Delhi District Court
Prabhav Chemicals vs Sharma Framing House on 27 April, 2024
1
IN THE COURT OF MS. GUNJAN GUPTA:
DISTRICT JUDGE 04 - SOUTH EAST DISTRICT, SAKET
COURTS, NEW DELHI.
In the matter of:
CS DJ No. 68/2017
PRABHAV CHEMICALS,
(Partnership Firm through its Partner
Mr. Pragnesh Shah),
Having its office at :
24 D Block, Bhangwadi Kalbadevi,
Mumbai, Maharashtra ....Plaintiff
VERSUS
SHARMA FARMING HOUSE,
( Proprietorship Firm through its Proprietorship
Mr. H.L Sharma),
E-129, Okhla Phase-III,
New Delhi. ....Defendants
Date of institution of suit : 11.01.2017
Judgment reserved on : 27.03.2024.
Judgment announced on : 27.04.2024
Final Decision : DECREED
AND
In the matter of:
CS DJ No. 10582/2016
M/S. SHARMA FARMING HOUSE,
(Proprietorship Firm through its Proprietorship
Mr. HL Sharma),
E-129, Okhla Phase-III,
New Delhi. ....Plaintiff
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017
&
M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016
2
Versus
1. M/S. PRABHAV CHEMICALS,
24 D Block Bhangwadi Kalbadevi,
Mumbai, Maharashtra
2. SHRI DIPAK SHAH,
24 D Block Bhangwadi Kalbadevi,
Mumbai, Maharashtra
3. SHRI JIGNESH SHAH,
Partner,
M/s Prabhav Chemicals,
24 D Block Bhangwadi Kalbadevi,
Mumbai, Maharashtra
4. BHAVNA JIGNESH SHAH,
Partner,
M/s Prabhav Chemicals,
24 D Block Bhangwadi Kalbadevi,
Mumbai, Maharashtra ....Defendants
Date of institution of suit : 07.06.2016
Judgment reserved on : 27.03.2024.
Judgment announced on : 27.04.2024
Final Decision : DISMISSED
JUDGMENT
1. By way of this common judgment, I shall dispose off two cases namely:
i). Suit No. 68/2017 - Prabhav Chemicals Vs. Sharma Framing House thereby seeking recovery of Rs. 36,63,781/- alongwith interest.
(hereinafter referred to as First suit).
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 3
ii). Suit No. 10582/2016 titled as M/s. Sharma Framing House vs. M/s. Prabhav Chemicals seeking the following reliefs:
a). Decree of declaration thereby declaring the cheques bearing nos. 000963, 000964, 000965, 000966, 000967 of Rs. 5 Lakhs each of Kotak Mahindra Bank as null and void and unforceable.
b). Decree of mandatory injunction thereby directing the defendants to return the said cheques of Kotak Mahindra Bank to the plaintiff.
c). Decree for damages for a sum of Rs. 25 lacs for losses suffered due to misuse of the cheques and supply of fake category of goods.
(hereinafter referred to as Second suit).
2. M/s. Prabhav Chemicals (hereinafter referred to as plaintiff) is a registered Partnership Firm engaged into the business of chemicals, wood and other articles and the present suit is filed through Mr. Pragnesh Shah (Partner of the plaintiff firm).
3. M/s. Sharma Framing House (hereinafter referred to as defendant) is a Proprietorship Firm engaged in the business of sale & marketing of paintings and its related works including installation of frames, etc. Case of Prabhav Chemicals
4. The following facts are averred by the plaintiff:
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 4 That the Plaintiff firm dealt in supplies of special wood known as "Ayous" to its clients that is used for framing and molding purposes. The said wood is not produced in India and is imported from overseas by Plaintiff. Plaintiff Firm also provides to its Clients free consultancy of one Mr. Dipak Shah, who is a technocrat specialized in wooden finished moldings since last 38 years. The customers who buy wood from the Plaintiff Firm also get free consultancy of Mr. Dipak Shah.
5. The Plaintiff and Defendant had past business relations since last several years. The plaintiff would accept order of defendant over the phone and then would get the same imported from the manufacturer overseas, at its own cost. Apart from supply of the wood, the Plaintiff also provided the services to the defendant for setting up of his workshop in Delhi, where the wood was cut to make the frames.
6. The Defendant purchased on an average three 40' containers of wood from the Plaintiff.
7. In the year 2013, apparently the Defendant came to know about the supplier of the Plaintiff Firm in Africa and adopted an unwarranted grievance against the Plaintiff that it has earned margin of 10-15% on the supply of wood to the Defendant.
8. In the first week of September 2013, the Plaintiff confirmed the order for supply of one full 40 ft. container, for Ayous Square Edged Lumber approx. 46 CBM unit at the rate of approx. 49,700 OMS, CST at 2% per unit.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 5
9. That as per the practice the Defendant would pay 20% in advance and balance 80% before the arrival of the goods in India/Delhi. However, this time Defendant requested that he would pay for goods in 2 to 3 months after receipt of the same as he was undergoing financial constraints to which the Plaintiff agreed keeping in view the past relations. Accordingly, the defendant in First week of September 2013, handed over five cheques drawn on Kotak Mahindra Bank, for a sum of Rs. Five Lakhs each, against the container booked by him, as security for payment.
10. Against aforesaid order placed by the Defendant, the Plaintiff raised tax invoice No. 001601 dated 12.02.2014, after the goods were supplied by the Supplier as it takes about 4-5 months for the goods to reach India from the date advance payment is made to the exporter and he dispatches the goods.
11. The Plaintiff sent the container imported by him on the order of defendant to the defendant through M/s Shiv Ganga Transport Pvt. Ltd., having office at Chembur, Mumbai which was received by the Defendant in New Delhi on 17.02.2014.
12. The Defendant issued a "C" Form as per the Sales Tax Rules to the Plaintiff, confirming purchase of the goods from the Plaintiff Firm.
13. Thereafter the Defendant requested the Plaintiff not to deposit the five post dated cheques handed over to it as he had to make arrangement for funds in his account in Kotak Mahindra Bank. Plaintiff acceded to the request.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 6
14. The Plaintiff demanded its payment from the Defendant from time to time, however, the defendant avoided it on one pretext or the other. Finally, the Plaintiff deposited the cheques on 01.04.2016, which were returned dishonored with remark "account closed".
15. It is averred that the Defendant did not have any intention to pay for the goods since the beginning and, therefore, he issued cheques to the plaintiff from his closed bank account. It is averred that apparently same was closed in October, 2013.
16. The Plaintiff issued legal notice dated 26.04.2016, to the the Defendant informing about return of cheques and calling upon him to make the payment. The Defendant replied to the same vide reply dated 29.05.2016, thereby raising false and baseless pleas.
17. A complaint was filed under Section 138 of the Negotiable Instruments Act, which is pending adjudication before the MM Court, Mumbai.
18. As a counter blast, the Defendant filed a suit for declaration and mandatory injunction against the plaintiff.
19. Hence the plaintiff has filed the suit for recovery of Rs.
23,19,251/-for the goods received by defendant on 17.02.2014 with interest @ 20% p.a. as per terms of invoice from 17.02.2014 till 08.01.2017, amounting to Rs. 13,44,530/- thus the total amount payable till filing of suit being Rs. 36,63,781/-.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 7 Case of defendant- Sharma Framing House.
20. The defendant has averred as follows:
That during course of its business dealings, the defendant came across one Sh. Dipak Shah and his several other associates in the year 2012 including one Sh. Jignesh Shah, who represented himself as the proprietor of plaintiff's firm engaged in supply of several qualities of wood and its elements across the globe.
21. A formal meeting in this regard took place at the office of the defendant at Okhla Industrial Area, New Delhi and an oral contract for supply of wood in the nature of 'Ayous Square' was executed between Sh. Dipak Shah and the defendant.
22. As per the contract the goods were to be supplied at the office of defendant at Okhla, New Delhi as and when the order was placed by defendant.
23. It is averred that it was agreed that the defendant shall raise a purchase order at Okhla, New Delhi in the name of the plaintiff's firm on such terms and conditions as the defendant may deem fit and proper. It is averred that the defendant have always been regular in payments to the plaintiff's firm. It is averred that for the first time with the service of legal notice dated 26.04.2016, it came to the knowledge of the defendant that the plaintiff is a partnership firm. It is averred that Sh. Dipak Shah later during the course of dealings introduced the defendant to Sh. Jignesh Shah as his business partner in the plaintiff firm. It is averred that the defendant has never met Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 8 Sh. Pragnesh Shah who claims to be the partner of the plaintiff's firm during the entire course of dealings between the plaintiff and the defendant.
24. It is averred that they acting in collusion with the plaintiff's firm and its partners and associates induced the defendant to purchase a specific category of wood from them 'Ayous Square' being its only vendor. It is averred that they further represented and assured that they shall supply the original said category of wood as and when required by the defendant and since the said category of wood was rarely available in Indian Market and the defendant had never dealt in the said category of wood, the defendant had no option but to trust the above named and the plaintiff's firm over their assurance to supply the said category of wood in its original form.
25. During the course of such dealings they also demanded and obtained certain blank cheques from the plaintiff to develop cordial relations in the business. Therefore, six blank cheques were drawn on Kotak Mahindra Bank, New Delhi in the name of the plaintiff firm. The said cheques were handed over by the defendant to said Sh. Jignesh Shah in the presence of Sh. Dipak Shah at defendant's office at Okhla, New Delhi on or around 14th August, 2013. Sh. Jignesh Shah in the presence of Sh. Dipak Shah had assured the defendant that the said cheques shall never be presented by them or the plaintiff's firm and the same shall be returned to the defendant on defendant's demand.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 9
26. It is averred that several purchase orders were placed on the plaintiff's firm for "Ayous" wood through said Sh. Dipak Shah and Sh. Jignesh Shah at New Delhi and the goods were delivered at the office premises of the defendant based at Okhla, New Delhi. It is averred that the defendant used the said category of wood for installation of frames in various artistic works for its customers. In or around June, 2014 the defendant began receiving complaints from its clients/customers with respect to quality of the said category of wood and thus defendant raised several questions to the plaintiff's firm over the supply of quality of said category of wood. However, no satisfactory reply was received from the plaintiff's firm.
