Bangalore District Court
Entered Into The Said Business ... vs To Rectify The Defects Proved Futile. As ... on 11 November, 2020
1
Com.O.S.No.7385/2009
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 11th DAY OF NOVEMBER 2020.
PRESENT:
SRI.DEVARAJA BHAT.M.,B.COM,LL.B.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.7385/2009
BETWEEN:
M/s Oliver Twinsafe Valves
Limited, represented by
its Power of Attorney
Holder Sri.S.Raghuraman,
Son of V.Santhanaraman,
aged 37 years, Parkgate,
Industrial Estate,
Knutsford, Cheshire, WA
16 8 DX, England, and also
at No.6, 1st Cross Street,
SIDCO, Industrial Estate,
Ambattur, Chennai-600
098.
: PLAINTIFF
(Represented by Sri.
D.P.Shiva Prasad,
Advocate.)
AND
1. M/s Ganesh Cam
Products, represented by
2
Com.O.S.No.7385/2009
its Partner,
Mr.N.S.Narayanan, No.B-
29, 1st Cross, 1st Stage,
Peenya Industrial Estate,
Bengaluru - 560 058,
Karnataka.
2. M/s Oriental Plants &
Equiptments Pvt.Ltd.,
Chief Commercial Officer,
Mr.V.R.Soundar Rajan, SF
No.663, Ravathur Main
Road, Ravathur Post,
Coimbatore - 641 103,
Tamil Nadu.
3. M/s Sri Balaji Alloys,
Proprietor,
Mr.R.Anbazhagan,
No.1/314, Happy Garden
Colony, Mettupalayam
Road, Coimbatore - 641
103, Tamil Nadu.
4. M/s Vinir Engineering
Pvt. Ltd., represented by
its Board of Directors,
No.102, 103 & 104,
Bommasandra Industrial
Area, Bengaluru - 560 099,
Karnataka.
: DEFENDANTS
(Defendants No.1 to 3 are
represented by Sri.
K.V.Ramesh, Defendant No.4
is represented by M/s ALMT
Legal- Advocates)
3
Com.O.S.No.7385/2009
Date of Institution of the 18.11.2009
suit
Nature of the suit (suit on Suit for Recovery of Money
pronote, suit for declaration
& Possession, Suit for
injunction etc.)
Date of commencement of 19.11.2010
recording of evidence
Date on which judgment 11.11.2020
was pronounced
Duration Years Months Days
10 11 23
(DEVARAJA BHAT.M),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This is a suit for the relief of recovery of Rs.6,01,32,918/- with interest.
2. The Brief facts as narrated in the Plaint are as follows:-
The Plaintiff received an Order from a customer in Brazil for the supply of 138 valves - 117 numbers in LF2 materials and 21 numbers in SS316 material. Mr. Ritesh Gupta identifying himself as Director - Commercial of the 4 th Defendant informed 4 Com.O.S.No.7385/2009 the Plaintiff that the 4th Defendant is a leading manufacturer and supplier of forgings to several reputed National and International Companies and is also renowned for the quality of products. Subsequently, the Plaintiff identified the Defendants 1 to 3 as the machinists who would machine the forgings supplied by the 4th Defendant as per their drawings. The Plaintiff entered into the said business transaction for supply of one of its key components, LF2 and forgings for one of its major consignments with the Defendants. The Plaintiff and Defendants had a specific understanding that the components to be supplied would be in consonance with the quality specified by the Plaintiff as well as in conformity with the ENG008 specifications mandated by it. The Defendants were also required to certify the goods with the appropriate values before exporting the same. The 4th Defendant dispatched the forgings to the Defendants 1 to 3 along with test certificates stating that the forgings were in accordance with the specifications namely ENG008 mandated by the Plaintiff. Thereafter, the Defendants 1 to 3 completed the necessary machining operations and exported the machined parts to the Plaintiff. The first batch of consignment consisting of two parts reached the Plaintiff on 05.02.2009. The same after assembly were exported to its customer in Brazil via., Belgium. Thereafter, the Plaintiff 5 Com.O.S.No.7385/2009 received the second batch of the machined forgings along with the test certificates issued by the Defendants. During assembly, the Plaintiff discovered that one of the valves was not passing the pressure tests. The Plaintiff suspected that problem was with Trunnion Plate Part No.V3231 and decided to subject it to tests to check for conformity to its specifications, namely ENG008. Much to the Plaintiff's shock, the part failed miserably.
Immediately the Plaintiff informed the Defendants about the non-conformance of the part to their specification, namely ENG008. The Defendants were called upon to rectify the defect. Despite being informed of the issue, the Defendants failed to respond. Thereafter the Defendants started avoiding the Plaintiff and its attempts to get in touch with them proved futile. The Defendants and more specifically the 4 th Defendant supplied defective material and falsely certified the same as high quality material. The Defendants remained evasive after supplying defective materials and all attempts to contact the Defendants to rectify the defects proved futile. As a result, the Plaintiff had no choice but to incur further losses by investing huge sum of moneys to test the damaged goods, and also manufacture new goods at its personal cost to fulfill its contractual obligations to its clients. The Defendants have committed a breach of terms and conditions agreed upon. The 6 Com.O.S.No.7385/2009 Defendants have conspired and colluded with one another in order to make a wrongful gain which has subject the Plaintiff to financial loss and hardship apart from causing irreparable loss to its reputation. The Defendants are liable to compensate the Plaintiff for their illegal acts. The Plaintiff's efforts to seek compensation for the loss caused by the Defendants failed. Hence, the Plaintiff has filed the present suit.
3. Defendant Nos. 1 to 3 have appeared in this case and filed separate written statements. The contentions of the Defendants 1 to 3 in their Written Statement are as follows:-
That the suit of the Plaintiff filed against them is not maintainable since loss caused to the Plaintiff is only due to the supply of defective raw materials along with faulty test certificates by the 4th Defendant and therefore it is 4th Defendant alone who is liable to compensate the plaintiff, that they are in the business of supplying machined components to the Valve industry, and that for many years they have been carrying on the business without compromising the quality, that the Plaintiff identified them as a machinist and directed them to approach and procure forgings from the 4th Defendant and thus, it is the Plaintiff who chose the 4th Defendant for purchasing forgings of a particular specification, that during the 7 Com.O.S.No.7385/2009 meetings held between them, Plaintiff and 4th Defendant, Plaintiff informed 4th Defendant to supply forgings as per ENG008 specification and to provide test certificate along with every batch of forgings supplied to the Defendant Nos.1 to 3, that the Defendant Nos. 1 to 3 were directed by the Plaintiff to start machining the forgings only after receipt of forgings along with test certificates supplied by the 4 th Defendant and after verifying the Valves mentioned in the test certificate are in conformation with the ENG008 specification, that thereafter Defendant Nos.1 to 3 and Defendant No.4 communicated with each other and at that time Defendant Nos. 1 to 3 stressed once again to the 4th Defendant to supply the forgings in conformation to ENG008 specification, after conducting the test and along with test certificates, that the Defendant Nos.1 to 3 being machinists could not subject the forgings to test before machining them and therefore, the Defendant Nos. 1 to 3 machined the forgings supplied by the 4 th Defendant, by relying on the test certificate supplied by the 4 th Defendant, that the Orders of forgings were placed by Defendant Nos. 1 to 3 with the 4th Defendant only upon the instructions from the Plaintiff and then they checked each and every test certificate on receipt of the forgings for conformation to the ENG008 specifications, that they machined the forgings as per the 8 Com.O.S.No.7385/2009 specification and drawings supplied by the Plaintiff and thereafter they dispatched the same to the Plaintiff, that they have not committed breach of trust, that the fault lies only with the quality of the forgings supplied by the 4 th Defendant and therefore, Plaintiff ought to have proceeded only against the 4 th Defendant for recovery of loss and hence, Defendant Nos.1 to 3 have requested to dismiss the suit with costs.
4. Defendant No.4 has filed separate written statement. The contentions of the Defendant No.4 in its Written Statement are as follows:-
That it ought not to have been made a party to this suit, that the 4th Defendant does not have any business relationship with the Plaintiff and had an understanding with Defendant Nos.1 to 3 and one M/s Micro CNC Technologies Pvt.Ltd., for supply of forgings which were to be in turn machined and supplied to a third party, that it did not have any contract or agreement of supply with the Plaintiff, that the purchase orders were placed on this Defendant by the Defendant Nos. 1 to 3 and M/s Micro CNC Technologies, that even the forgings was supplied by it to the Defendant Nos.1 to 3 and not to the Plaintiff and therefore, there is no way to ascertain if the machined parts supplied by the Defendant Nos. 1 to 3 to the 9 Com.O.S.No.7385/2009 Plaintiff were made of the same forgings that were supplied by the 4th Defendant to the Defendant Nos.1 to 3, that the Plaintiff has miserably failed to establish that the machined parts supplied to it by the defendant Nos.1 to 3 were machined from the same forgings that were supplied to them by the 4th defendant, that it is a leading manufacturer of quality forgings & machined parts in Carbon steel, alloy steel, stainless steel and other steels for over two decades, the 4th defendant is a value oriented organization which seeks to support all buyers with timely and quality performance, that the plaintiff having had shared business relationship with it in the past, approached this Defendant with an offer on behalf of its suppliers and made clear that as soon as it raises orders for machined components onto its machine shops being Defendant Nos. 1 to 3, these Defendants would in turn place local purchase orders and take over supply and thus, it is apparent that the Defendant no.4 had agreed to supply the forgings to the Defendant Nos.1 to 3, that the forgings so supplied adhered to the quality regulations and were in accordance with the specifications that were provided to the Defendant No.4 by the Defendant Nos. 1 to 3, that it has done all the necessary testings to ensure that there are no defects or deviations in the raw forgings supplied to the Defendant Nos. 1 to 3, that when 10 Com.O.S.No.7385/2009 the Defendant Nos. 1 to 3 failed to make payment of dues, having had recommended and referred the Defendant Nos.1 to 3 to the 4th Defendant, it contacted the Plaintiff for ascertaining the reasons for no-payment and it was informed by the Plaintiff that certain machined parts supplied to it by the Defendant Nos. 1 to 3 were not in accordance with the specifications provided by it, that the 4 th Defendant was convinced that most of the parts were not made from the forgings supplied by it since the Defendant Nos. 1 to 3 were unable to furnish necessary documents in this regard, that the forgings that were returned by the Defendant Nos. 1 to 3 did not have necessary invoices as well as delivery challans in proof of the fact that these forgings were the same ones supplied to them, that the representatives of the plaintiff visited the work place of 4 th Defendant on 25.6.2009 to 27.6.2009 and after carrying out the testings in their presence, the concerned representatives testified and issued a certificate stating that "testing results are ok", that the Plaintiff had also signed on the Minutes of the Meeting held on 27.6.2009 recording the representations made by it regarding the testings, that having supplied the forgings under direct credit to the Defendant Nos. 1 to 3 on the recommendations made by the Plaintiff, it is being subjected to exploitation and undue harassment by the Plaintiff by colluding 11 Com.O.S.No.7385/2009 with each other with a malafide intention of avoiding payments to the 4th Defendant, that as per the understanding, in case of any defect, the forgings ought to have been returned within 7 to 10 days of supply in the same form and condition as it was supplied, that the liability of the 4 th Defendant to replace the forgings is limited to cases where the defects are found during the machining and not after it is machined, that having altered the materials supplied by the 4th Defendant, it is improper on the part of the Plaintiff or it suppliers to make baseless and fictitious claims against it and therefore, the 4 th defendant has prayed to dismiss the suit.
