Delhi District Court
M/S Jeena & Co vs R.K. Wind Ltd. (Earlier Knows As ... on 6 May, 2023
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS NO.59068 OF 2016
Date of institution:12.02.2014
Arguments heard on: 01.05.2023
Date of judgment: 06.05.2023
M/s Jeena & Co.
3rd floor, Sewa Corporate Park
M.G Mall Road, near IFFCO Chowk
Gurugram, Haryana-122015
..........plaintiff
VS
R.K. Wind Ltd. (earlier knows as Powerwind Ltd.)
3rd floor, GL Complex
Old Delhi Gurgaon Road,
opposite Udyog Vihar, Phase-I
Dundahera.
Gurgaon, Haryana
also at
2nd NBCL Tower
15 Bhikaji Cama Place
New Delhi-110066
and:
Plot no.352/353
HSHDC, Sector 2, Bawal
Haryana-123501
............Defendant
JUDGMENT
1. The plaintiff has filed the present summary suit against the defendant for recovery of sum of Rs.51,72,455/- alongwith interest @ 18% per annum.
2. By way of detailed order dated 09.01.2023, the application for leave to defend filed by defendant was conditionally allowed subject to the condition of deposit of Rs.51,72,455/- alongwith interest @ 9% per CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.1 of 24 annum from the date of filing of the suit till the date of deposit within six weeks from the date of order. It would be appropriate to set out in extenso, the order dated 09.01.2023 as under:
"ORDER
1. The plaintiff has filed the present summary suit under Order 37 CPC against the defendant for recovery of sum of ₹ 55,51,206/- along with interest. The appearance on behalf of the defendant has already come on record and the defendant has filed application for leave to defend under Order 37 CPC.
2. It is the case of the plaintiff in the plaint that the plaintiff is a registered partnership firm and is in the business of logistics. It is stated in the plaint that the plaintiff is renowned for its products and service offerings in both the domestic and international markets. It is stated that the defendant claimed itself to be a manufacturer of wind mills and other power generation equipment. It is the case of the plaintiff that the plaintiff received a query from the defendant by email on 18/06/2013 for a job. It is stated that the job to be performed was to pick up very large pieces of odd dimension consignment from Tennessee, USA and to transport to two locations at Indiana, USA and Ohio, USA. It is stated that in the request for quote document from the defendant, the last date for submitting the quote was 26/06/2013. It is stated that in the same request for quote document, the last date for pickup of the material from the site was 11/07/2013. It is stated that vide its email dated 04/07/2013, the plaintiff quoted its charges as USD 110,000. It is stated that the defendant did not respond to the said quote for over 15 days despite the fact that the defendant's request for quote document expressly mentioned the last date to lift the cargo from the site as 11/07/2013. It is stated that eventually on 20/07/2013, the defendant requested the plaintiff to re-forward the quote sent earlier on 04/07/2013, which the plaintiff did immediately the very same day i.e. on 20/07/2013. It is further stated that since in the trade costs vary substantially from time to time, in its email of 20/07/2013, the plaintiff clearly stated that the earlier quote was based on pickup before 11/07/2013 and that the plaintiff would need to reconfirm the costs from the agent now. It is stated CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.2 of 24 that the defendant replied the same day with a counter offer of USD 105,000. It is stated that the defendant sought the confirmation of the acceptance from the plaintiff. It is further stated that in this email the defendant also stated that the deadline to pick up the cargo would be informed to the plaintiff by one Mr. John, the counterpart of the defendant in USA. It is stated that thus, it was evident that even as per the defendant itself, the last pickup date of the materials from the site as mentioned in the request for quote document which was 11/07/2013 was no longer applicable. It is further stated that since the issue of the last date of pickup and the matter of opening of the LC was yet to be resolved, the plaintiff did not send the acceptance of the proposal made by the defendant as had been requested.
3. It is further stated in the plaint that on 23/07/2013, the plaintiff discovered that in the meantime the defendant had on 22/07/2013 directly contacted the plaintiff's agent in USA making a request to pick up the cargo on 26/07/2013. However, the said agent declined stating that it was not possible to move the cargo at such short notice. It is stated that this was dishonesty on the part of the defendant to directly contact the plaintiff's agent without informing the plaintiff.
4. It is further stated in the plaint that when on 23/07/2013, the said agent expressed inability to lift the cargo by 26/07/2013 stating that the time was too short, in its email dated 23/07/2013 the defendant asserted that while the cargo was always planned to be lifted before 31/07/2013 it was requesting preponent by just a few days to 26/07/2013. It is further stated that this deadline of pickup by 31/07/2013 had not been informed to the plaintiff at the time of asking for re-forwarding the quote on 20/07/2013, and it was for the first time on 23/07/2013 that it came to the notice of the plaintiff that there was a deadline of 31/07/2013 to pick of the cargo. It is stated that the plaintiff therefore declined the request. It is stated that thereafter on 26/07/2013, the defendant again requested the plaintiff to pick up the cargo by 31/07/2013. It is stated that this request was also declined by the plaintiff.
