Delhi District Court
Suit No. 41/16 vs M/S Sud & Waren Pvt Ltd on 18 February, 2016
IN THE COURT OF SH. HARISH KUMAR : ADDL. DISTRICT &
SESSIONS JUDGE 13 : CENTRAL DISTRICT : TIS HAZARI COURTS
: DELHI
SUIT NO. 41/16
In re :
M/s Continental packagings Pvt Ltd.
A Company inscorporated under the Companies Act, 1956
having its registered office at :
G5, Hans Bhavan
Bahadur Shah Zafar Marg, New Delhi ................... Plaintiff
Versus
M/s Sud & Waren Pvt Ltd.
Having its registered office at :
M135, Greater Kailash II,
New Delhi - 110 048.
also having its office at :
72, Sector 6,
Industrial Estate
Faridabad 121006
Haryana ................... Defendant
SUIT FOR RECOVERY OF RS. 10,01,402/
Date of institution of present suit : 15.05.1996
Date of receiving in this court : 01.02.2016
Date of hearing arguments : 08.02.2016
Date of Judgment : 18.02.2016
JUDGMENT
This judgment disposes off the suit filed by the Plaintiff against Defendant for recovery of a sum of Rs 10,01,402/ towards the cost of defective machine and consequent loss following M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 1 defective machine supplied by Defendant.
2. Briefly stated case of the Plaintiff as disclosed in the plaint is that Plaintiff, a Company incorporated under the Companies Act, 1956, is engaged in the business of printing of books, magazines, catalogs, brochures, periodicals and various other printing materials. Sh. G.P. Todi, the Managing Director of the Plaintiff Company, fully conversant with the facts of the case, is duly authorised and competent to sign, verify and institute the present suit.
Plaintiff has placed an order with the Defendant for supply, installation and commissioning of a Sheeter and Numbering Unit for its Orient Super Web OffSet Machine vide purchase order dated 11.08.1994, which was containing the terms and conditions for the purchase of the said Sheetercum Numbering Unit. Said order was duly accepted by the Defendant along with all the terms and conditions as laid down therein. The Defendant was to deliver the Sheeter cum Numbering Unit at the factory of the Plaintiff within 60 days of the said order against sale consideration of Rs. 6,09,840/ inclusive of Excise duty out of which the Plaintiff paid an advance of Rs. 1,84,800/ vide cheque No. 484604 at the time of placing of the order. Balance of the same M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 2 was payable at the time of dispatch of the said machine.
The purchase order dated 11.08.1994 it was specifically mentioned that the Sheeter cum Numbering Unit to be supplied by the Defendant was to be connected directly to the Orient Super II Web Offset Printing Machine of the Plaintiff, that Plaintiff required an arrangement to operate the Sheeter both with the web offset directly as also separately, that it maintained cut off of 560 mm as also 280 mm at an accuracy of +1 mm at the speed of 10000 or over, and that the machine should be able to handle the paper varying from 40 gsm to 120 gsm. The Defendant had undertaken to guarantee perfection in the performance of the Sheeter. Defendant was to install the machine free of cost at the factory of the Plaintiff and also impart requisite training to the technical staff of the Plaintiff for the operation of the said machine. It was also agreed that in case the Sheeter does not perform satisfactorily either in speed or accuracy etc. the Defendant shall be obliged to take back the same and return the payment made by the Plaintiff. It was further agreed that since the Numbering Unit could not be made operational without the Sheeter, the Defendant shall take back the Numbering Unit as well in such an eventuality.
The machine in question was delivered to the Plaintiff only on 28.02.1995 i.e. after a lapse of more than 6 months. M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 3 Despite the repeated requests of the Plaintiff, the Defendant did not provide proper instructions for the foundation platform and grouting causing a further and avoidable delay in installation of the machine. When the machine was finally installed at the works of the Plaintiff at Faridabad it was discovered that the machine had some major inherent defects, which were immediately brought to the notice of the Defendant with request to rectify the same at the earliest. In the meanwhile, the Plaintiff also paid to the Defendant the entire balance sale consideration for the said machine amounting to Rs. 4,25,040/ vide cheque no. 133403 dated 23.02.1995.
It is pleaded that due to failure to rectify the defect Sheeter Unit remained nonfunctional despite consistent followup by the representatives of the Plaintiff. Reminder on phone and also by letters dated 08.06.1995 and 18.07.1995 resulted only in assurance of the Defendant but in vain for a long time. Subsequently Defendant deputed its electrical Engineer to whom the defects in the Sheeter were duly communicated and Explained and the same were enumerated in the report dated 31.07.1995.
