Delhi District Court
A B Pal Electricals (P) Ltd vs Ambience Projects Ltd on 3 December, 2016
IN THE COURT OF SH. HARISH KUMAR : ADDL. DISTRICT
JUDGE -13 : CENTRAL DISTRICT ; TIS HAZARI COURTS : DELHI
CS NO. 12584/16
In re :
A B Pal Electricals (P) Ltd.
(A Company Registered under the
Companies Act, 1956)
Having its Registered Office at
1826, Bhagirath Palace,
Delhi-110 006.
................. Plaintiff
VERSUS
Ambience Projects Ltd.
(A Public Limited Company
Incorporated under the Companies
Act, 1956)
Having its Registered Office at
L-4, Green Park Extension,
New Delhi- 110 016. .......... Defendant
Date of institution of present suit : 04.01.2005
Date of receiving in this court : 01.03.2016
Date of hearing arguments : 10.11.2016
Date of Judgment : 03.12.2016
SUIT FOR RECOVERY OF RS.14,61,62.93 WITH INTEREST
PENDENTE LITE, FUTURE AND COST OF THE SUIT
JUDGMENT
This judgment shall dispose of the suit filed by the plaintiff for recovery of Rs. 14,61,62.93/- with interest pendente lite, future and cost of the suit against the defendant.
2. Brief facts as set out in the pleadings are that Plaintiff company is a CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 1/19 wholesale dealer and is engaged in the sale / supply of wireless and other cables of different makes and brands. The plaintiff is also an authorized dealer of M/s Grandlay Electricals (India). The defendant approached the plaintiff for purchase of cables including the brand 'Grandlay' cables. The defendant agreed and undertook to pay the amounts of invoices, issue requisite Sales Tax Declarations besides paying requisite Central Sales Tax, etc. The defendant also undertook to pay interest at the rate of 24% per annum to be added monthly, if the invoices are not paid within a week of its presentation.
3. Defendant purchased goods from the plaintiff including cables between the period October 15, 2001 and June 21, 2002. The total value of the invoices issued by the plaintiff and accepted and acknowledged by the defendant during the above said period is Rs. 79,16,921.20/- only whereas, the defendant made payments to the tune of RS. 71,76,421.02/- up to May 28, 2003 leaving a principal sum of Rs. 7,40,500.18/- due to the plaintiff and payable by the defendant.
4. Defendant was called upon orally and otherwise to pay the said due/balance amount and meet its liability. Defendant had, accepting and acknowledging its liability to pay the amounts due with respect to the invoices, issued Central Sales Tax declarations on 1 st February 2003, for an amount of Rs. 73,61,667.42/- only and failed to issue sales tax declaration in respect of two invoices.
5. Since, the defendant did not pay its admitted due of Central Sales Tax payable by it, plaintiff had to meet the said liability and paid the amounts due (Rs. 14,878/-) to the Revenue. Defendant is liable to pay the said sum of Rs. 14,878/- towards this. Interest is payable on the said amount from the date of deposit by the plaintiff, which comes to Rs. 1,701.62/- up to as on 2 nd January, 2005/-.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 2/196. As the defendant was obliged to pay interest at the rate of 24 per cent per annum with monthly additions in the event of it not discharging its liability qua the invoices within one week of its presentment, therefore, defendant is liable to pay a sum of Rs. 14,61,632.93/- besides interest at the rate of 24% with effect from January 3, 2005, till the date of payment.
7. As the defendant has failed and neglected to pay the sum due and payable by it to the plaintiff despite repeated requests, the plaintiff had initiated winding up proceedings against the defendant company vide Company Petition no. 92 of 2004 and the same is pending adjudication before the Hon'ble High Court of Delhi and plaintiff filed the present suit for recovery aforesaid dues with interest.
