Delhi District Court
M/S S.R. Trading Company vs M/S Dsc Ltd on 21 April, 2017
IN THE COURT OF MS VANDANA JAIN
SENIOR CIVIL JUDGE-CUM-RENT CONTROLLER
NEW DELHI DISTRICT, PATIALA HOUSE COURTS
NEW DELHI
CS No. 57565/16
In the matter of:
M/s S.R. Trading Company
Through its proprietor Sh. Rajeev Aggarwal,
X-18, 2nd Floor, Loha Mandi, Naraina,
New Delhi-28
...........Plaintiff
VERSUS
M/s DSC Ltd
E-9, South Extn. Phase-II,
New Delhi
Through its Managing Director ......... Defendants
Date of Institution : 28.10.2014
Date of arguments : 20.04.2017
Date of Judgment : 21.04.2017
JUDGMENT
1. Present suit is for recovery of Rs. 2,06,744/- alongwith future interest.
2. Brief facts of the case as stated in the plaint that plaintiff firm is engaged in trading in Iron & Steel, TMT Steels and other allied products which were supplied to defendants vide various purchase orders from time to time The goods were supplied to two different projects of the same firm of the defendant M/s S.R. Trading Company Vs. M/s DSC Ltd Page 1 of 15 namely Barapullah and KMP project. The plaintiff is maintaining a regular statement of account for various purchases and payments made by the defendants and as on 18.02.2012, a sum of Rs 1,00,000/- and as on 17.02.2012, a sum of Rs. 1,06,744/- is outstanding and payable by the defendants to the plaintiff. The plaintiff has supplied the material with the terms that interest @ 18% shall be charged if the bill is not paid within fifteen days from the date of its issue. The plaintiff has requested the defendants various times for clearing the outstanding dues but the defendants have not cleared the same despite assurances made by the AR/Director of the defendant company. As per the plaintiff, an amount of Rs. 2,06,744/- is still due and payable by the defendant. The plaintiff also served two legal notices dt. 30.01.2014 on the defendant calling upon the defendant to pay the outstanding amount. The defendants made no payment despite receipt of demand notices. Hence this suit was filed to pass a decree in favour of the plaintiff and against the defendant for a sum of Rs. 2,06,744/- alongwith interest @ 18 % per annum till realization.
3. Written statement to the plaint was filed by defendant M/s S.R. Trading Company Vs. M/s DSC Ltd Page 2 of 15 company and it has been stated that petition u/s 494 of the Companies Act, 1956 was filed jointly by the defendant herein, M/s DSC Engineering Pvt Ltd and DSC Hydro Power Pvt Ltd which was allowed vide order dated 16.12.2011 and thereby transferring all the liabilities and duties of the defendant relating to the EPC Undertakings to DSC Engineering Pvt Ltd including the liabilities, if any, qua the claimant with effect from 30.11.2011. It is further stated that there exists no legal relationship of debtor and creditor between the plaintiff and the defendant and the liability, if any, after passing the order dated 16.12.2011 is that of DSC Engineering.