It is further stated that in the meeting held on 07.08.1995 between the representatives of Plaintiff and the electrical engineers of the Defendant, the problems of Excessive M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 4 vibration and sound were also discussed and Plaintiff was assured that these problems would be removed. However, even after the visits of the Engineer of the Defendant, there was no substantial improvement in the working of the machine. Some of the major problems in the functioning of the machine were Excessive vibration, improper jogging of the sheets at the delivery table and cross deviation of more than 5 mm when the paper was folded from corner to corner, therefore, the Plaintiff could not gainfully utilized the said machine and the same remained virtually non functional. Plaintiff was constrained to issue a legal notice dated 30.09.1995 through its advocate Mrs. Rukhsana Choudhary after receipt of which Defendant deputed its representative on 7.10.1995 and checked the complaints but even after the said visit problem of improper jogging of sheets and cross deviation of more than 5 mm continued. Defendant sent its letter dt. 26.10.1995 in response to the legal notice dt. 30.09.1995 wrongly contending that the problems in the machine had been removed to the satisfaction of the representative of the Plaintiff on 07.10.1995 signed by Mr Lahiri. Plaintiff sent letter dated 19.12.1995 refuting the assertion of the Defendant about rectification of the defects in the machine, describing the attempt as an eye wash. The Plaintiff sent another legal notice dated 20.02.1996 through its advocate Mr. Sudhir K. M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 5 Makkar calling upon the Defendant to take back the Sheeter cum Numbering Unit and refund the Plaintiff a sum of Rs. 6,10,200/ i.e. cost of the said Sheeter along with interest thereon @ 21% p.a. from the date of payment of the said amount till the date of refund. No reply has been received by the Plaintiff to the said legal notice.
In the aforesaid background Plaintiff filed the suit claiming decree for sum of Rs 10,01,402/ which include cost of machine i.e. Rs. 6,09,840/ paid by the Plaintiff towards the cost of the machine, interest on the said amount @ 21% amounting to Rs. 1,66,342/ having fallen due till 20.04.1996, Rs Rs. 83,400/ towards the cost for erection of the platform and grouting, Rs 50,000/ towards loss of paper and other printing inputs during the trial runs, Rs. 25,000/ for wastage of man hours of technical staff working on the said machine trying to make it functional and during the trial runs and Rs. 50,000/ toward loss of business and reputation. The Plaintiff has also claimed loss on account of wastage of industrial space to the tune of Rs. 14,820/. Accordingly Plaintiffs claims to be entitled to recover the total amount of Rs. 10,1,402/ (details stated as above) and claims for passing of decree for recovery for aforesaid amount with pendilite and future interest @ 21% p.a. till the date of realization alongwith cost of the suit and damages @ Rs. 780/ per month from the date of filing of M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 6 the suit till the date of removal of the machine on account of proportionate rent for the industrial space occupied by the machine.
3. Defendant was duly served and filed written statement. In the written statement, the Defendant had taken several preliminary objections interalia : that the Plaintiff has overvalued the suit with a view to deprive the competent court of its jurisdiction. Sh. G.P. Todi is not competent to sign, verify and to file the suit; that the suit is barred by limitation and that the assumed cause of action to the Plaintiff arose at Faridabad. The value of the machine was paid by the Plaintiff Company to the Defendant Company at Faridabad. Merely because the Defendant Company has its registered office at New Delhi, the this Court cannot be given jurisdiction by the Plaintiff.
In reply on merits, the Defendant denied each and every allegation as raised by the Plaintiff in the plaint and submitted that Sh. M.M. Rai, Sales Manager of the Defendant Company visited the Plaintiff's on 11.08.1994 and the Plaintiff handed over letter dated 11.08.1994, which he brought to the Defendant Company on the same day. However, the offer contained in the said letter dated 11.08.1994 could not be accepted M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 7 by Shri M.M. Rai and did not bind the Defendant Company to the terms contained in the letter. The Defendant Company made a counteroffer to the Plaintiff Company by its letter dated 12.08.1994, which was unequivocally accepted by the Plaintiff Company. This does not contain any conditions as were mentioned in the Plaintiff's letter dated 11.08.1994. It is accepted by the Defendant that the Plaintiff paid and advance amount of Rs. 1,84,800/ towards total payment of Rs. 6,09.840/.
It is stated by the Defendant that neither it had undertaken to guarantee any perfection in the performance of the Sheeter nor agreed to take back the machines or return payments made by the Plaintiff Company. It is stated by the Defendant that invoice dated 10.12.1994 for the goods was sent to the Defendant Company (the correct word is Plaintiff Company, however, wrongly written as Defendant Company in the written statement) and the balance of Rs. 4,25,040/ was shown in it. The Plaintiff inspected the working of the machines in the month of February, 1995, accepted the same and made the balance payment of Rs. 4,25,040/.
It is denied that any major defects in the machines were brought to the notice of the Defendant immediately on delivery of the machines.
M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 8
It is submitted by the Defendant that in the beginning of June, 1995, a complaint was received from the Plaintiff from which it appeared that the foundation platform was not built by the Plaintiff appropriately. On 12.06.1995, the Defendant sent their Expert to the Plaintiff's premises and found that the foundation platform was not made appropriately. Although the Defendant was not bound to do so, yet to maintain cordial business relations, on 14.06.1995, the Defendant handed over the foundation drawing to the Plaintiff.
It is submitted by the Defendant that the Plaintiff un necessarily made a complaint on 18.07.1995 with the result that a meeting was held by Mr. Sabharjeet Singh of the Defendant with Mr. A.N. Pandey and Mr. S.K. Lahiri, Maintenance Incharge and Production Manager respectively of the Plaintiff. The machine was found to be running properly but there was slightly Excess vibration of the machine and the gripping of the paper required to be improved.
It is submitted that the Defendant replied vide its letter dated 30.08.1995 (which was containing advise with regard to functioning of machine) qua the letter dated 29.08.1995 written by the Plaintiff.
