Delhi District Court
Jaiveer Singh vs Jhs Svendgaard Laboratories Ltd on 29 May, 2024
In the court of Ms. Anu Grover Baliga,
District Judge (Commercial Court-04), South East District,
Saket Courts, New Delhi.
CS DJ 339/19
Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd.
In the matter of:
Jaiveer Singh
L-222, 1st Floor,
Mahipalpur,
New Delhi-110037. ...Plaintiff
Versus
JHS Svendgaard Laboratories Ltd.
B1/E23, Mohan Co-Operative Industrial Area,
Mathura Road, New Delhi-110044.
Also at:
Trilokpur Road (Kala-Amb)
Distt. Sirmour,
Himachal Pradesh-173030. ...Defendant
ORDER
29.05.2024
1. Vide the present order, I shall decide an application filed by the Plaintiff under Order XIII-A CPC (as amended by the Schedule to the Commercial Courts Act) praying therein that the suit of the Plaintiff be decreed at this stage itself, for in view of its written statement and the documents filed therewith, the Defendant has no real prospects of successfully defending the claim of the Plaintiff.
2. Briefly stated, the present suit has been filed by the Plaintiff interalia on CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 1 of 26 the assertions that the Plaintiff being a Licensed Customer House Agent (hereinafter referred to as CHA), duly registered with the Department of Central Board of Indirect Taxes, had provided services to the Defendant for export of its consignments of toothbrushes/toothpastes to Poland, USA and China and the Defendant failed to clear the outstanding payments due to the Plaintiff for the said services rendered. It has been interalia asserted in the plaint filed that the Plaintiff had duly performed the custom clearance work for various consignments of the Defendant during the period 01.11.2017 to 16.02.2018 and had raised 24 invoices of a total amount of Rs.34,27,014.80 and that the Defendant till date has only paid Rs.20,03,434/-. The details of the 24 invoices have been given in para 5 of the plaint and in paragraph 6 of the plaint, the Plaintiff has given the details of the invoices which still remain unpaid. The Plaintiff has also categorically asserted that as per Form 26AS, available on TRACES(official website of Income Tax Department) an amount of Rs.30,681/- towards TDS against subject invoices has been deposited by the Defendants in the Income Tax Account to the credit of the Plaintiff thereby clearly proving that Defendant accepts its liability towards the subject invoices raised by the Plaintiff.
3. It is relevant to mention that initially the present suit was filed under the provisions of Order XXXVII CPC before the Court of Ld. ADJ on 20.04.2019. Perusal of the record reflects that on the first date of hearing, Ld. Counsel for the Plaintiff however requested that the suit be treated as an ordinary suit for recovery and based on the said submission, summons of the suit were sent by the Court of Ld. ADJ to the Defendants. The Defendants, after being served, filed an application under Order VII Rule 10 and 11 CPC asserting therein that no cause of action had occurred within the jurisdiction of Delhi Courts.
CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 2 of 26Defendants No.2 and 3 also filed an application under Order I Rule 10 CPC seeking their deletion from the array of parties. Record further reveals that the dispute being raised by the Plaintiff being commercial, the suit was transferred to one of the Ld. Predecessors of this Court by the Ld. Principal District and Sessions Judge, South-East District vide order dated 25.01.2022. This Court vide its order dated 28.11.2022 allowed the application of the Defendants No.2 and 3 filed under Order I Rule 10 CPC and dismissed the application of the Defendants under Order VII Rule 10 CPC vide its order dated 05.07.2023. Vide the said order, this Court held that based on the averment that the Defendant made payments against the services rendered by the Plaintiff, by transferring various amounts to the bank account of the Plaintiff in Delhi, this Court does have the territorial jurisdiction to try the present suit.
4. Coming now to the other pleas taken by the Defendant Company in its written statement, it has been interalia contended that the suit of the Plaintiff is liable to the dismissed because the Plaintiff exhibited deficiency in rendering its services and miserably failed to manage the export and delivery of the consignments of the Defendant. In support of this allegation, the following averments have been made by the Defendant in the written statement. a. The services of Plaintiff were engaged by the Defendant to deliver a consignment in Poland and the Plaintiff further engaged CP World lines Pvt. Ltd. (hereinafter referred to as CPW) to act as Freight Forwarding Agency for shipment of the goods. However when the goods reached Poland, the Defendant's consignee refused to take the entire stock and out of 17 containers only 5 containers were accepted by them. The Defendant thereafter found a new consignee and vide email dated 02.02.2018 informed the Plaintiff and CPW that the leftover containers be sent to the new consignee, and it was at the instance of CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 3 of 26 Plaintiff that all necessary documents were sent to CPW by the Defendant to ensure orderly dispatch of its containers to USA.
b. Instead of fulfilling their promises, the Plaintiff and CPW instead resorted to extorting money out of the Defendant by claiming unjustified charges of alleged demurrage and detention and refusing to dispatch the consignment till the same were paid. By way of email dated 09.02.2018, CPW sent an email to the Defendant demanding that the Defendant should pay Rs. 57,91,500/- towards the purported demurrage and detention charges, failing which the consignment would not be shipped to the new consignee. Since CPW had, to the knowledge of the Plaintiff, represented that the consignment will be dispatched once the aforementioned payment is released and which was also vehemently asserted by the Plaintiff, the Defendant, in its helplessness, was compelled to release a payment amounting to Rs. 57,91,500/- on 12.02.2018 in order to prevent any further losses.