5. On the above pleadings of the parties, the following issues are framed :-
1. Whether the plaintiff proves that the 4th defendant supplied defective raw material as ENG008 specification and falsely certified the same as high quality material?
2. Whether plaintiff proves that it incurred further losses by investing huge sum of money to test the damaged goods and manufacture new goods as a result of the defective material supplied by the 4th defendant?12
Com.O.S.No.7385/2009
3. Whether the plaintiff proves that the plaintiff spent huge sums of money in heat treating the affected parts in an attempt to bring the machined components back in line with the specification namely ENG008 ?
4. Whether plaintiff proves that it has suffered a loss of Rs.6, 01, 32,918/- ?
5. Whether the plaintiff proves that the 4th defendant deliberately gave a false Test Certificate certifying that the forging supplied by them to the defendant Nos.1 to 3 are of ENG008 specification?
6.Whether plaintiff proves that the defendant Nos. 1 to 3 are also jointly and severally liable to pay a sum of Rs.6,01,32,918/- considering that it is the 4th defendant who has supplied defective material ?
7. To what decree or order?
6. In order to prove the contentions of the Plaintiff, the Plaintiff has got examined 4 witnesses as P.Ws.1 to 4 and got marked Exs.P.1 to P.433.
7. In order to prove the contentions of the Defendants, the Defendants have got examined 4 witnesses as DWs. 1 to 4 and got marked Exs.D.1 to D.137.
13Com.O.S.No.7385/2009
8. I have heard arguments of the learned Advocate for Plaintiff Sri.D. Ferdinand, the learned Advocate for Defendants 1 to 3 Smt. B.V.Nidhishree and the learned Advocate for Defendant No.4 Sri. Chinnappa. Among them, the learned Advocate for Defendants 1 to 3 submitted her arguments through Video Conferencing. The Advocates for the Plaintiff and 4th Defendant have submitted their separate Written Arguments.
9. My findings on the above issues are as follows:-
Issue No.1 : In the Affirmative Issue No.2 : In the Affirmative Issue No.3 : In the Affirmative Issue No.4 : In the Affirmative Issue No.5 : In the Affirmative Issue No.6 : In the Affirmative Issue No.7 : As per the final Order for the following reasons.
REASONS
10. Issue No. 1: - The controversy between the parties is about the supply of alleged defective materials by the 4 th Defendant through Defendants Nos.1 to 3 to the Plaintiff. The 4th Defendant has contended that the Plaintiff issued its purchase 14 Com.O.S.No.7385/2009 orders to the Defendant Nos.1 to 3 and Micro CNC Technologies Pvt. Ltd., for the procurement and machining of raw forgings and subsequent supply of the so machined forgings, that the 4 th Defendant is neither privy to nor bound by the terms and conditions of the Plaintiff's purchase orders, that for any breach of the Plaintiff's purchase orders and any defects in the said machined forgings, the Defendant Nos. 1 to 3 along with Micro CNC Technologies only liable.
11. In order to decide the said controversy, now I discuss about the oral evidence adduced by the Plaintiff.
12. The P.W.1 is the Power of Attorney holder of the Plaintiff company and he has reiterated the contentions of the Plaintiff in his evidence. The P.W.2 is the Technical Talent Development Manager at M/s Exova (UK) Ltd., and he is an expert and he has deposed that the components under testing and evaluation failed to meet the industry and Plaintiff's requirements for reasons stated in the Test Certificates marked as Ex.P.149 to 161, that the components that failed the testing and evaluation procedure cannot be used in cohesion with any other component to form a single mechanical unit in the nature of a valve as it would in all probability lead to break down of the unit. The P.W.3 is the 15 Com.O.S.No.7385/2009 authorised person of the Plaintiff company and he has deposed that during the pendency of the matter for evidence on the side of the Defendant, the Plaintiff has obtained Ex.Ps. 429 to 433, under the provisions of Right to Information Act, from SAIL which shows that the 4th Defendant has not purchased the raw materials from SAIL. It is to be noted here that the P.W.3 has not been cross- examined by the Defendants. The P.W.4 is the Assistant General Manager, Personnel and HRD in SAIL-VISL, Bhadravathi and has deposed that the Ex.P.119 & 203 Test Certificates have not been issued by SAIL. He has also deposed that the Ex.D.4 is not issued by SAIL-VISL. It is to be noted here the P.W.4 has not been cross- examined by the Defendants. Hence, the evidence of P.W.3 & 4 is unchallenged.
13. With this background, I now appreciate the some of the relevant documentary evidence produced by both parties by arranging them in chronological order, with reference to the oral evidence adduced by the parties.
14. Ex.P. 15 is the Technical specification of raw material ENG008 issued by the Plaintiff to all the Defendants.
16Com.O.S.No.7385/2009
15. Ex.D.72 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 25.02.2008, issued to M/s CNC Technologies (P) Ltd. Ex.D.57 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 28.02.2008, issued to M/s CNC Technologies (P) Ltd. Ex.D.58 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 29.02.2008, issued to M/s CNC Technologies (P) Ltd. Ex.D.59 & 60 are the Tax Invoices cum Delivery Challans from 4th Defendant dated 13.03.2008, issued to M/s CNC Technologies (P) Ltd. Ex.D.61 & 62 are the Tax Invoices cum Delivery Challans from 4th Defendant dated 15.03.2008, issued to M/s CNC Technologies (P) Ltd. Ex.D.63 is the Tax Invoice cum Delivery Challan from 4th Defendant dated 11.04.2008, issued to M/s CNC Technologies (P) Ltd.
16. Ex.D.86 is the Purchase Order issued by the 1 st Defendant to 4th Defendant dated 26.04.2008, for the material of the above- mentioned specification LF2 ENG 008. In Ex.D.86 it is specifically mentioned that the components should be free from cracks/blow holes etc. and that if any rejections rejected pieces will be sending back for replacement, that original Mill Certificate and Material Test Certificate to be sent along with the material itself.
17Com.O.S.No.7385/2009
17. Ex.D.30 is the Test Certificate dated 07.05.2008 issued by 4 th Defendant to 3rd Defendant. In turn, the 3rd Defendant has issued Certificate of Conformity based on Ex.D.30, as per Ex.P. 141 to the Plaintiff, on 05.02.2009. The D.W.4 has deposed during his cross- examination by the learned Advocate for the Plaintiff that as per Ex.P.30 & 31, after finalizing only the 4 th Defendant has decided to raise the supply parts to local customers. The same indicates the terms of contract between the parties.
18. Ex.D.38 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 07.05.2008, issued to 3 rd Defendant. Ex.P. 126, 128 & 129 are the Certificates of Conformity issued by 2 nd Defendant along with the Test Certificate of the 4 th Defendant dated 20.05.2008.
19. Ex.D.87 is the Purchase Order from 1 st Defendant to the 4th Defendant dated 24.06.2008. Ex.D.88 is the Purchase Order from 1st Defendant to the 4th Defendant dated 02.07.2008.
20. Ex.D.12 is the Test Certificate issued by SAIL dated 13.08.2008. Ex.D.64 is the Tax Invoice cum Delivery Challan from the 4th Defendant dated 02.09.2008. Ex.D.65 is the Tax Invoice cum Delivery Challan from the 4th Defendant dated 05.09.2008. Ex.D.66 is the Tax Invoice cum Delivery Challan from the 4 th 18 Com.O.S.No.7385/2009 Defendant dated 20.09.2008. Ex.D.90 is the Purchase Order from 1st Defendant to 4th Defendant dated 26.09.2008. Ex.D.89 is the Purchase Order from 1st Defendant to the 4th Defendant dated 29.09.2008. Ex.D.91 to 93 are the Purchase Orders from 1 st Defendant to the 4th Defendant dated 24.10.2008.
21. Ex.D.31 is the Test Certificate dated 06.11.2008 issued by the 4th Defendant to the 3rd Defendant. In turn, the 3rd Defendant has issued Certificate of Conformity based on Ex.D.31, as per Ex.P.140 to the Plaintiff, on 05.02.2009.
22. Ex.D.39 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 06.11.2008, issued to 3rd Defendant.
23. Ex.D.29 is the Test Certificate dated 10.12.2008 issued by the 4th Defendant to the 3rd Defendant. In turn, the 3rd Defendant has issued Certificate of Conformity based on Ex.D.29, as per Ex.P.142 & 143 to the Plaintiff, on 05.02.2009.
24. Ex.D.37 is the Tax Invoice cum Delivery Challan from 4 th Defendant dated 10.12.2008, issued to 3rd Defendant.
25. Ex.D.3 & 24 are the Test Certificates issued by SAIL to 4 th Defendant dated 17.12.2008.
19Com.O.S.No.7385/2009
26. Ex.P.78 to 86 are the purchase orders from Plaintiff to Defendant No.2 & 3 dated 23.12.2008. Ex.D.10, 19 to 21 are the similar purchase orders dated 23.12.2008.
27. Ex.D.11 is the purchase order from 2 nd Defendant to 4th Defendant dated 26.12.2008.
28. Ex.P.125 is the Certificate of conformity by 2 nd Defendant along with the Test Certificate of 4 th Defendant dated 29.12.2008. The same is also marked as Ex.D.13.
29. Ex.P.127, 136 to 138 are the Certificate of conformity by 2 nd Defendant along with the Test Certificate of 4 th Defendant dated 29.12.2008. The same is also marked as Ex.D.15.
30. Ex.D.14 is the Invoice dated 29.12.2008 by 4 th Defendant to 2nd Defendant. Ex.D.23 is the amendment to the purchase order dated 29.12.2008. Ex.P.139 is the Certificate of conformity by 2 nd Defendant along with Test Certificate of 4 th Defendant dated 30.12.2008.
31. Ex.P.65 is the purchase order from Plaintiff to 1 st Defendant dated 07.01.2009. Ex.P.84 is the purchase order from Plaintiff to 20 Com.O.S.No.7385/2009 Defendant No.2 dated 07.01.2009. Ex.D.94 is the purchase order from 1st Defendant to 4th Defendant dated 07.01.2009.
