Delhi District Court
M/S. Pritha Offsets Pvt. Ltd vs Egmount Imagination (I)P. Ltd on 31 July, 2014
IN THE COURT OF CIVIL JUDGE 07,
CENTRAL DISTT.,TIS HAZARI COURTS,DELHI
Presiding Officer: Ms. AANCHAL, DJS
Civil Suit No. 413/13/04
Unique ID No. 02401C5937452004
M/s. Pritha Offsets Pvt. Ltd.
Through its Managing Director,
Sh. Sanjay Jain,
Regd. Office at B-62/11, Naraina Indl. Area,
Phase -II, N. Delhi-28.
.......Plaintiff
vs
1. Egmount Imagination (I)P. Ltd.
Through its Managing Director,
Sh. Uday Mathur
158, Vidya Nagri Marg, Kalina,
Santacurz East, Mumbai 400098.
2. Sh. Uday Mathur,
Managing Director,
Egmount Imagination (I)P. Ltd.
158, Vidya Nagri Marg, Kalina,
Santacurz East, Mumbai 400098.
....... Defendants
Date of Institution of suit : 03.12.2004
Date on which reserved for judgment: : 09.07.2014
Date of Judgment : 31.07.2014
JUDGMENT
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 1
1. Vide present judgment, this court shall dispose of the present suit filed by the plaintiff against the defendant for the recovery of sum of Rs. 2,25,000/- along with pendente-lite and future interest at the rate of 24 per cent per annum.
2. In brief, the facts as pleaded in the plaint are that :-
(a) Plaintiff who is dealing in the business of printing, lamination etc., is also doing job work time to time as per the orders placed by defendants at Delhi and delivered the goods to defendants for which respective bills/invoices to the defendant were raised. Plaintiff has been maintaining regular books of accounts of the dues from the defendants and payment made by the defendant. Similarly, defendants have been making running payment on running account from time to time of the plaintiff.
(b) The sum of Rs.1,73,416/- is due from the defendants on account of the balance price of goods supplied to the defendant and job work done by the plaintiff but defendants have failed to pay the same despite repeated demands and requests made by the plaintiff which include written reminders/demand letters dated 15.05.2003, 29.08.2003, 12.04.2004, 02.06.2004 and 19.06.2004.
(c) Further, a sum of Rs.24,359.60/- is to be paid by the defendants on account of interest at the rate of 24 per cent per annum as per the terms and conditions agreed upon by the parties and usage and customs of the market. Therefore, the total sum of Rs.1,97,775.60/- as due from the defendant was demanded repeatedly and through legal notice dated 22.07.2004 served upon the defendant under M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 2 registered cover and UPC which was replied by the defendant vide reply dated 11.09.2004 but defendants have failed to pay.
(d) Defendants are also liable to Sales Tax at the rate of 4 per cent amounting to Rs.21,158.40/- on account of failure on their part in supplying ST-1 Form for the following bills amounting to Rs. 5,28,960/- :-
Bill No. Date Amount (Rs.)
70 06.11.2003 2,37,041.00
71 06.11.2003 16,750.00
73 13.11.2003 11,805.00
74 13.11.2003 15,573.00
89 18.12.2003 10,691.00
93 26.12.2003 2,37,100.00
(e) Defendants are also liable to pay Tax at the rate of 10 per cent amounting to Rs.6,066/- for their omission to give C-Form for the bill no.01 dated 08.04.2003 for Rs.60,660/-.
(f) Despite admitting the liability to supply ST-1 Form and C Form in their reply dated 11.09.2004 to the notice of the plaintiff, defendant had not issued any ST-1 Form and C-Form.
(g) Finally, the plaintiff made last demand through notice dated 22.07.2004 for the sum of Rs.2,25,000/- to the defendant but the defendant had failed to make the payment. Hence, plaintiff has filed present suit for recovery.
