Delhi High Court
M/S Park Side Limited vs M/S Blues Luxury Impex Pvt Ltd on 21 October, 2013
Author: Mukta Gupta
Bench: Mukta Gupta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ IA No. 8109/2011 in CS(OS) 437/2011
% Reserved on: 26th September, 2013
Decided on: 21th October, 2013
M/S PARK SIDE LIMITED ..... Plaintiff
Through: Mr. Anupam Srivastava, Mr. Anil
Kumar Chandel and Mr. Chandra
Shekhar, Advocates.
versus
M/S BLUES LUXURY IMPEX PVT LTD ..... Defendant
Through: Mr. Sidharth Dutta, Advocate.
CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA
IA No. 8109/2011 (u/Order XXXVII Rule 3 CPC by Defendant)
1. By this application under Order XXXVII Rule 3 CPC the Defendant
seeks leave to defend.
2. Learned counsel for the Defendant contends that a summary suit under
Order XXXVII CPC can be based only on a written contract and all invoices
cannot be deemed to be a written contract. Invoices relied upon by the
Plaintiff do not have the necessary terms of agreement. The invoice only
gives number of articles and the value thereof. Neither the brand name nor
the quality of the goods is mentioned. Further particulars of sellers, terms of
supply, and place of supply are not mentioned. Thus no terms of contract are
incorporated in the invoices and only term of payment is noted. Being
IA No. 8109/2011 in CS(OS) 437/2011 Page 1 of 17
devoid of terms and conditions of the contract, the invoices cannot be said to
be a binding contract. The decision in M/s Lohmann Rausher Gmbh vs. M/s
Medisphere Marketing Pvt. Ltd, 2005 (80) DRJ 9 relied upon by the Plaintiff
is not applicable to the facts of the present case. Hence the Defendant is
entitled to grant of leave to defend. Reliance is placed on M/s Sunil
Enterprises and another vs. SBI Commercial and International Bank Ltd.,
1998 (5) SCC 354; Bharat Forge Ltd. vs. Onil Gulati, 121 (2005) DLT 357;
A.R. Electronic Pvt. Ltd. vs. R.K. Graphics Pvt. Ltd. 97 (2002) DLT 913; and
Simba F.R.P. (P) Ltd. vs. Department of Tourism, Lucknow, Uttar Pradesh,
1995 (34) DRJ 273.
3. Learned counsel for the Plaintiff submits that all conditions necessary
for the determination of the contract are mentioned in the invoices. Merely
by not mentioning that the disputes will be subject to a particular jurisdiction
would not take the invoices out of the purview of a contract between the
parties. The present case is covered by the decision of this court in Lohman
Rausher Gmbh (supra). Along with the invoices the Plaintiff has also
enclosed the bill of lading. By email dated 18th June, 2009 they agreed to
make part payment and no grievance with regard to the quality of goods was
raised. The Plaintiff and Defendant were in continuous course of
IA No. 8109/2011 in CS(OS) 437/2011 Page 2 of 17
correspondence through emails. Further Sections 41 and 42 of the Sales of
Goods Act are applicable to the facts of the present case. If the goods were
not of the same description the Defendant ought to have returned the same
and not sold them further. The first intimation about the rejection of the
goods was given only after Plaintiff's notice seeking payment was served on
the defendant. The Defendant made part payments and thus was stopped
from disputing the quality of the goods thus no case for leave to defend is
made out and the application be dismissed and the suit be decreed.
4. I have heard learned counsel for the parties.
5. The present suit under Order XXXVII has been filed by the Plaintiff
which is a private limited company incorporated under the laws of the
Republic of Mauritius and engaged in the business of selling fashion garmets
under the name and style of KARL KAISER, NIELS and CERRUTI 1881.
The suit has been filed through its authorized representative Mr. Didier
Camboulives. The Defendant is also a private limited company incorporated
under the Companies Act, 1956 having its corporate office at South
Extension-I, New Delhi and is engaged in the business of retail selling of
high end fashion garments. The Defendant placed orders upon the Plaintiff
IA No. 8109/2011 in CS(OS) 437/2011 Page 3 of 17
vide its invoice dated 16th April, 2009 bearing PK04/2009/454 for the supply
of the following goods.
DESCRIPTION QUANTITY UNIT PRICE AMOUNT USD
Woolen Jackets 213 60.00 12,780.00
Cotton Trouser 300 14.00 4,200.00
Polo Shirts 606 08.00 4,848.00
Linen Shirts 500 10.00 5,000.00
Cotton Shirts 2084 10.00 20,840.00
Woolen Suits 1028 100.00 102,800.00
TOTAL 150,468.00
6. It was agreed between the parties that the entire consideration of USD
1,50,468/- was to be paid in four equal installments of USD 36,617/- in the
months of May, 2009, June, 2009, July, 2009 and August, 2009 respectively.
