Delhi District Court
M/S. Scj Plastics Ltd vs M/S. Reckit Benckiser (I) Ltd on 23 April, 2011
M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser
(I) Ltd.
IN THE COURT OF SH. SANJAY SHARMA, JSCC-CUM-
ASCJ-CUM-GUARDIAN JUDGE (WEST): DELHI
Suit no.2051/08
Unique Case I.D. No. 02401C
M/s. SCJ Plastics Ltd.,
F-3/10-11, Okhla Industrial Area
Phase-I,
New Delhi-110 020. ...........Plaintiff.
Versus
M/s. Reckit Benckiser (I) Ltd.
227, Okhla Industrial Estate
Phase-III,
New Delhi-110 020. .........Defendant.
Date of filing of the application : 13.04.2009
Date of reserving order : 23.03.2011
Date of pronouncement of order : 23.04.2011
ORDER
1. The defendant filed an application under Order 37 Rule 3 (5) of the Code of Civil Procedure, 1908 (Hereinafter referred as "the Code") for grant of unconditional leave to defend.
2. Briefly stated, the plaintiff filed a suit under Order 37 of the Code against the defendant for a decree of recovery of Rs.62,270/- together with pendente-lite and future interest @ 24% per annum on the averments that the plaintiff had supplied Master Batches worth Rs.36,786/- to the defendant vide invoice no.1566 dated 06.07.2005 for Rs.8167/- and vide invoice no.2475 dated 29.08.2005 for Rs.28,619/- on credit of 30 and 45 days respectively. It is stated that the purchase order was received and accepted by the plaintiff in Delhi. The Suit no.2051/08 Page No. 1/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
defendant had to make payment to the plaintiff in Delhi.
3. It is stated that the material vide invoice no.2475 was sent to the defendant through Bharat Motor Transport Co. (P) Ltd. whereas material vide invoice no.1566 was sent to M/s Olive Polymers (P) Ltd. under the instruction of the defendant. The defendant was liable to pay interest @ 24% per annum on delayed payment. It is stated that the defendant failed to make the payment of the said invoice amount of Rs.36,786/- despite repeated requests and therefore, the defendant was liable to pay Rs. 25,484/- on account of interest @ 24% per annum for the delayed period. The plaintiff had issued legal notice dated 06.06.2007 and 18.02.2008 to the defendant. The defendant failed to make payment of the bill amount despite service of the said notice and therefore, the plaintiff filed a suit under Order 37 of the Code for a decree of recovery of Rs.62,270/- together with pendente lite and future interest.
4. On being served with the summons for judgment, the plaintiff sought leave to defend by way of filing the present application on the following grounds:
a) The suit is not covered under Order 37 of the Code.
b) The suit has not been instituted and verified in accordance with the provisions of Order 29 of the Code.
c) The plaintiff has not filed any document to show that the defendant had received the invoiced goods.
d) The plaintiff has not filed purchase order emanating from the defendant's office in Delhi and therefore, this Court has no territorial jurisdiction to try the suit.
e) Invoice no.1566 dated 06.07.2005 does not mention that invoiced goods were received by M/s Olive Suit no.2051/08 Page No. 2/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
Polymers Pvt. Ltd. at Baddi, District Solan, Himachal Pradesh under the instruction of the defendant and the payment thereof was to be made by the defendant.
f) The plaintiff has not impleaded M/s Olive Polymers Pvt.
Ltd. as a party to the suit.
g) The suit of the plaintiff in respect of invoice no.1566 dated 06.07.2005 barred by limitation on 04.08.2008.
h) The invoiced goods were never received by the defendant and therefore, the bill amount was not captured in their Enterprises Resource Planning (ERP) System.
5. In the reply, the plaintiff stated that the invoiced goods were dispatched to the defendant through transporter on 'To pay basis' and the plaintiff has not received back the said goods. The defendant can sue the transporter for damages if the invoiced goods were not received by it. The defendant is having its registered office in Delhi. The cause of action had arisen within the jurisdiction of this Court as the order was received in Delhi, the goods were dispatched from the Delhi and the payment was to be made in Delhi. The defendant failed to raise any triable issue and, the suit is maintainable under Order 37 of the Code.
6. I have heard arguments of Sh. Pankaj Chaudhary, Adv. for the plaintiff and Sh. Kalyan Vadlamani, Adv. for the defendant and perused the record.
7. Ld. Counsel for the plaintiff argued that the defendant has failed to raise any triable issue. He argued that the goods vide invoice no.2475 dated 29.08.2005 were sent to the factory of the defendant in Himachal Pradesh through Bharat Motor Transport Company on 'To Pay' Basis. He argued that in Marwa Tent Factory Vs Union of India' AIR Suit no.2051/08 Page No. 3/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
1990 SC 1753: Hon'ble Supreme Court of India held that that the property in goods together with risk passes from consignor to consignee as soon as goods are loaded at place of dispatch.
8. Ld. Counsel for the plaintiff further argued that the defendant can sue the said Transporter for damages if the goods were not received by it. He argued that the goods vide invoice no.1566 dated 06.07.2005 were sent to M/s Olive Polymers Pvt. Ltd. under the instruction of the defendant. He argued that the goods were dispatched from Delhi. He argued that the purchase order was placed in Delhi, the goods were dispatched through transporter in Delhi and the payment was to be made in Delhi and further, the defendant has its registered office in Delhi and therefore, cause of action had arisen within the jurisdiction of this Court and this Court has jurisdiction to try the suit. He argued that the suit is within limitation as the goods were purchased by the defendant of 30 days credit basis. He argued that mere denial that the goods were not received by the defendant is not a sufficient ground for leave to defend. He argued that the goods vide bill no.2475 were sent to the defendant through Bharat Motor Transport Pvt Ltd. on ' To Pay' basis and therefore, the defendant cannot escape its liability to pay the bill amount. He argued that the defendant is liable to pay the interest @ 24% per annum as stipulated in the invoice. He argued that the suit on the basis of invoice is maintainable under Order 37 of the Code.
