Bangalore District Court
M/S Evans Consoles Corporation vs M/S Navrathna Solutions Pvt Ltd on 28 November, 2024
1
Com.O.S.No.544/2023
KABC170010752023
IN THE COURT OF LXXXII ADDL. CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH.83)
THIS THE 28th DAY OF NOVEMBER 2024
PRESENT:
SUMANGALA S BASAVANNOUR., B.COM, LL.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com. O.S. No.544/2023
BETWEEN:
M/s Evans Consoles
B.V, Einsteinlann 28,
289 CC Rijswijk, The
Netherlands, Having
Head office located at:
Evans Consoles
Corporation, 1616,
27th AVE NE, Calgary,
AB Canada,
represented by its
Authorized signatory,
Mr. Mandeep Singh
Khillan.
: PLAINTIFFS
2
Com.O.S.No.544/2023
(Rep. by S.
Ramakrishnan -
Advocate)
AND
1. M/s Navratna
Solutions Private
Limited, Having its
registered office at No.
36, Shukra, 2nd Floor,
15th cross road, MPL
Shastri Road,
Malleshwaram,
Bangalore - 560 003,
represented by its
Director, Bharath
Kumar Bhawarlal.
2. Bharath Kumar
Bhawarlal, Director -
M/s Navratna Slutions
Private Limited, no.
36, Shukra, 2nd Floor,
15th cross Road, MPL
Shastri Road,
Malleshwaram,
Bangalore - 560 003.
3
Com.O.S.No.544/2023
Defendant No.1 and 2
also availalbe at:
Ground Floor, Flat No.
619/E, 36th cross, 2nd
Block, Rajajinagar,
Bangalore - 560 010.
: DEFENDANTS
(Represented by Sri. D.L.
Manjunath. - Advocate)
Date of Institution of the 19.04.2023
suit
Nature of the suit (suit on
pronote, suit for declaration Recovery Suit
& Possession, Suit for
injunction etc.)
Date of commencement of
recording of evidence 02.12.2023
Date on which judgment 28.11.2024
was pronounced
Total Duration Year/s Month/s Day/s
01 07 09
(SUMANGALA S BASAVANNOUR),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
4
Com.O.S.No.544/2023
JUDGMENT
This suit is filed by the Plaintiff for recovery of money, the Defendant No.1 and 2, to jointly and severally pay to the Plaintiff a sum of Rs. 91,00,022.75 with interest at 12% per annum until the date of payment.
2. The Brief facts of the Plaint are as follows:-
The Plaintiff is a 100% subsidiary of Canadian Corporation registered under the laws of Canada and was incorporated in 1980 and is into the business of providing innovative solutions for mission-critical operations. Further, the Plaintiff provides services such as consulting, design services, construction and other such services to cater to the needs of service buyers.
The Defendant is a private limited company registered under the Indian laws and is having its registered office at Bangalore and is into the business of providing transport IT, control room infrastructure and communication specialist infrastructure supplies. Against a purchased order dated 04.09.2018 bearing PO number NSPL 18-19-41 ordered by 5 Com.O.S.No.544/2023 Defendant, the Plaintiff supplied operational goods being customize consoles for west REMC/Siemens, under project number 17-5237-301 amounting to USD 1,58,170.17 and raised 2 invoices bearing number AI000421 and AI000460 dated 26.09.2018 and 31.12.2018 amounting to USD 43,123.45 and USD 1,15,046.72. The present dispute pertains only to the invoice No. AI000460 for USD 1,15,046.72. As regards this invoice, the Defendant has only made a total payment of 42219 on the various dates mentioned herein and thus is still due a sum of USD 72,827.72 excluding interest.
