Delhi District Court
Classic Switchgears And Control ... vs A-1 Design And Construction Private ... on 3 June, 2024
IN THE COURT OF MS. PRABH DEEP KAUR: DJ-05:
SOUTH EAST DISTRICT: SAKET COURTS: N. DELHI
CS DJ NO. 11717/2016
CNR NO. DLSE01-005195-2016
In the matter of :-
1. M/s Classic Switchgears & Controls Pvt Ltd,
Through is Director Sh. Subrat Jain,
38/2/30, Site-4, Industrial Area,
Sahibabad, District Ghaziabad, Uttar Pradesh-201010.
.......Plaintiff.
1. A-1 Design & Construction Pvt Ltd,
Through its Promoter / Director Amar Mehrotra,
Registered office at E-98, 1st Floor, Lajpat Nagar, New Delhi-
110024.
2. Sh. Ammar Mehrotra,
Promoter and Director of,
A-1 Design and Construction Pvt Ltd,
Office at: I-28, Lajpat Nagar-II, New Delhi-110024.
3. Ms. Shikha Khanna,
The Director, A-1, Design and Construction Pvt Ltd &
also of M/s S.M. Design Construction Syndicate,
At: E-95, Ist Floor, Lajpat Nagar, New Delhi.
4. Sh. Vivek Khanna,
The Director, A-1, Design and Construction Pvt Ltd &
also of M/s S.M. Design Construction Syndicate, At: E-95, Ist
Floor, Lajpat Nagar, New Delhi.
.........Defendants
Date of Institution : 10.08.2016
Arguments heard on : 19.04.2024
Date of Judgment : 03.06.2024
CS DJ NO. 11717/2016 Page No. 1 of 34 dated 03.06.2024
SUIT FOR RECOVERY OF RS. 33,49,129/- (RUPEES
THIRTY THREE LAKH FORTY NINE THOUSAND AND
ONE HUNDRED AND TWENTY NINE ONLY).
JUDGMENT
1. Vide this judgment, the suit of the plaintiff for recovery of Rs. 33,49,129/- alongwith interest and cost filed against the defendant has been disposed off.
2. The factual background of the case, as gathered from the plaint is that:
2 (a) The plaintiff is a duly registered company and Sh.
Subrat Jain being Director of the company, has been authorized vide board resolution dated 12.09.2013 to file institute and contest the present suit. The defendant no. 1 is also a duly registered company and defendant nos. 2 to 4 are owners/Directors of defendant no.1 company. The plaintiff is carrying business of manufacturing, assembling marketing of electrical products.
2 (b) In year 2008-2009, Defendant-Company had received a Civil Contract from Symbiosis Society for construction of building complex for Law College in Sector 62, NOIDA. The plaintiff company was approached by Directors, defendant nos. 2 and 3 on behalf of defendant-company seeking supply of electrical goods and installation on job basis from plaintiff company and the contract was actually assigned to Mr. Amar Mehrotra of M/s. S. M. Design Construction Syndicate. 2 (c) It is further stated that on 31.07.2009, confirmation was given to quotation dated 21.07.2009 of plaintiff company and purchase order was placed by defendant company through its allied/subsidiary company named S. M. Design Construction CS DJ NO. 11717/2016 Page No. 2 of 34 dated 03.06.2024 Syndicate for providing lighting and cable for Symbiosis Institute of Law at Sector-62, NOIDA.
2 (d) It is further stated that on 04.12.2009, another confirmation was given to quotation of Plaintiff- Company dated 02.11.2009 and purchase order was accordingly placed by Defendant No. 1 for Sub Station Work at project site at A-47 & 48, and ida Sector-62 NOIDA. On 04.12.2009, one more confirmation was given to quotation of Plaintiff Company dated 19.11.2009 and purchase order was placed by Defendant- Company for Earthing and Lighting Arrestor for Academic Block in Symbiosis Institute of Law at Sector-62, NOIDA. 2 (e) It is further stated that the goods and work jobs as desired through purchase orders stand supplied and done to satisfaction of Defendant-Company. During progress of impugned work, the Plaintiff-Company kept submitting running bills pertaining to goods supplied and jobs done, whereby Defendant-Company have also made few partial payments to Plaintiff-Company.
2 (f) It is further stated that against invoice no. 002 dated 20.04.2010, invoice no. 008 dated 03.05.2010, invoice no. 010 dated 02.05.2010, invoice no. 011 dated 03.06.2010, invoice no. 013 dated 18.06.2010, invoice no. 007 dated 28.09.2010, invoice no. 008 dated 28.09.2010, invoice no. 009 dated 28.09.2010, invoice no. 010 dated 28.09.2010 as have been raised by Plaintiff Company for goods supplied and jobs done were collectively of Rs. 46,11,644.00 (Rupees Forty Six Lacs Eleven Thousand Six Hundred And Forty Four Rupees) but only a sum of Rs. 27,79,017.00 (Rupees Twenty Seven Lacs Seventy Nine CS DJ NO. 11717/2016 Page No. 3 of 34 dated 03.06.2024 Thousand and Seventeen Rupees) was paid by Defendant- Company against the mentioned invoices, consequently, a sum of Rs. 18,32,627.00 (Rupees Eighteen Lacs Thirty Two Thousand Six Hundred and Twenty Seven Rupees) has not been released. Statement of Ledger Account pertaining to Defendant -Company was duly reflected in the balance sheet of the Plaintiff-Company in audit report of March 2011.
2 (g) It is further stated that the Plaintiff had issued legal notice dated 02.01.2012 and dated 04.06.2012 to Defendants demanding payment of outstanding amount along with an interest @ 3% per month (payable in event of default as per terms as mentioned on sale invoices). Every time, on receipt of Legal Notice, Directors of defendant no. 1 company i.e. defendants no. 2 to 4 have agreed to make payment of outstanding amount with interest and crave time. The Directors of Defendant-Company have perpetually diverted the payments to Plaintiff-Company, highlighting their dispute with Symbiosis pending adjudication vide O.M.P no. 527 of 2010 all before this Hon'ble Court. All promised dates of payment kept expiring but the outstanding amount has not been made.
2 (h) It is further stated that the Plaintiff-Company has finally sent legal notice dated 22.07.2013 calling upon Defendants to pay outstanding dues within 3 weeks failing which the Defendant-Company is liable to be wound up. The Defendants have neither replied the notice nor made any payment to Plaintiff.
