Bangalore District Court
M/S. Eastern Silk Industries Ltd vs M/S.Dtm Resources on 1 April, 2017
IN THE COURT OF THE XXX ADDL.CITY CIVIL JUDGE,
BANGALORE CITY
DATED THIS THE 1st DAY OF APRIL 2017
-: PRESENT: -
SRI.M.G.KUDAVAKKALIGER, B,Com., LL.M.,
XXX Addl.City Civil Judge,
Bangalore.
O.S.NO.1604/2014
PLAINTIFF/S. M/s. Eastern Silk Industries Ltd.,
Reg.Office 19, R.N.Mukerjee Road,
Kolkatta 700 001.
No.3, Koramangala Industrial
Layout, Bengaluru 560 096.
Rep. by Sri.Dilip Kumar Shah,
Authorized signatory& GPA holder.
(By Pleader Sri.M/s.Harish V.R.,
Adv.)
/VS/
DEFENDANT/S. M/s.DTM Resources,
Bhanji Udyog Nagar, Penkar Pada,
Near Hotel Ajit Palace,
Mira Road East-Mumbai 401 107.
(By Pleader Sri.G.D.A., Adv.)
*****
2 O.S.No.1604/2014
DATE OF INSTITUTION 25-02-2014
NATURE OF THE SUIT (Suit on Suit for money
Pronote, Suit for declaration and recovery
Possession, Suit for injunction, etc.)
DATE OF THE COMMENCEMENT
OF RECORDING OF THE EVIDENCE 05-10-2016
DATE ON WHICH THE JUDGEMENT 01-04-2017
WAS PRONOUNCED
TOTAL DURATION : YEAR/S MONTH/S DAY/S
3 1 7
(M.G.KUDAVAKKALIGER),
XXX ADDL.CITY CIVIL JUDGE,
BENGALURU.
3 O.S.No.1604/2014
JUDGEMENT
1. The plaintiff company has filed this suit against the defendant for recovery of Rs.16,57,909/- with future interest at the rate of 24% p.a. from the due date till realization with costs.
2. The following are the brief facts leading to the case of the plaintiff:
That the plaintiff is a public limited company and is engaged in the business of textile with manufacturing units in Bengaluru urban district. During the course of business, defendant has placed purchase order No.ZV002 dtd.30-8-2012 for supply of materials- 100% Georgette Silk, on plaintiff along with 30% advance payment of Rs.7,11,450/- of the total value of the order through HDFC Bank. The plaintiff had supplied the materials vide invoice Nos.126800338, 126800349, 126800354, 126800382, 126800385, 126800393 and 126800424 on various dates for a total 4 O.S.No.1604/2014 amount of Rs.23,69,359/-. The material supplied was taken delivery and accepted by the defendant. Thus, the plaintiff is liable to receive a balance amount of Rs.16,57,909/- after adjustment of 30% advance money Rs.7,11,450/- against the total value of supplies made under the above invoices, the defendant is due and liable to pay 70% of the value of the invoice i.e. a total sum of Rs.16,57,909/- to the plaintiff. The plaintiff demanded the balance amount, but the defendant failed to make the payment. Plaintiff further averred that defendant against the materials received and accepted, without any communication or correspondence, unilaterally, illegally and arbitrarily sent debit notes as under:
DN/O5/2013 DTD.20-2-2013 3,31,710-00 (Being amount debit note for the Shrinkage charges @ 14% on fabric DN/O6/2013 DTD.28-3-2013 2,32,285-00 (Being amount debit note for the Washing charges Rs.25 per meters on fabric 5 O.S.No.1604/2014 DN/O7/2013 DTD.28-3-2013 7,642-00 (Being amount debit note for the Transportation charges paid on fabric DN/O8/2013 DTD.28-3-2013 4,40,250-00 (Being amount debit note for the Air freight charges paid on fabric delay DN/O9/2013 DTD.28-3-2013 (Being amount debit note for the Extra cost incurred for over time production Electricity charges and late charges 5,92,340-00 Total 16,04,227-00 Plaintiff further averred that on scrutiny of the debit notes, the plaintiff found that the reasons stated by the defendant for raising debit notes are void, arbitrary, imaginary, illegal and false and same was not communicated to the plaintiff by the defendant before raising the same. The materials delivered and accepted in accordance to the purchase orders placed by the defendant. The materials supplied are not subject to any shrinkages and washing is not required and they are delivered according to the terms and conditions of the business and requirement of the defendant and 6 O.S.No.1604/2014 transportation or freight charges and extra cost charges will not arise and the amount claimed under these heads by way of debit notes are arbitrary, illegal and opposed to principles of law and are not binding on the plaintiff and the same was communicated to the defendant, but defendant has not replied. Therefore, plaintiff got issued a legal notice calling upon the defendant to make payment of the balance amount of Rs.16,57,909/- within 7 days from the date of receipt of notice along with interest at the rate of 24% p.a. In spite of it, the defendant has not repaid nor complied the said notice. Hence, the defendant is now liable to pay Rs.20,55,807/- which is inclusive of balance amount of Rs.16,57,909/- and interest at 24% p.a. on Rs.16,57,909/-.