It is submitted by the Defendant that on receipt of M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 9 notice dated 30.09.1995 on behalf of the Plaintiff Company, Defendant Company deputed its engineer to visit and attend the problem. On 07.10.1995, the engineer visited the premises of the Plaintiff and the machinery was run before him. Shri S.K. Lahiri, Production manager of the Plaintiff Company was fully satisfied with it and gave it in writing that the machinery was tried on 07.10.1995. He did not mention that any defects had been left in the working of the machinery.
It is submitted by the Defendant that the machine has worked satisfactorily with the Plaintiff and he has no right under any contract or under any law to the reimbursement of the price paid by him.
It is further submitted by the Defendant that it had given proper instructions for preparation of the foundation platform by the Plaintiff for the installation of the machine but it is unfortunate that the Plaintiff could not appreciate the way the platform was to be constructed. The Plaintiff has to put a strict proof with regard to Expenditure of Rs. 83,400/ on the erection of the platform.
Defendant has further denied the merits and entitlement of the Plaintiff qua all the claims with regard to incurring of Expenses or suffering of losses etc. on any count and has M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 10 claimed dismissal of the suit.
4. Plaintiff did not file any replication to the written statement of the Defendant.
5. Vide order dated 22.04.1999 following issues were framed by the Hon,ble High Court when the matter was being tried by it before enhancement of pecuniary jurisdiction of District Court:
1. Whether Shri G.P. Todi is competent to sign and verify the plaint and bring forward the present suit as alleged in para 2 of the written statement (preliminary objections)?
2. Whether the suit is barred by limitation as alleged in para 3 of the written statement (Preliminary objections)?
3. Whether this court has got no territorial jurisdiction to entertain the present suit as alleged in para 4 of the written statement (Preliminary objections)?
4. (a) Whether the Plaintiff inspected the working of the machine in the month of February, 1995 and found it to their satisfaction and made the balance payment of Rs. 4,25,040/ as alleged in paras 7 and 8 of the written statement? If so, its effect?
(b) Whether the machine supplied by the Defendant was defective? If so, its effect?
(c) Whether the machine supplied by Defendant was not in accordance with the terms of the purchase order? M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 11
(d) Whether the Defendant had committed the breach of the terms of the contract?
5. Whether Mr. Daljit Singh, an engineer of the Defendant was deputed to Examine the machinery in question and to repair the same and the machinery was repaired to the satisfaction of Mr. S.K. Lahiri, Production Manager of the Plaintiff as alleged in paras 13 to 16 of the Written Statement?
6. Whether the Plaintiff are entitled to the refund of Rs. 6,08,940/ i.e. price of the machine under the contr4act in between the parties?
7. Whether the Plaintiff is entitled to damages? If so, to what amount?
8. Whether the Plaintiff is entitled to interest? If so, at what rate and to what amount?
9. Relief, if any?
6. In support of its case, Plaintiff Examined Sh. Sanjay Mishra, Accounts Executive as PW1. He in his affidavit verbatim repeated the case of the Plaintiff and relied upon documents Ex Pw1/1 Board Resolution dt. 28/04/06, Ex Pw1/2 quotation/offer dt. 6/04/1994 given be Defendant, Ex Pw1/3 revised quotation/offer dt. 16/06/1994, Ex Pw1/4 purchase order dt. 11/08/1994, Ex Pw1/5 letter dt. 12/08/1994 (which Defendant contends to be counter offer), Ex Pw1/6 letter dt. 29/08/1995 from Plaintiff to Defendant about defects and dissatisfaction about working of machine, Ex M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 12 Pw1/7 letter dt. 23/02/1995 about balance payment and prima facie satisfaction to an Extent, Ex Pw1/8 letter dt. 8/6/1995 complaining for no instruction for foundation and grouting for Sheeter Unit, Ex Pw1/9 complaint in continuation of letter dt. 8/06/1995, Ex Pw1/10 joint inspection report, Ex Pw1/11 Minutes of joint meeting, Ex Pw1/12 Legal notice dt. 30/09/1995 issued by Plaintiff, Ex Pw1/13 (which was marked as MarkA during Examination in chief) letter dt. 7/10/1995 recording attending off problem by representative of Defendant, Ex Pw1/14 letter dt. 26/10/1995 sent by Defendant conveying recording of satisfaction by the Plaintiff, Ex Pw1/15 letter dt. 19/12/1995 by legal advisor of Plaintiff conveying persistence of defect and dissatisfaction in getting obtained report of satisfaction from induced employee of Plaintiff, Ex Pw1/16 letter dt. 3/01/1996 by Defendant requesting Plaintiff to appoint time for visiting for inspection, Ex Pw1/17 (which was marked as MarkB during Examination in chief) legal notice dt. 20/02/1996 issued by Plaintiff.
7. On the other hand, Defendant examined Sh. M.M. Rai, Senior Manager, Production and Sales as DW1 and relied upon Ex Dw1/1 Board resolution dt. 10/01/2007. M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 13
8. The depositions (chief examination and cross examination) of both the witness shall be discussed while recording findings issue wise to avoid repetition.
9. I heard the argument addressed by Sh S.K.Gupta Ld. Counsel for Defendant and went through the written arguments filed by Shri Makkar, Ld. Counsel for the Plaintiff and Sh.S.K Gupta, and perused the record. Counsel for Plaintiff did not address orally but got conveyed submission that court can dispense with his oral argument and take into consideration the written submission filed on Plaintiff's behalf. Issuewise findings are as under:
ISSUE No. 1 : Whether Shri G.P. Todi is competent to sign and verify the plaint and bring forward the present suit as alleged in para 2 of the written statement (preliminary objections)?
