Delhi District Court
Aditya Jain Huf Proprietor Of Ms Contra ... vs Asco Global Exim Pvt Ltd on 21 August, 2024
IN THE COURT OF SH. BRIJESH KUMAR GARG,
DISTRICT JUDGE (COMMERCIAL COURT)-01 :
SHAHDARA, KARKARDOOMA COURTS: DELHI
CS (Comm.) No. 690/2022
CNR No. DLSH01-007895-2022
ADITYA JAIN HUF
Proprietor of M/s Contra Packaging,
Through its Karta Mr. Adiya Jain,
R/o B-59, East Jyoti Nagar,
Loni Road, Shahdara, New Delhi.
Mobile No. 9873664590
Email- [email protected]
......Plaintiff
Versus
ASCO GLOBAL EXIM PVT. LTD.
Plot No. B-2, Udyog Kendra Extn.-1,
Ecotech-III, Greater Noida,
Gautam Budha Nagar,
Also At :
D-2/28, SSCO Tower,
Vibhuti Khand, Gomti Nagar,
Lucknow-Uttar Pradesh-226010.
Mobile No. - 9123388232, 9839800186 & 8299355105
Email- [email protected], [email protected]
......Defendant
Date of institution : 21.12.2022
Date of final arguments : 08.08.2024
Date of Judgment : 21.08.2024
JUDGMENT
1. The present commercial suit for recovery of a sum of Rs.21,38,741/- (Rs. Twenty One Lakhs Thirty Eight Thousand Seven Hundred Forty One Only), alongwith pendentelite and future interest @24% per annum, has been filed, on behalf of the CS (Comm.) 690/2022 page 1 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi plaintiff, wherein, it is stated that the plaintiff is a manufacturer and trader of laminated pouches and packing material. Whereas, the defendant was involved in fast moving consumer goods (FMCG) and was involved in the business of manufacturing of various varieties of namkeen, chips, snacks, dry fruits etc.
2. It is further stated in the plaint that the defendant approached the plaintiff for supply of laminated printed packaging material of various sizes, specifications and dimensions, with its brand name and artwork, and after discussion, the design and artwork of laminated pouches were discussed and finalized between the parties and rates of packaging material etc. were also finalized.
3. It is further stated in the plaint that the plaintiff supplied the packaging material, after sharing proforma invoices and all the purchase orders/proforma invoices clearly specify the shade, variant, size and design of the packaging material.
4. It is further stated in the plaint that the goods were supplied by the plaintiff in the form of laminated printed rolls and the defendant packaged the goods in the packets carved out of the said rolls, with the help of various pouch cutting machines. It is further stated that the plaintiff supplied the aforesaid goods to the defendant, against various invoices w.e.f. February, 2020.
5. It is further stated in the plaint that the goods of the defendant were manufactured, after due acceptance of the proforma invoice and the details of consignments, invoice CS (Comm.) 690/2022 page 2 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi number, amount and mode of delivery were also mentioned in the respective invoices.
6. It is further stated in the plaint that as per industry standard and as agreed between the parties, there was bound to be a difference of about 10% in the quantity, stated in the proforma invoice, and the final invoice was to be prepared and sent at the time of final dispatch of goods.
7. It is further stated in the plaint that after serving of proforma invoices and delivery of packaging material at its production facility at Greater Noida, various payments were also made by the defendant, after duly receiving the goods and invoices. It is further stated that at no point of time, any issue or concern was raised by the defendant, regarding the quality and quantity of the supplied goods.
8. It is further stated in the plaint that after initial transactions, the defendant started delaying the payments and it was agreed between the parties that, in case, the payments were not made within the stipulated period of 30 days, an interest @24% per annum shall be charged for the delayed payments.
9. It is further stated in the plaint that as per the accounts maintained by the plaintiff, for the period w.e.f. February, 2020 to December, 2020, goods worth Rs.44,79,952/- were sold by the plaintiff and the defendant made payments worth Rs.31,45,000/- and therefore, an amount of Rs.13,34,952/- is due and payable by the defendant, as principal amount.
CS (Comm.) 690/2022 page 3 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi
10. It is further stated in the plaint that after supply of last consignment on 24.12.2020, the defendant shifted its production premises from Greater Noida to Jaunpur, U.P.
11. It is further stated that despite repeated emails and legal demand notice, dated 31.07.2021, the defendant has failed to make the aforesaid payment and hence, the present suit.
12. It is further stated in the plaint that an amount of Rs.8,03,789.92p has also accrued against the defendant, as interest @24% per annum, on the aforesaid principal amount of Rs.13,34,952/-, and therefore, the plaintiff has claimed the total amount of Rs.21,38,741/-.