2 (i) It is undisputed that Defendant-Company accepted the goods from Plaintiff- Company and appropriated the same. It CS DJ NO. 11717/2016 Page No. 4 of 34 dated 03.06.2024 is also uncontroversial that during execution of work, the running bills were submitted to the Defendant- Company. The submitted bills were duly accepted and never disputed by the Defendants. It is also matter of record that a part payment was also released to Plaintiff-Company. Therefore, it is beyond doubt that the orders placed for supply of goods and rendering work jobs were completed by Plaintiff Company to utter satisfaction of Defendants.
2 (j) It is further stated that as per knowledge of Plaintiff, the Defendants were litigating with Symbiosis Society, Noida and under such circumstances to recover the money from defendants, the winding up petition was preferred by Plaintiff on 08.05.2014 vide Company Petition No. 314/2014. In the said petition when despite service defendants did not turn up, the Hon'ble High Court of Delhi directed the Official Liquidator on 23.03.2016 to seal the premises of the Defendants and to proceed with liquidation proceeding. Consequently upon sealing of premises the Defendants approached the Hon'ble Delhi High Court and submitted their defence.
2 (k) The primary defence has been taken by the defendants that one of independent Director Mr. Ashutosh Kumar, the Manager of Plaintiff (at the time of procuring the business) later on procured the business from Symbiosis Society Noida in his individual capacity through his another company and for this reason the Defendant Company made allegation that Plaintiff Company is hand in glove with the Independent Director Mr. Ashutosh Kumar. The actual facts are that Mr. Ashutosh Kumar joined the Plaintiff Company in year 2009 and being a CS DJ NO. 11717/2016 Page No. 5 of 34 dated 03.06.2024 Market Manager he procured business and the company was also new in the market. As the targets are being achieved hence he was made a director in the company with the view that he will bring good business being the Market Manager. Later, while procuring the second purchase order he made certain goof up hence he was being asked to stop doing business for the Plaintiff and is asked to leave Plaintiff's job in year 2010. Thereafter, Mr. Ashutosh Kumar started his own business. It further transpired after receipt of reply of Defendant that said independent director further procured purchase order and executed the same for symbiosis society Noida against interest of Defendant No. 1. 2 (l) It is further stated that it had been informed informally to director of Defendant that Plaintiff Company has no role and connection with said independent director and even shown the resignation of said director. The whereabouts of said independent director is not in the knowledge of the Plaintiff for long.
2 (m) It is further stated that the Hon'ble Delhi High Court on hearing dated 12.05.2016 gave an option to deposit principal amount in case they intend to contest the defence before Civil Court and the Defendant opted to deposit the said amount of Rs. 18,32,627.00 and shown their willingness to contest the case before Civil Court.
2 (n) It is further stated that the plaintiff, since 2012, is diligently making efforts for recovery of his money and finding no solution plaintiff instituting the winding up petition in accordance with law before the Hon'ble Delhi High Court. It is further stated that since 08.05.2014 i.e. till three years of last CS DJ NO. 11717/2016 Page No. 6 of 34 dated 03.06.2024 transaction with Defendant No. 1, Plaintiff instituted the winding up petition before the Hon'ble Delhi High Court and same was diligently contested by Plaintiff since 12.05.2016. 2 (o) It is stated that in order dated 12.05.2016 the Hon'ble Court granted 15 weeks time to the Plaintiff for approaching the civil court. That to get the ambiguity clarified, the Plaintiff immediately approached Hon'ble Delhi High Court seeking clarification in order dated 12.05.2016 for giving liberty to the Plaintiff under section 14 of the Limitation Act. Despite fact that the rights are available with this Hon'ble Court to entertain delay for which Plaintiff diligently contesting his rights before the Hon'ble High Court for realization of his money. 2 (p) It is further stated that an application under section 14 of Limitation Act is also filed herewith with application under section 151 of Code of Civil Procedure before this Hon'ble Delhi High Court.
2 (q) It is further stated that as per the statement of Ledger Account, a sum of Rs. 33,49,129.00 (Rupees Thirty Three Lacs Forty Nine Thousand One Hundred Twenty Nine Rupees) inclusive of Rs 18,32,627.00 towards principal and interest thereon of Rs. (15,16,502.00 calculated till 06.09.2013) @ 3% per month (payable in event of default as per terms mentioned on the sale invoices) is due to Defendant-Company. Reliefs sought by the plaintiff;
i. Decree of Rs. 33,49,129.00 (Thirty Three Lacs Forty Nine Thousand One Hundred Twenty Nine Rupees) inclusive of Rs 18,32,627.00 towards principal and interest thereon of Rs. (15,16,502.00 calculated till 06.09.2013) @ 3% per month CS DJ NO. 11717/2016 Page No. 7 of 34 dated 03.06.2024 (payable in event of default as per terms mentioned on the sale invoices) in favour of Plaintiff and against Defendant; ii. Decree regarding interest amount from 06.09.2013 till finalization of present suit in favour of Plaintiff and against Defendant as deem fit and proper to this Court. Defence of defendant nos. 1, 3 & 4:
3. (a) As per defendants filed written statement wherein it is stated that the plaintiff had filed a winding up petition no. 314/2014 against the defendants and the same was disposed off by the Hon'ble High Court of Delhi on 12.05.2016. 3(b) It is further stated that Mr. Amar Mehrotra is not a Director of Defendant no. 1 company and was never been a director of defendant no. 1 company since its inception. It is denied that M/s S.M. Design Construction Syndicate is an allied /subsidiary company of Defendant no. 1. 3(c) It is further stated that the entire payment has been made by the defendant company to the plaintiff and nothing is due. As there was no due over the defendant company there was no question of payment of any money to the plaintiff company. It is further stated that the bills towards the actual value of the work as approved was always paid to the defendant as per the agreement. As the quality of work and material supplied by the plaintiff was not up to the marks. It was well within the knowledge of the plaintiff that they have no dues against the defendant company and that is why they have not filed any suit against the defendant company.
3(d) It is further stated that the plaintiff cunningly and illegally tried to adopt a method of arm twisting of defendant and CS DJ NO. 11717/2016 Page No. 8 of 34 dated 03.06.2024 filed a winding up petition against it before Hon'ble High Court of Delhi. It is further stated that the entire payments were made to the plaintiff by the defendants. It is further stated that consequently upon sealing of premises the defendant no. 1 approached the Hon'ble High Court of Delhi and submitted their defence.