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.3 of 24
5. It is further stated in the plaint that it appears that on 30/07/2013 the defendant received an email from its suppliers reminding it about the extra storage costs that would apply from 01/08/2013. It is stated that thereupon at around 11.58 AM on 30/07/2013 the defendant forwarded the said mail of its supplier to the plaintiff regarding the extra storage costs. It is stated that the defendant was of course aware that it had till then not even given any contracts/work order to the plaintiff. It is stated that hence, to cover the omission, at 12.04 PM on 30/07/2013, i.e. 6 minutes after the previous mail, the defendant emailed a "revised work order" to the plaintiff. It is stated that thus it was only at 12.04 PM on 30/07/2013 that the defendant had given the plaintiff any work order hence the question of it being a "revised" work order did not arise.
6. It is further stated in the plaint that the plaintiff taking a long-term business view of the matter decided to accept the work order and pick up the extra storage costs. It is stated that while doing so the plaintiff was mindful of the fact that the revised work order did not mention any penalty and the defendant only wanted the plaintiff to pick up the extra storage costs. It is further stated that since the date and time of the said instruction was evident from the defendant's email dated 30/07/2013, it was not considered necessary to make any reply to it at the time. It is stated that thus it was at this point of time i.e. after 12.04 PM on 30/07/2013 that the contract came into existence between the parties.
7. It is further stated in the plaint that vide email dated 01/08/2013, the plaintiff shared the cargo pickup and delivery plan with the representative of the defendant. It is stated that the plan required at least 10 days from 01/08/2013 to pick up the cargo. It is stated that thus the defendant was aware that the cargo would be picked up within that timeframe. It is stated that the cargo was indeed picked up within 10 days of 01/08/2013 as per plan. It is stated that the cargo was delivered as per the schedule. It is further stated that the plaintiff paid a sum of USD 5,543.00 on account of the storage charges beyond 31/07/2013. It is stated that thereupon vide email dated 12/08/2013 Mr. N.P. Sharma, the representative of the CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.4 of 24 defendant acknowledged and appreciated the good job done by the plaintiff. It is stated that at such time there was no allegation that the cargo had not been delivered within the agreed time frame.
8. It is further stated in the plaint that thereafter on 24/08/2013, the plaintiff raised an invoice for an amount of ₹ 70,19,303.00 for the job and sent it by email with the request to make the payment.
9. It is further stated that apart from the aforesaid invoice, there were six other bills totalling ₹ 8,82,009/- that had been raised from 18/07/2013 to 25/09/2013 for six other jobs. It is stated that in respect of these six bills, payments amounting to ₹ 1,28,857/- had been received, and this left a balance of ₹ 7,53,152/- due against these other six jobs. It is stated in the plaint that thereupon, the defendant paid a further sum of ₹ 26,00,000/- (an amount of ₹ 16,00,000/- paid on 10/09/2013 and an amount of ₹ 10,00,000/- paid on 25/09/2013). It is stated that out of the sum of ₹ 26,00,000/-, the plaintiff adjusted a sum of ₹ 7,53,152/- towards the balance due against the other six jobs. It is stated that this left a balance sum of ₹ 18,46,848/- which was adjusted against the invoice dated 24/08/2013 of ₹ 70,19,303/- as aforesaid. It is stated that accordingly, a balance of ₹ 51,72,455/- thus remained outstanding.
10. It is further stated in the plaint that the plaintiff was following up with the defendant on its payments. It is stated that even while the plaintiff was following up on the balance payment, the plaintiff was also in the process of completing certain other shipments for the defendant and in respect of which it subsequently raised certain invoices. It is stated that the plaintiff followed up on the payments with the defendant through emails. It is stated that the defendant only replied making promises that the payments would be made but the promises turned out to be false.
11. It is stated that as the defendant failed to honour its commitment, the plaintiff on 18/10/2013 caused a notice of winding up to be issued to the defendant. It is stated that CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.5 of 24 thereupon the defendant sent a reply dated 19/10/2013 contending for the first time and after a period of 2 months of delivery of the cargo, that the delivery of the consignment had been made after 31/07/2013 and was hence late. It is stated that the defendant falsely claimed that as a result of the delay in the delivery the defendant had been caused losses of USD 83,870.00. It is stated that thus the defendant refused the plaintiff's dues. It is stated that the defendant even called upon the plaintiff to pay it a sum of USD 83,870.00 along with interest. It is stated that this was despite the fact that the defendant had never even put the plaintiff to notice of any such potential loss at any stage, and hence the plaintiff had not agreed to bear any such loss and/or potential loss at any stage whatsoever. It is stated that on 28/10/2013, the plaintiff made a further reply to the defendant denying the allegations and calling upon the defendant to tender the plaintiff's balance dues. However, the defendant failed to tender the payment.