32. Ex.D.53 & 54 are the Invoices by 3 rd Defendant on the Plaintiff dated 08.01.2009. Ex.P.67 is the purchase order from Plaintiff to 1st Defendant dated 09.01.2009. The same is also marked as Ex.D.1. Ex.P.69 to 71 and Ex.D.95 are the purchase orders from Plaintiff to Defendant No.1 dated 09.01.2009. Ex.P.96 & 97, 68, 72 to 76 are the purchase orders between the Plaintiff and Defendant No.1 dated 12.01.2009. Ex.P.114 is the certificate of conformity by 1st Defendant along with the Test Certificate of Defendant No.4 dated 16.01.2009. Ex.D.118 is the Test Certificate referred to in Ex.P.114. Ex.D.101, 67 & 68 are the Tax Invoice cum Delivery challan by 4th Defendant on 1st Defendant dated 16.01.2009.
33. Ex.D.2 is the purchase orders raised by 1 st Defendant on 4th Defendant dated 20.01.2009. Ex.P.134 is the Certificate of conformity by 2nd Defendant along with Test Certificate of 4 th Defendant dated 28.01.2009. Ex.P.77 is the purchase order from Plaintiff to Defendant No.1 dated 29.01.2009. Ex.P.101 is the invoice by 2nd Defendant on the Plaintiff dated 29.01.2009. Ex.P.130 & 132 are the Certificate of conformity by 2 nd Defendant 21 Com.O.S.No.7385/2009 along with the Test Certificate of 4 th Defendant dated 29.01.2009. Ex.D.99 is the purchase order from 1st Defendant to the 4th Defendant dated 29.01.2009.
34. Ex.P.102 is the Invoice by 2nd Defendant on the Plaintiff dated 31.01.2009. The same is also marked as Ex.D.16. Ex.P.103 is the Invoice by 2nd Defendant on the Plaintiff dated 31.01.2009. Ex.D.100 is the Tax Invoice cum Delivery Challan by 4 th Defendant on 1st Defendant dated 31.01.2009. Ex.P.87 is the Invoice from 1 st Defendant on the Plaintiff dated 04.02.2009. Ex.P.111 is the Invoice dated 04.02.2009 by the 2nd Defendant on the Plaintiff. Ex.D.45, 47 & 48 are the certificate of conformity issued by 3 rd Defendant dated 05.02.2009. Ex.D.49 is the Invoice by 3 rd Defendant on Plaintiff dated 05.02.2009. Ex.P.88 is the Invoice from 1st Defendant on the Plaintiff dated 06.02.2009. Ex.P.131 & 133 are the Certificate of conformity by 2 nd Defendant along with Test Certificate of Defendant No.4 dated 09.02.2009. Ex.D.74 & 75 are Tax Invoice cum Delivery Challan from 4 th Defendant dated 09.02.2008.
35. Ex.P.115 is the Certificate of conformity by Defendant No.1 along with Test Certificate of Defendant No.4 dated 13.02.2009. Ex.D.119 is the Test Certificate referred to in Ex.P.115. Ex.D.102 is 22 Com.O.S.No.7385/2009 the Tax Invoice cum Delivery challan by 4th Defendant on 1st Defendant dated 13.02.2009.
36. Ex.P.148 is the Certificate of conformity by 3rd Defendant along with the Test Certificate of 4 th Defendant dated 14.02.2009. Ex.D.28 is the Test Certificate referred to in Ex.P.148. The D.W.4 during his cross-examination has deposed that he cannot say the exact dates without looking to the records when the steel was purchased from the Steel Authority of India for the purpose of supplying the materials to the Plaintiff in this case, that he cannot say how many months prior the steel was purchased before the materials were supplied to the Plaintiff, that he cannot say on going through Ex.P.148 the dates when the Test Certificate along with the Test Certificate of Steel Authority of India was received, that he does not know if the date mentioned by the Steel Authority of India on the Test Certificate is connected with the supplies made or not, that sometimes the 4th Defendant purchased steel from the Steel Authority of India and keep it with the 4 th Defendant and utilize it for making forgings whenever the 4 th Defendant received the orders and sometimes only after the receipt of the orders the 4th Defendant would purchase the steel from Steel Authority of India, that in the instant case she does not remember whether the steel was purchased and kept before the order was placed by the 23 Com.O.S.No.7385/2009 Plaintiff or was it purchased when the actual order was placed by the Plaintiff.
37. Ex.D.36 is the Tax Invoice cum Delivery challan by 4 th Defendant on 3rd Defendant dated 14.02.2009. Ex.P.89 is the Invoice from 1st Defendant on the Plaintiff dated 16.02.2009. Ex.P.135 is the certificate of conformity by 2nd Defendant along with Test Certificate of 4th Defendant dated 17.02.2009. Ex.D.76 is the Tax Invoice cum Delivery challan from 4 th Defendant dated 17.02.2008. Ex.P.104 is the Invoice by 2 nd Defendant on the Plaintiff dated 19.02.2009. Ex.P.146 is the Certificate of conformity by 3rd Defendant along with the Test Certificate of 4 th Defendant dated 19.02.2009. Ex.D.27 & 120 are the Test Certificates referred to in Ex.P.146. Ex.D.103, 35, 77 & 78 are the Tax Invoice cum Delivery challan by 4th Defendant on Defendant No.1 & 3 dated 19.02.2009.
38. Ex.P.116 is the Certificate of conformity by 1 st Defendant along with Test Certificate of 4 th Defendant dated 20.02.2009. Ex.D.121 is the Test Certificate referred to in Ex.P.116. The D.W.4 during his cross-examination by the learned Advocate for the Plaintiff has deposed that the Test Certificates issued by the Steel Authorities pertains to a chemical values, that the suppliers will 24 Com.O.S.No.7385/2009 give the heat number which is unique to that product and the same will be stamped even on the said product. However, he has denied the suggestion of the learned Advocate for the Plaintiff that the 4th Defendant also give the same heat number to the customers of the 4th Defendant in order to show that the said unique product has been supplied. The D.W.4 has further deposed that in Ex.P.116 the Certificate bears the same unique number 57240, and that the 4th Defendant will mention the same number in the certificate issued by 4 th Defendant while supplying it to the customers of 4th Defendant to show that the same materials has been supplied. The 4th Defendant has admitted the suggestion put to him by the learned Advocate for the Plaintiff that if the Test Certificate given by the supplier is improper the values on the further test on the same materials do not match.
39. Ex.D.104 and 79 are the Tax Invoice cum Delivery challan by 4th Defendant on 1st Defendant dated 20.02.2009. Ex.D.80, 81 and 82 are the Tax Invoice cum Delivery challan by 4 th Defendant dated 21.02.2009. Ex.P.147 is the Certificate of conformity by 3 rd Defendant along with Test Certificate of 4 th Defendant dated 24.02.2009. Ex.D.32, 69, 70, 83 & 84 are the Tax Invoice cum Delivery challan by 4th Defendant on 3rd Defendant dated 24.02.2009.
25Com.O.S.No.7385/2009
40. Ex.P.117 to 119 are the Certificate of conformity by 1 st Defendant along with Test Certificate of 4 th Defendant dated 25.02.2009. Ex.D.122 to 124 are the Test Certificates referred to in Ex.P.117 to 119. However, the P.W.4 has deposed that the SAIL- VISL has not issued the said Test Certificate in Ex.P.119.
41. Ex.D.105 to 109 & 85 are the Tax Invoice cum Delivery challan by 4th Defendant on 1st Defendant dated 25.02.2009.
42. Ex.P.112 is the Invoice by the 2 nd Defendant on the Plaintiff dated 26.02.2009. Ex.P.120 is the Certificate of Conformity by 1 st Defendant along with Test Certificate of Defendant No.4 dated 26.02.2009. The same document is also marked as Ex.D.6. Ex.D.4 is the Test Certificate referred to in Ex.P.120. The certified copy of Ex.D.4 is again marked as Ex.D.125.
43. It is to be noted that the P.W.4 has deposed that the said Ex.D.4 is not issued by SAIL. The said evidence of P.W.4 is unchallenged. Hence, the said evidence of D.W.4 cannot be accepted at all and the Ex.D.4 is also not issued by SAIL and hence no sanctity can be attached any of the Test Certificates issued by and relied upon by the 4th Defendant.
26Com.O.S.No.7385/2009
44. Ex.P.156 & 157 are the copies of the Original Test Certificates issued by Exova (UK) dated 17.07.2009, stating that the Exova Salford Materials Testing failed to comply with specifications.
45. Ex.P.160 is the copy of the Original Test Certificate issued by Exova (UK) dated 28.07.2009.
46. Ex.P.161 is the copy of the Original Test Certificate issued by Exova (UK) dated 04.08.2009. Ex.P.155 is the copy of the Original Test Certificate issued by Exova (UK) dated 05.08.2009. Ex.P.152, 153 & 154 are the copies of the Original Test Certificates issued by Exova (UK) dated 10.08.2009. Ex.P.149 & 151 are the copies of the Original Test Certificates issued by Exova (UK) dated 12.08.2009. Ex.P.150 is the copy of the Original Test Certificate issued by Exova (UK) dated 14.08.2009.
47. Ex.P.158 is the copy of the Original Test Certificate issued by Exova (UK) dated 21.08.2009.
48. Ex.P.159 is the copy of the Original Test Certificate issued by Exova (UK) dated 27.08.2009.
27Com.O.S.No.7385/2009
49. When such being the case, the 4th Defendant issued a legal notice to 1st Defendant on 28.09.2009 as per Ex.D.8 making allegations against 1st Defendant for not conducting independent testing and calling upon to pay Rs.7,66,296/- with interest.
50. Thereafter, on 30.09.2009 the 4th Defendant issued a legal notice as per Ex.D.17 to the 2nd Defendant making allegations against 2nd Defendant for not conducting independent testing and calling upon to pay Rs.40,63,444/- with interest. The same legal notice is again marked as Ex.D.136.
51. On the same day the 4th Defendant issued a legal notice as per Ex.D.55 to 3rd Defendant making similar allegations and calling upon to pay Rs.6,80,121/- with interest. The same legal notice is again marked as Ex.D.135.
52. Thereafter, on 13.10.2009, Plaintiff has issued a legal notice to the Defendants as per Ex.P.3. In Ex.P.3, the Plaintiff has made similar contentions which are taken in the Plaint. He has also called upon to pay Rs.6,01,32,918/- from the Defendants.
53. The 1st Defendant issued the reply to Ex.D.8 notice on 13.10.2009 as per Ex.D.9. The 2 nd Defendant issued reply to 28 Com.O.S.No.7385/2009 Ex.D.17 notice on 30.10.2009 as per Ex.D.18. The 3 rd Defendant issued reply to Ex.D.55 notice on 30.10.2009 as per Ex.D.56.