c. Once the Defendant made the payment, no action was taken by the Plaintiff or CPW to fulfill their obligation of shipping the consignment to the new consignee. Instead, CPW and Plaintiff followed up with further unjustified demand of Rs. 10,79,715.86/- from the Defendant on 13.02.2018 purportedly towards further demurrage and detention charges. It was further stated by CPW and Plaintiff that the consignment would not be shipped if these demands were not met by the Defendant. It is noteworthy that these demands were being made to the clear knowledge of the Plaintiff and with the consent/approval of the Plaintiff.
d. The Plaintiff and CPW never dispatched the consignment to the new consignee and kept on making unjustified demands in order to extort more money from the Defendant. As a consequence of the inaction on behalf of the Plaintiff and the Freight Forwarding Agency, the Consignment was auctioned as CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 4 of 26 'Unclaimed Goods' at the Hamburg Port. As a result, the Defendant has suffered immense losses including, but not limited to, the value of the consignment auctioned, i.e. Rs. 10,58,85,024/-.
e. Since the Plaintiff and the agencies hired by him and acting as his agent/extension, were unable to dispatch the Consignment to its destination despite expressly agreeing to do the same, the Plaintiff and CPW are jointly and severally liable to the Defendant for damages on account of the losses faced by Defendant No. 1, which include, but are not limited to, Rs. 10,58,85,024/- as the value of the consignment lost and Rs. 57,91,500/-, being the unjustified payments extorted by the Plaintiff/CPW on account of purported demurrage and detention charges, along with applicable interest.
5. Apart from the aforementioned averments, in para 13 of the preliminary objections, the Defendant has sought to assert that even if it is held that any amount claimed by the Plaintiff in this suit is payable by the Defendant, the same is to be adjusted and / or appropriately set off against the amounts owed by the Plaintiff to the Defendant, which include, but are not limited to, Rs.10,58,85,024/- as the value of the consignment lost and Rs.57,91,500/-, being the unjustified payment extorted by the Plaintiff and CPW on account of purported demurrage and detention charges.
6. Now in view of the aforementioned assertions made by the Defendant, the Plaintiff has preferred the present application under Order XIIIA CPC as amended by Schedule to the Commercial Courts Act. It has been asserted by the Plaintiff that the Defendant has no where specifically denied its liability to make payment against the invoices raised by the the Plaintiff and on the basis of which the present suit has been filed. The assertion of the Plaintiff is that once CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 5 of 26 the Defendant Company has admitted that the Plaintiff had rendered the services for which the invoices in question have been raised, it cannot be allowed to set off its so called claim against CPW in this suit filed by the Plaintiff. It has been asserted that the responsibility of the Plaintiff was merely to arrange and organize the consignment of the shipments to Hamburg, Germany and once the shipments reached Hamburg, Germany, the contract between the Plaintiff and the Defendant came to an end and the Plaintiff is entitled to be paid for the services provided by it. It has also been asserted that the Plaintiff does not provide any custom clearance services with respect to the consignments to be shipped to USA from Hamburg, Germany and therefore there is no question for the Plaintiff having ever accepted a contract from the Defendant to deliver its consignments to the new consignee in USA. It has been averred by the Plaintiff that e-mails filed on record by the Defendant itself show that the Defendant had directly dealt with CPW and the documents pertaining to change of consignee shipments were also handed over by the Defendant to the CPW and asserted payments were directly made by the Defendant Company to CPW. It has therefore been asserted that the Defendant cannot be allowed to set off any amount against the suit amount claimed by the Plaintiff and that therefore this suit should be summarily decreed in favour of the Plaintiff at this stage itself.
7. In reply to the aforementioned application, it has been asserted that no summary judgment can be passed against the Defendant, for the provisions of Order XIIIA Rule 1 CPC make it clear that an application for summary judgment under this Order should not be made in a suit in respect of any commercial dispute that is originally filed as a summary suit under Order XXXVII. It has also been asserted that the Defendant has been able to raise many triable issues that require a trial by this Court and that therefore the CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 6 of 26 Plaintiff is not entitled to any summary judgment.
Contentions of Ld. Counsels:-
8. Ld. Counsel for the Defendant, Sh. Keshav Madhav Gulati has sought to contend that this Court must not exercise its powers under Order XIIIA CPC to pronounce a summary judgment in favour of the Plaintiff, for it is settled law that such powers have to be exercised sparingly as an exception. He has further submitted that since the present suit has been filed under Order XXXVII CPC,no summary judgment can be passed by this Court in view of the specific provisions of Order XIIIA CPC , as amended by Schedule to the Commercial Courts Act. He has pointed out that sub-rule (3) of Order XIIIA CPC makes it clear that an application for summary judgment under Order XIIIA CPC will not be made in a suit in respect of any commercial dispute that was originally filed as a summary suit under Order XXXVII CPC. It is also the contention of Ld.Counsel for the Defendant that the original engagement pertaining to shipping of consignments to Hamburg, Germany stood novated and the Plaintiff was therefore bound to then deliver the consignments to Newark, USA and since he failed to do so, he is not entitled to any amount from the Defendant. It has also been sought to contend that the issue of novation of contract is a question of facts which can only be decided by this Court after a trial is held. As regards the contention of Ld.Counsel for the Plaintiff that this Court would not have the pecuniary jurisdiction to try the counter claim being raised by the Defendant, Ld. Counsel for the Defendant has submitted that the adjustments/set off sought by the Defendant is segregated into 02 claims and that this Court can easily set off the amount of Rs.57,91,500/- against the suit amount, for it does have the pecuniary jurisdiction to do so. In support of aforementioned contentions, Ld. Counsel for the Defendant has relied upon the following judgments:-
CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 7 of 26. Syrma Technology Private Limited v. Powerwave Technologies Sweden AD, 2020 SCC OnLine Mad 5737.
