Delhi District Court
M/S. Vsm Technologies Pvt. Ltd vs Wlci College (I) Ltd on 8 July, 2016
IN THE COURT OF HARJYOT SINGH BHALLA : ACJ/CCJ/ARC(SE),
SAKET COURTS, NEW DELHI
CS No. 426/13
Computer ID No. 02406C0338472013
M/s. VSM Technologies Pvt. Ltd.
Registered Office at F90/32, Okhla Industrial Area,
PhaseI, New Delhi110020,
Through its Authorized Representative,
Vide resolution of the board of Directors,
Dated 11/11/2013
.........Plaintiff
Versus
WLCI College (I) Ltd.
160B, Western Avenue, Sailik Farm,
New Delhi110062.
Also At :
WLCI College (I) Ltd.
C56A/26, Industrial Area,
Near HDFC Bank,
Sector62, Noida, UP,
........... Defendant
Date of institution : 07.12.2013
Arguments heard on : 20.05.2016
Judgment pronounced on : 08.07.2016
CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 1 of 14
Judgment
1.By this Judgment I shall decide the above suit filed by the plaintiff seeking recovery of money due towards goods supplied to the defendant.
2. It is averred that the plaintiff is a well established company duly incorporated under the Company's Act 1956 and are having its registered office at the above mentioned address. The plaintiff company deals in IT Integrated solutions for Corporates and Dealer/Distributors etc. and is an authorized partner of Dell, Lenovo and HP since 2009. The present suit is filed, signed and initiated through a duly authorized official Sh. Biswajit Sen, Manager - Administration, who has been duly authorized vide resolution dated 11.11.2013, passed by the Board of Directors of the company. The copy of the incorporation certificate and the copy of the Board Resolution dated 11.11.2013 have been filed.
3. It is averred that the defendant had approached the plaintiff for the supply of computers, Laptops, Servers and other computer accessories through Mr. Dinesh (EA to CM) and the plaintiff supplied all the materials as ordered by the defendant.
4. It is averred that the plaintiff supplied the desired Laptop and other accessories on the agreed terms and conditions as per the defendant's specification and requirement. It is averred that the plaintiff supplied all the materials against the purchase order and raised invoices towards the supply of CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 2 of 14 such materials, which were duly acknowledged by the defendant. Invoices have been filed.
5. It is averred that the plaintiff has all the detailed accounts and documents showing that in the ongoing accounts maintained, pertaining to the defendant, the defendant, has deliberately defaulted in making payment of the outstanding dues amounting to Rs.2,35,600/ against the abovesaid consignments availed as per defendant's specific requirements.
6. It is averred that the plaintiff has been persistently requesting and demanding payment from the defendant for the balance amount due and even sent repeated reminders and many times its sales personnel's have personally approached the defendant and requested for the payment. The defendant has illegally withheld the amount due to the plaintiff.
7. It is averred that the without prejudice to its rights, the plaintiff and its officers have made various efforts to communicate with the defendant and settle the matter. However, defendant has refrained from contacting the plaintiff and never initiated any action regarding payment of the dues.
8. It is averred that the feeling aggrieved the plaintiff has sent a legal notice dated 04.07.2013 to the defendant for the demand of the outstanding dues against for supply of computer materials through speed post and courier. The defendant replied to the said notice admitting the supply of a Dell Laptop alongwith accessories known as Del Latitude XT3. However, the defendant has refused to make the payment for the same stating that the Laptop was not CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 3 of 14 working properly. It is pertinent to mention here that the defendant made such excuse only to avoid the payment for the supply made by the plaintiff company and neither chose to pay or even to return the defective Laptop as alleged by the defendant.
9. It is averred that the total sum of Rs.2,35,600/ is due to the plaintiff and interest also to be calculated upon the amount due @ 24% per annum.
10. It is averred that the cause of action arose for filing of the suit on various dates such as when the goods were supplied, when request for payment were made but not complied with and it finally arose when despite receiving the legal demand notice as sent by the counsel of the plaintiff, the defendant has failed to clear the outstanding dues.
11. It is averred that the parties to the suit are residing and working for gain at Delhi and cause of action also arose at Delhi, hence this Court has got jurisdiction to try and entertain the present suit.