13. After filing of the present suit, the summons of the suit for settlement of issues were duly served upon the defendant. But, despite due service, none had appeared on behalf of the defendant and therefore, the defendant was proceeded 'exparte', vide order dated 04.05.2023.
14. 'Exparte' plaintiff's evidence was recorded on 05.06.2023, and thereafter, the 'exparte' final arguments were addressed by the Ld. Counsel for the plaintiff on 27.07.2023, wherein, it was reported that there was some typographical error in the name of the defendant. Thereafter, an application under Order VI Rule 17 r/w Section 151 CPC was moved on behalf of the plaintiff, for correction of the name of the defendant. The said application was allowed vide orders, dated 08.08.2023 and thereafter, fresh summons of the suit for settlement of issues were issued to the defendant. Thereafter, in compliance, Sh. Chandra Kant Shukla, CS (Comm.) 690/2022 page 4 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi Advocate, had appeared before the court, for the first time, on 29.01.2024 and he sought some more time to file the written statement. On his request, a further period of two weeks was granted to the defendant to file the written statement, subject to imposition of a cost of Rs.10,000/- on the defendant. But, despite opportunity, no written statement was filed on behalf of the defendant, till 20.02.2024. Vide order dated 20.02.2024, a further period of three days was granted to the defendant to file the written statement, and in compliance, the written statement was filed on behalf of the defendant on 21.02.2024.
15. In its written statement, it has been stated by the defendant that the plaintiff had supplied the defective packaging material to the defendant and due to this reason, the same could not be utilized by the defendant. It is further stated that a huge quantity of the packaging material is still lying at the warehouse of the defendant and despite repeated reminders from the defendant, the plaintiff has neither replaced the defective packaging material nor took it back. It is further stated that the entire claim of the plaintiff is pertaining to the said defective packaging material. It is further stated that the defendant has already made the entire payment in respect of the defect-free material, and therefore, no amount is due and payable by the defendant. It is further stated that the defendant had never agreed for payment of any kind of interest, to the plaintiff. It is further stated that the plaintiff is not entitled to claim any interest or any amount from the defendant.
16. It is further stated in the written-statement that due to inferior quality of packaging material supplied by the plaintiff, CS (Comm.) 690/2022 page 5 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi the defendant has suffered huge losses in its business, and therefore, the defendant reserves its right to take appropriate legal action against the plaintiff. It is further stated that the defendant has orally, and by meeting, and on phone, requested the plaintiff to take back his inferior quality packaging material supplied by him and to set-off the amount of unused packaging material. It is further stated that the plaintiff has admitted the supply of inferior quality packaging material and had assured to take it back and set-off the amount. It is further stated that due to inferior quality of packaging material, which was meant for packaging of food items for consumption of public at large, the defendant received complaints from its buyers and hence, caused loss of reputation, loss of goods, as well as, loss of income to the defendant.
17. It is further stated in the written statement that due to bad condition of the market, due to spread of 'Covid-19', and due to fraudulent act of the plaintiff by supplying the inferior quality of goods, the defendant was compelled to close its FMCG business, due to which, it has suffered huge loss and damages, for which the plaintiff is solely liable. It was also objected that this court was having no territorial jurisdiction to try & entertain the present suit. It has been prayed that the suit of the plaintiff may be rejected.
18. Replication to the written statement of the defendant was also filed, wherein, the contents of the written statement were denied and the contents of the plaint were reiterated and reaffirmed as correct.
CS (Comm.) 690/2022 page 6 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi
19. First case management hearing was conducted on 13.03.2024 and from the pleadings of the parties, the following issues were framed by the court, as under:
1. Whether the plaintiff is entitled to recover the amount of Rs. 21,38,741/-, from the defendant, as claimed in the plaint ?
2. Whether the plaintiff is entitled to claim interest from the defendant? If so, at what rate and for which period ? OPP
3. Relief.
20. Vide order, dated 13.03.2024, Ms. Darshika Tiwari, Advocate, was also appointed as a local commissioner, to record the evidence of the parties and to file her report, alongwith complete record of evidence, on the next date of hearing. The date for addressing the final arguments was also fixed as 26.04.2024. But, since then, none has appeared on behalf of the defendant.
21. During the trial, the plaintiff has examined Sh. Aditya Jain as PW-1. But, none had appeared on behalf of the defendant, after 13.03.2024, and no witness was examined on its behalf.
22. After completion of trial, final arguments were concluded by Sh. Chetan Wahi, Advocate, for the plaintiff, on 02.07.2024.