3(e) The primary defence has been taken by the defendant that one of the independent Director Mr. Ashutosh Kumar, The Manager of Plaintiff (at the time of procuring the business) later on procured the business from Symbiosis Society NOIDA in his individual capacity through his another company and for this reason the defendant company made allegation that plaintiff company is hand in glove with the independent Director Mr. Ashutosh Kumar. It is correct that said independent director further procured purchase order and executed the same for symbiosis society NOIDA against interest of director no. 1. It is further submitted that as soon as the defendant company came to know about the Winding up petition before Hon'ble High Court of Delhi, it appeared before the Hon'ble Court and requested to deposit the amount to prove that the defendant company is capable of making the payment and is not entitled for liquidation.
4. Defendant no. 2 has appeared and has filed application under Order 1 Rule 10 CPC for deletion of his name and the application was dismissed vide order dated 02.11.2017. Thereafter, none appeared on behalf of defendant no. 2 and therefore, the right of the defendant no. 2 to file WS was closed vide order dated 12.03.2018. Thus, the defence of defendant no. 2 has not come on record nor defendant no. 2 has cross examined CS DJ NO. 11717/2016 Page No. 9 of 34 dated 03.06.2024 PWs during cross examination.
5. From the pleadings of the parties, following issues were framed vide order dated 25.05.2018:-
I. Whether the plaintiff is entitled to recovery from the defendant an amount of Rs. 33,49,129/- or any other amount alongwith interest @ 3% per month or at any other rate pendent-lite and future interest on the basis of the grounds taken in the plaint? OPP II. Whether the suit for recovery is barred by limitation? III. Whether the suit of the plaintiff is bad for mis-joinder of parties?OPD IV. Whether the previously instituted suit bearing no. 314/2014, titled as "Classic Switchgears & Controls Pvt. Ltd. Vs. A-1 design & Construction Pvt. Ltd. & Anr." has any bearing on the present proceedings, if so, to what effect? V. Whether the suit of the plaintiff is without any cause of action?
Relief.
6. Thereafter, matter was fixed for plaintiff's evidence.
7. In order to prove his case, Plaintiff examined the Sh. Subrat Jain, Functionary/director of plaintiff company as PW-1. He tendered his evidence by way of affidavit (as Ex. PW1/A) and reiterated the contents of the plaint and has relied upon the documents i.e. copy of Board Resolution dated 12.09.2013 Ex.PW1/1, copy of Certificate of Incorporation Ex.PW1/2 (objected to being photocopy), copy of master details of the plaintiff company Ex.PW1/3 (objected to being photocopy), copy of quotation Ex.PW1/4 (OSR), confirmation purchase order dated 21.07.2009 and 31.07.2009 Ex.PW1/5 (colly.) (OSR), copy of quotation and confirmation order dated 04.12.2009 Ex.PW1/6 (colly.) (OSR) (objected to being photocopy of CS DJ NO. 11717/2016 Page No. 10 of 34 dated 03.06.2024 internal pages 6 to 13), copy of quotation and confirmation order dated 19.11.2009 and 04.12.2009 Ex.PW1/7 (colly.) (OSR) (objected to being photocopy of internal pages 2 to 5), invoice dated 20.04.2010 Ex.PW1/8, invoice dated 03.05.2010 Ex.PW1/9, invoice dated 02.06.2010 Ex.PW1/10, invoice dated 03.06.2010 Ex.PW1/11, invoice dated 28.09.2010 Ex.PW1/12, invoice dated 28.09.2010 Ex.PW1/13, invoice dated 28.09.2010 Ex.PW1/14, invoice dated 28.09.2010 Ex.PW1/15, certified copy of order dated 23.03.2016 Ex.PW1/16, certified copy of order dated 12.05.2016 Ex.PW1/17, copy of statement of ledger account of the defendant company Mark 'A' copy of invoice dated 18.06.2010 Mark 'B', copy of legal notice dated 02.01.2012 Mark 'C', copy of postal receipt dated 03.01.2012 Mark 'D', copy of legal notice dated 04.06.2012 Mark 'E', copy of postal receipt dated 04.06.2012 Mark 'F', copy of legal notice dated 22.07.2013 Mark 'G', copy of postal receipt dated 23.07.2013 Mark 'H', copy of company petition No. 324/14 filed before Hon'ble High Court Mark 'I' and copy of application filed by the defendant before Hon'ble High Court in company petition No. 324/14 Mark 'J'. He was cross examined at length by Sh. J.K. Jha, Ld. counsel for the defendant no. 1, 3 and 4.
8. Thereafter, PE was closed on 29.02.2020 and the matter was fixed for defendant's evidence.
9. In order to prove his case, the defendant no. 4, being director of defendant no. 1 examined himself as DW-1. He tendered his evidence by way of affidavit Ex.DW1/A and relied upon the documents i.e. Certified copy of application dated CS DJ NO. 11717/2016 Page No. 11 of 34 dated 03.06.2024 25.05.2016 alongwith affidavit of plaintiff filed in Hon'ble High Court of Delhi in CO.PET. 324/2014 which is Ex. DW- 1/1(OSR); Certified coy of order dated 02.12.2016 of Hon'ble High Court in CO.PET 324/2014 Ex. DW-1/2(OSR) and Certified copy of order dated 12.05.2016 of Hon'ble High Court in CO.PET. 324/2014 Ex. DW1/3 (OSR) and reiterated the contents of the written statement. He was cross examined at length by Sh. Hitendra Nahata, Ld. Counsel for the plaintiff.
10. Thereafter, the DE was closed vide order dated 24.03.2023 and matter was fixed for final arguments.
11. I have heard Ld. counsel for both the parties and meticulously gone through the record.
12. My issue-wise findings are as follows:-
Issue nos. 1 & 5 I. Whether the plaintiff is entitled to recovery from the defendant an amount of Rs. 33,49,129/- or any other amount alongwith interest @ 3% per month or at any other rate pendent-lite and future interest on the basis of the grounds taken in the plaint? OPP V. Whether the suit of the plaintiff is without any cause of action?
Both these issues are taken up together since they are interconnected and finding on one issue will have bearing on the other. The onus to prove issue nos. I & V was placed upon the defendant.
