Delhi District Court
M/S Masarsinsa Steels P. Ltd vs M/S Avon Industries on 1 August, 2023
IN THE COURT OF MS. HEMANI MALHOTRA,
DISTRICT JUDGE (COMMERCIAL COURT)-02, WEST,
TIS HAZARI COURTS EXTENSION BLOCK, DELHI
CNR NO.DLWT01-0004682-2020
CS (COMM) NO.38/2020
M/S MASARSINSA STEELS PVT. LTD.
HAVING REGISTERED OFFICE AT:
18/39, GALI NO.5,
ANAND PARBAT INDUSTRIAL AREA,
NEW ROHTAK ROAD,
DELHI-110005
......PLAINTIFF
VERSUS
M/S AVON INDUSTRIES
THROUGH ITS PARTNER SH. VIPIN GUPTA
AT: 68/8, KHERA KHURAMPUR INDUSTRIAL AREA,
FARUKH NAGAR,
GURUGRAM-122001
ALSO AT:
H.NO.6, G-BLOCK, GROUND FLOOR,
SOUTH CITY-2,
GURUGRAM-122018
......DEFENDANT
Date of institution : 18.01.2020
Date of receiving by this Court : 20.01.2020
Date of conclusion of arguments : 19.07.2023
Date of announcement of judgment : 01.08.2023
SUMMARY JUDGMENT
1.By this judgment, I shall dispose off the application U/o XIII A CPC filed by plaintiff seeking Summary Judgment.
2. Brief facts necessary for the disposal of the present CS (Comm) No.38/2020 Page No.1 of 10 application are that the plaintiff which is a company engaged in steel business, filed a suit for recovery of Rs.11,35,731/- against the defendant firm on the premise that defendant approached the plaintiff company at its office at Delhi and placed orders for purchase of CR Steel. The plaintiff accordingly supplied CR Steel to the defendant against bills/invoices of various dates. Since there was an outstanding of huge amount towards defendant, Sh. Vipin Gupta, who was Partner in defendant firm, on 22.09.2015 gave an acknowledgment in writing admitting the liability of Rs.8,50,000/- and assuring the plaintiff that defendant shall make payments from November 2015 onwards. To express his bonafide, he also issued 17 post dated cheques of Rs.50,000/- each, payable to "yourself" for the purpose of making payment through RTGS/NEFT upto the year 2017. The last cheque was dated 28.06.2017. However, all the said cheques except one could not be encashed due to insufficient funds in the account of the defendant.
3. The plaintiff was also maintaining a running account qua the business transactions with the defendant, as per which, a sum of Rs.7,99,811/- was found due against the defendant as on 31.03.2018. When despite requests, no payment was made by the defendant, the plaintiff was constrained to issue legal demand notices dated 02.05.2019 and 02.07.2019 demanding the principle amount of Rs.7,99,811/- along with contractual interest @ 24% per annum. The legal notices were neither replied to nor complied with, hence, the present suit was filed by the CS (Comm) No.38/2020 Page No.2 of 10 plaintiff.
4. In the Written Statement filed by defendant, the defendant did not deny that CR steel was supplied to defendant against the invoices raised by the plaintiff. It was, however, claimed that the material supplied by the plaintiff was below standard and was rejected. It was further claimed that the information qua rejection was given to the representative of the plaintiff company immediately but the plaintiff company refused to accept the rejected material. The defendant denied that Sh. Vipin Gupta, partner in defendant firm, had handed over any acknowledgment letter dated 22.09.2015 admitting the liability of Rs.8,50,000/-. It was alleged that the acknowledgment letter dated 22.09.2015 was obtained by the plaintiff company forcefully. With respect to the 17 post dated cheques, it was claimed that no such cheques were ever issued by Sh. Vipin Gupta. It was averred that barring one cheque bearing No.351136, the remaining 16 cheques were lying unsigned in the office of defendant firm for making payment to some other party through NEFT/RTGS and were stolen by the representative of plaintiff company who used to frequent the office of defendant. It was alleged that the signatures of Sh. Vipin Gupta were forged on the cheques. The defendant further claimed that the present suit was also barred by limitation as the last transaction between the parties took place on 20.04.2016, whereas, the present suit was instituted on 20.01.2020.
CS (Comm) No.38/2020 Page No.3 of 105. Based on the averments of defendant, the plaintiff filed the present application under disposal for summary judgment.
6. It was very vehemently argued by learned counsel for plaintiff that the defendant has made self destructive and self contradictory statements in the written statement, hence, the defendant does not have any real prospect to defend the suit/claim of the plaintiff.
7. The application filed by the plaintiff was opposed by defendant on various grounds urging that present case involved substantial questions which required proper trial and appreciation of evidence. It was thus, contended that plaintiff was not entitled to summary judgment.