(3) Defendants are summoned and both the defendants filed their M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 3 written statement wherein the preliminary objections to the suit of the plaintiff are taken that suit of the plaintiff is bad for non-joinder and mis- joinder of necessary parties. On merits, it is denied that plaintiff and defendants were maintaining running account or defendant is liable to make any payment to the plaintiff or any interest there upon at the rate of 24 per cent per annum or otherwise and the suit of the plaintiff is prayed to be dismissed. It is submitted that defendant no.1 is the exclusive licensee for several known and reputed companies which include Walt Disney Publications, Aamir Khan Productions, FIFA, BBC worldwide, King Features etc. which are the copy right owners of well known brands of children books, to publish the books of copy right owners. Defendants made the positives from the disk and other soft format provided by copyright owners at their own expenses by employing services of third party professional for preparation of such positives by a very expensive process. These positives qualify for copy right protection as they are the intellectual property of the copy right owners consequently, that of defendant no.1 under the license agreement and royalties are also paid by defendant no.1 to the copy right owners in consideration for license agreement. Based on the license agreement entered into between defendant no.1 and copy right owners, a purchase order is placed to the plaintiff by the defendant alongwith positives as well as specifications. Essentially clause of the agreement between the defendant and plaintiff provided the execution of printing job and return of positives to the defendant after 15 days of execution of printing job by the plaintiff but the plaintiff miserably failed to adhere to the quality and quantity specifications, time schedules and he withheld the following positives which value in total Rs.11,88,400/- :-
Sr. No. Description Value
1. Lagan Graphic Novel: English Big, 56,153/-
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 4
English Small, Hindi, Marathi, Gujrati
2. FIFA World Cup - English & Bengali 99,138/-
3. Lagan Mega Kit 2,366/-
4. Barbie Activity Books for Love Dev. 3,891/-
5. Pooh Discovery Series - 18 titles 3,29,841/-
6. Disney Educational Pads - 16 titles 3,78,033/-
7. Disney Educational Stories 2,95,868/-
8. Jumbo Colouring Book 3 titles 19,949/-
9. Phantom Big format Bengali 4 titles 3,161/-
Total 11,88,400/-
On failure on the part of the plaintiff to return the positives within 15 days of completion of transaction, defendant had right to withheld the payment till the positives are returned as per clause 12 of purchase order. Defendant had also suffered losses due to poor quality of work executed by plaintiff which makes defendant entitled to damages to the extent of Rs.4,55,352/- due to poor quality of materials used, improper and poor quality binding, improper and poor quality cutting, incorrect lay out, non-adherence to time schedules and short supply of quantities more specifically the plaintiff did not comply with the terms and conditions of the following purchase order by the plaintiff:-
(i) Disney Enchanting series - Purchase order no.453 dated 26.03.2003, invoice no.JW/01 dated 02.04.2003 for Rs.
2,22,400/- due to which more than 5000 books were sold at a high discount on account of bad quality of binding.
(ii) Phantom Format purchase order no.145 dated 10.11.2003, invoice no.JW/188 dated 13.11.2003 for Rs.96,000/- as the entire consignment of books suffered from offside cutting due to which they went capable of being put in the market for sale & stocks had to be sold at a loss.
(iii) Jumbo Colouring Book - purchase order no(s).
61/77/82/95/104/120/158 as against a purchase order for 67,650 books only 66,650 books were delivered resulting in losses.
Further, raw material worth Rs. 65,849/- belonging to the defendant is lying with the plaintiff and as such, the plaintiff owes a total M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 5 amount of Rs.17,09,601/- along with interest to the defendant. Thereafter, the defendant had held back the final payment as there was no sign of plaintiff returning the positives.
Thus, it is the plaintiff who owes money to the defendant and the defendant is not liable to pay any money to the plaintiff. Further, by several letters/emails of the defendant dated 06.11.2003, 16.12.2003, 20.01.2004, 18.05.2004, 20.05.2004, 27.05.2004, 28.05.2004, 24.06.2004 and 11.09.2004, it has clearly been intimated to the plaintiff that with respect to Disney Enchanting series, Phantom Bengali and Jumbo colouring book there have been several lapses of quality, quantity and adherence to time schedules and in several letters more specifically in letter dated 20.05.2004 and 02.04.2004, the plaintiff herein admits short supply and poor quality.
4. Plaintiff filed replication to the written statement. In replication, plaintiff reiterated his case pleaded in the plaint and denied that any detail in compact disc or other soft format was given by the defendant or he defaulted in return of positives to the defendant or any specific agreement was entered into between the parties with any of the essential clause or plaintiff failed to adhere to the quality and quantity specification, time schedule or the defendant has the right to withhold the payment from the plaintiff till the positives are returned or the positives valued Rs 11,88,400/- or defendant suffered any loss on account of poor quality of work executed or defendant is entitled for damage to any extent or any material belonging to defendant is lying with the plaintiff or the plaintiff owes a total amount of Rs 17,09,601/- or any book was sold at high discount for any reason in case of purchase order no. 453 dt. 26.03.2003 or any consignment of book was suffered from off side cutting in purchase order no. 143 dt. 10.11.2003 or short supplies were given in respect of purchase no.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 6 61/77/82/94/104/120/158 or any intimation was given to the plaintiff in respect of any lapse in quality, quantity or adherence to the time schedule by any of letter or e-mail or in letter dt. 20.05.204, the plaintiff admitted his fault or the plaintiff had suppressed any correspondence between the parties.