27. It is averred that in or around December 2015, the defendant discovered that the plaintiffs including the above named were never the vendors or suppliers of any category of wood and were only engaged in supply of chemicals. It is averred that the above named in connivance with the plaintiff's firm further manipulated various documents showing themselves as the vendor of wood in form of forged Invoices, delivery challans, etc and also presented the cheques without knowledge and consent of the defendant despite knowing-fully well that the account on which the said cheque are held has already been closed by the defendant way back in September, 2013. It is averred that the plaintiff's firm is not registered under VAT for supply of wood and its elements.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 10
28. It is averred that the plaintiff's firm provided fake quality of wood to the defendant and when the defendant confronted the above named about the supply of fake wood they denied the issues raised by defendant. It is averred that some supplies of fake wood were immediately returned to the plaintiff in the same vehicle wherein they had been dispatched by the plaintiff's firm and no further orders to purchase the said category of wood were placed by the defendant. It is averred that the plaintiff's firm failed to resolve the issue of fake supply.
29. It is averred that the defendant further learnt that during the course of supplying the said category of wood, the plaintiff must have forged various documents in the nature of Invoices, receipts, challans, forms etc to escape from the liability to compensate the defendant for all such losses caused to the defendant over the supply of fake category of wood. It is averred that the said fact of supplying fake wood to the defendant was discovered when the plaintiff came across the original vendor for supply of said wood namely "Roserwood".
30. It is averred that on confrontation, Sh. Dipak Shah and Jignesh Shah confessed to the defendant that they were never vendors of the wood and that they had deliberately supplied the fake wood to the defendant several times in collusion with the plaintiff's firm. It is averred that it was also discovered that the Sh. Dipak Shah or Mr. Jignesh Shah were never proprietor of said M/s Prabhav Chemicals and Mrs. Bhavna Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 11 Jignesh Shah probably wife of Mr. Jignesh Shah was looking after the business affairs of the plaintiff's firm and the said fact stood corroborated by the legal notice sent by the plaintiff's firm to the defendant. It is further averred that it was discovered during the course of exchange of Emails between the plaintiff and the defendant that Sh. Dipak Shah and Jignesh Shah in collusion with Ms. Bhavna Jignesh Shah forged bills in the name of M/s Prabhav Chemicals for supply of wood to the defendant.
31. It is averred that the defendant wrote letters dated 15.12.2015 and 29.01.2016 to Sh. Dipak Shah and the plaintiff's firm for return of above mentioned cheques which were never returned and a complaint in this regard was filed at the PS Okhla Industrial Area, New Delhi.
32. It is stated that the account on which the said cheques had been drawn had already been closed by the defendant since 23.09.2013. It is averred that the said cheques were admittedly blank cheques and without consideration.
33. It is also averred that the legal notice dt 26.04.2016 got issued by Mrs. Bhavna Jignesh Shah qua the amount of cheques was received only on 11.05.2016 i.e., the date on which the suit for declaration and permanent injunction was filed by the defendant against the plaintiff qua the same cheques.
34. It is averred that by virtue of the said notice, the defendant came to know that the plaintiff has presented the said blank cheques to its Banker after filing the five blank Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 12 cheques (out of said six blank cheques) each for Rs 5,00,000/- (Rupees Five Lacs only) dated 06.04.2016 and presented the same despite knowing fully well that the account on which the said cheque are held has already been closed by the defendant way back in September, 2013.
35. It is averred that tax invoice no. 001601 dated 12.02.2014 is forged manipulated and created document of the plaintiff so as to establish his false claim against the defendant.
36. It is pertinent to point out here that in the second suit the defendant has averred that he started receiving the complaints in October, 2013.
Replication by Plaintiff- M/s. Prabhav Chemicals
37. Replication was filed by the plaintiff reiterating the contents of the plaint and denying the averments of the W.S. It is stated that plaintiff is a Partnership Firm and Mr. Dipak Shah and Mr. Jignesh Shah are not its partners and the said partnership consists of Mr. Pragnesh A Shah and Ms. Bhavna Jignesh Shah.
38. It is averred that the correct facts are that the defendant knows Mr. Dipak Shah since 2004, when he was associated with M/s Param Wood Mouldings at Daman, as its consultant. It is stated that earlier before having business relations with the Plaintiff, the Defendant used to purchase moldings from M/s Param Wood. However, in 2010 Mr. Dipak Shah quit M/s Param Wood and it was then that the defendant approached him to set up finished wooden moulding factory for him at Delhi and also help him with the supply of wood. Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 13 It is averred that Sh. Dipak Shah never claimed that he is a supplier of wood to any customers in India or elsewhere as alleged by the defendant. It is averred that as this wood namely "AYOUS WOOD" is a very special wood used only for making wooden mouldings world over, there were only two industries of such kind at that time and both were importing, as said wood is not available in local market. In these circumstances, the defendant agreed to purchase above wood from Plaintiff with whom Sh. Dipak Shah was associated as a consultant. It is further pertinent to point out that in said meeting, it was also discussed and agreed upon that the Mr. Dipak Shah as a technocrat would assist the defendant herein to set up his factory/workshop in Delhi, where the wood was cut to make the frames. During the meeting, the defendant was duly informed that the Plaintiff Firm for its services would charge 10-15% over and above the rate at which it would receive the goods from its supplier, which is the usual business practice.
39. It is stated that Sh. Dipak Shah never claimed himself to be the proprietor of Plaintiff i.e. M/s. Prabhav Chemicals as alleged and the said fact is evident from the invoices that were being received by the defendant which clearly mentions that the plaintiff is a Partnership Firm which was purposely not filed by the defendant as that would falsify his story. It is further stated that the Plaintiff Firm, since 2010 is engaged in sales of several qualities of wood and its elements.
40. It is averred that the defendant is making contradictory Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 14 statements. At one place, the defendant claims that he was not aware of the fact of Plaintiff is a partnership firm and at another, it is stated that during the course of dealings for supply of wood, he came to know Sh. Jignesh Shah is business partner of Sh. Dipak Shah.
41. It is stated that the Plaintiff never cheated the defendant about quality, which can be seen from the invoices of Plaintiff's supplier from abroad, which is a public listed Company in France supplying wood from Africa to world over in hundreds of containers per month. It is submitted that the defendant used to earlier buy mouldings from PARAM Wood of the same quality and were very much aware of the quality and nature of wood required by him.
42. It is stated that the allegation of fake wood is baseless as Custom verifies the wood quality on arrival and a separate department issues pytho certificates for every lot of wood by supplier from abroad confirming quality. Therefore, any allegation of the defendant that the wood supplied to him was not genuine is false and frivolous.
43. It is stated that the plaintiff somehow came to know about the details of the supplier of Plaintiff in France, who also participated in an exhibition in Bangalore, India. The defendant is now procuring the wood directly from said supplier and has by passed the Plaintiff. It is submitted that to evade payment of the last container received by him, the defendant is levelling false allegations against the answering defendants.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 15
44. It is stated that for the subject consignment, the defendant had made payments to the transporter for unloading, therefore, contention of the defendant that he never placed any order is incorrect and false.
45. It is stated that for the order placed in September 2013, the answering Plaintiff delivered the goods on 17.02.2014, against the receipt as evident from the receipt issued by the Transporter "Shiv Ganga Transport Private Limited. It is averred that thereafter the defendant did not place the order from the answering plaintiff not because of grievance with quality but because he got details of the overseas supplier.
46. It is stated that when a buyer purchases goods from out of his residence State, then the buyer is under obligation to inform to local sales tax authority to issue C Form in favour of supplier, which has been done in the present case by the defendant. It is submitted that these forms are issued by Service Tax Department after all confirmation and not otherwise. Thus, the C Form cannot be fake.
47. It is stated that the cheques were handed over to Sh. Dipak Shah, by the defendant for payment of the subject consignment, in first week of September 2013 wherein the date and name of payee was written by the plaintiff but the amount on the same was written by the defendant.
48. It is stated that the letters dated 15.12.2015 and 29.01.2016 were never received by the answering plaintiff and since the defendant is aware of the fact that the Plaintiff has filed proceedings under section 138 of the Negotiable Instrument Act, Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 16 therefore claim of retaining or return of cheques is legally not maintainable, since said cheques are part of court proceedings.
49. It is stated that as per the business practice adopted by the plaintiff, it used to transport the wood directly from the dock to the factory of the defendant and never ever downloaded container in Mumbai.
50. It is averred that the plaintiff has no means to verify if the sample of wood sent by defendant to the supplier for verification was the one sold by the answering plaintiff or was other sample. Issues framed in suit no. 68/2017 (First suit)
51. From the pleadings of the parties and the documents placed on record, the following issues were framed :
1. Whether the plaintiff is entitled to recover an amount of Rs.3563781/- or any other amount along with interest, pendente lite and future @ 20% per annum or at any other rate from the defendant on the basis of the grounds taken in the plaint? OPP.
2. Whether the suit for recovery is a counter blast to the suit for declaration and mandatory injunction filed by the defendant against the plaintiff seeking return of the cheques, the subject matter of the suit for recovery and therefore is filed without any cause of action? OPD
3. Whether the five cheques in question are not issued in discharge of any outstanding legal liability and are without consideration? OPD
4. Whether the suit for recovery is bad for non joinder of necessary parties? OPD
5. Relief.
Issues framed in suit no. 10582/2016 (Second suit)
52. From the pleadings of the parties and the documents Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 17 placed on record, the following issues were framed :
1. Whether the plaintiff is entitled to a decree of declaration in favour of the plaintiff and against the defendants thereby declaring that the cheques in question, six in number are enforceable in the eyes of law ? OPP
2. Whether the plaintiff is entitled to a decree of mandatory injunction in favour of the plaintiff and against the defendants thereby directing the defendants to return to the plaintiff the cheques in question, six in number ? OPP
3. Whether the plaintiff is entitled to a recover damages from the defendants jointly or severally in the amount of Rs. 25 lacs or any other amount by way of losses suffered by the plaintiff due to misuse of the cheques in question by the defendants as also due to supply of fake category of wood ? OPP
4. Whether the suit of the plaintiff is bad for mis-joinder of parties ? OPD
5. Whether the suit of the plaintiff is not maintainable in the present form ? OPD
6. Whether the suit of the plaintiff is without any cause of action ? OPD
7. Relief.
53. Vide order dt 27.10.2018 passed by Ld. Predecessor of this Court, at the request of the parties, both the suits were consolidated for the purposes of trial and suit no. 68/2017 was ordered to be treated as the lead suit, hence common evidence was allowed to be led in the matter.