It was argued by the Ld. counsel for the plaintiff that the witness of the plaintiff has proved the case of the plaintiff and the defendant has failed to rebut the contentions of the plaintiff, by leading any cogent or reliable evidence, and therefore, the suit of the plaintiff may be decreed. He has further argued that the CS (Comm.) 690/2022 page 7 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi plaintiff, who is the proprietor of M/s Contra Packaging, has also proved the various documents on record and his testimony has remained unrebutted, uncontroverted and unchallenged, as the plaintiff was not subjected to any cross-examination on behalf of the defendant. He has also filed the written arguments and has prayed that the suit of the plaintiff may be decreed for the principal amount of Rs.13,34,952/-, alongwith interest @24% per annum w.e.f. 07.11.2020, till its realization.
23. None had appeared, on behalf of the defendant, even to address the final arguments despite ample opportunities. Vide orders dated 13.03.2024, a local commissioner was appointed by the court for recording the evidence of the parties and the Ld. Local Commissioner had reported that none had appeared before her also, on behalf of the defendant, for cross-examination of the witness of the plaintiff and for recording the evidence of the defendant. In view of the report of the Ld. Local Commissioner, a court notice was also issued to the defendant and its Ld. Counsel. But, despite service of the court notices, none had appeared on behalf of the defendant, even to address the final arguments.
24. I have carefully perused the case file and I have also given my considered thoughts to the arguments addressed by the Ld. Counsel for the plaintiff. I have also perused the written arguments filed by the Ld. counsel for the plaintiff. My findings on the various issues are as under:
CS (Comm.) 690/2022 page 8 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi Issue No. 1 Whether the plaintiff is entitled to recover the amount of Rs. 21,38,741/-, from the defendant, as claimed in the plaint ?
25. The burden to prove this issue lies on the plaintiff and in support of its contentions, the plaintiff has examined himself as PW-1 and has filed his affidavit Ex.PW1/A, wherein, he has reproduced the entire contents of the plaint. It has been reiterated in the affidavit that PW-1 Sh. Aditya Jain, being the Karta of Aditya Jain HUF, and proprietor of M/s Contra Packaging, was a supplier of various varieties of plastic packaging material, whereas, the defendant was involved in fast moving consumer goods and was manufacturing various varieties of namkeen, chips, snacks, dry fruits etc and the defendant approached the plaintiff for supply of laminated printed packaging material of various sizes and specifications, with its brand name and artwork printed on it, and accordingly, after discussions, the design and artwork of laminated pouches were finalized and the rates of packaging material were also finalized and all the supplies were made by the plaintiff to the defendant, as per its requirements. It is reiterated in the affidavit Ex.PW1/A that the actual business transactions between the parties started in the month of February, 2020, and the plaintiff supplied goods to the defendant against various invoices w.e.f. 18.02.2020 to 26.11.2020.
26. It is reiterated in the affidavit Ex.PW1/A that the invoices sent by the plaintiff to the defendant constitute the written contract and after serving of proforma invoices, packaging CS (Comm.) 690/2022 page 9 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi material were delivered to the defendant at its' production facility at Greater Noida, and thereafter, various payments were also made by the defendant. The defendant also gave due receipt and endorsement, in respect of delivery of goods and at no point of time, any issue or concern was raised by the defendant regarding the quality and quantity of the goods supplied.
27. It is also reiterated in the affidavit Ex.PW1/A that around twenty consignments of goods and services were sent to the defendant and no issue regarding the quality and quantity of the goods was ever raised by the defendant. It is also reiterated that the defendant had also reported all the transactions in its returns filed with the GST Department and had also utilized the Input Tax Credit (ITC) received from the GST Department.
28. It is also reiterated in the affidavit Ex.PW1/A that the goods worth Rs.44,79,952/- were sold by the plaintiff to the defendant, out of which, the defendant had made payments of Rs.31,45,000/- only, and therefore, a principal amount of Rs.13,34,952/- is due and payable by the defendant, to the plaintiff firm.
29. During the trial, vide orders dated 13.03.2024, a local commissioner was also appointed by the court to record the evidence of the parties, in the presence of the Ld. Counsel for the defendant. In compliance of the said order, the plaintiff examined PW-1 Sh. Aditya Jain, before the Ld. Local Commissioner, on 06.04.2024. But, none had appeared before the Ld. Local Commissioner for cross-examination of PW-1.
CS (Comm.) 690/2022 page 10 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi Therefore, the testimony of PW-1 has remained unrebutted, uncontroverted or unchallenged.