. Bright Enterprises Private Limited v. Bizcraft Lip 2017 SCC OnLine Del 6394.
. Purbanchal Cables & Conductors (P) Ltd. v. Assam SEB, (2012) 7 SCC 462.
. Basant Goel Vs. Som Prakash Sethi [CS (Comm) 557/2022] . Munshi Ram and Ors. Vs. Radha Kishan (decd.) and Ors., AIR 1975 P&H 112. . Most. Pemlo alias Pemplo and Anr. Vs. Hiralal Mahto and Ors., 1992 (2) PLJR 858. . J. K. Industries Limited Vs. Mohan Investments & Properties Private Limited, AIR 1992 Delhi 305.
9. In rebuttal, Ld. Counsels for the Plaintiff, Sh. Jitesh Vikram Srivastava and Sh. Atul Agarwal have contended that present is a fit case for this Court to exercise its jurisdiction under Order XIIIA CPC and pronounce a summary judgment in favour of the Plaintiff. Ld. Counsels for the Plaintiff have relied upon the judgment of Hon'ble Delhi High Court pronounce in the case titled Siddhatha Singh Vs. Ajit Singh Bawa (deceased) Through LRs RFA (Comm) 40/2022 to submit that there is no compelling reason before this Court to put this case for recording of evidence. Ld. Counsels have submitted that there is no specific denial in the entire written statement that the Plaintiff has not rendered the services for which he has raised the invoices and on the basis of which the present suit has been filed. It is their submission that in a catena of judgments pronounced by the Hon'ble Supreme Court and Hon'ble High Courts, it has been held that where a Defendant wants a case to go for trial, every allegation of fact made in the plaint is to be specifically and categorically denied by the Defendant and where there are only vague and evasive denials in the written statement, the allegations made by the Plaintiff are to be taken as admitted and the Plaintiff is not required to prove the said statement during evidence. In support of their contentions, Ld. Counsels for the Plaintiff have relied upon the following judgments:-CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 8 of 26
• Thangam And Another v. Navamani Ammal [2024] 3 S.C.R. 146: 2024 INSC 164.
• M/s Gian Chand Brothers v. Rattan Lal, (2013) 2 SCC 606. • Badat & Co. v. East India Trading Co. AIR 1964 SC 538.
Their submission therefore is that the Defendant cannot be allowed to contend that the Plaintiff should prove in trial the fact of him having rendered his services for which the invoices have been raised. Ld. Counsels for the Plaintiff have strenuously contended that the Plaintiff performed his part of contract by delivering the consignments of Defendant at Hamburg Port, Germany, USA and China. It is the submission of Ld. Counsels for the Plaintiff that there was no novation of contract whatsoever between the parties. They have sought to point out that the e-mails being relied upon by Ld. Counsel for the Defendant clearly show that the Plaintiff had nothing to do with the re-routing of the consignments from Hamburg, Germany to USA and that the discussions in this respect were only held between the Defendant and CPW. Ld. Counsels for the Plaintiff have contended that this Court must take into account that the Plaintiff, being a customs clearing agent, in India did not have any authority whatsoever to get any customs clearance done from Hamburg Port, Germany and that the only role played by the Plaintiff in the re-routing of the consignment was that it had forwarded the contact details of the CPW to the Defendant. According to Ld. Counsels for the Plaintiff, the Plaintiff had appointed CPW as its freight forwarding agent to deliver the consignments of the Defendant till Hamburg Port, Germany and once the goods were delivered at the said Port, the relationship between the Plaintiff and CPW stood terminated. They have pointed out that all the e-mails placed on record by the Defendant show that it is the Defendant and the CPW who were corresponding amongst themselves regarding the re-routing of the consignment and that the Plaintiff had nothing to do with the same. Their submission therefore is that by no stretch of imagination CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 9 of 26 can the Plaintiff held liable for the alleged acts of CPW in not being able to reroute the consignments of the Defendant from Hamburg Port, Germany to USA. Ld. Counsels for the Plaintiff have also vehemently contended that the Defendant cannot at all be allowed to set off its so called claim against CPW in this suit filed by the Plaintiff. They have further pointed out that the asserted claim of Rs.10,58,85,024/- being made by the Defendant on account of the value of its consignments is much beyond the pecuniary jurisdiction of this court and that therefore on this ground also, the said claim is not triable by this Court. It has further been submitted that the contention of Ld. Counsel for the Defendant that this court should only adjust the suit amount against the amount of Rs.57,91,500/-, the amount that the Defendant allegedly paid to CPW on account of purported demurrages and detention charges of its consignments at Hamburg, Germany, is absolutely misplaced. It is their submission that no such adjustment can be done more so when there is no separate prayer made for set off/adjustment in the written statement, as per the provisions of Order VIII CPC and no court fees whatsoever had been filed by the Defendant in this respect. In support of this contention, Ld. Counsels for the Plaintiff have relied upon the judgment dated 26.04.2012 of Hon'ble Delhi High Court pronounced in the case titled as Walchandnagar Industries Ltd. Vs. Cement Corporation of India, FAO(OS)No.39/2007. Ld. Counsels for the Plaintiff have also sought to submit that the prohibition laid down by sub-rule (3) of Order XIIIA CPC will not come into play in the present case for though initially, the present suit was filed under Order XXXVII CPC,on the date of its admission itself, the suit was converted into an ordinary suit. In support of their contention that the objection of the Defendant in this respect has no merit, Ld. Counsels for the Plaintiff have relied upon the judgment of Hon'ble High Court of Maharashtra, Mumbai Branch in W.P. No.10573/2022 titled as M/s Ashok Commercial Enterprises & Anr. Vs. CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 10 of 26 Rajesh Jugraj dated 31.01.2023.