12. It is on the aforesaid basis that the plaintiff has filed the present summary suit under Order 37 CPC based on the work order and the invoice.
13. The defendant has filed its application seeking leave to defend which is presently under consideration. It is stated in the application for leave to defend that the plaintiff has wrongly applied the conversion rate from USD to INR and has claimed an exaggerated amount. It is also stated that the suit is bad for misjoinder of parties. It is stated that the plaintiff has deliberately and wilfully not impleaded M/s. Green Worldwide Shipping LLC, the plaintiff's agent in Atlanta, USA, which is stated to be a necessary and proper party in the present suit. It is further stated that the work order did not provide for any payment of interest in case of delay in payment, and as such the present suit was not maintainable as a summary suit under Order 37 CPC.
14. It is further the defence sought to be raised by the defendant in its application for leave to defend that the defendant had to lift the concerned equipment from the loading site before 31/07/2013 and that the delay in lifting of the equipment had resulted in huge cost, penalty and CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.6 of 24 damages to the defendant. It is stated that the plaintiff had approached the defendant and had submitted that it had necessary infrastructure and representation in USA to transport the equipment. It is stated that the defendant had provided the necessary specifications of the equipment as well as the terms of transportation to the plaintiff to work out the rates. It is further stated that in the specifications it was mentioned that the proposed last date of pickup was 11/07/2013 and delay beyond this time would attract penalty up to the actual value of the material. It is further stated that the pickup date was crucial as the loading site had to be vacated by 31/07/2013 and based on this, the entire deal had been structured between Hilco from whom the equipment was being purchased and the defendant. It is stated that on 18/06/2013, the plaintiff was called upon to give a more competitive offer. It is stated that on 20/07/2013 the plaintiff submitted revised quotation and gave the details of its agent i.e. M/s. Green Worldwide Shipping LLC. It is stated that it was stated by the plaintiff that the earlier rates were given on the basis that the cargo was to be lifted before July 2011 and that the plaintiff would reconfirm the charges with its agent. It is further stated that there was no fluctuation of charges and the contract price remained the same, subject to minor deviations. It is stated that on 20/07/2013, the defendant apprised the plaintiff that the defendant wished to open a letter of credit on the foreign entity i.e. agent of the plaintiff to avail certain financial benefits. It is stated that this arrangement was acceptable to the plaintiff who never raised any objection to it and rather took necessary steps in furtherance of the same. It is stated that the right from the beginning the plaintiff itself was coordinating between the defendant and its agent.
15. It is further stated by the defendant in the application for leave to defend that the plaintiff asked the defendant to contact its agent and the three parties i.e. the plaintiff, the defendant and the plaintiff's agent were constantly in touch to complete the project within time. It is further stated that the defendant had informed the plaintiff that the equipment had to be lifted by 31/07/2013, however due to certain changed circumstances, the defendant asked the plaintiff to arrange early lifting i.e. on 26/07/2013. It is stated that the defendant was regularly approaching the plaintiff and the CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.7 of 24 plaintiff's agent for early pick up on 26/07/2013. It is stated that in response the plaintiff's agent assured that they were working for the schedule but did not confirm. It is stated that the plaintiff was in loop and the contention of the plaintiff that the defendant had directly approached the plaintiff's agent or that the plaintiff was not kept in loop was false.
16. It is stated that the consignee was also in constant touch with the plaintiff's agent as well as the plaintiff for having the delivery schedule for 26/07/2013. It is further stated that it was also communicated by the consignee that the cranes for the unloading had been arranged and therefore, efforts should be made for making the delivery on 26/07/2013. It is further stated that the plaintiff's agent was repeatedly giving assurance to the defendant as well as the consignee regarding efforts being made for delivery in time. It is stated that the plaintiff was always kept in the loop. It is further stated that there were some inter se disputes between the plaintiff and its agent due to which substantial delay took place.
17. It is further stated that on 26/07/2013, the defendant in categorical terms informed the plaintiff that the payment would now be made directly to the plaintiff after completion of the job and that the plaintiff must ensure that the job was executed as planned for 31/07/2013. It is further stated that the plaintiff thereafter on 26/07/2013 intimated to the defendant that the cargo cannot be lifted before 31/07/2013. It is stated that the defendant however kept on pressing for early lifting of the cargo. It is further stated that on 26/07/2013, the consignee asked the schedule from the agent of the plaintiff. It is stated that on 30/07/2013, the defendant was intimated by the consignee regarding consequences of not lifting the equipment on 31/07/2013. It is stated that the email of the consignee was forwarded to the plaintiff on 30/07/2013 itself. It is stated that it was notified to the plaintiff that the cost incurred on non-compliance shall be debited to the plaintiff.
