Delhi District Court
M S Mashel Electric vs Ritajya Industries Private Ltd on 24 May, 2024
In the court of Ms. Anu Grover Baliga, District Judge
(Commercial Court-04), South-East District
Saket Courts, New Delhi
CS (COMM.) 530/2021
M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd
In the matter of:
M/s Mashel Electric
having its registered office at:
R/o F-9/15, First Floor,
Gali No.6/4, Zakir Nagar
Okhla, New Delhi-110025.
Also having its branch offices at:
D-247, D-248, Second Floor
L/S Abul Fazal Enclave Part-I,
Jamia Nagar, Okhla
Near A1-Shifa Hospital
New Delhi-25. .....Plaintiff
Versus
Ritajya Industries Pvt. Ltd.
L-21/10, K.D.A. Colony, Ganga Vihar,
Jajmau,
Kanpur-208010 (U.P.) ......Defendant
Date of institution : 20.11.2021
Date of reserving judgment : 09.05.2024
Date of pronouncement of Judgment : 24.05.2024
EX-PARTE JUDGMENT
1.Vide this judgment, I shall decide a suit filed seeking recovery of Rs.3,51,872/- alongwith pendente lite and future interest.
CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 1 of 10
2. Briefly stated, the material averments on the basis of which the present suit has been filed are as follows:
(a) The Plaintiff is a duly registered partnership firm carrying on the business of trading of electrical appliances and providing solutions in the nature of erection, testing and commissioning of electrical power equipment and product to its clients/customers.
(b) The Defendant is also engaged in the same business. The Plaintiff firm vide Purchase Order bearing No.MEK/PO-0087 dated 25.03.2019 placed an order upon the Defendant for purchasing certain electrical goods and the total value of the purchase order was Rs.4,69,709/-.
(c) The aforementioned purchase order was placed by the Plaintiff firm upon the Defendant after having detailed discussion, negotiations, etc. and during the course of said negotiations, it was specifically conveyed by the Plaintiff firm to the Defendant that the goods purchased have to be further supplied by the Plaintiff to its customer and that therefore time was the essence of the agreement and the purchased material should be delivered by the Defendant to the Plaintiff by 20.04.2019. The Defendant had categorically agreed and confirmed that the delivery of material would be completed by 20.04.2019.
(d) Further one of the terms of the agreement entered between the parties stipulated that the Plaintiff was required to pay an advance payment of Rs.1,40,912/- amounting to 30% of the total purchase value. In pursuance of the said term, the Plaintiff duly made the payment of the said amount by transferring amounts of Rs.50,000/- and Rs.90,912/- in the bank account of the Defendant Company on 29.03.2019 and 06.04.2019 respectively. Despite the advance payment made by the Plaintiff to the Defendant, the Defendant failed to CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 2 of 10 deliver the ordered material to the Plaintiff within the stipulated date i.e. 20.04.2019. The Plaintiff kept on reminding the Defendant to deliver the goods as early as possible for it to supply the material to its customer but the Defendant failed to do so.
(e) Finally, on 30.04.2019, the Plaintiff firm wrote an e-mail to the Defendant to seek a date on which the representative of the Plaintiff could visit the Defendant's factory for site inspection so as to see the quality of material, its preparation and readiness. In reply to the said mail, the Defendant informed the Plaintiff that due to its factory relocation, it could not deliver the goods in time and undertook to deliver the goods by 09.05.2019. The Defendant further invited the Plaintiff for material inspection on 09.05.2019 at its Kolkata factory.
(f) The partner of the Plaintiff firm on his visit to the factory of the Defendant was shocked to find that even the raw material for the goods ordered by the Plaintiff was not ready. In such circumstances, the Plaintiff informed the Defendant that the purchase order dated 25.03.2019 issued by it in favour of the Defendant stands cancelled. It was also specifically informed to the Defendant that the Plaintiff would now purchase the same material from some other manufacturer and the difference in the purchase value will have to be borne by the Defendant. In response to the aforementioned act of the Plaintiff, two of the Directors of the Defendant Company requested the Plaintiff to wait for another 04 days for the delivery of the ordered material but the material was not delivered even after the expiry of 04 days.
