Delhi District Court
Sh. Ramesh Bansal vs Rajendra Gears And Ors on 27 February, 2024
-1-
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-02, NEW
DELHI DISTRICT, PATIALA HOUSE COURTS, NEW
DELHI.
CNR NO.: DLND010007682022
CS (Comm.) No. 127/2022
IN THE MATTER OF:-
Sh. Ramesh Bansal,
Sole Proprietor of Shri Ram Steel Traders
Having office at:
Y-24, Loha Mandi,
Naraina, Delhi-110028.
...PLAINTIFF
VERSUS
1. Rajendra Gears
A Partnership Firm
At E-13, Udyog Kunj, Industrial Area,
NH-24, Ghaziabad, UP-201010.
2. Sh. Rajendra Singh Chaudhary,
(Partner of Rajendra Gears)
3. Sh. Puneet Singh Chaudhary,
(Partner of Rajendra Gears)
At E-13, Udyog Kunj, Industrial Area,
NH-24, Ghaziabad, UP-201010.
...DEFENDANTS
Date of Institution : 29.01.2022
Date of reserving Judgement : 12.02.2024
Date of pronouncement of Judgement : 27.02.2024
JUDGEMENT
1. The plaintiff has filed the present suit for recovery of Rs.15,13,712/- (Rupees Fifteen Lacs Thirteen Thousand CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 1 of 33 -2- Seven Hundred and Twelve Only) along with pendent lite and future interest @ 18% per annum besides costs of the suit against the above named defendants.
FACTS OF THE CASE:
2. Succinctly stated, it is the case of the plaintiff that he is engaged in the trade business of Iron and Steel Plates and is running the said business in the name and style of Shri Ram Steel Traders as its sole proprietor. Thus, he is competent to sign, verify and file the present suit. It is further averred that the plaintiff deals in MS Plate Sheet, HR Coils, MS Angles, colour coated Sheets, GP Coils, etc. It is stated that the defendant No. 1 is a partnership firm and defendant nos. 2 & 3 are the partners of defendant no.1 firm.
3. It is further averred that the defendants had approached the plaintiff at his office situated at Naraina for purchase of MS Plates, CR Sheet, SS Sheet and other material. The defendants no. 2 and 3 had represented the plaintiff that they have very big business and required the material on regular basis. The defendants further assured the plaintiff that they shall make the payment of the goods in time and on the basis of regular and continuous account.
4. It is further averred that on the assurance of the defendants, the plaintiff agreed to supply goods to the defendants. It is stated that on 03.08.2019, the defendants placed an order of MS Plates and the plaintiff supplied the goods i.e. MS CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 2 of 33 -3- plates to the defendants, vide Invoice No. GST/19-20/178 for a sum of Rs. 7,79,331.00/-. The defendants had made the payment of said invoice. It is further averred that after making the abovesaid payment, the defendants again placed another order for supply of MS Plates. On 18.10.2019, plaintiff supplied MS Plates, vide Invoice No. GST/19-20/276 for a sum of Rs. 11,25,449.00/-. The goods were duly received by the defendants. However, after receipt of the goods, they avoided to take the calls of the plaintiff and his son. It is further averred that since, October,2019, the plaintiff has been approaching the defendants for payment of the goods supplied to them and son of the plaintiff had also visited the factory of the defendants. The defendants made excuses one after the other but did not make the payment despite repeated requests and demands.
5. It is further averred that since the defendants failed to make the due payment, therefore, the plaintiff in compliance of Section 12-A of Commercial Courts Act, 2015, instituted Pre-litigation mediation proceedings before New Delhi District Legal Services Authority against the defendants on 21.10.2021. Despite issuance of notice for two dates i.e. 25.11.2021 and 15.12.2021, the defendants opted not to cause any appearance and ultimately, the said Statutory body has issued Non-Starter Report dated 22.12.2021 to the plaintiff. Finally, the plaintiff filed the present commercial suit before the Court.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 3 of 33 -4-RELIEF SOUGHT:
6. On the basis of the aforesaid averments made in the plaint, the plaintiff has sought the following reliefs:-
(i) Decree for recovery of a sum of Rs.15,13,712/-
against the defendants;
(ii) Pendente-lite and future interest @ 18% per annum from the date of filing the suit till its realization; and
(iii) Costs of the suit.
