Delhi District Court
Sole Proprietor Of vs M/S Dcm Shriram Consolidated Ltd on 1 June, 2010
''IN THE COURT OF MS. GOMATI MANOCHA, CIVIL
JUDGE (NORTH), TIS HAZARI COURTS, DELHI''
SUIT NO. 108/02
UNIQUE CASE ID NO.
SH. ASHWANI KHEMKA
S/O SH. H. PRASHAD KHEMKA
R/O S382, PANCH SHEEL PARK
NEW DELHI
SOLE PROPRIETOR OF
AAY KAY TEXTILES
HAVING ITS OFFICE AT
353, SHAHPUR JAT
NEW DELHI ........... PLAINTIFF
VERSUS
M/S DCM SHRIRAM CONSOLIDATED LTD.
18, BARAKHAMBA ROAD
NEW DELHI .......... DEFENDANT
Date of Institution : 20.08.1998
Date of Reserving : 18.05.2010
Date of Pronouncement : 01.06.2010
SUIT FOR RECOVERY OF A SUM OF RS. 1,18,116/
JUDGMENT
1. The plaintiff has filed the present suit against the defendant praying for a decree for a sum of Rs. 1,18,116/ in favour of the plaintiff and against the defendants along with pedentelite and future interest at the rate of 24 % p.a. along with cost of the suit.
2. Brief facts relevant for adjudication of the plaintiff's case are that the plaintiff is a proprietor of the concern M/s Aak Kay Textiles, dealing in export of high quality fabric at Delhi.
3. The plaintiff and the defendant entered into certain business transactions wherein the defendant agreed to supply certain processed fabric as per the requirements of the plaintiff. The defendant assured the plaintiff that only best of fabric would be supplied to the plaintiff and the processing would also be made under strict quality control.
4. Acting upon the representation of the defendant the plaintiff entered into certain transactions with the defendant and supplied the fabric for printing to the defendant.
5. The plaintiff vide challan no. 1711, 1733 and 1302 supplied to the defendant 5246m, 80 mts., 578 mts. and 166.30 mts. of fabrics respectively for the purpose of printing and processing. Out of the total 5990.10 mts of fabric supplied for printing to the defendant the plaintiff till date has only received back 5092.80 mts. of printed fabric from the defendant. Thus, there was a shortage of 897.30 mts of fabric. The cost of 897.30 mts. works out to be Rs. 16,151/. Out of the 5092 mts of fabric processed and printed by the defendant, certain fabrics were not processed and printed as per the instructions of the plaintiff. The printing and processing was done contrary to the representations given to the plaintiff that the printing and processing would be done under strict quality control. The fabric thus supplied to the plaintiff was of no use as a result of which the plaintiff's export order had to be cancelled and the plaintiff suffered losses in his business. Even though the plaintiff has not raised any claim for the damages or the cost of the fabrics supplied to the defendant, which was not processed properly, the plaintiff has raised claim only for the processing charges, which had been wrongly charged by the defendant on the said material. Accordingly, the plaintiff raised certain claims vide debit note dated 7.3.1991 and 7.5.1991 and these were acknowledged and received by the defendant. The claim of the plaintiff on this account was Rs. 12,407/.
6. Out of the total fabric processed and accepted by the plaintiff the plaintiff realised that the defendant has over charged the plaintiff for processing fabric supplied by the plaintiff the said charges amount to Rs. 2410/. Vide letter dated 18.3.1991 the plaintiff had duly informed the defendant of the same and raised a claim in respect thereto.
7. On receiving the said fabric from the defendant, the plaintiff duly informed the defendant that the fabric was not of superior quality and could not be used as there were printing defects in the same. Accordingly, defendant sent its folding inspector to inspect the goods in the plaintiff's godown. The folding inspector sent by the defendant company, informed the plaintiff that 325 mts. of the fabric is wasted. The plaintiff accepted the consignment of the recommendations of the defendant that 325 mts. would be treated as waste and plaintiff would not be charged for that. The same is evident from the letter dated 10.5.1991 of the plaintiff company. The plaintiff has claimed on this account a sum of Rs. 10,979/. The defendant was called upon vide notice dated 29.4.1992 to settle the accounts of the plaintiff which has not been done till date.
8. The total amount of bills raised by the defendants by way of invoices, was Rs. 2,20,681/ for the printing of the fabric supplied to them. Hence, an excess amount of Rs. 7,913/ has been credited in the account of the defendant. The defendant debited in the account of the plaintiff Rs. 8,211/ on 2.8.1991 and Rs. 8,600/ on 13.6.1991. These amounts have been included in the total invoices of Rs. 2,20,681/ which the defendant as per the statement of account has raised on various dates.