8. Summons of the suit were issued to the defendant which filed written statement raising preliminary objection that M/s Grandlays Electricals (India) and Sh. Pradeep Batra are the necessary parties and in the absence of necessary parties, the suit is liable to be dismissed. The plaintiffs do not have any privity of contract with the defendant. It was submitted that according to the terms of the Purchase Order dated 20.08.2001, plaintiff considerably delayed the supply of the material and instead of commencing the supply with effect from 30.08.2001, it made the first supply on 15.10.2001. It was further pleaded that at the time of taking the first cheque for Rs.15 lakhs, plaintiff admitted the delay in supply of the material and undertook to supply the balance quantity till 13.11.2001. It was further pleaded that it was undertaken by them that in case plaintiff was unable to make the supply till 13.11.2001, entire payment of Rs.15 lakh would be treated as full and final payment against the material supplied by the plaintiffs till then and the balance payable amount would be treated as having been adjusted towards the damages suffered by the defendants. On merits, defendant denied the averments made in the plaint.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 3/199. On the pleadings of the parties, following issues were framed by the Ld. Predecessor vide order dated 08.04.2005:
1. Whether the suit has been singed, verified and instituted by a duly authorized person? OPP
2. Whether there is no privity of contract between the plaintiffs? OPD
3. Whether M/s Grindlays Electricals (India) and Pradeep Batra are necessary parties? OPD
4. Whether time was essence of the contract? OPD
5. Whether at the time of taking cheque for Rs.15 lakhs the plaintiff undertook to supply the balance quantity till 13.11.2001 in case of inability to do so whether the payment was to be treated as full and final payment? OPD
6. Whether there was agreement to offer Rs.3 lakh as compensation towards the delay in supply of material? OPD
7. Whether the defendants made full and final payment vide cheque dated 05.12.2001 for Rs.15,496.672.06 paisa? OPD
8. Whether the material supplied by the plaintiff after 07.12.2001 was substandard? OPD
9. Whether the plaintiff is entitled to interest, if so, at what rate? OPP
10. Relief.
10. In order to prove plaintiff's case, plaintiff examined Sh. Devinder Singh as PW-1 who tendered his evidence by way of affidavit Ex. PW1/A and relied upon documents i.e. Extract of Resolution dt o4.08.03 Ex Pw1/1 passed by Board of Directors of the plaintiff company, copy of notice dated 30.07.2003, Resolution dated 04.08.2003 of Minutes Book & confirmation thereof Ex.PW1/2 (colly), Statement of Account Ex.PW1/3, invoices/bills Ex. PW1/4 (colly), CST declaration and the details of invoices Ex. PW1/5, notice dated 15.09.2003 Ex. PW1/6. He was cross examined by the Ld. Counsel for defendant.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 4/1911. Plaintiff also examined Sh. Pradeep Batra as PW-2 who tendered his evidence by way of affidavit Ex. PW2/A. However, PW-2 did not turn up for his cross-examination and thereafter plaintiff's evidence was closed vide order dated 07.04.2015
12. Defendant examined Sh. S.S. Vohra as DW-1 who tendered his evidence by way of affidavit Ex. DW1/A and relied upon the following documents:-
1. Certified true copy of the Memorandum and Articles of Association including certificates of incorporation Ex. DW1/1
2. Invoice no. 405 dated 19.09.2001 of M/s Grindlays Electricals (India) Ex. DW1/2
3. Test result reports dated 19.09.2001 accompanying invoice dated 19.09.2001 Ex. DW1/2 are Ex. DW1/3 (colly.)
4. Invoice no. 448 dated 05.10.2001 Ex. DW1/4
5. Test Result Reports dated 05.10.2001 Ex. DW1/5 (colly.)
6. Letter dated 06.10.2001 Ex. DW1/6
7. Letter dated 24.10.2001 Ex. DW1/7
8. Receipt/confirmation dated 06.11.2001 Ex. DW1/8
9. Fax dated 13.11.2001 Ex. DW1/9
10. Letter of M/s Grandlays Electricals (India) dated 05.12.2001 Ex.DW1/10
11. Test Report of Shree Ram Institute for Industrial Research dated 31.03.2002 Ex.DW1/11
12. Reply notice dated 29.09.2003 Ex. DW1/12
13. Original postal receipt Ex. DW1/13
14. All the bills raised by M/s Grandlays Electricals (India) and the payments made directly to them Ex.DW1/14 (colly.)
15. The accounts in respect of the supplies made by M/s Grandlays CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 5/19 Electricals (India) through M/s AB Pal Electricals (P) Ltd. Ex. DW1/15 (colly.)