10. From the nature of issue, the initial onus of proof is upon the Plaintiff because while filing the present suit, Plaintiff has not placed on record any document to the effect that Sh. G.P. Todi was authorized or was otherwise competent to sign, verify and institute the present suit.
PW1 in his chief has stated that Sh G.P.Thodi is managing director of the Plaintiff Company and he identified the M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 14 signature of Sh. G.P.Thodi on the plaint. He in his chief Examination did not depose that Sh. G.P.Thodi was competent to sign, verify and institute the present plaint. Defendants neither cross Examined the PW1 on this point nor did give any suggestion to the contrary.
Counsel for Plaintiff in his written argument while relying upon the case law of Hon'ble Supreme Court in case titled as Union Bank Of India Vs Naresh Kumar AIR 1007 SC 3 has argued that alleged lack of authority is curable defect and in any case act of the Managing Director stands ratified by the Company. It has been further argued that Order 29 rule 1 empowers the principal officer to sign, verify and institute suit on behalf of Company and Sh. G.P.Thodi being the Managing Director of the Company is the Principal Officer and therefore issue be decided in favour of the Plaintiff.
Per Contra it has been argued by the Counsel for Defendant that PW1 was not cross Examined on this point because no evidence on the issue of competency was led by the Plaintiff. PW1 only deposed that Sh. G.P.Thodi is the Managing Director of the Plaintiff Company and he has signed the same. He further argued that in the facts of the present case lack of cross Examination at best proves the signature of Sh. G.P.Thodi and that M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 15 he was Managing Director of the Plaintiff Company but still competency has not been proved. He has drawn my attention to the Section 291 of Companies Act to say that Except where the Express provision is made that the powers of the Board in respect of the particulars matter are to be Exercised by the Company in general meeting in all other places, the Board of Directors are entitled to Exercise all its powers. The individual directors have only such powers which are vested in them by the Memorandum and Article of Association. He further argued that Plaintiff have not placed Memorandum and Article of Association to show that Managing Director of the Plaintiff Company had such power and therefore he called for drawing of adverse inference against the Plaintiff Company. He had relied upon case law cited at AIR 1991 Delhi 25 and 2013(137) DRJ 449.
On thoughtful consideration of rival contentions what emerges is that even Plaintiff admits there to be defect in the institution of Plaint but contends it to be curable one. But the fact of the matter is that defects have not been cured till date. It is not his contention that defects is pardonable. Plaintiff has not come forward to cure the defect. As far as contention of ratification of the act of Sh. G.P.Thodi in institution of plaint is concerned, it must be said that same cannot be sustained in law in the face of Chapter IV M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 16 of Delhi High Court (Original Side) Rules 1967 which lays that a suit can be presented by a duly authorized agent or by an advocate duly appointed by him for the purpose. This authorization in the case of Company can be given only after the decision to institute a suit is taken by the Board of Directors of the Company, which may authorize a particular director or the principal officer or the secretary to institute a suit. Case law cited supra by Ld. Counsel for Defendant is relied upon. Moreover judgment of Hon'ble Supreme Court in Union Bank Of India (supra) is not applicable to the facts of the present case as the said judgment was rendered where public money was involved whereas in the present case it is the private dispute between the parties and said case law is clearly distinguishable on facts. There is also weight in the argument of Ld. Counsel for Defendant that once Plaintiff itself has not led any evidence on the point of competency qua institution, non cross Examination on that point is not fatal to the case of Defendant. Moreover it is also settled proposition of law that special enactment such as Company Act 1956 will prevail over procedural law i.e. over Order 29 rule 1 C.P.C.
Additionally it would also be pertinent to mention that PW1 has given his address as C/o Ajanta Offset & Packaging Ltd. 95B, Wazirpur Industrial Area, Delhi110092 but has deposed that M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 17 he is an Account Executive in the Plaintiff Company. On record there is one resolution appeared to have been passed by Board of Directors of AJANTA OFFSET & PACKAGINGS LTD on 10/04/1996 whereby authorizing Sh.G.P.Thodi to institute legal case against Defendant. Though not apparent from the record as to who filed this document but connecting with the address given by PW1, this document appears to have been filed by Plaintiff. For the purpose of identification, this document is being marked as MarkC by the Court under its signature. This document has neither been proved nor referred to nor did any connection between Plaintiff Company and AJANTA OFFSET & PACKAGINGS LTD has been Explained. This gives this court one more reason to decide the issue no.1 against the Plaintiff and in favour of Defendant because this document can certainly be read against the Plaintiff to conclude that Sh G.P.Thodi lacked competency. However, this issue is decided against the Plaintiff not only on the basis of this document.
In view of the above discussion, issue no. 1 is to be decided against the Plaintiff and in favor of Defendant and is accordingly decided hereby.
ISSUE NO. 2 : Whether the suit is barred by limitation as M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 18 alleged in para 3 of the written statement (Preliminary objections)? AND ISSUE NO. 3 : Whether this court has got no territorial jurisdiction to entertain the present suit as alleged in para 4 of the written statement (Preliminary objections)?