3. The defendant has appeared through its counsel and filed the written statement contending inter-alia that the suit filed by the plaintiff is not maintainable either in law or on 7 O.S.No.1604/2014 facts. The defendant has submitted that it had an export order for 100% silk garments for European customer and has contacted the plaintiff to supply to the defendants with good quality of 100% silk georgette with 40 gsm fabrics and the plaintiff has agreed to supply the same on 20-9-2012 or no later than 5-10-2012 and the plaintiff issued an order of confirmation/proforma invoice dtd.4-9- 2012. As per the purchase terms, the defendant had clearly mentioned that for any delay in supplying the fabrics will attract discount of 1% per day of the value of the shipment. As per the terms and negotiations, the defendant deposited an amount of Rs.7,11,450/- on 30-10- 2012 towards 30% advance of the value of the materials and plaintiff has sent a confirmation email on 22-11-2012 and further stated that the order will be executed within two weeks to complete on receiving of approvals. Accordingly, approvals were given to the plaintiff on 22-11- 2012 itself by the defendant. Inspite of approvals were 8 O.S.No.1604/2014 given on 22-11-2012 itself, the fabrics were dispatched only on 19-12-2012 to the defendant i.e. one month after the approval which was in fact delay by two weeks from the date of the plaintiff's commitment. The remaining fabrics were dispatched in different intervals as per their various emails and the last delivery was made on 18-2-2013 which was in fact delay by 3 months. Based on the above actual debit note will attract more than 90% of the value of the goods supplied in addition to the cost incurred as below, however the defendant is only asking on what is actually the cost incurred. It is further contended by the defendant that as per the purchase order terms the fabrics was supposed to be fully furnished with shrinkage control less than -/+ 1% on receiving the actual goods. But after the fabric was received by the defendant on checking the same fabrics, it was noticed by the defendant that the fabric actually had shrinkage of 14% in length and 8% in width. As a result the defendant had to refinish the 9 O.S.No.1604/2014 full fabrics on receipt and that defendant had to incur the expenses towards washing and finishing. Due to shrinking shortage of fabrics, the defendant had to incur additional expenses towards the quantity of the fabrics. It is further contended that the color-noir-the color (black) of the fabrics supplied to the defendant was of poor quality as after washing the fabrics, the full fabrics become patchy and had to be re-dyed and hence, the defendant had to give huge discount to their customers due to the fault of the plaintiff for supplying poor quality of fabrics. Further due to the delay in supplying he fabrics, the defendant had to incur huge losses and also for loss in production. The defendant further contended that it had to pay for the air fright of the goods to shift to the customers at the defendant's cost. And defendant had to pay discount to his customers for supplying the goods by the plaintiff beyond the schedule time. Due to these reasons, the defendant had incurred huge loss due to the 10 O.S.No.1604/2014 negligence of the plaintiff and therefore, the defendant had issued a debit notes to the plaintiff. Hence, the debit notes issued by the defendant are legal. The defendant did not dispute the supply of fabrics to them on various dates. The defendant has denied all other averments made in the plaint. There is no cause of action for the plaintiff to file this suit. Hence, prayed to dismiss the suit with costs.