Arguments on behalf of plaintiff:
12(a) It has been argued on behalf of plaintiff that the transactions between plaintiff company and defendant on. 1 company are not in dispute and admittedly, plaintiff company had CS DJ NO. 11717/2016 Page No. 12 of 34 dated 03.06.2024 supplied goods/material to the defendant company. As per plaintiff, defendants have failed to make the payment of entire amount and therefore, present case has been filed for recovery of the remaining amount. Further, Ld. Counsel for plaintiff has read over the testimony of PW-1 and has argued that there is no dispute as to the board resolution dated 12.09.2013 Ex. PW-1/1, certificate of incorporation Ex. PW-1/2 and master details of plaintiff company Ex. PW-1/3. Further, Ld. Counsel for plaintiff has pointed out towards the order dated 12.05.2016 passed by Hon'ble High Court of Delhi i.e. Ex. PW-1/17 and has argued that there is no dispute that the suit has been instituted through Mr. Subrat Jain who being director of plaintiff company is duly authorized to file the suit on behalf of plaintiff company. Further, Ld. Counsel for plaintiff has pointed out towards the quotations and confirmations Ex. PW-1/4, Ex. PW-1/5, Ex. PW-1/6 and Ex. PW-1/7 and has argued that the quotations and confirmations orders Ex. PW-1/6 and Ex. PW-1/7 have been duly signed by defendant no. 1 through its director and the same have been duly handed over to plaintiff company. Further, Ld. Counsel for plaintiff has stated that all the invoices Ex. PW-1/8 to Ex. PW- 1/16 were produced in originals and defendants have not disputed these invoices and all these invoices were duly issued to defendants. Further, Ld. Counsel for plaintiff has drawn the attention of the Court towards t he ledger account of defendant company i.e. Mark-A and it has been argued that as per the ledger account Mark-A, the defendants have not paid a total sum of Rs. 18,32,627/- as shown in the last page of the ledger account. It has been further argued that during cross examination of PW-1, CS DJ NO. 11717/2016 Page No. 13 of 34 dated 03.06.2024 defendants had taken the defence that director of plaintiff company Mr. Ashutosh Kumar had started working independently and got the contract directly from Symbiosis College but admittedly, defendants have not taken any action against Mr. Ashutosh Kumar for the said wrongful act. It has been further argued that moreover, the defence of defendants with respect to the acts of Mr. Ashutosh Kumar is not a tenable defence and it cannot be a defence in the business transactions. It has been further argued that during cross examination of PW-1, defendants had raised the issue of quality of work but on such issue was raised by the defendants earlier. The defendants had admitted that plaintiff had supplied goods to the defendant no. 1 company and during cross examination of PW-1, defendants had admitted the case of plaintiff and thus, plaintiff has duly proved its case which has not been disputed by the defendants. It has been further argued that defendants have not led any evidence to prove that goods were not supplied to the defendants by the plaintiff. It has been further argued that plaintiff had already filed relevant documents to prove that though plaintiff company got registered later on but Mr. Subrat Jain i.e. AR of the plaintiff was doing work for the same site through his partnership firm and plaintiff has already filed the relevant documents. The plaintiff has already filed relevant invoices which have not been disputed by the defendant. Further, Ld. Counsel for plaintiff has read over the cross examination of DW-1/defendant no. 4 and has argued that during cross examination when DW-1 was questioned about the quatations and confirmations i.e. Ex. PW-1/5 to Ex. PW-1/7, he gave evasive reply which proves that the defence of CS DJ NO. 11717/2016 Page No. 14 of 34 dated 03.06.2024 defendants is a shame defence. It has been further argued that plaintiff has been able to prove his case and while defendants have failed to prove their defence and therefore, the suit of the plaintiff is liable to be decreed in favour of plaintiff against the defendants.
Arguments on behalf of defendant no. 1, 3 and 4;
12(b) It has been argued on behalf of defendants that as per incorporation certificate Ex. PW-1/2 the plaintiff company was incorporated on 19.08.09 while the documents Ex. PW-1/4 is dated 21.07.2009 and thus, the documents Ex. PW-1/4 pertain to the period prior to incorporation of company, therefore, the Ex. PW-1/4 does not pertain to plaintiff company. It has been further argued that Ex. PW-1/4 has been signed by Mr. Ashutosh Kumar and same is dated 11.08.2009 and Ex. PW-1/5 has also been signed by Mr. Ashutosh Kumar and same is dated 23.11.2009 and thus, defendant company was exclusively dealing with Mr. Ashutosh Kumar only. It has been further argued that in the document Ex. PW-1/5 at page no. 61 there is a reference to the letter dated 02.11.2019 but the said letter has never come on record for the reasons best known to the plaintiff. Further, it has been argued that all the quotations and confirmations allegedly executed between the parties were exclusively signed by Mr. Ashutosh Kumar and same were referred to Mr. Ashutosh Kumar only and there was no dealing between defendant no. 1 company and plaintiff company. It has been further argued that plaintiff stated that Sh. Ashutosh Kumar was his director but plaintiff has not brought anything on record that Mr. Ashutosh Kumar was director of plaintiff company. It has been further argued that CS DJ NO. 11717/2016 Page No. 15 of 34 dated 03.06.2024 during cross examination, AR of plaintiff submitted that Mr. Ashutosh Kumar was made director of plaintiff company in the midden of the year 2010 because he succeeded in bringing orders for the company but as per the documents filed by the plaintiff, the orders have already been placed by the end of year 2009 only and therefore, no reason arises why Mr. Ashutosh Kumar was made a director later on. Further, Ld. Counsel for defendants has read over the cross examination of PW-1 and has argued that PW-1 admitted that Mr. Ashutosh Kumar had independently taken the contracts from the symbiosis law society and despite that he was not removed from the directorship of plaintiff company till the year 2015 and this proves that plaintiff and Mr. Ashutosh Kumr were in gloves with each other. It has been further argued that plaintiff has not approached the Court with clean hands because as per plaintiff, legal notices were served upon the defendants but admittedly in the legal notice dated 02.07.2012 Mark-C, plaintiff had made two defendants but in the subsequent legal notice dated 04.06.2012 plaintiff sent the legal notice to four persons and changed the nomenclature of plaintiff and thereafter, in the legal notice dated 22.07.13 Mark-G, plaintiff made everybody a party just to harass the defendants. It has been further argued that when the company was incorporated at later stage then prior to incorporation, it cannot enter into an agreement with the defendants. It has been further argued that it is an admitted case by the plaintiff that work orders were given by the defendants to the partnership firm M/s Classic Electric and thus, there is no privity between plaintiff and defendants. It has been further argued that the purchase orders and work orders are CS DJ NO. 11717/2016 Page No. 16 of 34 dated 03.06.2024 totally different and therefore, suit is liable to be dismissed on this ground. It has been further argued that the conditions of work orders were applicable qua SM Design Construction and not against the defendants. Further, Ld. Counsel for defendants has read over the cross examination of plaintiff and has argued that during cross examination, plaintiff has admitted the defence of defendants that there was collusion between plaintiff and Mr. Ashutosh Kumar and plaintiff has also admitted that he has not completed the work and material supplied by the plaintiff was never tested and due to defect in the work of plaintiff were raised by Symbiosis Law Society in the arbitration proceedings pending between Symbiosis Law Society and defendants company. It has been further argued that the plaintiff has completely failed to prove his case and therefore, suit is liable to be dismissed.