11. Issue no. 2 and 3 have been taken up together as the same have not been pressed for by the counsel for the Defendant during the course of final arguments. Ld. Counsel for the Defendant has fairly conceded that the suit is well within limitation and since part cause of action arose in Delhi, therefore, this Court has territorial jurisdiction to try the present suit. Even otherwise the cause of action has firstly indisputably arose on 11.08. 1994 and the suit has been filed on 15/05/1996, therefore, plaint is well within limitation. Similarly, both the Plaintiff and the Defendant have their offices in Delhi, therefore, the part cause of action having arisen in Delhi, hence this Court has territorial jurisdiction. Accordingly, Issue no. 2 and 3 are decided in favour of Plaintiff and against the Defendant.
ISSUE NO. 4 (a) : Whether the Plaintiff inspected the working of the machine in the month of February, 1995 and found it to their satisfaction and made the balance payment of Rs. 4,25,040/ as alleged in paras 7 and 8 of the written statement? If so, its effect?
12. Onus to prove this part of the issue is upon the M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 19 Defendant. DW1 in para 9 of his Examination in chief by way of affidavit Ex. DW1/A has deposed categorically that Plaintiff inspected the working of the machine in the month of February 1995, accepted the same and made the balance payments of Rs 4,25,040/. In cross examination also he deposed that Plaintiff had inspected and took trial of the machine before taking delivery. No contrary suggestion has been given by the Plaintiff. Similarly PW1 did not specifically deposed in his chief examination that the machine was received without any prior inspection, though in his cross examination he did denied the suggestion that machine was inspected by Plaintiff before delivery. Plaintiff by filing and proving the document Ex. PW1/7 has to an extent lighten the burden of the Defendant to prove this part of the issue. Bare perusal of Ex. PW1/7, which is the document filed and relied upon by the Plaintiff, shows that the Plaintiff has seen the demonstration of the attachment on the assembly floor of the Defendant. Although found the performance not upto the mark, but, requested for installation of the said machine at the Plaintiff's premises so as to see the working to its satisfaction. It is also not in dispute that vide Ex. PW1/7 Plaintiff has reimbursed the entire balance payment towards the agreed price of the said machine.
Although, during the admissiondenial of the M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 20 documents, the Defendant has not admitted the Ex. PW1/7, but in the crossexamination of PW1, Defendant has not disputed the same by putting any crossquestion on the above said letter.
In the light of the undisputed position with regard to receipt of letter Ex. PW1/7 and above deposition of witnesses as discussed, it can be concluded that Plaintiff was not completely satisfied with the performance of the machine shown during the demonstration at the assembly floor of the Defendant. However, here, it should not be lost sight of the fact that the machine was only an attachment to the Web Off Set Printing machine available at the Plaintiff's premises. Nothing has come on record from either side that whether the demonstration was shown by attaching the said machine with that of the Web Offset printing machine at the Defendant's assembly floor. In the absence of Web Offset machine at Defendant's premises, the logical conclusion could be that the demo performance with any other machine may not be upto the mark and the Plaintiff might be having some reservation with regard to satisfactory performance of the machine at the demonstration but was overall satisfied otherwise it would not have released the balance payment. If Plaintiff was not satisfied with the demo performance then the Plaintiff would have asked for correction then and there or at least would not have asked for M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 21 installing the same at the Plaintiff's premises. It is also not to be ignored that the Plaintiff did not examine the person who has seen the demo performance at the Defendant's premises nor has examined any technical person to prove dissatisfaction with the performance.
In the light of above discussion and on the basis of preponderance of probability, it can safely be concluded that Plaintiff did inspect the machine in question before taking delivery.
Therefore Issue no. 4 (a) is decided against the Plaintiff and in favor of Defendant.
ISSUE NO. 4 (b) : Whether the machine supplied by the Defendant was defective? If so, its effect?
13. It has been the case of the Plaintiff that the machine supplied by the Defendant was defective whereas it has been the case of the Defendant that the machine was functioning properly. Since issue No. 4(a) has been decided against the Plaintiff therefore initial onus to prove issue No. 4(b) is upon the Plaintiff.
PW1 has deposed in his affidavit Ex. PW1/A that machine has inherent defects and the said fact was brought to the notice of the Defendant. PW1 relied upon the letters/documents Ex. PW1/6 to Ex. PW1/11. In strict sense of the terms these M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 22 documents cannot be said to have been proved by the PW1 as neither he is the author of these letters nor he deposed to the effect that this letters were written in his presence nor did he depose that he identifies the signature or writings on the letters/documents. Although Defendant denied these Ex. PW1/6 to Ex. PW1/11 during admission denial of documents but did not put contrary questions to PW1 about these documents nor did it deny these letters/documents in the deposition of DW1. Applying the rule of evidence these letters/documents for all practical purpose stands proved/admitted and therefore contents thereof can be relied upon in concluding if the machine had defect or not.
As far as deposition of PW1 about defect in machine is concerned same can safely be discarded for the simple reason that it has not flowed from his personal knowledge nor is he a technical person. PW1 is working as an Accounts Officer and in his cross Examination has deposed that he has completely no technical knowledge and has specifically deposed that he is concerned only with accounts and finance of the Plaintiff Company. He had further deposed that he has no personal knowledge with regard to the condition of the machine supplied by the Defendant. He had further deposed that he did not personally notice any vibration/sound or defect/accuracy in the machine as it was the job M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 23 of the technical department with which he has no concern. He has further deposed that technical staff of his Company with the help of advocate might have prepared the contents of his affidavit Ex. PA. Therefore testimony of PW1 qua the defect in machine is discarded hereby.
