Delhi District Court
M/S. Medical Devices Endoscopy vs M/S. Nestiva Medicare Pvt. Ltd on 18 July, 2023
IN THE COURT OF
SH. PREM KUMAR BARTHWAL, DISTRICT JUDGE
(COMMERCIAL COURT)-01 : SOUTH DISTRICT,
SAKET COURTS : NEW DELHI
CS (COMM) NO. 379/2021
CNR NO. DLST01-009201-2021
M/S. MEDICAL DEVICES ENDOSCOPY
Proprietor Mr. Reji Chako
A-3, Flat No. 8, Panchsheel Vihar,
Malviya Nagar,
New Delhi-110017.
Through its AR Mr. Lijo Reji ..... PLAINTIFF
Versus
1. M/S. NESTIVA MEDICARE PVT. LTD.
H.No. 384, First Floor Munirka,
JS Complex, Near Canara Bank,
Opp. Indane Gas Godown,
New Delhi-110067.
Also at : Road No. 1, Yarpur,
Gardanibagh, Patna, Bihar--800001.
Also at : L-125, Old Rangpuri Road,
Opp. Shiv Murti Complex, Mahipalpur,
New Delhi-110037.
2. MR. ANKESH RANJAN
Director,
H.No. 384, First Floor, Munirka,
JS Complex, Near Canara Bank,
New Delhi-110067.
3. DR. AMIT CHAUDHARY
Director,
L-125, Rangpuri Road,
Opp. Shiv Murti Complex, Mahipalpur,
New Delhi-110037.
CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12
..... DEFENDANTS
Date of Institution : 25.11.2021
Reserved for judgment : 13.07.2023
Date of Judgment : 18.07.2023
JUDGMENT:
1. The plaintiff has filed the present suit against the defendants for recovery of Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) along with interest.
2. The brief facts, according to the plaintiff, are that the plaintiff is a sole proprietorship firm and Mr. Lijo Reji is its authorized representative. The plaintiff/firm is engaged in the business of manufacturing and supplying of healthcare goods including endoscopic accessories and has good reputation in the market. It is submitted that the defendant no.1/company is registered under Companies Act, 1956 having its registered office at New Delhi and is running hospital by the name of Nestiva Hospital situated at 384, JS Complex, Munirka, New Delhi- 110067 and Nestiva Hospital Patna situated at Road No.1, Yarpur, Gardanibagh, Patna, Bihar-800001. It is submitted that Sh. Ankesh Ranjan/defendant no.2 and Dr. Amit Chaudhary/ defendant no.3 are the directors of the defendant/company.
3. According to the plaintiff, the defendant no.1/company through defendants no.2 and 3 approached the plaintiff firm for supply of endoscopic accessories for installation at their aforementioned hospitals at Delhi and Patna, Bihar and also told the plaintiff that defendant no.1/company is going to extend its CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 operation throughout the country. It is submitted that after considering the fact that defendants are running hospitals in Delhi and Patna and believing their assurance the plaintiff decided to supply the endoscopic machines to defendant no.1/company. It is submitted that the plaintiff/firm shipped the medical devices at the desired locations as per the orders placed by the defendant. It is submitted that in the year 2017-18, the plaintiff firm had supplied endoscopy and lacroscopy machines to the defendant no.1/company at Delhi for which some payments were also made by the defendant no.1/company.
4. It is submitted that the orders were made for supply of the machine placed by the defendants in the month of June-July 2020 and the plaintiff firm had supplied the machines at Patna, Bihar vide invoice dated 27.06.2020 bearing invoice no. MDE/050/2021 and invoice dated 21.07.2020 bearing invoice no. MDE/052/2021. It is submitted that after supply of the machineries at the desired location of defendants, the plaintiff also installed the machineries at the work site of the defendants company on 29.07.2020 and demonstration and training was also provided to the staff members of the defendants. It is submitted that after supply of machineries, the plaintiff approached the defendants for the payments but defendants have failed to make the payments. It is submitted that the defendants no.2 and 3 showed their inability to pay due to cash crunch and pandemic and after several follow ups negotiated for discount and also for waiver of interest and penalty. They offered to repay on monthly EMI and the plaintiff had agreed to their said proposal and a meeting was fixed on 24.05.2021 at their hospital situated at CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 Delhi. In the said meeting, the defendants agreed to pay Rs.10,45,000/- and the defendants gave 40 post dated cheques with an assurance that the same will be honoured upon presentation. Believing the assurance given by defendants no.2 and 3, the plaintiff started presenting the post dated cheques given by defendants no.2 and 3, but to the utter shock of plaintiff, only two cheques were honoured and remaining were dishonoured for the reason "payment stopped by the drawer". After constant follow up, a total of five cheques of Rs.27,145/- each were finally cleared but defendants did not make the balance payment. The plaintiff firm, on request of defendants, again presented the cheques but out of 40 cheques given by defendants a total of 13 cheques have been dishonoured. It is submitted that the plaintiff also came to know from its sources that the defendants no.2 and 3 were in process of selling all their assets including the hospitals i.e. Nestiva Hospital, Delhi and Nestiva Hospital, Patna, Bihar and they are planning to run away after selling all its machineries. It is submitted that the defendants are jointly and severally liable to pay the principal amount of Rs.9,50,075/- alongwith future interest @ 12% p.a. and damages etc.
