Delhi District Court
Smt. Sunita Garg vs M/S Arvind Chemi Synthetics Pvt. Ltd on 31 October, 2022
IN THE COURT OF DISTRICT JUDGE (COMM-02),
SOUTH DISTRICT, SAKET COURT, NEW DELHI
CS (COMM.) 41/20
Smt. Sunita Garg
Wife of Shri Suresh Garg,
Proprietor of M/s Balaji Manufacture Co.
H. No. B-116, Mahendra Enclave, Shashtri Nagar,
Ghaziabad, Uttar Pradesh
Through her Special Power of Attorney
Shri Suresh Garg S/o Late Shri Inder Mal
Presently residing at Flat No. 502,
SG Impression Raj Nagar Extension,
Ghaziabad, Uttar Pradesh ..... Plaintiff
Versus
M/s Arvind Chemi Synthetics Pvt. Ltd.
Through its Directors
B-7/7, Safdarjung Enclave, New Delhi ..... Defendant
Suit instituted on: 23.01.2020
Counter claim institutued on : 03.03.2021
Arguments concluded on : 22.10.2022
Date of Judgment: 31.10.2022
JUDGMENT
1. This is a suit for recovery of Rs.5,32,455/-.
CASE OF THE PLAINTIFF
2. In brief, facts of the case are that plaintiff company is engaged in the business of providing IT infrastructure Services and was appointed as reselling partner of AWS Services by Amazone Web Services LLC ("AWS"). It is pleaded that defendant company is engaged in the business of running a platform with access to one of the largest medicine databases of e-distributor and manufactures of medicines and general wellness product.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 1 of 362.1 It is pleaded that the plaintiff had purchased the goods from the defendant by making an advance payment time to time, sometimes by RTGS or some time by cash. It is pleaded that plaintiff purchased the goods from defendant vide following bills/invoices :-
Sr. No. Date Mode Amount
1. 652 15-10-2014 Rs. 3,42,245/-
2. 741 11-11-2014 Rs. 3,33,432/-
3. 843 12-12-2014 Rs. 4,12,061/-
4. 927 07-01-2015 Rs. 5,23,886/
5. 1014 28-01-2015 Rs. 3,23,258/-
6. 1162 03-03-2015 Rs. 6,78,845/-
7. 240 06-06-2015 Rs. 3,49,868/-
8. 289 19-06-2015 Rs. 4,67,335/-
9. 418 27-07-2015 Rs. 4,75,496/-
10. 487 24-08-2015 Rs. 4,77,179/-
11. 607 22-09-2015 Rs. 6,57, 884/-
12. 695 16-10-2015 Rs. 6,60,176/-
Total Rs. 57,01,665/-
2.2 It is pleaded that plaintiff made following advance
payment to the defendant :-
Sr. No. Date Mode Amount
1. 24-07-2014 RTGS Rs.5,00,000/-
2. 08-08-2014 RTGS Rs.2,15,000/-
3. 09-09-2014 RTGS Rs.2,42,000/-
4. 14-10-2014 RTGS Rs.1,80,000/-
5. 05-11-2014 RTGS Rs. 2,00,000/-
6. 02-12-2014 RTGS Rs. 2,27,000/-
7. 12-12-2014 RTGS Rs. 93,000/-
8. 01-01-2015 RTGS Rs. 3,06,000/-
9. 05-01-2015 RTGS Rs. 60,400/-
10. 04-02-2015 RTGS Rs. 3,00,000/-
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 2 of 36
11. 14-02-2015 RTGS Rs. 2,24,000/-
12. 02-03-2015 RTGS Rs. 2,00,000/-
13. 10-03-2015 RTGS Rs. 1,24,000/-
14. 17-04-2015 RTGS Rs. 1,97,000/-
15. 07-05-2015 RTGS Rs. 2,08,000/-
16. 27-05-2015 RTGS Rs. 2,80,000/-
17. 03-06-2015 RTGS Rs. 2,03,000/-
18. 16-06-2015 RTGS Rs. 1,40,000/-
19. 22-07-2015 RTGS Rs. 3,30,000/-
20. 27-07-2015 RTGS Rs. 1,37,200/-
21. 24-08-2015 RTGS Rs. 4,25,000/-
22. 03-09-2015 RTGS Rs. 51,000/-
23. 18-09-2015 RTGS Rs. 3,80,000/-
24. 22-09-2015 RTGS Rs. 98,000/-
25. 15-10-2015 RTGS Rs. 6,00,000/-
26. 23-10-2015 RTGS Rs. 58,000/-
27. 16-11-2015 RTGS Rs. 2,00,000/-
28. 14-06-2016 Cash Rs. 10,000/-
29. 28-12-2016 Cash Rs. 12,000/-
30. 09-03-2016 Cash Rs. 7,500/
31. 09-04-2017 Cash Rs. 9,500/-
32. 08-06-2017 Cash Rs. 6,000/-
33. 20-08-2017 Cash Rs. 10,500/
Total Rs.62,34,100/-
2.3 It is pleaded that plaintiff had been maintaining
regular accounts of all the transactions carried out between plaintiff and defendant in the ordinary course of business thereby debiting the amount paid to defendant and crediting the amounts of goods purchased from the defendant. It is stated that as per the account maintained by the plaintiff in the ordinary course of its business in the name of defendant, plaintiff made payment of Rs.62,34,100/- to defendant and purchased goods worth Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 3 of 36 Rs.57,01,665/- from defendant and hence there is an outstanding amount of Rs.5,32,435/- liable to be paid by defendant to plaintiff.
2.4 It is pleaded that initially defendant supplied the goods to plaintiff of standard quality but after some times, defendant supplied the goods of inferior quality and defective goods to plaintiff several times and when plaintiff objected the same, defendant assured the plaintiff each and every time that they will adjust the difference amount but defendant failed to do so.
2.5 It is further averred that during the aforesaid business transactions, defendant demanded few blank signed cheques from plaintiff as security to the goods sold by him to plaintiff and assured the plaintiff that defendant will return the same to plaintiff later on. It is submitted that plaintiff having trust upon the defendant handed over one blank signed cheque bearing no. 258330 drawn on Vijaya Bank, Kaushambi Branch, Delhi from account of plaintiff and cheques of the account of her husband to defendant as security in the year 2014, however, defendant misused the cheque bearing no. 258330 drawn on Vijaya Bank, Kaushambi Branch, Delhi and presented the same before banker for encashment after filling the date and amount of Rs.4,13,689/- despite the fact that the said cheque was given to defendant as blank signed as security in the year 2014 and no amount was due against the plaintiff, who had already made an excess payment of Rs.5,32,455/- to defendant and defendant is legally liable to return the same to the plaintiff. It is submitted that the said cheque was returned dishonored and later on defendant filed a complaint case U/s 138 NI Act against the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 4 of 36 plaintiff on false fact and the said complaint is pending adjudication before the court of Ld. MM, Saket Court, New Delhi.