18. It is further stated that on 30/07/2013, the plaintiff intimated that disputes and differences had arised between CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.8 of 24 the plaintiff and its agent and the plaintiff requested for issuing revised work order with certain amended terms. It is stated that the scope of work was changed and unloading of the 1st part shipment was also taken up by the plaintiff and charges were agreed as USD 4600. It is further stated that it was agreed that the plaintiff would be liable for storage charges. It is stated that the parties were goverened by the general terms and conditions of the Work Order.
19. It is further stated in the application for leave to defend that the plaintiff's agent had backed out and the plaintiff had taken upon itself to deliver the equipment. It is stated that the plaintiff was aware about the consequences of delay and was liable to indemnify the defendant as per the work order. It is stated that as per the terms and conditions governing the work order, the plaintiff was liable to indemnify the defendant for the losses, costs, expenses et cetera suffered by the defendant on account of the breach of the plaintiff. It is further stated that the defendant was also entitled to deduct 1% of the basic cost per week towards delay in the delivery schedule.
20. It is further stated that the plaintiff picked up the equipment belatedly and delivered on 15/08/2013. It is stated that the equipment was to be supplied to SUREnergy LLC. It is stated that the defendant under the contract with SUREnergy LLC, to supply the equipment in a time-bound manner. It is stated that the delay in delivery resulted in damages to SUREnergy LLC who in turn claimed the same from the defendant. It is stated that for 15 days additional retention of cranes, SUREnergy LLC incurred liability of USD 34,000 which was claimed from the defendant. Further, SUREnergy LLC imposed additional penalty of USD 49,870 on account of delay in delivery of the equipment which resulted in delaying the project. It is stated that thus, on account of such delay on the part of the plaintiff, the defendant suffered losses of USD 83,870. It is stated that the losses occasioned to the defendant directly on account of the breaches committed by the plaintiff. It is stated that as per the contract, the plaintiff had to indemnify the defendant and keep it harmless of losses. It is stated that accordingly, the defendant was entitled to deduct USD 83,780 from the contract price. It is further CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.9 of 24 stated that the defendant was further liable to claim 3% of contract price towards delay in delivery i.e. USD 3,288. It is stated that there was delay of 15 days which would be counted as 3 weeks for the purposes of calculation of liquidated damages for delay.
21. It is further stated that thus the defendant was liable to adjust USD 87,158 from the amount payable to the plaintiff against the work order/invoices. It is stated that upon adjustment of the amount, no amount whatsoever is due and payable by the defendant to the plaintiff.
22. The learned counsel for the defendant has reiterated the averments made in the application for leave to defend, which have already been summarised in the aforesaid paragraphs, and has submitted that the defendant has raised genuine triable issues in its application for leave to defend, and has submitted that, as such the defendant is liable to be granted unconditional leave to defend.
23. On the other hand, the learned counsel for the plaintiff has argued that the defence in the application for leave to defend was sham, frivolous and moonshine. It is submitted that the consequence for any delay beyond 31/07/2013 was only to be the storage charges for the period beyond 31/07/2013 as mentioned in the defendant's email dated 30/07/2013. It is submitted that apart from this, there could have been no penalty imposed upon the plaintiff. It is submitted that the defendant had never put the plaintiff to notice regarding any damages or penalty by the consignee SurEnergy apart from the storage charges. It is submitted that by its own email dated 30/07/2013, it was the position of the defendant that only the storage charges were to be paid extra beyond 31/07/2013. It is further submitted that vide email dated 01/08/2013, the plaintiff had shared the cargo pickup and delivery plan with the defendant and the plan required at least 10 days from 01/08/2013 to pick of the cargo. It is submitted that thus the defendant was always aware that the cargo would be picked up within that timeframe only. It is further submitted that the cargo was indeed picked up within 10 days of 01/08/2013 as per plan. It is further submitted that the plaintiff paid a sum of USD CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.10 of 24 5,543.00 on account of the storage charges beyond 31/07/2013. It is further submitted that after two months of the cargo having been delivered, the defendant through its reply dated 19/10/2013, for the first time as an afterthought took the stand that the delivery of the consignment was made after 31/07/2013 and was late and fraudulently claimed that as a result there were losses of USD 83,870 to the defendant. It is submitted that the defendant had never ever put the plaintiff to notice of any such potential loss at any stage. It is submitted that the defence which is sought to be raised in the application for leave to defend is sham and frivolous and is only with a view to deny the just claims of the plaintiff.