12(c) Arguments heard. Record perused. 12(d) It has been vehemently pressed upon by the
defendants that the arguments on behalf of the plaintiff has no locus standi to file the present suit in view of its own case that the alleged purchase order dated 31.07.2009 was taken by the other firm i.e. M/s Classic Electricals and since both are distinct entities, plaintiff cannot institute the present suit against the defendant. It is further argued that on the date of alleged quotation dated 21.07.2009 and the purchase order dated 31.07.2009, the plaintiff company was not in existence as certificate of incorporation was issued on 19.08.2009. On the contrary, as canvased by Ld. Counsel for plaintiff and culled out from the affidavit of PW-1, Ex. PW1/A that the initial purchase order dated 31.07.2009 Ex.PW1/3 was issued in the name of the CS DJ NO. 11717/2016 Page No. 17 of 34 dated 03.06.2024 other firm of the plaintiff i.e. M/s Classic Electricals but later on due to technical reason with the management of the said firm, said purchase order was issued to the plaintiff. The purchase order dated 04.12.2009 for supply of various products of certain specifications to the plaintiff through the parent company of the defendant is Ex. PW1/4, which at the time of examination in chief of PW1 was objected to on behalf of defendant as internal page 6 to 13 and 15 to 18 in original was not filed nor shown. It is manifest that the plaintiff has not thereafter filed any such original documents and not removed the objection, thus, the said pages of the documents Ex.PW1/4 cannot be read in evidence.
Nevertheless, in view of the original invoice dated 20.04.2010 Ex.PW1/ 8 to Ex. PW-1/15 which were issued in the name of the defendants against the supply of material, it stands established that there were dealings between Classic Switchgears Controls Private Limited i.e. the plaintiff and the defendants". 12(e) Further during cross examination PW-1 deposed that "........In the year 2009, which is the relevant period, I was partner of M/s. Classic Electricals, Director in the plaintiff company and a company named as Aye Polymers Pvt. Ltd. In Classic Electricals other than me, only my mother was the partners. The defendant No. 1 company firstly gave the work order to M/s. Classic Electricals. The work order / purchase order was also given to the plaintiff company by the defendant No. 1 company. Both the work order / purchase order were different. (Vol. But it was for the same site)..........The entire supply as per the work order / purchase order given by the defendant No 1 company to the plaintiff company was not CS DJ NO. 11717/2016 Page No. 18 of 34 dated 03.06.2024 completed as the defendant No. 1 company failed to adhere to the payment terms and condition of their work order / purchase order. (Vol. The plaintiff company could also not completed the work in terms of the work order / purchase order of the defendant No. 1 company as there were dispute between the defendant No. 1 company and M/s. Symbiosis Law Society because of the same, the site was not made available, as the same was not prepared). It is correct that I have not given any notice in writing or through e-mail to the defendant No. 1 company. (Vol. I have conveyed the same to the defendant No. 1 company verbally)..........The Then material supplied by me to the defendant No. 1 company was never tested through its application at site. (Vol. Before supplying the material, all the material was tested and the test report as well as the relating certificate were handed over to the site In-charge or to the representative of the defendant No. 1 company). I do not have any copy of the test reports / certificates or any proof of receipt of the same by the defendant. (Vol. As per standard procedure, all such reports / certificate supplied alongwith the materials to the defendant).........It is correct that I know that there was an arbitration proceeding between M/s. Symbiosis Law Society and the defendant No. 1 company. I have neither received any notice nor participated in the said arbitration proceeding.............I never came to know that the materials supplied by me was found to be defective. It is correct that the defendant No. 1 company in a proceeding before the Hon'ble High Court of Delhi gave descriptions of the defects in the material supplied by the plaintiff company. (Vol. The same defects / deficiencies were not related to work in the scope of the CS DJ NO. 11717/2016 Page No. 19 of 34 dated 03.06.2024 plaintiff company)............It is correct that the defendant has never issued any letter showing their satisfaction to the plaintiff. (Vol. But the verification and receiving the invoices itself proved that they were satisfied with the quality and quantity of the material. It is wrong to suggest that invoices Ex. PW-1/8, Ex. PW-1/9, Ex. PW-1/10, Ex. PW-1/11, Ex. PW-1/12, Ex. PW-1/13, Ex. PW-1/14, Ex. PW-1/15 and Mark B has been issued without supply of the same materials and services............It is wrong to suggest that all the deliveries were not made within the period stipulated in the contract. It is further wrong to suggest that inspections as mentioned in the heading inspection in the work order / contracts was not completed by the plaintiff. It is further wrong to suggest that the drawings were not provided by the plaintiff to the defendants in terms of the contract. It is further wrong to suggest that plaintiff failed to give transit insurance in terms of the contract. It is incorrect to suggest that materials have not passed the performance test. It is further wrong to suggest that the warranty was not given to the defendants alongwith the material supplied in terms of contract..............".
From the tone and tanner of cross examination of PW-1, it can be conclusively held that defendant company has received the goods and materials from the plaintiff in view of which its stands established that the plaintiff has locus to file the present suit.
12(f) Further, in the pleadings defendants have taken the defence that entire payment has been made to the plaintiff and payment towards actual work has been given to the plaintiff. Once, the defendants had taken the defence that all payments CS DJ NO. 11717/2016 Page No. 20 of 34 dated 03.06.2024 have been made to the plaintiff and plaintiff produced the original invoices, the onus of prove shifted to the defendants to prove its defence. However, during cross examination, DW-1 deposed that "...........I had mentioned in my written statement that the goods has been supplied or that the question of its utilization does not arise. It is wrong to suggest that the goods has not been supplied. Whatever payments we have made to the plaintiff are duly disclosed in my written statement........... I do not remember whether the defendant no.1 company has disclosed their liability in favour of plaintiff company corresponding to the financial year 2009-2010, 2010-2011, 2011-2012. I can place on record the balance sheets of the defendant no.1 company. I can place on record the ledger account of defendant no.1 company related to plaintiff for the period from 01.04.2009 till 10.03.2012......". However, no such disclosure is there either in the WS or during DE.