16. Letter dated 07.09.2001 Ex. DW1/16
17. Letter dated 06.10.2001 Ex. DW1/17 (already exhibited as Ex.
DW1/6)
18. Fax dated 09.11.2001 Ex. DW1/18
19. Purchase Order dated 17.11.2001 Ex. DW1/19
20. Letter dated 23.11.2001 Ex. DW1/20
21. Letter dated 28.11.2001 Ex. DW1/21
22. Letter dated 28.11.2001 Ex. DW1/22 and
23. Certified copy of Resolution dated 15.04.2015 Ex. DW1/23.
He was cross examined by the plaintiff after which defendant closed its evidence.
Admitted Facts
13. A purchase order was placed on 20.08.2001 and same was placed on M/s Grandlays Electricals (India) for supply of cables. Plaintiff supplied cables worth Rs 79,16,921/- and defendant paid to plaintiff Rs 71,76,421/-.
Disputed Facts
14. There is no privity of contract between plaintiff and defendant. Mr Pradeep Batra of M/s Grandlays Electricals (India) had given cash discount of Rs 3,00,000/- for delay in delivery and Rs 4,00,000/- discount for supply of sub standard quality cables. Adjustment of an amount of Rs 1670.00/- for excess billing and an amount of Rs 29,631/- towards lab testing charges. Sum of Rs 3,878.46/- and Rs 5,320.23/- for rate difference in Bill No. 10367 and 10368.
Findings CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 6/19
15. After going through the pleadings and evidence and other materials on record and appreciating the argument put forth by the respective Counsel for parties, issue wise findings as under:-
ISSUE No.1:- Whether the suit has been singed, verified and instituted by a duly authorized person? OPP
16. Onus to prove this issue is upon the plaintiff. Present suit has been instituted by Sh Devinder Singh who being director and authorised representative of the plaintiff instituted the resent suit on behalf of plaintiff company. Plaintiff also examined him as PW1 who deposed that he was authorised and empowered to sign and verify the affidavit Ex PW1/A. In the plaint it was mentioned by him that he was authorised to sign and verify the plaint vide resolution. He in his examination in chief exhibited the resolution Ex PW1/1 and copy of Notice dt 30.7.2003, Resolution dt 4.08.2003 of Minute Book and confirmation thereof Ex PW1/2 (colly). In his cross examination he deposed that he has not brought the original minute book and denied the suggestion that no such resolution was passed authorising him to sign, file and verify the suit.
17. Plaintiff has placed on record the resolution Ex PW1/1 whereby Devender Singh has been authorised to take legal action against defendant. Minutes book of 10th August has also been placed in original on record which ratifies the meeting held on 4th August 2003.
18. Hon'ble High Court relying upon the judgment of Hon'ble Supreme Court in Union Bank of India v. Naresh Kumar & Ors., (1996) 6 SCC 660 in CM(M) No. 1419/06 titled as "Capital Land Builders Pvt Ltd v. Tirath Singh & Ors" decided on 12.07.2007 held that where a plaint has been signed on behalf of the company by its secretary or its director or its principal officer no formal prove of authorization is necessary. To prove that the person concerned is CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 7/19 the secretary or director or principal officer as the case may be is sufficient to hold that the suit has been instituted by a duly authorized person and the plaint has been signed and verified on behalf of the corporation by a duly authorised person. It was also held that there was no necessity to establish that there was a board resolution empowering the director to file the suit on behalf of the plaintiff and sign the plaint.
19. Defendant has not disputed that Devender Singh was the director of the plaintiff company. Therefore in the light of the above evidence and case law it can be concluded that plaint was signed, verified and filed by authorised person.