12. It is averred that the value of the suit for the purpose of the Court fee and jurisdiction of this Hon'ble Court is Rs.2,35,600/ and the required advolerum court fee has been paid.
13. Summons were duly served on the defendant. Defendant has filed its written statement. Defendant took a stand that the suit was not properly instituted on behalf of the plaintiff company. That the plaintiff concealed the correspondence exchanged between the parties.
CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 4 of 14
14. On merits it is submitted that the payment for the supply of goods was to be made after 15 days of satisfactory delivery as per purchase order dated 05.07.2012. It is averred that the laptop was a useless equipment since the basic key for operating the Microsoft system was not provided and email dated 30.10.2012 from customer care department of Dell has been relied upon. Although the invoice was raised on 14.08.2012, the computer was not functional till 30.10.2012 and therefore the defendant was not liable to pay any amount to the plaintiff. On 30.10.2012, the defendant wrote a mail at 03.55 pm calling upon the plaintiff to take away the computer and replace the same with a better one. Several other mails were sent dated 28.11.2012 and 29.12.2012 calling upon the plaintiff to take away the laptop. Representative of the plaintiff agreed to take back the laptop on 21.12.2012 as recorded in defendant's mail dated 22.12.2012 but no response was received. The laptop has been lying useless and the plaintiff never came to take the same back.
15. It is stated that the defendant never approached the plaintiff for purchase of goods but it was the plaintiff who approached the defendant for supply of laptop/computers to the defendants.
16. Plaintiff filed its replication denying the allegations in the WS. It was denied that the defendant ever approached the plaintiff to take back the defective products. It is reiterated that the products were working properly at the time of delivery. The communications between the parties about defective product, acknowledgment of mistake on part of the plaintiff etc. have been CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 5 of 14 denied in the replication. It is categorically stated that the defendant never communicated with the plaintiff for rectifying the problem. In case there was any problem the duty of repair was of Dell's Service/Customer Care and not of the plaintiff.
On the pleadings of parties, the following issues were framed:
1.Whether the plaintiff is entitled to decree for recovery of money of Rs. 2,35,600/. OPP?
2.Whether the plaintiff is entitled to an interest. If so at what rate? OPP?
3.Whether the defendant is entitled to return/exchange of damaged goods supplied by the plaintiff. OPD?
4.Relief.
17. At the stage of evidence plaintiff filed an application under Order 7 Rule 14 of CPC seeking to file certain documents being communication made between the defendant and Dell vizaviz servicing/repair of the laptop.
18. Evidence has been led by both sides, Sh. Biswajit Sen, the Administrative Manager/AR of the plaintiff entered the witness box. Sh. Dinesh Kumar, Executive Assistant to the Chairman of the defendant was examined as the sole defendant's witness. Both witnesses were cross examined.
19. My issue wise findings are as follows:
20. Issue no. 1 and 3 are being taken together. Whether the plaintiff is entitled to decree for recovery of money. Of Rs. 2,35,600/. OPP? Whether the defendant is entitled to return/exchange of damaged goods supplied by the plaintiff. OPD?
CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 6 of 14
21. It is the settled proposition of law that the admitted facts need not be proved. The defendant has clearly admitted that defendant had been supplied with one Laptop, two TFT's, Lenovo DVD writer, two sets of keyboard and mouse combo and one headphone. The total value of laptop inclusive of a Carry case and Lenovo DVD writer as per the Ex. PW1/3 is Rs. 1,81,000/. The remaining items supplied vide separate invoices are priced Rs. 11,600/ (two set of keyboard, mouse combo), Rs.37,000/ (two TFT 24 inch screen) & Rs.6,000/ (headphones). It is admitted position that the defendant has not been paid any amount towards the said items as well as admitted by the defendant's witness in his cross examination and I quote:
"It is correct that the payment has not been made by us against the invoices which are Ex. PW1/3 (colly) and which includes three other invoices apart from the invoice raised against the Laptop".
22. The defendant as per its WS has only complained about defect in Laptop and rejected the same. However, at no point of time were the TFT screens, headphones, two sets of keyboard and mouse rejected or offered to be returned or claimed to be defective as per the admission of the said witness and I quote:
"It is also correct that there is no disputes on other invoices which is Ex. PW1/3 (colly) except the invoice raised against the Laptop".
