Delhi District Court
M/S. Vrb Consumer Products Pvt Ltd vs M/S. Mysore Fruit Products Pvt. Ltd on 22 December, 2023
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT) (DIGITAL-04),
SOUTH, SAKET COURTS, NEW DELHI
Presiding Officer: Sh. RAJEEV BANSAL
CS (Comm) No. 718/2022
In the matter of:
M/S VRB Consumer Products Pvt. Ltd.
(Formerly Known as M/s Veeba Food Services)
Having Its Registered Office at
133, Saidullajab, M.B. Road,
New Delhi-110030. ............Plaintiff
Vs.
1.M/s. Mysore Fruit Products Pvt. Ltd.
2. THEJESWARI AUDIKESAVULU DALAVAI Director of M/s Mysore Fruit Products Pvt. Ltd.
3. KALPAJA DALAVAI AUDIKESAVULU Director of M/s Mysore Fruit Products Pvt. Ltd.
ALL AVAILABLE AT :-
100% EOU, Unit-II, Veerasandra Village, Near Electronic City, Bangalore, Karnataka-560100 ALSO AT:-
Post Box No. 8615, Mahalaxmi Puram, Bangalore, Karnataka-560086. .........Defendants Date of institution : 21.12.2022 Date on which argument was concluded : 20.12.2023 Date of pronouncement of the order : 22.12.2023 CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 1 of 11 Digitally signed RAJEEV by RAJEEV BANSAL BANSAL Date: 2023.12.22 15:28:00 +0530 EX-PARTE JUDGMENT
1. This suit has been filed for recovery of an amount of Rs.
64,00,000/- along with pendente-lite and future interest @ 18 % per annum alongwith cost.
2. It is stated that Plaintiff is a Private Limited Company, incorporated under the Provisions of Indian Companies Act, 1956 and is engaged in the business of manufacturing and sale of sauces and dressings. It is stated that the present plaint has been filed through its Authorized Representative Sh. Chandan Singh, who is duly authorized by the Resolution dated 19.04.2016 and 04.11.2022 to institute the present suit.
3. It is stated that the Defendant No. 1 is also a Company incorporated and registered under the Companies Act and is engaged in the business of manufacturing and supplying of Aseptic Tomato Paste. It is stated that Defendant Nos. 2 and 3 are the Directors of Defendant No. 1 company.
4. It is stated that Defendant Nos. 2 and 3, in their capacity of Directors of Defendant No. 1 Company, approached the Plaintiff at Plaintiff's Office and offered to supply Aseptic Tomato Paste to the Plaintiff. It is stated that accordingly, an Agreement dated 11.01.2021 was entered into between Plaintiff and Defendant No. 1, under which the Defendants agreed to supply 8 Lakh KGs of Aseptic Tomato Paste @ Rs. 52/- per KG from 20.01.2021 to 20.02.2022. It is stated that the Defendant failed to supply Aseptic Tomato Paste to the Plaintiff despite reminders and e-mails.
CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 2 of 11 Digitally signed by RAJEEV RAJEEV BANSAL
BANSAL Date:
2023.12.22
15:28:08 +0530
5. It is further stated that due to failure of the Defendant, the Plaintiff was left with no other option but to purchase the goods of same quality from another company vide Agreement dated 11.02.2021 at a higher price of Rs. 60/- per KG. It is stated that the Plaintiff thus spent Rs. 8/- per KG extra for 8 Lakh KGs of Aseptic Tomato Paste i.e. Rs. 64 Lakhs, which resulted in huge monetary as well as goodwill loss to the Plaintiff.
6. It is further stated that the Plaintiff also sent a Legal Notice dated 18.09.2021 to the Defendant calling upon them to pay the damages as per Contract alongwith interest, but to no avail.
7. It is further stated that the amount was not paid by the defendant and hence, the plaintiff invoked Section 12-A of the Commercial Courts Act by approaching South District Legal Services Authority on 04.07.2022 for Pre-Institution Mediation Proceedings, but the defendant did not appear in Pre Institution Mediation proceedings and hence, a Non-Starter Report was issued by South District Legal Services Authority on 13.09.2022, where-after, the present Suit was filed by the plaintiff on 21.12.2022 for recovery of Rs. 64,00,000/- with interest @ 18% p.a.