(g) As a result of the breach committed by the Defendant Company of its obligations, the Plaintiff had to place another order for supply of goods on a manufacturer namely M/s Om Shiv Enterprises and that too, at higher prices. The Plaintiff thereafter orally demanded the return of its advance amounts from the Defendant and the freight charges and the excess amount that the Plaintiff CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 3 of 10 had to pay to the other manufacturer for purchase of the material. When the Defendant failed to pay heed to demands of the Plaintiff, a written communication dated 03.08.2019 and a legal notice dated 01.11.2019 were issued by the Plaintiff to the Defendant asking for the aforementioned amounts alongwith interest @18% per annum.
(h) The Defendant despite receiving the legal notice sent by the Plaintiff, failed to pay the due amounts to the Plaintiff. On 03.02.2020, the Plaintiff initiated pre-institution mediation proceedings, but the Defendant did not appear before the mediation authority despite receiving the notices from the said authority and hence, the present suit.
3. As per record, summons sent to the Defendant Company through registered AD were received back with the report that the Defendant Company has left its previous known address. The Plaintiff firm had thereafter filed an application under Order V Rule 20 CPC seeking substituted service of the Defendant Company through publication. The said application was allowed by this Court vide its order dated 31.08.2023 and when despite service through publication the Defendant Company failed to appear before this Court, it was proceeded ex-parte vide order dated 07.12.2023 and on request of Ld. Counsel for the Plaintiff, the case was listed for ex-parte evidence.
4. On behalf of the Plaintiff firm, Md. Imran, partner of the Plaintiff firm, through whom the present suit has been filed, has tendered his affidavit before this Court for the purposes of ex-parte evidence. In the said affidavit, he has more or less reiterated the contents of the plaint. The copy of the registration certificate of the Plaintiff firm, the purchase order dated 25.03.2019 placed by the Plaintiff firm upon the Defendant Company, the copies of the 02 payment CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 4 of 10 notes dated 29.03.2019 and 06.04.2020 vide which the Plaintiff made advance payment to the Defendant, the copies of the e-mails exchanged between the parties regarding the date of delivery, the copy of purchase order dated 18.05.2019 placed by the Plaintiff firm upon M/s Om Shiv Enterprises alongwith tax invoices raised by the said firm and the legal notice dated 01.11.2019 issued by the Plaintiff to the Defendant alongwith postal receipts and tracking reports, as per the deposition of the partner of the Plaintiff firm, have been given Ex.PW1/2, Ex.PW1/5, Ex.PW1/6 (Colly.), Ex.PW1/8 (Colly.), Ex.PW1/9 (Colly.), Ex.PW1/11, Ex.PW1/12 (Colly) and Ex.PW1/13 (Colly.) respectively. The said witness has also tendered his certificate under Section 65- B of the Indian Evidence Act in respect of the tracking reports, which has been given Ex.PW1/14.