7. Defendants, in their joint written statement, have raised several preliminary objections, inter-alia, that no part of cause of action has arisen within the jurisdiction of this Court; none of the defendants resides within its territorial limits; the plaintiff himself has stated that the material was delivered to the defendants at Ghaziabad; the defendants reside and work for gain in Ghaziabad; and the defendants are engaged in the business of rolling mill equipments manufacturing and design, and rolling mill plant set up sometime in 2019. It is averred that the defendants were looking to purchase MS Plates and were approached by the plaintiff to supply the same to them. It is further stated that the plaintiff gave assurances that the product will be of highest quality standards and that the defendants would face no issues in usage and applications of the product. In view thereof, an order was placed by defendant No.1 on 03.08.2019 and the payment of this order was duly made CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 4 of 33 -5- to the plaintiff and same had been duly acknowledged. Thereafter, the defendant No. 1 placed another order with the plaintiff for supply of MS Plates and same was to be further supplied by defendant No. 1 to its clients namely M/s Gajanan Iron Steels Pvt. Ltd. at Durgapur and Shafiul (sic) Alam Steels Pvt. Ltd. in Bangladesh. It is further stated that the plaintiff was aware that the defendant No. 1 had placed the order solely for such application/usage of the product. However, the plaintiff supplied goods of poor grade, which were cracking and breaking during installation and were not suitable for use. It is further stated that clients of the defendants had raised complaints because of MS Plates used in the machine that were supplied by the plaintiff and thereafter, the defendants had to purchase the same from some other supplier and installed them at the client's site, which caused grave loss to the defendants. It is further stated that the defendants promptly informed the plaintiff regarding the same and demanded the product to be replaced immediately but the plaintiff made excuses on one pretext or the other. It is further stated that due to said reason, the defendants faced grave loss of their reputation and image in front of their clients. Based on said defense, dismissal of the suit has been prayed for.
8. Plaintiff filed replication to the written statement filed by the defendants, thereby denying the contents of the written statement and reiterated those of the plaint.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 5 of 33 -6-ISSUES:
9. From pleadings of the parties, the following issues were framed, vide order dated 19.07.2023:-
i. Whether the plaintiff is entitled to a decree of Rs.15,13,712/- alongwith interest, as prayed for? OPP.
ii. Whether the goods/material supplied by the plaintiff to defendant No. 1 were defective? Onus on defendants to prove.
iii. Whether this court has no territorial jurisdiction to try the present suit? Onus on defendants to prove. iv. Relief.
10. In support of his case, the plaintiff has examined only his son/attorney namely Sh. Sahil Bansal as PW1. He led his examination-in-chief by way of affidavit (Ex.PW1/A) and deposed in terms of the averments made in the plaint. He has relied upon the following documents:-
Sr. Details of documents Exhibit
No.
1. 2 Invoices including Invoice in Ex.PW1/1
question i.e. Invoice No. GST/19- (Colly.)
20/276 dated 18-10-2019
2. Whatsapp Chat/ Conversation took Ex.PW1/2
place between plaintiff and Sh. (Colly.)
Puneet Singh
3. Certificate in Compliance of S. Ex.PW1/3
65-B of the Indian Evidence Act.
4. Ledger Account for the period Ex.PW1/4
from 1.4.2018 to 31.12.2021
5. Non-Starter Report Ex.PW1/5
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 6 of 33
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11. PW1 has been cross-examined by Ld. Counsel for Defendants. In his cross-examination, PW1 has deposed that the present suit has been filed by his father, who owns the business by the name of Shri Ram Steel Traders.The defendant no. 2 namely Sh. Rajendra had physically come to the office to meet his father about 10 to 30 days approximately before placing the order or it could be earlier also, but, he did not remember whether the order was placed telephonically, by e-mail or by coming to the office. He further deposed that the e-mail ID of his father is [email protected]. Copy of e-mail dated 01.08.2019 (Ex. PW1/D1) was sent by Sh. Vinay Shukla, who used to be an employee in his father's company. The payment of first order dated 03.08.2019 was duly received by his father's company. He further deposed that he might have sent or not sent the messages before November 2020 to Puneet and before February, 2020 to Sh. Rajendra. The defendants had made the first payment in order to win the confidence of his father. He admitted that the time period of payment as per invoice was one day. His father had surrendered the GST number and shut down the business. He admitted that payment for the first order was received after about 2-2 ½ months i.e., 50% was received after 30 days and remaining 50% by next 30 days and he was satisfied as the opposite party had stated that he had certain problems due to which he was making late payment. He denied that the products supplied by them were substandard or that is why, they were satisfied with late CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 7 of 33 -8- payment made by the defendants. He denied that his father used to supply substandard products and for this reason, they used to approach the customers. He deposed that the defendants had approached the office of his father where he also sits and no talks were held with the defendants through e-mail.
12. He further deposed that second order was placed by the defendants on telephone and the defendants never told them that the material supplied by them was of substandard quality. He admitted that the factory of the defendants was situated at Ghaziabad. He denied that the goods supplied by them, was substandard and the order was placed at Ghaziabad. He denied that the plaintiff was informed about the defect in the goods supplied or that he did not have any personal knowledge regarding facts of the present case.