4. It is further asserted in the written statement that this court has no territorial jurisdiction as registered office of the defendant is at E-9, South Extension, Part-II, New Delhi. It is further submitted that jurisdiction in respect of orders of the supplies to be made for KMP project is that of the District Gurgaon and in respect of purchase orders for the Barapullah project is that of the District Saket and this court has no territorial jurisdiction. It is further stated that plaintiff has not annexed any purchase order and it has not even been mentioned in the entire plaint. It is further stated that only three copy of invoices have been M/s S.R. Trading Company Vs. M/s DSC Ltd Page 3 of 15 attached with the plaint which do not seem to have any direct relationship with what has been averred in the plaint. It is further stated that out of the three invoices one invoice for Rs. 28,294/- refers to some supplies having been made in Dwarka for which there is no supporting work order. Even in the plaint there is no mention of any supply having been made in Dwarka. It is further stated that averments made in the plaint are contrary to what has been mentioned in the legal notices. In para no. 3 of the plaint it has been mentioned that the goods were supplied for two different projects of the defendant at Barapullah and KMP project in Haryana and in two separate legal notices dated 30.01.2014, there is no mention of any supply having been made for KMP project in Haryana and Gwalior Road Project. It is stated that there is no mention in two legal notices of any supply having been made for the Barapullah project. It is also stated that there is no mention of supply made in Dwarka in the plaint or in two legal notices. It is further stated that suit is bad for misjoinder of cause of action as plaintiff has clubbed the accounts in respect of all the projects. The ledger statement produced by plaintiff does not show as to which invoice is for which project and which payment is against which invoice. It is further stated that suit is M/s S.R. Trading Company Vs. M/s DSC Ltd Page 4 of 15 barred by law of limitation as last payment of Rs. 2,00,000/- was made on 22.04.2010 by cheque no. 661046 and in order to bring the suit within limitation, the plaintiff has shown two entries of payment having being made by the defendant and received by the plaintiff in cash on 04.07.2013 and 02.03.2014. It is stated that defendant has not made any payment for any of the projects in cash and therefore from the last payment made on 22.04.2010 limitation period of three years expired on 21.04.2013 and, therefore, suit is hopelessly time barred as same was filed on 28.10.2014. It is further stated that plaint is not maintainable and hence, be dismissed.
5. Replication has been filed by plaintiff , denying all the averments made in the written statement and reiterating the facts as stated in the petition.
6. On the basis of pleadings of the parties following issues were framed on 18.03.2015.
1. Whether there is no privity of contract between the parties? OPD
2. Whether present court has no territorial jurisdiction to try this matter ? OPD
3. Whether suit is barred by limitation? OPD M/s S.R. Trading Company Vs. M/s DSC Ltd Page 5 of 15
4. Whether plaintiff has concealed material facts and suit is bad for mis-joinder of cause of action ? OPD
5. Whether plaintiff is entitled to decree for a sum of Rs. 206744/-, if so interest at what rate and for what period ? OPP.
7. Thereafter, matter was listed for evidence. Plaintiff examined one Sh Rajeev Aggarwal, AR of plaintiff company as PW-1. He was cross examined by the Ld. Counsel for defendant. Thereafter additional evidence was led by PW-1 and certificate u/s 65-B Indian Evidence Act was produced. Thereafter, he was again cross examined on this aspect. Thereafter, PE was closed and the matter was listed for defendant's evidence. However, despite several opportunities have been granted to the defendant, defendant did not lead any evidence. Thereafter, defendant's evidence was closed.
8. Thereafter, matter was listed for final arguments and arguments heard. Record perused.
9. I shall deal with the issues one by one.
10. Whether there is no privity of contract between the parties? Onus to prove this issue was on the defendant company. Defendant in the written statement has claimed that proceedings u/s 494 of M/s S.R. Trading Company Vs. M/s DSC Ltd Page 6 of 15 Companies Act seeking sanction of scheme of arrangement stipulating that all the engineering, procurement and construction undertakings of the defendant would be transferred as a going concern to DSC Engineering Pvt Ltd and on 16.12.2011 sanction was given and scheme was allowed and all the liabilities an duties of the defendant relating to the EPC undertakings were transferred to DSC enigneering and there is no relationship of debtor and creditor between the plaintiff and defendant company now in this regard, it is stated that defendant has failed to prove its case despite several opportunities granted to him for leading evidence. No evidence was produced by defendant in order to prove the same and in absence of any evidence, this issue is decided against the defendant and in favour of the plaintiff.
