Delhi District Court
Davis Trading Company Limited vs Khas Food Pvt Ltd on 9 October, 2024
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-02
NEW DELHI DISTRICT, PATIALA HOUSE COURTS
NEW DELHI
CS (COMM) No.: 174/2024
CNR No. DLND01-001556-2024
IN THE MATTER OF:-
DAVIS TRADING COMPANY LTD,
(THROUGH ITS AUTHORISED REPRESENTATIVE
SH. AYUSH AGGARWAL)
91, CARBINE ROAD, AUCKLAND,
NEW ZEALAND 1060
E-mail id: [email protected]
Mobile No: +91-9891920024
......PLAINTIFF
VERSUS
1. KHAS FOOD PRIVATE LIMITED
D-5/11, VASANT VIHAR
NEW DELHI-110057.
EMAIL id: info@khasfoods, [email protected].
Tel: +91-9650280606, +91-8710000078.
2. SH. PRANAV PURI
DIRECTOR,
D-5/11, VASANT VIHAR,
NEW DELHI, INDIA-110057.
3. MS. MADHURI PURI,
DIRECTOR,
D-5/11, VASANT VIHAR,
NEW DELHI, INDIA-110057.
......DEFENDANTS
Date of institution of suit : 21.02.2024
Date of reserving judgment : 03.10.2024
Date of pronouncement of judgment : 09.10.2024
JUDGMENT
1. Vide this judgment, I shall dispose off the present suit CS (Comm) No. 174/2024 Page 1 of 15 for recovery of Rs.35,25,297/- along with interest and costs, filed by the plaintiff against the defendants.
BRIEF FACTS OF THE CASE:
2. The case of the plaintiff, as culled out from the plaint and the documents filed therewith, is as under:-
i. The plaintiff, which is stated to be a company duly registered under the Companies Act,1956 and has filed the present suit through its Authorized Representative namely Sh. Ayush Aggarwal, being authorized vide Board Resolution dated 11.09.2023, is engaged in the business of providing and supplying high-quality food ingredients;
ii. The defendant no. 1, which is also stated to be a company incorporated and registered under the provision of the Companies Act, 1956 and having its registered office at Vasant Vihar, New Delhi, is engaged in the business of manufacturing and supply of high-quality Basmati Rice;
iii. The defendant, through its Directors namely Sh.
Pranav Puri and Ms. Madhuri Puri (the defendant nos. 2 and 3 herein) had represented to the plaintiff that they are in the business of manufacturing and supply of Basmati Rice. Defendant nos. 2 and 3 also represented that they were looking after day-to-day business of defendant no. 1 and showed intent to deal with the plaintiff and offered to sell and transport Basmati Rice to the plaintiff;CS (Comm) No. 174/2024 Page 2 of 15
iv. On February 1, 2021, the defendants sent a Proforma Invoice No. KFPL/48/20-21 of USD 23,940 with a shipment period/date of March 2021 for supply of 3 MT India Khaas XL Authentic Basmati Rice, 2 MT Essenté Brown Basmati Rice, 17 MT Essenté Premium Basmati Rice and, 1 MT India Khaas X Authentic Basmati Rice with different packaging requirements and 100% advance was to be paid by the plaintiff;
v. On the basis of aforesaid Proforma Invoice, the plaintiff issued Purchase Order ("P.O.") number 679818 dated February 2, 2021 to the defendants for a sum of USD 23,940 with the stipulation regarding freight of USD 4,000 to be paid by the plaintiff to the defendants. On May 29, 2021,Commercial Invoice bearing number KF/EI/02/21-22 was issued by defendants for an amount of USD 27,940 (USD 23,940 for the goods and USD 4,000 for freight) in respect of the supply of goods to be made in terms of the aforesaid P.O. 679818/ Performa Invoice. On July 21, 2021, the plaintiff made payment of USD 27,930 (USD 23,930 for the goods and USD 4,000 for freight) through bank transfer, which was duly received by the defendants in their bank account no. 026463700001153 maintained with Yes Bank Limited Swift Code YESBINBBDEL;
vi. It is further averred that the goods were supplied from India by the defendants and the same were received on December 17, 2021 by the plaintiff as CS (Comm) No. 174/2024 Page 3 of 15 per the specification agreed with the defendants. Inadvertently, on December 7, 2021, another payment of USD 27,930 was made by the plaintiff against the same Invoice and P.O. for which the payment was previously made on July 21, 2021 by the plaintiff and the said amount was also received by the defendants in their bank account number 026463700001153 maintained with Yes Bank Limited, Swift Code YESBINBBDEL;