Evidence on behalf of Prabhav Chemicals
54. The plaintiff in support of his case, examined Sh. Dipak Shah as PW1. He tendered his evidence by way of affidavit Ex.PW1/A and reiterated the contents of the plaint and relied Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 18 upon the following documents:
1. Authority letter signed by Mrs. Bhavna Jignesh Shah Ex.PW1/1.
2. Copy of certificate issued by Registrar of Firms in favour of the plaintiff (OSR) Ex PW1/2
3. Copy of Certificate issued by Central Sales Tax Authority (OSR) Ex PW1/3
4. Copy of Invoice dated 17.10.2011 Mark A
5. Copy of Invoice dated 02.05.2012 Mark B
6. Copy of Invoice dated 05.12.2012 Mark C
7. Copy of Invoice dated 07.09.2013 Ex PW1/7 (OSR)
8. Copy of Invoice dated 23.10.2013 Ex PW1/8 (OSR)
9. Copy of Invoice dated 12.02.2014 Ex PW1/9 (OSR)
10.C Form dated 05.07.2013 for Rs 23,22,284/- Mark D
11.C Forms dated 05.07.2013 for Rs 22,96,157/- Mark E
12.C Form dt 18.09.2014 for Rs 22,03,197/-Ex. PW1/12 (OSR).
13.C Form dt 18.09.2014 for Rs 21,94,632/- Ex. PW1/13 (OSR).
14.C Form dt 22.09.2014 for Rs 23,19,251/- Ex. PW1/14 (OSR).
15.Copy of Cheques bearing nos. 000963, 000964, 000965, 000966, 000967 of Rs. 5 Lacs each as Ex.PW1/15 (colly).
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 19
16.Copy of consignment note dated 12.02.2014 issued by M/s Shiv Ganga Transport Pvt. Ltd Ex. PW1/16 (OSR)
17.Copy of Dishonoured memos of cheques -Ex. PW1/17 (Colly) (OSR).
18.Legal notice Ex.PW1/18.
19.Reply to legal notice Ex.PW1/19
20.Copy of certificates from importer Mark F (Colly).
55. PW2 is Sh. Santosh Pandey, Manager of M/s. Shiv Ganga Transport Pvt Ltd. He had brought the record pertaining to the Consignment Note No. 116673 and 116672 issued in favour of Consignee M/s. Sharma Framing House. PW2 proved the above consignment notes Ex PW2/1 and Ex.PW2/2 and stated that as per the practice followed by Shiv Ganga Transport Ltd, at Delhi office, they maintain a copy of the Bilty (Consignment Note) for the delivery of goods made all over India. PW2 further proved the invoices of freight charges for the above consignment raised by company of PW2 on M/s. Sharma Framing House-Ex.PW2/4. The account ledger of company of PW2 showing the payment made by Sharma Framing House for the above consignment Ex PW2/5 and the cheque credited in its account is shown at point X3, X4, X5 and X6. The summary of cheques for the payment of freight charges is Ex.PW2/3. PW2 also brought the bank statement of company of PW2 maintained with HDFC Bank showing credit of the cheques issued by M/s. Sharma Framing for the freight charges of above consignments, in bank account of PW2 Ex PW2/6 wherein the credit of these Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 20 cheques is shown at point X7,X8, X9 and X10.
56. PW3 Sh. Mukesh Kumar, Junior Assistant/ Record Keeper in the office of Ward 92, Trade and Taxes Department, New Delhi. He deposed that the C Forms are filled by the customers with their department online and the record of the same is also maintained by them online. He brought the print outs of the C Forms of different quarters which are Ex.PW3/2 to Ex.PW3/6. Ex.PW3/6 is the C-Form for the fourth quarter (2013-2014) pertaining to the purchases relating to the disputed transaction. He further deposed that their system can be operated only by the person who has the login I'd and password and the system maintained by the department is secured and nobody can access the same apart from the person who has the login I'd and the password.
Evidence on behalf of M/s. Sharma Framing:
57. The defendant in support of his case, examined Sh. Hori Lal Sharma as DW1. He tendered his evidence by way of affidavit Ex.DW1/1 and reiterated the contents of his pleadings and relied upon the following documents:
1. Bank statements of Kotak Mahindra Bank and Dena Bank as Ex.DW-1/A & Ex.DW1/B
2. Emails dt 23.12.2013 to 06.02.2016 as Mark-C
3. Sale contract between Rougier Afrique International and M/s. Sharma Framing House -Ex.DW-1/D
4. Copy of letter dated 15.12.2015 as Mark E-1.
5. Dispatch proof of letter dated 15.12.2015 as Ex.DW1/E
6. Copy of letter dated 29.01.2016 Mark F-1.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 21
7. Dispatch proof of letter dated 29.01.2016 as Ex. DW1/F.
8. Copy of confirmation letter dated 06.04.2016 on account of closure Mark DW1/G.
9. Copy of complaint to PS Okhla dated 06.04.2016 as Mark DW1/H.
10. Order dated 12.05.2016 as Ex. DW 1/J.
58. DW2 / HC Arvind Kumar produced the summoned record in respect of complaint bearing DD No 36 dated 08.04.2016 made against M/s. Prabhav Chemicals by M/s. Sharma Framing House, Okhla Industrial Area Phase II New Delhi. He proved the relevant entry of the complaint in their register as Ex. DW2/1 at Point X.
59. DW3/ Sh. Navneet Singh is an official from Kotak Mahindra Bank who had proved the record pertaining to account no 020520900003654 of defendant's firm including Account Opening Form as Ex DW3/A, Certificate of Registration as Ex DW3/B, PAN Card and Identity Card of the Plaintiff as Ex DW3/C, Customer Profile Sheet as Ex DW3/D, Bank Statement from 01.01.2013 to 30.09.2013 as Ex DW3/E. He deposed that as per the record, the account of the plaintiff in the Bank was opened on 01.01.2013 and closed on 23.09.2013.
60. DW4/ Ms. Shweta, an official from Dena Bank, had proved the record pertaining to account bearing no. 091613023772 of the defendant maintained by their Bank. DW4 deposed that the summoned record includes photo identification of defendant Ex DW4/A and the Bank Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 22 Statement of the defendant's firm from period 01.01.2014 to 31.10.2014 Ex DW4/B.
61. DW5/ Indermani Prasad Misra, Administrative Officer, Bharat Bhawan, Bhopal, M.P., brought the record including the Invoice dated 08.01.2014 Ex DW5/A, Receipt dated 08.01.2014 Ex DW5/B, Complaint dated 17.08.2017 Ex DW5/C and Invoice dated 02.06.2018 Ex DW5/D. The authority letter issued by Bharat Bhawan in favour DW5 is Ex DW5/E. DW5 was examined by the defendant to prove the complaints received from defendant's customers regarding quality of wood.
62. He further deposed that he along with committee came to defendant's firm and placed ordered to buy wood/ frames made out of wood 'Aqous Square' and paid Rs 75,000/- as advance to the defendant's firm. The defendant's firm had later issued Invoice Ex.PW5/A and receipt dated 08.01.2014 Ex.PW5/B in this regard.
63. He deposed that the quality of wood started wearing and tearing in December 2014 and January 2015 onwards. He had made telephonic complaints to the defendant's firm and was apprised that the defendant has been supplied fake quality of wood by the vendor Prabhav Chemicals. A complaint in writing was also made in this regard in August 2017 Ex.DW5/C.
64. The defendant further examined Sh. Rajinder Dhawan as DW6. He tendered his evidence by way of affidavit Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 23 Ex.DW6/A and relied upon following documents:
1. Invoice dated 28.07.2014 -Mark DW6/1
2. Letter Dated 28.10.2017 issued by defendant - Ex.DW6/2
65. The defendant also examined Sh. Shradha Nand as DW7. He tendered his evidence by way of affidavit Ex.DW7/A and relied upon the certificate u/s 65 B Indian Evidence Act Mark C.
66. I have heard the arguments advanced by Ld. Counsels for the parties and have gone through the record of the cases including the case laws cited by respective parties.
Findings on the issues framed in suit no. CS DJ No. 68/2017 (First suit):
67. Issue no. 1:
Whether the plaintiff is entitled to recover an amount of Rs.35,63,781/- or any other amount alongwith interest, pendente lite and future @ 20% per annum or at any other rate from the defendant on the basis of the grounds taken in the plaint? OPP.
Arguments of Ld. Counsel for plaintiff
68. It is submitted by Ld. Counsel for plaintiff that the claim of the plaintiff in the present matter is for recovery of the amount of Rs. 36,63,781/- alongwith pendente lite and future interest @ 20% p.a. It is further submitted that the plaintiff claims the said amount as the amount of the unpaid invoice raised by the plaintiff upon the defendant for supply of Ayous Square Wood consignment on 17.02.2014.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 24
69. It is further submitted that Ayous Square Wood, for which the order was received from the defendant, is not available in Indian Market and was therefore imported by the plaintiff from the manufacturer "Rougier Afrique International" in France. It is further submitted that the plaintiff used to place the orders on the manufacturer/exporter upon receiving the purchase order from the defendant and when the consignment was received in Mumbai, it was consigned directly from the port to the defendant and no unloading used to happen at the plaintiff's office. At the time of supply of goods, the invoices were raised upon the defendant and the same were sent along with the goods and the transport charges were directly paid by the defendant to the transport agency, on accepting the consignment. It is further submitted that the Sales Tax in Delhi was 18% where CST was only 2% and, therefore, if the defendant filed the 'C' Form from Delhi Sales Tax Authority, informing that it was an inter state delivery of goods, then it was entitled to pay the tax @ 2% and, therefore, to avail the said benefit, the defendant filed the said 'C' Form with the tax authority and also sent a copy of the same to the plaintiff.
70. It is further submitted that PW1 has also deposed that at the time of placing of order in September, 2019 for Ayous wood, the defendant had requested that he be allowed to pay for goods in 2-3 months after receipt of goods and as security thereof 5 cheques of Rs. 5 Lakhs each drawn on Kotak Mahindra Bank were issued by defendant leaving the date and payee section blank. Copy of the said cheques were exhibited as Ex.PW Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 25 1/5(Colly) as the originals are a part of record in NI Act case pending before the Bombay court. Even otherwise the issuance and dishonor of the cheques is admitted by the defendant. He further deposed that the consignment of the goods was sent to the defendant through M/s. Shiv Ganga Transport Pvt. Ltd and was received by the defendant on 17.02.2014 and alongwith the said consignment, invoice no. 001601 dt 12.02.2014 Ex.PW1/9 was also sent. The copy of the consignment note showing the delivery of goods to defendant was exhibited as Ex.PW1/16. He had further deposed that the defendant had filed the 'C' Form dated 22.09.2014 with respect to the invoice dated 12.02.2014 with the Delhi Sales Tax Authority and provided a copy of the same also to the plaintiff. Copy of the same was exhibited Ex.PW1/14 (OSR). It is argued that the dishonours of the cheques was proved by PW1 and return memo was exhibited as Ex. PW 1/17 (Colly). It is argued that the remarks 'account closed' in said memo reveals the malafide of the defendant as he issued the post dated cheques from a closed account to cheat the plaintiff. The fact of closing the account in September, 2013 is also admitted by the defendant.