5. From the pleadings of the parties and hearing, following issues were framed vide order dated 24.08.2005 by Ld. Predecessor of this Court:
1. Whether the suit of the plaintiff is bad for non-
joinder or mis-joinder of necessary parties?
OPD.
2. Whether the plaintiff is entitled for recovery of Rs.2,25,000/- as claimed? OPP.
3. Whether the plaintiff is entitled for the interest for what period and for what rate? OPP.
4. Relief.
6. In order to substantiate his case, plaintiff examined himself as PW1 and he relied upon the following documents:-
(1) Certificate of incorporation is Ex.PW 1/1.
(2) The resolution dt. 19.11.2004 is Ex PW1/2.
(3) The extract from the minutes book in respect of the
said resolution is Ex PW1/3.
(4) Purchase order dt. 07.04.2003 is Ex PW1/4
(5) Invoice dt. is Ex PW1/5.
(6) Purchase order dated 19.09.2003 is Ex PW1/6.
(7) Delivery Challan bearing no. 4488 is Ex PW1/7.
(8) Delivery Challan bearing no. 4482 is Ex PW1/8.
(9) Delivery Challan bearing no. 4469 is Ex PW1/9.
(10) Delivery Challan bearing no. 4466 is Ex PW1/10. (11) Delivery Challan bearing no. 4461 is Ex PW1/11. (12) Delivery Challan bearing no. 4460 is Ex PW1/12. (13) Delivery Challan bearing no. 4456 is Ex PW1/13.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 7 (14) Delivery Challan bearing no. 4454 is Ex PW1/14. (15) Delivery Challan bearing no. 4450 is Ex PW1/15. (16) Delivery Challan bearing no. 4449 is Ex PW1/16. (17) Invoice Dated 19.09.2003 is Ex PW1/17.
(18) Acknowledgment of Pritha Offsets dated
08.10.2003 is Ex PW1/18.
(19) Purchase order dt. 10.10.2003 is Ex PW1/19. (20) Covering letter from Pritha Offsets dt. 06.11.2003 is Ex PW1/20.
(21) Invoice bill JW/181 dt. 06.11.2003 is Ex PW1/21. (22) Invoice bill 70 dt. 06.11.2003 is Ex PW1/22. (23) Completion certificate issued by plaintiff dt. 06.11.2003 is Ex PW1/23.
(24) Purchase order dt. 10.10.2003 is Ex PW1/24. (25) Consignment note through which gods sent at the instruction of defendant dt. 08.11.2003 is Ex PW1/25. (26) Delivery Challan bearing no. 4579 is Ex PW1/26. (27) Covering letter dt. 06.11.2003 is Ex PW1/27. (28) Invoice bill JW/182 dt. 06.11.2003 is Ex PW1/28. (29) Invoice bill 71 dt. 10.10.2003 is Ex PW1/29. (30) Completion certificate dt. 06.11.2003 is Ex PW1/30.
(31) Paper Account dt. 06.11.2003 is Ex PW1/31.
(32) Purchase Order dt. 10.11.2003 is Ex PW1/32. (33) Consignment note through which goods sent at the instruction of defendant dt. 28.11.2003 is Ex PW1/33. (34) Delivery Challan bearing no. 4628 is Ex PW1/34. (35) Purchase order dt. 10.11.2003 is Ex PW1/35. (36) Covering letter dt. 13.11.2003 is Ex PW1/36. (37) Invoice dt. 13.11.2003 is Ex PW1/37.
(38) Paper account dt. 13.11.2003 is Ex PW1/38.
(39) Completion certificate issued by plaintiff to deft. dt. 13.11.2003 is Ex PW1/39.
(40) Invoice dt. 13.11.2003 is Ex PW1/40.
(41) Purchase order dt. 20.11.2003 is Ex PW1/41. (42) Delivery Challan bearing no. 4762 is Ex PW1/42. (43) Delivery Challan bearing no. 4750 is Ex PW1/43. (44) Delivery Challan bearing no. 4663 is Ex PW1/44. (45) Delivery Challan bearing no. 4657 is Ex PW1/45. (46) Delivery Challan bearing no. 4652 is Ex PW1/46. (47) Delivery Challan bearing no. 4651 is Ex PW1/47. (48) Delivery Challan bearing no. 4650 is Ex PW1/48. (49) Delivery Challan bearing no. 4634 is Ex PW1/49.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 8 (50) Invoice dt. 20.11.2003 is Ex PW1/50.