However, letters/documents Ex. PW1/6 to Ex.
PW1/11 can be read in ascertaining existence/non existence of defect in the machine. Ex. PW1/8 dt. 08/06/1995 is the first letter written by the Plaintiff to the Defendant after the delivery of machine. In this letter Plaintiff has conveyed that Sheeter machine had not been put to working condition and no proper instruction were given for the foundation platform or correct and proper drawing for Grouting has been supplied. Ex. PW1/9 dt. 18/07/1995 is the second letter which is in continuation of letter Ex. PW1/8 contents of which reveals that Sheeter unit was still not in working condition, leveling was still bending, conveyer belt was yet to be set, sheeters blades were not working in full speed and that Plaintiff had not received machine in full working condition. Ex. PW1/6 is the third letter the contents whereof reveals that machine had problem of excess vibration while running the machine at more than 800 IPH, sheets were not properly jogged at the delivery table and cut sheet delivered by the sheeter is not SQUARE i.e. 6 mm M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 24 deviation if folded from corner to corner. Ex. PW1/10 is the joint report proceeding of which records that machine was examined, designed was found OK, machine running 11000 sheets/hour, pillar level to be checked, one number gear to be fitted/changed, operational setting is required for satisfactory working of the machine. Ex. PW1/11 is the Minutes of Joint meeting recording the decision taken there which are to the effect that "presently machine is running on 10000 IPH and working is on ½ an hours on 11000 & 8000 IPH ½ hour, Excess vibration of machine to be removed by Sud and Warren , 1 no. assly to be added by Sud & Warren to support at belt & improve the gripping of paper with belt for better delivery, Excess sound on 11000/8000 also to be reduced". Ex. PW1/12 legal notice dt. 30/09/1995 by counsel of the Plaintiff wherein again problem as mentioned in Ex. PW1/6, Ex. PW1/8 and Ex. PW1/9 were reiterated and Defendant was called upon return the price with interest.
Conjoint reading of the above letters/documents it remains undisputed that the machine was not properly functioning. But it is not clear whether it was due to defect in the machine or due to improper installation. Moreover from the contents of Ex. PW1/10 and Ex. PW1/11 it can be concluded that machine was running on 10000 IPH and from Ex. PW1/11 working was on M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 25 running ½ an hour on 11000 IPH & 8000 IPH, defects were only to the effect of vibration and excessive sound, belt for improve gripping of paper for better delivery. Ex. PW1/11 makes it clear that machine was running at 11000 IPH and other problems were ancillary. It has been the case of the Plaintiff that the machine remained nonfunctional since the day of installation till the filing of the suit. Plaintiff, however, has not examined any technical person to prove the extent of defect or that the defects led to non functioning of the machine. What was the extent of defect is not explicit in any of the documents as referred to above nor is it clear whether the said problem rendered the machine non functional so as to call for its return. Plaintiff should have brought sufficient evidence to prove this issue.
In view of the above discussion as well due to failure of the Plaintiff to examine any witness conversant with the technical aspect of the machine or who actually noticed the defect or problem and applying the standard of preponderance of probability evidence of Plaintiff is not sufficient to hold that the machine supplied by the Defendant was defective. Hence, Issue No.4(b) is accordingly decided against Plaintiff and in favour of Defendant.
M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 26 ISSUE NO. 4 (c) :Whether the machine supplied by Defendant was not in accordance with the terms of the purchase order?
14. Onus to prove this issue is upon the Plaintiff. Plaintiff has averred that terms and conditions of delivery were recorded in the purchase order dt. 11/08/1994 to which Defendant agreed whereas it has been contented by the Defendant that contract was concluded when the Defendant offered to supply machine in accordance with the terms recorded in its letter/offer dt. 12/08/1994 which according to the Defendant was accepted by the Plaintiff unconditionally.
PW1 deposed in his affidavit that Defendant offered to supply machine by quotation dt. 6/4/1994 Ex. PW1/2, then again put in revised quotation dt. 16/06/1994 Ex. PW1/3. Plaintiff placed order for supply of machine vide purchase order dt. 11/08/1994 Ex. PW1/4 which included detail terms such as guidance for installation, training of personnel for operating the machine, refund in case of non satisfactory function of machine etc. In cross examination PW1 admitted that final terms agreed between the parties were accepted on 13/08/1994 vide letter Ex. PW1/D1. Ex PW1/D1 is the letter dt. 12/08/1994 relied upon by the Plaintiff and exhibited by PW1 as PW1/5. Ex. PW1/D1 is the document which Defendant claims to be counter offer and which was M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 27 unconditionally accepted by the Plaintiff by putting signature and seal.
DW1 in his deposition stated that he brought from Plaintiff's office letter dt. 11/08/1994 (Ex. PW1/4). The offer contained in Ex. PW1/4 could not be accepted by him and did not bind the Defendant Company to the terms contained therein. He further deposed that terms and conditions given in the letter dt. 11/08/1994 (Ex. Pw1/4) was not accepted by the Defendant. He further deposed that Defendant Company made a counter offer to the Plaintiff Company by its letter dt. 12/08/1994 which was unequivocally accepted by the Plaintiff Company. In cross examination he admitted that non acceptance of terms and conditions contained in letter dt. 11/08/1994 (Ex. PW1/4) was not communicated in writing to the Plaintiff but he did specifically deposed that in this regard communication dt. 12/08/1994 (Ex. PW1/D1) was addressed. No suggestion was given that Defendant agreed to the terms and condition contained in the letter dt. 11/08/1994 Ex. PW1/4 or that Plaintiff did not agree to it.