The Plaintiff supplied the consignment of the goods and shipped the same on
9th April, 2009. The goods reached India on or around 20th April, 2009
whereafter they were inspected by the Defendant and the custody of the
consignment was taken after clearing the custom duty. Despite having
accepted the receipt of goods the Defendant did not make the payments as
per the agreed schedule. After great persuasion and follow up, the Plaintiff
received a payment of USD 24,965/- on 11th August, 2009.
IA No. 8109/2011 in CS(OS) 437/2011 Page 4 of 17
7. After the receipt of the goods there were three communications
between the Plaintiff and the Defendant through emails on 18th June, 2009,
25th June, 2009 and 22nd July, 2009. In none of the emails the Defendant
made a grievance regarding the quality or the quantity of the goods received.
Further the Defendant sold the goods to its customers and collected the sale
proceeds. However, despite the same did not make payment to the Plaintiff.
Finally the Plaintiff sent a legal notice dated 6th May, 2010 inter alia
demanding a sum of USD 1,25,468/-. This notice was duly served on the
Defendant. For the first time in the reply dated 25th June, 2010 to the notice
it was stated that upon delivery of the goods it was found that the samples
shown by the Plaintiff's representative in March, 2009 and the goods
actually delivered were not the same and did not meet the minimum quality
standards. It was further stated that the entire deal was based upon the
goodwill enjoyed by the plaintiff in the market and on the basis of quality
assurance standards, guaranteed by the plaintiff and thus terms of such a sale
were not reduced in writing. The Defendant also sought refund of the entire
sum received by the Plaintiff, that is, USD 25,000/- with interest @ 18% per
annum.
IA No. 8109/2011 in CS(OS) 437/2011 Page 5 of 17
8. The invoice dated 16th April, 2009 in the present is reproduced as
under:-
"INVOICE
To,
BLUES LUXURY IMPEX PRIVATE LTD. PK04/2009/454
ST
1 FLOOR, H-64, SOUTH EXTENSION PART-1
NEW DELHI-110049
INDIA Date: 16.04.2009
ATT: MR. DINESH SEHGAL Shipment Date
20.04.2009
DESCRIPTION QTY UNIT AMOUNT
PRICE USD
USD
Woolen Jackets 213 60.00 12,780.00
Cotton Trouser 300 14.00 4,200.00
Polo Shirts 606 8.00 4,848.00
Linen Shirts 500 10.00 5,000.00
Cotton Shirts 2084 10.00 20,840.00
Woolen Suits 1028 100.00 102,800.00
Total USD 4731 150,468.00
Terms of payment: Payment in 4 installments by T.T.
May 09 USD 37,617
June, 09 USD 37,617
July, 09 USD 37,617
Aug, 09 USD 37,617
BANK DETILS; State Bank of Mauritius Ltd., State Bank Tower
1, Queen Elizabeth-II, Avenue
Port Louis, Mauritius
IBAN : MU93 STCB 1170 0262 0000 5991 0000 00"
IA No. 8109/2011 in CS(OS) 437/2011 Page 6 of 17
9. The present case is clearly covered by the decision of this Court in M/s
Lohmann Rausher Gmbh v. M/s Medisphere Marketing Pvt. Ltd., 2005 (80)
DRJ 9 wherein it was held-
"18. It is not the case of the defendant that the invoices do not
conform to the purchase order. As noted, the invoices raised
contain the description of the goods, quantity and price. As
noted, conditions of payment stand reflected in the invoice.
Additionally, delivery address also finds mentioned in the
invoice. All features pertaining to a contract of sale of goods are
to be reflected in the two invoices. The invoices are a complete
contract, required by law, where the contract pertains to sale of
goods.
19. The invoices in question would, Therefore, fall within the
category of a written contract within the contemplation of Order
xxxvII Rule 2 of the Code of Civil Procedure.
20. Section 41 and Section 42 of the Sale of Goods Act reads as
under:-
"41. Buyer's right of examining the goods.-
(1) Where goods are delivered to the buyer which he has
not previously examined, he is not deemed to have
accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of
ascertaining whether they are in conformity with the
contract.
(2) Unless otherwise agreed, when the seller tenders
delivery of goods to the buyer, he is bound, on request,
to afford the buyer a reasonable opportunity of
examining the goods for the purpose of ascertaining
whether they are in conformity with the contract.
IA No. 8109/2011 in CS(OS) 437/2011 Page 7 of 17
42. Acceptance.- The buyer is deemed to have
accepted the goods when he intimates to the seller that he
has accepted them, or when the goods have been delivered
to him and he does any act in relation to them which is
inconsistent with the ownership of the seller, or when, after
the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them."