(51) Completion certificate issued by plaintiff to deft. dt. 26.12.2003 is Ex PW1/51.
(52) Invoice dt. 26.12.2003 is Ex PW1/52.
(53) Ledger for the period 01.04.2002 to the year 2004 is Ex PW1/53 to Ex PW1/60.
(54) Letter dt. 15.05.2003 is Ex PW1/61.
(55) Letter dt. 29.08.2003 is Ex PW1/62.
(56) Letter dt. 12.04.2004 is Ex PW1/63.
(57) Letter dt. 12.04.2004 is Ex PW1/63.
(58) Letter dt. 12.04.2004 is Ex PW1/64.
(59) Letter dt. 02.06.2004 is Ex PW1/65.
(60) Courier receipt through which the said letter was dispatched is Ex PW1/66.
(61) The letter dt. 19.06.2004 is Ex PW1/67.
(62) Letter issued by Postal department, Govt. of India is Ex PW1/68.
(63) The copy of the notice dated 22.07.2004 sent on behalf of the plaintiff through their advocates is Ex PW1/69.
(64) The postal receipts are Ex PW1/70 & Ex. PW1/71. (65) The AD card bearing the acknowledgment on behalf of the defendant company confirming the service of the said notice is Ex PW1/72.
(66) The UPC is EX PW1/73.
(67) The reply dated 11.09.2204 is Ex PW1/74.
(68) The Envelop under which the said reply was received is Ex PW1/75.
On the other hand, Sh Muthu Kumar and Sh Atul Phansalkar are examined as DW1 and DW2 on behalf of the defendant and they relied upon the following documents:-
(a) The copy of Resolution of Board of Directors
authorizing Sh Dhirender Raj Guru as Mark A.
(b) Copy of Resolution of Board of Directors
authorizing Sh. Muthu Kumar as Mark B.
(c) Copy of e mail by the defendant to the plaintiff
dt.
20.05.2004 as Mark C.
(d) Invoice for the positives for the year 2003-04 as
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 9 ExDW2/A.
7. Final arguments heard and record is perused carefully. Now, this Court proceeds to give issue-wise finding which are as under:
ISSUE NO. 1Whether the suit of the plaintiff is bad for non-
joinder or mis-joinder of necessary parties?
OPD.
Onus to prove this lies upon the defendant. As appearing from the array of parties and the documents relied upon by the plaintiff, the defendant No.1 is the company. Defendants have pleaded in the written statement that the defendant No.2 is the managing director of the defendant No.1. This fact has not been specifically or impliedly denied by the plaintiff in the replication or otherwise. The company is a separate juristic person. Its personality is distinct from the personality of its directors. A company may be sued in its own name and its liability is not the personal liability of the managing directors of the company. Order 29 of CPC only provides that the company may be served through its director. Nothing makes the director liable in person for the liability of the company only for the reason that the company is served through the director. In plaint, nothing has been pleaded specifically against the defendant no.2 . Therefore this Court is of the opinion that in the present suit for recovery of the claimed sum, the relief is sought only against the defendant No.1 and the liabilities of the company and its managing director being distinct, the decree if passed would not suffer from any infirmity or irregularity for the absence of defendant No.2 in array of parties. Hence the suit against the defendant No.2 is held as bad for misjoinder.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 10 ISSUE NO. 2 Whether the plaintiff is entitled for recovery of Rs.
2,25,000/- as claimed? OPP.ISSUE NO. 3
Whether the plaintiff is entitled for the interest for what period and for what rate? OPP.
The onus to prove these issues lies on the plaintiff.
It is argued on behalf of the plaintiff that the deposition of Sh. Muthu Kumar can not be looked into as original resolution of board of directors of defendant authorizing him to depose has not been produced thereby authority in his favour remains unproved and the claim of defendant of making the adjustments of whole of the amount claimed by the plaintiff against the defendant's claim has no basis as the defendant has neither claimed set off nor filed the counter claim against the plaintiff nor preferred any suit even after the laps of about 10 years from the date of filing of the present suit thereby baring the claim of the defendant by the period of limitation. It proves that claim of plaintiff has not been disputed substantially and it entitles the plaintiff for the decree in his favour. Further, following judgments are relied in supported of these arguments on behalf of plaintiff.