4. From the above pleadings of both the parties, the following issues have been framed by my Learned Predecessor in office for disposal of the case:
1. Whether plaintiff proves that it has supplied materials as per the purchase order to the defendant worth of Rs.23,69,359/- on credit basis?
2. Whether it further proves that defendant pay the Rs.7,11,450/- as advance amount and failed to pay the balance amount of Rs.16,57,909/- inspite of request demands and issuance of notice?
3. Whether defendant proves that it has 11 O.S.No.1604/2014 suffered huge loss due to negligence of plaintiff and issued debit note?
4. What order or decree?
5. In order to substantiate the case made out by the plaintiff, the GPA Holder of the plaintiff company has entered in to the witness box and filed his affidavit evidence under Order 18 Rule 4 of C.P.C. as per P.W.1 and got marked as many as 10 documents as per Ex.P.1 to P.10.
Even though defendant has filed his written statement, he has not cross-examined P.W.1 and has not stepped into the witness box to substantiate his contentions taken in the written statement. Hence, cross-examination of P.W.1 is taken as nil and defendant's side evidence taken as closed and the matter has been posted for arguments.
6. I have heard the arguments on the side of plaintiff only, no representation was made on defendant's side, hence, arguments of defendant's side taken as heard. Perused the materials placed on record.
12 O.S.No.1604/2014
7. On the basis of the evidence both oral and documentary and other materials., I record my findings to the above issues as follows:
Issue No.1: In the affirmative. Issue No.2: In the affirmative. Issue No.3: In the negative.
Issue No.4: As per the final order for the following:
REASONS
8. ISSUE NOS.1 TO 3: As these issues No.1 to 3 are interlinked, discussion on one issue has its direct bearing on the discussion on another issue. In view to avoid repetition of discussion and facts of evidence, I am going to consider all these issues jointly.
9. The brief facts of the plaintiff's case are that the plaintiff is the public limited company engaged in the business of textile with manufacturing units in Bengaluru Urban District. During the course of its business, defendant placed purchase order for supply of Georgette 13 O.S.No.1604/2014 Silk on plaintiff along with 30% advance payment of Rs.7,11,450/- of the total value of the order through HDFC Bank. The plaintiff had supplied the materials vide invoice Nos. 126800338, 126800349, 126800354, 126800382, 126800385, 126800393 and 126800424 on various dates for a total amount of Rs.23,69,359/-. The material supplied was taken delivery and accepted by the defendant. Thus, the plaintiff is liable to receive a balance amount of Rs.16,57,909/- after adjustment of 30% advance money Rs.7,11,450/-. The plaintiff demanded the balance amount, but the defendant failed to make the payment. The defendant had received and accepted the materials, but without any communication or correspondence, unilaterally, illegally and arbitrarily sent debit notes for the Shrinkage charges @ 14% on fabric of Rs.2,32,285-00, for the Transportation charges paid on fabric for Rs.7,642-00, Rs.4,40,250-00 towards the Air freight charges paid on fabric delay and Rs. 5,92,340-00 14 O.S.No.1604/2014 for the Extra cost incurred for over time production Electricity charges and late charges, totally Rs.16,04,227-
00. On scrutiny of the debit notes by the plaintiff, the plaintiff found that the reasons stated by the defendant for raising debit notes are void, arbitrary, imaginary, illegal and false and same was not communicated to the plaintiff by the defendant before raising the same. The materials delivered are according to the purchase orders. Therefore, plaintiff got issued a legal notice calling upon the defendant to make payment of the balance amount of Rs.16,57,909/- within 7 days from the date of receipt of notice along with interest at the rate of 24% p.a. In spite of it, the defendant has not repaid nor complied the said notice. Hence, the defendant is now liable to pay Rs.20,55,807/- which is inclusive of balance amount of Rs.16,57,909/- and interest at 24% p.a. on Rs.16,57,909/-. The defendant has appeared through its counsel and filed the written statement contending inter-alia that the suit 15 O.S.No.1604/2014 filed by the plaintiff is not maintainable either in law or on facts. The defendant has submitted that it had an export order for 100% silk garments for European customer and has contacted the plaintiff to supply to the defendants with good quality of 100% silk georgette with 40 gsm fabrics and the plaintiff has agreed to supply the same on 20-9-2012 or no later than 5-10-2012 and the plaintiff issued an order of confirmation/proforma invoice dtd.4-9- 2012. As per the purchase