Findings:-
10. This Court has carefully considered the submissions made by the Ld. Counsels and has perused the entire record as well as the judicial dicta relied upon by Ld. Counsels for the parties.
11. This Court will first consider the contention made by Ld.Counsel for the Defendant, Sh. Keshav Madhav Gulati that the application filed by the Plaintiff under Order XIIIA CPC is not maintainable in the present case for the provisions of Order XIIIA CPC prohibit the passing of a summary judgment in a suit filed under Order XXXVII CPC. In the considered opinion of this Court, it is being rightly contended by Ld. Counsel for the Plaintiff that the said prohibition will not be applicable in the present case for though the present suit was filed under Order XXXVII CPC, on the first date of hearing itself, Ld. Counsel for the Plaintiff had prayed that it be treated as an ordinary suit. Thus present is not a case where the Defendant Company filed an application seeking leave to defend the present suit and on the same being allowed then filed its written statement. In the considered opinion of this Court, the provisions of Order XIIIA CPC prohibiting the passing of a summary judgment in suits filed under Order XXXVII CPC, cover those cases in which leave to defend is granted and thereafter the Defendant files its written statement and the Plaintiff again prays for a summary judgment. The intention behind such a provision is obvious, namely that once a Court has come to a conclusion that the Defendant has been able to raise a triable issue and has been granted leave to defend, the Plaintiff cannot be allowed to re-agitate that the defence won't succeed and it is entitled to summary judgment. This Court is supported in its view by the CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 11 of 26 judgment dated 31.01.2023 of the Hon'ble Mumbai High Court pronounced in W.P. No. 10573/2022 titled as M/s Ashok Commercial Enterprises & Anr. Vs. Rajesh Jugraj. In para 15 thereof it has been held that:
"The objective behind incorporating provision of sub-rule 3 of Rule 1 of Order XIII A of the Code is to prevent Plaintiff who once attempts pronouncement of judgment under Order XXXVII Rule 3 of the Code and upon conversion of his summary suit into commercial one, seeks to have another bite at the cherry by seeking pronouncement of judgment under Order XIII-A of the Code. The provisions of sub-rule 3 of Rule 1 of Order XIII A cannot be interpreted to mean that Plaintiff in a summary suit which is converted into commercial suit would loose both rights of pronouncement of judgment under Order XXXVII Rule 3 of the Code as well as seeking summary judgment under Order XIII A of the Code."
In view of the aforementioned judicial dicta there cannot be prohibition for the Plaintiff to seek summary judgment as per the provisions of Order XIIIA CPC.
12. Ld. Counsel for the Defendant has next contended that the Defendant has raised many triable issues in the present case and that therefore this Court must not exercise its jurisdiction under Order XIIIA CPC to pass a summary judgment. In the written submissions filed, Ld. Counsel for the Defendant has contended that the following triable issues have been raised by the Defendant in its written statement which require trial:
i. Whether the Defendant is liable to pay the Plaintiff a sum of Rs. 14,23,892/- along with pendete lite and further interest at 18%, purported due under the said invoices?
ii. Whether the Defendant is entitled to adjust against the Plaintiff a sum of Rs. 57,91,500/- towards the purported demurrage and detention charges incurred by the Defendant upon the insistence of the Plaintiff and CPW?
iii. Whether the Defendant is entitled to adjust against the Plaintiff a sum of Rs.
10,58,85,024/- towards losses suffered by the Defendant on account the Consignment having been auctioned as 'Unclaimed Goods' at the Hamburg Port?CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 12 of 26
iv. Whether, in the overall view of the facts and circumstances, there should be an adjustment of the amounts due by the Plaintiff to the Defendant as against the amount claimed by the Plaintiff in the instant suit?
13. Ld. Counsel for the Defendant has submitted that in view of the aforementioned issues raised by the Defendant, this court must not exercise its powers under Order XIIIA CPC to give a summary judgment. He has made the following contentions in this regard:
a. Power under Order XIIIA ought to be exercised sparingly and as an exception; there is always a possibility of a witness coming out with truth, though pleadings and documentary evidence may indicate otherwise.
b. In order to decide whether a case has a real prospect of success the court must not conduct a 'mini-trial' and should avoid being drawn into an attempt to resolve conflicts of fact which are normally resolved by the trial process;
c. There is a difference in "Impossibility of succeeding" and "Improbability of succeeding". Summary judgments under Order XIIIA can only be granted when there is an impossibility of succeeding and not when there is an improbability of succeeding.
In support of the aforementioned contentions, he has referred to the judgments of the Hon'ble Madras High Court and Hon'ble Delhi High Court pronounced in the cases titled and reported as Syrma Technology Private Limited v. Powerwave Technologies Sweden AD, 2020 SCC OnLine Mad 5737 and Bright Enterprises Private Limited v. Bizcraft Lip 2017 SCC OnLine Del 6394.