(a) Sh. Vipin Gupta Vs. Chitra Advt. Pvt. Ltd.
reported as AIR 1995 Delhi 65
(b)Shaw Wallace & Co. Ltd. Vs. Tajinder Singh Jolly reported as 49 1993 DLT 578
(c) M/s. Rajghria Paper Mills Ltd. VS. General Manager, Indian Security Press AIR 2000 Delhi 239 On the contrary it is argued on behalf of the defendant that though original resolution has not been produced, defendant co. has not objected the deposition made by DW1, therefore the act of DW1 may be deemed rectified by the defendant and the evidence given by DW1 may not be discarded for M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 11 technicalities only. Further it is contended that claim of the defendant being tenable in law is the sufficient defense and proved by the depositions of DW-1 and DW2. Therefore, defendant is entitled for adjustments as pleaded in WS and the suit of plaintiff be dismissed. In alternate, it is also argued that defendant had not agreed for payment of claimed rate of interest @24% per annum which is also at the higher side and may be refused by the court to be granted. Ld. counsel for defendant also relied upon the following judgments in support of these arguments :-
(a) United Bank of India Vs. Naresh Kumar And Ors. reported as 1996 6 Supreme Court Cases 660
(b) Nischintapur Tea Co. Ltd. Vs. Subrata Sen & Ors. CA No. 686 of 2010 in connection with CP No. 252 of 1985 decided on 05.07.2011 by Hon'ble High of Calcutta.
(c) The state Trading Corporation of Vs. Vanivilas Co- operative Sugar reported as 2001 (5) KarLJ 570
(d) National Insurance Co. Ltd. Vs. Seema Malhotra And Ors. reported as AIR 2001 SC 1197
(e) B.L. Joshi & Anr. Vs. Nitin Jain & Anr. RFA No. 24/2008 decided on 19.04.2012 by Hon'ble High Court of Delhi
(f) State of Rajasthan and Anr. Vs. Ferro Concrete Construction Pvt. Ltd. reported as (2009) 12 SCC1
(g) Mukand Ltd. Vs. Hindustan Petroleum Corporation Ltd. reported as 2006 (64) ALR 192
(h) Rajasthan State Road Transport Corpn. Vs. Indag Rubber Ltd. reported as 2006 (3) ARBLR567 (SC)
(i) Mrs. Veena Jain Vs. Sunil Sood in CS(OS) No. 1177/2003 decided by Hon'ble High Court of Delhi on 23.07.2012 This court has given thoughtful consideration to the contentions made on behalf of the parties.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 12 DW1 Sh. Muthu Kumar is the witness produced on behalf of the Defendant. Plain reading of authorities reallied upon on behalf of the plaintiff and United Bank of India Vs. Naresh Kumar And Ors. and Nischintapur Tea Co. Ltd. Vs. Subrata Sen & Ors relied upon on behalf of the defendant reveals that observations made therein by Hon'ble courts are in respect to the competency of a person signing the pleadings. It is not the case that this witness had signed any of the pleadings filed on behalf of the defendant. This has also not been objected on behalf of the plaintiff at any point of time during the proceedings that pleading for the defendant were signed by an unauthorized person. Hence the challenge if about the competency of person signing the pleading for the defendants, can not be dealt now and this court is of the opinion that these authorities relied upon are not applicable in the present case.
Otherwise too the present case is pending for about 10 years and proceedings have been followed up on behalf of the defendant, it amounts to a rectification of the pleading filed for defendant.
Objection on behalf of the plaintiff to read the evidence of DW 1 for absence of original resolution of board of director being produced by this witness is only to challenge the competency of this witness to give the evidence. A witness is said to be competent to depose if he is of sound mind and able to give rational answers to the questions put to him. Besides these qualifications, competency of a witness can not be challenged and it is only his deposition which may be inadmissible or irrelevant which may be ignored by the court. As the challenge is not on these counts and Sh. Muthu Kumar as DW1 has been produced by defendant for evidence, it is sufficient to prove that this witness is competent to depose, though facts deposed would be subject to the proof.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 13 Civil Procedure Code provides that a defendant may file a counter claim or set off. The set off as per order 8 Rule 6 CPC may be claimed for an ascertained sum of money which is legally recoverable from the plaintiff. This is known as legal sett off. For an unascertained sum of money, an equitable set off may be claimed, but not as of right. It is the only the legal set off for which the procedure is laid down in Civil Procedure Code, but none of the rules bar the defendant to claim equitable set off. This proposition has been recognized by Hon'ble Supreme Court of India in " Bhupinder Narain Singh Vs. Bahadur Singh AIR 1952 as Supreme Court 201" and in " Union of India Vs. Karam Chand Thapar and Brothers" in Civil appeal 2509 of 1997 decided on 10.03.2004. Therefore agreeing with the judgment passed by Hon'ble Karnataka High Court in " The State Trading Corporation Vs. Vanivilas Co-operative Sugar" as relied upon behalf of defendant, this court is of the opinion that defendant has the right to claim the adjustments without filing the set off or counter claim or payment of court fees. However this claim has to be proved by the defendant as per law.