9. Ld. Counsel for the defendant argued that the suit of the plaintiff in respect of bill no.1566 dated 06.07.2005 became barred by time on 04.08.2008. He argued that the Suit no.2051/08 Page No. 4/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
plaintiff has not placed any purchase order issued by the defendant. He argued that there is no receipt on record regarding receiving of the goods by the defendant. He argued that the goods were sent to Himachal Pradesh and therefore, this Court has no jurisdiction to try the present suit.
10. Ld. Counsel for the defendant further argued that the bill amount was not entered in the Enterprises Resource Planning (ERP) System of the defendant. He argued that the defendant had never received the goods and therefore, they are not liable to pay the bill amount. He argued that the suit is not maintainable under Order 37 of the Code as the suit is not based upon any Promissory note, Hundi, Bill of Exchange or a written contract. He argued that the suit involves triable issues with regard to the jurisdiction of this Court, limitation, receipt of goods and therefore, the suit cannot be decreed summarily without inviting the parties to lead evidence to prove their case. He argued that the invoices do not bear receiving or seal/stamp of the defendant. He argued that the issue 'whether the goods were sent to M/s Olive Polymers under the instructions of the defendant' is also a triable issue.
He argued that the defendant has a good, fair, bonafide, reasonable and substantial defence to the claim of the plaintiff on merits and therefore, the defendant is entitled to unconditional leave to defend.
11. In M/s. Mechelec Engineers and Manufacturers vs M/s. Basic Equipment corporation 1976 (4) SCC 687, it can be stated that the defendant is entitled to unconditional leave to defend if he has a good defence to the claim on Suit no.2051/08 Page No. 5/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
merits, or if the defendant raises any triable issue indicating that he has a fair or bonafide or reasonable defence. If the defendant may be able to show facts leading to the inference that at the trial of the action, he may be able to establish a defence to the plaintiff's claim, the court may in its discretion impose conditions as to time or mode of trial but not as to payment into court or furnishing security.
12. If the defendant has no defence or the defence is illusory or sham or practically moonshine, the Court may protect the plaintiff by allowing the defence to proceed if the amount claimed is paid into court or otherwise secured and give leave to the defendant on such condition, and enable the defendant to try to prove his defence.
13. The plaintiff filed this suit on strength of invoices and therefore, the suit is maintainable under Order 37 of the Code. The plaintiff had sent the goods to M/s. Olive Polymers vide bill no.1566 dated 06.07.2005 on credit of 30 days and the invoice amount became payable on 05.08.2005. In computing limitation, the day from which such period is to be reckoned is excluded. Having computed the limitation period from 06.08.2008, the suit is within limitation as it was filed on 05.08.2008.
14. Mere contention that the suit was not instituted and verified by an authorized person cannot be a good defence.
15. The plaintiff had dispatched the invoiced goods from Delhi through Transporter. The defendant has not denied that it has registered office in Delhi. The defendant has admitted that it has a plant/factory at Plot No.1-A, Sector 3, Suit no.2051/08 Page No. 6/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
Industrial Area, Parwanoo, Himachal Pradesh. It is not the case of the defendant that it is managing, supervising and controlling its business activities from its factory in Himachal Pradesh. In view of the fact that the invoiced goods were dispatched from Delhi and the defendant has its registered office in Delhi, part of cause of action had arisen within the jurisdiction of this Court and hence, this Court has jurisdiction to try the suit.
16. The plaintiff had sent the goods vide bill no.2475 dated 29.08.2005 to the defendant through Bharat Motor Transport Co. on 'To Pay basis'. Once the plaintiff had dispatched the goods to the defendant through a transporter, the property in goods passed to the defendant. The defendant is liable to make the payment of bill amount and can recover damages from the transporter if it had not received the goods. The defendant has practically no defence to the claim of the plaintiff in respect of bill no.2475. The contention that the invoiced amount was not entered in the ERP System of the defendant cannot be a bonafide defence. The defendant would not be absolved from its liability on the ground that it had not entered invoiced amount in its Accounting Software/System. This Court is of the considered opinion that the defence of the defendant in respect of bill no.2475 dated 29.08.2005 for Rs.28,619/- is illusory and moonshine.
17. In so far as the issue 'whether the plaintiff had sent the goods vide bill no.1566 dated 06.07.2005 for Rs.8167/- to M/s Olive Polymers (P) Ltd. under the instructions of the defendant' is concerned, it is a question of fact and the plaintiff must lead evidence to prove it.
18. Accordingly, the application under Order 37 Rule 3(5) of Suit no.2051/08 Page No. 7/8 M/s. S. C. J. Plastics Ltd. v. M/s Reckit Benckiser (I) Ltd.
the Code of Civil Procedure, 1908 for grant of leave to defend is allowed subject to the condition of deposit of bill amount in respect of the bill no.2475 dated 29.08.2005 for Rs.28,619/- in the form of Fixed Deposit within two months from today. Announced in the open Court today 23rd April, 2011.
(SANJAY SHARMA) JSCC-Cum-ASCJ-Cum GUARDIAN JUDGE (West) 23.04.2011 Suit no.2051/08 Page No. 8/8