vii. It is the case of the plaintiff that after noticing the double payment made by plaintiff in respect of the same invoice/ P.O., as aforesaid, the plaintiff informed the defendants about the same, vide e-mail dated March 25, 2022 and requested for a confirmation against which, the defendants sent reply on March 25, 2022, stating therein that the defendants will confirm the fact of double receipt in their bank account by first week of April 2022. In view of the fact that the plaintiff was going through yearly audit process, a follow up e-mail was sent on March 28, 2022, to expedite the process/ response, followed by another e-mail dated 30.08.2022, whereby, the plaintiff requested for repayment of funds and as the defendants had not responded for a long time despite giving an assurance that the fact of double receipt by them will be confirmed by them, the same was again followed up by the plaintiff on September 12, 2022 against which, the defendants once again gave an evasive reply on September 12, CS (Comm) No. 174/2024 Page 4 of 15 2022 and sought more time for checking the same from their accounts department;
viii. It is further the case of the plaintiff that on 06.10.2022, an e-mail was again sent by the plaintiff against which, the defendants responded that double amount has been received by them, and again expressed their intention not to pay the said amount immediately. Thereafter, on 10.10.2022, the plaintiff asked for immediate refund and since no response was received, it further asked the reasons for not immediately refunding the amount through another e-mail dated 13.10.2022. On the same day, the defendants responded, however, with a vague excuse not to refund the amount immediately and rather again wished to appropriate the payment towards future business with the plaintiff, for which the plaintiff did not agree;
ix. It is further the case of the plaintiff that on 29.10.2022, the plaintiff offered help to the defendants to expedite the refund and the defendants again on 01.11.2022 gave excuses for not paying back as they needed an approval from the Income- Tax Department to remit the funds abroad.
Thereafter, on 04.01.2023, the plaintiff asked for an update on re-payment against which, the defendants mentioned that they had got an approval (from the Income-Tax Department) to transfer the payment after March 31, 2023 and they also desired to send the same in the first week of April 2023;
CS (Comm) No. 174/2024 Page 5 of 15x. It is further averred that on 22.02.2023 and 22.03.2023, the plaintiff sought confirmation from the defendants regarding repayment of the funds, which remained un-responded. Thereafter, since plaintiff did not receive the amount within first week of April 2023, the plaintiff, on 06.04.2023 and 13.04.2023, wrote e-mails to the defendants seeking the refund and gave them one last opportunity to refund the amount within 48 hours. Against this, the defendants responded back on April 13, 2023 again citing vague and evasive reply that the bank account of Khas Foods Private Limited/Defendants had been frozen due to "need for discipline" by the Reserve Bank of India. Thereafter, on 04.04.2023, since the defendants had considerably delayed the payment on lame excuses, the plaintiff immediately confronted the defendants and inter-alia sought for the correspondence evidencing that the account had been frozen and the approval taken from the Income-Tax department earlier, and also offered for legal help in resolution of this issue. However, the plaintiff did not receive any reply;
xi. It is further the case of the plaintiff that as per the regular books of the plaintiff company maintained in its regular course of business, the said principal amount of USD 27,930/-, still remains due and payable by the defendants to the plaintiff company, besides agreed interest @ 24% per annum from 07.12.2021 till the date of actual realization.