terms, the defendant had clearly mentioned that for any delay in supplying the fabrics will attract discount of 1% per day of the value of the shipment. As per the terms and negotiations, the defendant deposited an amount of Rs.7,11,450/- on 30-10- 2012 towards 30% advance of the value of the materials and plaintiff has sent a confirmation email on 22-11-2012 and further stated that the order will be executed within two weeks to complete on receiving of approvals. Accordingly, approvals were given to the plaintiff on 22-11- 16 O.S.No.1604/2014 2012 itself by the defendant. Inspite of approvals were given on 22-11-2012 itself, the fabrics were dispatched only on 19-12-2012 to the defendant i.e. one month after the approval which was in fact delay by two weeks from the date of the plaintiff's commitment. The remaining fabrics were dispatched in different intervals as per their various emails and the last delivery was made on 18-2-2013 which was in fact delay by 3 months. Based on the above actual debit note will attract more than 90% of the value of the goods supplied in addition to the cost incurred as below, however the defendant is only asking on what is actually the cost incurred. It is further contended by the defendant that as per the purchase order terms the fabrics was supposed to be fully furnished with shrinkage control less than -/+ 1% on receiving the actual goods. But after the fabric was received by the defendant on checking the same fabrics, it was noticed by the defendant that the fabric actually had shrinkage of 14% in length and 17 O.S.No.1604/2014 8% in width. As a result the defendant had to refinish the full fabrics on receipt and that defendant had to incur the expenses towards washing and finishing. Due to shrinking shortage of fabrics, the defendant had to incur additional expenses towards the quantity of the fabrics. It is further contended that the color-noir-the color (black) of the fabrics supplied to the defendant was of poor quality as after washing the fabrics, the full fabrics become patchy and had to be re-dyed and hence, the defendant had to give huge discount to their customers due to the fault of the plaintiff for supplying poor quality of fabrics. Further due to the delay in supplying he fabrics, the defendant had to incur huge losses and also for loss in production. The defendant further contended that it had to pay for the air fright of the goods to shift to the customers at the defendant's cost. And defendant had to pay discount to his customers for supplying the goods by the plaintiff beyond the schedule time. Due to these 18 O.S.No.1604/2014 reasons, the defendant had incurred huge loss due to the negligence of the plaintiff and therefore, the defendant had issued a debit notes to the plaintiff. Hence, the debit notes issued by the defendant are legal. The defendant did not dispute the supply of fabrics to them on various dates. The defendant has denied all other averments made in the plaint. There is no cause of action for the plaintiff to file this suit. Hence, prayed to dismiss the suit with costs.
10. In order to substantiate the case made out by the plaintiff, the GPA Holder of the plaintiff company has entered in to the witness box and filed his affidavit evidence under Order 18 Rule 4 of C.P.C. as per P.W.1 and got marked as many as 10 documents as per Ex.P.1 to P.10. Even though defendant has filed his written statement, he has not cross-examined P.W.1 and defendant has not stepped into the witness box to substantiate his contentions taken in the written statement. Hence, cross- 19 O.S.No.1604/2014 examination of P.W.1 is taken as nil, plaintiff's side closed and defendant's side evidence taken as closed.
11. The GPA holder of the plaintiff company has entered into witness box and deposed as per P.W.1, in his evidence P.W.1 has reiterated all the averments made in the plaint and deposed with regard to the supply of materials worth Rs.23,69,359/- 100% Georgette Silk as per the order placed by the defendant No.ZV002 dtd.30-8-2012 and received 30% advance payment of Rs.7,11,450/-. The plaintiff has raised invoices Nos.126800338, 126800349, 126800354, 126800382, 126800385, 126800393 and 126800424. Copies of the invoices have been furnished, but defendant has not paid the balance amount of Rs.16,57,909/- which fell due against the supplies made under the said invoices against the purchase order of the defendant. Hence, plaintiff got issued legal notice as per Ex.P.2. Ex.P.3 is the postal acknowledgement which discloses service of legal notice to the defendant company. 20 O.S.No.1604/2014 The representative of the defendant has put seal of their company and signed on the Ex.P.2. Ex.P.4 is the order confirmation, Ex.P.5 is the purchase order, Ex.P.6 to 10 are the certified copies of the debit notes.