12(g) Further, during cross examination of PW-1, defendants have taken following new defences which are beyond pleadings and cannot be considered i.e. the material supplied by plaintiff was not tested through its application at site, copy of test reports/certificates not filed, material supplied by plaintiff was defective, deliveries not made within time, drawings not provided by the plaintiff to defendants, plaintiff failed to give transit insurance, warranty not given to defendants etc. Thus, all these defences taken during cross examination of PW-1 cannot be looked upon being beyond pleadings. Moreover, interestingly, defendants have not led any evidence to prove these defences and defendants have not led any evidence to prove the CS DJ NO. 11717/2016 Page No. 21 of 34 dated 03.06.2024 defence taken in the WS that the material provided or supplied by the plaintiff was defective and was not upto mark and was supplied beyond the stipulated time period.
12(h) Further, during cross examination DW-1 deposed that ".Q. Is it correct that the plaintiff supplied the goods on the basis of Ex.PW1/5, PW1/6 and PW1/7 only. What you have to say?
A. I am unable to understand the question.
It is wrong to suggest that I am deliberately evading from giving correct reply".
Thus, clearly, DW-1 has given evasive reply during cross examination and it seems that he was withholding the material information and therefore, an adverse presumption would be drawn against the defendants that they were trying to evade their legal liability to pay the due amount to the plaintiff. Thus, it can be concluded that plaintiff has been able to prove that material/goods against the invoices Ex. PW-1/8 to Ex. PW-1/15 and Mark-B has been supplied to the defendants. 12(i) Now the plaintiff has categorically deposed in his testimony that defendants had not made the entire payment and the amount of Rs. 18,32,627/- is payable by the defendant no. 1 company. While as discussed above defendants have taken the plea that bills towards the actual value of the work as approved was always paid to the plaintiff as per agreement. However, defendants had failed to produce the details of the payments made by the defendants to the plaintiff and thus, the testimony of plaintiff remained unrebutted to the extent that defendants had not made the payment of entire amount.
CS DJ NO. 11717/2016 Page No. 22 of 34 dated 03.06.2024 12(j) One defence taken by the defendants is that the director of plaintiff company Mr. Ashutosh Kumar had taken the contract from Symbiosis Society NOIDA independently and there is a collusion between plaintiff and Mr. Ashutosh Kumar.
Now during cross examination PW-1 deposed that ".......... I know Mr. Ashutosh Kumar, who had been working with M/s. R.S. Application, prior to joining my company as Marketing Executive and it was agreed between Mr. Ashutosh Kumar and the plaintiff company that if he procures orders of a fixed amount from the defendant No. 1 company with relation of project of Symbiosis Law Society Noida. After Mr. Ashutosh Kumar was able to fetch the purchase orders from the defendant No.1 company, he was made one of the Directors of the plaintiff company sometime in the middle of 2010 and remained Director of the plaintiff till about year 2015..........The plaintiff company wanted to remove Mr. Ashutosh Kumar as a Director of the plaintiff company since the year 2011 as he was found indulged in fraudulent practices. He remained as a Director of the plaintiff company till about the year 2015 as we were unable to contact him and he was evading even the phone calls and was not signing the necessary papers required as per the Companies Act for removing him as a Director of the plaintiff company. It is correct that neither I nor the plaintiff company ever made any complaint to police against said Ashutosh Kumar for his fraudulent works nor we have filed any case against him in any court of law till date date. ...............It is correct that Mr. Ashutosh Kumar has started working independently without my knowledge and consent since September- October, 2010. I came CS DJ NO. 11717/2016 Page No. 23 of 34 dated 03.06.2024 to know about the misdeeds of Mr. Ashutosh Kumar September- October, 2010 and when I started inquiring from him, he has stopped coming to the office. I have not taken any disciplinary action against said Mr. Ashutosh Kumar. Mr. Ashutosh Kumar was appointed on commission basis only but no salary was agreed to be paid or paid to him by the plaintiff. The plaintiff have paid approximately a sum of Rs. 50,000/- to him only after he became Director of the plaintiff. The plaintiff has not paid any other commission or remuneration to said Mr. Ashutosh Kumar. I do not remember the exact date when I have received the relevant documents from Mr. Ashutosh Kumar for appointing him as one of the Director of the plaintiff company but it may be month of March-April, 2010. The last formal meeting with Mr. Ashutosh Kumar took place between me and him either in 2010 or 2011. I have not met Mr. Ashotosh Kumar after that for getting any document signed or for any formal discussion............. It is correct that I came to know from external sources that said Mr. Ashutosh Kumar independently completed the portion of the work order without my knowledge. Knowledge........................ It is correct that the plaintiff has not intimated in writing to the defendants regarding conduct of Mr. Ashutosh Kumar and also not informed regarding his removal from the plaintiff company. (Vol. I have intimated the defendants verbally)....................."
Thus, during cross examination, PW-1 admitted that Mr. Ashutosh Kumar was made director of plaintiff company in the middle of 2010 and he immediately, thereafter, started working independently since September - October 2010 but still he remained director of plaintiff company till 2015. All the invoices CS DJ NO. 11717/2016 Page No. 24 of 34 dated 03.06.2024 Ex. PW-1/8 to Ex. PW-1/15 and Mark-B pertain to the period from 20.04.2020 to 28.09.2010 i.e. prior to September -October 2010 when Sh. Ashutosh Kumar allegedly started working independently. It is also an admitted fact that Mr. Ashutosh Kumar had taken away the contract of defendant no. 1 company and completed it independently. It seems odd and against the ordinary course of human nature that plaintiff company had not removed Mr. Ashutosh Kumar despite his misdeeds till 2015 and the plea of plaintiff that Mr. Ashutosh Kumar was not cooperating for his own removal does not seem satisfactory. However, defendants can claim damages from the plaintiff on this ground but defendants cannot stop the payments of material supplied to the defendant company, specifically in view of the fact that plaintiff being company is a separate legal entity. 12(k) Further, plaintiff has sought interest at the rate of 3% per month on the amount of Rs. 18,32,627/-. As regards invoice Ex. PW-1/8 to Ex. PW-1/15 and Mark-B are concerned, the same contains the stipulation of the interest being charged at the rate of 24% per annum if the bill remains unpaid, and the invoice being akin to a concluded contract between the parties, the defendant is bound to honor the same. Defendant is, thus, held to be liable to pay interest on the decreetal amount at the rate of 24% per annum from date of the invoice till the date of institution of the suit. In so far as pendentelite and future interest is concerned, Section 34 of CPC comes to fore, as per which, the court, while making a decree for payment of money, is entitled to grant interest at the current rate of interest or contractual rate as deems reasonable. By virtue of the said provision, plaintiff is awarded CS DJ NO. 11717/2016 Page No. 25 of 34 dated 03.06.2024 interest on the aforesaid sum @ 7% per annum from the institution of the suit till realization of the amount. However, as there are no specific allegations of fraud or misrepresentation of defendant no. 2 to 4, they cannot be held personally liable for the liability of defendant no. 1 company.