CS (Comm) No. 174/2024 Page 6 of 15xii. On 29.06.2023, the plaintiff through its Counsel sent a legal demand notice dated 29.06.2023 and demanded the refund of USD 27,930 along with interest @ 24% per annum from the date of payment, pendente-lite and future interest till the date of re-payment/realization and cost, however, the defendants did not comply with the said notice and failed to make the payment and did not even reply to the above stated legal notice.
xiii. It is further the case of the plaintiff that since the defendants failed to comply with the legal demand notice, the plaintiff instituted Pre-Litigation Mediation before Delhi Legal Services Authority, Patiala House Courts, New Delhi. However, the defendants did not appear in the said proceedings and consequently, on 11.12.2023, Non Starter Report was issued by the concerned Authority. Thereafter, the present suit came to be instituted.
3. Summons of the suit were issued to the defendants. The defendants were duly served with the summons of the suit through e-mail and ordinary mode on 18.04.2024 and 28.05.2024 respectively. However, the defendants failed to appear despite service and consequently, were proceeded against ex-parte, vide order dated 01.06.2024 passed by this Court.
4. On 13.08.2024, Ld. Counsel of plaintiff stated at Bar that plaintiff did not want to proceed against defendant nos. 2 and 3 namely Sh. Pranav Puri and Ms. Madhuri Puri, both being the Directors of defendant no. 1 company. He also made statement in CS (Comm) No. 174/2024 Page 7 of 15 that regard. Accordingly, suit was dismissed as withdrawn against defendant nos. 2 and 3. Now, the suit survives as against the defendant no. 1 only.
5. In support of its case, the plaintiff has examined its AR namely Sh. Ayush Aggarwal as PW1, who has deposed on the lines of the averments made in the plaint by way of affidavit in evidence Ex. PW1/A. He has also relied upon/proved the following documents:-
Srl. no. Document/Particulars Exhibit(s)
1. Copy of Board Resolution Ex. PW1/1 dated 11.09.2023.
2. Original Non Starter Report Ex. PW1/2 dated 11.12.2023.
3. Copy of Performa Invoice no. Ex. PW1/3 KFPL/48/20-21.
4. Copy of Purchase order no. Ex. PW1/4 679818 dated 02.02.2021 issued by plaintiff.
5. Copy of Commercial Invoice Ex. PW1/5 bearing no. KF/EI/02/21-22
6. Copy of Payment details report Ex. PW1/6 dated 21.07.2021.
7. Copy of Payment details report Ex. PW1/7 dated 07.12.2021.
8. Printout of e-mail Ex. PW1/8 conversations between parties.
9. Office copy of Legal Notice Ex. PW1/9 alongwith original postal receipt.
10. Affidavit under Order XI Rule Ex. PW1/10
6 (3) CPC for electronic record documents.
6. On 03.09.2024, an application under Section 151 CPC seeking permission to file additional documents along with documents i.e. copy of reference rates for conversion of USD to INR obtained from the website of www.fbil.org.in and CS (Comm) No. 174/2024 Page 8 of 15 xe.com/currencycharts along with requisite certificate, besides leave to lead additional evidence by way of additional affidavit of PW1, was moved by the plaintiff, which was allowed vide order dated 03.09.2024 passed by this Court and the plaintiff was permitted to lead additional evidence.
7. AR of Plaintiff, by way of his additional affidavit in evidence Ex. PW1/B, has relied upon/proved the following documents:-
Srl.no Document/Particulars Exhibit(s)
1. Copy of Reference rates for Ex. PW1/11 conversion of USD to INR obtained (Colly) from the website of www.fbil.org.in and xe.com/currencycharts.
2. Certificate under Order XI Rule 6 Ex. PW1/12 (3) CPC r/w Section 63 of Section 63 of The Bharatiya Sakshya Adhiniyam, 2023.
8. I have already heard Ld. Counsel for the plaintiff. I have also gone through the material available on record including the plaint and the evidence, oral as well as documentary, led from the side of the plaintiff. I have also gone through the written submissions filed by the plaintiff.
