following issues were framed on 21.03.2017.
1. Whether the plaintiff is entitled for recovery of suit amount, as claimed? (OPP)
2. Relief.
9. Plaintiff's examined PW1 and defendant no.1 examined DW1 as the sole witnesses and thereafter, closed their evidence. Defendant no.2 did not lead any evidence.
10. I have heard the Ld. counsel for the parties and perused the record.
11. PW1 reiterated the contents of the plaint and relied on the CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.5 of 13 documents Ex.PW1/1 to Ex.PW1/10. In crossexamination, PW1 stated that the entire material as per Ex.PW1/1 was supplied to defendant no.2. and the document Ex.PW1/2 bears signatures of defendant no.2's supervisor at point A. He was not aware if the document Ex.PW1/5 to Ex.PW1/7 was bearing any receipt of defendant no.1 about articles delivered by defendant no.2. He had not sent any written demand before issuance of legal notice Ex.PW1/8 but had personally visited for making demand. He denied that no material was supplied to the defendant no.1. and volunteered that the material was supplied to defendant no.2 as per instructions of defendant no.1. He denied that defendant no.1 was not liable to make any payment as they did not receive round signages. He admitted that there was no other documents except Ex.PW1/1 in regard to the terms and conditions for supply of material in question. The witness was not cross examined on behalf of defendant no.2.
12. DW1 reiterated the contents of the WS and relied on the documents Ex.DW1/1 and Mark A and B. In crossexamination, DW1 stated that Ex.DW1/1 did not bear any date, name or designation or details about the person who issued the said documents. But volunteered that it was bearing signature of Ms. Mehar Sarid Group President. He also admitted that there was no document on record to show that Ms. Mehar Sarid was competent to authorize the witness to appear in the CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.6 of 13 present case. He denied that Ex.DW1/1 did not authorize him to depose on behalf of defendant no.1. He admitted that defendant no.1 had placed order vide Ex.PW1/1 with the plaintiff and that the entire material was to be delivered to M/s Universal Print (defendant no.2) after sample approval as is mentioned from point A to A1 on Ex.PW1/1. He denied that defendant no.2 was authorized and competent to receive articles from plaintiff on behalf of defendant no.1. He also denied that he was making contrary statement to the contents of Ex.PW1/1. He admitted that delivery of purchase material was to be made after approval. He stated that he had no knowledge if plaintiff had supplied the agreed material to defendant no.2 as per instructions mentioned on Ex.PW1/1. He admitted that the total central Tax on the material was Rs.90,000/ and total price of the material was Rs.22.5 lacs. He was not aware if defendant no.2 was agent of defendant no.1 for receiving the goods from plaintiff. He admitted that Ex.DW1/PA to Ex.DW1/PC (Mark B to D) were the photocopy of invoices issued by defendant no.2 to defendant no.1. Volunteered the documents were unsigned and of no legal value. He denied that the entire material were supplied by the plaintiff on 15.06.2008 and payment was to be made within 30 days. He denied that plaintiff had no concern with the dealings between the defendants. He denied that material supplied was not of poor quality. He admitted that defendant no.2 had to carryout work on the material supplied by the CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.7 of 13 plaintiff and plaintiff had no concern with the same. He admitted that there was no written document relating to quality specification as claimed by defendant no.1. He denied that defendant no.1 was liable to make the payment of Rs.17.5 lacs alongwith interest. The address mentioned on Ex.PW1/8 (legal notice) at point A was correctly mentioned. He stated that the document Ex.PW1/D1 was the relevant document relating to cancellation. He denied that he could not produce any document to show that the order was cancelled prior to delivery of invoices. He denied that he was denying the delivery of goods to escape the legal liability.
Issue no. 1.
13. PW1 stated that defendant no.1 placed order for supply of goods vide Ex.PW1/1 for total price of Rs.22.5 lacs with the instructions that plaintiff would delivery the goods to defendant no.2 after sample approval. Plaintiff stated that as ordered by defendant no.1 they delivered the goods to defendant no.2 vide invoice Ex.PW1/2 on 15.06.2008. The invoice was for the value of Rs.23.4 lacs which including Rs.90,000/ as Central Sale Tax. Defendant no.1 paid amount of Rs.90,000/ on 21.08.2008 and further payment of Rs.5 lacs on 17.10.2008. The balance payment of Rs.17.5 lacs were never paid. Defendant no.1 did not dispute Ex.PW1/1 or its contents. The aforesaid payment is also not disputed. The only dispute according to defendant CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.8 of 13 no.1 was that plaintiff had to supply 10000 rectangular signages and 5000 round signages but they only received the rectangular signages. The sample of round signages was not approved and therefore, the order relating to round signages was cancelled. They had made payment of goods received and therefore, they were entitled to recover an amount of Rs.2,50,625/ from plaintiff and defendant no.2. DW1 did not dispute the delivery of goods to defendant no.2 but only stated that he was not aware if complete material was supplied to defendant no.2. He also admitted that material was to be supplied after sample approval. Defendant no.1 has raised an issue that they did not receive the round signages and that the sample relating to 5000 round signages failed and therefore,they had cancelled the order. They have claimed that both plaintiff and defendant no.2 were required to develop the right product meeting the defendant no.1's requirement but the same could not happen due to poor quality product.