2.6 It is averred that the plaintiff requested defendant to supply goods against the aforementioned amount of Rs.5,32,455/- several times. but defendant did not supply the goods to the plaintiff against the said amount and plaintiff requested defendant to return the said amount but defendant did not return the amount. It is stated that defendant is wrongly and malafidely withholding the said amount which is liable to be paid by him alongwith interest @ 24% per annum.
2.7 It is averred that the cause of action for filing the suit arose in favour of the plaintiff and against the defendant on various dates when the plaintiff made advance payments to the defendant through RTGS or cash. It again arose on various dates when plaintiff requested defendant to return the payment of Rs.5,32,455/- which were given by plaintiff as advance to the defendant in access. Plaintiff has prayed for a decree in the sum of Rs.5,32,455/- alongwith interest @ 24% per annum from the date of filing of this suit till realization and costs. Case of the defendant
3. Defendant has contested the suit by filing written statement and also filed counter claim. In written statement, defendant denied the allegations made against it. It is stated that entire case of the plaintiff is based on misrepresentations and concealment of material facts in an attempt to arm twist and coerce the defendant to make payments that were neither due nor payable and to avoid liabilities on the part of the plaintiff. Defendant has denied that the goods were purchased by the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 5 of 36 plaintiff from time to time by making advance payments, sometimes by RTGS or sometime by cash. It is submitted that while initially goods were released on the basis of advance payments, however, as the business transactions between the parties increased the defendant continued to supply goods irrespective of receipt of entire payment against goods in advance. It is stated that in fact, transactions between the parties continued on a running accounts basis. It is stated that entire payments were received only through bank transfer (RTGS or NEFT) and no payments were ever received in cash. It is stated that in fact, plaintiff is liable to pay an amount of Rs.4,13,289/- to the defendant.
3.1 Defendant admitted that that plaintiff had purchased goods from the defendant against the invoices for the amounts shown, however, according to defendant facts and figure given in the table is incomplete and three invoices which have been actively concealed are as under :
(a) Invoice No. 395 dated 28.07.2014 for Rs.3,54,202/-; (b) Invoice No. 445 dated 11.08.2014 for Rs.3,63,235/- & (c) Invoice No. 547 dated 15.09.2014 for Rs.2,18,207/-.
3.2 It is stated that the total amount of purchases which have been concealed by the plaintiff is sum of Rs.9,35,644/- and aggregate amount shown in the table in para 5 is incorrect. It is stated that defendant raised invoices for an amount of Rs.66,37,289/- after supplying corresponding value of goods as opposed to the amount indicated in the plaint. It is stated that while it is correct that the C-Forms relating to few sale transactions have been shown, but Form-C issued in respect of three invoices are actively concealed. It is stated that with Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 6 of 36 respect to the table filed for payment received, is incorrect in as much as entries at Sl. No. 28 to 33 are entirely falsified and no such payments in cash were received. It is submitted that in fact a sum of Rs.45,000/- was received by way of NEFT on 29.01.2016 which has not been shown in the table. It is stated that the actual transactions between the parties is reflected in the ledger and plaintiff never raised any objections to the quality, quantity or pricing of the goods and defendant initiated proceedings against the plaintiff U/s 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque bearing no. 258330 drawn on Vijaya Bank, Kaushambi Branch, UP for an amount of Rs.4,13,689/-.
3.3 Defendant has further pleaded that in order to complete payment for the balance of Rs.4,13,689/- (being the difference of the value of the goods supplied by the defendant and payments made by the plaintiff), plaintiff had herself issued the aforementioned cheque which was subsequently dishonored. It is stated that the entire falsity of the above narrative is evident from the fact that complaint case had been filed by the defendant in the year 2018 and the plaintiff would received intimation of dishonor through their bankers as well as by virtue of summons issued by the Ld. MM-02 (South), Saket Court, however, plaintiff filed the present suit only in December, 2020 i.e. after more than 2 years from the date of dishonor. It is stated that plaintiff did not pursue any other remedies and this by itself makes it evident that the plaintiff has full knowledge of the fact that amounts were due and payable from the plaintiff to the defendant and no vice versa as is being claimed.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 7 of 363.4 It is stated that rate of interest being claimed by the plaintiff is misconceived and baseless since neither has any such claim been raised for the pre-suit period by way of a notice or otherwise, nor the terms of agreement between the parties require any such interest to be paid by the defendant to the plaintiff and hence, plaintiff is not entitled to any pre-suit interest. It is submitted that since amounts are actually payable by the plaintiff to the defendant, the issue of pendent-lite or future interest payable to the plaintiff does not arise. It is re-iterated that plaintiff is liable to pay an amount of Rs.4,13,289/- alongwith interest @ 24% per annum to the defendant and that the said interest is as per the rate specified in the invoice wherein the plaintiff is liable to pay interest in case of non-payment of the invoiced amounts within seven days of receipt. 3.5 It is stated that the period of limitation for claims, if any, by the plaintiff had expired on 28.01.2019 i.e. within three years of the last payment which was effected on January 29, 2016 and subsequently, no payments have been effected by the plaintiff and averments to the contrary are completely false and denied. It is submitted that the instant suit is beyond the period of limitation and is liable to be dismissed.
Counter claim of the defendant
4. In its counter claim, defendant averred that the claim is filed by defendant through its authorized representative, Shri Abhinay Mishra (Marketing Executive), pursuant to board resolution dated 01.03.2021 authorizing Shri Abhinay Mishra to institute the present counter claim and sign and verify the pleadings on behalf of the defendant. In the ordinary course of business, plaintiff approached the defendant in and around July, Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 8 of 36 2014 for purchase of goods manufactured and supplied by the defendant and it was agreed between the parties that (a) plaintiff would pay advance prior to delivery of goods (b) based on such advance amounts received, upon supply of goods, defendant would raise an invoice upon the plaintiff and (c) plaintiff would supply 'Form-C' issued by the Central Sales Tax Department in order to avail benefit of reduced taxes on such supply. 4.1 It is pleaded that defendant initially supplied goods on the basis of the advance amounts which were received, however, subsequently, as transactions between the parties increased, defendant continued to supply goods basis orders received from the plaintiff notwithstanding receipt of sufficient funds in advance. It is pleaded that defendant further continued to raise invoices only after delivery of the goods was effected and the plaintiff continued to provide Form C in respect of the same, albeit with some delays and any amounts which were received were adjusted against goods supplied.
4.2 It is stated that defendant supplied goods and raised corresponding invoices for an amount of Rs.66,37,289/-, however, against the aforesaid supplies which were effected, defendant in the contemporaneous period extending till January, 2016 only made payments for an amount of Rs.62,23,600/- to the defendant and that the said fact is clearly evident from the ledger of the defendant which has been maintained in the ordinary course of business and accurately captures the transactions between the parties and thus, plaintiff became liable to pay a sum of Rs.4,13,689/-. It is pleaded that when no further payments were received, defendant repeatedly called upon the plaintiff to complete payments which were to be effected, however, plaintiff Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 9 of 36 one pretext or another dithered in its commitments to pay the entire balance amount.