Plaintiff has deposed that this sum is the total of sums due under following heads :-
(a) Rs. 1,73,416/- on account of balance price of goods supplied to the defendant and job work done for defendant.
(b) Rs. 24,359.60P towards interest @ 24% per annum on this due amount.
(c) Rs. 21,158.40P towards Sales tax @ 4% payable by the defendants due to failure to supply ST-I Form.
(d) Rs. 6,066/- towards tax @ 10% for failure to give C Form.
Now this court proceeds to examine the evidence and material available on record in respect of the claim of plaintiff under above four heads.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 14 Appreciation qua sum claimed vide head as mentioned in above said point (a):
Defendant has not denied that sum of Rs. 1,73,416/- is payable by the defendant as per the plaintiff but defendant had put forth the plea that this whole amount had been adjusted towards (1) damage/loss caused to the defendant on account of poor quality of work, inadequate supplies and non- adherence of time schedule by the plaintiff (2) non return of positives and (3) material of defendant lying in the custody of plaintiff. Plaintiff as PW-1 has produced the extracts of ledger i.e. regular books of account for the period 01.04.2002 to 2004 as Ex PW1/53 to Ex PW1/60. This record shows the various debit and credit entires in the account of the defendant and finally showing that Rs. 1,73,415.60P is payable by the defendant.
Defendant has not raised any objection on any ground upon these relied documents. During Cross examination it has been suggested to the witness that this account is incorrect and false because it does not reflect poor quality of binding in disney and enchanting series, poor quality of printing and shortage of jumbo colouring and value of positives. But it is not the case of the defendant that any of the debit note was accepted by plaintiff at any point of time. Further defendant has not produced any evidence to show that defendant had in fact suffered any loss.
Sh. Muthu Kumar DW-1 has stated in his deposition the specific sum of Rs. 4,55,352/- as damage for poor quality of work and Rs. 65,849/- towards the raw material lying with the plaintiff but defendant has neither produced any document which could reflect the quantity of material supplied to the plaintiff and then received by the defendant to ascertain the fact that raw material is lying with the plaintiff nor any record which could show that books were sold at discount or the books were kept lying in the stock or the books were returned by the suppliers/ Distributors to the defendant citing any reason M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 15 which could relate the loss accrued to the defendant with the work of plaintiff. Further nothing is placed on record which could show that defendant had put any objection to the plaintiff with in any reasonable time in respect of the deficiencies stated in the reply to the legal notice of the plaintiff and thereafter pleaded in the WS. Ex PW 1/6 which is also admitted and relied upon by defendant more specifically for the terms and conditions of the purchase order, also provides as one of its term in its para no. 11 that " in the even supply is found to be unacceptable quality, you shall ensure to replace the product of acceptable quality within seven days from the time of our intimation, failing which we shall have the right to destroy the copies and have the same printed or procured from another source at your cost" . Thus this term itself provides the procedure to be adopted by the defendant in case the work of the plaintiff was of unacceptable quality. It requires that defendants have to first give an intimation to the plaintiff regarding unacceptable quality of work and then plaintiff has to replace th product and it is only in case of failure on the part of the plaintiff, defendant would get the same work done at the cost of plaintiff. In the present case defendant has not placed on record any document intimating the plaintiff regarding presence of unacceptable quality in the work of plaintiff or reflecting the cost incurred by the defendant in getting the work done from other source or reflecting the cost incurred for destruction of supplies bearing unacceptable quality of work. Thus the defendant has failed to prove that defendant had incurred any losses for poor quality of work or deficient supplies on the part of plaintiff.