12. On careful perusal of the entire material evidence both oral and documentary, it is clear that as per the computerized statement of account of the defendant company and invoices raised by the plaintiff company against the orders placed by the defendant company plaintiff company has supplied materials worth Rs.23,69,359/-, out of which no payment was made by the defendant except 30% advance amount i.e. Rs.7,11,450/-. Plaintiff company has adjusted the advance amount and still the defendant company has to pay Rs.16,57,909/-. Hence, there was an outstanding balance of Rs.16,57,909/- as on 31st March 2013. Therefore, the plaintiff company had issued a legal notice calling upon the defendant company to pay the outstanding dues of Rs.16,57,909/-. 21 O.S.No.1604/2014 Meanwhile, on 20-2-2013 and 28-3-2013 defendant company has sent the debit notes to the plaintiff company. However, the defendant has admitted in his written statement about the supply of materials as per the specifications, the defendant has received the materials and accepted the stock without any communication or correspondences, but raised the debit notes and those debit notes have not been brought to the notice of the plaintiff. On careful perusal of the contentions taken by the defendant in his written statement para Nos.9 to 15, but those contentions remained as contentions only, in order to substantiate their case and contentions my predecessor has framed issue No.3, but none of the defendant have entered into witness box, deposed in support of their contentions. The contentions taken up by the defendant in its written statement above paras are not acceptable. Hence, the debit notes issued by the defendant without the communication after the lapse of 22 O.S.No.1604/2014 one year from the date of supply of materials cannot be taken into consideration and those debits notes are of no consequence to substantiate the claim made out by the defendant. On careful perusal of the invoice there was a condition that all claims must be lodged within 7 days from the date of supply of materials. Therefore, the contents of debit notes which have been issued to the plaintiff after the lapse of nearly one year cannot be taken into consideration. There were email communications between the plaintiff and defendant company. Defendant has not whispered anything about the debit note in the e-mail communications. Hence, this Court is of the opinion that raising of debit notes is a tactics adopted by the defendant to evade the payment of the outstanding dues.
13. The evidence of P.W.1 has remained unchallenged so also the contents of the documents though defendant has submitted his written statement, abut not cross-examined P.W.1 and not all entered into witness box to substantiate 23 O.S.No.1604/2014 their case. Hence, the claim of the plaintiff company remained unshattered, and contention of the defendant remained uncorroborated by evidence. Hence, there is no reason to disbelieve the unchallenged evidence on the side of the plaintiff. In view of the unchallenged oral and documentary evidence on record on the side of the plaintiff, there is no hurdle to accept the evidence of P.W.1. Hence, I accept the same and hold that the plaintiff company has established the liability of the defendants to pay the suit claim.
14. In the instant case, the contesting defendants remained uncontested after filing the written statement, claim of the plaintiff remained unshattered, perhaps the defendants might have conceded the case made out by the plaintiff. Hence, as per the provisions of Sec.114 of the Indian Evidence Act, an adverse inference can be drawn against the defendants as defendants purposely remained uncontested the case made out by the plaintiff though 24 O.S.No.1604/2014 written statement of the defendants on record, it has not been substantiated with the assistance of the defendant's evidence. As if the party remained absent without submitting his written statement to the claim of the plaintiff, counsel for the defendant has not cross examined the plaintiff and defendant not entered into the witness box to give his evidence to protest the claim of the plaintiff, adverse inference can be drawn against the defendants. Accordingly, adverse inference has drawn against the defendants. The principles evolved by their Lordships of the Hon'ble Supreme Court in the case of Vidyadhara Vs.Mankik Rao and others1, is squarely applicable to the present facts and circumstances of the case, which runs as under:
(A) Evidence Act (1 of 1872, S.114 -Adverse inference - Party to suit - not entering the witness box- Give rise to inference adverse against him.