8. Defendants were served on 13.05.2023 according to the affidavit of service filed by the Plaintiff. The Tracking Reports are on record. But neither any appearance was entered into on behalf of the defendants, nor any Written Statement was filed by them within the statutory period of 120 days from the date of service of summons, and in the circumstances, vide order dated 02.08.2023, the right of the CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 3 of 11 Digitally signed by RAJEEV RAJEEV BANSAL BANSAL Date:
2023.12.22 15:28:16 +0530 defendants to file the written statement was closed and the matter was directed to proceed ex-parte against the defendants.
9. In order to prove the case, the plaintiff has led its evidence wherein the Plaintiff examined its AR Sh. Chandan Singh, who reiterated the contents of plaint in his affidavit in evidence Ex. PW1/A and has relied upon the following documents:-
S. No. Documents Exhibit Page
No.
1. Certificate of incorporation of Plaintiff company Ex.PW1/1 10
2. Original Board of Resolution, dated 04.11.2022 Ex.PW1/2 11-12
3. Copy of Master Data of Mysore Fruit Products Pvt. Ex.PW1/3 13
Ltd
4. Copy of agreement dated 11.01.2021 Ex.PW1/4 (OSR) 14-16
5. E-mail conversation between the Plaintiff and Ex.PW1/5 17-24
Defendant
6. Copy of agreement dated 11.02.2021executed with Ex.PW1/6 (OSR) 25-27
M/S SNR Food
7. Legal Notice dated 18.09.2021 Ex.PW1/7 31-33
8. Postal receipt dated 20.09.2021 Ex.PW1/8 34
9. Tracking report and Notice sent through e-mail Ex.PW1/9 to 1/15 35-45
10. Certificate under Section 65B of the Indian Evidence Ex.PW1/16 48
Act
11. Certificate under Section 65B for notice sent through Ex.PW1/17 49
e-mail
12. Copy of invoice no. SNRPVT/TP/0002 dated Ex.PW1/18 4
20.04.2021 raised by SNR Foods (OSR)
13. Copy of invoice no. SNRPVT/TP/0008 dated Ex.PW1/19 5
12.06.2021 raised by M/s SNR Foods (OSR)
14. Copy of invoice no. SNRPVT/TP/0009 dated Ex.PW1/20 6
23.06.2021 raised by M/s SNR Foods (OSR)
15. Copy of invoice no. SNRPVT/TP/0010 dated Ex.PW1/21 7
04.07.2021 raised by M/s SNR (OSR)
16. Copy of invoice no. SNRPVT/TP/0014 dated Ex.PW1/22 8
18.07.2021 raised by M/s SNR Foods (OSR)
17. Copy of invoice no. SNRPVT/TP/0017 dated Ex.PW1/23 9
CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 4 of 11
Digitally signed
by RAJEEV
RAJEEV BANSAL
BANSAL Date:
2023.12.22
15:28:23 +0530
22.07.2021 raised by M/s SNR Foods (OSR)
18. Copy of invoice no. SNRPVT/TP/0023 dated Ex.PW1/24 10
31.07.2021 raised by M/s SNR Foods (OSR)
19. Copy of invoice no. SNRPVT/TP/0024 dated Ex.PW1/25 11
03.08.2021 raised by M/s SNR Foods (OSR)
20. Copy of invoice no. SNRPVT/TP/0026 dated Ex.PW1/26 12
13.08.2021 raised by M/s SNR Foods (OSR)
21. Copy of invoice no. SNRPVT/TP/0028 dated Ex.PW1/27 13
24.08.2021 raised by M/s SNR Foods (OSR)
22. Copy of invoice no. SNRPVT/TP/0031 dated Ex.PW1/28 14
06.09.2021 raised by M/s SNR Foods (OSR)
23. Copy of invoice no. SNRPVT/TP/0036 dated Ex.PW1/29 15
21.09.2021 raised by M/s SNR Foods (OSR)
24. Copy of invoice no. SNRPVT/TP/0037 dated Ex.PW1/30 16
23.09.2021 raised by M/s SNR Foods (OSR)
25. Copy of invoice no. SNRPVT/TP/0039 dated Ex.PW1/31 17
29.09.2021 raised by M/s SNR Foods (OSR)
26. Copy of invoice no. SNRPVT/TP/0038 dated Ex.PW1/32 18
28.09.2021 raised by M/s SNR Foods (OSR)
27. Copy of invoice no. SNRPVT/TP/0040 dated Ex.PW1/33 19