Defendant has strongly contended that plaintiff had not returned the positives which were Rs. 11,88,400/- and produced DW-2 Sh. Atul Phansalkar to supported the contention of the defendant that price of the positives in the year 2003-04 would be approx. Rs. 12 lac. During his cross M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 16 examination DW2 admitted that he had not prepared the representative invoices for the positives Ex DW2/1, hence this witness does not support the case of the defendant sufficiently. The defendant has not produced any material or document on record which could reveal that defendant has demanded the positives not returned by the plaintiff before replying the notice sent by the plaintiff. Assumingly, the positives were not returned by the plaintiff, it would have been a natural course for the defendant that defendant had incurred the expenses for getting these positives re prepared. In such a case it can not be said that defendant would not have the invoices showing the expenses incurred by defendant for re preparation of positives which could have been produced by the defendant to probablize the factum of non returning of positives by the plaintiff. Defendant has not placed even any of such invoice on record. Hence the defendant has failed to prove this contention of non returning of positives by the plaintiff. On the failure of the defendant to prove that plaintiff has not returned the positives, the defendant can not take the plea that defendant is not liable to fulfill the obligation of making the payment for the work performed by the plaintiff. Therefore, the authorities i.e. National Insurance Co. Ltd. VS. Seema Malhotra And Ors. and B.L. Joshi & Anr. Vs. Nitin Jain & Anr. are not applicable under the facts proved.
In view of the above, this court is of the opinion that defendant has failed to prove that any sum may be adjusted from the dues claimed by the plaintiff against the defendant and plaintiff has sufficiently proved by the preponderance of probability that plaintiff is entitled for the sum which is reflected as due as per the statement of account produced by him i.e. Rs. 1,73,415/-
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 17 Appreciation qua sum claimed vide head as mentioned in above said point (b) and Issue No. 3:
It is deposed by the plaintiff that the defendant is liable to pay interest @24% per annum upon the due sum as per the terms and conditions agreed upon and as per the usage and custom of the market. No evidence is produced by the plaintiff to show that this rate of interest is paid by the defaulter as per the customs or usage prevailing in the market in like business. Plaintiff has only relied upon the terms and conditions as mentioned in the invoices Ex PW1/5, PW1/17, PW1/21, PW1/28, PW1/29, PW1/37, PW1/40, PW1/50 and PW1/52. It is the admitted case of plaintiff and also deposed by plaintiff as PW1 that the defendant had placed the purchase order time to time. These purchase orders Ex Pw1/4, Ex PW1/6, PW1/19, PW1/24, PW1/32, PW1/35 and Ex PW1/41, all show that these purchase orders were issued subject to the terms and conditions as per over leaf. It is not the case of the plaintiff that the parties had not agreed for the terms and conditions mentioned in purchase order. The acceptance of purchase order by the plaintiff by commencing the work for defendant proves that plaintiff had agreed to execute the work for the terms which were incorporated in the purchase order. Clause 8 of terms and conditions provides that payment was to be made by the defendant with in 90 days from the date of receipt of documents as mentioned in clause 9 of these terms and conditions which required the plaintiff to provide invoice, acknowledge delivery challan and copies of LR/RR in triplicate to the defendant. The term endorsed at the bottom of invoice is certainly contradictory to the term provided in purchase order. In order to claim such rate of interest, the plaintiff has to prove that parties had agreed to such changed term i.r.t. rate of interest. This fact can be well established by the dealings of the parties and facts and circumstances. The mere fact that M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 18 defendant had accepted the invoice containing changed term, does not establish that defendant had agreed for the same. Invoices are used to be accepted by any of the staff member of the recipient who usually accept the invoice mechanically without making any deliberation upon the changed terms and conditions of the agreement. Assumingly, there is a change in term as to the rate of interest, this interest ought to be charged as soon as the amount as per invoice becomes due and it ought to have been reflected by plaintiff in its statement of account Ex PW1/53 to Ex PW1/60 but it only shows the entries from 01.04.2002 to 04.05.2004. As per this statement, bills used to remain unpaid even after the expiry of 15 days of the date of invoice but no entry imposing the interest on due amount is shown. It proves that it was only a unilateral term included in invoice on the part of plaintiff which was never agreed upon by the defendant expressly or impliedly or by its conduct. Hon'ble Supreme Court of India in " Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and others, 2005(6) SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road Transport Corporation Vs. Indag Rubber Ltd. (2006)7 SCC 700, Krishna Bhagya Jala Nigam Ltd. V. G. Harischandra, 2007 (2)SCC 720 & State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb.LR 140(SC) has also held that high rates of interest should not be granted by the courts as on account of the changed economic scenario where rates of interest have consistently fallen. It is also not proved by the plaintiff that there has been any agreement to pay compound interest in case of default in the payment. Therefore, on failure of the plaintiff to prove the agreement for payment of interest @ 24% p.a. and existence of any agreement for any compound interest and relying upon above referred judgments and " Central Bank of India Vs. Ravindra and Ors. (2002) 1SCC 367 passed by Hon'ble Apex Court, this court is of the opinion that M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 19 the plaintiff is not entitled for interest @ 24% per annum upon the sum due i.e. Rs. 1,73,415/- for any period before, during or after the decree.