4.3 It is stated that after repeatedly inquiries, plaintiff finally issued a cheque bearing no. 258330 drawn on Vijaya Bank, Kaushambi Branch, UP for an amount of Rs.4,13,689/- to fulfill its obligations for completing the full and final payment for the goods delivered by the defendant against the invoices raised by it to the plaintiff, however, the said cheque was dishonored upon presentation on 05.12.2017 with the remarks "Kindly Contact Drawer Drawee bank" and thereafter defendant approached the plaintiff and apprised her of the fact and plaintiff requested the defendant that she was unable to furnish the required funds and requested the defendant to present the said cheque after 25.01.2018 assuring that the same will be encashed upon presentation, however, when the defendant presented the cheque for payment, the said cheque was dishonored again with the remarks "Funds Insufficient" vide return memo dated 7th February, 2018. It is stated that owing to the aforesaid, defendant was constrained to issue a legal notice dated 20.02.2018 calling upon the plaintiff to pay the cheque amount within a period of 15 days from the date of receipt of the legal notice and when no response was forthcoming, defendant was constrained to institute a complaint U/s 138 of NI Act against the plaintiff in April, 2018. 4.4 It is stated that after a period of two and a half years from the date of filing of the complaint, plaintiff, in order to circumvent the legal liabilities, has filed the instant suit falsely claiming that amounts are due and payable by the defendant. It is stated that case of the plaintiff is predicated on misrepresentations and concealment of material facts in an Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 10 of 36 attempt to arm twist and coerce the defendant to make payments that were neither due nor payable. It is stated that plaintiff is required to pay to the defendant, the difference between the actual value of goods supplied i.e. Rs.66,37,289/- and the amount paid by the plaintiff i.e. Rs.62,23,600/- and in this manner, it is submitted that plaintiff is liable to pay a sum of Rs.4,13,289/- to the defendant. It is stated that in addition to this amount, defendant is also seeking pre-litigation, pendent-lite and future interest @ 24% per annum on the amounts which are due from the date of dishonor of cheque i.e. 05.12.2017 till its recovery. It is stated that the interest @ 24% per annum has been fixed on the basis of the rate of interest specified in the invoices and that the interest computed @ 24% per annum on the amount of Rs.4,13,689/-.
4.5 It is stated that cause of action arose when the defendant raised various invoices for a total amount of Rs.66,37,289/- against the goods delivered to the plaintiff and again it arose when plaintiff failed to make the complete payment and did not pay amount of Rs.4,13.689/- to the defendant. It is submitted that it further arose when cheque bearing no. 258330 dated 01.12.2017 issued by the plaintiff was dishonored on 05.12.2017 and 07.02.2018. It is stated that it further arose when defendant sent a legal notice demanding the payment of the due amount of Rs.4,13,689/- and when defendant instituted a complaint U/s 138 of NI Act, 1981. It is stated that cause of action is still continuing and subsisting since the plaintiff has failed to make the due payment of Rs.4,13,689/- to the defendant against invoices bearing no. 395 dated 28.07.2014; 445 dated 11.08.2014 and 547 dated 15.09.2014 till date.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 11 of 364.6 It is stated that the counter claim is within the period of limitation since the last cause of action arose on 07.02.2018 when the cheque was dishonored by reasons of 'Funds Insufficient.' It is stated that in addition by virtue of orders passed by the Hon'ble Supreme Court in respect of COVID situation, the period of limitation was extended where the period of limitation had otherwise not expired and consequently the present counter claim is within the period of limitation. Replication and response of the plaintiff to the counter claim
5. In replication, plaintiff has denied the allegations made by the defendant and reiterated her version as claimed in the suit. In reply to the counter claim, plaintiff stated that the claim filed by the defendant is liable to be dismissed as the counter claimant has not filed any board resolution alongwith counter claim to show that Shri Abhinay Mishra, Marketing Executive is duly authorized by board of directors of defendant to file counter claim against the plaintiff. It is submitted that board resolution filed by the defendant/counter claimant alongwith their written statement shows that the minutes of meeting was held on 01.03.2020 but the board resolution was issued on 01.03.2021 which shows that the said board resolution is a fabricated document as no meeting was held on 01.03.2020. It is stated that the board resolution dated 01.03.2021 filed by the defendant did not bear the name of the person who has signed the said board resolution.
5.1 It is stated that plaintiff always made the advance payment to the defendant before supply of goods irrespective of values of goods and plaintiff made the payment of Rs.62,34,100/- to defendant and purchased goods worth Rs.57,01,645/- from the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 12 of 36 defendant and hence plaintiff paid an excess amount of Rs.5,32,455/- to the defendant, who is legally liable to return the aforesaid amount of Rs.5,32,455/- to the plaintiff. It is stated that defendant had not filed any ledger account alongwith the claim, however, defendant had filed ledger account alongwith written statement.
5.2 It is stated that during the course of business transactions between plaintiff and defendant, defendant had demanded some blank signed cheques from the plaintiff as security to the goods sold by defendant to the plaintiff and assured that the defendant will return the same to the plaintiff later on and plaintiff having trust upon the defendant had handed over one blank signed cheque bearing no. 258330 drawn on Vijaya Bank, Kaushambi Branch, Delhi from the account of plaintiff and some cheques of the account of her husband, to the defendant as security, however, defendant misused the said cheque and presented the same before banker for encashment after filling the date and amount of Rs.4,13,689/- despite the fact that the said cheque was given to the defendant as blank signed as security in the year 2014 and no amount was due against the plaintiff as the plaintiff had already made excess payment of Rs.5,32,455/- to the defendant and defendant is legally liable to return the same to plaintiff.