30.09.2021 raised by M/s SNR Foods (OSR)
28. Copy of invoice no. SNRPVT/TP/0041 dated Ex.PW1/34 20
01.10.2021 raised by M/s SNR Foods (OSR)
29. Copy of invoice no. SNRPVT/TP/0044 dated Ex.PW1/35 21
08.10.2021 raised by M/s SNR Foods (OSR)
30. Copy of invoice no. SNRPVT/TP/0046 dated Ex.PW1/36 22
14.10.2021 raised by M/s SNR Foods (OSR)
31. Copy of invoice no. SNRPVT/TP/0049 dated Ex.PW1/37 23
26.10.2021 raised by M/s SNR Foods (OSR)
32. Copy of invoice no. SNRPVT/TP/0050 dated Ex.PW1/38 24
29.10.2021 raised by M/s SNR Foods (OSR)
33. Copy of invoice no. SNRPVT/TP/0051 dated Ex.PW1/39 25
03.11.2021 raised by M/s SNR Foods (OSR)
CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 5 of 11
Digitally signed
by RAJEEV
RAJEEV BANSAL
BANSAL Date:
2023.12.22
15:28:30 +0530
34. Copy of invoice no. SNRPVT/TP/0052 dated Ex.PW1/40 26
10.11.2021 raised by M/s SNR Foods (OSR)
35. Copy of invoice no. SNRPVT/TP/0053 dated Ex.PW1/41 27
19.11.2021 raised by M/s SNR Foods (OSR)
36. Copy of invoice no. SNRPVT/TP/0055 dated Ex.PW1/42 28
13.12.2021 raised by M/s SNR Foods (OSR)
37. Copy of invoice no. SNRPVT/TP/0057 dated Ex.PW1/43 29
16.12.2021 raised by M/s SNR Foods (OSR)
38. Copy of invoice no. SNRPVT/TP/0058 dated Ex.PW1/44 30
18.12.2021 raised by M/s SNR Foods (OSR)
39. Copy of invoice no. SNRPVT/TP/0059 dated Ex.PW1/45 31
27.12.2021 raised by M/s SNR Foods (OSR)
40. Copy of invoice no. SNRPVT/TP/0063 dated Ex.PW1/46 32
05.01.2022 raised by M/s SNR Foods (OSR)
41. Copy of invoice no. SNRPVT/TP/0066 dated Ex.PW1/47 33
09.02.2022 raised by M/s SNR Foods (OSR)
42. Copy of invoice no. SNRPVT/TP/0067 dated Ex.PW1/48 34
09.02.2022 raised by M/s SNR Foods (OSR)
43. Copy of invoice no. SNRPVT/TP/0068 dated Ex.PW1/49 35
21.02.2022 raised by M/s SNR Foods (OSR)
44. Statement of account from dated 26.04.2021 to Ex.PW1/50 36-40
29.03.2022 of M/s SNR Foods
45. Certificate u/s 65B of Evidence Act for statement of Ex.PW1/51 41
account between Plaintiff & M/s SNR Foods
46. Non-Starter Report, dated 13.09.2022 Ex.PW1/52 A1
10. During the course of arguments, learned counsel for the Plaintiff argued that the Plaintiff had entered into an agreement dt. 11.01.2021 (Ex. PW-1/4) with the Defendant whereby the Defendant had agreed to supply 8 Lakh kgs. of Aseptic Tomato Paste to the Plaintiff during the period 20th January 2021 to 20th February 2022 @ Rs. 52/- per kg. He argued that as per Clause 3(d)(vii) of the Agreement, the Defendant had bound itself to supply the contracted CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 6 of 11 Digitally signed by RAJEEV RAJEEV BANSAL BANSAL Date:
2023.12.22 15:28:37 +0530 quantity of 8 Lakh kgs, failing which the Plaintiff was left free to procure the shortfall supply from open market and the Defendant agreed to pay the differential amount. He argued that the Defendant did not supply any quantity, compelling the Plaintiff to procure the supplies from M/s SNR Foods Pvt. Ltd. by virtue of a separate agreement dt. 11.02.2021 which was entered into for procurement of 8 lakh kgs. of Aseptic Tomato Paste @ Rs. 60/- per kg. He argued that thus, the Plaintiff had to spend Rs. 64 Lakhs extra for procurement of 8 lakh kgs. of tomato paste by paying Rs. 8/- per kg extra over the contracted price of Rs. 52/- per kg and it is this amount of Rs. 64 Lakhs which the Plaintiff is claiming from the Defendant in the present case.