9. The plaintiff submits that the above mentioned bills dated 2.8.1991 and 13.6.1991 do not relate to any transaction between the plaintiff and defendant. The business transaction with the defendant was till 27.5.1991. Hence, the defendant has debited in the plaintiff's account an excess of Rs. 24,724/ which includes Rs. 7,913/.
10. As per the statement of account, there is an outstanding balance of Rs. 66,772.01 due to the plaintiff from the defendant as on 29.5.1991.
11. The defendant appeared and filed his written statement taking various preliminary objections. He stated that the plaintiff could not have filed the present suit in a civil court as there is an arbitration agreement between the parties and the matter in question is liable to be adjudicated upon by the arbitrator to be appointed in terms of arbitration agreement between the parties.
12. He submitted that the defendant processed the fabric supplied by the plaintiff from time to time in terms of the specifications and items of the orders placed by the plaintiff and all the supplies have already been made by defendant and there is nothing outstanding in that regard. He stated that all transactions were independent and based on separate contracts and orders.
13. He submitted that in fact a total supply of 5300 mtrs of fabric was to be given by the plaintiff to the defendant for the purpose of processing and printing, but since the material which was being supplied by the plaintiff was having short length by 2% and was power loom product and the plaintiff wanted that the net finished product of not less than 5000 mtrs should come in his hands after excluding therefrom the damage which occurs to the fabric during printing, therefore, the plaintiff knowing about the quality of the product supplied 5990.10 mtrs against 5300 mtrs of the fabric required.
14. He submitted that as per the contract between the parties the shortage permissible was 5% which is always damaged during printing and processing, but since the material supplied by the plaintiff was not a quality product which fact was even known to the plaintiff therefore, plaintiff in order to achieve 5000/ mtrs of the finished product supplied 5990.10 mtrs of fabric. The entire material was processed and printed by the defendant but since the material was not that of proper quality therefore, the actual finished length which came out after processing and printing was 5110.30 mtrs which was accordingly supplied.
15. He stated that whatever was the shortage the same was because of the defect in the quality of the material supplied which was known to the plaintiff at the time of making supply and that is the reason the plaintiff supplied 5990.10 mtrs as against 5300 mtrs. It is submitted that in power loom the standard length as against 100 cm is always 98 cm, therefore, 2% has to be deducted on account of shortage and 5% is otherwise to be deducted on account of printing and processing and damage as per practice of trade. But since, the material supplied was not that of standard quality, therefore, in this case the wastage was more than the specified which fact was known to the plaintiff and that is the reason why he supplied more fabric.
16. He stated that in the case of power loom 7% is otherwise to be deducted if the material supplied is of standard quality but since the material supplied was not of standard quality, therefore, wastage was bound to be more than the normal agreed damage.
17. He alleged that firstly finished processed and printed material was 5110.30 mtrs and rest of the material was wasted in printing and processing and the entire fabric of 5110.30 mtrs. was properly printed and processed as per the instructions of the the plaintiff and no complaint was ever received by the defendant from the plaintiff. Moreover, plaintiff never rejected any material after printing and utilized the same for his benefits.
18. He denied that fabric supplied to the plaintiff was of no use as a result of which the plaintiffs export orders were cancelled. He stated that the said allegation is absolutely false as at no point of time any grievance was raised by the plaintiff with the defendant nor any material was rejected or returned by the plaintiff. He denied that plaintiff had raised any claim vide debit notes dated 17.3.1991 and 7.5.1991and stated that no such debit notes were ever received and acknowledged by the plaintiff. Consequently the claim of the plaintiff on this account amounting to Rs. 12,407/ is false on the face of it.
19. The defendant denied having sent any folding inspector to the plaintiff 's site. He denied that any point of time it was ever agreed between the parties that 325 mtrs. would be treated as wastage and plaintiff would not be charged for that. He stated that on the one hand the plaintiff has alleged that 325 mtrs. of fabric had been wasted and on the other hand stated that he retained the same on the condition that it would not be charged. If there was any wastage in material or any material was found to be defective, the plaintiff could have rejected and returned the same to the defendant and then would have raised the claim. Since, no material was ever rejected/returned or wasted and returned to defendant therefore, there was no occasion for the plaintiff to claim a sum of Rs. 10,979 on that account. He stated that total bills raised by the defendant are to the extent of Rs. 2,47,269 and not Rs. 2,20,681/ as has been alleged.