14. In rebuttal, Ld. Counsel for the Plaintiff, Sh. Srivastava has relied upon the judgment passed by the Hon'ble Division Bench of the Delhi High Court in the case titled and reported as Siddhatha Singh Vs. Ajit Singh Bawa CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 13 of 26 (deceased) Through LRs RFA (Comm) 40/2022 to contend that present is a fit case where this Court should exercise its powers under Order XIIA CPC.
15. I have carefully gone through the judicial dicta referred to by both the Ld. Counsels. In paras 49 and 52 of its recent judgment pronounced in the case titled Sukam Power Systems Limited vs. Kunwer Sachdev & Anr. (2019) SCC Online, Delhi 10764, the Hon'ble Delhi High Court has observed as follows:
"49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra)....
52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is proportionate, more expeditious and less expensive means to achieve a fair and just result."
The aforementioned succinct enunciation of law by the Hon'ble Court, makes it clear that in case this Court is able to determine the necessary facts in dispute between the parties and is able to apply the relevant legal principles to the said facts so as to resolve the disputes between the parties, this Court will be justified in exercising its powers under Order XIIIA CPC.
16. Now, the dispute between the parties in the present case is with respect to an amount of Rs.14,23,892/-. According to the case put forward by the Plaintiff, he had provided services to the Defendant for export of its consignments of toothbrushes/toothpastes from India to Poland, USA and China during the period 01.11.2017 to 16.02.2018 and had raised 24 invoices for a total amount CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 14 of 26 of Rs.34,27,014.80 and that the Defendant till date has only paid Rs.20,03,434/-, thus leaving a balance of Rs.14,23,892/-. The details of the 24 invoices have been given by the Plaintiff in para 5 of the plaint. The invoices filed on record reflect that the Plaintiff had raised 17 invoices for getting custom clearance and shipping of 17 containers of the aforementioned products to Hamburg Port, Germany and the remaining 07 invoices for getting custom clearance and shipping of 07 other consignments from India to USA and China. Thus, as per the case put forward by the Plaintiff, in total there were 24 consignments for which his services had been engaged by the Defendant and he had rendered the said services successfully. Now in the written statement, the Defendant admits that it had engaged the services of the Plaintiff for the export and shipment of the aforementioned 24 consignments. However after making this admission, the Defendant thereafter simply, in an absolute vague manner, denies all other facts asserted by the Plaintiff. It denies the invoices raised by the Plaintiff and it even denies the payments made by itself to the Plaintiff. There are no reasons whatsoever given in the entire written statement as to why the Defendant is denying even the fact that it had made payments amounting to Rs.20,03,434/- to the Plaintiff, more so when admittedly it has itself deposited TDS against subject invoices with the Income Tax Department, to the credit of the Plaintiff. The only specific assertion that has been made by the Defendant regarding the services rendered by the Plaintiff is with respect to the shipping of consignments to Hamburg Port, Germany. According to the Defendant, there was deficiency in rendering of services by the Plaintiff with respect to the delivery of the consignments to this particular destination. As regards the delivery of 07 consignments to USA and China, there is not even a whisper in the entire written statement that the consignments did not reach these two destinations. However, according to Ld. Counsel for the Defendant, in view of the fact that CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 15 of 26 the Defendant has denied the facts asserted by the Plaintiff in this respect, this court must ask the Plaintiff to prove the shipment of 07 consignments to USA and China. In the considered opinion of this court, the said contention of Ld. Counsel for the Defendant has no merit whatsoever. Sub Rule 3 of Order VIII Rule 3A CPC as amended by the Schedule to the Commercial Courts Act mandates that a Defendant is bound to give reasons for the denial of a fact asserted by the Plaintiff. The said sub-rule lays down as follows:
"Where the Defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a different version of events from that given by the plaintiff, he must state his own version".
17. In Badat & Co. v. East India Trading Co., AIR 1964 SC 538, the Hon'ble Supreme Court while referring to Rules 3,4 and 5 of Order VIII of the Code has observed: - "These three rules form an integrated code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non-compliance. The written statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact, he must not do so evasively, but answer the point of substance. If his denial of fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary."
18. Thus if the Defendant wished to deny that the consignments meant for USA and China did not reach the said destinations or that it had not accepted the invoices raised by the Plaintiff and had not made part payments thereof, it should have given his own version in this respect. In view of its failure to do so, the assertions made by the Plaintiff that it successfully delivered the 07 consignments to USA and China and that the Defendant accepted the invoices raised against it and also made part payments towards the same is to be accepted CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 16 of 26 and there is no requirement for this Court to direct the Plaintiff to lead evidence in the said respect. The fact of payments made by the Defendant by transferring various amounts to the bank account of the Plaintiff within the jurisdiction of this Court also therefore clearly proves that this Court does have the territorial jurisdiction to try this suit.