Hence, issue No. 1 is decided in favour of plaintiff and against the defendant.
ISSUE No. 2:- Whether there is no privity of contract between the plaintiff and defendant ? OPD.
20. Onus to prove this issue is upon the defendant. It has come on record that defendant had placed purchase order on M/s Grandlay Electricals (India) for supply of cables vide purchase order dt 20.08.2001. Defendant has been successful in getting PW1 admits in cross examination that M/s Grandlay Electricals (India) was principal and plaintiff was its agent. But it has also come in evidence that plaintiff supplied the goods which was not only accepted but plaintiff was also paid for by defendant not once but many times and it was plaintiff which was raising bill directly upon the defendant.
21. In India doctrine of "privity of contract" admits of exception. One of such exception is "Acknowledgement or Estoppal". Where by the terms of a contract a party is required to make a payment to a third person and he acknowledges it to that third person, a binding obligation is thereby incurred towards him. Acknowledgment may be expressed or implied.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 8/1922. Similarly, in the present case also defendant by his conduct has agreed to pay to the plaintiff for the goods received from plaintiff and in fact it has paid plaintiff almost 90% of the cost of the goods it received from plaintiff. It is only when question of payments for remaining amount was raised, defendant has raised the doctrine of "privity of contract" ignoring that the by its conduct it has agreed to pay to the plaintiff for the goods it received from plaintiff.
Hence, doctrine of "privity of contract" has no application in the present facts and circumstance of the case and accordingly issue No.2 is decided against the defendant and in favour of plaintiff.
ISSUE No.3:- Whether M/s Grandlay Electricals (India) and Pradeep Batra are necessary parties? OPD
23. Onus to prove this issue is upon the defendant. It has been the case of the defendant that it had placed the purchase order dt 20.08.2001 upon M/s Grandlays Electrical and Mr Pradeep Batra of M/s Grandlays Electricals had offered cash discount of Rs 3,00,000/- for delay in supply and discount of Rs 4,00,000/- for supply of sub standard quality material and for these reason it has been argued that presence of M/s Grandlays Electricals (India) and of Mr Pradeep Batra was necessary as party.
24. It settled law that a party in whose absence suit cannot be decided effectively then presence of such party is essential. In the present case it has already been noted herein before that doctrine of "privity of contract" is not applicable to present case. It is also not that in the absence of M/s Grandlays Electricals and Mr Pradeep Batra, present suit cannot be decided effectively. It has already been noted herein before that plaintiff had supplied goods to the defendant which was not only accepted but was paid for also by the defendant to the extent of almost 90% of the cost of the goods received by it from plaintiff. In fact it was plaintiff which raised bills on the defendant and defendant paid for it.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 9/19Whether above said discount was offered by Mr Batra or not can be proved by defendant by calling Mr Pradeep Batra into evidence. In these circumstance it cannot be said that in the absence of both M/s Grandlays Electrical and Mr Pradeep Batra present suit cannot be disposed of effectively.
Hence, the issue No. 3 is decided against the defendant and in favour of plaintiff.
ISSUE No.4:- Whether time was essence of the contract? OPD.
25. Onus to prove this issue is upon the defendant. No argument has been addressed on this point as to how the time was the essence of the contract particularly when it is not in dispute that defendant placed second order for supply of cables vide purchase order dated 17.11.2001 Ex. DW-1/19. Had the time been essence of the contract, then defendant would not have placed the second purchase order as noted above as goods were allegedly delivered late. Even for arguments it is assumed that time was the essence of the contract that stands waived by the conduct of the defendant by placing the second order without any grievance with respect to allegedly non-performance of the previous purchase order in time.