5.3 It is stated that no question arises to pay interest @ 24% per annum by the plaintiff to defendant and that defendant is liable to pay pre-litigation, pendent-lite and future interest @ 24% per annum to the plaintiff as defendant failed to return the aforesaid amount to the plaintiff. It is stated that the alleged cheque was not issued against liability as the same was issued as Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 13 of 36 blank signed security cheque to defendant in the year 2014 and the same was misused by the defendant and that counter claim is barred by limitation. It is stated that as per own case of defendant, plaintiff lastly made the payment to counter claimant on 29.01.2016 hence the limitation to file the present counter claim arose on 30.01.2016, which expired on 29.01.2019 but the present counter claim has been filed on 04.03.2021. ISSUES
6. Case management hearing was held on 10.03.2022. From the pleadings of the parties, following issues were framed:-
1. Whether the suit is barred by limitation? OPD
2. Whether the counter claim is barred by limitation? OPP
3. Whether this court has no jurisdiction to entertain the present suit? OPD
4. Whether Shri Suresh Garg is properly authorized to file and verify the plaint? OPD
5. Whether the plaintiff has not come to the court with clean hand and has suppressed the material facts and if so, what is the effect thereof? OPD
6. Whether plaintiff is entitled to the recovery of an amount of Rs.5,32,455/-? OPP
7. Whether plaintiff is entitled to pendent-lite and future as claimed @ 18% per annum? OPP
8. Whether defendant is entitled to a sum of Rs.5,12,974/- as demanded in the counter claim? OPD
9. Whether defendant is entitled to pendent-lite and future interest @ 24% per annum? OPD
10. Relief.
Witnesses produced and documents exhibited
7. Plaintiff produced her husband and attorney Shri Suresh Garg as PW-1 who placed on record certificate U/s 65- B(2) of Indian Evidence Act, Ex.PW-1/1; special power of Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 14 of 36 attorneys executed by plaintiff, Ms. Sunita Garg on 16.01.2020 Ex.PW-1/2 and 07.04.2022 and Ex.PW-1/2A; computer printouts of 11 bills issued by defendant in favour of plaintiff during the period between 15.10.2014 to 16.10.2015, Ex.PW-1/3A to Ex.PW-1/3K; copy of original C-Forms bearing no. 0353586, 0851063, 0851064, 0851065 and 0851066 issued by Department of Sales Tax to defendants, Ex.PW-1/4A to Ex.PW-1/4E; photocopy of 27 deposit slips/counterfoils w.e.f. 24.07.2014 to 02.03.2015 in the Vijaya Bank by the plaintiff, Ex.PW-1/5-1 to Ex.PW-1/5-27; computer printout of ledger account w.e.f. 01.04.2014 to 31.03.2018, Ex.PW-1/16A to Ex.PW-1/16D; bank statement issued by Vijaya Bank to plaintiff w.e.f. 23.06.2014 to 31.03.2015, Ex.PW-1/7-1 to Ex.PW-1/7-8 and certified copy of order dated 02.02.2019 in CC No. 4095/2018 passed by the Ld. MM; certified copy of statement of Shri amit Rawat dated 28.07.2018; certified copy of affidavit of Shri Amit Rawat dated 03.04.2018 and certified copy of complaint alongwith documents as well as list of documents filed by the defendant in another complaint case U/s 138 NI Act, Ex.PW-1/8 to Ex.PW-1/11 respectively.
8. Defendant examined Shri Keshav Kumar Sekhri as DW-1, who placed on record copy of extract of board resolution dated 11.11.2021 executed by Shri Arvind Gupta, Chairman of the defendant, Ex.DW-1/1; copy of invoice nos. 395, 445 and 547, dated 28.07.2014, 11.08.2014 and 15.09.2014 respectively, issued by defendant to plaintiff, as Ex.DW-1/2 to Ex.DW-1/4 respectively; copy of 'C' form dated 26.06.2014 issued by plaintiff to defendant, Ex.DW-1/5 and computer printout of the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 15 of 36 tally ledger between 01.04.2014 to 31.03.2016 in respect of account of the plaintiff, Ex.DW-1/6.
9. This court has heard the submissions advanced by Shri T.R. Gupta, Ld. Counsel appearing for the plaintiff and Shri Aditya Vijay Kumar and Ms. Shreya Shree Singh, Ld. Counsels appearing for the defendant/counter claimant and considered material on record.
ISSUE-WISE FINDINGS ISSUE NO. 1 Whether the suit is barred by limitation? OPD
10. Onus to prove this issue is upon the defendant. Ld. Counsel for the defendant submitted that the suit is barred by limitation. For the purpose of claiming reimbursement of excess payments, period of 3 years applies in terms of Article 137 of Schedule 1 of the Limitation Act. It is submitted that the right to sue for excess payments accrues from the date each such purported excess payment is made i.e. from 16.11.2015 and there is no acknowledgment of liability which revived the period of limitation and thus, period of limitation expired on 15.11.2018. It is submitted that the suit was filed on 22.01.2020, after a period of 1 year after the purported claim became stale and thus, the claim for reimbursement of excess payment is barred by limitation.
10.1 In response, Ld. Counsel for the plaintiff submitted that the present suit is within a period of Limitation. It is submitted that plaintiff had made the advanced payment to the defendant, since 24.07.2014 to 20.08.2017 and made total payment Rs.62,34,100/-. It is submitted that in view of maintaining the regular books of account all the said business Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 16 of 36 dealing and transactions carried out between plaintiff and defendant in the ordinary course of business, the period or limitation would expire on 20.08.2020.
10.2 This suit was filed by plaintiff on 22.01.2020. In para 11 of the plaint, plaintif has pleaded that cause of action for filing this suit arose in his favour and against the defendant on various dates when the plaintiff made advance payment to the defendant through RTGS/NEFT/Cash. In para 5, details of the payments are specified. Case of the plaintiff as pleaded in para 5 of the plaint is that certain cash payment as detailed therein were made (Entry No, 28 to 33) last cash payment is stated to have been made on 20.08.2017. Case of the plaintiff is that she had made advance and excess payment to the defendant during the period between 24.07.2014 till 20.08.2017 as pleaded in para 5 of the plaint which includes certain cash payments which are disputed by the defendant. According to plaintiff, period of limitation expired on 20.08.2020.
10.3 Defendant's version is that no cash amount as alleged by the plaintiff in para 5 and otherwise has been paid. The period of limitation as per Article 137 of the Limitation Act, 1963 is three years from the date when the right to sue acrues. Now the question to be addressed is when right to sue acrued to the plaintiff? Other question which arose during argument was whether limitation would start from the date when first excessive payment was made or the last payment was allegedly made in cash on 20.08.2017 as averred in the plaint.
10.4 There is no dispute that plaintiff is seeking recovery of amount which she has paid excess in advance to the defendant.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 17 of 36As per the case pleaded by the plaintiff herself, last goods were received by her vide invoice no. 695 dated 16.10.2015 in the sum of Rs.6,60,176/-. As per averment made in the plaint, plaintiff made further payments in cash, totalling to Rs.55,000/-, details of which is pleaded at Sr. No. 26 to 33 in para 5.
10.5 During arguments, on asking, Ld. Counsel for the plaintiff submitted that he was expecting more goods from the defendant, therefore, he had made advance payments in cash. Admittedly, plaintiff lastly received goods on 16.10.2015. No goods were sold or received thereafter, then it does not seems probable and convincing that plaintiff kept on paying amounts to the defendant that too in cash, after several months. Moreover, plaintiff has not been able to prove payment of cash to the defendant as averred in the plaint.