5. Summons of the suit were issued to the defendants and Sh.
Amit, ld. Counsel (Mob. 9990772622, Email ID [email protected]) had appeared on behalf of the defendants and filed written statement dated 26.04.2022 on behalf of the defendants contending that the plaintiff has no cause of action or any part thereof against the defendant and that the suit is fictitious, frivolous and vexatious and is liable to be CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 dismissed; that the suit is barred under the doctrine/principle of rule of approbate and reprobate; that the plaintiff has filed false, baseless and frivolous suit for wrongful gain against the defendants on the basis of forged documents. It was contended that the plaintiff is using fabricated documents and suppressing the material facts to get the recovery of the alleged amount wrongly and illegally.
6. According to the written statement filed on behalf of defendants, there is nothing outstanding against the defendants and the defendants had been diligent in payment and has already made payment regarding the accessories. It is contended that the defendant company had placed the order for microscope and endoscope and these two machines were to be installed at their hospital at Patna, Bihar. Orders for supply of the machine placed by the defendants in the month of June-July 2020 and the plaintiff firm supplied the same vide invoice dated 27.06.2020 and invoice no. MDE/050/2021 dated 21.07.2020 was admitted and installation on 29.07.2020 at Patna, Bihar is also admitted and it is contended that the invoice no. MDE/050-20-21 dated 27.06.2020 for Olympus CV-260 series video endoscopy system for Rs.4,48,000/- had been duly paid to the plaintiff. It is contended that the plaintiff was requested several times for proper training to the staff of defendant/company at Patna as the machines are very sensitive and the same required extreme caution and care. It is contended that the defendants have cleared the dues on 04.12.2020 when the plaintiff had provided the staff training.
7. It is contended that the payments have already been made CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 on 04.12.2020 to the plaintiff and hence the question of payment on or after 24.05.2021 does not arise at all. It is contended that the cheques were issued at the time of purchase of the machines and later on the same were paid through electronic transfer and the plaintiff was directed not to present the same. It is further contended that the defendants also asked for return of cheques to the plaintiff but the plaintiff did not return the same and later on, the plaintiff used the same for the purpose of repairing and servicing of the machines. It is contended that the defendants demanded the cheques back but the plaintiff did not return the same and hence the defendants had no other option but to stop the payment to prevent the misuse of the same. It is contended that the plaintiff is trying to mislead the court as the machines installed by the plaintiff used to stop working properly and the defendants had to call the plaintiff for proper repair and servicing. Pertinently, the written statement dated 26.04.2022 filed on behalf of the defendants bears signature of Mr. Amit Chaudhary/defendant no.3 and it also bears the stamp of defendant no.1/company but same was defective as no statement of truth was filed on record. No affidavit of admission and denial was filed by the defendants and the defendants did not cure the defects pointed out in the written statement despite directions passed on 23.12.2022 and the pleadings not supported with statement of truth were struck off in terms of Order 6 Rule 15A of CPC (as amended and applicable to Commercial Disputes) vide order dated 10.02.2023.