Transaction made REceived Date Amount (USD) 07.08.2020 13,000 08.07.2021 14,219 31.01.2022 15,000 The Plaintiff has been requesting the defendant to make the payments and in this regard the Plaintiff has sent many emails to the Defendant beginning from 31.12.2018 and has also sent multiple reminders through phone calls, messages 6 Com.O.S.No.544/2023 and letters etc., The Defendant through email correspondence dated 19.12.2019 acknowledged the amount to be paid admitted its liability and nevertheless made irregular payment without fulfilling its obligation of making full payments towards the invoices raised by the Plaintiff.
The Defendant kept on giving excuses for the delay in making the payment towards the due amount. Further, in the email conversation dated 05.11.2020 the Plaintiff reminded the Defendant that it has been almost 2 years since the Plaintiff started to raise invoices towards the various services rendered by the Plaintiff to the Defendant. Defendant never had any intent to make the payment towards the services and yet intended to enrich itself by not making the payment at the cost of the loss of the Plaintiff. As per the email dated 09.08.2021, 16.08.2021 and 31.08.2021, the Plaintiff gently reminded the Defendant about the due amount that are pending towards the services rendered by the Plaintiffs, but to the utter dismay of the Plaintiffs, the Defendants choose to ignore the emails and did not bother to acknowledge the queries for reasons unknown. Plaintiff through email dated 08/09/2021, had communicated to the Defendant that in case if they procrastinate the payment any further then the Plaintiffs will be 7 Com.O.S.No.544/2023 left with no other alternative but to seek legal recourse before the appropriate authority, but the Plaintiff was left aghast as the Defendant informed the Plaintiffs that it will make the payment in coming weeks, but it turned out to be false promise as usual.
The Plaintiff further contended that the Defendant No.2 was the one who was constantly interacting with the Plaintiff and on whose insistence the products were delivered on the basis of the Purchaser Order mentioned hereinabove and he is fully involved in the day to day affairs of the Defendant company and therefore is jointly and severally liable to pay the amount due/suit claim along with Defendant No 1. The Plaintiff also caused a registered legal notice dated 11/12/2021 to the Defendant which got served on 06/01/2022 to the Defendant The Plaintiff further submits that the Defendant even after the expiry of 10 days as mentioned in the legal notice dated 11/12/2021 failed to pay the due amount to the Plaintiff. The Defendant responded to the Plaintiff's legal notice dated 11/12/2021 vide a letter dated 18/01/2022 acknowledging the due amount through the same letter The Plaintiff herein further submits that the Defendant through the letter dated 18/01/2022 assured the Plaintiff that the payment due will be 8 Com.O.S.No.544/2023 made within 6 months from the date of receipt of the legal notice The Plaintiff herein submits that the Defendant continued to make a false promise to the Plaintiff for the payment of the due amount. Through a letter dated 22/03/2022 with Ref No. LC/ECC/0053 the Defendant requested for an additional time period of 5 months and admitted the liability. The Defendant cited Covid-19 as a reason for the delay in making the payment and provided the detailed table for the amount to be paid by the Defendant The true copy of the letter dated 22/03/2022 with Ref No. LC/ECC/0053 is produced herewith as Document No.9 In the said letter the appears to have, on its own volition, suddenly insisted on a further deduction of $4570 for alleged service offered and a supporting invoice for the same which was never hitherto spoken about or discussed. Moreover the alleged invoice speaks of reimbursements of expenses and not services rendered This itself proves the falsity of the claim made by the Defendant. after the receipt of the legal notice dated 11/12/2021 the Defendant paid an amount of $ 15,000 as stated in para 6 of this Plaint. The Plaintiff submits that the Defendant after the above-mentioned amount of $ 15,000 has failed to pay the balance/due amount of $ 72,827.72 excluding interest.
9Com.O.S.No.544/2023 The Plaintiff further contended that as on date of defendants owe to the Plaintiff a sum of Rs. 91,00,022.75 ( it is to be noted that the conversion of US to Indian Rupee is based on the conversation rate as on 08.07.2022 as per FX rates of Bank of Canada as available on official website. The suit is filed within the period of limitation prescribed under the limitation Act, 1973 since the amount due has been acknowledged by the Defendants from time to time vide email dated 19.12.2019 and letter/replies dated 22.03.2022, 18.01.2022 and the last payment of USD 15000 was made on 31.01.2022. Hence, this suit.