24. I have considered the submissions of the learned counsel for both the parties and I have perused the record.
25. Insofar as the defence sought to be raised that M/s. Green Worldwide Shipping LLC who was the plaintiff's agent was a necessary party to the suit, the said contention deserves to be rejected. In its application for leave to defend, the defendant has admitted that ultimately the contract was between the plaintiff and the defendant only, and that after there were some disputes between the plaintiff and its agent inter se, the plaintiff had taken upon itself to deliver the equipment. It is specifically stated by the defendant in paragraph 12 (ee) of the affidavit in support of the application, that the plaintiff's agent had backed out and the plaintiff had taken upon itself to deliver the equipment. Further, the contract between the parties in the present case is basically the work order which was attached to the email dated 30/07/2013 at 12.04 PM from the defendant to the plaintiff. This work order was raised by the defendant upon the plaintiff. It is also the admitted position that the consignment was actually delivered. The invoice dated 24/08/2013 was raised by the plaintiff on the defendant in respect of the said work order annexed to the email dated 30/07/2013. Hence, it cannot be said that the plaintiff's agent was a necessary or proper party to the suit.
26. The contention of the defendant that the plaintiff had wrongly applied the conversion rate from USD to INR CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.11 of 24 appears to be highly doubtful. In the work order attached to the email dated 30/07/2013 from the defendant to the plaintiff, it is provided in clause 8 containing the payment terms that the payment would be 100% against successful execution of the work awarded and the rate of exchange of the date of execution plus 2 days shall prevail. The plaintiff had raised its invoice dated 24/08/2013 in which an amount of ₹ 70,19,303.00 was claimed. There is no communication from the defendant to the plaintiff stating that the exchange rate had been wrongly applied. The only defence which is taken by the defendant is in its letter dated 19/10/2013 in which the sole defence which is taken was that due to the delay there was a liability of USD 83,870 upon the defendant. There is no issue raised regarding exchange rate in its letter of 19/10/2013. Even in the application for leave to defend, the defendant has not mentioned what would be the applicable exchange rate as per the defendant. Thus, the contention sought to be raised regarding the exchange rate appears to be an afterthought and is highly doubtful.
27. The main contention of the defendant is that the amount claimed is not liable to be paid by the defendant to the plaintiff inasmuch as the defendant has suffered losses on account of the delay caused by the plaintiff in transporting the equipment and thus the defendant was entitled to adjust USD 87,158 from the amount payable to the plaintiff against the work order/invoices, due to which nothing was ultimately payable to the plaintiff. Upon having perused the record and having heard the learned counsel for the parties, I find this contention of the defendant to be very doubtful.
28. The contract between the parties is admittedly comprised in the work order attached to the email dated 30/07/2013 from the defendant to the plaintiff. The delivery time is given in the work order as under:
"All Immediate with pick up before 31-07-2013".
29. In clause 12 of the work order it is stated as under:
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.12 of 24 "12. All delay in execution beyond 31st July 2013, the all charges imposed by the property owner at the point of pickup shall be debited to Jeena".
30. It would be relevant to take note of the email dated 30/07/2013 at 11.58 AM from the defendant to the plaintiff forwarding the Email from the consignee to the plaintiff. This is an admitted document. The same is extracted hereunder:
"From: NP Sharma (NP [email protected]) Sent: Tuesday, July 30, 2013 11:58 am To: [email protected] Subject: In land movement of Towers in USA Importance: High Dear Mr. Sachin Mail below is self explanatory. The cost shall be debited to Jeena if not picked by tomorrow as agreed.
Regards N.P Sharma
----------------------------------------------------------------
From: Beth Amburgy (mailto:BAmburgy
@surenergy.us)
Sent: Tuesday, July 30, 2013 2:09 AM
To: [email protected]
Cc: John Fellhauer
([email protected]); Tim Rathbun Subject: Tower located at Hilco Mrinal, I hope all is well with you. We were notified today theat effective Wednesday, July 31, 2013 there will a demurrage/rental fee assessed upon the storage of the tower as of July 31, 2013 and going forward until the tower is relocated.
As a result, there will be an accrual of $600 per day rental fees as of August 1 and through the day the CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.13 of 24 tower is relocated. If not moved within a specified time by Hilco, Hilco will treat such property as abandoned. Hilco will have the option to sell or use the property in any manner compliant with the terms and conditions of their terms located on their website.
It is our recommendation that the tower be moved as soon as possible to avoid any further risk of forfeiture.
Thank you for your attention to this matter.
Sincerely, Beth Amburgy SUREnergy"
31. As per the aforesaid, the consignee SUREnergy LLC had sent email dated 30/07/2013 at 2.09 AM to the defendant stating that effective from 31/07/2013 there would be a demurrage/rental fee assessed upon the storage of the tower as on 31/07/2013 and till the tower was relocated. It was stated that as a result there would be an accrual of $600 per day rental fees as of 01/08/2013 and through the day the tower was relocated. The plaintiff had forwarded the email from the consignee to the plaintiff and had informed that the email of the consignee was self- explanatory and that the cost would be debited to the plaintiff if not picked up by 31/07/2013 as agreed.