23. These articles can very well be used with any other computer CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 7 of 14 system including desktops and other laptops. In my view, the defendant has not made out any case or raised any defence vizaviz its liability to pay for these items. Entire case is focused towards the defect in the laptop and defendant's right to reject the same. I have perused the entire correspondence between the parties placed on record and at no point were the remaining items offered to be returned nor rejected. Therefore, in my view, the liability to pay for these articles stands established. Defendant is therefore, clearly, liable to pay to the plaintiff of sum of Rs.11600/+ Rs.37000/+ Rs.6000/ = Rs. 54,600/ alongwith interest.
24. Now I shall move on to the aspect of liability of the defendant towards repayment of the laptop and entitlement of the defendant to return/exchange the damaged goods.
25. At the outset, it is pointed out that no counter claim or set off was pleaded by the defendant and no Court fees was paid by the defendant. The neat question is whether the laptop was defective ? If so, whether the defect constituted breach of guarantee or a breach of a warranty? and secondly, whether the defendant was entitled to reject the goods and whether in fact it had rejected the defective goods.
26. Clearly, its effect on the entitlement of the plaintiff to recover the amount has also to be seen. The present transaction was for purchase of goods in the form of a laptop and other computer devices. In the WS the defendant has stated that the laptop was a useless piece and the same could not be used CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 8 of 14 since the basic key for operating Microsoft system was not provided by the plaintiff and the defendant had complained about the same but nothing was done. A perusal of the documents Ex.PW1/D2, vide email on 30.10.2012, the defendant informed the plaintiff that the Chairman of the defendant was no longer interested using the same laptop because of problem faced by him since last two months and he wanted another better one for himself.
27. At this stage reference may be made to Section 16 of the Indian Sale of Goods Act which contains an exception to the rule of caveat emptor under the Act. Subsections (1) and (2) of S.16 are as follows :
16. Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale except as follows : (1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be reasonably fit for such purpose;
Provided that in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.
(2) Where the goods are bought by description from a seller who deals in goods of that description (whether he is CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 9 of 14 the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality :
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed."
28. In R. S. Thakur v. H. G. E. Corporation, AIR 1971 Bom 97 it was observed that:
"9. ... Exception 1 applies where the buyer requires the goods for a particular purpose, where the buyer expressly or implication makes known to the seller that particular purpose, where it is shown that the buyer relies on the seller's skill or judgment and where the seller's usual course of business is to sell such goods, whether he is the actual producer or not. Where all these essential facts exist, there is an implied condition that the goods shall be reasonably fit for such purpose. The buyer in our case did rely on the skill or judgment of the seller. This is not a case where he had inspected the goods and bought them on his own judgment. In this case, the buyer purchased the radio set with some specified purpose. It could easily be said that the vendor sold this radioset for that specified purpose. It has, therefore, to be of a certain quality. If it is not of that quality and if it is not fit for such purpose, then the law implies a promise from the vendor that he will supply to the purchaser an article of that quality and reasonably fit for the purpose for which it is required. The seller's liability in such cases to supply goods that are reasonably fit is an absolute one.
10. It is not necessary that the buyer should expressly or by implication make known to the seller a particular purpose.CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 10 of 14
The words "by implication" in Section 16(1) clearly indicate that the communication of the purpose to the seller need not be expressed in words. It may be inferred from the description of the goods given by the buyer to the seller or from the circumstances of the case. The buyer however must rely on the seller's skill or judgment. In this particular case, it does appear that the plaintiff naturally had relied on the radioset which he had purchased from the defendants. In the instant case defendant No. 2 was a firm which was supplying radios in the ordinary course of their business. In fact they were supplying the goods manufactured by defendant No. 1. Therefore the buyer naturally should expect goods which were fit enough for the purpose for which he was buying. We have seen that the radioset started giving the plaintiff trouble almost about two months after he purchased it. In this view of the matter, therefore, it appears to me that the case of the plaintiff could even come within the purview of subsection (1) of S.
16."