8. Lengthy arguments were addressed by Sh. Manuj Aggarwal, learned counsel for plaintiff and Sh. Kishan Nainwal, learned counsel for defendants. Judgments in support of their contentions were also filed.
9. It was firstly urged by learned counsel for defendant that the Statement of Account /Ledger Account was incorrect as the goods supplied by the plaintiff were rejected due to sub-standard quality and the information qua rejection was duly sent to the plaintiff. Per contra, it was contended by learned counsel for plaintiff that the argument of learned counsel for defendant was liable to be rejected as defendant in written statement had conceded the fact that the goods were supplied to the defendant and no document was filed by the defendant to support its claim that the CS (Comm) No.38/2020 Page No.4 of 10 goods were of poor and sub-standard quality.
10. So far as supply of goods is concerned, it is an undisputed fact that the goods supplied by plaintiff against invoices were delivered to defendant. Whether the defendant rejected or accepted the goods of the plaintiff is a question of fact. Section 42 of the Sale of Goods Act, 1932 defines "Acceptance" as follows:
"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."
It is a matter of record that the defendant did not place any document on record, leave alone, any document which could substantiate the claim of defendant that defendant had rejected the goods of plaintiff and had immediately informed the plaintiff qua the alleged sub-standard quality of goods. It is not the case of defendant that it had returned the goods of the plaintiff. The assertion of the defendant that the plaintiff was informed is thus, just a bald submission which appears to be an afterthought. Thus, in the absence of any such document, the defendant is deemed to have accepted the goods i.e. CT Steel delivered by the plaintiff.
11. The learned counsel for defendant also disputed the acknowledgment dated 22.09.2015 by urging that the acknowledgment dated 22.09.2015 was forcefully obtained by the plaintiff under coercion. Perusal of record CS (Comm) No.38/2020 Page No.5 of 10 reflects that the acknowledgment is dated 22.09.2015, the legal demand notices are dated 02.05.2019 and 02.07.2019, the suit was instituted on 20.01.2020 and the written statement was filed on 02.08.2022. It is significant to note that despite the lapse of seven years between the date of acknowledgment and filing of written statement, neither any police complaint nor any suit for declaration, declaring acknowledgment null and void was filed by the defendant. In such circumstances, an adverse inference is liable to be drawn against the defendant and it can be very fairly presumed that the acknowledgment dated 22.09.2015 was given without any undue pressure, coercion, force and duress. Meaning thereby, that Sh. Vipin Gupta willingly admitted the liability of defendant that defendant was liable to pay Rs.8,50,000/- (approximately) to the plaintiff along with interest.
12. In so far as the argument of defendant that the 17 cheques in question were stolen and signatures of Sh. Vipin Gupta were forged on 16 cheques is concerned, the said argument is also not tenable. The cheques which are alleged to have been stolen are a series of cheques bearing Nos. 351134, 351135, 351136, 351137, 351138, 351139, 351140, 351141, 351142, 351143, 351144, 351145, 351146, 351147, 351148 and 999460 which are perhaps from the same cheque book. It is rather improbable that anyone would fail to not notice the missing series of cheques. Yet again, nothing was placed on record to fortify this claim that same were stolen. The theft of cheques is a serious offence for which surprisingly, no FIR or criminal CS (Comm) No.38/2020 Page No.6 of 10 complaint was filed by the defendant. Moreover, the defendant in reply to the application u/o XIIIA CPC admitted that one of the cheques i.e. cheque bearing No. 351136 was signed by Sh. Vipin Gupta. Much to the surprise of this court, it was argued by learned counsel for defendant that the alleged signatures (signed as "Vipin") which were appended adjacent to the genuine signatures of Vipin Gupta on cheque bearing No. 351136 were forged. The argument of learned counsel for defendant is neither tenable nor logical as it is difficult to fathom as to why anyone would append a forge signature, that too, adjacent to the genuine signature which was previously appended. To my mind, the signatures of Sh. Vipin Gupta appended as 'Vipin' are also genuine. It is rather relevant to mention here that all the remaining cheques in question bear the signatures of Vipin Gupta as "Vipin" as on the cheque bearing No. 351136 which further fortifies the fact that the signatures were genuine and were appended on cheques by Vipin Gupta himself for defendant firm in discharge of his liability.