26. Hon'ble Supreme Court in Kailash Nath Asscociates v. DDA, (2015) 4 SCC 136 quoted with approval the judgment of Webb v. Hughes V.C.M.1870 wherein it was held:
"But if time be made the essence of the contract, that may be waived by the conduct of the purchaser; and if the time is once allowed to pass, and the parties go on negotiation for completion of the purchase, then time is no longer of the essence of the contract. But, on the other hand, it must be borne in mind that a purchaser is not bound to wait an indefinite time; and if he finds, while the negotiations are going on, that a long time will elapse before the CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 10/19 contract can be completed, he may in a reasonable manner give notice to the vendor, and fix a period at which the business is to be terminated."
In view of the above discussion, issue no. 4 is decided against the defendant and in favour of plaintiff.
ISSUE No. 5:- Whether at the time of taking cheque for Rs. 15 lakhs the plaintiff undertook to supply the balance quantity till 13.11.2001 in case of inability to do so whether the payment was to be treated as full and final payment? OPD
27. Onus to prove this issue is upon the defendant. Defendant has relied upon Ex PW1/X-1 to contend that plaintiff admitted delay in delivery. It is further contended that it was agreed that in case plaintiff failed to supply entire goods by 13.11.2001 then payment of Rs 15 lakhs by cheques would be considered full and final payments of good supplied till 6.11.2001 and defendant would be at liberty to adjust the differential amount payable to plaintiff, towards damages suffered by it due to non supply of ordered material quantity. Ex PW1/X-1 was admitted by plaintiff but explained it by saying that there might be delay.
28. Why plaintiff was required to issue such letter Ex PW1/X-1 ? No where in pleading it has come from the side of the defendant that it ever lodged any complaint about delay or wrote any letter registering its unhappiness over the delay. Why plaintiff on his own would write such letter acknowledging delay ? Therefore, this letter Ex PW1/X-1 does no appear to represent the true state as existing between the parties.
29. It is not in dispute that defendant placed order for supply of cables etc. vide. purchase order dt 20.08.2001 Ex PW1/X-2. Perusal of the purchase Ex PW1/X-2 shows that M/s Grandlays Electricals was required to supply goods worth Rs 39,92,335. This supply was to start by 30.08.2001 and was to be CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 11/19 completed by 25.09.2001. Defendant itself placed and proved on record two invoices Ex DW1/2 dt 19.09.2001 and Ex DW1/4 dt 5.10.2001 raised by M/s Grandlays Electricals as per which Defendant had received goods totaling worth Rs 8,07,374/- by 5.10.2001. Nothing has been placed on record by defendant to show that any letter of protest was made till 5 th October with M/s Grandlays Electricals. Plaintiff came into picture thereafter. By 13.11.2001 Plaintiff had supplied goods worth Rs 40,21,896.95 vide bills No. 9548 dt 15.10.2001, 9549 dt 15.10.2001, 9569 dt 22.10.2001, 9681 dt 24.10.2001, 9582 dt 24.10.2001, 9599 dt 30.10.2001, 9600 dt 30.10.2001, 9606 dt 1.11.2001, 9607 dt 1.11.2001, 9614 dt 6.11.2001, 9615 dt 6.11.2001, 9631 dt 9.11.2001 and 9639 dt 12.11.2001. Meaning thereby that defendant had by 13.11.2001 received goods worth Rs 48,29,270.95/- both from M/s Grandlays and plaintiff, whereas order placed was for goods worth Rs 39,92,335/- only.
30. Therefore by 13.11.2001 more than ordered goods vide purchase Order was supplied by the extended period till 13.11.2001. It is not the case of defendant that since the placing of purchase order dt 20.08.2001, there was any change in the quantity of goods ordered. Hence, there was no occasion for the defendant to treat the payment of Rs 15 laks as full and final payment for the goods supplied till 6.11.2001 and similarly there did not arise any occasion for defendant to adjust the alleged cash discount of Rs 3 lakh as damages against delay because by 13.11.2001 more than entire ordered good were duly stood supplied to the defendant.
Hence, the issue No. 5 is decided against the defendant and in favour of plaintiff.