Plaintiff has also not proved on record the date on which he submitted the documents as required under clause 9 of purchase order with the invoice which could make him entitled for interest after the expiry of 90 days of such compliance. However, it is not disputed on behalf of the defendant that last invoice was dated 26-12-2003 and pW1 on behalf of the plaintiff deposed that letter dated 19-06-2004 was sent to the defendant no. 2 being director of defendant no.1 and produced true copy of same alongwith original postal receipt bearing undisputed correct address. The defendant has not proved anything contrary to disprove the service of same. Hence it is presumed that this letter wherein the plaintiff made the demand for the payment of due sum, was served upon the defendant. Thus, the plaintiff is held entitled for the interest on the proved due sum of Rs. 1,73,415/- from the date of notice i.e. 19-06-2004 till the date of realization at a rate of 12% per annum which in the opinion of this Court is just, fair and appropriate in the circumstances of the case indeed simple only.
Appreciation qua sum claimed vide head as mentioned in above said point (c) & (d) :
It is contended on behalf of the plaintiff that it is undisputed on part of the defendant that defendant had not supplied ST-1 and C Form for the bill amount of Rs. 5,28,960/- and Rs. 60,660/- respectively, therefore plaintiff is entitled to claim the amount towards tax payable to the authorities in lieu of these forms.
Admittedly, the plaintiff is not the authority concerned who has to collect the tax. Plaintiff is merely entrusted to deliver C Forms and ST-1 Forms or tax M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 20 in lieu of the same on behalf of the defendant by the concerned authorities. Plaintiff can claim this amount if he had paid the tax to the concerned authorities on behalf of the defendant. But plaintiff has also not filed any document to show that plaintiff had paid the amount/tax in lieu of these forms to the authorities till date. Therefore, the plaintiff can not be allowed to be enriched for the failure on the part of defendant to provide these forms. Otherwise too, all the admitted purchase order Ex. PW1/4, PW 1/6, PW 1/19, PW1/24, PW 1/32, PW 1/35 and PW1/41 show that the parties had agreed for the transaction/ work for an amount mentioned in these purchase orders which includes all the taxes and duties as per clause 1 of its terms and conditions. Plaintiff has not placed any evidence on record that this amount was agreed or the invoices were issued by the plaintiff subject to the supply of C Form or ST-1 Form. Therefore, this court is of the opinion that plaintiff has not proved that it is entitled for the amount towards tax in lieu of ST-1 and C Form.
In view of the above discussion, the issue no. 2 & 3 are decided partly in favour of plaintiff and partly in favour of defendant.
ISSUE NO.4 - RELIEF As decided above, the suit of the plaintiff is partly decreed in favour of plaintiff and against the defendant no. 1 for the sum of Rs. 1,73,415/- (Rs. One lac seventy three thousand four hundred fifteen only) alongwith the simple interest @ 12% per annum on due sum of Rs. 1,73,415/- (Rs. One lac seventy three thousand four hundred fifteen only) from the date of notice i.e. 19-06-2004 till the date of realization.
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 21 Plaintiff is further held entitled for proportionate costs and advocate fees as per rules of Hon'ble High Court of Delhi.
Decree sheet be prepared accordingly. Thereafter file be consigned to Record Room.
Announced in open Court AANCHAL
today 31.07.14 at 4:30pm Civil Judge-07
Delhi/31.07.2014
M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 22 CS No.413/13/04 Pritha Offsets Pvt. Ltd. Vs. Egmount imagination (I) Pvt. Ltd.
31.07.2014 Present : None.
Vide separate judgment passed on even date, the suit of the plaintiff is partly decreed in favour of plaintiff and against the defendant no. 1 for the sum of Rs. 1,73,415/- (Rs. One lac seventy three thousand four hundred fifteen only) alongwith the simple interest @ 12% per annum on due sum of Rs. 1,73,415/- (Rs. One lac seventy three thousand four hundred fifteen only) from the date of notice i.e. 19-06-2004 till the date of realization.
Plaintiff is further held entitled for proportionate costs and advocate fees as per rules of Hon'ble High Court of Delhi.
Decree Sheet be prepared accordingly. Thereafter file be consigned to Record Room.
AANCHAL Civil Judge-07 Delhi/31.07.14 M/s. Pritha Offsets Pvt. Ltd. Vs. Egmount Imagination (I)P. Ltd. 23