3. The Defendant No.1 and 2 are filed written statement stating that the averments made by the Plaintiff in the para No.5 is denied. The PO No. NSPL 19-19-041 is not a signed document. Further since the Defendant company is a private limited company, there is no board resolution signed by all the directors on the board for the approval of the purchase transaction hence specifically denied. Further, the Description, reference no. in the PO and the invoices submitted by the Plaintiff is entirely different. As the invoice has no description of the material as per the PO, and mismatch in the project reference no.
10Com.O.S.No.544/2023 The Defendant further contended that none of the transactions were authorized by the Board of Directors of the Defendant company, the email correspondence does not quote any invoices reference, PO reference, since there were many other continuous transactions between the plaintiff and Defendants the email correspondence fails to connect to the said invoice and PO reference claimed by the Plaintiff for payment due and not liable to make the payments as claimed by the Plaintiff. Further in page no. 37 correspondence pertains to BEL project, in page no. 39 project reference no. is mismatch to the PO submitted by the Plaintiff along with plaint, in page no.50 PO no. mentioned differs from the PO in question. Hence on a whole the email correspondence pertains to many other transactions, hence the complete email correspondence is denied.
The Defendant further contention that as per the documents the purchase transaction as claimed by the plaintiff, is an import transaction. The Plaintiffs have not produced any acknowledgment for the materials shipment, Air Cargo/Shipping bills if the material has been Air shipped/Sea shipped, there is no bill of lading, packing list which are the 11 Com.O.S.No.544/2023 documents required in any import transactions. Hence, there is no supporting documents for the material being shipped and received by the Defendants, hence the payment due claimed by the plaintiff is specifically denied. The plaintiff is due to the Defendant for USD 4570 for the services rendered by the Defendant to the plaintiff as this was agreed by the plaintiff to reimburse the expenses incurred by the Defendant. There was no contractual interest rate agreed by the Defendant, nor there is no such clause mentioned regarding the interest in the PO or the invoices raised by the Plaintiff.
The Defendant further contended that the plaintiff has not made a prima facie case and the Documents, such as PO, Invoices, email correspondence fails to establish a particular transaction claimed by the Plaintiff company, further this being an import transaction, plaintiff has not produced any shipment documents, Air Cargo Bills, for the materials being shipped to the Defendants, acknowledgment, installation reports etc., Hence, he prayed to dismiss the suit.
4. Based on the above pleadings, my predecessor in office has framed the following issues :-
12Com.O.S.No.544/2023
1. Whether the plaintiff proves that, material under invoice No. A1000460 and Invoice No. A1000421 are being shipped and received by the Defendants ?
2. Whether the Plaintiff proves that Defendant No.1 and 2 are jointly and severally liable to pay for a sum of Rs.
91,00,022.75 ($ 1,14,732.71) ?
3. Whether the Plaintiff proves that Defendant is liable to pay the interest at the rate of 12% per annum till its realization ?
4. Whether the Plaintiff is entitled for relief as prayed for ?
5. What decree or order ?
5. In support of the plaintiff's case plaintiff is examined as PW.1 and got Ex.P.1 to Ex.P.13 and closed his side evidence.
On the other hand the defendant is examined as DW.1.
6. Heard arguments of both the sides.
13Com.O.S.No.544/2023
7. My answer to above issues are as under:
1. Issue No.1 :- In the Affirmative
2. Issue No.2 :- In the Affirmative
3. Issue No.3 :- In the Partly Affirmative.
4. Issue No.4 :- In the Partly Affirmative.
5. Issue No.5: As per the final order, On the following:
REASONS
8. ISSUE No.1 to 4: As these points are interlinked with each other, they are taken together for discussion, to avoid repetition.