It has been argued that since DW1 admitted that machine was required to be connected with other machine and that he deposed that drawings for foundation were given clearly proves that Defendant has agreed to the terms and conditions contained M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 28 in Ex. PW1/4 and Defendant having failed to honored contractual warranties it must be held that Defendant did not supply the machine in accordance with terms of the purchase order.
Per Contra it has been argued reminding the basic principal of contract that when offer is accepted unconditionally agreement comes into being and agreement enforceable by law is contract. He has argued that purchase order containing terms and conditions in Ex. PW1/4 was not accepted by the Defendant but the counter offer made by the Defendant vide letter dt. 12/08/1994 Ex. PW1/D1 was accepted by the Plaintiff unconditionally with which both Plaintiff and Defendant is bound.
On thoughtful consideration of submission, deposition and construction of Ex. PW1/2, Ex. PW1/3, Ex. PW1/4 and Ex. PW1/D1 (Ex. PW1/5), it cannot be concluded that Defendant agreed to the elaborate terms and condition contained in Ex. PW1/4. Ex. PW1/2 & 3 did not talk of those terms. Ex. PW1/4 refers to Performa invoice but the same has not come on record to infer if Defendant ever offered to supply the machine on such terms and condition. Apart from these it is settled proposition of law of contract that when an offer is made with terms and the offeree does not unequivocally accept it or returns with varied terms then it is treated as counter offer and if the proposer who M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 29 initially made the offer accepts the same then agreements comes into being in accordance with the terms proposed by the offeree. In the present case it is clear that terms contained in letter Ex. PW1/4 was not accepted by Defendant though not specifically conveyed that terms of letter Ex. PW1/4 was not acceptable to the Defendant but is inferred from the conduct of parties in accepting Ex. PW1/D1 (Ex. PW1/5). Though initially Defendant did offer to supply machine with accuracy of +/ 1mm but in Ex. PW1/D1 (PW1/5) there is no such assurance. Therefore even if machine was having cross deviation between 4 to 6 mm when folded from corner to corner, it cannot be said that machine was not supplied in accordance with terms of Ex. PW1/D1 (PW1/5). This was also one of the factors weighed against Plaintiff while deciding issue No. 4(b) against the Plaintiff, though deliberately not discussed there as it was considered more appropriate to discuss here.
In view of the above discussion since the purchase order as placed by the Plaintiff vide Ex. PW1/4 did not becoming binding between the parties, therefore issue N. 4(c) is decided against the Plaintiff and in favor of Defendant. ISSUE NO. 4 (d) : Whether the Defendant had committed the breach of the terms of the contract?
15. In view of the discussion and finding recorded in issue M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 30 No. 4(a), (b) and 4(c), issue No. 4(d) is decided against the Plaintiff and in favor of Defendant.
ISSUE NO. 5 : Whether Mr. Daljit Singh, an engineer of the Defendant was deputed to examine the machinery in question and to repair the same and the machinery was repaired to the satisfaction of Mr. S.K. Lahiri, Production Manager of the Plaintiff as alleged in paras 13 to 16 of the Written Statement?
16. The onus to prove this issue lies upon the Defendant. DW1 in his examination in chief has deposed that after receipt of legal notice Ex. PW1/12 Sh. Dalbeer Singh Defendant's engineer was deputed to visit and attend the problem. He further deposed that he visited the Plaintiff's machinery on 7/10/1995 and the machinery was run before him. He further deposed that Sh. S.K.Lahiri, Production Manager of the Plaintiff was fully satisfied with it and gave it in writing that the machinery was tried on 7/10/1995 and reported no defects left in the working of the machine. He further denied the allegation of induced signature of Sh. S.K.Lahiri on MarkA which records satisfaction and crossed deviation having been reduced to 1 mm. Plaintiff did not cross examine DW1 on this point nor did even give suggestion to the effect that Sh. S.K Lahiri was induced to sign on 7/10/1995.
PW1 in his chief examination admitted that M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 31 representative of the Defendant visited on 7/10/1995 following Plaintiff's notice Ex. PW1/12 and checked the complaints mentioned in the notice. He further deposed that said visit was merely an eye wash and was an unscrupulous attempt on the part of the Defendant to give an impression as if complaints about the Sheeter stood rectified. PW1 further deposed after receipt of letter dt. 26/10/1995 (wherein it was conveyed by Defendant that defects has been removed to the satisfaction of the Plaintiff and in token of the same Sh S.K.Lahiri has signed acknowledged the same) Plaintiff sent letter dt. 19/12/1995 Ex. PW1/15 wherein it was conveyed that employee of the Plaintiff was induced to record satisfaction of cross deviation having been reduced to 1 mm. The said document was Exhibited in his affidavit as Ex. PW1/13 but due to lack of original it was marked as MarkA. PW1 has also not been specifically cross examined on this aspect but from the deposition of PW1 in cross examination wherein it is recorded "It is wrong to suggest that there was no defect/vibration/sound or inaccuracy. Similar is my reply with regard to electrical engineers observation.", it did appears that a suggestion about defect having been removed and satisfaction was accorded was put to PW1.