11. I have heard learned counsel for the plaintiff and have perused the records of the case.
12. As per the Agreement dt. 11.01.2021 (Ex. PW-1/4), entered into between the Defendant and the Plaintiff, Defendant, being manufacturer of Aseptic Tomato Paste, agreed to supply 8 Lakh kgs.
of Aseptic Tomato Paste to the Plaintiff @ Rs. 52/- per kg. According to the agreement, the supply period was 20th January 2021 to 20th February 2022. Clause 3(d)(vii) of the Agreement provided for Indemnity and reads as under:
"Under any circumstances, 'Mysore Fruits' cannot refuse to supply the total contracted quantity within the agreed time limit. If 'Mysore Fruits' is not in a position to supply the total contracted quantity of tomato paste within the agreed time limit, the "VFSPL" shall be free to buy the remaining quantity of tomato paste from open market and CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 7 of 11 Digitally signed by RAJEEV RAJEEV BANSAL BANSAL Date:
2023.12.22 15:28:44 +0530 'Mysore Fruits' shall be liable to pay the differential amount. (The quantity procured in such case shall also be adjusted/deducted from the total Agreed Quantity). Also, 'Mysore Fruits' is free to dispatch the contracted quantity within the agreed time schedule and the 'VFSPL' is bound to receive the said consignment and also to make the payment of such consignment of tomato paste."
(Emphasis supplied)
13. The above extracted Clause thus clearly casts a duty on the Defendant to supply the contracted quantity of 8 lakh kgs. of tomato paste to the Plaintiff during the 13 months contract period starting from 20th January 2021. The parties also agreed to the condition that if the Defendant fails to supply the contracted quantity, the Plaintiff shall be entitled to procure the same from open market and in such an eventuality, the Defendant agreed to bear the price difference towards such procurement by the Plaintiff.
14. Ex. PW-1/5 are the emails exchanged between the parties. On 16.03.2021 at 4.03 PM, the defendant sent the following message to the Plaintiff:
Dear Mr. Ankit, We explained the situation to you already and you informed us in your earlier message that you have already asked your team to go ahead with another supplier. Hence we have dropped the idea of dispatch. We will let you once production starts. (emphasis supplied)
15. By the above email of 16,03.2021, the Defendant informed the Plaintiff that the Defendant has dropped the idea of dispatch. The email is clear. There is no ambiguity. In such a situation, where the Defendant showed its inability to supply the contracted quantity, the CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 8 of 11 Digitally signed by RAJEEV RAJEEV BANSAL BANSAL Date:
2023.12.22 15:28:54 +0530 Plaintiff was left with no other option, but to go for procurement from open market to meet his business requirements and as per terms of agreement between the Plaintiff and the Defendant, the Defendant was liable to make good the loss towards extra cost of procurement borne by the Plaintiff.