9. The plaintiff to substantiate its case, the Authorized representative of the plaintiff company is examined as Pw1. Pw1 in his evidence reiterated the averments of the plaint and got marked Ex.P1 to P13. The defendant counsel cross- examined in detail. The facts elicited during cross-examination is to be considered herein after at appropriate stage.
14Com.O.S.No.544/2023
10. On the other hand the Defendant to substantiate it is case the director of the defendant company examined as Dw1.
11. It is the case of the plaintiff that the present dispute pertains only to the invoice No. AI000460 for $ 1,15,046.72. As regards this invoice, the Defendant has only made a total payment of $ 42,219 on the various dates mentioned and this is still due a sum of $ 72,827.72 excluding interest.
12. On the other hand the Defendant contention that, there is no board resolution signed by all the directors on the board for the approval of the purchase transaction hence specifically denied. Further the description, reference no. in the PO and the invoices submitted by the plaintiff is entirely different. Since there were many other continuous transactions between the plaintiff and Defendants the email correspondence fails to connect to the said invoice and PO reference claimed by the plaintiff for payment due and not liable to make the payments as claimed in the plaintiff. The plaintiff have not produced any acknowledgment for the Material shipment, Air cargo/shipping bills if the material has been Air shipped/ sea shipped, there is 15 Com.O.S.No.544/2023 no bill of lading, packing list which are the documents required in any import transactions.
13. The cross-examination of DW.1 is relevant for considered of these issues.
14. During Cross-examination of DW.1, dw.1 stated as under:
"It is true to suggest that, I shipped and installed the consoles at the end customer's locations".
It is true to suggest that, as per the Ex.P.8 project competition report, we have admitted to complete the installation at various project site".
The signature found on Ex.P.2(a) and signature at page no. 16 of Ex.P.8 are pertains to me".
Now I see Ex.P.6 - email found in Ex.P.6 it is my official Email ID. It is true, the email dated 07.01.2020 is reply sent by us to the email sent by the plaintiff dated 19.12.2019".
It is true to suggest that, seal and signature found at page no.16 of Ex.P.8 pertains to me"
"the signature and seal at purchase order number mentioned in Ex.P.2 and page no. 16 of 16 Com.O.S.No.544/2023 Ex.P.8 are one and same. This signature found on Ex.P.2 (a) and signature at page no. 18,19,20 of Ex.P.2(a) are pertains to me".
15. From Ex.P.2 PO number NSPL 18-19-041 it is clear that, the Defendant company has placed a purchase order for supply of typical console, packing and crating charges, revised typical console and added storage charge per month the total quantity is 24 total value is 1,58,170.17.
16. From Ex.P.3 performa invoice it shows that, on account of invoice NO. A1000421 purchase order No. NSPL 18-19-041 dated 26.09.2018 shipping to Navratna Solutions Pvt Ltd amount to Rs. 43,123.45 dollers.
17. Ex.P.4 invoice it shows that invoice NO.A1000460 purchase order no. NSPL 18-19-041 dated 31.12.2018 shipping to Navratna Solutions Pvt Ltd amount of Rs. 115046.72 dollers
18. Ex.P.6 email dated 22.06.2021 from the Defendant to the Plaintiff in this email the Defendant stated that"
"Thank for your email, once again our sincere apologizes for this long delay.17
Com.O.S.No.544/2023 Will for you give you any reasons now but this time due to lockdown for last 2 months, we were unable to transfer the payments. We will clear all the payments till the last dollar on or before July 31st in 2 to 3 installments we will start paying from next week onwards.
We make sure to clear all the outstanding and win bank your confidence of our long term relationship and to opposing/selling our control room consoles in India.
This was very bad phase for us and you all have supported us during this period. Thank you again for all your held and patience.
That's our commitment that we will not only clear the o/s but win back your confidence."
From these mails it is clear that all the correspondence regarding the NSPLAR and this email conversations between the plaintiff and the Defendant from 19.12.2019 to 25.11.2021.