29. The Bombay High Court also relied upon another decision and observed that:
"13. In Raghava Menon v. Kuttappan Nair, AIR 1962 Ker 318, the Kerala High Court was dealing with the purchase of a wrist watch. The plaintiff there had purchased a wrist watch from the defendantcompany along with a guarantee certificate and within about three weeks the plaintiff found that the watch was not working properly. Therefore, he handed over the watch to the defendantcompany. It was kept there for a few days and was returned to the plaintiff but the plaintiff was not satisfied and therefore he handed over back the watch at the Headoffice of the defendant CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 11 of 14 company. It was again returned back to the plaintiff with the assurance that the defects were set right. But within a week the trouble again reappeared. The plaintiff therefore had to hand over the watch again to the defendantcompany and in the background of these circumstances he had to file a suit against the defendantcompany. That High Court observed that where a layman purchases a watch of a particular make from a reputed firm which exclusively deals in such watches, the sale is governed by exception (1) to Section 16 of the Sale of Goods Act because in such a case the purpose is only the common purpose and not any special purpose, the seller knows it and the purchaser being only a layman, he relies on the seller's skill or judgment. According to that High Court such transaction being a sale by description from a dealer who deals in goods of that description can also fall under exception (2) to Section 16."
30. In my view, the order placed by the defendant in the present case is also capable of falling under both sub sections of Section 16 inasmuch as the order was placed describing the specifications of the computer including the software components and therefore, a sale by description and secondly, the laptop was purchased for the MD of an educational institute who cannot be called a technician, the sale is for common purpose for which the laptop must be fit i.e. for use as a computer. Computer hardware cannot be put to any use by a common man unless the requisite operating system and softwares, required for interacting with the machine are installed in the system. In the present case it has been proved that the operating system could not be used CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 12 of 14 because of want of activation key. The only remedy would be to seek re installation of operating system and all the softwares from some other vendor or the service centre of the manufacturer in these circumstances. The sale/invoices do not segregate the software and hardware component and therefore the price of the hardware/software cannot be segregated from the total cost. The breach in my view was breach of guarantee and the defendant was within its right to reject the goods on breach of guarantee. The emails exchanged between the parties exhibited as Ex.PW1/D2 (colly) and admitted to be correct by PW1 in his cross examination reveal that the laptop was in fact rejected after numerous attempts to fix the same failed. The plaintiff has failed to prove that the laptop was repaired and the defendant continued to use it thereafter. In fact the plaintiff had denied any communication with regard to defect in the laptop and had taken a stand in the plaint that the defendant herein was not even responding to its request for payment whereas the truth is that there was correspondence exchanged between the parties regarding the defective laptop and which correspondence was placed on record by the plaintiff itself after filing of replication. In my view such litigants in any event, do not deserve any indulgence of the court and having concealed material facts they try and mislead the court. The plaintiff ought to have collected the laptop from the defendant but it allowed the laptop to remain in the office of the defendant and is now trying to potray that the defendant continued to use the same. Once the defendant had indicated that he did not want to use the said CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 13 of 14 laptop any more because of the defects i.e. want of activation key for operating system windows. Although, the defendant herein was a supplier and not the manufacturer, it is equally settled that the seller of goods is also liable besides the manufacturer and can be sued for recovery of price paid. Reliance is placed on Ashoke Khan v. Abdul Karim, AIR 2005 All 396 wherein it was observed that:
"The aforesaid subsequent judgment rendered in Philip Mampillil v. Premier Automobiles Ltd. (supra) makes the position clear that dealer/agent and manufacturer would be jointly and severally liable. Further, considering the provisions of Section 226 of the Contract Act, it cannot be said that agent or dealer is not jointly and severally liable for the defects in the 'power tiller', as the contract is through the dealer. Therefore, privity of contract is with him. It is true that normally such liability with regard to the manufacturing defects is to be borne by the manufacturer. But, that would not mean that the dealer is absolved from joint and several liability".
31. Accordingly, a suit of the plaintiff is partly decreed for a sum of Rs.54,600/ alongwith pre litigation interest @ 12% per annum w.e.f. August, 2012 i.e. the date of invoice as well as pendelite and future interest @ 9% per annum.
Announced in the open Court (Harjyot Singh Bhalla)
dated 08.07.2016 ACJ/CCJ/ARC/ SouthEast,
Saket Court Complex, New Delhi.
CS No. 426/13 M/s. VSM Technologies Pvt. Ltd. Vs. WLCI College (I) Ltd. Page 14 of 14