20. He stated that he rightly debited the amount of Rs. 8211/ and Rs. 8600/ to the plaintiff's account as the goods were supplied to the plaintiff for the said amount and it was the liability of the plaintiff to pay for the same. He denied that the total invoices were of Rs. 2,20,681/. He stated that the total liability of the plaintiff was Rs. 2,47,269/ against which the payments were made. He denied that the above mentioned bills dated 2.8.1991 and 13.6.1991 do not relate to any transaction. He stated that the goods were supplied and received by the plaintiff, therefore, it was the liability of the plaintiff to pay. He denied that the business transactions with the defendant were till 27.5.1991 and stated that the last transaction took place on 2.8.1991. He denied that defendant has debited in the plaintiff's account an excess of Rs. 24,724/. Denying rest of the contents of the plaint, the defendant sought dismissal of the suit of the plaintiff.
21. Plaintiff filed replication thereby denying the contentions raised in the written statement and stated that the issue regarding jurisdiction stands already decided by the Hon'ble High Court of Delhi and the defendant having submitted itself to the jurisdiction of this court is precluded from contending otherwise.
22. From the pleadings of the parties following issues were framed:
1. Whether the plaintiff is entitled to recover the suit amount from the defendant ? If so to what extent ? OPP.
2. Whether the plaintiff is entitled to recover the interest from the defendant ? If so, at what rate and for which period ? OPP.
3. Whether the present suit is not maintainable as alleged in the written statement ? OPD.
4. Whether the suit has been filed by a duly authorized person ? OPP.
5. Whether the defendant has made any payment to the plaintiff ? If so its effect ? OPD.
6. Relief
23. In order to prove his case, the plaintiff examined himself as PW1 and Sh. Vijay Kapoor as PW2 and relied upon the following documents :
1. Ex PW 1/1 to Ex. PW 1/2 Letters
2. Ex. PW 1/3 to Ex. PW 1/ 4 Debit Notes
3. Ex. PW 1/5 Acknowledgment regarding the amount of Rs. 30,000/
4. Ex. PW 1/6 Copy of the notice
5. Ex. PW 1/7 Postal Receipt
24. To counter the case of the plaintiff the defendant examined five witnesses namely Sh. Sunil Sirivastava as DW1, Sh. Kailash Gupta as DW 2, Sh. R. C. Sharma as DW3, Sh. Shyam Lal Mittal as DW4 and Sh. O. P. Kakar as DW5 and relied upon the following documents :
1. Ex. DW 1/1 to Ex. DW 1/13 Receipts
2. Ex. DW 1/14 to Ex. DW 4/8 Acknowledgment receipt
25. My issuewise findings are as follows : ISSUE NO. 1 & 2 The plaintiff has claimed the recovery of Rs.1,18,116/ along with Pedente lite interest. He has sought this amount on the basis of five different claims of different amounts. He has claimed Rs.16,151/ on account of short supply of fabric. The plaintiff has stated that he has received a short supply of 897.30 m and the total cost of the same comes out to be Rs.16151/.
The defendant has on the other hand, admitted this fact but attributed the same to the inferior quality of fabric. He also stated that in power loom the standard length as against 100 cm is always 98 cm, therefore 2% has to be deducted on account of shortage and 5% had to be deducted on account of printing and processing and damage as per practice of trade. He alleged that 7% in case of power loom is to be deducted if the material is of standard quality, but as the material supplied was not of standard quality therefore, the wastage was more than the normal agreed damage. He stated that this fact was known to the plaintiff and therefore, he had supplied more cloth so as to get finished product of length of 5110.30 m. He further stated that no cloth was retained by the defendant so he can not be held liable to pay for the same. He further stated that no complaint was received by the defendant from the plaintiff nor was the material rejected or returned by the plaintiff.
In the document EX PW1/DI i.e. the folding report filed by the plaintiff it is mentioned that the length is short by 1%. Further, in the document EXDW1/2 which has been signed by the seller and the buyer it is specifically mentioned that 2% shrinkage and wastage shall be acceptable. Also, in EXDW1/3 it is mentioned that 5% printing and processing damage shall be acceptable. These documents have not been challenged by the plaintiff. The plaintiff in his crossexamination has himself admitted that in processing and dyeing, grey material is wasted to the extent of 3 to 4%.The defendant has admitted that there was a short supply of goods but has attributed the same to wastage caused due to processing etc. and due to the poor quality of goods. The onus was now on the plaintiff to prove that no wastage to this extent could have been caused in processing of the fabric or that the defendant retained any fabric with him. This onus has not been satisfactorily discharged by the plaintiff who has failed to prove that he is entitled to the claim on account of short supply of goods.