19. The mail dated 19.12.2019 regarding invoice No. A1000460 it is clear that all the correspondence regarding the purchase order No. NSPL18-19-041.
20. From Ex.P.5 it is clear that the purchase order by the Defendant towards invoice NO. A1000460 and total invoice 18 Com.O.S.No.544/2023 balance amount is 72,827.72 in US dollar and interest Due 39,726.14 in US dollar and total collectable 112553.86 in US dollar.
21. The DW.1 during cross-examination has categorically admitted that, E-mail I.D. found on Ex.P.6 is pertaining to him and he has also admitted that he has sent a reply through mail dated 07.01.2020 in page No. 52 and 53 of Ex.P.6, reply to mail sent by the Plaintiff on 19.12.2019.
E-mail dated 07.01.2020 discloses as under:
"Thank for your email, we wish to explain the actual reasons for the delay in payments, We are well capitalized for our business and not using this amount for our business.
We had taken WEST REMC Project on very price aggressive pricing (almost loss) due to pressurs from all the ends, hence we had to split & adjust the billing to get away with custom duty as much as possible & were successful in doing the same While making any import remittance payments from India, we have to submit the Bill of Entry (BOE) to Bank which we get while clearing the imported goods. We had under invoiced the amount for adjusting the custom duty due to cost, we had 19 Com.O.S.No.544/2023 paid the amount for whatever the amount we had invoiced for customs.
Unfortunately for us, in the recent past, government compliance & rules have become very strict hence we are unable to make the payments for the balance invoice amount as Consulting or service invoice since there is no BOE.
If we pay the amount without submitting BOE to bank, we will be penalising almost 30-40% of the amount which again will be huge loss for us & hence we are working with our auditors & bankers for the solution, but till now we are yet get any update.
Our auditors & bank have assured to sort out this documentation issue by this week or latest next week & we should be able to start making the payments to Evans & close our outstanding This is the first time after our association with Evans, it is happening & this is very genuine issue which we are facing currently. We are seriously working on the same to resolve & pay the balance amount within Feb 15th Please be remain confident on us & we are growing company and are serious about our business
22. On perusal of the Ex.P.6 email dated 07.01.2020 it is clearly shows that the Defendant has undertaken to pay the amount. On the contrary, during cross-examination, Dw.1 20 Com.O.S.No.544/2023 stated that, the said email conversation is not related to the suit transaction and it is related to some other transaction and he can produce the documents to shows that these mails are pertaining to projects of Infosis and BEL. Inspite of undertaking the defendant failed to produce the documents, hence there is no documents to shows that the email conversation dated 07.01.2020 is not pertaining to invoice no. A1000460. Though the D.W.1 has stated that these email conversation pertaining to project of infosis and BEL, except the bare contention he has not produced any single scrap of paper before this court. Under these circumstances, the contention of the defendant the email conversation is pertaining to other transaction is not acceptable.
23. Furthermore the DW.1 during cross-examination has categorically admitted that the Invoice number mentioned in Ex.P.4 and invoice number mentioned in Page no.53 of Ex.P.6/ e-mail dtd.19.12.2019 are one and same.
24. Furthermore, Ex.P.8 mail dated 05.09.2018 mail sent by the Defendant to the plaintiff it clearly shows that, purchase order and description and also price quotation and terms and conditions:
21Com.O.S.No.544/2023
25. The DW.1 has admitted that as per clause 5.6 of terms and conditions :
If the buyer is responsible for shipping the work, the shipping term will be ex-works(named placed of delivery) as defined in incoterms 2010. Evans will place the work on Evans' loading dock, suitably packaged for export shipment and advise the buyer in writing it is available for pickup. If pickup does not occur with 3 working days, additional cost may apply. The buyer shall communicate to evans the method of transport to ensure the packaging is appropriate, subject to the shipping provisions contained herein. Title pass to the buyer or their representative carrier, signs the bill of lading. The buyer is responsible for damages during loading, transport or off-loading."