ISSUE No. 6:- Whether there was agreement to offer Rs.3 lakh as compensation towards delay in the supply of material? OPD
31. Onus to prove this issue is upon the Defendant. Defendant has CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 12/19 releid upon letter dt 5.12.2001 Ex DW1/10 to contend that vide letter Ex DW1/10 an offer of additional discount was made for Rs 3,00,000/- as damages for delay in supply.
32. PW-1 Sh Devender Singh in his cross examination denied any offer having been made by Mr Pradeep Batra to compensate for delay by giving additional cash discount or having written any such letter to that effect. PW1 was not confronted with Ex. DW 1/10 to evince his testimony about Ex. DW-1/10. He also denied the suggestion that for supplies made till 5.12.2001 a discount of Rs 3 lakh was given to compensate for the delay.
33. Defendant witness DW-1 relied upon Ex DW-1/10 and deposed on the lines of their stand. In cross examination he admitted that letter Ex DW1/10 was not acknowledged by plaintiff. When he was asked if he can show any document where discount of Rs 3 lakh was mentioned, he replied that amount mentioned is Rs 2.5 lakh but after adding the excise duty, CST and handling charges the amount comes around Rs 3 lacs. He denied the suggestion that no such offer was made.
34. Perusal of Ex DW1/10 shows that an additional discount of Rs 2.5 lakh was offered by Pradeep Batra. By no stretch of imagination such offer could be enhanced to include handling charges, CST, excise duties etc. Such offer always happens to be on the final bill amount and does not include discount on tax component. So some manipulation appears to have been done.
35. It has already been held herein before that by 13.11.2001 M/s Grandlays Electricals and plaintiff had jointly supplied goods worth Rs 48,29,270.95 as against good ordered for worth Rs 39,92,335/-. Defendant itself relied upon one fax message Ex DW1/9 sent by plaintiff informing defendant about execution of commitment to supply balance goods till 13.11.2001 against CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 13/19 the purchase order dt 20.08.2001. Defendant has claimed that this fax was sent falsely as plaintiff by that date had not supplied the complete order. The stand of the defendant is false because if there had been truth in the stand of the defendant then defendant would not have placed another purchase order dt 17.11.2001 Ex DW1/19. In the purchase order dt 17.11.2001 there was no allegation of mischief committed by the plaintiff by sending false fax as alleged by defendant. If plaintiff had not supplied the entire goods by the due date of 13.11.2001 as committed vide EX PW1/X-1 and had falsely sent fax message of compliance, then such act would have infuriated defendant and defendant would not have placed another order vide Ex DW1/19 or at least there would have been mention of mischief of faxing false fax. Once the over all delay of the original purchase order was condoned by defendant there cannot be any reason for any discount, particularly when delay was discussed and conditionally resolved by Ex PW1/X- 1 and condition stood complied with. Therefore, there was no occasion for offering further discount of Rs 3 lakh or 2.5 lakhs as alleged by defendant.
36. As noted defendant placed next purchase order Ex DW1/19 dt 17.11.2001 as per which supply was to commence from 25.11.2001 and was to be completed 30.11.2001. Defendant has relied upon letter from M/s Grindlays Electricals dt 23.11.20001 Ex DW1/20 perusal of which shows that M/s Electrical had requested for extension of time for completion of supply by 14.12.2001 and has also requested for release of some more amounts vide letter dt 28.11.2001. Referring to letter dt 23.11.2001 and subsequent discussion with Mr Pradeep Batra, M/s Grindlays Electricals vide letter dt 23.11.2001 requested for release of amount of Rs 5 lacs out of the total amount "due" and for release of balance amount at the earliest. Between 17.11.2001 and 5.12.2001 only once goods were delivered vide Bill No. 9660 dt 23.11.2001 worth Rs 3,39,445.60. It has been already noted herein before that over all delay in supplying material under first purchase order dt 20.08.2001 stood resolved with compliance of commitment by 13.11.2001 as agreed vide receipt Ex PW1/X-1. It is, therefore, CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 14/19 hardly believable that one would offer discount of Rs 3,00,000/- from the transaction of Rs 3,39,445.60 supplied vide bills dt 23.11.2001. Defendant's version does not inspire confidence.