11. Whether present court has no territorial jurisdiction to try this matter ? Before deciding the present issue, it is important to discuss section 20 of CPC which provides here as under :-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally M/s S.R. Trading Company Vs. M/s DSC Ltd Page 7 of 15 works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the court is given, or the defendants who do not reside, or carry on business, or personally work for gain,as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
In section 20 (c) of CPC, the court whose local limit cause of action has arisen wholly or in part has territorial jurisdiction, therefore, in this context it is relevant to discuss the expression cause of action:-
"the expression "cause of action" has acquired a judicially settled meaning. In the restricted sense cause of action means the M/s S.R. Trading Company Vs. M/s DSC Ltd Page 8 of 15 circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sens, it means the necessary conditions for coupled with the right itself. Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in "cause of action".
It has to be left to be determined in each individual case as to where the cause of action arises; Reliance is placed upon judgment Rajasthan High Court Advocates' Association Vs. Union of India, 2001 (2) SCC 294; AIR 2001 SC 416".
12. In the present case, admittedly the registered office of the plaintiff company is situated at Naryana, Loha Mandi. It is stated by PW-1 in his cross examination that material was supplied from Loha Mandi, M/s S.R. Trading Company Vs. M/s DSC Ltd Page 9 of 15 Naryana which comes into the jurisdiction of this court. This fact has been averred in the plaint also. No suggestion was given to the witness with respect to non supply of goods from Naraina. Cause of action arises on the place from where material has been supplied. Therefore, it cannot be said that this court does not have territorial jurisdiction. This court has territorial jurisdiction to try the present suit. This issue is also decided against the defendant and in favour of the plaintiff.
13. Issue no. 4 shall be taken up first, whether plaintiff has concealed material facts and suit is bad for mis-joinder of cause of action ?. Onus to prove this issue was upon defendant. The defendant in his written statement has stated that suit is bad for misjoinder of cause of action as plaintiff has clubbed the accounts in respect of all the projects. The ledger statement produced by plaintiff does not show as to which invoice is for which project and which payment was made against which invoice. In the present case, only three invoices have been placed on record by the complainant company. One is of 09.06.2009 wherein the delivery was made at South Extension, New Delhi and another is of 15.07.2009 wherein delivery was made at Dwarka and third is of 16.07.2009 wherein delivery was made at Gurgaon. In the plaint moved by plaintiff, it has been alleged that plaintiff used to M/s S.R. Trading Company Vs. M/s DSC Ltd Page 10 of 15 supply iron & steel, TMT steels and other allied products to the defendants vide various purchase orders from time to time. In para no. 3, it has been specifically mentioned that goods were supplied to two different projects of the defendant naming Barapullah and KMP project. Apart from this no other place has been mentioned in the entire plaint where the goods were supplied. However, in the invoices which are only a photocopy and are not be admissible as such, there is only one invoice dated 16.07.2009 which relates to KMP project which is mentioned in the plaint. There is no mention about the supply at Dwarka or delivery of goods at registered office of the defendant company in the plaint. In addition thereof plaintiff has filed photocopy of ledgers account of the defendant, it has been marked as original has not been proved. This ledger cannot be taken into account in the absence of production of original ledger books in the court and not proving it the same in accordance with law. As per the ledger last payment by cheque was made in the year 2010. In the ledgers account only, it is shown that next payment was made in cash in sum of Rs. 7362/- on 04.07.2013 and Rs. 5000/- on 02.03.2014. Though it has been alleged that several projects have been going on between the parties, M/s S.R. Trading Company Vs. M/s DSC Ltd Page 11 of 15 however, there is no specific averment with respect to the same. It is interesting to note here that on 30.01.2014 two legal notices have been sent. It has not been explained by the counsel for plaintiff that as to why these two legal notices were sent. Ld counsel for plaintiff has orally argued that though purchase order were being received from time to time separately for separate project but the defendant was making payment for them altogether and therefore, no separate account was kept for separate purchase orders/supplies. However, one