16. The Plaintiff has placed on record and proved execution of Agreement dated 11.02.2021 (Ex. PW1/6) between the Plaintiff and M/s SNR Foods (India) Pvt. Ltd. whereby SNR Foods agreed to supply 8 Lakhs KGs of Aseptic Tomato Paste to the Plaintiff @ Rs. 60/- per KG between the period from 01.03.2021 to 30.04.2022. Invoices from Ex. 1/18 dt. 20.04.2021 to Ex. 1/49 dated 21.02.2022 for procurement of tomato paste from SNR Foods Pvt. Ltd. have also been placed on record. The last invoice being dated 21.02.2022 (Ex. PW1/49) would not qualify for payment as the said purchase was made on 21.02.2022, which was beyond the agreement period in Ex. PW1/4 which ended on 20.02.2022. A close perusal of Ex. PW1/18 to Ex. PW1/48 show that the Plaintiff had purchased Aseptic Tomato Paste to the tune of 7,80,216 KGs from M/s SNR Foods (India) Pvt. Ltd. between 20.04.2021 to 09.02.2022 @ Rs. 60 Per KG. Ex. PW1/50 is the Ledger Account Statement of SNR Foods (India) Pvt. Ltd., according to which all the aforesaid invoices Ex. PW1/18 to Ex. PW1/48 have been mentioned therein alongwith the payments made by the Plaintiff to the Defendant Company. It is clear that the Plaintiff Company incurred a liability to pay Rs. 62,41,728/- extra to M/s SNR Foods (India) Pvt. Ltd. for purchasing the above calculated quantity of 7,80,216 KGs of Aseptic Tomato Paste from them over the amount which it would have paid to the Defendant had the Defendant supplied CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 9 of 11 Digitally signed by RAJEEV RAJEEV BANSAL BANSAL Date:
2023.12.22 15:29:02 +0530 the Tomato Paste to the Plaintiff as per the Agreement dated 11.01.2021 (Ex. PW1/4).
17. The Plaintiff has thus proved that the extra liability of Rs. 62,41,728/- incurred by it is on account of the failure of the Defendant to supply Aseptic Tomato Paste to the Plaintiff as per the Agreement dated 11.01.2021 (Ex. PW1/4) and in terms of Clause 3 (d) (vii), the Defendant is liable to reimburse this amount to the Plaintiff. Although, the rate of interest has been claimed @ 18% p.a. in the Suit, but there is no such Agreement between the parties and hence, this Court feels that Award of interest @ 7% p.a. from the date of filing of the Suit would serve the interest of justice in the present case.
18. The Plaintiff has impleaded Defendant Nos. 2 and 3 also in the Memo of Parties, but since the Agreement dated 11.01.2021 Ex. PW1/4 was entered into by Defendant No. 1, which is a Company as per the Extract of the Defendant No. 1 taken down from the website of Ministry of Corporate Affairs (Ex. PW1/3), which in itself is a legal entity, it will be Defendant No. 1 Company only which shall be liable to pay the amounts as per this Judgment to the Plaintiff Company.
19. According to the Agreement dated 11.01.2021 (Ex. PW1/4), the parties decided to give territorial jurisdiction to the Courts of Delhi. The Plaintiff has its office at Delhi. According to the Plaint, Defendant Nos. 2 and 3 had approached the Plaintiff at Plaintiff's Office at 133, Saidullajab, M.B. Road, New Delhi and the Agreement was also entered into between the parties at Delhi. As such, this Court will have the territorial jurisdiction to entertain this plaint.
CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 10 of 11 Digitally signed by RAJEEV RAJEEV BANSAL
BANSAL Date:
2023.12.22
15:29:09 +0530
20. The Suit is within limitation as the Agreement between the parties was entered into on 11.01.2021 and this Suit was filed on 21.12.2022, which is well within the limitation period of 03 years.
21. The plaintiff is thus, entitled to recover an amount of Rs. 62,41,728/- from Defendant No. 1 with 7% Interest per annum w.e.f. 21.12.2022. The plaintiff shall also be entitled to cost of Rs. 90,000/- towards the cost of litigation, which includes the Court Fees and other legal expenses.
22. Defendant No. 1 is therefore directed to pay an amount of Rs. 62,41,728/- to the plaintiff with 7% interest per annum w.e.f. 21.12.2022 till the date of realization and an amount of Rs. 90,000/- towards cost of litigation, within a period of 06 (six) months from today.
23. As a result, the present suit is decreed in favour of the plaintiff and against the Defendant No. 1 in the above terms.
Decree Sheet be drawn accordingly.
File be consigned to be Record Room.
Digitally signedRAJEEV by RAJEEV BANSAL Announced in open Court on 22.12.2023 BANSAL Date: 2023.12.22 15:29:16 +0530 (RAJEEV BANSAL) District Judge (Commercial Court) (Digital-04) South,Saket,ND/22.12.2023 CS (Comm) No. 718/22 VRB Consumer Products vs. M/s Mysore Fruit Products & Ors. Page 11 of 11