54. The 1st Defendant issued reply to the Ex.P.3/legal notice issued by the Plaintiff as per Ex.P.8 on 01.11.2009. The 2 nd Defendant issued reply to the Ex.P.3/legal notice issued by the Plaintiff as per Ex.P.10 on 05.11.2009. The 3 rd Defendant issued reply to the Ex.P.3/legal notice issued by the Plaintiff as per Ex.P.9 on 05.11.2009. However, the reply if any sent by the 4 th Defendant is not marked as exhibit in this case. Henc,e the 4 th defendant has impliedly admitted the contents of Exs.P.3 Notice.
55. Thereafter, on 18.11.2009, the Plaintiff has filed this suit against the Defendants.
56. After filing of this suit, the 4 th Defendant has sent a response to Ex.D.9/Reply Notice of the 1st Defendant on 15.12.2009 as per Ex.D.132. This is an internal correspondence between the 1 st Defendant and 4th Defendant. It is to be noted here that the 4 th Defendant has not sent any reply to Ex.P.3/Legal Notice issued by the Plaintiff, and that he has impliedly admitted the contents of Exs.P.3 Notice.
29Com.O.S.No.7385/2009
57. Ex.P.200 to 318 are the documents relating to costs incurred by the Plaintiff. Ex.P.320 to 385 are the documents relating to replacement of the alleged defective goods.
58. The Plaintiff has contended that the 4 th Defendant supplied defective raw materials and falsely certified as high quality material. The 4th Defendant has contended that the Plaintiff has failed to prove that the machined parts supplied to it by the Defendants No.1 to 3 were machined from the same forgings that were supplied to them by the 4 th Defendant. Having contended so, the 4th Defendant has relied upon several test reports as mentioned above and as contended that he had not supplied any defective forgings. During the cross-examination of D.W.4 by the learned Advocate for the Plaintiff, he has deposed that the 4 th Defendant has not replied to any of the Emails sent by the Plaintiff denying that the materials supplied to the machine shops are not belonging to D.W.4 and that the 4th Defendant was informed that the goods sent by the 4th Defendant to U.K. were defective. Further, during the course of cross-examination of D.W.1 by the learned Advocate for the 4th Defendant it is elicited that in the present case Plaintiff had instructed to source the forgings from 4 th Defendant. When such being the case, the said contention of the 4th Defendant cannot be accepted at all.
30Com.O.S.No.7385/2009
59. According to the 4th Defendant, there is no privity of contract between the Plaintiff and 4th Defendant. However, as discussed by me earlier there were several exchange of Emails between the Plaintiff and 4th Defendant. For the said aspect, the D.W.4 in his Affidavit filed in-lieu of oral Examination-in-Chief, at Para No.1 has deposed as follows :-
"..... In spite of the same when the Plaintiff had raised issues about the machined parts that were supplied by the Defendants No.1 to 3 and Micro CNC to the Plaintiff, this Defendant had responded to these requests only in good faith and with a noble intention to try and resolve the issues as this Defendant's money was stuck due to the dispute".
60. From the above evidence, the 4th Defendant has admitted that he has responded to the Plaintiff about the said issues/requests.
61. Further, at Para No.2 of the said Affidavit, the D.W.4 has deposed as follows :-
"..... While the Plaintiff and this Defendant were negotiating on the certain commercial terms pertaining to the supply of forgings, the Plaintiff had made it very clear that as soon as it raises orders for machined components on to its machine shops being Defendants No.1 to 3 and 31 Com.O.S.No.7385/2009 Micro CNC, these Defendants would intern place local purchase orders and take over supply. Thus it is apparent that the Defendant No.4 had agreed to supply the forgings to the Defendant Nos. 1 to 3 and Micro CNC upon them raising a purchase order on this Defendant. It is also pertinent to note that the Defendant No.1 to 3 and Micro CNC were only referred to this Defendant by the Plaintiff".
62. From the said evidence, the D.W.4 has admitted that there were negotiations between the Plaintiff and 4 th Defendant on certain commercial terms pertaining to the supply of forgings.
63. Further, at Para No.3, D.W.4 has deposed as follows :-
"Pursuant to the Plaintiff confirming their orders with the Defendants No.1 to 3 and Micro CNC, the said Defendants approached the Defendant No.4 and had business discussions. Based on the understanding arrived at between the Defendant No.4 and the Defendants No.1 to 3 and Micro CNC, the Defendant No.4 agreed to supply forgings to them. Subsequent to the said understanding the Defendants No.1 to 3 and Micro CNC approached this Defendant on several occasions and placed Purchase Orders with it for supply of forgings, copies of which are produced herewith. The Defendants No.1 to 3 as well as Micro CNC had provided this Defendant with the details of specifications that were to be complied with in this regard. This Defendant had accordingly supplied the forgings worth several lakhs of Rupees to these Defendants who were the suppliers of the Plaintiff. The forgings so supplied adhered to the quality regulations as applicable and were 32 Com.O.S.No.7385/2009 in accordance with the specifications that were provided to the Defendant No.4 by the Defendants No.1 to 3 and Micro CNC. In this regard this Defendant has done all the necessary testings to ensure that there are no defects or deviations in the raw forgings supplied by it to the Defendants No.1 to 3 and Micro CNC. In support of the same this Defendant has furnished the required certificates wherein their tested results have been mentioned copies of which have also been furnished to the Defendants No.1 to 3 and Micro CNC, which are being produced herewith".
64. However, this evidence is disproved by the evidence of P.W.4. Further, at Para No.4 of the said Affidavit he has admitted that the Plaintiff informed that certain machined parts supplied to it by the Defendants No.1 to 3 and Micro CNC were not in accordance with the specification provided by it. He has further deposed at Para No.5 of the said Affidavit that the 4 th Defendant in good faith agreed to the proposals of Defendants No.1 to 3 and Micro CNC to rectify the defective forgings. Further, the D.W.4 has referred to a meeting held on 27.03.2009 and in the said meeting it was agreed by the parties that the DBB shipments made from the 4 th Defendant shall be witnessed by the Plaintiff's persons for quality requirements and no further complaints will be taken into account thereafter.
33Com.O.S.No.7385/2009
65. It is to be noted that during course of cross-examination of D.W.1, the learned Advocate for the 4th Defendant has confronted the above-mentioned Ex.D.8 & 9, Legal Notices exchanged between the 1st Defendant and 4th Defendant and cross-examined the said aspect in length, which is not at all relevant to decide the controversy between the Plaintiff and the Defendants and thereby wasted the judicial time of the Court and also abused the process of Court. The same tactics were made during the cross- examination of D.W.2 & 3 by confronting Ex.D.17 & Ex.D.55 to the said witnesses.
66. The learned Advocate for the Defendant No.4 has vehemently argued that all the Purchase Orders were issued by the Plaintiff in favor of Defendants 1 to 3 only and all the Invoices were raised by the Defendants 1 to 3 only in favor of the Plaintiff and that there is no direct transaction between the Plaintiff and 4 th Defendant and hence, there is no privity of contract between the Plaintiff and the 4th Defendant. He has also argued that neither in the pleading nor in the evidence, the Plaintiff has contended about any oral contract between the Plaintiff and 4 th Defendant and only during the course of arguments, the learned Advocate for the Plaintiff by relying on certain decisions has contended that there is an oral contract and hence, the same cannot be accepted. He has 34 Com.O.S.No.7385/2009 also argued that if any defective material is supplied by the Defendant No.4 to the Defendants 1 to 3, the Defendants 1 to 3 should have taken legal action against the 4 th Defendant and no such legal action has been initiated by the Defendants 1 to 3 against the 4th Defendant, per contra, the 4 th Defendant has taken legal action against the Defendants 1 to 3 for breach of terms of contract, that the said conduct of the Defendants interse, itself shows that the materials supplied by the 4 th Defendant were not defective. He has also argued that the forgings supplied by the 4th Defendant machinised by the Defendants 1 to 3 and it underwent a process of change and hence, if any defective material after such process was delivered by the Defendants 1 to 3 to the Plaintiff, the 4th Defendant is not at all liable to the same.
67. In support of the said arguments, the learned Advocate for the 4th Defendant has relied on a decision reported in 2015 (10)- S.C.C. - 642 (Essar Oil Limited vs. Hindustan Shipyard Limited and others), wherein it is held that when a corporation grants a contract to a construction firm, the sub-contractors cannot sue the corporation for its dues, that the sub-contractors have no privity of contract with the corporation. Stating so, the Hon'ble Supreme Court exempted Oil and Natural Gas Corporation (ONGC) from paying the amount in the arbitral award to a sub-
35Com.O.S.No.7385/2009 contractor in the said case. In the said case, ONGC granted a contract to Hindustan Shipyard to carry out work of fabrication, skidding, sea fastening, transportation at various stations in the coastal areas. Hindustan Shipyard gave a sub-contract to Essar Oil. While the work was in progress, Essar was given some amounts by ONGC as it wanted the project to be completed faster. Later disputes arose between Essar and Hindustan Shipyard. The issues were referred to arbitration. By majority, the tribunal decided that Essar Oil's demand should be met by Hindustan Shipyard. Against this, the latter moved the Hon'ble High Court of Andhra Pradesh. It ruled that all the three had contractual obligations and therefore Essar could get its dues from ONGC. Thus the Hon'ble High Court quashed the award. Essar moved the Hon'ble Supreme Court. It set aside the order of Hon'ble High Court and upheld the majority view of the tribunal. The judgment noted that ONGC, in its anxiety to complete the project, had paid amounts to Essar several times and there was correspondence in this regard. However, "only for that reason ONGC cannot be saddled with a liability to pay the amount payable to Essar," and further held that Hindustan Shipyard will make the payment to its sub-contractor.
68. The learned Advocate for the 4th Defendant has also relied on a decision reported in A.I.R. - 1938 - P.C. - 26 (Ottoman 36 Com.O.S.No.7385/2009 Bank of Nicosia vs. Ohanes Chakarian), wherein it is held as follows :-
"... that if the contract is clear and unambiguous, its true effect cannot be changed merely by the course of conduct adopted by the parties in acting under it."
69. The learned Advocate for the 4th Defendant has also relied on a decision reported in A.I.R. - 1952 - S.C. - 9 ( Ganga Saran vs. Firm Ram Charan Ram Gopal) wherein a four-Judge Bench of the Hon'ble Supreme Court has held as follows :-
"6. ... Since the true construction of an agreement must depend upon the import of the words used and not upon what the parties choose to say afterwards, it is unnecessary to refer to what the parties have said about it."
70. He has also relied on the decisions reported in I.L.R. - 1996
- KAR - 2837 (Commissioner of Income Tax, Karnataka - I vs. Motor Industries Company Ltd.,) and 2016 (1) S.C.C. - 762 - (K.Nanjappa vs. R.A.Hameed @ Ameersab (D) by Lrs. & Others).