13. Thereafter PE was closed on 13.10.2023.
14. Defendants' evidence was led, during which, the defendant no.2 examined himself as DW1.
He led his examination-in-chief by way of affidavit (Ex.DW1/A) and deposed in terms of the averments made in the written statement. He relied upon copies of invoices bearing No. 165, 163 and 151 issued in the names of M/s Shafiul Alam and M/s Gajanan Iron, as Ex.DW1/1 (Colly) and printout of purchase order received from M/s Shafiul Alam as Ex. DW1/2.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 8 of 33 -9-15. In his cross-examination, DW1 admitted that his evidence Ex. DW1/A was prepared by his Counsel, who had sent the same to him to sign it. His son had taken the same from the Counsel and he had signed it after going through the same. He deposed that he had gone to the Notary public for it's attestation. He admitted that they had purchased MS plates from the plaintiff, vide invoice no. GST/19-20/178 for a sum of Rs. 7,79,331/- and again purchased M. S. plates from the plaintiff on 18.10.2019, vide invoice no. GST/19- 20/276 for a sum of Rs. 11,25,000/-. He further admitted that till date, they had not made the payment of said invoice to the plaintiff and also that they had duly received the said invoice from the plaintiff. He further admitted that the defendants never raised any objection with the plaintiff with regard to any of the terms and conditions mentioned in the said invoice. He could not tell if the office/godown of the plaintiff is situated in Naraina, Delhi. It is not within his knowledge as to whether or not the plaintiff had dispatched the goods against the invoice in question to the defendants from his godown situated at Naraina, Delhi. He admitted that the defendants have nowhere mentioned in the written statement that the plaintiff had ever visited their office situated at Ghaziabad, U.P. He denied that neither the plaintiff nor any other person on his behalf, ever visited the office of the defendants to obtain the order and also that he along with his son had visited the office of plaintiff situated in Naraina, Delhi, to place the order for the above said invoice. He admitted that the defendants never CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 9 of 33 -10- intimated in writing to the plaintiff regarding defective/poor grade quality of the goods supplied against the invoice in question and also that e-mail (Ex. PW1/D1) was written communication sent by the plaintiff to the defendants. He deposed that it is not within his knowledge as to whether or not chat conversation through whatsapp numbers took place between son of the plaintiff and defendant no. 3 regarding non payment of the amount of invoice in question. He admitted that defendant no. 3 is one of the partners of defendant no. 1 and also that he is his son. He further admitted that the defendants have not placed on record any complaint from any of their customers regarding defective/poor grade quality of the products, as stated in para no. 6 of his affidavit Ex.DW1/A. He denied that same was not done by the defendants as there was no such complaint whatsoever received by them from any of their customers. He admitted that the goods/products supplied by plaintiff to the defendants against the invoice in question, were never sought to be returned to the plaintiff at any point of time and they had not placed on record any documentary proof showing that any financial loss whatsoever has been suffered by them on account of goods/products supplied against the invoice in question. He, however, denied that the products supplied against the invoice in question were of good quality and the defendants are illegally withholding the amount of the invoice in question or that the defendants are legally bound to pay the amount of CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 10 of 33 -11- invoice in question along with interest and costs.
16. The Defendants have also examined Sh. Puneet Singh as DW2. He tendered his affidavit dated 04.01.2024 as Ex.DW2/A, wherein he deposed that he had received messages from Sh. Sahil Bansal, the son of the plaintiff, on WhatsApp wherein he (son of the plaintiff) had asked as to when his bills would be cleared. As he did not know the details of the Plaintiff's dealings with the firm, he had initially given him a standard positive response in the interests of maintaining business relationships. However, he had subsequently spoken with his father about this, and he (his father) told him (witness) that the goods supplied by the plaintiff were defective. Thus, thereafter, he informed Sh. Sahil Bansal that the payment was not possible. He also deposed that Sh. Sahil Bansal had intentionally contacted him as he knew that he was not aware of the details of the dealings with the plaintiff, and thus in order to create some fake record in whatever manner possible, he contacted him over Whatsapp. He has relied upon purchase order received from M/s Shaiful Alam Re-Rolling Mills, which was already Ex.DW1/2 and his affidavit for electronic record documents as Ex.DW2/1.
17. In his cross-examination, he admitted that he is the active partner of defendant no. 1 partnership firm. However, he denied that he had assured son of the plaintiff that they shall make the payment of invoice in question to the plaintiff. He admitted that SIM No. 9811284824 is used by CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 11 of 33 -12- his father namely Sh. Rajendra Singh, who is defendant no. 2 in the present matter but he could not comment on the chat conversation appearing in the document Ex.PW1/2 (Colly). He denied that he was aware of the dealings of their firm with the plaintiff. He admitted that the amount of Rs.11,25,449/- against the invoice in question has not been paid by the defendants to the plaintiff. He, however, denied that the defendants are illegally withholding the amount of the invoice in question or that the defendants are legally bound to pay the amount of invoice in question along with interest and costs.
18. Thereafter, DE was closed on 27.01.2024.
19. I have already heard Sh. Rahul Madan, Advocate for plaintiff and Sh. Nipun Arora alongwith Sh. Deepak Nagar, Advocates for the defendants. I have also gone through the material available on record and the authorities cited at the Bar.
20. My issue-wise findings are as under:-
ISSUE NO.3 Issue no. (iii) - Whether this court has no territorial jurisdiction to try the present suit? Onus on defendants to prove ?