8. From the pleadings of the parties, following issues were framed on 26.11.2021 :
CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12
1. Whether the plaintiff is entitled for recovery of the suit amount as prayed for? OPP
2. Whether plaintiff is entitled to the interest, if so, at what rate and for which period? OPP
3. Relief.
9. On behalf of the plaintiff, Sh. Lijo Reji, AR of the plaintiff company has been examined as PW-1 and he has relied upon the following documents:
1) Ex.PW1/1 : Authorization letter dated 21.09.2021
2) Ex.PW1/2 : Invoice number: MDE/050/20-21dated 27.06.2020
3) Ex.PW1/3(colly):Installation report dated 29.07.2020
4) Ex.PW1/4(colly): Printout of e-mails exchange between the parties.
5) Ex.PW1/5 : Office copy of the installation report dated 12.02.2018;
6) Ex.PW1/6 : Copy of invoice number: MDE/052/20- 21 dated 21.07.2020;
7) Ex.PW1/7(colly): Copies of invoice number MDE/051/20-21 dated 16.07.2020 and invoice number 009 dated 15.01.2018;
8) Mark X(colly) : Copies of the 33 cheques alongwith return memos (page 57 to 76).
10. On 13.04.2023, Advocate Mr. Amit (Enrollment No. D/3095/2011) filed an application U/o 6 Rule 17 CPC for amendment of the written statement which was dismissed vide detailed order dated 13.04.2023. During the course of proceedings, the counsel for the defendants stopped participating in the proceedings and the defendants did not choose to cross examine the plaintiff's witness/PW-1 nor any evidence was led CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 by the defendants. Accordingly, the defendant's evidence was closed vide proceedings dated 05.06.2023.
11. I have heard the detailed submissions of Mr. Vibhor Verdhan, ld. Counsel for the plaintiff and have carefully perused the record. The defendants have not chosen to adduce evidence or advance any arguments and my issue-wise findings on the basis of evidence on record is as under :-
ISSUE NO. 1 :
Whether the plaintiff is entitled for recovery of the suit amount as prayed for? OPP
12. The onus to prove issue no.1 was upon the plaintiff. PW-1, Mr. Lijo Reji appearing on behalf of the plaintiff has categorically averred that the plaintiff is the proprietorship firm and he proved his authorization letter dated 21.09.2021, Ex.PW1/1. He deposed that the plaintiff is engaged in the business of manufacturing and supplying of healthcare goods and the plaintiff had supplied the machines to the defendant no.1/company vide invoices Ex.PW1/2 (colly) and that the plaintiff had also demonstrated and provided training to the staff members of the defendant no.1 on 29.07.2020. He also proved the installation report, Ex.PW1/3 (colly). The copies of e-mails exchanged between the parties are Ex.PW1/4 and according to PW-1, an amount of Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) is outstanding against the defendants. The testimony of PW-1 Mr. Lijo Reji has remained unrebutted and unchallenged in absence of any cross examination by the defendants and there is no reason to disbelieve the CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 testimony of the plaintiff's witness and the documents proved on record. The defendants had claimed in para 3, 6, 8 and 10 of their written statement dated 26.04.2022 that they had already paid to the plaintiff and there is nothing outstanding against the defendants. According to the defendants, they had cleared the dues on 04.12.2020 when the plaintiff provided staff training but the defendants have not chosen to cross-examine the plaintiff's witness/PW-1 nor has cared to enter into the witness box to prove their said claim. No witness has been got examined or summoned by the defendants nor any document has been proved on record by the defendants to substantiate their claim of having already paid to the plaintiff. No statement of account has been filed on record by the defendants and nothing has been brought on record by the defendants to establish the payment of the invoices in question. In the absence of any evidence being brought on record by the defendants and the uncontroverted, unrebutted and unchallenged testimony of PW-1 and the documents proved on record, this Court is satisfied that the plaintiff has proved its case in respect of the due amount i.e. Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) on the scales of preponderance of probabilities and the plaintiff is entitled for recovery of the same. The ld. Counsel for plaintiff has contended that the defendants are jointly and severally liable to pay the said amount. However, in the case titled as Space Enterprises v. Srinivasa Enterprises Ltd., MANU/DE/0079/1998 : 72 (1998) DLT 666, the Hon'ble Delhi High Court while dealing with liability of the director of a company has made following observations :-
CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 "11. In so far as the liability of defendant No. 2 is concerned, the effect of the registration of a company under Section 34 of the Companies Act is that it is a distinct and independent person in law and is endowed with special rights and privileges; a person distinct from its members. Consequently, the company is enable to contract with its shareholders also, to use common sea and acquire and hold property in its corporate name. The company is distinct from its shareholders and its directors.