71. It is argued that PW1 has given a coherent statement and stood by his evidence even in his cross examination.
72. It is further submitted that plaintiff has also examined one summoned witness Mr. Santosh Pandey as PW2, who was working as Manager with M/s. Shiv Ganga Transport Pvt. Ltd. It is submitted that the said witness has proved the consignment note no. 116673 and 116672 Ex.PW2/1 and Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 26 Ex.PW2/2 respectively and the receiving of the goods is on these exhibits at point X1 and X2 issued in favour of M/s. Sharma Framing House. Invoice for the freight charges raised by Shiv Ganga Transport Pvt. Ltd is Ex.PW2/4 and the freight charges details is Ex.PW2/3. It is further submitted that the said witness has also proved the receipt of the freight charges from the defendant itself and the delivery of the goods to the defendant. The witness further deposed that the freight charges were paid by the defendant by way of cheques which were also credited in the HDFC Bank account of M/s. Shiv Ganga Transport Pvt. Ltd, statement of which is Ex.PW2/6 wherein credit of the said cheque is shown at point X.7 to X.10. The said witness has also proved the account ledger of the company for the freight charges of the consignment delivered to the defendant as Ex.PW2/5, wherein the cheques credit as mentioned above is shown at point X3 to X6. It is further submitted that the said witness PW2 has, therefore, proved the delivery of the consignment to the defendant for which even freight charges have been paid by the defendant on accepting the said goods. It is argued that if the goods were not received by the defendant, there was no occasion for the defendant to pay the freight charges to M/s. Sjiv Ganga Transport. The fact of the above payments by way of cheques to M/s. Shiv Ganga Transport was admitted by defendant DW1 in his cross-examination.
73. It is submitted that in his cross examination by defendant the witness had deposed that the original Ex.PW2/1 and Ex. PW2/2 was with the Consignee i.e. defendant herein.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 27 It is submitted that the said witness had also answered in his cross examination that payment for freight charges are made after delivery of consignment under all circumstances and therefore it is clear that the goods were received by the defendant.
74. It is further submitted that the plaintiff has also examined one official from the tax department namely Mukesh Kumar, Jr. Asst/Record Keeper of Trade and Tax Department, New Delhi as PW3, who had proved the 'C' Forms filed online by the defendant, through a print out of the 'C' Form maintained by his department and the same is Ex.PW3/6 dated 22.09.2014 which was filed for the fourth quarter for a sum of Rs. 23,19,251/- .
75. It is further submitted that filing of the 'C' Form with the tax authorities shows the liability of the defendant to pay the invoice amount to the plaintiff as he has already claimed the tax benefit for the said transaction. Had it been the case that the defendant had not placed any order or had not accepted any consignment, there would have been no occasion for the defendant to file the said 'C' Form.
76. It is further submitted that to prove its claim in the present suit, the plaintiff is required to prove the following:
i). Order for the Ayous Square Wood received from the defendant;
ii). Delivery of the ordered goods to the defendant;
iii). Acceptance of the same by the defendant and non-
payment by the defendant for the said goods.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 28
77. It is submitted that as far as the non-payment of the goods is concerned, it is not disputed that the defendant has accepted the fact of non-payment for the said goods, however setting up a different story that he was not required to pay the same as no order, as alleged by the plaintiff was ever placed upon the plaintiff by the defendant and, therefore, he is not liable to make any payment to the plaintiff. It is further submitted that PW1- Dipak Shah has stated in his evidence that the defendant had placed the order for supply of one Container of Ayous Edged Lumbar Wood in the first week of September, 2013 @ Rs. 49700/- qms, CST @ 2% Per Unit orally and the order was placed to him only in the meeting held at defendant's office at Okhla. The practice of placing oral orders is accepted by the defendant though denying the specific order of September, 2019. It is argued that the evidence of PW1 is consistent and could not be shaken by cross-examination.
78. The delivery of the goods and acceptance of the same by the defendant has been proved by PW2 Sh. Santosh Pandey which is further corroborated by the 'C' Form filed by the defendant which is proved by PW3 Sh. Mukesh Kumar and thus the plaintiff has proved his case and the defendant is liable to make the payment for the unpaid invoice Ex. PW1/9.
79. It is further submitted that the defendants are contesting the claim of the plaintiff on the ground that they had not placed any order upon the plaintiff and the cheques bearing nos. 000963, 000964, 000965, 000966, 000967 of Rs. 5 Lakhs each were handed over only to maintain cordial Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 29 relations but has miserably failed to show that the said cheques were issued to maintain cordial relations and not towards discharge of its liability of the invoice in question. It is further submitted that defendant has alleged in its W.S and in his affidavit of evidence of DW1 as well that defendant has returned the defective goods to the plaintiff, however, in the cross-examination of DW1 conducted on 03.04.2018, it was stated by him that the defendant had not returned the goods to the plaintiff as is mentioned in para 'H' of the W.S.
80. It is further submitted that it is also the defence of the defendant that the goods supplied by the plaintiff for the previous business transactions were defective and he was receiving the complaints from the customers and, therefore, defendant stopped placing orders with the plaintiff company. It is argued that in his Cross-examination, DW1 has stated that he used to use many woods for finished frames and one of the sample out of those was Ayous Square Wood which was supplied by the plaintiff. The witness has also deposed that the customer was not informed about the quality of wood being used for finished product and therefore, in light of these statements of DW1 Sh. Hori Lal, even if it is to be believed that defendant had received complaints qua quality of wood it cannot be said that it was the wood supplied by the plaintiff that was bad.
81. The relevant part of cross-examination of DW1 is reproduced hereunder for the sake of convenience.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 30 " ****** One of the sample out of many woods used by the firm for finished frames are Ayous Wood which was supplied by the plaintiff Q. Was the customer informed about the quality of wood being used for the finished product ?
A. No.
**************"
82. It is further argued that even otherwise the defendant has failed to prove that any complaints were received by the defendant from its clients regarding quality of wood supplied by plaintiff. It is argued that evidence of DW5 & 6 is vague and in no way establishes that they purchased frames made of Ayous Wood and complaint was made qua the same and in fact they have even failed to prove that any complaint was made by them.
83. It is further submitted that the defendant has not lead any evidence to contradict the documents produced by PW2 to show that the payment as shown in the account of the Shiv Ganga Transport were not in lieu of delivery of consignment note. No. 116673 and 116672.
84. To counter the objection raised by the defendant to the authority of PW2 to produce the summoned record in the case, it was argued by the Ld. Counsel for the plaintiff that no authority is required for a witness to give evidence in the court and anyone who is acquainted with the facts of the case can give evidence. The Ld. Counsel for plaintiff has placed reliance upon the judgment of Hon'ble High Court of Bombay in Central Bank of India Vs. Tarseema Compress Wood Manufacturing Co. & Ors decided on 20.12.1996 passed by Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 31 Hon'ble High Court of Bombay.
85. The Ld. Counsel for plaintiff has also relied upon the judgment of Hon'ble High Court of Delhi in Lokhmann Rausher Gmbh v. Medsphere Marketing Pvt. Ltd. (117 (2004) DLT 95) and SCJ Plastics vs. Creative Wares Ltd - 2012 DHC 4543 to argue that the goods if not rejected within a reasonable time or any act in-consistent with the ownership of seller is done the goods are deemed to be accepted as per section 42 and further even if the defendant says that he did so in ignorance of the fact that they are of a different description different from the one provided by contract then also only a claim for damages can be maintained.
86. It is further argued that the DW1 has stated in his cross examination conducted on 03.04.2018 that he had not returned the goods to the plaintiff as is stated in para (H) of the Written Statement and thus is liable to pay for the same.
87. The Ld. Counsel for the plaintiff also argues that the defendant/ DW1 also admitted in his cross examination conducted on 24.04.2018 that the cheques mentioned in evidence of PW2-Santosh Pandey have been cleared from his Bank Account maintained with Dena Bank which were reflected at A1, A2, A3 and A4.
88. It is further argued that during the cross examination of DW5 the plaintiff had raised objection that defendant Hori Lal Sharma was prompting the witness and an observation in the this regard was made by the Ld. Local Commissioner who thereafter sent him out of the court and the said fact also Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 32 shows the conduct of the defendant.
89. It is also argued that in the statement recorded on 01.07.2019, DW5 stated that there was no written agreement with respect to the nature of wood that was to be used for the frames made by the defendant. No sample of said wood was taken. Further, he stated that there was no way that they could have verified that the frames are made from 'Aqous Square' wood. He stated that the first written complaint was made in the year 2017 by way of DW5/C, however, no postal proof of the same was filed on record. The said letter Ex.DW5/C was written after filing of the suit by the plaintiff. It is argued that there is no evidence on record to show that the frames supplied to Bharat Bhawan was made of 'Aqous Square' wood supplied by the plaintiff firm. Also, DW5/C appears to be frabricated document that has been prepared to assist the defendant, however, the same also does not support the case of the defendant in absence of any document/ evidence that the said frames were made of the wood supplied by the plaintiff.
90. Pointing out the contradictions in the evidence of DW5 it is argued that he stated on 04.07.2018 that he placed order for frames made Ayous wood on the information given by Sh. Hori Lal at time of purchase whereas in his chief he merely stated that he along with committee placed order for frames made of Ayous wood.
91. It is submitted that DW6 in his cross examination stated that he has personal relations with Mr. Hori Lal and has Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 33 come to court to record his evidence at the instance of Mr. Hori Lal. It is submitted that Mr. Rajinder Dhawan (DW6) in his statement stated that the frames were procured in July 2014, complaint was made in 2015 and the frames were replaced in the year 2017.
92. It is argued that his statement is full of contradictions as at one instance he states that he instructed the defendant to prepare the frame in 'Ayous' and then he states that he has no knowledge of the quality of different woods. He states that on receiving the frames he told defendant that the same are not in Ayous woods, whereas, in examination in chief he states that the complaint to defendant was made in 2015.