5. Ld. Counsel for the Plaintiff, Mohd. Arif, has urged that since none has appeared on behalf of the Defendant Company to controvert the statements made on oath by the partner of the Plaintiff firm and documents proved on record by him, the suit of the Plaintiff firm must be decreed. Ld.Counsel for the Plaintiff has urged that since the Plaintiff has averred and deposed on oath that the negotiations between the parties were made at the registered office of the Plaintiff at Okhla and the delivery of goods was to be made by the Defendant at the said office of the Plaintiff and further that the advance payments had been made by the Plaintiff to the Defendant through its bank situated at New Friends Colony, this Court has the territorial jurisdiction to try the present suit. It has been further submitted by Ld. Counsel for the Plaintiff that the cause of action arose in favour of the Plaintiff for the first time when it cancelled the purchase order issued by it in favour of the Defendant i.e. in May, 2019 and since the present suit has been filed in November, 2021, it has been filed within the CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 5 of 10 prescribed period of limitation. Ld. Counsel for the Plaintiff has further submitted that the purchase order and the e-mail communications proved on record by the partner of the Plaintiff firm clearly prove that time was the essence of the agreement entered between the Plaintiff firm and the Defendant Company and that the Defendant Company despite undertaking to deliver the material by 20.04.2019 and then by 09.05.2019 committed breach of its obligations. He has further contended that in view of the said breach, the Plaintiff firm is not only entitled to return of the advance amount paid by it to the Defendant Company but it is also entitled to the excess amount that it had to incur for purchase of material from another manufacturer. Ld. Counsel has pointed out that the invoices raised by M/s Om Shiv Enterprises, Ex.PW1/7 show that the Plaintiff had to pay an excess amount of Rs.1,45,611/- for the purchase of material that it had initially asked the Defendant to supply to it. He further submits that though in the plaint, the Plaintiff had also claimed an amount of Rs.4,600/- on account of freight charges that it had to incur for taking delivery of the goods from M/s Om Shiv Enterprises, he is not pressing for the said amount as the Plaintiff has not been able to place on record the documents in this respect. He therefore submits that the Plaintiff has been able to lead sufficient evidence to entitle it to the principal amount of Rs.2,86,523/-. It is also the submission of Ld. Counsel for the Plaintiff that in addition, the Plaintiff is also entitled to interest @18% per annum. Ld. Counsel has pointed out that a legal notice dated 01.11.2019 was issued to the Defendant specifically calling upon it to pay the due amount alongwith interest @18% per annum. The submission therefore is that the interest @18% per annum w.e.f. 01.11.2019 till the date of filing of the present suit should be allowed by this Court.
6. I have carefully considered the submissions of Ld. Counsel for the CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 6 of 10 Plaintiff and have gone through the record. Since the Defendant has chosen not to contest the present proceedings, the evidence led by the Plaintiff remains uncontroverted. The deposition of PW1 and the documentary evidence proved on record by this witness prove that a purchase order dated 25.03.2019, Ex.PW1/2 was placed by the Plaintiff firm upon the Defendant Company and the same was accepted by the Defendant. Further the deposition of PW1 and the payment notes dated 29.03.2019 and 06.04.2020, Ex.PW1/6 (Colly.) also prove that the Plaintiff had made an advance payment of Rs.1,40,912/- to the Defendant in pursuance of the aforementioned purchase order. The deposition of PW1 further makes it clear that no goods were supplied by the Defendant to the Plaintiff despite receiving the aforementioned advance payment. As such, clearly the Plaintiff is entitled to the refund of the advance amount of Rs.1,40,912/- paid by the Plaintiff to the Defendant. The Plaintiff has next claimed an amount of Rs.1,45,611/-. As per the case put forward by the Plaintiff, this is the amount of the losses suffered by it due to the breach of the contract committed by the Defendant. Ld. Counsel for the Plaintiff has urged that this amount is payable by the Defendant to the Plaintiff in terms of Section 73 of the Contract Act. The relevant part of the said Section lays down as follows:-
73. Compensation for loss or damage caused by breach of contract. - When a contract has been broken, the party who suffers by such breach is a entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Further illustration (k) to the said Section is as follows:-
(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain piece of machinery. A does not deliver the piece of machinery, at the time specified, and, in consequence of this, B is obliged to procure another at a higher price than that which he was to have paid to A, and is prevented from performing a contract which B had made with a third CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 7 of 10 person at the time of his contract with A (but which had not been communicated to A), and is compelled to make compensation for breach of that contract. A must pay to B, by way of compensation, the difference between the contract price of the price of machinery and the sum paid by B for another, but not the sum paid by B to the third person by way of compensation.