21. As per the mandate of Section 41 of the Sale of Goods Act,
the defendant not having inspected the goods in question prior
to delivery, had a right to inspect the case on delivery and report
defects within a reasonable time of delivery. If not rejected
within reasonable time, mandate of Section 42 stipulates that
the defendant would be deemed to have accepted the goods.
22. Undisputably, goods under first invoice were received in the
month of May, 2000 and under the second invoice in the month
of September, 2000. Defendant, on receipt of the goods, did not
indicate to the plaintiff that the goods were defective till as late
as 31.12.2001. This was when the plaintiff had served upon the
defendant a legal notice in the month of October, 2001.
23. Rejection of the goods predicated on a stand that the goods
were sub-standard and defective on 31st December, 2001 is not
within a reasonable period of time considering the fact that the
goods under the first invoice were received in the month of
May, 2000 and under the second invoice were received in the
month of September, 2000. Rejection indicated on 31st
December, 2001 was after one year and seven months of receipt
of goods under the first invoice and one year and three months
after receipt of goods under the second invoice. Defendant, as
per mandate of Section 42 of the Sale of Goods Act is,
Therefore, deemed to have accepted the goods.
24. Three communications from the defendant to the plaintiff
being the communications dated 31.1.2001, 30.3.2001 and
3.4.2001 may be noted.
"Dear Dr. Pichler,
IA No. 8109/2011 in CS(OS) 437/2011 Page 8 of 17
-Thanx for your email of 31.01.
-There is no reason to not answer your mail or fax
pertaining to the overdue payments, infact when I met you
in late Nov' 00 the payment for invoice 1108748 for the
amount of DM 35178.14 had already been done to our
bankers but it seems that due to delay of this payment
beyond 180 days the Reserve Bank of India (R.B.I.)
stopped the remittance & advised our bankers to get a 'No
interest Charge' certification from the principal company,
hence you are advised to send us a certificate to this effect
immediately so that we can seek R.B.I.'s permission for
release of this payment.
-Anyhow by now the payment of Inv. 1116864 amount
DM 41321.- is also due so in order to avoid any further
misunderstanding between us we will expedite this
payment this month because this can be released
immediately as it is well within the R.B.I. Credit
guidelines.
-Now, coming back on the subject of 'Help' to reach
the Earthquake affected state of Gujarat let me inform you
that in the past 2 weeks a lot of Lohmann dressings etc.
available ex-stock has already been picked up by the
Rescue authorities & sent free of cost to Gujarat. The
requirement exists in large numbers for
Dressings/Cellacast so if you can rush supplies of
whatever is available it will add a lot to the image of
Raucher-Lohmann in India plus to this humanitarian cause.
-Yes, whatever payment delays are at our end, needless
to worry they are safe & in the process now even though
we have contributed a lot as a company to the Country's
crisis situation.
-Please let us have your comments on what's available
so that we can advise you how & where to ship!
IA No. 8109/2011 in CS(OS) 437/2011 Page 9 of 17
Best regards,
Rajan Bajaj."
"Dear Dr. Pichler,
Please refer your email of 29.3.
Both your payments are awaiting RBI clearance & the
necessary 'No Interest Certificate' has been submitted. Due
to year ending March 31 there seems to be a delay in
processing this approval from RBI. This is not in our
hands, we can only follow up with the Government
authorities- normally it get cleared- one thing we promise
that your money is safe & definitely will be cleared in
April' 01.
Because of these delays we had no option but to go
ahead & open the L/C for Euro 23,816.84 against your PFI
of 15.2.
These goods Along with what we supplied in Jan' 01
are for the Earthquake Relief Fund hospitals run by the
State Government & there is a delay in realizing the
monies from them at present. In order to secure your
monies we opened the L/C but we need more product to
complete our orders with the Government to realize our
monies.
There is no question of non-payment whether we do
business or not, we are an old company & our association
is long to think about other activities.
You will be receiving the original L/C this week or
early next week if you feel like, please cooperate & send
material A.S.A.P. by Air freight to New Delhi on CIF or
CNF basis otherwise please send your non-acceptance to
the bank with a copy to us.
IA No. 8109/2011 in CS(OS) 437/2011 Page 10 of 17
Add a few brochures Raucher-Lohmann complete
booklet Curapore/Opraflex/Cellacast brochures 50 only.
Our business with you will get back to normal within the
next quarter, I am sure.
Regards,
Rajan Bajaj."
"Dear Dr. Pichler,
By the time we were ready to pay your second invoice
it had also crossed 180 days & Therefore we had to apply
to RBI for clearance & used the same certificate for both
the invoices. We do not require another letter from
yourselves & assure that during this month these payments
will be cleared.