32. Thus, the defendant had put the plaintiff to notice that the plaintiff would have to incur cost of USD 600 per day rental fees beyond 31/07/2013. This was as per the mail sent by the consignee Sure Energy to the plaintiff.
33. On 01/08/2013 at 18.01, the plaintiff sent an email to the defendant stating that there was an offer received from another agent and that the agent required at least 10 days' notice to secure the equipment/permits. In response, the defendant send email dated 01/08/2013 at 7.38 PM stating that: "We must try and discuss for pick up within next week." Next is an email dated 02/08/2013 at 16.29, from the plaintiff to the defendant stating that the agent crane company had visited the site to see the facility. Vide email CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.14 of 24 dated 03/08/2013 at 1.50 PM, the plaintiff wrote to the defendant that the plaintiff stood by its commitment and confirmed pickup by 09/08/2013 or latest by 12/08/2013 and accepted the storage charges on the plaintiff. It was further stated that the offer for subject shipment was USD 1,09,600 plus additional government fees for transport approvals against actual receipt as per the defendant's work order.
34. Thus, the defendant was always aware that the pickup and delivery of the equipment would only be post 01/08/2013. The parties had agreed that for delay beyond 31/07/2013, the plaintiff would be liable for rental/storage costs incurred on daily basis beyond 31/07/2013. The plaintiff has stated in the plaint that it had paid sum of USD 5,543.00 towards storage charges beyond 31/07/2013 which is not disputed in the application for leave to defend filed by the defendant.
35. Further, it would be appropriate to extract Clause 7 of the general terms and conditions for work order which states as under:
"7. In case the SELLER fails to deliver the material(s)/execute the Order within the date specified or agreed as in the inquiry or order, BUYER shall deduct liquidity damages (LD) @1% of the basic cost per week or part thereof limited to maximum of 10% of PO value. Notwithstanding this clause, time is the essence of the PO and BUYER shall have the right to terminate or cancel the PO for failure to comply with the agreed delivery schedule. In such eventuality, SELLER, will have to fully compensate BUYER for the financial loss on account of cancellation/nondelivery".
36. Thus, in any case, as provided in Clause 7 of the general terms and conditions for work order, the liquidated damages which could be imposed for delay was only @1% of the basic cost per week or part thereof limited to maximum of 10% of PO value. Even as per the own case of the defendant in its application for leave to defend, under clause 7, the LD amount came to 3% of contract price i.e. CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.15 of 24 USD 3288 towards delay in delivery. Even this has also been calculated by the defendant by counting 3 weeks against delay of 15 days only (which is the number of days of delay as per the defendant's case). As already mentioned, the plaintiff has already stated in the plaint that it had paid sum of USD 5,543.00 towards storage charges beyond 31/07/2013 which is not disputed in the application for leave to defend filed by the defendant. Thus, the plaintiff has paid an amount towards storage charges which are even more than the LD amount.
37. The defendant had only on 19/10/2013, after a period of over two months from the transport of the consignment, stated for the first time that due to delay a penalty of USD 34,000 had been imposed on the defendant by the consignee SureEnergy. It was further informed that an additional penalty of USD 46,870 had been imposed due to the delay, amounting to a total of USD 83,870. It is on this basis that the defendant has claimed that after adjustment of such loss caused, the defendant was not liable to pay any amount to the plaintiff. I find this defence of the defendant to be very doubtful. The relationship between the plaintiff and the defendant would be governed by the contract between them. As already mentioned, the parties had agreed that for delay beyond 31/07/2013, the plaintiff would be liable for the daily storage/rental costs. Further, the plaintiff has stated in the plaint that it had paid sum of USD 5,543.00 towards storage charges beyond 31/07/2013 which is not disputed in the application for leave to defend filed by the defendant. In any case, even as per the own case of the defendant in its application for leave to defend, under clause 7, the LD amount came to 3% of contract price i.e. USD 3288 towards delay in delivery. Thus, I find it highly doubtful that the defendant could now claim adjustment of USD 83,870 by alleging that such penalty had been imposed upon the defendant by the consignee. It appears that the defendant has sought to raise this plea as an afterthought only to evade the payments to be made to the plaintiff.
38. At this juncture, it would be appropriate to refer to the judgment of the Hon'ble Supreme Court in B.L. Kashyap & Sons Ltd. v. JMS Steels & Power Corpn., (2022) 3 SCC CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.16 of 24 294, in which the principles of grant of leave to defendant under Order XXXVII CPC have been laid down. The relevant portion of the judgment is extracted hereunder:
"32.2. In IDBI Trusteeship [IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568 :
(2017) 1 SCC (Civ) 386] , this Court modulated the aforementioned principles and laid down as follows:
(SCC pp. 596-97, para 17) "17. Accordingly, the principles stated in para 8 of Mechelec case [Mechelec Engineers & Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] will now stand superseded, given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case [Milkhiram (India) (P) Ltd. v. Chamanlal Bros., AIR 1965 SC 1698] , as follows:
17.1. If the defendant satisfies the court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit.
17.2. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend.