It has been argued that no material has been placed on record by the Defendant to prove the issue nor is it borne out M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 32 from the testimony of DW1. It has been further contented that PW1 categorically deposed that said visit was an eye wash and machine was not repaired and thus the Defendant has failed to prove the issue.
On the other hand it has been argued by the Ld. Counsel for Defendant that visit of Sh. Dalbeer Singh has been admitted by the Plaintiff and so also the signature of the employee of the Plaintiff and therefore Defendant has successfully proved the issue in its favour and now onus has shifted on Plaintiff to prove that signature were obtained after inducing its employee or that repair was not carried out to their satisfaction.
On thoughtful consideration of the submission, deposition of the witnesses and pleading document MarkA becomes an admitted document dispensing with the need of formal proof in view of section 58 of Indian Evidence Act. Though Plaintiff in its plaint or PW1 in examination in chief did not plead/depose that its employee was induced to sign and record satisfaction that cross deviation had been reduced to 1 mm but in Ex. PW1/15 it has been so stated in the last three lines of page 2 of Ex. PW1/15. Therefore argument of the Ld. Counsel for the Defendant appeal to mind that onus to prove shifted on the Plaintiff to prove that signature and satisfaction on MarkA were induced or M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 33 that visit was merely an eye wash. As observed its neither pleaded in plaint nor has been deposed by PW1 that signature were induced, Plaintiff has failed to prove that the visit was mere eye wash or that satisfaction or signature were induced. Moreover Plaintiff did not choose to examine Sh S.K.Lahiri to prove inducement.
In view of the above discussion it stands proved that Sh Dalbeer Singh (wrongly mention as Mr. Daljit Singh in issue) an engineer of the Defendant visited, examined and repaired to the satisfaction of Sh S.K.Lahiri and therefore Issue No.5 is decided against the Plaintiff and in favour of Defendant. ISSUE NO. 6 :Whether the Plaintiff are entitled to the refund of Rs. 6,08,940/ i.e. price of the machine under the contract in between the parties?
17. Finding on issue No.6 is dependant upon finding recorded on issue no.4. As all the part of issue No. 4 have been decided against the Plaintiff then certainly Plaintiff is not entitled to refund of Rs 6,08,940/.
Accordingly issue No.6 is also decided against the Plaintiff and in favour of Defendant.
M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 34 ISSUE NO. 7 : Whether the Plaintiff are entitled to damages? If so, to what amount?
18. In the plaint Plaintiff has claimed a sum of Rs 83,400/ towards the cost of erection of platform and grouting, a sum of Rs 50,000/ towards wastage of paper and other printing inputs, a sum of Rs 25,000/ towards wastage of man hours of technical staff working on the machine to make it functional, restricted claim for a sum of Rs 50,000/ towards a the loss of reputation and business on account of faulty machine and a sum of Rs 14,820/ towards wastage of industrial space.
PW1 in his examination in chief deposed on the lines of aforesaid claim however in cross examination he stated to be unaware if Plaintiff have filed any documentary support to the claim depose by him at items B to F in para 28 of the affidavit. He further deposed ignorance about the period of trial run or how much paper was wasted. He further deposed inability to give detail about the name of skilled labourer or the time taken by him for operating the machine or the remuneration paid to them. He further admitted that platform was to be erected at the cost of Plaintiff.
It has been argued that Plaintiff has successfully proved the consequential loss suffered by the Plaintiff whereas it has been argued by the Ld. Counsel for the Defendant that M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 35 deposition of PW1 is not sufficient to prove consequential loss nor PW1 is trustworthy on account of his ignorance. It has been further argued that as Plaintiff failed to prove any defect therefore question of consequential loss does not arise.
On consideration of material and deposition of PW1 it cannot be said that Plaintiff has successfully proved its aforesaid losses. Plaintiff being a Company must be maintaining some record to the effect of wastage of material or labour etc. but kept the document away from the court. Although it could have raised the issue of wastage/loss etc in any of its correspondence with the Defendant, but Plaintiff remained silent on this count in previous correspondence.
In view of findings recorded in issue No. 4 as well as also because Plaintiff miserably failed to prove consequential losses, issue No. 7 is decided against the Plaintiff and in favor of Defendant.
ISSUE NO. 8 : Whether the Plaintiff is entitled to interest? If so, at what rate and to what amount?
19. In view of the finding recorded in issue No. 4, 6 and 7, issue No.7 is also decided against the Plaintiff and in favor of Defendant.
ISSUE NO. 9 : Relief, if any?
20. In view of the findings recorded above on all the M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd. Suit No. 41/16 Page No. 36 issues Plaintiff is not entitled for any relief. Accordingly suit of the Plaintiff is dismissed.
Decree sheet be drawn accordingly. Parties are left to bear their own cost. File be consigned to record room after necessary compliance.
Announced in the open (Harish Kumar)
Court on 18/02/2016 ADJ13 (Central)/THC
(Judgment contains 37 pages) Delhi/18/02/2016
M/s Continental packagings Pvt Ltd. Vs M/s Sud & Waren Pvt Ltd.
Suit No. 41/16 Page No. 37