19. Coming now to the shipping of consignments to Hamburg Port, Germany, the assertion of the Defendant is that there was deficiency in rendering of the services by the Plaintiff with respect to the delivery of consignments to the said destinations. The Defendant has alleged that the due to the deficient services provided by the Plaintiff, it had to suffer losses to the tune of Rs.10,58,85,024/- and Rs.57,91,500/-. However if one carefully considers the allegations made by the Defendant in this respect, it becomes clear that the Plaintiff had successfully got exported the consignments of the Defendant even to Hamburg Port, Germany. This is so because it is the assertion of the Defendant itself that when the consignments of toothbrushes, etc exported by the Defendant from India reached Poland via Hamburg, Germany, its own consignee refused to accept the 17 containers and only accepted 05 containers. In other words, there is an admission on behalf of the Defendant that the Plaintiff completed its part of the contract by making sure that the consignments of these 17 containers were cleared by the customs authorities of India and that these containers did reach Poland via Hamburg Port, Germany. Thus according to the Defendant itself, there was no deficiency of services provided by the Plaintiff with respect to the export of consignments from India to Poland via Hamburg Port, Germany. The submission of Ld. Counsel for the Defendant, Sh. Keshav Madhav Gulati however is that the original contract between the parties with respect to the consignment of containers from India to Germany stood novated and the CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 17 of 26 Plaintiff was, under the novated contract, bound to export the rejected consignments from Hamburg, Germany now to USA.
20. In the considered opinion of this Court, the aforementioned contention of Ld. Counsel for the Defendant cannot be accepted and it cannot be held that initial contract executed between the parties for shipment of the consignment of the Defendant from India to Poland via Germany stood novated. The judicial dicta referred to by Ld. Counsel for the Defendant in support of his contention that there is a novation of the contract in the present case, is not at all applicable to the facts and circumstances of this case. In Purananchal Cables's case (supra-the judgment relied upon by Ld.Counsel for the Defendant), the appellant had supplied certain goods to the Respondent and the Respondent had set up a case that the goods had not been delivered to it in time. In response to the said plea of the respondent, the appellant had sought to contend that the respondent had specifically agreed to extend the time of delivery and therefore there was a novation of contract between the parties. It is in such circumstances that the Hon'ble Supreme Court held that the plea of novation of contract is a mixed question of law and fact. The said dicta is absolutely inapplicable in the facts of the present case wherein the contract given by the Defendant Company to the Plaintiff to send its shipments to Hamburg, Germany stood completely performed by the Plaintiff. Nothing remained by the Plaintiff to perform in the said contract and therefore there arises no question of novation of the contract. In Basant Goel's case (supra-the judgment relied upon by Ld.Counsel for the Defendant), the Plaintiff and the defendants had entered into an agreement to sell and the Plaintiff being the buyer had paid certain amounts to the defendant seller but the defendant/seller was not coming forward to complete the sale proceedings in favour of the Plaintiff. The defendant /seller took a plea before CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 18 of 26 the Hon'ble Delhi High Court that the parties by written communications had altered the terms of the agreement to sell and on the basis of said communications, the Hon'ble Delhi High Court dismissed the application of the Plaintiff under Order XIIIA CPC and listed the matter for evidence. Now based on the said judgment, Ld. Counsel for the Defendant has urged before this Court that the email communications between the parties to the present suit similarly prove that the original contract was modified and that therefore this Court must also list this case for evidence. I have gone through all the emails referred to by Ld. Counsel for the Defendant. Apparently, all the said correspondence was made between the Defendant and CPW, much after the 17 containers stood delivered by the Plaintiff at Hamburg Port, Germany. Thus these mails cannot by any stretch of imagination be relied upon by the Defendant to seek the novation / modification of the initial contract, for the contract of shipping the consignments from India to Hamburg Port, Germany, already stood performed by the Plaintiff. Further the said mails nowhere reflect that the Defendant ever directed the Plaintiff to get its consignments reshipped from Hamburg Port, Germany to USA. All the said emails have been exchanged between the Defendant and CPW, with only one mail being addressed to the Plaintiff asking it to intervene in the matter. The Plaintiff admittedly also did not reply to the said mail. Suffice to state that in view of such facts it can hardly be inferred that there was a novation of the original contract entered between the Plaintiff and the Defendant and that the Plaintiff agreed to export and ship the consignments of the Defendant from Hamburg Port, Germany to USA.
21. Ld. Counsel for the Defendant has however then sought to contend that even if the Plaintiff had rendered the services for which he was engaged by the Defendant, the Defendant is entitled to adjust/set off against the consideration of CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 19 of 26 the said services, the losses suffered by it on account of failure of the Plaintiff and its agent CPW in not shipping the rejected consignment from Hamburg, Germany to USA. He has sought to contend that the Plaintiff and its asserted agent CPW illegally extorted an amount of Rs.57,91,500/- from the Defendant by falsely representing that the rejected consignment of 12 containers of the Defendant will not be allowed to be shipped from Germany to USA till the Defendant deposits the said amount with the concerned authorities at Germany. He has further pointed out that it is an admitted case between the parties that despite the Defendant making the said payment to CPW, the consignment was not shipped from Germany to USA and was infact auctioned by the concerned authorities at Hamburg, Germany, thereby causing a loss of Rs.10,58,85,024/- to the Defendant, being the value of the consignment. His contention is that the Defendant reserves its right to file a separate suit against the Plaintiff and CPW for the recovery of the said amount, before a court of competent pecuniary jurisdiction but that this Court in the meanwhile should adjust the amount of Rs.14,23,892/-, that is the suit amount being claimed by the Plaintiff. According to Ld. Counsel, even if this court does not have the pecuniary jurisdiction to try the said suit as and when filed by the Defendant, it does have the jurisdiction to try the claim of the Defendant that an amount of Rs.57,91,500/- was illegally extorted by the Plaintiff and CPW from it. It is his submission that against the said claim, this Court has the jurisdiction to adjust the suit amount.