The other claim of the plaintiff is to the tune of Rs 12,407/ on account of debit notes dated 7.3.91 and 7.5.91. The plaintiff has claimed this amount on account of excess processing charges due to substandard printing on the fabric done by the defendant. The defendant stated that the plaintiff did not raise any claim vide debit notes and denied having received any such debit notes. The defendant further stated that the plaintiff also did not return any material to the defendant and chose to keep the material and also claim its price.
In the opinion of this court, the plaintiff is not entitled to claim this amount as the damage caused to the plaintiff due to the alleged sub standard printing on the fabric done by the defendant cannot be quantified because the plaintiff did not return the damaged goods and chose to keep them. The plaintiff has also failed to prove any special damage caused to him due to the alleged poor quality of goods delivered to him by the defendant. Thus, the plaintiff is not entitled to claim a sum of Rs 12,407 on account of substandard printing on goods.
The plaintiff has further raised a claim of Rs. 2410/ on account of over charging done by the defendant in processing the fabric. The defendant has stated that the charging was done in terms of agreement between the parties. The defendant has placed on record sale notes showing processing charges of Rs. 3.50 per metre. The plaintiff has stated that the processing charges agreed to by the defendant was Rs. 2.50 per metre but he has not led sufficient evidence to prove this and to substantiate his aforesaid claim. In the document MARK C filed by the plaintiff himself, the processing charges are mentioned as Rs. 3.50 per metre for 45'' finished width. No document has been filed by the plaintiff to prove that the rate of Rs. 2.50 per metre was settled between the parties. Thus, the plaintiff has failed to prove his aforesaid claim.
The other claim raised by the plaintiff is of Rs.10,979/on account of printing defects. The defendant has stated that the grey cloth was processed as per specification of the plaintiff. Further, at no point of time the plaintiff returned any material to the defendant. He also submitted that the folding department is only concerned with folding of material dismounted from each beam and is not the competent authority for checking the quality of printing etc. and cannot give its report about wastage of exact quantity of 325 m. He stated that only a printing master or a personnel from quality control is equipped to give report about the quality of the finished product.
In this case, no such person qualified or experienced to assess the quality of the finished product has submitted his report to substantiate the claim of the plaintiff. Further, the plaintiff did not reject the goods in question and utilized them so the loss caused to him by the alleged poor quality of goods cannot be quantified. The plaintiff has stated that he utilized the goods on the assurance of the defendant that they shall be treated as waste and the plaintiff shall not be charged for the same. The plaintiff has also failed to prove any such assurance given by the defendant. Thus, the plaintiff has failed to prove that he is entitled to the above claim.
The plaintiff has raised a claim of Rs. 7,913/ on account of excess payment made by the plaintiff to the defendant. He has stated that the defendant wrongly debited a sum of Rs. 8,600/ on 13.6.91 and raised a fictitious invoice of Rs. 8,211/ on 2.8.91 from the total invoices amount of Rs. 2,20,681/ raised upon the plaintiff by the defendant. He stated that the last transaction with the defendant was on 27.5.91. The defendant has stated that the cost of the development of design is borne by the party and Rs. 8600/ being cost of development of design was debited to the plaintiff. He stated that he rightly debited the amount of Rs. 8211/ and Rs. 8600/ to the plaintiff's account as the goods were supplied to the plaintiff for the said amount. He denied that the total invoices are of Rs. 2,20,681/ and stated that the total liability of the plaintiff was Rs. 2,47,269/ against which payments were made. He denied that the bills dated 2.8.91 and 13.6.91 do not relate to any transaction. He stated that the last transaction took place on 2.8.91.
According to the defendant, he charged a sum of Rs. 8600/ on account of design development charge which has to be paid by the buyer according to the accepted practice of trade and a sum of Rs. 8211/ was debited on account of goods supplied to the plaintiff as per document EXDW1/16. Further, the defendant has also placed on record the gate pass regarding dispatch of goods to the plaintiff on 2.8.91. Thus, this completely falsifies the contention of the plaintiff that the last transaction with the defendant was on 27.5.91. In view of my above discussion, I decide these issues against the plaintiff and in favour of the defendant.
ISSUE NO. 3, 4 & 5 Not pressed.
RELIEF
26. In view of my foregoing discussion, I dismiss the suit of the plaintiff. No order as to cost. Decree sheet be prepared accordingly. File be consigned to record room after necessary compliance. Announced in the open court today i.e 01.06.2010 GOMATI MANOCHA CIVIL JUDGE (NORTH) 01.06.2010 Suit no. 108/02 01.06.2010 Present : None Vide separate judgement of even date, I hereby dismiss the suit of the Plaintiff. Decree sheet be prepared accordingly. File be consigned to record room after necessary compliance.
GOMATI MANOCHA CIVIL JUDGE (NORTH) 01.06.2010