In view of above discussions, issue no. I and V are decided in favour of plaintiff against the defendants. Now, I will decided issue no. 2
13. Issue no. II: Whether the suit for recovery is barred by limitation?
13(a) It has been argued on behalf of plaintiff that admittedly plaintiff has filed petition for winding up defendants company before Hon'ble High Court of Delhi and vide order dated 12.05.2016 Ex. PW-1/17 the petition was disposed off. Further, Ld. Counsel for plaintiff has read over the para no. 23 of the plaint and has argued that in the plaint, plaintiff has already explained the issue of limitation and it has been argued that the last payment was made by the defendant company on 07. 05.2011 by way of cheque and therefore, limitation was to expire on 14.05.2014 and the plaintiff filed the winding up petition on 08.05.2014 i.e. well within 03 years from the date when cause of action lastly arose in favour of plaintiff. The plaintiff had pursued the petition till 12.05.2016 when it was disposed off. It has been further argued that perusal of order dated 12.05.2016 clearly shows that there were two things involved first that defendants stated in the winding up petition that they have valid defence which they want to contest in the civil suit and thereafter, plaintiff has not pressed upon the petition and thus, cause of CS DJ NO. 11717/2016 Page No. 26 of 34 dated 03.06.2024 action arose freshly in favour of plaintiff on 12.05.2016, therefore, the present suit instituted on 23.09.2016 is well within limitation. It has been further argued that vide order dated 12.05.2016 Hon'ble High Court of Delhi had given the liberty to the plaintiff to file suit within 15 weeks as Registrar General of Hon'ble High Court of Delhi was to hold amount deposited by the defendants in form of FD for 15 weeks and amount to be released if no suit is file by the plaintiff during the said period and thus, the plaintiff has filed the suit well within time. 13(b) On the other hand, Ld. Counsel for defendants has strongly opposed the arguments of plaintiff and it has been argued that by way of filing the winding up petition, plaintiff cannot stop the clock for limitation nor Court can give any exemption to plaintiff and therefore, time consumed during disposal of winding up petition cannot be excluded, therefore, the suit of the plaintiff is time barred. It has been further argued that plaintiff has filed an application in Hon'ble High Court of Delhi to grant the liberty to file the suit and to condone the delay but the application was disposed off as withdrawn by the plaintiff and thus, plaintiff was duly aware of the fact that period of limitation for filing of the civil suit of recovery has already expired. It has been further argued that admittedly the last transactions took place on 28.09.2010 as during cross examination, PW-1 admitted that the last bill was raised on 28.09.2010 and therefore, even the winding up petition was filed beyond the period of limitation. Further, Ld. Counsel for defendants has relied upon the following judgment of Hon'ble High Court of Delhi in case titled as "Niyogi Offset Printing CS DJ NO. 11717/2016 Page No. 27 of 34 dated 03.06.2024 Press Ltd. Vs. Doctor Morepen Limited", CP No. 303/2006 & CA No. 190/2007 decided on 05.03.2007.
13(c) In rebuttal, Ld. Counsel for plaintiff has argued that the judgments relied upon by the defendants are not applicable to the facts in hand and Ld. Counsel for plaintiff has read over the judgments and has argued that in the present matter, plaintiff had approached the correct forum and petition was disposed off on merits while in the judgments relied by the defendants, petition was filed in wrong forum and afterwards petition was withdrawn.
13(d) Arguments heard. Record perused. 13(e) In the present matter, plaintiff has relied upon the
statement of account/ledger account maintained by the plaintiff regarding the defendant company and same is mark-A. As per the statement of account Mark-A, last payment was made by the defendant company to the plaintiff on 07.05.2011 by way of cheques. This fact has not been disputed by the defendant during trial nor defendant has brought any evidence to dispute the same. It is settled principle that when the loan amount /any other liability is outstanding, then the creditor is at liberty to set off the payment towards the oldest debt unless the opposite is specifically intimated by the debtor. It is also settled principle that as a consequent to above mentioned principle, the part payments towards the outstanding amount is equivalent to the acknowledgment. Therefore, the period of limitation for recovery of the amount will commence from 08.05.2011 (as the last payment was made on 07.05.2011) and plaintiff has filed winding up proceedings in May 2014 and thus, the winding up petition was filed within limitation. However, the present suit has been CS DJ NO. 11717/2016 Page No. 28 of 34 dated 03.06.2024 filed on 23.09.2016 and thus, the period of limitation, if computed from 08.05.2011, stands expired. Now the question before the Court is whether the period during which winding up proceedings were held, should be excluded while computing the period of limitation for filing the civil suit for recovery of the amount .
13(f) It has been held in "Niyogi Offset Printing Press Ltd. Vs. Doctor Morepen Limited" (SUPRA) that :
17. What is excluded under Section 14 is the time during which another civil proceeding was prosecuted with due diligence relating to the same matter in issue in good faith in a court which, from defect of jurisdiction or other cause of similar nature became unable to entertain it. Section 14 of the Limitation Act, 1963 is as under:
14.Exclusion of time of proceeding bona fide in court without jurisdiction.- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908, the provisions of Sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the Court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the CS DJ NO. 11717/2016 Page No. 29 of 34 dated 03.06.2024 jurisdiction of the court or other cause of a like nature.
Explanation,--For the purposes of this section,--
(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.
18. One of the conditions required to be satisfied is that the proceedings taken earlier must be of same relief as claimed in the present proceedings as contemplated under Section 14(2) of the Act. It has already been held that there is no limitation in filing an application under Section 433 of the Companies Act, 1956 provided under the said Act. What is to be considered is whether the period of limitation to recover the amount shall be extended by filing a petition under Section 433 of the Companies Act, 1956.
19. For application of Section 14(1) it is necessary to show that the civil proceedings which were taken earlier by the petitioner were relating to the same matter in issue and the said matter was prosecuted in good faith in a Court which for the defect of jurisdiction or other cause of a like nature was unable to entertain it. A company petition for winding up in which ultimately the petitioner may get the amount due to him or some amount on pro rata basis does not necessarily mean that the matter in issue will be the same as in a suit for recovery of amount, had it been filed. In order to ascertain whether the claim of the petitioner is barred by time or not, what is to be considered is whether the petitioner can institute the suit for recovery of the amount claimed to be due from the respondent to the petitioner.
20. In Narayan Ambaji Chavan v. Hari Ganesh Navare AIR 1930 Bombay 505, the High Court...... ........Till this day the suit for recovery of the said amount has not been filed by the petitioner.