22. I am afraid that the aforementioned contention of Ld. Counsel for the Defendant cannot be allowed at all.
23. In Walchandnagar's case (supra - the judgment relied upon by Ld. Counsel for the Plaintiff), the Hon'ble Division Bench of Delhi High Court has CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 20 of 26 explained the various defences a Defendant can take in its written statement. It has been observed that in every suit for recovery of money, the Defendant may take defences which are in the nature of either payment or adjustment or set off or counter claim. It has been further observed that for the defences of payment and adjustment, neither is the court fees payable by the Defendant nor does the law of limitation apply to it and this is for the reason that the Defendant is not required to go to a court of law regarding the amounts being claimed by him against the payment/adjustment for he already has moneys of the Plaintiff in his pocket and he is not required to file a suit for recovery. In the case before the Hon'ble Delhi High Court, the Respondents/Defendant therein had encashed the bank guarantees furnished to it by the Plaintiff and it therefore had already in its pocket the amount of the bank guarantees and it was not required to file a suit for recovery and thus the said case was an example of a plea of adjustment taken by the Respondent. In the very same judgment, the Hon'ble Delhi High Court has explained that defence of set off or counter claim necessarily require the payment of court fees and further same have to be specifically pleaded in the written statement.
24. Now in the present case, the fact that the Defendant alleges that the Plaintiff and its agent CPW caused losses to it to the tune of Rs.10,58,85,024/- and also illegally extorted from it, an amount of Rs.57,91,500/- as demurrage and detention charges, are admittedly not in the nature of adjustment. It is the own contention of Ld. Counsel for the Defendant that for recovery of the losses suffered by it, the Defendant will be filing a separate suit as and when it so desires before the court of competent pecuniary jurisdiction. Thus these amounts are presently not in the pocket of the Defendant and therefore cannot be adjusted against the suit amount. As explained by the Hon'ble Delhi High Court, the CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 21 of 26 Defendant can only adjust such amounts against a claim of the Plaintiff, which it already has in its pocket and for which it is not required to file a suit for recovery. Further, the contention of Ld. Counsel that the Defendant be allowed to set off the suit amount against the losses allegedly suffered by the Defendant, also cannot be accepted. Admittedly, there is neither a prayer of set off in the written statement nor has any court fees been paid by the Defendant regarding the set off being claimed. It is also apparent that the amounts being claimed by the Defendant, are not in the nature of set off. In a recent case, the Hon'ble Delhi High Court in a case titled as Bharat Heavy Electricals Ltd vs. M/s. Zillion Infraprojects Pvt. Ltd-FAO(COMM) 66/2021, vide its order dated 21.02.2023 has explained what constitutes a set off. It has been observed that "Set-off" is defined in Black's Law Dictionary (7th Edn., 1999) interalia as a debtor's right to reduce the amount of a debt by any sum the creditor owes the debtor. It has been further explained by the Hon'ble Court that set-off exempts a person entitled to it, from making any satisfaction of a claim brought against him, or of so much of the claim as equals the amount which he is entitled to set- off and thus to the extent of this set-off, he is discharged from performance of the obligation in respect of which the claim arises. It has also been categorically held that set-off is an admitted amount adjustable from the due being claimed a person. The aforementioned judicial dicta therefore makes it clear that a claim of set-off made by the Defendant has to be equal to or less than the suit amount claimed by the Plaintiff. Now in the present case, it is to be noted that the said huge amount of approx. Rs.11 Crores being claimed by the Defendant is not an admitted amount payable by the Plaintiff and it is the own averment of the Defendant that it will lead evidence to show that though the said losses have been directly caused to it by CPW, the Plaintiff is equally liable for the said losses for CPW was the agent of the Plaintiff. Admittedly, CPW is not even a CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 22 of 26 party in the present suit and therefore it is unacceptable that a claim being made by the Defendant principally against CPW is sought to be set off in the present suit. Further the said amount is much more than the suit amount of Rs.14,23,892/- being claimed by the Plaintiff in the present suit. The contention of Ld. Counsel that a part of the said claim of approximately Rs.11 Crores or so be adjusted in the present suit can by no stretch of imagination be allowed in view of the clear law governing the defence of set off. This Court does not even have the pecuniary jurisdiction to try the claim of the Defendant regarding the losses allegedly caused to it by the Plaintiff and its asserted agent CPW. The submission of Ld. Counsel for the Defendant that this Court can segregate the amounts being claimed by the Defendant and that since this Court has the jurisdiction to try the claim of Rs.57,91,500/- being demanded by the Defendant as an amount extorted from it by the Plaintiff and its agent CPW, the Court can set-off a part of the said claim against the suit amount, is again not acceptable. The cause of action which the Defendant claims to have arisen in his favour by the alleged illegal acts of the Plaintiff and its asserted agent CPW are from the same bundle of facts namely that the Plaintiff and CPW failed to get the consignments of the Defendant shipped from Germany to USA even after collecting an amount of Rs.57,91,500/- from the Defendant and that as a result of this inaction of the Plaintiff and CPW, the consignment of the Defendant was auctioned by the concerned authority at Hamburg, Germany. This cause of action cannot be split up in the manner being sought by Ld. Counsel for the Defendant. In the considered opinion of this Court, the Defendant is bound to file a separate suit if it so desires to claim the losses allegedly suffered by it on account of the alleged illegal acts of the Plaintiff and its asserted agent CPW and it cannot be allowed to set off a part of the said claim in the present suit (it is made clear that since this court is of the opinion that it does not have the CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 23 of 26 jurisdiction to try the claims raised by the Defendant, this court has not given any final finding on the question whether or not CPW was the agent of the Plaintiff even after the consignments of the Defendant stood delivered at Hamburg Port, Germany).