21. Firstly, I shall decide the aforesaid issue regarding territorial jurisdiction of this Court. The onus to prove this issue has been placed upon the defendants in view of CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 12 of 33 -13- Preliminary Objection No. (3) raised by them in their written statement to the effect that no part of cause of action has arisen within the territorial jurisdiction of this Court.
22. Ld. Counsel for the defendants argued that the defendants do not reside and work for gain within the territorial jurisdiction of this Court. Further, the goods were delivered to them at Ghaziabad, UP and therefore, this Court does not have territorial jurisdiction to entertain and try the suit. In support of his submissions, Ld. Counsel of defendants has also relied upon following judgements :-
(i) Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas and Co. reported as 1965 SCC Online SC 38; and
(ii) "S. K. Contractor & Engineers v. Hindustan Petroleum Corporation" reported as (2008) 103 DRJ 61.
23. On the other hand, Ld. Counsel for the plaintiff argued that part cause of action has arisen within the territorial jurisdiction of this Court as the purchase order was placed by the defendants at the office of the plaintiff situated at Naraina, New Delhi and the goods were also supplied to them by the plaintiff from his godown situated at Naraina, New Delhi.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 13 of 33 -14-24. As already noted above, the defendants have examined two witnesses i.e. DW-1 Sh. Rajendra Singh and DW-2 Sh.Puneet Singh towards defendants' evidence. The testimony of DW-2 is completely silent on this aspect and thus, is not relevant for deciding the present issue. However, DW-1 Sh. Rajendra Singh has deposed during his examination-in-chief by way of affidavit Ex.DW-1/A that since neither materials were supplied from the territorial jurisdiction of this Court nor contract has been formulated or, as alleged, breached, within territorial jurisdiction of this Court, therefore, this Court does not have territorial jurisdiction to entertain and try the present suit. However, during his cross-examination, DW-1 admitted that the defendants had purchased the goods i.e. MS Plates from the plaintiff on 18.10.2019 against the invoice in question i.e. Invoice No.GST/19-20/276 for a sum of Rs.12,25,000/- and also that the defendants never raised any objection with regard to any of the terms and conditions of the said invoice.
25. On the other hand, PW-1 Sh. Sahil Bansal has categorically deposed during his examination-in-chief by way of affidavit (Ex.PW-1/A) that the defendants had approached the plaintiff for purchase of goods at his office situated in Naraina, which falls within the territorial jurisdiction of this Court. However, during his cross- examination, PW-1 deposed that order was placed by the defendants telephonically upon the plaintiff.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 14 of 33 -15-26. Considering the nature of oral evidences led from the both the sides, the relevant terms and conditions as mentioned in the invoice in question assumes relevance and importance. As already noted above, DW1 Sh. Rajendra Singh has admitted during cross-examination dated 27.1.2024 that the defendants never raised any objection with regard to the terms and conditions mentioned in the invoice in question. Thus, it is very much evident that both the sides agreed to the terms and conditions mentioned in the invoice in question i.e. Invoice No. GST/19-20/276 dated 18.10.2019, which is part of Ex.PW-1/1(Colly.). Clause no.3 of the terms and conditions, as mentioned therein, recites "Subject to 'Delhi' jurisdiction only". That being so, it is beyond doubt that both the parties by their mutual agreement agreed that in case of any dispute arising out of business transaction based on the said invoice, the Courts at Delhi shall have exclusive jurisdiction to entertain and try the dispute.
27. Now, the question arises as to whether any part of cause of action is shown to have arisen within the territorial jurisdiction of this Court or not. It is not in dispute that the plaintiff is working for gain, having his office situated at Naraina, New Delhi, which falls within the territorial jurisdiction of this Court. It is the case of the plaintiff that the defendants had approached him at his office situated at Naraina, New Delhi for purchase of goods. Not only this, invoice in question also contains same address of the CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 15 of 33 -16- plaintiff. As already noted above, the authenticity and genuineness of said invoice is admitted by the defendants. Further, the invoice in question contains details of the bank account of the plaintiff, showing that the bank account of plaintiff is also situated at Naraina, New Delhi. It is nowhere disputed by the defendants that the payment against the invoice in question was required to be made in the bank account of the plaintiff as per their details mentioned in the invoice in question. Further, DW1 could not tell during his cross-examination that office of the plaintiff was situated in Naraina, New Delhi. He feigned ignorance that plaintiff had dispatched the goods from his godown situated at Naraina, New Delhi. The defendants have failed to lead any cogent evidence showing or even suggesting that the goods were not supplied by the plaintiff from his godown. In this backdrop, it is beyond doubt that the goods were supplied by plaintiff from his godown situated at Naraina, New Delhi, which falls within the territorial jurisdiction of this Court. That being so, the Court is of the considered opinion that part cause of action has arisen within the territorial jurisdiction of this Court as defined under S. 20(c) CPC.