It is clear from the above clause that, since the defendant has liability to transport the product from the manufacturing site. So, the Airway bills are definitely in the custody of the defendant. Under these circumstances, the contention of the defendant that there is no bill of lading, packing list which are the documents required in any import transaction are not produced by the plaintiff is not acceptable.
26. From Ex.P.7 demand notice dated 11.12.2021 given by the plaintiff for calling upon the defendant to pay the due 22 Com.O.S.No.544/2023 amount in respect to the invoice No. A1000421 and A1000460. It is admitted fact hat the defendant has given a reply letter as per EX.P.9 dated 18.01.2022 wherein is categorically stated that, "we shall be making balance payment of $.72,000(Actual outstanding) within 6 months period from now."
27. From Ex.P.9 reply letter dated 18.01.2022 given by the Defendant it is proved that defendant has been admitted the purchase order at Ex.P.2 and invoice at Ex.P.4 and also undertaken to pay the actual outstanding amount. DW.1 categorically admitted that, they have been installed the consoles at various locations.
28. From EX.P.5, Ex.P.6 and Ex.P.8 it is clearly proved the Defendant has placed purchase order towards invoice no. A1000460 and undertaken to pay the balance amount against the said invoice. Further, the Defendant has not disputed the ledger account at Ex.P.12 during the cross-examination of PW.1. DW.1 clearly admitted in cross-examination regarding one of the payment made against the Ex.P.4 invoice.
29. From Ex.P.9 and Ex.P.10 it is clear proved that the defendant has admitted the liability which matches with amount 23 Com.O.S.No.544/2023 due. Hence, the plaintiff proved that the Defendants are jointly and severally liable to pay 91,00,022.75.
30. The plaintiff claimed the interest at 12% per annum until the date of payment. In this case, there is no agreement regarding the payment of interest in case of delayed payment. However, the present transaction is a commercial transaction. The plaintiff is entitled to claim interest. However by considering the interest prevailing, it is proper to award interest @ 10% per annum from the date of suit till realization. Therefore, the Plaintiff is entitle for recovery of the suit claim amount of Rs.91,00,022.75/- with interest @ 10% per annum from the date of suit till realization. Hence, I, hold that the plaintiff has proved issue No.1 and 2 are affirmative 3 and 4 partly Affirmative.
31. Issue No.5 : -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed in part with cost.
24Com.O.S.No.544/2023 The Defendants are jointly and severally liable to pay a sum of Rs.
91,00,022.75/- to the Plaintiff along with interest at the rate of 10% per annum form the date of suit till the realization.
Draw Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by him directly on computer, verified and then pronounced by me in open Court on this the 28th day of November, 2024).
(SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.
25Com.O.S.No.544/2023 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF P.W.1 Mandeep Singh Khillan LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Board resolution Ex.P.2 Purchase order dtd.04.09.2018 (pg no.16 to 20) Ex.P.3 Proforma invoice no.A1000421, dtd.26.09.2018 Ex.P.4 Proforma invoice no.A1000460, dtd.31.12.2018 Ex.P.5 Ledger statement Ex.P.6 E-mail correspondence between plaintiff and defendant (pg no.24 to 54) Ex.P.7 Copy of demand notice dtd.11.12.2021 Ex.P.7(a) 02 postal receipts and 02 track reports (pg no.61, to (d) 62) Ex.P.8 E-mail dtd.05.09.2018 along with documents attached to the e-mail (pg no.1 to 16) Ex.P.9, Reply notice of defendants along with postal Ex.P.9(a) cover Ex.P.10, Letter issued by defendant no.1 dtd.22.03.2022 Ex.P.10(a along with invoices at page no.21 to 27 and ) postal cover Ex.P.11 Certificate U/s.65b of Indian Evidence Act 26 Com.O.S.No.544/2023 Ex.P.12 A snapshot of exchange rate as on 08.07.2022 (pg no.67, 68) Ex.P.13 PIM report dtd.01.02.2023 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT DW. 1 Bharath Kumar LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT NIL (SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.