71. Per Contra, the learned Advocate for the Plaintiff has relied on the decisions reported in 1999 (1) - S.C.C. - 1 (Rickmers 37 Com.O.S.No.7385/2009 Verwaltung GMBH vs. Indian Oil Corporation Ltd.) and 2015 (13) - S.C.C. - 477 (Govind Rubber Limited vs. Louis Dreyfus Commodities Asia Pvt. Ltd.,) wherein it is held that an agreement even if not signed by the parties can be spelt out from correspondence exchanged between the parties, that it is duty of Court to construe correspondence with a view to arrive at the conclusion whether there was any meeting of minds between the parties which could create a binding contract between them, and that it is necessary for the Court to find out from correspondence as to whether parties are ad idem to terms of contract.
72. In the said circumstances, I now propose to discuss about the contention regarding privity of contract between the Plaintiff and 4th Defendant by considering the legal effect about various Emails exchanged between the parties.
73. Sections 4 and 6 of the Information Technology Act, 2000 provide for legal recognition of electronic records and their use in Government and its agencies. Section 10-A of the said Act specifically provides for validity of contract through electronic means and accordingly provides that such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose. Section 12 of 38 Com.O.S.No.7385/2009 the said Act provides for acknowledgment of receipt including in an automated manner. Section 13 of the said Act provides for time and place of dispatch and receipt of electronic records. Upon careful consideration of all these provisions, it is seen that electronic records have been provided with full legal recognition.
74. Under the provisions of the Information Technology Act, 2000 particularly Section 10-A, an electronic contract is valid and enforceable, which states as follows:-
"Section 10-A: Validity of contracts formed through electronic means:- Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose."
75. E-Contracts can be entered into through modes of communication such as e-mail, internet and fax. The only essential requirement to validate an E-Contract is compliance with the necessary pre-requisites provided under the Indian Contract Act, 1872.
39Com.O.S.No.7385/2009
76. The evidenciary value of e-contracts can be well understood in the light of the Sections 85A, 85B, 88A, 90A and 85C deals with the presumptions as to electronic records whereas Section 65B relates to the admissibility of electronic record. In the present case,there is no dispute about the admissibility of various e-mails exchanged between the parties, no objections raised during the marking of said e-mails as exhibits. Further, in the course of arguments as well as in the written arguments, both parties relied on the said e-mails.
77. Formation of contracts online via emails has been recognized and given validity to by the Indian courts time and again. In the decision reported in 2010(1) - SCALE - 57 (Trimex International FZE Limited, Dubai vs. Vendata Aluminium Ltd.), the parties thoroughly agreed to the terms of the contract via emails. The Hon'ble Supreme Court upheld the validity of this contract and further held as follows:-
"Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initiated by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initiated."
78. In the said case, the Hon'ble Supreme Court after going 40 Com.O.S.No.7385/2009 through the various E-mails exchanged between the parties including an E-mail attaching the draft contract, which remained unsigned, opined as follows:-
"44. From the materials placed, it has to be ascertained whether there exists a valid contract with the arbitration clause. It is relevant to note that on 15- 10-2007 at 4.26 p.m. the petitioner submitted a commercial offer wherein Clause 6 contains the arbitration clause i.e. "this contract is governed by Indian law and arbitration in Mumbai courts". At 5.34 p.m. though the respondents offered their comments, as rightly pointed out by Mr K.K. Venugopal, no comments were made in respect of the "arbitration clause". It is further seen that at 6.04 p.m., the petitioner sent a reply to the comments made by the respondent. Again, on 16-10-2007 at 11.28 a.m., though the respondents suggested certain additional information on the offer note, here again no suggestion was made with regard to the arbitration clause...........".
79. The Hon'ble Supreme Court in the decision reported in (2001) 7 SCC 328 (Smita Conductors Limited vs. Euro Alloys Limited), has commented about two contracts and held that one of the party had in his mind those contracts while opening the letters of credit and while addressing the letters to the bank in that regard and had also invoked force majuere clause in those contracts which would obviously mean that the parties had in their mind those two contracts which stood formed by those letters of credit. It is held by the Hon'ble Supreme Court that if two 41 Com.O.S.No.7385/2009 contracts stood affirmed by reason of conduct of the parties as indicated in the letters exchanged, it must be held that there was an agreement in writing between the parties in that regard. The said judgment of the Hon'ble Supreme Court was specifically approved by the Hon'ble Supreme Court in its subsequent above- mentioned decision reported in 2010(1) - SCALE - 57 (Trimex International FZE Limited, Dubai vs. Vendata Aluminium Ltd.),
80. In another decision reported in (2009) 2 - S.C.C. - 134 (Shakti Bhog Foods Ltd. vs. Kola Shipping Ltd .) the Hon'ble Supreme Court has held as follows:-
"The existence of an arbitration agreement can be inferred from a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication, which provide a record of the agreement".
81. Therefore, the correspondence through email can be considered as a valid binding agreement/contract between the parties and hence, the contention of the 4 th Defendant that there is no privity of contract between the Plaintiff and 4th Defendant, cannot be accepted at all.
42Com.O.S.No.7385/2009
82. In the present case, the details of Email correspondence exchanged between the parties are as follows :-
Ex.P.16 is the Email correspondence from Plaintiff to 4 th Defendant containing LF2 requirements dated 13.12.2008. Ex.P.17 & 18 are the Email correspondence from 4 th Defendant to the Plaintiff containing corrected prices dated 15.12.2008. Ex.P.19 is the Email correspondence dated 16.12.2008 from Defendant No.4 to the Plaintiff stating that the prices are acceptable and requested to place order. Ex.P.20 to 22 are the Email correspondence from Plaintiff to Defendant No.4 dated 16.12.2008 which contain offer and acceptance of prices to place order. The D.W.4 during his cross-examination by the learned Advocate for the Plaintiff has denied the suggestion that as per Ex.P.22 the Plaintiff has sent the Email stating that "to appreciate if he performed well in this project", and that the Plaintiff has supplied finished parts sizes to 4th Defendant. He has deposed that he is unable to say about the Emails that are sent by Sri.Ritesh Gupta. The said evidence of DW.4 is evasive.
83. Ex.P.23 is the Email correspondence from Defendant No.4 to the Plaintiff dated 16.12.2008 accepting the offer of the Plaintiff. Ex.P.30 & 31 are the Email correspondence from 4 th Defendant to Plaintiff dated 18.12.2008. In the said correspondence the 4 th 43 Com.O.S.No.7385/2009 Defendant asked the Plaintiff for purchase order. Ex.P.32 is the Email correspondence from Plaintiff to 4th Defendant dated 18.12.2008. In the said correspondence the Plaintiff has informed that the purchase order will be released by Defendant Nos.1 to 3. This is complete answer to the arguments of the learned Advocate for the 4th Defendant tht there was no direct Purchase Order placed by the Plaintiff to the 4 th Defendant. The Ex.P.33 is the Email correspondence from Defendant No.4 to the Plaintiff dated 18.12.2008. Ex.P.34 & 35 are the Email correspondence from Plaintiff to Defendant No.4 dated 18.12.2008. Ex.P.37 is the Email correspondence from Defendant No.4 to Plaintiff dated 18.12.2008. Ex.P.24 is the Email correspondence from Plaintiff to Defendant No.4 dated 20.12.2008 with attachment of the body drawings.
84. Ex.P.43 is the Email correspondence from Defendant No.3 to Defendant No.4 containing corrected purchase order for 'sizes' towards supply of forged billets dated 26.12.2008. It is to be noted here that Ex.P.43 is also marked to Plaintiff. Ex.P.44 is the Email correspondence dated 26.12.2008 from 4 th Defendant to 3rd Defendant containing acceptance of the purchase order. Ex.P.45 is the Email correspondence dated 26.12.2008 from the Plaintiff to the 4th Defendant containing revised table containing reference 44 Com.O.S.No.7385/2009 drawings. Ex.P.46 is the Email correspondence dated 26.12.2008 from 2nd Defendant to Plaintiff containing purchase order for reference along with attachments. Ex.P.38 is the Email correspondence from Plaintiff to 4th Defendant dated 24.12.2008. Ex.P.39 is the Email correspondence from 3rd Defendant to Plaintiff and 4th Defendant dated 24.12.2008. As per Ex.P.39, the 3 rd Defendant raised the purchase order. Ex.P.40 is the purchase order amendment from 3rd Defendant to 4th Defendant dated 25.12.2008. Ex.P.41 is the Email correspondence from Plaintiff to Defendant No.4 containing request for revised prices dated 25.12.2008.
85. The D.W.4 has deposed during his cross-examination by the Advocate for the Plaintiff that he cannot say what Ex.P.41 Page No.2 conveys with the Plaintiff and it is only a drawing and that he does not know which drawing Ex.P.41 Page No.2 pertains to. The D.W.4 has further deposed that the drawing which is annexed to Ex.P.41 is signed by Sri. Ritesh Gupta, that the said Sri. Ritesh Gupta who has signed the second page of Ex.P.41 will be the proper person to speak about the said drawing.
86. Ex.P.42 is the Email correspondence from Plaintiff to Defendant No.4 dated 26.12.2008. The D.W.4 has deposed during 45 Com.O.S.No.7385/2009 his cross-examination by the learned Advocate for the Plaintiff that similar is the case of Ex.P.42 Page No.3 and that he is not able to see the contents of Ex.P.42 Page No.3 pertaining to pressure.
87. Ex.P.47 is the Email correspondence from 3 rd Defendant to 4th Defendant containing amended purchase order dated 29.12.2008. It is to be noted here that when Ex.P.47 was confronted to D.W.4, who is the director and authorised representative of the 4th Defendant, he admitted the contents of the last page of Ex.P.47 and the same is marked as Ex.P.47(a).
88. Ex.P.25 and 26 are the Email correspondence from Plaintiff to 4th Defendant dated 30.12.2008. Ex.P.27 is the Email correspondence from Plaintiff to 4th Defendant dated 31.12.2008. Ex.P.28 is the Email correspondence from 4th Defendant to Plaintiff dated 31.12.2008, which finalizes the terms. Ex.P.29 is the Email correspondence from Plaintiff to Defendant No.4 dated 07.01.2009. Ex.P.48 is the Email correspondence from Plaintiff to Defendant No.1 & 4 dated 07.01.2009. Ex.P.49 is the Email correspondence from Defendant No.1 to Defendant No.4 containing purchase order dated 07.01.2009.
46Com.O.S.No.7385/2009
89. Ex.P.50 is the Email correspondence dated 08.01.2009 from Plaintiff to Defendant No.4 containing orders to be placed along with target price and lead time. Ex.P.51 is the Email correspondence from Plaintiff to 4th Defendant containing transcript of Email dated 31.12.2008 on prices for particular components dated 08.01.2009.