Neither the shareholders nor the director can treat the companies assets as their own. Directors of a company are liable for misappropriation of company's funds and other misfeasance, but not for an ordinary contractual liability of the company. The liability of the members or the shareholders or the directors is limited to the capital invested by them. So long the liability is not unlimited under Sections 322 and 323 of the Companies Act and no special resolution of the limited company making liability of the director or the managing directors unlimited is alleged. The doctrine of lifting of the corporate veil could be applied in cases of tax evasion, or to circumvent tax obligation or to perpetuate fraud or trading with an enemy are concerned. It is not alleged that the director has lost the privilege of limited liability and has become directly liable to the plaintiff i.e. creditor of the company on the ground that with his knowledge the company carries on business six months after the number of its members was reduced below the legal minimum number. In absence of such a case it would be totally inappropriate and improper to say that defendant No.2 is patently covered under Order 37 CPC.
12. There is no contract between the plaintiff and defendant No. 2, therefore, case against defendant No.2 is not based on any contract nor there is any such liability on defendant No. 2. Consequently, there is no cause of action against defendant No. 2. since there is no cause of action against defendant No. 2, the plaint is liable to be rejected so far as defendant No. 2 is concerned."
CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12
13. In the present case, there is admittedly no assertion in the plaint that the defendants no.2 and 3 had extended any contract of guarantee or had even undertaken to make payment to the plaintiff on behalf of the defendant no.1/company. It is also well settled that fraud, if alleged, must be pleaded meticulously and in detail and proved to the hilt. No case of joint and several liability is, therefore, made out in the present matter and the liability to pay is the sole liability of the defendant no.1/company. The defendants no.2 and 3 being directors of the defendant no.1/company cannot be fastened with the liability of the defendant no.1/company as there is no case of the defendants no.2 & 3 being guarantors or indemnifiers of the payment of the amount due from the defendant no.1/company. Accordingly, the plaintiff is entitled for the recovery of Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) from defendant no.1/company only. No case of joint and several liability has been made out against the defendants no.2 and 3. Further, the suit is well within limitation.
14. In view of the foregoing discussion and uncontroverted evidence brought on record, the plaintiff is held to be entitled for recovery of an amount of Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) from the defendant no.1/M/s. Nestiva Medicare Pvt. Ltd. Accordingly, the issue no.1 is decided in favour of the plaintiff and against the defendant no.1/company.
ISSUES NO. 2 :
Whether plaintiff is entitled to the interest, if so, at what rate CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 and for which period? OPP
15. The onus to prove issue no. 2 was upon the plaintiff. The plaintiff has claimed the pendente-lite interest and future interest @ 12% p.a. on the suit amount till its realization. However, in the considered opinion of this Court, an interest @ 9% towards pendente lite and future interest would be justified in the present matter in view of prevailing banking rates and accordingly, an interest @ 9% per annum is hereby awarded in favour of the plaintiff on the suit amount from the date of the institution of the suit till its realization. Accordingly, the issue no.2 is decided in favour of the plaintiff and against the defendant. ISSUE NO. 3 :
Relief.
16. In view of the findings on the aforesaid issues, this court holds that the plaintiff is entitled to a decree in the sum of Rs.9,50,075/- (Rupees Nine Lakh Fifty Thousand and Seventy Five Only) in favour of the plaintiff and against the defendants alongwith pendente-lite and future interest @ 9% p.a. on the suit amount from the date of institution of the suit till its realization.
17. The plaintiff has also claimed the costs of the suit. Keeping in view Section 35 and 35A of CPC and particularly when the defendant is responsible for the litigation, the defendant no.1/company is hereby held to be liable to bear the costs to the extent of court fees etc. Accordingly, the plaintiff is entitled for the costs of litigation. The advocate fee is assessed to be Rs.20,000/- only and same is hereby awarded in favour of the plaintiff. Cost of the suit i.e. court fee is also awarded in favour CS (Comm) No. 379/2021 M/s. Medical Devices Endoscopy Vs. M/s. Nestiva Medicare Pvt. Ltd. & Ors. Page No.: 12 of 12 of plaintiff. Decree sheet be prepared accordingly.
18. File be consigned to record room after necessary compliance.
Announced in the open Court Dated : 18th July, 2023 (Prem Kumar Barthwal) District Judge (Commercial Court)-01, South District/Saket Courts, New Delhi.
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