10.6 As per Order VII rule 1(e), the plaint has to contain the particulars regarding the facts as to when the cause of action arose. In the plaint, plaintiff has not specified on which date, the cause of action or the right to sue acrued to her, except stating in para 11 of the plaint that cause of action arose on various dates when she made advance payment and when she requested defendant to return the payment. It is also admitted case of the plaintiff that no request or payment in writing was made by the plaintiff asking defendant to return the excess payment of Rs.5,32,455/- as claimed. In para 5, it is merely stated that suit is within the period of limitation. How and when limitation starts has not been pleaded.
10.7 Now coming to evidence adduced as regards cash payment, in para 9 of his evidence affidavit, plaintiff again Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 18 of 36 deposed that she requested defendant several times to supply the goods to her against the amount of Rs.5,32,455/- which was lying with the defendant but did not specify any date. No demand notice in writing has been served. In the affidavit, para 5 of the plaint has been reproduced and it is merely stated that she made advance payment to the defendant through RTGS/NEFT/cash. During his cross-examination, PW-1, Shri Suresh Garg, who is husband as well as attorney of the plaintiff testified that no receipt was issued by the defendant as regards cash payment made to them at any point of time. PW-1 deposed that plaintiff has filed ITR for the period 2014 to 2017. On asking, he did not remember if the cash payments were reflected in the books of accounts during the relevant period or not. PW-1 deposed that he could not produce the books of account.
10.8 On the other hand, Shri Keshav Kumar Sekhri who was examined by the defendant as DW-1, in his deposition stated that no money had been reeived by the defendant in cash as alleged by the plaintiff and the monies had been received through banking channel only and which fact is reflected in the tally ledger (Ex.DW-1/6) maintained in the regular course of business w.e.f. 01.04.2014 till 31.03.2016. DW-1 further made it clear in para 16 that defendant had not taken any money by cash and had not executed any receipt in this regard and all the money which had been received was duly accounted for in the books of accounts. In the plaint, it has not been pleaded which person, whether the plaintiff herself or her attorney Shri Suresh Garg or any other person paid the amount in cash and since defendant is a company, who was the person on behalf of the defendant who received the cash. Ld. Counsel for the defendant pointed out that Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 19 of 36 no suggestion has been put to DW-1 regarding the fact that no money was received in cash by any specific person on behalf of the defendant. This court finds that plaintiff has failed to establish the fact that it paid any amount in cash to the defendant as alleged.
10.9 To sum up, this court finds that for the purpose of claiming reimbursement of excess payments, period of 3 years is to be counted from the date when the right to sue accrues, in terms of Article 137 of Schedule 1 of the Limitation Act and right to sue for excess payments accrues from the date each purported excess payment is made i.e. from 15.10.2015. There is no acknowledgment of liability by the defendant which revived the period of limitation. Thus, the period of limitation expired on 16.10.2018, whereas this suit was filed by plaintiff on 22.01.2020, after a period of 1 year and 3 months after the purported claim became stale. The claim for reimbursement of excess payment is therefore barred by limitation. Issue No. 1 is, therefore, decided in favour of the defendant and against the plaintiff.
ISSUE NO. 2Whether counter claim is barred by limitation? OPP
11. Onus to prove this case is upon the plaintiff. Defendant has claimed Rs.5,12,974/- in the counter claim which includes Rs.4,13,689/- as principal amount towards goods sold to the plaintiff and Rs.99,285/- towards interest @ 24% per annum w.e.f. 05.12.2017.
11.1 Ld. Counsel for the plaintiff submitted that as per own case of defendant/counter claimant that the plaintiff lastly Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 20 of 36 made the payment to Counter claimant on 29.01.2016 hence the limitation to file the present counter claim arose 30.01.2016 and the same was expired on 29.01.2019, whereas the present counter claim has been filed on 04.03.2021, hence the counter claim filed by defendant/counter claimant is time barred and the same is liable to be dismissed on this ground alone.
11.2 In response, Ld. Counsel for the defendant submitted that no period of credit was fixed. In the invoices Ex.DW-1/2 to Ex.DW-1/4, no period of credit is specified nor otherwise agreed, therefore, Article 14 of Limitation Act, 1963 would apply according to which period of limitaiton is three years from the date of delivery of the goods. It is admitted case of the parties that last delivery of goods was on 16.10.2015 vide invoice no. 695 (Ex.PW-1/3). On behalf of defendant/counter claimant, it is submitted that as per the case of plaintiff herself, the last cash payment of Rs.10,500/- was allegedly given by the plaintiff to the defendant on 20.08.2017 and therefore, period of three years should be reckoned from that date having regard to Section 19 of the Limitation Act, according to which if payment on account of debt is made before the expiration of prescribed period, the limitation shall be computted from the time when the payment was made.
11.3 Admittedly, in the present case, plaintiff had given a cheque dated 01.12.2017 bearing no. 258330 (Ex.PW-1/11), which was a payment towards the outstanding amount payable by the plaintiff and the cheque was dishonoured on presentation by the defendant on 05.12.2017 and thus, three year period for counter claim is to be counted from the said date would come to Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 21 of 36 an end on 04.12.2020. Ld. Counsel for defendant further submitted that the effect of dishonourment of cheque is refusal to pay, the date when the cheque was dishonoured was the breaking point on which date the cause of action arose for the purpose of limitation. In support, Ld. Counsel referred as case titled, Geo Miller & Co. Pvt. Ltd. Vs. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd., AIR 2019 SC 4244.
11.4 Thus, it stands established that defendant could file counter claim by 20.08.2020, but the counter claim in this case was filed on 02.03.2021. Ld. Counsel for defendant submitted that defendant is covered within the purview of order dated 10.01.2022 of the Supreme Court in Suo Moto Writ Petition No. SWP 3/2020 whereby the period of limitation had been excluded w.e.f. 15.03.2020 till 28.02.2022 and 90 days period was granted w.e.f. 01.03.2022 till 28.05.2022 and therefore, defendant could file its counter claim by or before 28.05.2022 and therefore, the counter claim is not barred by limitation.
11.5 Ld. Counsel for the plaintiff submitted that as per para 5 of the counter claim, against the supplies, defendant made payment till January, 2016 only and therefore, three years period would come to an end by January, 2019. Now, coming to the cheque dated 01.12.2017 which is stated to have been given by the plaintiff to the defendant/counter claimant and which was dishonoured on presentation. As per para 7 of the counter claim, plaintiff issued the aforementioned cheque dated 01.12.2017 for an amount of Rs.4,13,689/- to fulfil its obligation for completing full and final payment for the goods delivered by the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 22 of 36 defendant/counter claimant against the invoices raised by it to the plaintiff.
11.6 In reply to the counter claim, plaintiff stated that the aforementioned cheque was blank signed cheque given in 2014 to the defendant towards security for the goods sold by the defendant to the plaintiff. In this context, question to be addressed is whether the aforementioned cheque was issued by the plaintiff in the year 2014 towards security and if so, its effect. For this, we have to see what evidence has been adduced by the parties on this point. PW-1, Shri Suresh Garg in his evidence tendered an affidavit. In para 8 thereof, PW-1 deposed that defendant mis-used the cheque and presented the same for encashment after filling the date and amount of Rs.4,13,689/- despite the fact that the said cheque was given to the defendant as blank signed security in the year 2014 and no amount was due against the plaintiff who had already paid excess amount to the defendant.