13. Last but not the least, it was also one of the defence of the defendant that suit was barred by limitation. This argument also has no force. The perusal of Statement of Account/ Ledger Account filed by the plaintiff reflects that last transaction between the plaintiff and defendant took place on 18.03.2015 when goods worth Rs.23,365/- were supplied to the defendant. Thereafter, the defendant made part payments towards its outstanding. The last payment was received by the plaintiff on 20.04.2016 vide cheque CS (Comm) No.38/2020 Page No.7 of 10 bearing No. 999466 which on presentation was returned unpaid on the same date i.e. 20.04.2016. The plaintiff subsequent thereto, had also attempted to encash the cheque bearing Nos. 351134 and 351148 both dated 25.10.2016 through NEFT but was unable to as there were insufficient funds in the account of defendant. The limitation period therefore, starts running w.e.f. 26.10.2016. Since the present suit is filed to recover the price of goods sold and delivered and no fixed period of credit was agreed upon, the relevant article is Article 14 of the Schedule of The Limitation Act. As per which, the period of limitation is three years from the date of delivery of goods. As the cheques bearing Nos. 351134 and 351148 were dishonoured on 25.10.2016, the time from which the limitation period begins to run is 26.10.2016. After adding the period during which the parties remain occupied with pre-institution mediation, the present suit was filed well within the period of limitation.
14. Summary judgment as the name suggests is an outcome of the case decided summarily, based on the documentary evidence produced before the Court by the parties, without going for recording of evidence. The rule of Civil Procedure empowers the court to narrow issues and expedite proceedings by granting summary judgments where the common law permits. It is an effective tool for deciding cases where it can be clearly demonstrated that a trial is unnecessary. However, to grant a summary judgment, the court must be satisfied that there is no issue for trial. Rule 3 of Order XIII A of the CPC lays down the CS (Comm) No.38/2020 Page No.8 of 10 following grounds for Summary Judgment against a party on a claim, when it considers that :
(a) The plaintiff has no real prospect of succeeding on a claim or the defendant has no real prospect of successfully defending the claim : and
(b) There is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
15. In a case titled as "AMBAWATTA BUILDWELL PRIVATE LIMITED VS. IMPERIA STRUCTURE LTD. AND ORS. reported as 2019 SCC ONLINE DL 8657, it was held by the Hon'ble High Court of Delhi as under:
"What has to be seen is, whether the defence pleaded, has any chance of succeeding of in law and if the answer is in the negative, a decree on admissions or order XXV of CPC or a summary judgment Under Order XIII A CPC as applicable to commercial dispute where Chapter X-A of the Delhi High Court (in original sites) Rules 2018 has to follow."
16. Similarly, in SYRMA TECHNOLOGY PVT. LTD. VS.
POWERWAVE TECHNOLOGIES SWEDEN AD and another reported as 2020 SCC ONLINE MAD 5737, it was held by the Hon'ble Madras High Court as under:
"This rule provides sufficient powers to the court to pass the conditional order. This power has to be exercised when it appears to the court that it is possible that a claim or defence may succeed but it is improbable that it shall do so. If we read Order XIII A Rule 6 & 7 together, a clear picture would emerge. If it appears to the court that a claim or defence may succeed and it is also probable, then the application filed seeking a Summary judgment will have to be dismissed. If it appears to the Court that it is possible but improbable as stated in Rule 7 of Order XIII-A of the Code, then it may consider passing a conditional order."
If the court considers that a plaintiff has no real prospect of succeeding on the claim or the defendant CS (Comm) No.38/2020 Page No.9 of 10 has no real prospect of successfully defending the claim there is no other compelling reason as to why the claim should not be disposed of before recording of oral evidence, it may give a Summary judgment. Alternatively, the Court can also consider striking out the pleadings either in whole or in part. This discretion is given to the Court before deciding to give a summary judgment. Therefore, the court has to keep in mind and decide as to whether it is a fit case for striking out the pleadings dismissing an application and proceed further or a conditional order could be passed. After exhausting these stages, the question of granting a summary judgment would arise."
17. Now applying the principles of summary judgment to the facts of the instant case, I am of the considered opinion that the defendant miserably failed to satisfy this court that there is any triable issue which requires trial or that defendant has any real prospect of successfully defending the claim of plaintiff. Resultantly, the application of plaintiff under Order XIIIA CPC is allowed. Present suit is, thus, decreed in favour of the plaintiff and against the defendant for an amount of Rs.11,35,731/- along with cost.
18. So far as pendente lite and future interest @ 24% per annum is concerned, I am of the considered opinion that pendente lite and future interest @ 12% per annum would be just and reasonable and would meet the ends of justice. Hence, plaintiff is also entitled to pendente lite and future interest @ 12% per annum w.e.f. the date of institution of the present suit till its actual realization. Decree sheet be prepared accordingly.
File be consigned to Record Room.
ANNOUNCED IN THE OPEN COURT ON 1ST AUGUST, 2023 (HEMANI MALHOTRA) DISTRICT JUDGE (COMMERCIAL COURT)-02/WEST, TIS HAZARI COURTS EXTN. BLOCK, DELHI CS (Comm) No.38/2020 Page No.10 of 10