7. Now in the present case also, the Defendant had undertaken to deliver to the Plaintiff the electrical goods ordered by the Plaintiff by 20.04.2019 or latest by 09.05.2019, but it did not do so. This undertaking is apparent from the e-mail dated 30.04.2019 sent by the AR of the Defendant to the Plaintiff [a part of Ex.PW1/8 (Colly.)]. The same mentions that due to factory relocation work, the items ordered by the Plaintiff could not be delivered on time and that delivery of goods will now be made by 09.05.2019. Further the fact that the Defendant did not deliver the electrical goods as per this undertaking is proved by the deposition of PW1. The deposition of PW1 also makes it clear that on failure of the Defendant to supply the goods to the Plaintiff, the Plaintiff was obliged to procure the said goods at a higher prices than that he was to have paid to the Defendant. The said testimony remains uncontroverted and is also supported by the invoices raised by the said manufacturer, M/s Om Shiv Enterprises, which have been given Ex.PW1/9 (Colly.). The said invoices and the purchase order placed by the Plaintiff upon the Defendant makes it clear that the Plaintiff had to incur an excess amount of Rs.1,45,611/- for the goods required by it. In view of such facts and in view of the provisions of Section 73 of the Contract Act, the Defendant would be liable to pay, by way of compensation, this amount of Rs.1,45,611/- , it being the difference between the contract price of the electrical goods ordered by the Plaintiff to the Defendant and the sum paid by the Plaintiff to obtain the said goods from another manufacturer.
8. In view of the discussion herein above, it is hereby held that the CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 8 of 10 Defendant is liable to pay to the Plaintiff the principal amount of Rs.2,86,523//- as on the date of filing of the suit.
9. As regards the interest being claimed @18% per annum, I have considered the submissions of Ld. Counsel for the Plaintiff. The Hon'ble Delhi High Court in the case CS (OS) 209 / 2016 titled as Gopesh Mehta Vs Swift Initia Pvt. Ltd. has held that even if there was no agreement between the parties with respect to the payment of interest on delayed payments, a Plaintiff is entitled to claim interest on the principles of equity, justice and good conscious. In the said case, the Hon'ble High Court on the basis of the aforementioned principles, awarded interest in favour of the Plaintiff, from the date of the legal notice issued to the Defendant.
10. Now in the present case, the Plaintiff, in his affidavit filed for the purposes of evidence, has affirmed on oath that a legal notice dated 01.11.2019 was sent on behalf of Plaintiff to the Defendant through speed post. He has also placed on record the postal receipts and also the tracking reports of the same. On the basis of said documents, it is to be held that the Defendant was duly served with the legal notice. Keeping in view the said evidence and the judicial dicta referred to by this Court in the preceding paragraph, interest on the principal amount adjudged of Rs.2,86,523/- is allowed @ 10% p.a. from 01.11.2019 till the date of filing of the suit i.e. 20.11.2021.
11. As regards the pendente lite and future interest, learned Counsel for the Plaintiff have submitted that in terms of Section 34 of CPC, since the liability in relation to the sum adjudged has arisen out of a commercial transaction, this Court must award interest at the rate of 10% per annum for the same is the rate CS (COMM) 530/2021 M/s Mashel Electric Vs. Ritajya Industries Pvt Ltd. 9 of 10 on which moneys are lent and advanced by nationalised banks in relation to commercial transactions. Taking into consideration that many suits are pending in this Court wherein nationalized banks are claiming recovery of unpaid loan amounts along with interest at the rate of 10% per annum, the aforesaid contention of the learned counsel is accepted.
11. As such, the suit of the Plaintiff is hereby decreed against the Defendant for an amount of Rs.2,86,523/- (Rupees Two Lakhs Eighty Six Thousand Five Hundred Twenty Three Only). Interest on the principal amount adjudged of Rs.2,86,523/- is allowed @10% p.a. from 01.11.2019 till the date of filing of the suit i.e. 20.11.2021. Pendente lite and future interest is awarded at the rate of 10% per annum, on the principal amount adjudged of Rs.2,86,523/-. Costs of the suit are also allowed. Decree Sheet be prepared accordingly. This file be consigned to Record Room. ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2024.05.27 BALIGA 17:18:03 +0530 Announced in the Open (Anu Grover Baliga) Court on 24.05.2024 District Judge (Commercial Court-04) South-East/Saket Court New Delhi.
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