11.7 During cross-examination, PW-1 admitted signature of Smt. Sunita Garg on the cheque Ex.PW-1/11. Suggestion was put to PW-1 that the aforesaid cheque was issued towards part payment against delivery received from the defendant and it was not a security cheque but was made in discharge of plaintiff's liability. This suggestion was denied by the PW-1. DW-1, during his cross-examination, clearly deposed that they had not received any advance security cheque from the plaintiff. Admittedly, plaintiff had not taken any action during the period between 2017 to 2020 to indicate that cheque in question had been mis-used by the defendant before filing of this suit, whereas Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 23 of 36 defendant had already filed a complaint U/s 138 of Negotiable Instrucment Act in the year 2018 (Ex.PW-1/11 - Colly.). In the result, this issue No. 2 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 3Whether this court has no jurisdiction to entertain the present suit? OPD
12. This issue is not pressed by the Ld. Counsel for the defendant during arguments. In the plaint, plaintiff has averred that defendant is doing its business from its registered office situated within the jurisdiction of this court and cause of action arose within the jurisdiction of this court. Accordingly, this issue no. 3 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 4Whether Shri Suresh Garg is properly authorized to file and verify the plaint? OPD
13. Onus to prove this issue was upon the defendant. Ld. Counsel for the defendant submitted that the present suit has been instituted by the Power of Attorney (PW-1) who was not properly authorised to institute the present case. It is submitted that plaintiff had executed a Power of Attorney (Ex. PW-1/2) in favour of her husband, Mr. Suresh Garg (PW-1), however, the same fails to specifically authorise PW-1 to "institute" the present suit and to depose and merely grants authority to sign and receive documents and without specific power to institute, the suit does not lie. In support, Ld. Counsel for the defendant has placed reliance upon a case reported as 'Nibro Ltd Vs. National Inasurance Company Ltd.', AIR 1991 Delhi 25 and Rajghria Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 24 of 36 Paper Mills vs GM, Indian Security Press., MANU/DE/1010/2000.
13.1. In response, Ld. Counsel for the plaintiff submitted that Shri Suresh Garg is the husband of plaintiff, Ms. Sunita Garg, who had signed, filed and verified the plaint. Plaintiff has placed on record Ex.PW-1/1 and Ex.PW-1/2. Special Power of Attorney, executed by the plaintiff authorizing him to sign, file and verify the pleadings and do other acts.
13.2. In Nibro's case (supra), it was observed that :-
"29. It is true that ordinarily the court will not unsuited a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far reaching effects. It often affects the policy and finances of the company. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard.
Chaper IV of the Delhi High court (Original Side) Rules deals with the question of presentation of suits. Under this rule, a suit can be presented by a duly authorized agent or by an advocate duly appointed by him for the purpose. This authorization, in my view, in the case of a company can be given only after a decision to institute a suit is taken by the board of directors of the company, the board of directors may in turn authorize a particular director, principal officer or the secretary to institute a suit."
13.3 In Rajghria Paper Mills Ltd's case (supra) also Nibro Ltd. case was referred and it was observed that :-
"In the decision in M/s Nibro Limited Vs. National Insurance Co. Ltd., MANU/DE/0138/1991 : AIR 1991 Delhi 25 after taking note of a series of decisions on the subject the view taken by this Court was that unless a power to institute suit is specificlaly conferred on a particular director he has no authority to institute suit on behalf of the company. It must, therefore, follow that although the plaint was signed and verified properly but the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 25 of 36 suit was not instituted by a duly authorized person on behalf of the plaintiff."
13.4 The observations made in the aforenoted judgments are in relation to the suit instituted on behalf of a company. In the present case, the suit has been instituted by the individual as proprietor, who has specifically conferred authority upon her husband who looks after the business and is stated to be having full knowledge of the facts and circumstances of the case. As per Order IV Rule 1 CPC, suit is instituted by presenting a plaint in duplicate to the court, in accordance with the rules contained in Section 6 and 7 CPC so far as they are applicable. Any person who is conversant with the facts of the case is competent to testify as a witness unless court considers that he is prevented from understanding the question put to him or giving rational answers to those questions because of old age or disease or any other cause of the same kind. In the present case, plaintiff is the proprietor and Shri Suresh Garg is the husband as well as her special power of attorney. Ex.PW-1/1 which is special power of attorney executed by the plaintiff Ms. Sunita Garg is duly notorized clearly specifies, inter-alia, that she appoints and constitutes her husband Shri Suresh Garg as her special lawful attorney to file suit against the defendant and to act, appear, plead, sign, file, verify, file documents and affidavits as may be deemed necessary. In the plaint, it has been averred that Shri Suresh Garg looks after the business and has full knowledge of the facts and circumstances of the case. In view of the aforenoted material on record, this court finds that Shri Suresh Garg is properly authorized to file, verify and institute the suit.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 26 of 36Therefore, this issue no. 4 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 5Whether the plaintiff has not come to the court with clean hand and has suppressed the material facts and if so, what is the effect thereof? OPD
14. Onus to prove this issue was upon the defendant. Ld. Counsel for the defendant submitted that plaintiff has supressed facts which are central to the scheme of events and has approached this Court with unclean hands. It is submitted that to substantiate their case, plaintiff suppressed and upon production, disputed the invoices (Ex. DW-1/2 to Ex DW-1/4) and disputed 'C Form' (Ex. DW-1/5).
14.1 Ld. Counsel for plaintiff submitted that defendant company prepared few fake and fabricated bills and invoice and filed few C-Forms before the court received prior to supply of the goods and misused those 'C-Forms' after filing of this suit by the plaintiff and as well as concealed the materials facts in his ledger and defendant company has not filed any bank statement in support of the same.
14.2 The Hon'ble Apex Court in a catena of judgements has reiterated that if there is no candid disclosure of relevant and material facts or the Plaintiff is guilty of misleading the court, his plaint may be dismissed at the threshold without considering the merits of the claim. In support, Ld. Counsel for defendant relied upon Prestige Lights Ltd. vs State Bank of India, MANU/SC/3355/2007, K.D. Sharma vs Steel Authority of India, MANU/SC/3371/2008 and Vijay Syal & Anr. vs State of Punjab, AIR 2003 SC 4023.
Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 27 of 3614.3 The observations made by the Hon'ble Supreme Court in para 45 in Vijay Syal's case (supra), may be noted, which is as under :-
"In order to sustain and maintain sanctity and solemnity of the proceedings in law courts it is necessary that parties should not make false or knowingly, inaccurate statements or misreprsentation and/or should not conceal material facts with a design to gain some advantage or benefit at the hands of the court, when a court is considered as a place where truth and justice are the solemn pursuits. If any party attempts to pollute such a place by adopting recourse to make misrepresentation and is concealing material facts it does so at its risk and cost. Such party must be ready to take consequences that follow on account of its own making. At times lenient or liberal or generous treatment by courts in dealing with such matters are eithere mistaken or lightly taken instead of learning proper lesson. Hence there is a compelling need to take serious view in such matters to ensure expected purity and grace in the administration of justice."
14.4 In the present case, plaintiff has not comeforward and has not disclosed all the documents and complete facts. Plaintiff concealed the invoices (Ex. DW-1/2 to Ex DW-1/4) which had been placed on record and proved by the defendant and also disputed 'C Form' (Ex. DW-1/5) dated 26.06.2014, issued and signed by the plaintiff. During cross-examination, PW-1, on being confronted with the said 'C-Form', which was earlier exhibited as Ex.D-1 for the purpose of identification during the cross-examination of PW-1, PW-1 admitted signatures of Smt. Sunita Garg (Plaintiff) thereon at Point-A. Thus, it stands established that plaintiff had concealed and failed to disclosed all the material facts and relevant documents. Thus, this court finds that plaintiff has not come to the court with clean hand and has suppressed the material facts. It indicates that the verification of the plaintiff is not correct and the plaint is not Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 28 of 36 verified in the manner as required U/o VI Rule 15-A CPC as amended by the Commercial Courts Act as plaintiff has not filed all the documents in its power, possession and control peretaining the facts and circumstances of the case. Thus, on this score itself, the suit filed by the plaintiff deserves to be dismissed. Accordingly, this issue no. 5 is decided in favour of the defendant and against the plaintiff.
ISSUE NO. 6 & ISSUE NO. 8Whether plaintiff is entitled to the recovery of an amount of Rs.5,32,455/-? OPP & Whether defendant is entitled to a sum of Rs.5,12,974/- as demanded in the counter claim? OPD
15. These issues being inter-connected are taken up together. Ld. Counsel for the plaintiff submitted that defendant has wrongly and malafidely withholded an amount of Rs.5,32,455/- and thus, defendant is also liable to pay the interest @ 24% per annum as per the terms and usage of the trade.
15.1 It is submitted that plaintiff had made the payment of Rs.62,34,100/- to defendant and purchased the goods of Rs.57,01,645/- from defendant and hence plaintiff paid an excess amount of Rs.5,32,455/- to defendant and defendant is legally liable to return the aforesaid amount of Rs.5,32,455/ to plaintiff. 15.2 As regards counter claim, Ld. Counsel for the plaintiff submitted that the defendant/counter claimant has not come clean hands before this Court as counter claim is for sum of Rs.5,12,974/- which is aggregate of principal Rs.4,13,689/- and Rs.99,285/- pre-suit interest, whereas claimant filed complaint under section 138 NI Act for sum of Rs.4,13,689/- against the Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 29 of 36 plaintiff. Certified copies thereof indicates claim amounting Rs.37,65,889/- and showing the part payment of Rs.33,52,200/ only and in this view, counter claimant had no proper books of accounts and misused the security cheques of plaintiff. 15.3 Ld. Counsel for the defendant submitted that it is the Plaintiff's claim that it has made excess payments in the sum of Rs.5,32,455/. It is submitted that this has been arrived at by concealing Ex.DW-1/2 to Ex. DW-1/4. It is submitted that in addition, the plaintiff has claimed that it has paid monies in cash and that the plaintiff has also disputed the 'C' Form being Ex. DW-1/5.
15.4 Ld. Counsel for plaintiff argued that in cross- examination dated 31.05.2022, defendant, DW-1 Shri Keshav Kumar Sekhri contradicted his statement and affidavit dated 12/05/2022. DW1 admitted in para No. 2 that affidavit was prepared on the basis of the records placed by him and seen by him and witnesses had no personal knowledge of present case. In cross-examination DW-1 admitted that he left company in 2014 & again joined the defendant company on 10/7/2019 and also admitted it as correct that he had no concern during the period he left the defendant company. He admitted in the cross- examination, that initially when they were not known to the party, then advanced payment was received before supply of material but later on, material was supplied even without receiving advance payment, thus, DW-1's deposition shows that said company supplied the goods against advanced payment. 15.5 It is pointed out that in cross-examination, DW-1 stated that Mr. Yudhishter Kumar, Mr. Amit Rawat and Anil Sharma were the employees of the defendant company and Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 30 of 36 admitted that one case U/s 138 NI Act was filed against the plaintiff by the defendant company and had claimed total amount of Rs.37,65,889/-. Certified copy of Complaint alongwith documents as well as list of documents filed by defendant in complaint case 138 NI Act Ex.PW-1/11 have been filed. Certified copy of order dated 02.02.2019 in C.C. No. 4095/2018 passed by Ld. M.M. (Ex.PW-1/8), copy of statement of Shri Amit Rawat, dated 28.07.2018 (Ex.PW-1/9) and copy of affidavit of Mr. Amit Rawat dated 03.04.2018 (Ex.PW-1/10).
15.6 In evidence by way of affidavit, DW-1 admitted in para No. 4 that the defendant continued to supply the goods irrespective of receipt of entire payment or even part advanced for the goods so supplied. It is argued that therefore, it is clear that defendant company received the entire payment or part advance amount and thereafter, supplied the goods, hence no question of the debit or credit balance against the plaintiff arises and also no question arises for claiming of Rs.5,12,974/- in the counter claim filed by the defendant against the plaintiff by misusing the security cheques issued by the plaintiff by the defendant company.
15.7 Ld. Counsel for the plaintiff submitted that in his cross-examination, DW-1 admitted that Ex.DW1/1 does not bear his signature. It is submitted that as per the counter claim or written statement, the minutes of meetings was held on 01.3.2020 but the alleged board resolution was issued on 01.3.2021 which shows that the board resolution is a fabricated documents as no meeting was held on 01.3.2020. It is submitted that defendant is wrongly and malafidely withholding the said amount of Rs.5,32,435/- and thus, defendant is also liable to pay the interest Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 31 of 36 @ 24% per annum as per the terms and usage or the trade and plaintiff is legally entitled to the claimed amounts from the defendant.
15.8 Defendant's case, that it is entitled to Rs.5,12,974 (Rs.4,13,689 + Rs.99,285 interest) after factoring in Ex. DW-1/2 to Ex. DW-1/4 and excluding cash payments for this. Question to be addressed is whether these invoices were raised after goods were delivered and whether amount were payable towards that end or not?