90. Ex.P.52 is the Email correspondence from 1 st Defendant to 4th Defendant containing purchase order dated 09.01.2009. Ex.P.66 is the said purchase order referred to in Ex.P.52. Ex.P.53 is the Email correspondence from Plaintiff to 4 th Defendant containing request for price quotations dated 10.01.2009. Ex.P.54 is the Email correspondence from 4th Defendant to Plaintiff containing price quotations dated 10.01.2009. Ex.P.55 is the Email correspondence from Defendant No.3 to Defendant No.4 containing purchase order for supply of billets in LF2 material dated 10.01.2009.
91. Ex.P.56 & 57 are the Email correspondence from Defendant No.1 to Defendant No.4 containing purchase order dated 13.01.2009. Ex.D.98 is the purchase order referred to in Ex.P.56 &
57. Ex.P.58 is the Email correspondence from Plaintiff to Defendant No.4 containing order for billets dated 14.01.2009. Ex.P.59 is the Email correspondence from 3rd Defendant to 4th Defendant 47 Com.O.S.No.7385/2009 containing purchase order for supply of forgings dated 17.01.2009. Ex.P.60 is the Email correspondence from 1st Defendant to 4th Defendant containing amended purchase order dated 20.01.2009.
92. Ex.P.61 is the Email correspondence from 1 st Defendant to 4th Defendant containing pending orders dated 21.01.2009. Ex.P.62 is the Email correspondence from Plaintiff to Defendant No.1 dated 21.01.2009.
93. Ex.P.63 is the Email correspondence from 1 st Defendant to 4th Defendant containing purchase order dated 31.01.2009. Ex.P.64 is the Email correspondence from Plaintiff to 4 th Defendant requesting status of outstanding orders from 1 st Defendant dated 16.02.2009.
94. Ex.D.137 is an Email correspondence from Plaintiff dated 11.05.2009 about Test Results, which is marked subject to objection about Section 65-B of Indian Evidence Act.
95. Ex.P.162 is the Email from the Plaintiff to 4 th Defendant dated 24.07.2009, wherein the Plaintiff asked the 4 th Defendant about the explanation regarding the procedure followed for the testings.
48Com.O.S.No.7385/2009
96. Ex.P.164 is an Email correspondence from Plaintiff to 4 th Defendant dated 29.07.2009, complaining about defects.
97. Ex.P.188 to 197 are the Email correspondence dated 28.07.2009, 29.07.2009, 30.07.2009 & 31.07.2009 are the Internal communication of the Plaintiff, which elucidates the damages suffered by the Plaintiff in rectifying and resolving the quality issue due to 4th Defendant.
98. Ex.P.163 is the Email correspondence from 4 th Defendant to Plaintiff dated 30.07.2009. The D.W.4 during his cross-examination has deposed as follows :-
"It is not true to suggest that there was a contract between us and the Plaintiff to supply the forgings of ENG 008 specification. The witness volunteers that there was no any such contract between them or the Plaintiff. It is not true to suggest that even if there is no contract between us and Plaintiff we were required to supply ENG 008 specifications to the Defendant No.3 Balaji. It is true that if the specification is mentioned in the purchase order then we were required to supply as per the specifications. I do not remember whether we have sent any payment bills to the Plaintiff in respect of the material supplied to the other Defendants. It is true that I have sent the Email to the Plaintiff as per Ex.P.163 to release the amount. The witness volunteers that still he has not received the amount mentioned in Ex.P.163."49
Com.O.S.No.7385/2009
99. Therefore, it is very clear that in Ex.P.163/E-mail, the 4 th Defendant has requested the Plaintiff to release the amount in respect of the present transaction. If there was no privity of contract, the 4th Defendant would not have claimed such amount. Hence, the Ex.P.163 falsifies the contentions of the 4 th Defendant.
100. Ex.P.165 is a Email correspondence from Plaintiff to Defendant No.4 dated 14.08.2009 informing the forgings were not confirming to their specifications. The D.W.4 during his cross- examination has admitted that the contents of Ex.P.165, in which it is mentioned that the Plaintiff wanted the material to be further tested and he had asked him to come and participate.
101. Ex.P.166 is another Email correspondence dated 15.08.2009 from Plaintiff to 4th Defendant containing spread sheet attachments showing test results.
102. Ex.P.167 is another Email correspondence dated 19.08.2009 from Plaintiff to 4th Defendant complaining about the problems with forgings.
103. Ex.P.168 is an Email correspondence dated 20.08.2009 from Defendant No.4 to the Plaintiff. Ex.P.169 is a Email 50 Com.O.S.No.7385/2009 correspondence from Plaintiff to 4th Defendant dated 26.08.2009 requested to send a person to meet in U.K. about testing.
104. Ex.P.170 is the Email correspondence which is reply to Ex.P.165 Email dated 14.08.2009. Ex.P.170 is issued by the 4 th Defendant to the Plaintiff on 28.08.2009, requesting the Plaintiff to provide VISA. The D.W.4 has deposed during his cross-examination that he has replied to the Email stating that "I will send Mr. Pradeep to represent us in the said testing" as per Ex.P.170.
105. Ex.P.171 is the Email correspondence dated 03.09.2009 from Plaintiff to 4th Defendant asking when Mr. Pradeep will be visiting U.K. to help with the material problem. If there was no privity of contract, why the 4th Defendant agreed to provide VISA is unexplained. Hence, the said conduct of 4th Defendant itself shows that there was privity of contract between the parties.
106. Ex.P.173 is the Email correspondence dated 11.09.2009 from Plaintiff to 4th Defendant requiring financing reimbursement. Ex.P.198 is another letter sent by Plaintiff to 4 th Defendant dated 11.09.2009 regarding forgings were not confirming to their specifications.
51Com.O.S.No.7385/2009
107. Ex.P.174 is the Email correspondence dated 17.09.2009 from the Plaintiff to 1st Defendant about the issues with 4 th Defendant, who supplied the defective forgings.
108. It is to be noted that all these Email correspondence are the correspondence between the Plaintiff and Defendant Nos.3 and 4 in respect of the transaction involved in the present suit. These Email correspondence shows that there was meeting of minds between the parties and they were ad idem to the terms of the contract and that there is a privity of contract between the Plaintiff and 4th Defendant through 3rd Defendant. Further, all the ingredients of a valid contract is fulfilled in these e-mail correspondence and as per the ratio of the above-mentioned decisions, the court has to construe the terms and conditions if E- Contract as per Section 10-A of Information Technology Act, has to be formed and the same is formed in the present case.
109. In the said circumstances, it is proved that there is a valid contract between the Plaintiff and Defendant Nos. 1 to 4 under Section 10-A of Information Technology Act and hence the Defendants No.1 to 4 have to supply the forgings to the Plaintiff as per the specification mentioned in Ex.P.15.
52Com.O.S.No.7385/2009
110. It is the case of the Plaintiff that the end customer of the Plaintiff at Brazil complained that the said forgings did not comply with the said specifications and hence the materials supplied to the Plaintiff by the Defendants No.1 to 4 were defective or substandard. In order to prove the same, the Plaintiff has examined P.W.2/Dr. John Richard Wilcox, who is a Technical Talent Development Manager at M/s Exova (UK) Limited. He has deposed that the said company is in the business of specialist testing and advisory services, that in or around the month of June 2009, the Plaintiff approached for testing part of No.V3231 on trace code GMW 772 and on testing the Plaintiff was informed that the same were found defective and of substandard quality and different from the contractually agreed standards. Apart from his oral testimony, the Plaintiff has also produced Ex.P.149 to 161 Test Certificates issued by M/s Exova. Though the P.W.2 is cross-examined at length, by the learned Advocate for the Defendant No.4 and also the learned Advocate for the Defendant Nos.1 to 3 separately, nothing is elicited to disbelieve his oral testimony or the veracity of Ex.P.149 to 161. Further, during the course of cross- examination, it is further elicited the manner of testing and how the alleged defective material did not match the other parts of the machine etc. Further, during the cross-examination of the learned Advocate for the Defendant Nos.1 to 3, the P.W.2 has specifically 53 Com.O.S.No.7385/2009 deposed that the type of steel supplied is in capable of meeting the impact properties required by the Plaintiff and that the material supplied were not defective but were not appropriate for the use. He has further deposed that in Ex.P.160, it is not expressly stated about the not matching of the mechanical properties, but implicitly discloses about not matching of mechanical properties.
111. Therefore, from the evidence of P.W.2 and Ex.P.149 to 161, it is proved that the material supplied were not appropriate for use and that it is not in conformity with the specification of the Plaintiff, as mentioned in Ex.P.15.
112. In the said circumstances, I now propose to discuss about the effect of legal provisions on the said aspect.
113. Section 15 of the Sale of Goods Act, 1930 covers sale by description as in the case here where the description of the goods is the basis of the contract and it is essential to their identity as the subject matter of the contract, the case is one of sale of goods by description. In other words, the buyer must have contracted for them as described so that the falsity of the description made the goods substantially different things from those that were described so as to constitute a failure of consideration. Section 16 enacts 54 Com.O.S.No.7385/2009 that where goods are bought by description as in this case, as mentioned in Ex.P.15, there is an implied condition that the goods shall be of the said technical specification, i.e., ENG 008.
114. Section 12 of the Sale of Goods Act defines a condition and warranty. Section 12 (2) and (3) state:-
"(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.
(3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated."
115. Under Section 15 if there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description. Under Section 16(2) there is a further implied condition where there had been no previous inspection by the buyer, that the goods are of merchantable quality. The effect of these two definitions is to give a right or an occasion to the buyer to reject the goods in case what was tendered did not answer the description or was not of merchantable quality. The passing of property in the goods is not the test as to the applicability of this right. If the goods do not conform to the description there is no 55 Com.O.S.No.7385/2009 performance of the contract at all. If the goods are not of the merchantable quality the thing for which the buyer bargained for was not given. In either case the default of the seller/manufacturer goes to the root of the transaction and therefore the occasion would arise to the buyer to reject the goods and sue for the price if he had paid the price. It was also open to the buyer to accept the goods and sue on the basis of a warranty.
116. Section 59 of the Indian Sale of Goods Act states thus:-
"Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may .....
(b) sue the seller for damages for breach of warranty."
117. The remedy of a buyer where he has accepted the goods is only to sue for damages. As to when a buyer is deemed to have accepted the goods is provided for by Section 42 which runs thus: -
"The buyer is deemed to have accepted the goods 56 Com.O.S.No.7385/2009 when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."