LIMITATION:
9. Firstly, I shall deal with the issue as to whether or not the present suit is instituted within the period of limitation. In this regard, while referring to the relevant documents, Ld. Counsel for plaintiff submitted that the suit is well within the period of limitation as on 21.07.2021, the plaintiff had made payment of USD 27,930 to the defendants in their bank account and on 07.12.2021, inadvertenly, the plaintiff again made double payment of USD 27,930/- against the same invoice to the CS (Comm) No. 174/2024 Page 9 of 15 defendants. He further submitted that on 25.05.2022, the defendants through e-mail, had confirmed/acknowledged the factum of receipt of double payment in their bank account. Therefore, it is claimed that since the suit was filed on 21.02.2024, the same is well within the period of limitation.
10. This is a suit for recovery of money and limitation is 3 years from the date when the cause of action arises. As per Proforma Invoice, Purchase order, Payment details and copy of e-mails [Ex.PW1/3, Ex. PW1/4, Ex. PW1/6 & Ex. PW1/8(Colly)], which are duly proved by PW1, the plaintiff has proved the factum of making of double payment to defendant no. 1 company in its bank account against the aforesaid Proforma Invoice on 07.12.2021, which was also acknowledged and confirmed by said defendant, vide e-mail dated 25.05.2022. Since, the present suit was filed on 21.02.2024, therefore, the Court is in agreement with Ld. Counsel for the plaintiff that the present suit is instituted within the prescribed period of limitation.
JURISDICTION:
11. Ld. Counsel of plaintiff submitted that the registered office of defendant no.1 company is situated in Vasant Vihar, New Delhi, which falls within the territorial jurisdiction of this Court and the goods were also supplied by said defendant to plaintiff from Delhi. He further submitted that Invoice has been raised by defendant no. 1 from Delhi. Thus, it is submitted that part cause of action has arisen within the territorial jurisdiction of this Court.
12. It is the specific case of the plaintiff company, as CS (Comm) No. 174/2024 Page 10 of 15 mentioned in Para no. 4 of the plaint, that the defendant company has its registered office situated at Vasant Vihar, New Delhi.
Further, the Proforma Invoice (Ex. PW1/3) also reflects the address of defendant no. 1 company at D5/11, Vasant Vihar, New Delhi. Furthermore, the PW1 has also deposed on the identical lines during his chief examination by way of affidavit (Ex. PW1/A). As already noted above, the entire testimony of said witness has gone unchallenged and unrebutted from the side of defendant no. 1, which preferred not to appear and cross examine the said witness examined on behalf of the plaintiff company. Hence, it is duly established on record that part cause of action has arisen within the territorial jurisdiction of this Court and thus, this Court has territorial jurisdiction to adjudicate the dispute involved in the present suit.
13. Since the suit amount is above specified value i.e. Rs.3 lacs, as prescribed under the Commercial Courts Act, 2015, the Court has also pecuniary jurisdiction to adjudicate the suit.
ENTITLEMENT:
14. Ld. Counsel of plaintiff has argued that the entire testimony of PW-1 has remained unchallenged and unrebutted from the side of defendant no. 1 and therefore, the plaintiff is entitled to the decree, as prayed for. While referring to the additional affidavit in evidence (Ex. PW1/B) and the relevant documents Ex. PW1/11 (Colly) and Ex. PW1/12, Ld. Counsel of plaintiff submitted that the conversion rate for one US Dollar in terms of Indian Currency was Rs. 75.3532 paise as on 07.12.2021. He further submitted that since the plaintiff has CS (Comm) No. 174/2024 Page 11 of 15 transferred USD 27930 in excess in the bank account of defendant company on 07.12.2021, the excess amount in terms of Indian Currency, comes out to Rs. 21,04,614.88 paise (Rupees Twenty One Lacs, Four Thousand, Six Hundred, Fourteen and Eighty eight Paise only). He also referred to the relevant documents (Ex. PW1/1 to Ex. PW1/10), in order to bring home its point that these documents clearly prove that the suit amount of Rs. 21,04,614.876 paise (which is shown to be equivalent to USD 27930) was paid in excess as double payment by the plaintiff to defendant no. 1. He, therefore, prayed that the suit may be decreed.