15.9 In his deposition, on asking, if any communication in writing was made by him regarding the purported excess payment of Rs.5,32,455/-, PW-1 stated that there was no written communication. PW-1 voluntarily added that everything used to take place in good faith and he had informed over phone. PW-1 further stated that no written assurance was given by the defendant that the differences would be adjusted. PW-1 has admitted that he had not issued any notice or letter before filing the suit calling upon the defendant to adjust the amount. 15.10 From the testimony adduced on record, it emerges that (a) DW-1 has proved that Ex. DW-1/2 to Ex. DW-1/4 was raised and delivered to the plaintiff. This fact has not been disputed during evidence on record. No question was posed in this regard. Thus, goods were received by the plaintiff against invoices Ex.DW-1/2 to Ex. DW-1/4 and it is also not in dispute that the goods were not rejected or returned by the plaintiff at any point in time. It is also proved that 'C Forms', Ex. DW-1/5, was issued against Ex. DW-1/2 to Ex. DW-1/4. Admittedly, neither any cash receipt was executed nor did the plaintiff produced its accounts. Defendant's tally ledger (Ex.DW-1/6) stood proved in Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 32 of 36 evidence. That apart, it may be observed that dishonoured cheque had been tendered by the plaintiff to the defendant is also in the nature of an admission of liability. Delivery of the cheque has been proved. Nothing has been shown that blank cheques were handed over by the plaintiff to the defendant or the date of handing over the "blank" cheque. There was no police complaint as to the purported misuse of the cheque. No reason is furnished by the plaintiff as to why no action had been taken by her since 2017, the date of dishonour of the cheque till the filing the suit in the year 2020. Factum of misuse of cheque appears to be an afterthought. The relevant discussion of evidence pertaining to alleged cash payment made by the plaintiff to the defendant has already been dealt with while dealing with issue no. 1 in the earlier part of this judgment and, therefore, is not being repeated herein. Plaintiff has not been able to esatablish that any cash payments were made by the plaintiff to the defendant as claimed. Thus, plaintiff has failed to establish that the cheque in question was misused by the defendant in any manner. This court finds that case of the plaintiff stands disproved and defendant has discharged its onus by proving that claimed amount were payable to it.
15.11 Admittedly, cheque bearing no. 258330 dated 01.12.2017 issued by the plaintiff was dishonored on 05.12.2017 and 07.02.2018. Material on record shows that legal notice dated 20.02.2018 was issued by the defendant calling upon the plaintiff to pay the due amount within a period of 15 days from the date of receipt of the legal notice and no response was filed by the plaintiff and thereupon defendant instituted a complaint case U/s 138 of NI Act against the plaintiff in April, 2018. Defendant has Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 33 of 36 claimed Rs.99,285/- towards interest for the period prior to filing of the counter claim as demanded in the counter claim. Now, as per order VII Rule 2A CPC as amended by the Commercial Courts Act, where interest is sought in the suit, the plaint (counter claim herein), a statement has to be filed alongwith the details set out under Sub Rule (2) & (3) of Rule 2A CPC as amended by the Commercial Courts Act. In the present case, defendant has claimed pendent-lite and future interest @ 24% per annum. It has claimed interest from the date of dishonourment of cheque i.e. 05.12.2017 till its recovery. Although defendant has quantified interest as Rs.99,285/- but has not specified the date up to which the interest is calculated and the daily rate at which the interest accrues after that date. This counter claim had been filed by the defendant on 03.03.2021, therefore, no interest is being awarded prior to the filing of the counter claim. The claim of the defendant regarding pendent-lite and future interest is dealt with in issue no. 9 below.
15.12 As regards the principal amount, this court finds that plaintiff has failed to prove its entitlement for recovery of an amount of Rs.5,32,455/- as claimed, whereas, defendant has succeeded in establishing its entitlement to a sum of Rs.4,13,689/- towards principal amount. Accordingly, these issues i.e. issue no. 6 and issue no. 8 are decided accordingly in favour of the defendant and against the plaintiff.
ISSUE NO. 7Whether plaintiff is entitled to pendent-lite and future as claimed @ 18% per annum? OPP
16. Onus to prove this issue is upon the plaintiff. Since issue no. 6 has been decided in favour of the defendant and Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 34 of 36 against the plaintiff, this issue no. 7 is decided against the plaintiff and in favour of the defendant.
ISSUE NO. 9Whether defendant is entitled to pendent-lite and future interest @ 24% per annum? OPD
17. Defendant/counter claimant has claimed pendent-lite and future interest @ 24% per annum. Ld. Counsel for the defendant submitted that the invoices, one of the terms mentioned therein is that interest @ 24% per annum will be charged if payment is not made within seven days. Claimed interest @ 24% per annum is on the higher side in comparision to the prevailing market/bank rate. Having regard to the lending rate of the bank in the commercial transaction, this Court is of the view that interest @ 12% is reasonable and would serve the ends of restitutive justice, therefore, it is held that defendant/Counter claimant is entitled to the said interest from the date of filing of counter claim i.e. 03.03.2021 till the realization of the entire amount. This issue no. 9 is decided accordingly in favour of the defendant/counter claimant and against the plaintiff. RELIEF
18. In view of the aforesaid findings, plaintiff is not entitled to any relief, whereas defendant is entitled to recover Rs.4,13,689/- alongwith interest @ 12% per annum i.e. w.e.f. 03.03.2021 till realization of the entire amount. In the facts and circumstances, defendant shall also be entitled to the costs. While working out costs, having regard to the Section 35 CPC as amended by Commercial Courts Act, the court has discretion to determine whether costs are payable, the quantum of those costs and the costs mean a reasonable costs related to the fees and Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 35 of 36 expenses of the witnesses incurred, legal fees and expenses incurred any other expenses incurred in connection with the proceedings. Moreover, in making order for payment of costs, the courts shall have regard to certain circumstances which include, the conduct of the parties and the fact whether a party had made a frivolous claim/counter claim and instituted a vexatious proceedings wasting the time of the court and whether any reasonable offer to settle was made by parties and unreasonably refused by the other. In the present case, defendant has not placed on record any bills of costs/details of expenditure incurred. The conduct of the plaintiff regarding concealment of documents has already been mentioned above. Having regard to totality of facts and circumstances noted above, pleader's fee and litigation expenses are assessed as Rs.33,000/- and Court fee deposited by the defendant/counter claimant is Rs.7,350/-. This Court finds that defendant/counter claimant is entitled to total costs of Rs.40,350/- (inclusive of Court fees.)
19. In the result, in view of the aforenoted findings, suit of the plaintiff is dismissed and counter claim filed by the defendant/counter claimant is decreed. A decree is hereby passed in favour of the defendant/counter claimant and against the plaintiff in the sum of Rs.4,13,689/- alongwith interest @ 12% per annum w.e.f. 03.03.2021 till realization of the entire amount and costs of Rs.40,350/-. Decree sheet be prepared accordingly. File be consigned to record room.
(Dictated and announced in the open court today i.e. 31.10.2022) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi/31.10.2022 Sunita Garg Vs. M/s Arvind Chemi Synthetic Pvt. Ltd.{CS(Comm) 41/20} Page 36 of 36