118. The law on the subject has been considered in a decision reported in A.I.R. - 1955 - Mad - 481 (Sha Thilokchand Poosaji vs. Crystal And Co.,), where it was held that where goods not answering the description contracted for are delivered to a buyer he has a right to one of two alternative remedies: -
(a) that of rejecting the goods and obtaining a refund of price and also suing for damages for non-delivery
(b) waiving the condition and accepting the goods and suing for damages for breach of warranty.
119. The Merchantable quality as per Section 16 of the said Act means that the goods comply with the description in the contract so that to a purchaser buying goods of that description the goods would be good tender. Goods are of merchantable quality if they are of such a quality and in such condition that a reasonable man, acting reasonably, would, 57 Com.O.S.No.7385/2009 after a full examination, accept them under the circumstances of the case in performance of the offer to buy them, whether he buys for his own use or to sell again. The condition is not that the goods shall be merchantable, but that they shall be of merchantable quality and it is more restricted than it would have been, if it had required that the goods should be merchantable.
120. Goods cease to be merchantable because of defects rendering them unfit for the purpose for which they are usually sold or merchantability is fulfilled when the goods do not differ from the normal quality of the described goods including under the term quality the state or condition as required by the contract. The goods should be immediately saleable under the description by which they are known in the market. The seller is bound by an implied condition that the goods are free from such defects.
121. The proviso to Section 16 of the Act, however, divides all such defects into two kinds, often called patent and latent defects. Patent defects are those which can be found on examination by a person of ordinary prudence with the exercise of due care and attention. Latent defects are those which 58 Com.O.S.No.7385/2009 cannot be discovered on such examination. There is an implied condition on the seller's part that the goods are free from latent defects. In the decision reported in I.L.R. - 1946 (1)- Cal - 225 (G. McKenzie and Co. (1919) Ltd. vs. Nagendranath), it was found that the particular car delivered to the plaintiff was not what a Plymouth car of average quality may be expected to be and that the defect due to bad workmanship and faulty parts was a latent defect and that the plaintiff would not have discovered the defect even if he had examined the car and that the defect made the car unmerchantable.
122. Section 41 of the Sale of Goods Act only gives a buyer a right of examining the goods and not a right to repudiate the contract. The right of inspection could only arise either when the consignee had taken the delivery from the carrier or when it was tendered for delivery to the buyer. Where the buyer was the consignee the question of affording an opportunity could arise only after the consignee received the consignment. Where the seller was the consignee, it was his duty to take delivery of the goods and give an opportunity to the buyer to inspect and examine the goods. It means that when the seller tenders the goods to the buyer he is bound to afford an opportunity for the inspection of the goods. The buyer was obliged to receive the 59 Com.O.S.No.7385/2009 goods and make an examination and if he found that it was sub- standard or contrary to specification, he could sue for the refund of the price or sell the goods and sue for the damages.
123. In the decision reported in A.I.R. - 1950 - Orissa - 42 (Mahadev Ganga Prasad vs. Gouri Shanker ), the Division Bench of the Orissa High Court considered the question of Section 41 of the Sale of Goods Act, in a case where a contract of five bales of sarees was entered into. The consignment was despatched through Railways to be collected through a Bank. The Division Bench observed :
"There was, therefore, delivery of the goods to the purchaser under the terms of the contract and the only right of the purchaser thereafter was the right to examine the goods as provided for under Section 41 of the Act. That Section makes a distinction between the delivery of the goods to the buyer and his acceptance of the same after examination. There is, however, no provision for the buyer to refuse to receive the goods. He may receive the articles and yet not accept them. The plaintiff's case that he was justified is not receiving the goods at all, does not find support either from the express terms of the contract, as stipulated between the parties, or from any of the provisions of the Sale of Goods Act."
124. In the decision reported in A.I.R. - 1965 - Mad -
60Com.O.S.No.7385/2009 271 (Firm Beharilal Baldeo Prasad vs. Unknown), where the Court had occasion to consider the provisions of Sections 16, 17 and 41 of the Sale of Goods Act. It was observed :-
"These Sections show that even after the buyer has a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract and even when such an examination has taken place it might still be open to the buyer to reject the goods when they are not in conformity with the contract because of some defect which was not apparent on such examination."
125. Under Section 41 of the Sale of Goods Act an actual examination is necessary. A mere receipt of goods does not amount to acceptance and before the buyer can be called upon to accept the goods, he can claim a reasonable opportunity of examining the goods. The inspection and rejection must be without practicable delay. The buyer is bound to make payment against the tender of goods; his right of examining the goods and to reject them if they are not in conformity with the contract, however, remains even after payment and is exercised on actual delivery of goods.
126. Where the goods to the knowledge of the seller are purchased by the buyer to deliver for further destination and 61 Com.O.S.No.7385/2009 the nature of goods and the way in which they are packed make it unreasonable to inspect immediately on delivery, the right to reject will be extended to the later date.
127. In the said circumstances, as already discussed the 4th Defendant has supplied defective/substandard material to the Plaintiff through Defendants No.1 to 3 and thereby there is a breach of contract by the Defendant No.4. The learned Advocate for the Plaintiff has relied on a decision reported in 1999 (3) - S.C.C. - 500 (Dwaraka Das vs. State of M.P. and another), wherein it is held that when the breach of contract is proved the erring party is legally bound to compensate the other party to the agreement under Section 73 of the Indian Contract Act.
128. In view of above-mentioned legal provisions coupled with the contentions, oral evidence and documents as discussed above, the Plaintiff has proved that the 4 th Defendant has supplied defective raw material as ENG 008 specification. Therefore, I answer Issue No.1 in the 'Affirmative'.
129. Issue No.2 :- The Plaintiff has proved that it got 62 Com.O.S.No.7385/2009 tested the said defective materials with M/s Exova (UK) Limited through the evidence of the P.W.2 and Ex.P.149 to 161 Test Certificates. It is contention of the Plaintiff that he had incurred further loss investing huge sums of money to test the said defective goods. He has also contended that he manufactured new goods thereby he incurred huge sums of money for the said aspect. For identifying the defect and heat treatment, the Plaintiff has produced various documents as mentioned at Annexure-1 to the written submissions filed by him on 28.11.2019. For replacement of defective components, the Plaintiff has produced various documents as mentioned at Annexure-2 to the written submissions filed by him on 28.11.2019. For the expenses incurred by the Plaintiff towards painting of replaced valves, the Plaintiff has produced various documents as mentioned at Annexure-3 to the written submissions filed by him on 28.11.2019. For transportation and freight charges, the Plaintiff has produced various documents as mentioned at Annexure-4 to the written submissions filed by him on 28.11.2019. For claim about management and labour costs, the Plaintiff has produced Ex.P.428. Therefore, the Plaintiff has proved the said aspects. All these documents are produced in the course of evidence by marking the said documents as exhibits. The oral evidence is also adduced in 63 Com.O.S.No.7385/2009 support of said documents. The said documents are corroborated by oral evidence also. Therefore, I answer Issue No.2 in the Affirmative.
130. Issue No.3:- I have already discussed while answering Issue No.1 & 2 that the Plaintiff spent huge sums of money in heat treating the affected parts in an attempt to bring the machined components back in line with the specification mentioned at Ex.P.15 and for the same reasons, the Plaintiff has proved the Issue No.3 also. Therefore, I answer Issue No.3 in Affirmative.
131. Issue No.5 :- For the sake of convenience, I now propose to discuss about this Issue and Issue No.4 will be discussed together with Issue No.6.
132. The 4th Defendant has contended that he has procured materials from SAIL/VISL, Bhadravathi, as per the agreed specifications and even furnished a Test Certificate issued by the SAIL/VISL, Bhadravathi, which contained a particular heat number, that after processing the materials it supplied the forged materials to Defendants No.1 to 3 for machining, that at the time of sending across the forged material, the 4 th Defendant issued a Test Certificate of its own, which also contained a heat number, which 64 Com.O.S.No.7385/2009 was the same as that in the Test Certificate issued by the SAIL/VISL, Bhadravathi. Further, the DW.4 has deposed during his cross-examination as follows:-
"I have produced the Test Certificates before the Court. It is true that we have also enclosed the Test Certificates issued by Steel Authority of India along with our Test Certificates. Ex.D.4 is in respect of the forgings that are supplied by us to Defendant Nos.1 to 3. Since we buy steel from the Steel Authority of India and we will manufacture the forgings, so we have produced the Ex.D.4 to show that it corresponds to the quality of the materials supplied by the Steel Authority of India. We had purchased the Steel from Steel Authority of India for manufacturing and supplying the forgings to Defendants No.1 to 3 in this case."
133. It is the contention of the Plaintiff that the 4th Defendant has deliberately issued false Test Certificates certifying that the forgings supplied by him to the Defendants No.1 to 3 are of ENG- 008 specification. In order to prove the same and to disprove the contentions and evidence of the 4th Defendant, he has examined PW.3. The PW.3 has deposed that during the pendency of the evidence on the side of the Defendants, the Plaintiff has obtained Ex.P.199 to 203 from SAIL in response to their Application under the provisions of Right to Information Act. This witness has not been cross-examined by the Defendants 1 to 4. In order to prove the same, the Plaintiff has also examined the Asst.General 65 Com.O.S.No.7385/2009 Manager of the SAIL-VISL as PW.4 and he has deposed that the said Institution/Company has not issued the Test Certificates mentioned in Ex.P.203. In fact, Ex.P.203 is a Purchase Order and not the Letter dated 26.03.2014 issued by VISL. However, as per the Order sheet dated 7.12.2017, in view of the Memo filed by the Advocate for the Plaintiff, the documents marked as Ex.P.199 to P.203 during the evidence of PW.3 on 8.12.2017, are re-numbered as Ex.P.429 to P.433. Ex.P.433 is a letter issued by the VISL under the provisions of R.T.I. Act. In the said letter, it is informed by the VISL to the Plaintiff that the following three Test Certificates were not issued by SAIL/VISL, Bhadravathi:-
1. VISL Test Certificate No.34225 dated 13.09.2007 for heat No.48880.
2. VISL Test Certificate No.56385 dated 13.08.2008 for heat No.56846. (It is to be noted that this Test Certificate is marked as Ex.D.12).
3. VISL Test Certificate No.56848 dated 17.12.2008 for heat No.57420. (It is to be noted that this Test Certificate is marked as Ex.D.3 & D.24).
134. The PW.4 has also deposed that the SAIL/VISL has not issued Ex.P.119, which is the Certificate of Conformity issued by 1 st 66 Com.O.S.No.7385/2009 Defendant with the Test Certificate of 4th Defendant dated 25.02.2009. The same Test Certificates are marked as Exs.D.121 to D.124.
135. The PW.4 has also deposed that the said Company has not issued Ex.D.4 Test Certificate also. The Defendant No.4 or any other Defendants have not cross-examined the said witness.