93. It is further argued that DW6 filed no document on record to prove purchase of the frames from defendant and the letter Ex.DW6/2 relied upon by DW6 is dated 28.10.2017 i.e. after filing of the present suit and also no such document was filed by the defendant alongwith his written statement. Therefore, apparently it is a fabricated document prepared to obtain favourable order from this court. No evidence is come on record that the frames supplied to DW6 were of 'Ayous' wood supplied by the plaintiff.
94. It is argued Mr. Shradha Nand DW7 in his statement stated that he was employed as Supervisor, however, DW1 in his statement stated that he is an accountant. In his cross examination, he stated that he was looking after marketing work, however, when asked about the clients he could not name even one. This prima facie shows that this witness has Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 34 been implanted by the defendants to mislead the court.
95. It is argued that Mr. Shradha Nand DW7 in his cross examination agreed that many woods were used by defendant for framing purposes. He stated that he does not know if any supplier was informed about the bad quality of the wood, as he was only looking after marketing. The falsity of his statement is evident from the fact that he stated that he has physically given the wood to the plaintiff whereas DW1 Hori Lal stated that he never returned any wood to the plaintiff. Further, the witness could not state as to what was the quantity of the wood returned. Also no document to that effect is also filed on record. It is argued that No receiving from the client is placed on record showing the collection of the frames from them. No document is placed on record to show that the alleged frames were made by the wood supplied by the plaintiff. It is argued that the said witness is making false statement at the behest of the defendant and his statement cannot be relied upon.
96. It is argued that no evidence was led to show that sample of wood sent to the Rougier Afrique International was the one supplied by the plaintiff.
97. It is argued that from the evidence and documents on record, it is apparent that the goods worth Rs.23,19,251/- has been supplied by the plaintiff to the defendant, which is corroborated by the evidence of PW2 and also by the C-Form submitted by defendant as is proved by PW3. Further, with respect to the bad quality of the goods, no evidence is on Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 35 record to support said contention of the defendant. Also, no goods have been returned by the defendant, which clearly shows that the same has been used by the defendant for his commercial benefit without paying the price for the same. Thus, it is submitted that the plaintiff is entitled to the decree of recovery of money with interest as prayed. Arguments of Ld. Counsel for defendant
98. Per contra it is argued by the Ld. Counsel for defendant that the plaintiff has set up a concocted story by forging and fabricating documents to reap a wrongful gain by using the cheques which were handed over by the defendant to the plaintiff only to build cordial relations.
99. Reiterating the story as stated in Written Statement it is argued that the plaintiff was supplying fake wood to the defendant in the name of Ayous wood which fact is established by the testimony of DW5 and DW6.
100. It is further argued that the fact that plaintiff is supplying fake wood came to its knowledge during the course of exchange of its e-mails with the supplier of the plaintiff 'Rougier Afrique International' also known as 'Roserwood' wherein it was confirmed by Roserwood that the said category of wood did not match with the one supplied by them.
101. It is submitted that after discovering the the said fact that the defendant returned the goods of the plaintiff and never placed further orders upon the plaintiff and started to directly purchase from the Roserwood since 2014.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 36
102. It is argued that PW1 in his evidence has stated that as per document Ex. PW1/3 the plaintiff - firm is engaged in business of wood, however, the said document does not reflect that plaintiff firm was authorized to trade in imported wood and supply the same in the domestic market. Further the said PW1 has not proved his designation in the plaintiff- firm and also admitted that the meetings at defendant's Office were not attended by anyone else from plaintiff-firm. It is further argued that the certificate of genuineness of wood as allegedly provided by overseas supplier of the plaintiff-firm and as stated by PW1 in his evidence was never placed on record and hence plaintiff has failed to establish the genuineness of the wood it was dealing in.
103. The Ld. Counsel for the defendant has further pointed out that in his evidence PW1 has stated it is wrongly mentioned in the legal notice Ex.PW1/18 that the alleged telephonic order was placed in February 2014.
104. It is further argued that the documents exhibited by PW2 as PW2/1 and PW2/2 cannot be relied upon as the defendant had taken the objection to the mode of proof of the Ex. PW2/1 and Ex. PW2/2 same being only copies. It is further argued that the said witness had stated that he does not know the name of the driver who delivered the consignment. It is further pointed out that the said witness had also stated that he was not present when the consignment was delivered to the consignee.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 37
105. Thus it is argued that the evidence of PW2 is of no support to the plaintiff case for above reasons and further cannot be looked into because he had not brought with him any authority letter to depose in the case.
106. It is further argued that even the documents exhibited by PW3 as Ex.PW3/2 to Ex. PW3/6 cannot be looked into as objection was taken by him as to the mode of proof of the same, they being copies online record. Ld. Counsel for defendant relied upon judgment cited as Anwar P.V vs. P.K. Basheer & Ors on 18.09.2014 - CA NO. 4226 of 2012 passed by Hon'ble Supreme Court.
107. It is further stated that summoned record brought by the said witness did not bear any signatures of any person. There was no acknowledgement anywhere of the Asst. Commr. that the summoned record was the original of the record maintained in the department.
108. The Ld. Counsel has further relied upon the cross-
examination of PW3 which is not being discussed here for the reasons given in the finding of this court in the later part of this judgment.
109. It is further argued that the DW1 Sh. Hori Lal Sharma has clearly stated in his evidence that no person by the name of R.N. Singh worked in his firm and therefore, receiving of R.N. Singh as alleged holds no value against the defendant.
110. It was further argued that DW2 who is a Head Constable had proved the complaint made by the defendant against the plaintiff regarding the non- return of the cheques Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 38 by the plaintiff.
111. It is further argued that DW5, who is the Administrative Officer Bharat Bhawan, Bhopal, Madhya Pradesh, one of the client of the defendant had proved the complaint dated 17.08.2017 Ex.DW5/C regarding the bad quality of wood supplied to them and the invoice dated 02.06.2018 Ex.DW5/D issued qua the replacement goods sent by the defendant in lieu of the bad quality goods supplied earlier, after procuring the same from the original vendor.
112. It is argued that DW6 had also deposed that the complaints were made to the defendant in 2015 and frames were replaced in the year 2017 and in this regard had proved Ex.DW6/2 dated 28.10.2017 which is issued by defendant.
113. It is argued that the above submissions of his, it is clear that the plaintiff has misused the cheques issued to it by the defendant for building cordial relations and the plaintiff was involved in supplying fake quality wood to the defendant and upon the discovering the said fact the defendant stopped placing any orders upon the plaintiff. It is argued that the suit of the plaintiff is liable to be dismissed.
114. It is also argued by the Ld. Counsel for defendant that the PW1 Sh. Dipak Shah has not been authrorized to depose on behalf of plaintiff, therefore the evidence of PW1 cannot be looked into. In support of his contentions the Ld. Counsel has relied upon the judgment of Hon'ble High Court of Delhi in Lucas Indian Services Ltd vs. Sanjay Kumar Agarwal on 25 August, 2010 and judgment Vadivel Sizing and Weaving Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 39 Mills vs. M/s. Fenner (India) Ltd on 20.12.2012, CRL. RC No. 98 of 103 of 2009 passed by Hon'ble Madras High Court.
115. It is further argued that Sh. Dipak Shah could not have deposed in place of the plaintiff as is a settled law that a Power of Attorney Holder cannot depose in place of the party. Ld. Counsel has placed reliance upon the judgment in Man Kaur (Dead) by Lrs vs. Hartar Singh Sangha on 05.10.2010- CA no. 147-148 of 2001 passed by Hon'ble Supreme Court and case titled as Janki Vashdeo Bhojwani & Anr vs. Indusind Bank Ltd and Ors, date of Judgment 06.12.2004 passed by Hon'ble Supreme Court.
116. It is further argued that where a party to a suit does not appear in the witness box and state his own case on oath and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct and a GPA holder cannot become a witness on behalf of party.
117. It is further argued that as per the case of the plaintiff invoice was of the amount of Rs. 23,19,251/-. However, the said cheques as alleged were of the amount of Rs. 25 Lakhs in total. It is submitted that there was no reason for the defendant to pay an extra amount. Attention is drawn to Q-60 of the cross examination of PW1 which is reproduced hereunder:
" ***** Q. 60. Has the defendant paid anything to the plaintiff firm over and over the invoice amount against consignment delivered ?
A. No.
******"
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 40 Reasons for decision
118. It is the case of plaintiff that the defendant had placed an order for Ayous Squarewood on the plaintiff through its employee Sh. Dipak Shah and upon receiving the said order and as per the practice, the plaintiff placed order on its overseas supplier for the same. On receipt of the goods from the supplier, which usually used to take 5-6 months after placing of the order, the consignment was directly got delivered to the defendant from the port/deck to the office of defendant at Okhla through Shiv Ganga Transport. It is the case of plaintiff that the said consignment was duly delivered and received by the defendant, however, the payment for the said consignment against the invoice dt 12.02.2014 raised by the plaintiff upon the defendant was not made by the defendant. It is further the case of plaintiff that the general practice during the course of dealings between the parties was that the defendant used to take 20% of the amount of the consignment at the time booking and the remaining 80% amount was paid before the delivery of the goods, however, different arrangement was entered into qua the disputed transaction wherein at the request of the defendant, the plaintiff has accepted five cheques drawn on Kotak Mahindra Bank for amount of Rs. 5 lacs each leaving blank space for date and payee details on the said cheques. The said cheques were handed over as security for the payment of the consignment for which the defendant had requested 2-3 months time after delivery of goods. It is further the case of plaintiff that the defendant had also claimed tax benefit by filing 'C-Form' with the tax authorities as Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 41 in the absence of the said form, the defendant would have been liable to pay tax @ 18 % p.a. whereas on filing the same, he only had to pay 2% tax.
119. Before appreciating the evidence, this Court shall deal with the objection of the defendant (para 114 and 115 of this judgment) qua the authority of PW1 to depose on behalf of the plaintiff. In my considered opinion, the objection is unfounded as any person who is acquainted with the facts of the case may become a witness and in such a case even no authority would be required for him to step into the witness box (Central Bank of India Vs. Tarseema Compress Wood Manufacturing Co. & Ors decided on 20.12.1996 passed by Hon'ble High Court of Bombay). In the present case, it is the case of plaintiff and also the defendant that the entire dealing qua the disputed transaction was done by Sh. Dipak Shah and hence he was the face of plaintiff firm and was in personal knowledge of the entire facts of the case and hence could have been the best person to depose. Thus PW1 has validly deposed for the plaintiff.