17.3. Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.17 of 24 17.4. If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires. 17.5. If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith.
17.6. If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court."
(emphasis in original)
33. It is at once clear that even though in IDBI Trusteeship [IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568 : (2017) 1 SCC (Civ) 386] , this Court has observed that the principles stated in para 8 of Mechelec Engineers case [Mechelec Engineers & Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] shall stand superseded in the wake of amendment of Rule 3 of Order 37 but, on the core theme, the principles remain the same that grant of leave to defend (with or without conditions) is the ordinary rule; and denial of leave to defend is an exception. Putting it in other words, generally, the prayer for leave to defend is to be denied in such cases where the defendant has practically no defence and is unable to give out even a semblance of triable issues before the court. 33.1. As noticed, if the defendant satisfies the Court that he has substantial defence i.e. a defence which is likely to succeed, he is entitled to unconditional leave to defend. In the second eventuality, where the CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.18 of 24 defendant raises triable issues indicating a fair or bona fide or reasonable defence, albeit not a positively good defence, he would be ordinarily entitled to unconditional leave to defend. In the third eventuality, where the defendant raises triable issues, but it remains doubtful if the defendant is raising the same in good faith or about genuineness of the issues, the trial court is expected to balance the requirements of expeditious disposal of commercial causes on one hand and of not shutting out triable issues by unduly severe orders on the other.
Therefore, the trial court may impose conditions both as to time or mode of trial as well as payment into the court or furnishing security. In the fourth eventuality, where the proposed defence appears to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of payment into the court or furnishing security or both, which may extend to the entire principal sum together with just and requisite interest.
33.2. Thus, it could be seen that in the case of substantial defence, the defendant is entitled to unconditional leave; and even in the case of a triable issue on a fair and reasonable defence, the defendant is ordinarily entitled to unconditional leave to defend. In case of doubts about the intent of the defendant or genuineness of the triable issues as also the probability of defence, the leave could yet be granted but while imposing conditions as to the time or mode of trial or payment or furnishing security. Thus, even in such cases of doubts or reservations, denial of leave to defend is not the rule; but appropriate conditions may be imposed while granting the leave. It is only in the case where the defendant is found to be having no substantial defence and/or raising no genuine triable issues coupled with the court's view that the defence is frivolous or vexatious that the leave to defend is to be refused and the plaintiff is entitled to judgment forthwith. Of course, in the case where any part of the amount claimed by the plaintiff is admitted by the defendant, leave to defend is not to be granted unless the amount so admitted is deposited by the defendant in the court.
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.19 of 24 33.3. Therefore, while dealing with an application seeking leave to defend, it would not be a correct approach to proceed as if denying the leave is the rule or that the leave to defend is to be granted only in exceptional cases or only in cases where the defence would appear to be a meritorious one. Even in the case of raising of triable issues, with the defendant indicating his having a fair or reasonable defence, he is ordinarily entitled to unconditional leave to defend unless there be any strong reason to deny the leave. It gets perforce reiterated that even if there remains a reasonable doubt about the probability of defence, sterner or higher conditions as stated above could be imposed while granting leave but, denying the leave would be ordinarily countenanced only in such cases where the defendant fails to show any genuine triable issue and the court finds the defence to be frivolous or vexatious." (Emphasis supplied by me)
39. As held by the Hon'ble Supreme Court in B.L. Kashyap (supra), grant of leave to defend (with or without conditions) is the ordinary rule, and denial of leave to defend is an exception. While dealing with an application seeking leave to defend, it would not be a correct approach to proceed as if denying the leave is the rule or that the leave to defend is to be granted only in exceptional cases or only in cases where the defence would appear to be a meritorious one. It has been held that even in cases of doubts or reservations, denial of leave to defend is not the rule, but appropriate conditions may be imposed while granting the leave.
40. As grant of leave to defend is the ordinary rule and denial of leave to defend is the exception, I am inclined to allow the application of the defendant for leave to defend. However, as I find that the defence raised by the defendant appears to be very doubtful and not genuine, I would make the grant of leave to defend subject to the condition of deposit by the defendant of ₹ 51,72,455.00 along with interest @ 9 % p.a. from the date of filing of the suit till the date of deposit.
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.20 of 24
41. Accordingly, the application of the defendant for leave to defend is allowed subject to the condition of deposit by the defendant with this Court of ₹ 51,72,455.00 along with interest @ 9 % p.a. from the date of filing of the suit till the date of deposit, within 6 weeks from today.