Hence, his evidence is unchallenged. In view of the said evidence of PW.4, the Plaintiff has not only proved that the 4 th Defendant has deliberately issued false Test Certificates, but also disproved the above-mentioned evidence of DW.4. Hence, I answer this issue in 'Affirmative'.
136. Issue Nos.4 & 6 :- Since these two issues are interlinked with each other, I discuss the same jointly in order to avoid repetition.
137. The Plaintiff has contended at Para No.25 of the Plaint that he has incurred loss in view of several aspects like identifying the defect, heat treatment, expert advise, subsequent testing of raw-material, mechanical testing, replacement of defective components, painting of replaced valves, transportation and 67 Com.O.S.No.7385/2009 freight charges and management and labour costs, totally amounting to Rs.6,01,32,918/-. In the written arguments filed by the Plaintiff dated 28.11.2019 at Annexure No.1 to 4, he has clearly mentioned the various documents marked as exhibits for each and every aspect and he has also mentioned in the tabular form the expenses incurred for each of the said claims. I have already discussed about the said documents earlier. Hence, I am not reproducing the same. In view of my earlier discussions, observations and findings, the 4 th Defendant has supplied defective material to the Plaintiff through Defendant Nos.1 to 3 and hence, I am of the opinion that the Defendants 1 to 4 are jointly and severally liable to pay the said amount to the Plaintiff with interest. In view of the prevailing market conditions, trade practice and bank rate, I am of the opinion that the rate of interest is to be fixed at 12% per annum from the date of suit till the date of realization.
138. So far as the cost of the suit is concerned, though the Defendants 1 to 3 are jointly and severally liable to pay the suit claim with the 4th Defendant to the Plaintiff under the legal provisions of Information Technology Act and Sale of Goods Act as discussed above, since the role in this suit for having supplied the defective forgings to the Plaintiff is only by the 4th Defendant, the Defendants 1 to 3 are not liable to pay the cost of the suit to the 68 Com.O.S.No.7385/2009 Plaintiff. However, the 4th Defendant for his conduct of supplying the defective material and also for the reasons stated in Para No.65 of this judgment, is liable to pay costs to the Plaintiff by taking into consideration of Section 35 of Civil Procedure Code as amended under Section 16 of the Commercial Courts Act. With this observation, I answer these Issues in 'Affirmative'.
139. Issue No.7:- Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed.
The Defendants No. 1 to 4 jointly and severally are hereby directed to pay a sum of Rs.6,01,32,918/- (Rupees Six Crores One Lakh Thirty Two Thousand Nine Hundred and Eighteen only) to the Plaintiff with interest at the rate of 12% per annum from the date of suit till realisation.
The Defendant No.4 is directed to pay the cost of the suit to the Plaintiff. The Advocate for the Plaintiff is directed to file Memorandum of Cost before the Office within 5 days from today as required under Rule 99 and 100 of Karnataka Civil Rules of Practice.
Draw decree accordingly.
The Office is directed to send copy of this 69 Com.O.S.No.7385/2009 judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code read with Section 16 of the Commercial Courts Act.
(Dictated to the Judgment Writer, typed by her directly on the computer, transcribed by her, verified and pronounced in the open court on 11th day of November 2020).
(DEVARAJA BHAT.M.), LXXXII Addl. City Civil & Sessions Judge, BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF:
PW.1 Sri. S.Raghuraman PW.2 Dr. John Richard Wilcox PW.3 Sri. S.Muthukumar PW.4 Sri. L. Praveen Kumar
LIST OF DOCUMENTS MARKED ON BEHALF OF THE PLAINTIFF Exs.P-1 Board Resolution " P-2 Special Power of attorney " P-3 Legal notice issued to defendants by the Plaintiff " P-4 to 7 File containing four Speed post receipts " P-8 to 10 File containing Reply notices dated 1.11.2009 70 Com.O.S.No.7385/2009 and 5.11.2009.
" P-11 to 14 File containing proof of delivery notice sent by Plaintiff to defendants " P-15 ENG008-Technical Specifications issued by the Plaintiff to the Defendants.
" P-16 to 39 File containing copies of E-mail correspondence between Plaintiff and 4th defendant.
" P-40 Amended Purchase order issued by defendant
No.3 to defendant No.4
" P-41 to 47 File containing copies of Email correspondence
between Plaintiff, defendant No.3 and 4
" P-47(a) Commercial Terms & Conditions
" P-48 to 64 File containing Email correspondence between
the Plaintiff and defendants
" P-65 to 77 File containing Purchase orders raised by the
plaintiff to defendant No.1.
" P-78 to 85 File containing Purchase orders raised by the
plaintiff to defendant No.2
" P-86 Purchase order raised by the plaintiff to
defendant No.3
" P-87 to 100433 File containing Copies of Invoices raised by the defendant No.1 on the plaintiff " P-101 to 113 File containing Copies of Invoices raised by the defendant No.2 on the plaintiff " P-114 to 124 File containing Copies of Certificates of Conformity issued by the defendant No.1 along with Test Certificates of defendant No.4 " P-125 to 139 File containing copies of Certificates of Conformity by defendant No.2 along with Test Certificates and Ultrsonic Examination Report issued by defendant No.4 " P-140 to 148 File containing copies of Certificates of Conformity by defendant No.3 along with Test Certificates and Ultrsonic Examination Report issued by defendant No.4 " P-149 to 161 File containing original Test Certificates from 71 Com.O.S.No.7385/2009 Exova (UK) Ltd.
" P-162 Copy of email from Mr. Mike Elsworth to the 4 th defendant.
" P-162 to 174 File containing Email correspondence between 4th defendant and plaintiff.
" P-175 to 187 File containing Copies of Invoices raised by plaintiff towards its Brazilian customer " P-188 to 197 File containing copies of Email correspondence between the plaintiff and its Brazilian customer " P-198 Letter issued by plaintiff to defendant No.4 " P-199 to 428 File containing Purchase orders and Invoices " P-429 Minutes of Meeting dated 09.07.2015 " P- 430 Authorization Letter " P-431 to 433 File containing three Letters dated 6.2.2014, 24.03.2014 and 29.03.2014 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANTS:
DW.1 Sri. N.S.Narayanan
DW.2 Smt. N. Padma
DW.3 Sri. R.Anbazhagan
DW.4 Sri. Nitesh Gupta
LIST OF DOCUMENTS MARKED ON BEHALF OF THE
DEFENDANTS
Exs.D-1 Copy of Purchase order issued by the plaintiff
" D-2 Copy of Purchase order issued by 1 st defendant to
the 4th defendant
" D-3 Copy of Test Certificate issued by Steel Authority
" D-4 Copy of Test Certificate issued by defendant No.4
" D-5 Tax invoice cum delivery challan
" D-6 Copy of Certificate of Conformity issued by 1st
defendant
72
Com.O.S.No.7385/2009
" D-7 File containing Invoices issued by the 1 st
defendant (containing 15 sheets)
" D-8 Legal notice dated 28.09.2009 issued by
defendant No.4
" D-9 Reply notice
" D-10 Purchase order in 8 sheets
" D-11 Copy of purchase order issued by 2 nd defendant to
the 4th defendant containing 2 sheets
" D-12 File containing Copies of Test Certificates issued
by Steel Authority of India containing 2 sheets " D-13 File containing Copies of Test Certificates issued by 4th defendant containing 20 sheets " D-14 Tax Invoice cum delivery challan issued by 4th defendant to the 2nd defendant containing 13 sheets " D-15 File containing Office copies of conformity certificates issued by the 2nd defendant containing 15 sheets " D-16 File containing Invoices issued by the 2nd defendant to the plaintiff containing 20 sheets " D-17 Copy of Notice issued by the defendant No.4 dated 30.9.2009 " D-18 Copy of reply notice dated 30.01.2009 " D-19 to 21 File containing Purchaser orders dated 23.12.2008 3 in numbers " D-22 & 23 File containing Purchase order issued by defendant No.3 to defendant No.4 in 2 sets " D-24 to 31 File containing 8 Test Certificates issued by Steel Authority of India Ltd., and also Defendant No.4. " D-32 to 39 File containing 8 Tax Invoices issued by defendant No.4 " D-40 to 48 File containing 9 Certificates of Conformity issued by defendant No.3 to the plaintiff " D-49 to 53 File containing 5 Invoices and packing list of the exports made to the plaintiff by defendant No.3 " D-54 Invoice " D-55 Notice given by the defendant No.4 to D.3 73 Com.O.S.No.7385/2009 " D-56 Reply given by defendant No.3 to Ex.D.55 " D-57 to 72 File containing 16 office copies of invoices raised by defendant No.4 " D-73 Original purchase orders of Oriental Plants & Equipments Pvt.ltd. dated 21.1.2009 " D-74 to 85 File containing Office copies of 12 invoices raised by defendant No.4 in favour of Oriental Plants & Equipments Pvt.ltd.
" D-86 to 100 File containing Certified copies of 15 purchase orders raised by Ganesh Camp on defendant No.4 " D-101 to 117 File containing Certified copies of 17 tax invoices raised by defendant No.4 on Ganesh Camp " D-118 to 128 File containing Certified copies of 11 Test Certificates issued by defendant No.4 on Ganesh Camp " D-129 to 131 File containing Certified copies of 3 Test Certificates issued by Steel Authority of India Ltd. " D-132 Certified copy of rejoinder issued by defendant No.4 on Ganesh Camp " D-133 Certified copy of under certificate of posting and postal receipt " D-134 Certified copy of Board Resolution " D-135 Office copy of legal notice issued by defendant No.4 to Balaji Alloys " D-136 Office copy of legal notice issued to OPEL dated 30.9.2009 " D-137 Xerox copy of reply given by OPEL (DEVARAJA BHAT.M.), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.
74 Com.O.S.No.7385/2009 11.11.2020 P : DPS D.1 to 3 : KGR D.4 : AR For Judgment The Judgment is pronounced in Open Court today. The operative portion of the said judgment is as follows:- ORDER The Suit of the Plaintiff is decreed. The Defendants No. 1 to 4 jointly and severally are hereby directed to pay a sum of Rs.6,01,32,918/- (Rupees Six Crores One Lakh Thirty Two Thousand Nine Hundred and Eighteen only) to the Plaintiff with interest at the rate of 12% per annum from the date of suit till realisation. The Defendant No.4 is directed to pay the cost of the suit to the Plaintiff. The Advocate for the Plaintiff is directed to file Memorandum of Cost before the Office within 5 days from today as required under Rule 99 and 100 of Karnataka Civil Rules 75 Com.O.S.No.7385/2009 of Practice. Draw decree accordingly. The Office is directed to send copy of this judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code read with Section 16 of the Commercial Courts Act. (Vide my separate detailed Judgment dated 11.11.2020) (Typed as per my dictation). (DEVARAJA BHAT.M.), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.