25. In view of the discussion hereinabove,it is therefore clear that none of the issues seeking to set off the suit amount raised by the Defendant in its written statement, require any trial. Further as discussed in the preceding paragraphs (paragraphs No. 16 to 20) this Court is of the considered opinion that the necessary finding of fact namely that the Plaintiff did render services to the Defendant by exporting and shipping its 24 consignments to the various destinations ordered by the Defendant, is apparent from the pleadings of the parties and does not require any trial whatsoever. The fact that the Defendant has paid only Rs.20,03,434/- against the total outstanding of Rs.34,27,014.80 and that an amount of Rs.14,23,892/- is still to be paid by the Defendant to the Plaintiff, is also to be deemed an admitted fact in view of the evasive denials made by the Defendant and therefore does not require any trial. As such, the application filed by the Plaintiff under Order XIIIA CPC (as amended by the Schedule to the Commercial Courts Act), stands allowed and it is hereby held that the Plaintiff is entitled to the principal amount of Rs.14,23,892/- from the Defendant. As regards the rate of interest that the Plaintiff is entitled to and for what period, Ld. Counsel for the Plaintiff, Sh. Jitesh Vikram Srivastava, has submitted that the invoices raised and placed on record by the Plaintiff make it clear that the Defendant was liable to pay interest @ 24% per annum on the delayed payments. It is the submission of Ld. Counsel for the Plaintiff that the said invoices constitute an agreement between the parties and that therefore this Court must award interest @24% per annum on the principal amount of CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 24 of 26 Rs.14,23,892/- till the date of filing of the suit. This Court is unable to accept the contention of Ld. Counsel for the Plaintiff, for the invoices placed on record by the Plaintiff do not bear the signatures of the Defendant and are merely in the nature of tax invoices. The statement of account maintained by the Plaintiff filed on record also reflects that the Plaintiff never adjusted any amount paid by the Defendant towards any interest. There is also no averment in the entire plaint that the parties ever agreed that the Defendant would be liable to pay interest @24% per annum on the delayed payments. In such view, in the absence of any specific agreement between the parties regarding the rate of interest to be paid by the Defendant on delayed payments, the Plaintiff is not entitled to claim interest @24% per annum. Ld. Counsel for the Plaintiff has then urged that this Court may note that the Plaintiff had demanded interest @18% per annum in the legal notice dated 28.12.2018 issued by it to the Defendant and has therefore prayed that interest at this rate be awarded from the date of the legal notice.
26. The Hon'ble Delhi High Court in the cases CS (OS) 209 / 2016 titled as Gopesh Mehta Vs Swift Initia Pvt. Ltd. and RSA No. 195 / 2004 titled as Sh. Zile Singh Vs. Sh. Mangloo Ram Bansal, has held that even if there was no agreement between the parties with respect to the payment of interest on delayed payments, a Plaintiff is entitled to claim interest on the principles of equity, justice and good conscious. In both the said cases, the Hon'ble High Court on the basis of the aforementioned principles, awarded interest in favour of the Plaintiff, from the date of the legal notice issued to the Defendant.
27. Now in the present case, admittedly, a legal notice dated 28.12.2018 was duly served upon the Defendant, for the Defendant itself has stated that it had CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 25 of 26 replied to the said notice of the Plaintiff. In the said reply, the same averments as taken in the written statement were taken by the Defendant. In view of such facts and the judicial dicta referred to hereinabove, interest on the principal amount adjudged of Rs.14,23,892/- is allowed @ 10% per annum from 28.12.2018 till the date of filing of the suit i.e. 20.04.2019.
28. As regards the pendente lite and future interest, learned Counsel for the Plaintiff has submitted that in terms of Section 34 of CPC, since the liability in relation to the sum adjudged has arisen out of a commercial transaction, this Court must award interest at the rate of 10% per annum for the same is the rate on which moneys are lent and advanced by nationalised banks in relation to commercial transactions. Taking into consideration that many suits are pending in this Court wherein nationalized banks are claiming recovery of unpaid loan amounts along with interest at the rate of 10% per annum, the aforesaid contention of the learned Counsel is accepted.
29. As such, the suit of the Plaintiff is hereby decreed against the Defendant for an amount of Rs.14,23,892/- (Rupees Fourteen Lakhs Twenty Three Thousand Eight Hundred Ninety Two Only). Interest on the principal amount adjudged of Rs.14,23,892/- is allowed @10% per annum from 28.12.2018 till the date of filing of the suit i.e. 20.04.2019. Pendente lite and future interest are awarded at the rate of 10% per annum, on the principal amount adjudged of Rs.14,23,892/-. Costs of the suit are also allowed. Decree Sheet be prepared accordingly. This file be consigned to Record Room.
Digitally signed by ANU ANU GROVER GROVER BALIGA BALIGA Date: 2024.05.31 15:51:56 +0530 Announced in the open court (Anu Grover Baliga) on 29th May, 2024 District Judge (Commercial Court-04) South-East/Saket Courts New Delhi CS DJ 339/19 Jaiveer Singh Vs. JHS Svendgaard Laboratories Ltd. Page 26 of 26