Where a party to the suit does not appear into the witness box and states his 1 AIR 1999 SUPREME COURT 1441 25 O.S.No.1604/2014 own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct. In the instant case defendant no.1 alleged that the sale deed, executed by defendant No.2 in favour of the plaintiff, was fictitious and the whole transaction was a bogus transaction as only Rs.500/- were paid as sale consideration to defendant No.2. But, this plea was not supported by first defendant as he did not enter into the witness box. He did not state the facts pleaded in the written statement on oath in the trial Court and avoided the witness box so that he may not be cross-
examined. This, by itself is enough to reject the claim that the transaction of sale between second defendant and the plaintiff was a bogus transaction.
15. In the instant case, the plaintiff has claimed interest at 24% p.a. on the outstanding amount, but the interest claimed by the plaintiff is on the higher side. This Court is not empowered to change the contractual rate of interest agreed between the parties. However, this Court is empowered to award future rate from the date of filing of the suit till realization of the decreetal amount as per the prevailing rates of interest on the bank deposits under 26 O.S.No.1604/2014 various nationalized banks as per the rules and regulations made by the Reserve Bank of India. Under the Interest Act, the party is entitled to claim interest at the 'current rate of interest' which expression is defined in Clause(b) of Sec.2 of the Interest Act, it means that, the highest of the maximum rates at which interest may be paid on different classes of deposits by different classes of schedule banks in accordance with the direction given or issued to the banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949. Therefore, if interest at the rate of 12% p.a. on the outstanding amount from the date of filing of the suit till the realization of the entire decreetal amount is awarded, it would meet the ends of justice. Hence, this Court is of the opinion that plaintiff is entitled to interest at the rate of 12% p.a. from the date of suit till realization on principal amount of Rs.16,57,909/-.
27 O.S.No.1604/2014
16. On careful perusal of the entire material placed on record in consonance with both oral and documentary evidence and the principles evolved by their Lordships of the Hon'ble Supreme Court, this Court is of the opinion that the plaintiff has proved its case with all preponderance of probabilities. However, issue No.3 has been framed by my predecessor placing the burden on the defendant to prove the same. But, the defendant company has utterly failed to discharge its burden in proving issue No.3 and its defence. Hence, this Court is of the opinion that defendant is liable to pay the suit claim. Hence, I answer issue No.1 & 2 in the affirmative and Issue No.3 in the negative.
17. ISSUE NO.4: In view of my above discussions and the reasons stated therein and my answer to above issues, I proceed to pass the following:
28 O.S.No.1604/2014
ORDER The suit of the plaintiff is hereby decreed with costs.
Plaintiff company is entitled to recover Rs.16,57,909/- (Rupees Sixteen Lakhs Fifty Seven Thousand Nine Hundred and Nine only) with future interest at the rate of 12% p.a. on the principal amount of Rs.16,57,909/- from the date of suit till realization.
The defendant company is hereby directed to pay the decreetal amount within three months from the date of this judgment & decree.
Draw decree accordingly.
(Dictated to the Judgment Writer on computer, corrected, signed and then pronounced by me in the open Court on this THE 1st DAY OF APRIL 2017).
(M.G.KUDAVAKKALIGER), XXX ADDL.CITY CIVIL JUDGE, BENGALURU.29 O.S.No.1604/2014
ANNEXURE WITNESSES EXAMINED FOR THE PLAINTIFF/S:
P.W.1 : Dilip Kumar Shah.
WITNESSES EXAMINED FOR THE DEFENDANTS/S:
NIL.
DOCUMENTS MARKED FOR THE PLAINTIFF/S:
Ex.P.1 : GPA. Ex.P.2 : Copy of legal notice. Ex.P.3 : Acknowledgement. Ex.P.4 : Invoice. Ex.P.5 : Purchase order. Ex.P.6 to 10 : CC of the debit notes.
DOCUMENTS MARKED FOR THE DEFENDANTS/S: NIL.
(M.G.KUDAVAKKALIGER), XXX ADDL.CITY CIVIL JUDGE, BENGALURU.