28. Moreover, as per terms and conditions mentioned in the Invoices Ex.PW-1/1 (Colly.), no place of payment is specified. It is nowhere the case of the defendants that any particular place of payment was agreed to between the parties in terms of S. 49 of the Indian Contract Act. It is CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 16 of 33 -17- now well settled principal of law that where, under a contract, no place of payment is specified, the debtor must seek his creditor and therefore, a suit for recovery is maintainable at the place where the creditor resides or works for gain, because a part cause of action arises at that place also. My view in this regard is fortified by the judgment passed by our own Hon'ble High Court in the case titled as "Satyapal v. Slick Auto Accessories Pvt. Ltd. & Ors" reported as 2014 LawSuit (Del) 1150. Since, in the present case, the plaintiff claims to have his office situated at Naraina, New Delhi and his bank account is also situated in Naraina, New Delhi. Keeping in view that there is no contract where place of payment is specified, the Court is of the opinion that part cause of action arose at the place of the office of plaintiff i.e. Naraina, New Delhi which falls within the territorial jurisdiction of this Court. For all these reasons, the authorities relied on behalf of the defendants are totally distinguishable from the facts of the present case.
29. In view of the foregoing reasons, Court is of the view that the defendants have failed to discharge the burden of proving this issue even on the basis of preponderance of probability. Hence, it is held that this Court does have territorial jurisdiction to entertain and try the present suit. Accordingly, the issue no.3 is decided against the defendants and in favour of the plaintiff.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 17 of 33 -18-ISSUE NO.2 Issue no.(ii) - Whether the goods/material supplied by the plaintiff to defendant No. 1 were defective? Onus on defendants to prove.
30. The onus to prove the issue no. (ii) has also been placed upon the defendants in view of Preliminary Objection No. (9) raised by them in the written statement, whereby it is claimed that goods supplied by the plaintiff were of poor grade and same were not even suitable for use. The defendants have alleged that MS Plates, on account of its poor quality, were cracking and breaking during installation and when they supplied the machine and equipment to their clients situated at Durgapur and Bangladesh, they received several complaints regarding the same. Not only this, they have further claimed that they had to purchase the MS Plates from some other supplier and then they reinstalled the same in the machines at the site of their clients, which also caused grave injury and loss to them.
31. In this regard, the legal position is well settled now. Before referring to the case law on the point in issue, it would be relevant to refer the legal provisions contained in The Sales of Goods Act. To quote:-
41. Buyer's right of examining the goods.--
(1)Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 18 of 33 -19-
(2)Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
42. Acceptance.--
The buyer is deemed to have accepted the goods 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.
32. In the case titled as "KLG Systel Ltd. vs Fujitsu ICIM Ltd.", reported as MANU/DE/0406/2001 decided by Hon'ble High Court of Delhi, the aforesaid issue directly came up for consideration. Hon'ble High Court has observed as under:
"12. The disputes between the parties cannot be decided do hors the sundry provisions of the Sale of Goods Act. Part- payment to a substantial extent has been made by the Defendant/Applicant. When a buyer such as the Defendant/Applicant asserts that the merchandise/goods were defective, it is not open to it to withhold payment once the delivery is accepted; since they are deemed to have been accepted by operation of law. In Nagandas Mathuradas vs. N.V. Valmamohomed and Others, AIR 1930 Bombay 249, in the opinion of the Bench, the Buyer was playing fast and loose inasmuch as the initial credit entry recorded in favor of the Seller was subsequently reversed. The fact that a substantial part payment had been made by the Defendant to the Plaintiff was found very relevant, in this context. It reiterated the view approved by the House of Lords that "if a buyer orders goods of a certain description, and the seller delivers goods of a different description, it is open to the buyer to reject them. But if he does not reject them but keeps the goods, even if he does so in ignorance of the fact that they are of a description different from that provided for by the contract he is debarred from rejecting the goods thereafter, and can only fall back upon a claim for damages, as upon a breach of warranty." These observations apply, a fortiori, where the goods supplied were according to the specifications, and their price had been substantially paid.CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 19 of 33 -20-
xxxxxxxxxxxxxxx.
13. xxxxxxxxxxxx Sections 41 and 42 of the Act conjointly indicate that if defects in the goods are not recorded within a reasonable time, they will have been deemed to have been accepted. Furthermore, by making substantial payments for the price of the goods the Defendant has acted in a manner which would render it inconsistent for the Plaintiff to still claim ownership thereon. On a careful reading of the Act, it appears that the intendment is generally that the price of the goods must be paid and if there is a subsequent defect (in contradistinction to a defect detected within a reasonable time of the delivery) the remedy that is envisaged is for the Buyer to sue for damages. This is obviously impregnated with sound commonsense and business ethics. In the present case, raising questions pertaining to the suitability of the supply after one year is not reasonable. A friable issue does not arise because what was supplied by the Plaintiff was what was ordered by the Defendant, if it did not suit the latter's requirements the Plaintiff cannot be made responsible and liable. Significantly, it has not been shown that any legal action has been filed even by FEDO for recovery of damages from the Defendant. Some prima facie evidence of such an action should have been filed by the Defendant to justify the grant of leave to defend."