Hence, defendant failed to prove that there was an agreement to offer Rs 3 lakh as compensation towards late supply of material. Accordingly, issue No.6 is decided against the defendant and in favour of plaintiff.
ISSUE No.7:- Whether the defendants made full and final payment vide cheque dated 05.12.2001 for Rs.15,496.672.06 paisa? OPD
37. Onus to prove this issue is upon the defendant. It has been contended by defendant that after adjustment of discount of Rs 3,00,000/- and excess billing of Rs 1670.49, defendant paid balance Rs 15,49,672.06/-. However, it has already been noted herein before that defendant failed to prove any discount of Rs 3,00,000/-, hence any payment of Rs 15,49,672.06 cannot be said to be full and final payment as payment of Rs 3,00,000/- remained unpaid if not the excess bill amount of Rs 1670.49/-.
Hence, issue No.7 is decided against the defendant and in favour of plaintiff.
ISSUE No.8:- Whether the material supplied by the plaintiff after 07.12.2001 was substandard? OPD
38. Onus to prove this issue is upon the defendant. It has been pleaded by the defendant that material worth Rs 30,90,804.15 supplied by plaintiff between 7.12.2001 and 28.12.2001 was of substandard quality and it failed the test of lab as not confirming to I.S. specifications. It has been further pleaded that Mr Batra had asked the defendant to withhold a sum of Rs 4 lakh pending test result and since material failed the test, therefore, sum of Rs 4,00,000/- was appropriated towards further discount/compensation.
39. DW1 deposing on the above lines relied upon test report Ex CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 15/19 DW1/11. In cross examination he admitted that no representative of plaintiff was present when sample was sent for testing. He denied the suggestion that plaintiff never authorize defendant for sending the sample for testing or that false report has been obtained or that material was of good quality etc. Defendant has not examined any one from the lab which allegedly tested the sample. Defendant also did not prove payment of lab testing charges. Hence, test report as filed by defendant cannot be relied upon as the same has not been proved by the defendant as per law.
40. Ld Counsel for defendant has argued by referring to his cross examination that PW1 has admitted the report Ex DW1/11 but said contention is not sustainable. PW-1 has deposed that as per report supplied material failed in physical test for insulation. He did not admit that report was correct. What he admitted was that it was mentioned in the report that material failed the test. This is also apparent from the fact that he volunteered that samples were sent without their consent and knowledge and they were not aware whether the samples were their's or not. He also denied that he was not aware if any sum of Rs 29,631/- was paid to the lab. In these circumstance, it cannot be said that PW1 admitted that material supplied between 7.12.2001 and 28.12.2001 were of substandard quality entitling defendant to deduct sum of Rs 4 lakh and testing charges of Rs 29,631/-.
41. It is also worthwhile to note that defendant has not returned the material supplied between the aforesaid period finding them to be of substandard quality as alleged nor has set up the case that said material were sold to other person who were interested in purchasing and using substandard material. Meaning thereby that defendant itself has consumed the same and cheated (if at all material was of substandard quality) his own consumer by representation that the best quality material had been used by it because it is not the case of the defendant that because of poor quality material it passed on the discount to its own consumer.
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 16/19Hence, in view of the above discussion, issue No. 8 is decided against the defendant and in favour of plaintiff.
ISSSUE No.9:- Whether the plaintiff is entitled to interest, if so, at what rate? OPP.
42. Onus to prove this issue is upon the plaintiff. Plaintiff has claimed interest at the rate of 24% per annum. PW1 deposed that defendant had undertaken to pay interest @ 24% per annum and was liable to pay a sum of Rs 14,61,632.93 besides interest @ 24% w.e.f. 3 rd January 2005 till the date of payment. In plaint it was pleaded that defendant undertook to pay interest at the rate of 24 % per annum and interest was charged at the rate of 24% per annum with monthly rests by Nationalized Bank at the time of the transaction between the parties. There was no cross examination on the point of interest by the defendant. Defendant denied any such agreement or undertaking for payment of interest at such rate in the written statement. Plaintiff did not lead any evidence on this aspect.