15. As already noted above, there is no challenge to the case of the plaintiff from the side of defendant no. 1, which preferred not to appear and contest the present suit despite being duly served. The averments made by PW1 on oath are duly supported by the relevant documents Ex. PW1/1 to Ex. PW1/10, as already referred to herein above. Even otherwise, nothing contrary to the case of plaintiff has been brought on record. Hence, there is no reason to disbelieve such testimony made on oath.
16. From the unchallenged and uncontroverted testimony of PW-1 coupled with documents proved during the course of evidence, it is duly established on record that the plaintiff had made double payment to the defendant no.1 company against single invoice in respect of the goods supplied by defendant no. 1 to the plaintiff. In fact, the defendant no. 1 has acknowledged the receipt of double payment vide its e-mail dated 25.03.2022, which is part of e-mails Ex. PW1/8 (Colly). Despite receipt of double payment, which was inadvertently made by plaintiff, the CS (Comm) No. 174/2024 Page 12 of 15 defendant no. 1 failed to refund the said amount of Rs. 21,04,614.876 paise to the plaintiff without any rhyme or reason. Therefore, the Court is of the view that the plaintiff is entitled to recover Rs. 21,04,614.876 paise from the defendant no. 1 company.
INTEREST:
17. The plaintiff has claimed interest @ 24% p.a. from 07.12.2021 till its actual realization. Ld. Counsel for plaintiff argued that the nature of transaction was of commercial in nature and statute provides that the pendete lite interest should be awarded at the rate on which money are lent or advanced by nationalized banks in relation to commercial transaction under Section 34 of The Code of Civil Procedure. Hence, the plaintiff is entitled for the interest on the principal amount up to the date of filing the present suit and pendent-lite and future interest @ 24% per annum.
18. Order VII Rule 2A of Code of Civil Procedure (hereinafter referred as CPC) in respect of a commercial dispute of a specified value was brought in the statute by way of amendment in respect of the requirements of pleadings, where the interest is claimed by the plaintiff.
19. Section 34 CPC provides that where the liability in relation to the sum so adjudged, had arisen out of commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to the commercial transactions.
CS (Comm) No. 174/2024 Page 13 of 1520. Keeping in view the above discussion, in my opinion, the plaintiff has been able to justify the claim of default interest @ 24% per annum as claimed in the plaint. It has been duly established that there was commercial transaction between the parties. Thus, the Court is of the view that the plaintiff is entitled to recover pre-suit interest at the contractual rate of 24% per annum from due date i.e., 7.12.2021 till the date of filing of the suit. However, the claim of the plaintiff to recover interest at similar rate after filing of the suit till the date of realization, is considered to be on higher side. Hence, court is the view that considering the prevalent rate of interest in nationalized banks in such type of transactions, interest of justice will be served if plaintiff is awarded pendente-lite and future interest @10% per annum from the date of filing of the suit till the date of realization. It is so ordered accordingly.
RELIEF:
21. In the light of the aforesaid discussion, the Court is of the view that the plaintiff has been able to prove its case on the basis of preponderance of probability. Thus, the suit is decreed in favour of plaintiff and against the defendant no. 1 and the following reliefs are granted:-
i. The plaintiff is entitled to recover Rs. 21,04,614.88 paise (Rupees Twenty One Lacs, Four Thousand, Six Hundred, Fourteen and Eighty eight Paise only);
ii. Pre-suit Interest @ 24% per annum is awarded on outstanding amount from 07.12.2021 till the institution of the suit.CS (Comm) No. 174/2024 Page 14 of 15
iii. Pendente-lite and future interest is awarded @ 10% per annum from the date of filing of the suit till the date of its realization;
iv. Cost of the suit is also awarded in favour of the plaintiff.
22. Decree sheet be prepared accordingly. File be consigned to Record Room, after due compliance.
Digitally signed by VIDYAAnnounced in the open court VIDYA PRAKASH on this 09th Day of October, 2024 PRAKASH Date:
2024.10.09 17:15:01 +0530 (VIDYA PRAKASH) DISTRICT JUDGE (COMMERCIAL COURT)-02 PATIALA HOUSE COURTS, NEW DELHI CS (Comm) No. 174/2024 Page 15 of 15