120. The judgment in Lucas Indian Services Ltd (supra), relied upon by the defendant is not applicable to the facts of the present case as the same pertains to a company and the issue before the court was relating to authority to sign the pleadings. The Judgment in Vadivel Sizing and Weaving Mills (supra) is also not applicable to the facts of the case as the same pertains to prosecution u/s. 138 of NI Act matter. Even the judgment in Man Kaur (Dead) by Lrs (supra) and Janki Vashdeo Bhojwani (Supra) is not applicable to the facts of the present Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 42 case as in that case, the power of attorney holder had no knowledge of the transaction and it was the plaintiff who ought to have appeared whereas in the present case, it is only Sh. Dipak Shah who had the personal knowledge of the entire transaction and thus was the best witness to depose.
121. In support of his case, the plaintiff has examined PW1-Sh.
Dipak Shah-Manager/consultant of the plaintiff, who had deposed in his evidence that the order was placed by the defendant to him over the phone and even in the cross- examination, he has stated that the order was placed by the defendant verbally to him. It is also the admitted case of defendant that the defendant in his business relations with the plaintiff, used to place orders orally/verbally. In cross- examination by the defendant as to the date of placing of the order, PW1 has consistently replied that the same was placed in the first week of September, 2013. Even on being confronted with the legal notice and as to filing of the complaint u/s. 138 of NI Act in Mumbai Courts, the said witness stood firm stating that in the said legal notice and the complaint u/s. 138 of NI Act, date has been wrongly mentioned as February, 2014 but the same is September, 2013 and the goods were only delivered in February, 2014.
122. Further, it is the own case of defendant that it was PW1 who was in actual dealings with the defendant herein. Further, on the aspect of placing the order orally, the said testimony of the witness has remained unrebutted and the only question that has been put to him by the defendant is as to how the orders were Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 43 placed. Further as to the dates of placing the order, the witness stood firm and was consistent.
123. As to the handing over of 5 cheques as security for the payment of consignment, PW1 has clearly stated that the said cheques were demanded from the defendant as security for payment as this time the parties deviated from the practice of payment of 20% at the time of booking and 80% before the delivery of the goods at the request of the defendant for which they sought 2-3 months time to make the payment, after receipt of the goods. It is clearly stated that the said agreement has been arrived at keeping in view the past business relations between the parties.
124. PW1 has further deposed that on the presentation of the said cheques Ex.PW1/15 (colly), the said cheques were returned with the remarks "account closed" vide return memos Ex.PW1/17 (colly). The factum of handing over of the said cheques and the account being closed in September, 2013 itself, has been accepted by the defendant in his evidence as DW1 as well as in the pleadings. However, it is the case of defendant that the said cheques were only issued in August, 2013 to maintain cordial relations between the parties and inspite of request for return of the said cheques vide letter dt 15.12.2015 Mark-E1 and 29.01.2016 Mark-F1, the plaintiff did not return the same due to which he also filed a suit for declaration and permanent injunction bearing suit no. CS DJ 10582/2016. However, the letter dt 15.12.2015-Mark E1 and 29.01.2016 - Mark-F1 have not been proved by the defendant. Infact, the despatch receipt of Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 44 Mark-E1 is Ex.DW1/E which is of the date 10.12.2015 i.e a date even before the letter was written and this does not inspire confidence. As far as the cheques are concerned, the defendant has not led any evidence to show that the cheques were handed over to maintain cordial relations and not as security for the payment of consignment for which the order was placed in September, 2013. Even the questions put to PW1 qua handing over of the cheques and filling of all the details in the cheques, were answered by the witness stating that the said cheques were handed over to him at Okhla address of the defendant in the presence of Sh. Sujit Sharma, Brother of the defendant.
125. The relevant part of cross-examination to this effect conducted on 25.10.2017 is reproduced hereunder:
"***** Q. 37. Can you state to whom the cheques mentioned in para 14 of your affidavit Exb. PW1/A were handed over by the defendant ?
A. There were five cheques handed over to me. Q. 38. When were the cheques handed over ? A. The cheques were handed over to me at the time of placing of order by the defendant. I cannot recall the exact date and time of handling of the cheques by the defendant. Q. 39. When was the order mentioned above placed by the defendant ?
A. I have mentioned in para 14 of the Affidavit Exb. PW-1/A that the orders were placed in first week of September, 2013 ."
Q. 40. Where were the cheques handed over and in whose presence ?
A. The cheques were handed over to me in Okhla at defendant's office by the defendant in the presence of defendant's brother Mr. Sujit Sharma.
******"
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 45
126. No evidence to contradict the said evidence has been led on behalf of defendant. Further the defendant has failed to explain that if the said cheques were at all handed over for developing cordial relations then why, the defendant after handing over the said cheques in August, 2013 (as alleged by him) closed its account in September, 2013 itself and why no intimation qua the same was given to the plaintiff at any point of time or why no fresh cheques were issued in terms of the understanding in building cordial relations. Further as per the case of the defendant himself and the emails Mark C, placed on record by the defendant, the defendant was already in conversation with the supplier of the plaintiff " Rougier Afrique International" from even before December, 2013 for supply of wood and if so, why would the defendant handover cheques for building cordial relations when he was contemplating to severe business ties with the plaintiff.
127. On the contrary, the defendant in his evidence has stated that he does not remember when he had handed over the cheques to Sh. Dipak Shah and the same may be in the year 2013-2014 and that these cheques were given as security when the defendant firm has started business dealings with the plaintiff firm. However, in the pleadings and in the affidavit of evidence, it is clearly stated that it was given in August, 2013 to build cordial relations, therefore the defendant has contradicted himself as as per the record, the transaction between the parties had started way back in the year 2010-2011 (as is evident from the bank statement of the defendant himself).
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 46
128. To prove the delivery of the consignment to the defendant, the plaintiff has examined PW2-Sh. Santosh Pandey, Manager of Shiv Ganga Transport Pvt. Ltd, who was summoned to produce the relevant documents qua consignment notes no. 116673 and 116672 and the freight/payment for the said consignment. The said witness has proved the delivery of the above consignment as Ex.PW2/1 & Ex.PW2/2 by producing the copy of the same i.e. the record maintained at the Delhi office. It was clearly stated by the witness that the Delhi office maintains the copy of the consignment note for the delivery made all over India. The witness has also clarified that the original of the consignment note were handed over to consignor i.e. Sharma Framing.
129. A perusal of Ex.PW2/1 and Ex.PW2/2 clearly shows that the name of the consignor is Prabhav Chemicals and the name of the consignee is M/s. Sharma Framing and the said note also mentions about the pick up of consignments from Nava Sheva and to be delivered at Okhla, New Delhi. The said consignment notes dt 13.02.2014 also bears receiving of one Sh. R.N. Singh on 17.02.2014. The consignment note no. 116673 dt 13.02.2014 has also exhibited by PW1 in its evidence as Ex.PW1/16 (OSR). Thus, the said document stands corroborated and proved by the evidence of PW2.
130. During the course of arguments, it is submitted by ld.
counsel for defendant that if the original was delivered to the defendant himself then how did the plaintiff filed a copy of the same alongwith his plaint, to which it is answered by Ld. Counsel for plaintiff that as per practice two originals of the Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 47 consignment notes are prepared, one is for consignor and the other for the consignee and it is the consignor's copy that was placed by him on record.
131. PW2-Sh. Santosh Pandey has also brought with him a summary of the cheques given by the defendant to Shiv Ganga Transport Pvt. Ltd for payment of freight charges which is Ex.PW2/3 and the invoice for the freight charges for the consignment raised by Shiv Ganga Transport Pvt. Ltd upon Sharma Framing House is Ex.PW2/4. The account ledger maintained by Shiv Ganga Transport Pvt. Ltd showing the payment made by defendant for freight charges is Ex.PW2/5. The said ledger account clearly mentions the date, bill number and consignment number and the payment for the said charges by the defendant which are reflected at point X3 to X6. The witness has also produced the bank account statement maintained by Shiv Ganga Transport Pvt. Ltd with HDFC Bank-Ex.PW2/6 showing credit in the account of Shiv Ganga Transport Pvt. Ltd on 08.04.2014, 11.04.2014, 07.06.2014 and 30.07.2014.
132. The payment of the said amount of freight charges and the credit of the same in the account of Shiv Ganga Transport Pvt. Ltd stands corroborated by the bank account statement of defendant with Dena Bank DW4/B which was proved by DW4- Ms. Shweta, Manager of Dena Bank, Lodhi Road Branch, and the payment of the same is admitted by Sh. Hori Lal-DW1 in his cross-examination which was conducted on 24.04.2018. The relevant portion of the said cross-examination is reproduced hereunder:
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 48 "****It is correct that the cheques details as mentioned in Ex.PW2/3 have been cleared from my Bank Account with Dena Bank. The same have been now pointed as 'A1', 'A2', 'A3' and 'A4'. Vol. All other contents of PW2/3 except the cheque details are denied.
******** It is wrong to suggest that the payments reflected in Ex.PW2/3 is against the consignment delivered to you on 17.02.2014.
*****"
133. It is not explained why no evidence has been led by the defendant to prove that the above payment made by the defendant to Shiv Ganga Transport Pvt. Ltd were not towards freight charges of the consignment no. 116672 & 116673. It has not been shown as to why and for what consignment, the said payments were made by the defendant. The defendant has also not produced any ledger account maintained by him of Shiv Ganga Transport Pvt. Ltd and, therefore, a presumption u/s. 114 of Indian Evidence Act also arise and it can be safely presumed that the said payment was towards freight charges of the consignment note dt 13.02.2014.
134. Further the said cheques have been encashed in the month of April, June and July 2014 which corroborated the fact that the said payments were towards the last consignment delivered to the defendant in February, 2014.
135. It has been argued by Ld. Counsel for defendant that the said witness was not authorised to bring the record of Shiv Ganga Transport Pvt. Ltd and, therefore, the record produced by him cannot be looked into. However, the said witness is a summoned witness who had brought with him the original summoned record alongwith the copies of the summons which was duly received Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 49 by him and has also placed on record his visiting card showing him to be the Branch Manager of Shiv Ganga Transport Pvt. Ltd. Since, the witness is only summoned to produce a record u/s. 139 of Indian Evidenc Act, 1972, no authority to depose was required in his favour. In view of the same, the objection of defendant is not sustainable.