42. Upon deposit by the defendant as aforesaid, the Ahlmad is directed to deposit, without any delay, the said deposited amount in an interest-bearing fixed deposit account renewable annually with a scheduled bank and file the fixed deposit receipts in the record of the suit.
43. The defendant is directed to file the written statement within 30 days from today with advance copy to the other side.
44. The plaintiff is at liberty to file the replication, if any, within 30 days from filing of the written statement with advance copy to the other side.
45. Both parties are directed to file the affidavits of admission-
denial of documents within 30 days from filing of the written statement with advance copy to the other side.
46. Both parties are directed to file the list of proposed issues 7 days prior to the next date of hearing with advance copy to the other side.
47. List for framing of issues on 13.03.2023.
48. It is clarified that the observations made in the present order regarding the doubtfulness of the defence of the defendant are only for the purposes of adjudicating the application for leave to defend and shall not influence the final adjudication of the suit on merits."
CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.21 of 24
3. However, the defendant failed to deposit the amount in terms of the order dated 09.01.2023. In the hearing held on 13.03.2023, the ld. counsel for defendant requested that the time for deposit be extended till 31.03.2023. In the interest of justice, the defendant was permitted to make the deposit on or before 31.03.2023. However, again despite extension of time, deposit was not made. No deposit has been made till date.
4. The ld. counsel for the plaintiff has submitted that in as much as the condition for deposit has not been complied with by the defendant, the grant of leave to defend is liable to be revoked and the application of the defendant u/O XXXVII CPC for leave to defend liable to be dismissed, and that the plaintiff shall be entitled to judgment forthwith. It is submitted that the plaintiff would be entitled to the principal sum as well as interest at the rate of 18% as provided in the Invoice dated 24/08/2013. It is submitted that the said invoice and the rate of interest mentioned therein was never disputed by the defendant. It is submitted that the defendant has not placed on record any document showing that the defendant had objected to or disputed the rate of interest of 18% p.a. mentioned in the aforesaid invoice. The ld. counsel for the plaintiff has relied upon the judgment dated 13/12/2007 of the Hon'ble High Court of Bombay passed in Jatin Koticha v. VFC Industries Pvt. Ltd. in Summary Suit No.2411/2006, and has contended that when there was a specific stipulation for interest in the invoice which was not disputed, then the plaintiff was entitled to the rate of interest as mentioned in the invoice.
5. The ld. counsel for the defendant has simply submitted that the defendant has been unable to deposit the amount for the conditional CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.22 of 24 leave to defend. The ld. counsel has made no submissions in response to the submissions of the ld. counsel for the plaintiff.
6. In as much as the condition for deposit has not been complied with by the defendant, the grant of leave to defend is hereby revoked and the application of the defendant u/O XXXVII CPC for leave to defend is dismissed. The plaintiff is entitled to judgment forthwith. The plaintiff would be entitled to the principal sum of Rs. 51,72,455/-. The invoice dated 24/08/2013 has not been disputed by the defendant. The invoice clearly mentions at the foot as follows: "Interest @ 18% p.a. on the invoice amount will be charged if payment is not received within the due date. Contents of this Invoice will be considered correct if no error is reported within 7 days of invoice date." The ld. counsel for the defendant has been unable to show that the defendant had ever disputed the rate of interest mentioned in the invoice. The invoice also forms part of the written contract between the parties as there is parole acceptance of the invoice by the defendant. The defendant never disputed the terms mentioned in the invoice in their communications with the plaintiff. Accordingly, the plaintiff would also be entitled to pre-suit interest from 01/09/2013 till the date of filing of the suit @ 18% p.a. The present suit was filed sometime in 2014. Considering that the transaction was commercial in nature, I deem it reasonable to grant the plaintiff pendente lite interest however @ 15% p.a. for the period from filing of the suit till 31/12/2019 and @ 12% p.a. for the period from 01/01/2020 till the date of the decree. I deem it reasonable to grant future interest @ 10% p.a. from the date of decree till actual realization.
7. Accordingly, decree is passed in favour of the plaintiff and against the defendant for sum of Rs. 51,72,455/-, along with pre-suit CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.23 of 24 interest from 01/09/2013 till the date of filing of the suit @ 18% p.a., and pendente lite interest @ 15% p.a. for the period from filing of the suit till 31/12/2019 and @ 12% p.a. for the period from 01/01/2020 till the date of the decree, and future interest @ 10% p.a. from the date of decree till actual realization. Costs are decreed in favour of the plaintiff.
Pleader's fees is computed as Rs.25000/-.
Announced in the open court.
File be consigned to record room.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/06.05.2023 CS NO.59068/2016 M/S JEENA & CO. VS. R.K WIND LTD. Page no.24 of 24