33. In the light of law as laid down in the above cited judgment, let us examine the facts of the present case.
34. DW-1 Sh. Rajendra Singh has deposed on similar lines of their defense during his examination-in-chief by way of affidavit Ex.DW-1/A. He deposed that the goods supplied by the plaintiff were of poor grade resulting into cracking and breaking during their installation and were not suitable for use. He had promptly informed the plaintiff in this regard and also called upon the plaintiff to replace the product. DW-1 has also exhibited 3 invoices bearing nos. 151, 163 and 165 issued in the name of M/s Saiful Alam and Gajanan Iron as Ex.DW1/1 (Colly.) and copy of CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 20 of 33 -21- purchase order as received from some other firm as Ex.DW-1/2 in support of the said stand. However, said documents do not inspire confidence as same do not, in any manner, show/reflect that the description of the material as mentioned in Ex.DW-1/1 (Colly) match with the material supplied by the plaintiff to the defendants against the invoice in question. It is relevant to note that the plaintiff supplied goods i.e. MS Plates, whereas, the description of goods as mentioned in Ex.DW-1/1(Colly.) are Capital Machinery for Steel Rolling Mill - Base Plate for Mill Stand, AC Motors 11 KW, Electric Motors of various KWs etc. Hence the said documents are neither of any relevance nor of any help to the defense set up by the defendants in their written statement.
35. In Preliminary Objection No.8, the defendants alleged that they had placed another order with the plaintiff for supply of MS Plates which had to be used by defendant no.1 in the gear boxes, flying shear, base frame and cooling bed used in the installation of rolling mill, meaning thereby, the defendants had actually used the material supplied by the plaintiff against the invoice in question. In this backdrop, the question arises as to whether or not the defendants can be allowed to raise such defense that the goods supplied by the plaintiff were defective. The answer, in the opinion of the Court, has to be in negative for the following reasons:-
(i) Firstly, the defendants themselves admitted that they had used the material supplied by the plaintiff for CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 21 of 33 -22- manufacturing their products in the form of gear boxes, flying shear, base frame and cooling bed which are used in the installation of rolling mill. In other words, the defendants claimed to have supplied the finished goods to their clients after using the material i.e. MS Plates supplied to them by the plaintiff;
(ii) Secondly, the defendants have failed to lead any evidence showing that they ever pointed out any defect in the supplied material or took up the issue with the plaintiff at any point of time till the filing of the present suit. Rather, DW1 admitted during his cross-examination that defendants never intimated in writing regarding poor grade of goods delivered against the invoice in question. He also admitted that defendants have not placed on record any complaint received from their client/customer regarding defective/ poor grade quality of the product as stated in para no. 6 of his affidavit Ex.PW1/A. Further, he admitted that goods supplied by the plaintiff to defendants, were never sought to be returned to the plaintiff at any point of time;
(iii) Thirdly, the defendants have not led any evidence to show that any financial loss was caused to them due to poor grade/ inferior quality of the material supplied by plaintiff to them against the invoice in question. DW-1 admitted during cross-examination CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 22 of 33 -23- that no documentary proof in this regard has been placed on record; and
(iv) Fourthly, the defendants, though alleged, that they received complaints from their clients ie M/s Saiful Alam in Bangladesh and M/s Gajanand in Durgapur but neither any such complaint is placed on record nor either of their said clients is produced as witness during the course of the trial. Hence, an adverse inference is liable to be drawn against them for the same.
36. Moreover, it is trite law that in case at a subsequent stage of supply of goods, the defendants had suffered any loss on account of any lapse on the part of the plaintiff or on account of defective goods/material supplied by the plaintiff, the only option available with them is to sue the plaintiff for damages. However, same is not shown to have been done by the defendants till date. Not only this, the defendants have not filed even counter claim against the plaintiff for grant of damages in the present suit. This is apart from the fact that the defendants have failed to establish that the material supplied by the plaintiff against invoice in question was defective. It is relevant to note that the material was supplied by the plaintiff to the defendants on 18-10-2019 and the plaintiff has filed the present suit on 29-01-2022. Thus, the defendants kept silent throughout the said period and did not raise any issue concerning poor quality of the goods with the plaintiff at any point of time.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 23 of 33 -24-Hence, the defense raised by the defendants that the material supplied by the plaintiff was of poor grade quality, seems highly improbable and unacceptable under the law. Thus, the Court is of the view that the defendants have failed to discharge the burden of proving this issue even on the basis of preponderance of probability. Accordingly, the issue no.2 is also decided against the defendants and in favour of the plaintiff.
ISSUE NO.1 Issue no. (i) - Whether the plaintiff is entitled to a decree of Rs. 15,13,712/- along with interest, as prayed for? OPP.
37. The onus to prove the aforesaid issue was placed upon the plaintiff. In order to discharge such burden, the plaintiff has examined only one witness i.e. PW-1, who deposed during his examination-in-chief by way of affidavit Ex.PW1/A on the identical lines as averred in the plaint that despite having received and accepted the goods so supplied by plaintiff, the defendants withheld the payment against the invoice in question and hence, they are liable to pay the outstanding amount along with interest @ 18% per annum. He deposed that Rs.15,13,712/- is due from the defendants [Rs.11,25,499/- towards the amount of invoice in question and Rs.3,88,263/- towards interest calculated @ 18% per annum from the date when the amount became due till filing of the suit].