Therefore, the claim of the petitioner to recover the amount due from the respondent has become barred by time. Therefore the time spent by the petitioner in prosecuting company petition can not be excluded CS DJ NO. 11717/2016 Page No. 30 of 34 dated 03.06.2024 while computing the period of limitation under Section 14 of the Limitation Act, 1963.....
21. The Supreme Court had held in Yeshwant Deorao v. Walchand Ramchand 1950 SCR 852 that there can be no exclusion under Section 14 of the Limitation Act of time spent in Insolvency proceedings against the judgment debtor, in computing the period of limitation for executing a decree against him, as the proceedings are not for obtaining the same relief. The Apex Court had held as under:
5. ...The relief sought in insolvency is obviously different from the relief sought in the execution application. In the former, an adjudication of the debtor as insolvent is sought as preliminary to the vesting of all his estate and the administration of it by the Official Receiver or the Official Assignee, as the case may be, for the benefit of all the creditors;
but in the latter, the money due is sought to be realized for the benefit of the decree-holder alone, by processes like attachment of property and arrest of person. It may be that ultimately in the insolvency proceedings the decree-holder may be able to realize his debt wholly or in part, but this is a mere consequence or result. Not only is the relief of a different nature in the two proceedings but the procedure is also widely divergent.
22. A fortiori the time spent by the petitioner in winding up petition which is for different relief than seeking the relief of recovery, will not save the limitation of the petitioner to recover the amount. Winding up petition is not for recovery of the amount. An adjudication of the debtor company as unable to pay its debt is sought as preliminary to the vesting of all his estate and the administration of it by the Official liquidator or the Official Assignee, as the case may be, for the benefit of all the creditors; but in the suit for recovery, the money due is sought to be recovered for the benefit of the creditor alone. It may be that ultimately in the winding up proceedings the petitioner may be able to realize his debt wholly or in part, but this is a mere consequence or result. Not only is the relief of a different nature in the two proceedings but the procedure is also widely divergent. The precedent relied on by the Petitioner , Ajab Enterprises v. Jayant Vegoils and Chemicals Pvt. Ltd. rather lays down that the time spent in prosecuting winding up CS DJ NO. 11717/2016 Page No. 31 of 34 dated 03.06.2024 petition against company can not be excluded in computing the period of limitation for the claim of recovery of amount. Consequently the claim of the petitioner to recover the amount allegedly due from the respondent was barred on 4th December, 2006 when the present petition for winding up was filed and consequently the claim of the petition is barred by time.
13(g) It has been cleared in the plethora of judgments that winding up petition is not for recovery of amount and the nature of winding up petition is different from the suit for recovery and both the proceedings are different in procedure too. Therefore, the time spent by the plaintiff in prosecuting the winding up petition cannot be excluded while computing the period of limitation for filing of present suit. In view thereof, issue no. II is decided in favour of defendants against the plaintiff and suit is held to be barred by limitation.
Further, in view of findings upon issue no. II, the application of the plaintiff for condonation of delay in filing present suit also stands disposed off.
14. Issue No. III. Whether the suit of the plaintiff is bad for mis-joinder of parties?OPD 14(a) It has been argued on behalf of defendants that PW-1 himself has filed company master details of defendants company i.e. Ex. PW-1/3 and as per the said documents defendant no. 2 i.e. Mr. Amar Mehrotra was never the director of defendant company and thus the suit is bard of misjoinder of parties.
14(b) On the other hand, It has been argued on behalf of plaintiff that defendant no. 2 had actively participated in the transactions between plaintiff company and defendant company CS DJ NO. 11717/2016 Page No. 32 of 34 dated 03.06.2024 and therefore, he was a necessary party to the present suit.
14(c) Arguments heard. Record perused. 14(d) Admittedly, Mr. Amar Mehrotra was not a director
of defendant company as reflected from the documents Ex. PW- 1/3. Further, plaintiff himself admitted that the another company i.e. M.S. Design Construction Syndicate belonging to defendant no. 2 /Mr. Amar Mehrotra was involved in the transactions in question but plaintiff has not impleaded M. S. Design Construction Syndicate as a party to the present suit nor plaintiff has filed any document to prove that the said entity belongs to Mr. Amar Mehrotra.
14(e) Further, it is also important that defendant no. 3 and 4 have been impleaded as defendants on the ground that they were directors of defendant no. 1 company but the defendant no. 1 company is a separate legal entity and there are no specific allegations of fraud or misrepresentation against defendant no. 2 to 4 and therefore, they cannot be impleaded in the present matter in their personal capacity. Thus, the suit is bad for mis-joinder of parties. However, it has not been argued that mis-joinder of parties is having any impact over the merits of the case and therefore, the fact that the suit is bad for mis-joinder of parties, is not fatal to the fate of present suit. Accordingly, issue no. III is decided in favour of plaintiff against the defendants.
15. Issue no. IV: Whether the previously instituted suit bearing no. 314/2014, titled as "Classic Switchgears & Controls Pvt. Ltd. Vs. A-1 design & Construction Pvt. Ltd. & Anr." has any bearing on the present proceedings, if so, to what effect?
CS DJ NO. 11717/2016 Page No. 33 of 34 dated 03.06.2024 15(a) It has been argued on behalf of defendant that the plaintiff had filed another suit against the defendants and both the suits are interconnected and involved the same transactions and therefore, the present suit is not maintainable. While Ld. Counsel for plaintiff has opposed the same and has argued that plaintiff has filed two different and independent suit and the other case has no bearing upon the present suit.
15(b) Arguments heard. Record perused. 15(c) During cross examination DW-1 has deposed that
"it is correct that transactions related to CS OS No. 7512/2016 is based on different plaint".
15(d) Thus, defendant itself has admitted that present case is related to different transactions. Moreover, defendants have not brought anything to prove that the previously instituted suit against the defendants has any bearing upon the fate of present suit. In view thereof, issue no. IV is decided in favour of plaintiff and against the defendants.
Relief.
16. In view of findings on aforesaid issues, the suit of the plaintiff is dismissed being barred by period of limitation. Parties to bear their own costs. All the pending misc. applications are being dismissed as not pressed or argued or prosecuted. Decree sheet be prepared accordingly. File be consigned to Record Room.
Typed to the direct dictation and (Prabh Deep Kaur)
announced in the open court District Judge-05, South East
rd
on this 3 June, 2024 Saket Courts, New Delhi
CS DJ NO. 11717/2016 Page No. 34 of 34 dated 03.06.2024