136. Ld. counsel for defendant has relied upon certain questions put to the witness in the said cross-examination. However, the witness was only an official witness to produce the summoned record and, therefore, could not have been cross- examined as per section 139 of Indian Evidence Act and the same cannot be of any use to the defendant.
137. Ld. Counsel for plaintiff in support of his case has examined the summoned witness-PW3 Sh. Mukesh Kumar, Junior Assistant/Record Keeper from the office of Trade and Taxes Department, New Delhi. The said witness was summoned by the plaintiff to prove C-Form placed by him on record which was alleged to have been filed by the defendant to take tax benefit. The said witness has proved the C-Form filed by defendant with Trade and Taxes Department Ex.PW3/6. The said C-Form dt 22.09.2014 for the fourth quarter 2013-2014, shows the name of the purchasing dealer as Sharma Framing and also mentions the TIN number of the defendant. The said C- Form also mentions the name of the plaintiff herein. It also specifically refers to the bill number, date of invoice and the amount which matches with the bill number, date and amount as mentioned in the invoice Ex.PW1/9. It was argued by Ld. Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 50 Counsel for defendant that the said C-Form is not a genuine document and was never filed by him with Trade and Taxes Department. It was further argued that the witness who was summoned to produce the C-Form has only produced the online printed copy of C-Form and, therefore, the same cannot be looked into. In regard to this objection of Ld. Counsel for defendant, a perusal of the statement of PW3 would show that he has stated on oath as under:
"... The print outs of Ex PW3/2 to PW3/6 (objected to as to mode of proof) have been taken out by me from the system. The said system can be operated only by the person who has the login I'd and password. The system maintained by the department is secured and nobody can access the same apart from the person who had the login I'd and the password."
138. Thus where a statement to the above effect is made on oath by a person having control over the system, in my considered opinion, requirement of section 65-B of Indian Evidence Act stands satisfied. Further, this court has found C- Form to be correct by verifying the same from the website www.dvat.gov.in and there remains no doubt as to the genuineness of the C-Form. Further, the said C Form as proved by PW3 corroborates the exhibit Ex.PW1/14 which is filed by PW1 plaintiff with his evidence.
139. During the course of arguments, Ld. Counsel for defendant has relied upon the answers given by the said witness in his cross-examination. However, PW3 being a summoned witness to produce a document, his cross-examination cannot be looked into by virtue of section 139 of Indian Evidence Act and is of no support to the case of defendant. Thus the very fact that Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 51 the defendant has filed the C-Form with the Trade and Taxes Department to claim the concessional rate of taxes, shows that the defendant had placed the order upon the plaintiff for purchase of Ayous Squarewood and has also received the said goods. Had it not been so, there would have been no occasion for the defendant to file the said C-Form. Further, it is required to be taken note of that the defendant in his cross-examination conducted on 03.04.2018 had stated that his accountant Sh. Shradha Nand can confirm if the C-Form was issued to the plaintiff by his firm. However, on 24.04.2018, he stated that he did not inquire the said fact from his accountant, thus an attempt was made to conceal the fact of filing of the C-Form.
140. Further, as already stated above, the details of the invoice and the amount as mentioned in the C-Form, matches with the invoice dt 12.02.2014 Ex.PW1/9.
141. Further the entire defence of the defendant is based on the ground that he had stopped placing orders upon the plaintiff after receiving the complaints as to the quality of the goods from his clients but has made contradictory statements in the First suit and the Second suit as to the date of receiving complaints. In First suit, the defendant states that he received the complaints in June, 2014 and in Second suit, he states that they received complaints in October, 2013. Further the letter of complaint relied upon by DW5 -Ex.DW5/C bears a date after the filing of the suit. Thus, it is not clear as to when the complaints were received by the defendant. Further it is also the case of the defendant that he returned the fake category of the goods supplied by the plaintiff Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 52 in the same vehicle in which it was despatched by the plaintiff firm and no further orders were placed until the said issue was resolved by the plaintiff.
142. Further, in his cross-examination, it was stated by the DW1-Sh. Hori Lal Sharma that no goods were returned to the plaintiff firm as alleged in para 8 of the W.S. The said portion is reproduced hereunder:-
"...I have not returned the goods to the plaintiff firm as is mentioned by me in para (h) of my written statement. I cannot say if the statement made by me in para (h) of the written statement with respect to return of the goods to the plaintiff firm is false...."
143. Similarly a contradictory statement was given by DW7- Sh. Shradha Nand stating that he returned the wood to Sh. Dipak Shah. Thus, the said defence of the the defendant remained unproved.
144. Further, as to the contention that the defendant had stopped placing orders upon the plaintiff as it had started receiving complaints as to the quality of the wood, also does not inspire confidence as, as per the case of the defendant, it started receiving complaints June, 2014 onwards whereas the present dispute pertains to an order placed in September, 2013 and received in February, 2014.
145. It was stated by defendant in his cross-examination conducted on 24.04.2018 that the cheques details as mentioned in Ex.PW2/3 i.e. the summary of the freight charges maintained by Shiv Ganga Transport has been cleared from his Dena Bank account. However, he denied all the other contents of Ex.PW2/3 Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 53 except the cheque details. The defendant did not lead any evidence to show that the said payment was not against the freight invoice no. 000979 dt 24.02.2014 drawn by Shiv Ganga Transport but towards some other transaction. In the absence of any evidence, it is to be presumed that it was against the above mentioned invoice number.
146. The defendant in support of his case has examined DW5- Indermani Prasad Misra, Administrative Officer, Bharat Bhawan, Bhopal, M.P. to substantiate his contentions that complaints were received from his clients regarding the quality of Ayous Squarewood supplied to the plaintiff. However, it was argued by Ld. Counsel for plaintiff that nowhere the evidence of the said witness establishes that the wood regarding which the complaint was received was the Ayous Squarewood supplied by the plaintiff. A careful perusal of the evidence of the said witness would show that the said witness in his cross-examination stated that no written agreement with respect to the nature of the wood to be used for frames to be supplied by the defendant was entered into and further that the documents filed by him on record do no mention the nature of the wood. Further, it was also stated in the same cross-examination that he had stated about the Ayous Squarewood in his examination-in-chief only on the basis of the information given by Sh. Hori Lal Sharma at the time of purchase. It is further submitted that he had not taken any sample of the Ayous Square wood and there was no way he could have verified at the time of receipt of frames that it was Ayous Sqaure Wood as promised. Thus it can be easily Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 54 deduced from the above extract of evidence of DW5 that neither the said witness was in a capacity to ascertain the quality of the wood being Ayous Squarewood nor it was verified at the time of receipt of the frames whether the same were made of Ayous Squarewood. The defendant has not led any evidence to show that the frames supplied to Bharat Bhawan, Bhopal, were made of Ayous Squarewood and complaint regarding frames made of the same wood were received by him from the said client. In his cross-examination conducted on 03.04.2018, it was stated by Sh. Hori Lal that out of the many sample of the wood that he used for making frames, one of the wood was Ayous Square Wood. Thus it cannot be said with certainty that the complaint, if any received from DW5 pertained to the goods supplied by the plaintiff. Further, the copy of the complaint qua the quality of frames Ex.PW5/C, which was for the first time produced by the said witness while recording his evidence was neither pleaded in the pleadings nor was filed alongwith the documents filed with the W/S. Further the said document was stated to have been sent through post as well as by email by DW5. However, no proof of post as well as email was filed alongwith the said documents. Thus the said complaint was not proved. Also the said complaint is dt 17.08.2017 which is after the date of filing of the suit and hence does not supports the case of defendant regarding the severance of business ties with the plaintiff due to receipt of complaints regarding quality of goods.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 55
147. In the totality of the circumstances and considering the fact that the proof of despatch of the said document was not placed on record. The defendant has failed to establish that the complaint Ex.DW5/C was ever received by him and the same was not a manufactured document. Even otherwise, since the document was never pleaded nor filed, coupled with the fact that the same was not proved, the said document cannot be looked into for the purposes of defence of the defendant.
148. It is also pertinent to note that the entire story in the evidence of DW5 qua defective quality of goods supplied by the plaintiff has been stated to be on the basis of the information received from the defendant and thus cannot be relied upon.
149. This court has also perused the documents Ex.DW5/A to Ex.DW5/D and the said document in no manner establish that the frames for which the order was placed and for which the payment was made, were to be made of Ayous wood. Also PW5/C no where mentions that previous complaints have been made telephocially or otherwise qua the quality of the frames supplied to Bharat Bhawan, Bhopal. Even document DW5/D does not in any way establishes as to for which order replacement was provided and whether the replacement was for the frames made out of Ayuous wood.
150. Defendant has also examined one Sh. Rajender Dhawan, stating him to be one of his client as DW6. However, the evidence of the said witness is of no support to the defendant as the defendant has failed to show whether the frames supplied to the said clients were agreed to be made of Ayous wood or the Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 56 same were actually made of the wood supplied by the plaintiff. Further, it has been stated by the said witness in his evidence that the order was placed for Ayous wood frame but the same were returned as they were not of the same quality wood. However, he also stated that he has no technical knowledge about the quality of woods and was told by his interior decorator that they were not of Ayous Square wood. The said interior decorator was never brought in the witness box. Further the copy of the bill Mark DW6/1 and the letter dt 28.10.2017-DW6/2 in no way prove that the order was placed for the frames of Ayous Squarewood and the same were replaced vide letter DW6/2. Thus even the evidence of DW6 in no way supports the case of defendant and does not establish the defence of the defendant. Further, at the time of recording of evidence of DW6, the plaintiff had objected to the documents being tendered on the ground that they have been filed for the first time. It was objected that the documents are executed by the defendant himself and has not filed the same with his W.S due to which the plaintiff could not have the opportunity to cross-examine the defendant on this point. Vide order dt 27.10.2018, Ld. Predecessor of this Court had held that the objection shall be decided at the time of final arguments. In my considered opinion, the said documents cannot be admitted in evidence since the documents were executed by defendant himself and were in the knowledge of the defendant at the time of filing his written statement and could have been filed before the framing of issues. However, the same were only filed for the first time at the time of recording the evidence of DW6 without Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 57 affording an opportunity to the plaintiff to cross-examine the defendant on these documents. Even otherwise, this court has already held that the said documents do not support the case of defendant.