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 24 of 33 -25-38. Ld. Counsel of the defendants vehemently argued that the plaintiff himself did not enter into witness box, due to which, the present suit must fail. Further, he argued that PW1, who is son of the plaintiff, was not competent to depose as a witness in this case. Further, he submitted that since the plaintiff shied away from entering into witness box, the defendants did not get any opportunity to cross- examine him in order to prove their defense and hence, the plaintiff should be held not entitled to recover the suit amount from the defendants. In order to buttress his submissions, he also relied upon the following judgments:-
(i) "Iswar Bhai C Patel v. Harihar Behera" reported as (1999) 3 SCC 457;
(ii) "Vidhyadhar v. Manikrao" reported as (1999) 3 SCC 573;
(iii) "Janki Vashdeo Bhojwani v. Indusind Bank Ltd"
reported as (2005) 2 SCC 217; and
(iv) "Iqbal Basith v. N. Subbalakshmi", reported as (2021) 2 SCC 718.
39. On the other hand, Ld. Counsel of the plaintiff argued that PW1 had been assisting the plaintiff in his business and he had due knowledge of the entire facts of the present case and therefore, testimony of PW1 should be duly considered by the Court. He further argued that any person who is competent and fully conversant with the facts of the CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 25 of 33 -26- case, may appear as a witness in matter. In support of his submission, he also relied upon judgment passed by Hon'ble High Court of Bombay in case titled as "Central Bank of India v. Tarseema Compress Wood Manufacturing Co." reported as 1996 LawSuit(Bom) 574.
40. I have duly considered the rival submissions made on behalf of both the sides in the light of judgments/ authorities relied upon by the respective parties.
41. There cannot be any dispute to the proposition of law as discussed by Hon'ble Apex Court in the aforesaid authorities relied on behalf of defendants. However, all the said judgments are entirely distinguishable from the facts of the present case. As per the ratio of law laid down by Hon'ble Apex Court in all these judgments, a person's testimony, who is not conversant with the facts of the case, cannot prove the case of such party on whose behalf said person has entered into the witness box. It is further held that in such a situation, an adverse inference must be drawn against such party having not entered into witness box to face cross-examination from the opposite side, in view of the principle enshrined in Illustration (g) of S. 114 of the Indian Evidence Act, 1872.
42. However, in the case in hand, it is the case of the plaintiff since beginning that his son had been assisting him in his business. It is averred in para no.6 of the plaint that when the defendants started avoiding calls of the plaintiff and his CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 26 of 33 -27- son (emphasis provided), son of the plaintiff had visited the factory of the defendants. Not only this, son of the plaintiff had Whatsapp Chat with defendant no.2 who is none else but one of the partners of the defendant no.1/ partnership firm. Moreover, relevant averments appearing in para no.6 of the plaint, have not been denied by defendants in corresponding para of 'Reply on Merits' in their written statement. Thus, it would clearly show that son of the plaintiff was throughout involved in the business transaction which took place between the parties concerning invoice in question. Further, PW1 namely Sh. Sahil Bansal, son of the plaintiff, has categorically testified in para no.1 of his examination-in-chief by way of affidavit that he is duly conversant with the facts and circumstances of the present case and is competent to swear his affidavit. The said portion of his testimony, has gone unchallenged from the side of the defendants.
43. It is also relevant to note that the defendants have not even put any suggestion to PW1 that he had no knowledge whatsoever regarding facts of the present case or that he was never involved in the business transaction, which took place between the parties concerning the invoice in question. It may further be noted that during cross- examination of PW1, the following question has been put to him on behalf of the defendants:-
Q. In the Whatsapp Chat Ex.PW1/2, is it correct that you have not sent any message before November, 2020 to Sh. Puneet and before February, 2020 to Sh. Rajender ?CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 27 of 33 -28-
A. I may have sent or I may not have sent the messages. If the payment is not made within 60 days, then thereafter we start follow up regarding the payment.
44. The aforesaid conduct on the part of defendants in putting the aforesaid question to the witness i.e. PW1, would go to show that defendants are also admitting the fact that there has been Whatsapp Chat/ Conversation between PW1 and defendant no.3 (who is DW2 Sh. Puneet Singh) concerning the transaction in question. Not only this, DW2 Sh. Puneet Singh has admitted during cross-examination that that SIM number 9811284824 was being used by his father namely Sh. Rajendra Singh (defendant no.2 and DW1). Although, he did not comment on chat/ conversation appearing in Ex.PW1/2 (Colly), however, he has stated in Para No.4 of his chief-examination by way of affidavit Ex.DW2/A that he had received messages from PW1 Sh. Sahil Bansal i.e. son of the plaintiff, on Whatsapp asking about the date when the outstanding bill would be cleared and also that he (DW2) had initially given positive response. This would clearly show that PW1 was actively involved in the business of the plaintiff and was regularly in touch with the defendants demanding payment of the invoice in question.