of the legal notice dated 30.01.2014 finds mention of supply of material at Gwalior Road Project for the sum of Rs. 1,06,744/- which was stated to be outstanding on 17.02.2012 whereas in other legal notice of the same date, the material was stated to be supplied at KMP project and amount of Rs. 1,00,000/- was stated to be outstanding as on 18.12.2013. Meaning thereby that they were maintaining separate account for separate projects and probably they had issued separate legal notices for the outstanding payment in respect of different projects. It is really interesting to note further that though these notices were in respect of Gwalior project and KMP project, however, the invoices attached are with respect to delivery of goods at South Extension, Dwarka and KMP project. It is nowhere in the legal notices M/s S.R. Trading Company Vs. M/s DSC Ltd Page 12 of 15 that outstanding amount is against which invoice. The photocopy of invoices though are inadmissible, however, even otherwise they cannot be relied upon in support of the demand made by plaintiff company from defendant in its legal notices as legal notices do not find mention of any date when the goods were supplied. Further, it would not be out of place to state here that in the plaint the goods were stated to be at Barapullah and KMP project but there is no invoice with respect to Barapullah project and no legal notice with respect to Barapullah was sent, therefore, this court is of the considered view that plaintiff has not been able to prove its case. From the legal notices, it so appears that plaintiff has falsely averred in its plaint that no separate account were maintained for different projects. Ld counsel for plaintiff has also relied upon judgment "Bharath Skins Corporation Vs. Taneja Skins Company (P) Ltd on dated 21.12.2001 in the case RFA (OS) No. 13/2002" in order to support the averments made that the account between the the plaintiff and defendant parties was an open, running and non-mutual between them. This judgment is not applicable in the present case. In the present case, plaintiff has not produced any document to show that parties were maintaining an open account apart from the filing copy of ledger account. Nothing has been produced on record to prove the M/s S.R. Trading Company Vs. M/s DSC Ltd Page 13 of 15 same. The reasoning for non applicability of this judgment has already been discussed above. This issue is accordingly against the plaintiff and in favour of the defendant.
14. Whether suit is barred by limitation? In order to prove that suit was filed within the limitation period, the plaintiff has filed the printed copy of ledger account of defendant company made by the plaintiff but original ledger book was never produced in the court. This ledger account has not been proved in accordance with law. Admitted payment was made on 22.04.2010 by cheque which clearly shows that suit is barred by limitation as it was filed in October 2014, i.e. after expirty of three years from last payment. Even in case this ledger book is taken into account, this ledger entry of cash payment of Rs. 7362/- on 04.07.2013 and Rs. 5000/- on 02.03.2014 has not been proved. Apart from producing photocopy of ledger account, no document has been produced in order to prove that alleged cash amount of Rs. 7632/- and Rs. 5000/- were deposited by defendant. It is also pertinent to mention here that all the earlier payments were made by the defendant by cheque and the payment made by defendant ran into lacs or few thousands of rupees and has never been in cashed. Even otherwise, these cash entries are not supported by any counterfoil of the receipt which would have M/s S.R. Trading Company Vs. M/s DSC Ltd Page 14 of 15 been given by the plaintiff company to defendant company when the alleged cash payment was received by them. It is also not averred in the entire plaint that as to when and where these payments were made and who came on behalf of the defendant company to hand over the cash amount of Rs. 7362/- and Rs. 5000/- on 04.07.2013 & 02.03.2014 respectively. Therefore, these cash payments are not proved to have been made by defendant. Hence, this suit is barred by limitation. This issue is accordingly decided against the plaintiff and in favour of the defendant.
15. Whether plaintiff is entitled to decree for a sum of Rs. 206744/-, if so interest at what rate and for what period ? Since issue no. 3 & 4 has been decided against plaintiff, therefore, plaintiff is not entitled to decree for the recovery of Rs. 206744/-. Hence, this issue is against the plaintiff and in favour of the defendant.
16. Accordingly, the present suit stands dismissed. No order as to cost. Decree sheet be prepared accordingly.
17. File be consigned to Record Room after due compliance.
Announced in the open ( VANDANA JAIN) court on 21.04.2017 SCJ-CUM-RC:PHC:NEW DELHI JUDGE CODE: DL0345 M/s S.R. Trading Company Vs. M/s DSC Ltd Page 15 of 15