14. There is no dispute in regard to the purchase order or the conditions mentioned in the said order Ex.PW1/1. Defendant no.2 did not dispute the delivery of the goods to them as per Ex.PW1/2. The only dispute left is whether plaintiff was required to complete some work before defendant no.1 was to release the remaining payment or plaintiff was merely to delivery articles to defendant no.2 after sample approval. Defendant no.1 stated that both plaintiff and defendant no.2 CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.9 of 13 were required to develop the right product as per defendant's specification but the same in respect of round signages could not be done and therefore, they were not liable to make the payment but was entitled for recovery of the excess amount. In this regard, DW1 stated that they had served letter Ex.PW1/D1 to plaintiff and defendant no.2 for cancelling the order relating to round signages and had asked them to submit corrected invoices. According to plaintiff they were only required to get samples approved and thereafter, deliver the material to defendant no.2. Defendant no.2 was to carryout some work on the same but plaintiff had no concern with the same.
15. Defendant no.2 did not raise any issue regarding non supply or poor quality products. They have also did not dispute the plaintiff's claim that they were only required to deliver the goods and were not concerned with the arrangement between the two defendants. The relevant documents in question is Ex.PW1/1. The same is addressed by defendant no.1 to plaintiff with the directions to supply round and rectangular signages after sample approval to defendant no.2. This document does not mention about any work to be carried out by the plaintiff on the said product. As per the admitted case of the parties, defendant no.2 after delivery of goods had to carryout some work on the material and thereafter, had to supply the goods to the defendant no.1. There is thus no document on record to show that plaintiff was to carry CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.10 of 13 out some additional work or would be entitled for payment only if the work on the goods by defendant no.2 was properly carried out. Thus the documents available on record are clear to the extent that plaintiff was only required to get the sample approved and thereafter, deliver the goods as per Ex.PW1/1 to defendant no.2. Defendant no.1 has not been to able to prove that there was any violation by the plaintiff in regard to the conditions mentioned on Ex.PW1/1. As per Ex.PW1/D1, defendant no.1 had not received the supply of round signages due to the reason that defendant no.2 and plaintiff had failed to develop the product meeting quality specification and the sample failed due to poor quality and bad workmanship. This document also mentioned that they had waited for one year but the right product had not been developed as such they had not choice but to cancel the order relating to round signages. This document mentions the fact that the sample had failed and the other two parties had failed to develop the right product as per their specification. But this document is contrary to Ex.PW1/1 where plaintiff's liability was only to the extent of getting the sample approved and thereafter deliver the material to defendant no.2. It no where mentions that plaintiff was required to develop the product as per requirement of defendant no.1 and admittedly, in pursuance to Ex.PW 1/1 dated 23.04.2008, after sample approval plaintiff was to deliver and had delivered goods to defendant no.2 on 15.06.2008. Defendant no.1 CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.11 of 13 also made payment of Rs.90,000/ and Rs.5 lacs to plaintiff on 21.08.2008 and 17.10.2008 respectively, i.e. after the delivery of goods on 15.06.2008. As per the agreed conditions plaintiff was to deliver goods to defendant no.2 only after approval of sample. Thus, if the sample had failed there was no occasion for defendant no.1 to have made payment aforesaid to defendant no.1. The cancellation letter Ex.PW1/D1 is dated 30.03.2009, which is almost 9 months after the delivery of the goods. Defendant no.2 has not dispute the delivery of goods and DW1 also admitted that goods were to be supplied to defendant no.2 only after approval of the sample. Thus, if defendant no.1 's version is believed than on delivery defendant no.1 should have immediately brought the fact of poor quality goods to the plaintiff's notice. This was not done at the relevant time. The document Ex.PW 1/D1 appears to be an after thought or attempt to force defendant no.2 to carry out proper work. It appears that after the delivery of goods by the plaintiff, defendant no.2 was to carryout some work on the article which might not have been carried out by the said defendant. But there is nothing on record to show that it was the plaintiff duty to ensure proper work on the said articles which were delivered to defendant no.2. Thus, plaintiff has proved that they had delivered the goods as per instructions of defendant no.1 vide Ex.PW1/1 to defendant no.2. Defendant no.1 has failed to show any default by the plaintiff in regard CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.12 of 13 to delivery of goods as per their instructions to defendant no.2. There is also nothing on record to show that plaintiff would not be entitled for payment in regard to any dispute between defendant no.1 and 2. Plaintiff has no claim against the defendant no.2. Accordingly, issue no.1 is decided in favour of the plaintiff and against the defendant no.1.
16. Plaintiff has further claimed interest @ 18% P.A. on the outstanding amount after the expiry of 30 days date of raising the bills. But there is no such condition either in the purchase order or the invoices in question. Accordingly, a reasonable interest @ 6% P.A. is allowed on the aforesaid amount from the date of the next financial year of the invoices in question i.e. w.e.f. 1st April, 2009 till realization with cost.
Decree sheet be drawn accordingly.
File be consigned to record room.
Announced in open (Dinesh Bhatt)
Court on 04.05.2022 District Judge (Commercial Court)01
West, Tis Hazari Courts, Delhi
CS (COMM.) No11286/16 M/s Perfect Advertisers Vs. M /s Oxigen Services Pvt. Ltd. Page No.13 of 13