45. As already noted above, it is case of the plaintiff right since beginning that his son had Whatsapp chat/ conversation with the defendants concerning the transaction in question. Since genuineness and authenticity of the Whatsapp Chat/ conversation as appearing in Ex.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 28 of 33 -29-PW1/2 is beyond any dispute, it would be relevant to reproduce some of its extracts:-
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 29 of 33 -30-46. A bare perusal of the entire Whatsapp Chat/Conversation which occurred between son of the plaintiff i.e. PW1 and aforesaid SIM number belonging to DW2, shows that son of the plaintiff i.e. PW1 was throughout demanding payment from the defendants against the invoice in question and was also seeking time to meet the defendants concerning their outstanding dues. However, the defendants kept on delaying the matter without any plausible and justifiable ground. At no point of time, the defendants are shown to have raised any issue concerning poor grade / inferior quality of the goods/ material supplied by the plaintiff against invoice in question. In view of these facts and circumstances and for the reasons stated hereinabove, Court is of the view that PW1 namely Sh. Sahil Bansal, since fully conversant with the facts and circumstances of the case, is a competent witness.
47. This brings me down to the issue as regards the liability of the defendants to pay the amount against invoice in question. As already noted above, it is an admitted case of the defendants that they had received material against the invoice in question. In fact, DW1 and DW2, during their respective cross-examinations, admitted that they had received MS Plates from the plaintiff against invoice in question, as also that they have not made any payment against the said invoice amounting to Rs.11,25,000/-. Hence, it amounts to clear cut admission on the part of defendants of their liability towards the plaintiff to pay the CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 30 of 33 -31- amount against the invoice in question. Hence, it is established on record that the plaintiff had supplied the goods i.e. MS Plate to the defendants, vide Invoice No. GST/19-20/276 dated 18.10.2019 for a sum of Rs.11,25,449.00/-, which was duly received and accepted by the defendants, who actually used the same for their purposes. Further, the plaintiff has also claimed Rs.3,88,263/- towards interest @ 18% per annum, calculated on the said amount from the date when the amount became due till filing of the suit.
48. Since the defendants illegally and without any reasonable ground, withheld the aforesaid amount due towards the plaintiff and utilized the said amount for their benefit, the defendants are also liable to pay interest on the said amount involved in the commercial transaction which took place between the parties. In view of overall facts and circumstances of the case, the Court is of the view that plaintiff is entitled to pre-suit interest @ 18% per annum from the date when the amount became due till filing of the suit. The plaintiff has calculated the pre-suit interest @ 18% per annum and claimed Rs.3,88,263/- towards the same.
49. Therefore, the Court is of the view that plaintiff is entitled to recover Rs.11,25,449.00 towards amount in respect of invoice in question and Rs.3,88,263/- towards interest calculated @18% per annum from the date when amount became due till date of filing of the suit.
CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 31 of 33 -32-50. Defendant no.1 is a partnership firm and defendant nos. 2 to 3 are its partners. This fact is not at all in dispute, it being admitted by the defendants in their written statement itself. Hence, all the three defendants are equally liable to make the payment to plaintiff against invoice in question.
51. As regards pendente lite and future interest, although, the plaintiff has also claimed interest at the same rate of 18% per annum, however, Court is of the view that the plaintiff is not entitled to interest at the said rate as same is on higher side and is no more the banking rate of interest prevalent during the relevant period. Court is of the view that the interest of justice shall be met by awarding statutory interest @ 10% p.a. in favour of the plaintiff and against the defendants from date of filing of the suit till date of its realization. In these terms, the issue no.1 is decided in favour of the plaintiff and against the defendants.
RELIEF
52. In the light of the aforesaid discussion, Court is of the view that the plaintiff has been able to prove his case on the basis of preponderance of probability. The suit is decreed in favour of the plaintiff and against all the defendants and thus, the following reliefs are granted:-
(i) The plaintiff is entitled to recover Rs.11,25,449/-
towards amount in respect of invoice in question and Rs.3,88,263/- towards interest calculated CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 32 of 33 -33- @18% per annum from the date when amount became due till date of filing of the suit from the defendants;
(ii) Pendente lite interest is awarded @ 10% per annum from the date of filing of the suit till the date of judgment;
(iii) Future interest is awarded @ 10% per annum from the date of judgment till the date of its realisation; and
(iv) Cost of the suit is also awarded in favour of the plaintiff.
53. Decree sheet be prepared accordingly.
54. File be consigned to Record Room, after due compliance.
Digitally signedAnnounced in the open Court VIDYA by VIDYA PRAKASH On 27th February, 2024. PRAKASH Date: 2024.02.27 17:14:37 +0530 (VIDYA PRAKASH) DISTRICT JUDGE (COMMERCIAL COURT)-02 PATIALA HOUSE COURTS, NEW DELHI CS (Comm.) No :127/2022 Ramesh Bansal Vs. Rajendra Gears & Ors. Page 33 of 33