151. The defendant has also examined DW7-Sh.Shradha Nand.
The said witness stated that he was looking after the marketing work of Hori Lal whereas Hori Lal in his statement stated him to be an Accountant. The said witness has stated in his evidence that many woods were being used by the defendant for the purposes of frames. It is pertinent to note that the said witness had stated in his cross-examination that he had returned the wood orally and physically to Dipak Shah which is clearly in contradiction with the statement given by Hori Lal in his evidence that no wood was ever returned. Further, the said witness had stated in his evidence that the wood supplied by the plaintiff was of fake quality and in his cross-examination when confronted with the said part of his evidence, he stated that he states the same as clients were returning the frames because of termite borer and as the wood was wet. However, no document has been filed by the defendant or by the said witness to establish the veracity of the said statement.
152. Further, the defendant in support of his defence and to establish that the wood supplied by the plaintiff was not Ayous wood which the supplier of the plaintiff Rougier Afrique International supplied to him, has relied upon the emails exchanged between the defendant and Rougier Afrique International from December, 2013 to February, 2016 Mark C. Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 58 However, the defendant has not led any evidence to show that the sample which was sent to Rougier Afrique International was that of Ayous wood that was supplied by the plaintiff nor has examined any one from Rougier Afrique International to prove the same. Thus from the above, it is clear that the defendant has failed to establish his defence that the goods received from the plaintiff were fake quality goods and the complaints were being received from his clients regarding the same. Further, he has also failed to establish that the payment made to Shiv Ganga Transport vide cheques bearing nos. 263103, 263104, 263198 and 266264 drawn on Dena Bank was not in lieu of the freight charges payable for the transport of the consignment received by him on 17.02.2014. The defendant has also failed to establish that the C Form was not filed by him. The defendant has also failed to establish that the blank cheques bearing nos. 000963, 000964, 000965, 000966, 000967 of Rs. 5 Lacs each as Ex.PW1/15 (colly) drawn on Kotak Mahindra Bank and handed over to the plaintiff were to maintain cordial relations with the plaintiff. The defendant has also failed to establish that the sample sent to Rougier Afrique International was that of Ayous wood supplied by the plaintiff.
153. Further a perusal of the email Mark C would show that on a specific query from Ms. Marie Philppe Bonnet, the defendant herein had replied that the said wood was received from M/s. Param Wood Moulding Pvt. Ltd.
154. Thus in totality of the above discussion, the defendant has failed to establish his case whereas the plaintiff has proved his Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 59 case on the basis of above evidence. In view of the above, issue no. 1 is decided in favour of plaintiff and against the defendant.
155. Issue No. 2:
2. Whether the suit for recovery is a counter blast to the suit for declaration and mandatory injunction filed by the defendant against the plaintiff seeking return of the cheques, the subject matter of the suit for recovery and therefore is filed without any cause of action? OPD No arguments have been advanced by the parties on the above issue. The burden to prove the same was on the defendant.
However, from the findings on issue no. 1, it is clear that the defendant has failed to show that the suit of the plaintiff is without any cause of action. Issue no. 2 is accordingly decided against the defendant.
156. Issue no. 3:
3. Whether the five cheques in question are not issued in discharge of any outstanding legal liability and are without consideration? OPD The onus to prove this issue was on the defendant.
The defendant has failed to substantiate and prove his averments that the cheques in question were handed over by the defendant to the plaintiff without any consideration and to maintain cordial relations. It has already been discussed above while deciding issue no. 1 that if at all the contention of the defendant is to be believed, then the defendant has not explained as to why the account from which the said cheques were issued to maintain cordial relations was got closed by him within a month of handover of the cheques as per his own story and why Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 60 no communication at all was sent to the plaintiff informing about the closure of the account and why no replacement cheques from an active account were given to the plaintiff to maintain cordial relations.
157. The defendant has further failed to prove any written conversation from the defendant to the plaintiff informing the closure of the account and requesting not to encash the cheques as alleged by him. Even if the letter dt 15.12.2015 Mark-E1 and 29.01.2016 Mark-F1 are to be relied upon (though not proved) yet the said letters were only sent in the year 2015 & 2016 which is after a long time of the closing of account by the defendant. To the contrary, as discussed in Issue no. 1 above, the plaintiff has established its case of receiving of the cheques as security for payment of the invoice dt 12.02.2014. The amount on the said invoice is near about the same, as the total amount of the five cheques handed over by the defendant to the plaintiff. Further it was also argued by the plaintiff during the course of arguments that a question was put to PW1 that there was a difference in the amount of the bills and the cheques handed over. It was argued that no particular or no further question as to the reasons for difference in the amounts were put to the said witness due to which it remained unexplained and it was submitted that the difference in the said amount was due to the currency exchange rate as the articles were procured from overseas supplier and the final payable amount was calculated only after receipt of the goods from the supplier.
Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 61
158. Further the date of handing over of the cheques and the placing of the disputed order are of about the same time. It has been the case of plaintiff and has been deposed by the defendant in his evidence that the supply of the goods used to take 4-5 months for delivery after placing of the order to the supplier. Thus the date of delivery as proved in the case is 17.02.2014 and the handing over of the cheques is August, 2013 (as alleged by the defendant)-Sept, 2013 (as alleged by the plaintiff) and there is without any doubt a gap of around 4-5 months in the same.
159. Further, it is the case of defendant himself that he had sent the emails to Rougier Afrique International to confirm the quality of the goods supplied by the plaintiff.
160. A perusal of the said emails mark C would show that the defendant was in conversation/interaction with Rougier Afrique International since even before December, 2013 and was buying the goods directly from the said supplier. Thus it does not find reason with this court as to why the defendant would handover the cheques to the plaintiff for developing cordial relations when the defendant was already contemplating to buy products from the supplier directly which would show his intentions to severe business relations with the plaintiff.
161. In view of the above findings and the findings in issue no.
1, this issue is decided against the defendant and in favour of plaintiff.
162. Issue No. 4:
4. Whether the suit for recovery is bad for non joinder of necessary parties? OPD Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 62 No submissions and evidence has been led by the parties on this issue. Further, a suit is not liable to be dismissed on the ground of non-joinder of parties in view of the provisions of order 1 Rule 9 CPC R/w section 99 of CPC. Hence this issue is deleted in exercise of power u/o. 14 CPC.
163. RELIEF:
In view of my findings on the above issues, the suit of M/s. Prabhav Chemicals stands decreed for an amount of Rs. 36,63,781/- alongwith interest at the contractual rate of 20% p.a from the date of filing of the suit till realization. One time costs of Rs. 1.5 lacs (including court fee and litigation charges) is also awarded in favour of plaintiff.
Decree sheet be drawn accordingly.
164. Findings on issues framed in suit no. 10582/2016 (Second suit).
165. Issue no. 1:
Whether the plaintiff is entitled to a decree of declaration in favour of the plaintiff and against the defendants thereby declaring that the cheques in question, six in number are unenforceable in the eyes of law ? OPP Onus to prove this issue was upon M/s. Sharma Framing House. However, in view of my findings on issue no. 3 in suit no. 68/17, it is held that M/s. Sharma Framing House has failed to discharge the onus of this issue. Further M/s. Sharma Framing House has failed to establish that the Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 63 cheques handed over by him were six in number and has not led any evidence to that extent. Hence, this issue is decided against M/s. Sharma Framing House.
166. Issue No. 2:
Whether the plaintiff is entitled to a decree of mandatory injunction in favour of the plaintiff and against the defendants thereby directing the defendants to return to the plaintiff the cheques in question, six in number ? OPP There is no dispute between the parties that the original cheques bearing nos.000963, 000964, 000965, 000966, 000967 of Rs. 5 Lacs each drawn on Kotak Mahindra Bank Ex.PW1/15 (colly) have already been presented to the bank and returned dishonoured vide bank memo Ex.PW1/17 (Colly) and are a subject matter of litigation between the parties in case u/s. 138 of NI Act pending before Mumbai Court and that the said cheques are deposited before the said court. Further I have already observed above that the defendant has failed to prove that he had handed over 6 cheques and not 5 cheques. Thus in view of the above and the finding in issue no. 1 in suit no. 68/2017, the relief as prayed for in this issue cannot be granted and the issue is decided against M/s. Sharma Framing House.
167. Issue no. 3:
Whether the plaintiff is entitled to a recover damages from the defendants jointly or severally in the amount of Rs. 25 lacs or any other amount by way of losses suffered by the plaintiff due to misuse of the cheques in question by the defendants as also due to supply of Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 64 fake category of wood ? OPP No evidence has been led by M/s. Sharma Framing House with regard to the damages suffered and quantum thereof as claimed and in view of the provisions of Indian Contract Act and the settled law, no damages can be awarded to the defendant herein. Further as far as the claim for damages for supply of fake category of goods is concerned, the same can also not be granted as M/s. Sharma Framing House has failed to establish that the wood supplied by M/s. Prabhav Chemicals was fake wood and has failed to lead any evidence qua damages suffered by him. Further, in view of my finding on issue no. 1 in suit no. 86/2017, M/s. Sharma Framing House has failed to discharge the onus of this issue and hence, this issue is decided against M/s. Sharma Framing House.
168. Issue No. 4:
Whether the suit of the plaintiff is bad for mis-joinder of parties ? OPD No submissions and evidence has been led by the parties on this issue. Further, a suit is not liable to be dismissed on the ground of mis-joinder of parties in view of the provisions of order 1 Rule 9 CPC R/w section 99 of CPC. Hence this issue is deleted in exercise of power u/o. 14 CPC.
169. Issue no. 5.
Whether the suit of the plaintiff is not maintainable in the present form ? OPD Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016 65 No specific pleadings nor any specific arguments have been led by the parties on this issue. This issue accordingly stands deleted in exercise of powers u/o. 14 CPC.
170. Issue No. 6.
Whether the suit of the plaintiff is without any cause of action ? OPD In view of my findings on issue no. 1 and 3 in suit no. 68/2017 and issue no. 1 and 2 in this suit, the present suit of M/s. Sharma Framing House is held to be without any cause of action as M/s. Sharma Framing House has failed to prove any cause of action in its favour. The issue is accordingly decided.
171. Relief:
In view of my findings on the above issues in this case, the suit of M/s. Sharma Framing House is dismissed. No order as to costs.
172. Decree sheet be drawn accordingly.
173. Both the Files be consigned to Record Room.
Announced in open court on 27.04.2024 (GUNJAN GUPTA) DJ-04/South-East, Saket Courts, New Delhi Prabhav Chemicals Vs. Sharma Framing House, suit no. CS DJ No. 68/2017 & M/s. Sharma Framing House vs. M/s. Prabhav Chemicals, suit no. CS DJ No. 10582/2016