30. PW-1 Sh. Aditya Jain has proved his GST registration certificate as Ex.PW1/1. Various emails exchanged between the parties have been proved on record as Ex.PW1/2 to Ex.PW1/5, Ex.PW1/11, Ex.PW1/19, Ex.PW1/25, Ex.PW1/31, Ex.PW1/44, Ex.PW1/50, Ex.PW1/54 and Ex.PW1/61 to Ex.PW1/66. The proforma invoices, tax invoices and eway bills have been proved on record as Ex.PW1/6 to Ex.PW1/10, Ex.PW1/12 to Ex.PW1/24, Ex.PW1/26 to Ex.PW1/30, Ex.PW1/32 to Ex.PW1/43, Ex.PW1/45 to Ex.PW1/49, Ex.PW1/51 to Ex.PW1/53 and Ex.PW1/55 to Ex.PW1/58. The ledger account pertaining to various proforma invoices, tax invoices and eway bills has been placed on record as Ex.PW1/60. The details of master data of the defendant company have been placed on record as Ex.PW1/68.
31. As the testimony of PW-1 Sh. Aditya Jain has remained unrebutted, uncontroverted or unchallenged, and no evidence has been led by the defendant, during the trial, to rebut his testimony, I find no reason to disbelieve his testimony and the documents. From the ledger account Ex.PW1/60, it is clear that the last payment was made by the defendant on 24.12.2020, and thereafter, an amount of Rs.13,34,952.58p was due and payable by the defendant.
Accordingly, this issue is decided in favour of the plaintiff and against the defendant.
CS (Comm.) 690/2022 page 11 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi Issue No. 2 Whether the plaintiff is entitled to claim interest from the defendant? If so, at what rate and for which period ? OPP
32. The burden to prove this issue also lies on the plaintiff. In the plaint and his affidavit, Ex.PW-1, the plaintiff has claimed the interest, @ 24% per annum, on the basis of the tax invoices/proforma invoices, wherein, it has been mentioned that an interest @24% per annum will be charged, if the payment was not made within the specified time. But, no specific period for payment has been mentioned in the tax invoices or the proforma invoices. The rate of interest claimed by the plaintiff, @24% per annum is also highly excessive. Even the provisions of Section 34 of the CPC, provide the rate of interest only at a maximum of 6% per annum.
33. It has been held by the Hon'ble High Court of Delhi, in case titled as, 'Mrs. Veena Jain vs. Sunil Sood', passed in, 'CS (OS) No.1177/2003', on 23.07.2012, as under :
"8. I am however not agreeable to grant the huge rate of 24% interest as claimed by the plaintiff. The Supreme Court in the recent chain of judgments reported as 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 v. 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 mandated that Courts must reduce the high rates of interest on account of the consistent fall in the rates of interest in changed economic scenario. In my opinion, plaintiff will be thus entitled to interest @ 9% per annum on the principal amount due of `27,84,947.50/-for the period prior to the filing of the suit i.e. CS (Comm.) 690/2022 page 12 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi from 10.5.2000 till the date of filing of the suit. Plaintiff will also be entitled to pendente lite and future interest till payment @ 9% per annum simple."
(emphasis supplied)
34. In these circumstances, I am of the considered opinion that the plaintiff is entitled to claim interest @9% per annum only, on the principal due amount of Rs.13,34,952.58p (rounded to Rs.13,34,950/-) w.e.f. 24.01.2021, till its realization.
This issue is decided accordingly, in favour of the plaintiff and against the defendant.
Relief
35. In view of my findings on the various issues, as discussed above, the suit of the plaintiff is hereby decreed, in favour of the plaintiff and against the defendant, and a money decree is passed for the principal amount of Rs.13,34,952.58p (rounded to Rs.13,34,950/-), alongwith simple interest @9% per annum, w.e.f. 24.01.2021, till its realization.
The costs and expenses i.e. the fees of the Ld. counsel for the plaintiff, as provided under the High Court of Delhi, Rules, are also awarded in favour of the plaintiff and against the defendant.
Decree sheet be prepared accordingly.
File be consigned to record room after due compliance.
Announced in the open Court BRIJESH Digitally by BRIJESH signed on this 21st Day of August, 2024 KUMAR KUMAR GARG Date: 2024.08.21 GARG 16:09:10 +0530 BRIJESH KUMAR GARG District Judge (Commercial Court)-01 Shahdara Distt, KKD, Delhi CS (Comm.) 690/2022 page 13 of 13 D.J.(Commercial)-01/Shahdara/KKD/Delhi