43. In none of the invoices Ex PW1/4 (colly), there is mention of payment of interest on delayed payment. Plaintiff could not prove when, where and how defendant agreed for such payment of interest. Hence, plaintiff evidence is not sufficient to inspire confidence in the plaintiff's assertion that defendant had undertaken to pay interest at such rate.
44. Section 34 of CPC empowers the Court to award interest for the period pendente-lite as well as for future interest at the rate of 6 per cent per annum, however, in case of commercial transactions, Court can award future interest at higher rate than 6 % but not beyond the contractual rate and when there is no contractual rate, interest can be granted at such rate at which moneys are advanced by Nationalised Bank in relation to commercial transaction. No CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 17/19 doubt in the present case the transactions between the plaintiff and defendant is that of commercial transaction and presently the Nationalised banks are charging interest between 9 to 12 per cent on the various kind of loans. As far as pendente- lite interest is concerned, vide order dt 09.08.2007 plaintiff was held dis-entitled to interest for period between the date of framing of issue and till the plaintiff evidence was led. In the present case issue were framed on 28.04.2005 and evidence was led by plaintiff on 06.05.2008, accordingly in terms of order dt 09.08.2007 plaintiff is not entitled to any interest between the period 28.04.2005 and 06.05 2008. In view of above discussion, this Court deems it reasonable to award simple interest @ 9 per cent per annum with effect from the date of institution of the suit till realisation except for period between 28.04.2005 to 06.05.2008. Since, plaintiff has failed to prove contract for payment of interest, therefore, plaintiff is held not entitled to any interest for period prior to institution of the suit.
45. What amount upon which interest is payable ? It has been found above that defendant failed to prove that any discount of Rs 3 lakh and Rs 4 lakh was given. Defendant also failed to prove that it spent a sum of Rs 29,631/- on lab testing. Admittedly defendant had not issued any debit notes for Rs 3878.46/- and Rs 5320.23/- for excessive billing in bill No. 10367 and 10368. Hence, defendant is not entitled to deduct the same. As far as debit note for Rs 1670.49/- is concerned, PW1 in his cross examination shown ignorance about the same. It is worthwhile to note both plaintiff and defendant have relied upon ledger accounts of respective parties but same being electronic record are not admissible in evidence for want of mandatory certificate under Section 65 B of Evidence Act. Therefore defendant also failed to prove that it was entitled to deduct Rs 1670.49 on account of alleged excess bill. Since defendant has admitted that it had deducted above said all sums but failed to prove that it was entitled to deduct aforesaid amount, therefore, defendant is liable to pay the aforesaid amount total of which comes to Rs 7,40,500.18/-. Accordingly, plaintiff is entitled to aforesaid CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 18/19 simple interest @ 9% per annum on the amount of Rs 7,40,500.18/- from the date of institution of the suit till its actual realisation except for period between 28.04.2005 and 06.05.2008.
RELIEF
46. In view of the findings recorded on all issues, suit of the plaintiff is allowed for lesser amount than claimed and a decree for recovery of sum of Rs 7,40,500.18/- (Rupees Seven Lakh Forty Thousand Five Hundred and Eighteen Paise) is hereby passed in favour of plaintiff and against the defendant alongwith simple interest @ 9% per annum from the date of institution of the suit till its actual realisation except for period between 28.04.2005 and 06.05.2008. Cost of the suit is also awarded in favour of plaintiff. Parties to bear their own cost.
47. Decree sheet be prepared accordingly.
File be consigned to Record Room after necessary compliance.
(Harish Kumar)
Announced in the open Court ADJ-13(Central) / THC
(Judgment contains 19 pages) Delhi /03.12.2016
CS No. 12584/16 A B Pal Electicals (P) Ltd. Vs. Ambience Project. Ltd., Page No. 19/19