The second invoice was not paid also due to the fact
that our payments were stuck with the Government & they
only got released on March 31, when the Government
ending the fiscal year.
So, please understand the situation that the delays are
primarily due to the Government supplies made to the
Earthquake areas & money realization took a long time.
Please acknowledge receipt of L/C for Euro 23816.84.
Also you were supposed to visit us this year! What are
your plans, once you visit us you will have more
confidence in our operations.
Regards,
Rajan Bajaj""
10. Even in the decision relied by the defendant in Bharat Forge Ltd. v.
Onil Gulati, AIR 2005 Delhi 369 it was held that an invoice which
incorporates the particulars of seller, purchaser, description of goods, weight,
IA No. 8109/2011 in CS(OS) 437/2011 Page 11 of 17
quantity, rates and price including sale tax and other dues accompanied with
additional terms would be regarded as a written contract on acceptance by
the respondent.
11. In the present case, a perusal of the invoice shows that it specified the description of the goods, quantity, unit price, final amount, terms of payment i.e. payment in 4 installments by T.T. on May, 2009, June, 2009, July, 2009 and August, 2009. The bank details with IBAN details were also specified. Thus, merely because the invoice does not say that the disputes would be subject to which jurisdiction, it cannot be said that the invoice is not a concluded contract. Further the defendant for the first time raised objection with regard to quality of the goods in its reply dated 25 th June, 2010 to the legal notice dated 6th May, 2010 of the plaintiff after having made part payments. After receipt of goods there have been correspondences between the parties which reads as under:-
"Roland Fan Ian From: Éva Kaiser" [email protected] To: "Roland Fan Ian" [email protected] Sent: Wednesday, July 29, 2009 11:55 AM Subject: FW:payment Eva Kaiser Managing Director IA No. 8109/2011 in CS(OS) 437/2011 Page 12 of 17 Karl Kaiser Parkside Ltd.
Longtillbuilding Route Royale Arsenal Mauritius Tel: +230 249 22 70 Cell: +230 250 20 37 Mail : [email protected]
-----Original Message------- From : Abhay Gupta [mailto: [email protected]] Sent: Wednesday, July 22, 2009 12:56 PM To : Eva Kaiser Cc: Ankush aggarwal Subject: Re:payment Dear eva, I understand from accounts that documents have been put into the bank. As soon as they have cnfmation, they will mail you directnly. Kind regards, Abay
-----Original Message----- From: Éva Kaiser" <[email protected]> To: "blues abhay" <[email protected]> Sent: Wednesday, July 22, 2009 2:09 PM Subject: Payment >Dear Abhay, > >Dinesh informed me, that payment of 50% of the merchandise >will be made today. >Can you plse send me copy of transfer, which I need to >discount the invoice IA No. 8109/2011 in CS(OS) 437/2011 Page 13 of 17 >as I have an important payment to make tomorrow."
">Eva Kaiser >Managing Director > >Karl Kaiser >Parkside Ltd.
> >Longtillbuilding >Route Royale >Arsenal > >Mauritius > >Tel: +230 249 22 70 >Cell: +230 250 20 37 >mail : [email protected] > >-----Original Message------ >from : Eva Kaiser [mailto: [email protected]] >Sent: Tuesday, June 23, 2009 1:31 PM >To: Abhay Gupta >Cc: didier >Subject: RE:***PROBABLY SPAM*** Re: payment >Importance: High > >Dear Abhay, > >Can you plse inform me whether payment has been effected. >This is now urgent, and I ask you, please, to proceed >immediately with may/june installments >Best regards >eva > >Eva Kaiser >Managing Diretor > >Karl Kaiser IA No. 8109/2011 in CS(OS) 437/2011 Page 14 of 17 >Parkside Ltd.
> > Longtillbuilding >Route Royale >Arsenal > >Mauritius >Tel: +230 249 22 70 >Cell: +230 250 20 37 >mail: [email protected] > >----Original Message----- >From:Abhay Gupta [mailto: abhay@bluesclothingcompany >.com] >Sent: Thursday, June 18, 2009 4:47 PM >To : Eva Kaiser"
"Roland Fan Ian From: Éva Kaiser" [email protected] To: "Roland Fan Ian" [email protected] Sent: Wednesday, July 29, 2009 11:55 AM Subject: FW:***PROBABLY SPAM***Re. ***PROBABLY SPAM***Re:payment Eva Kaiser Managing Director Karl Kaiser Parkside Ltd.
Longtillbuilding Route Royale Arsenal Mauritius Tel: +230 249 22 70 IA No. 8109/2011 in CS(OS) 437/2011 Page 15 of 17 Cell: +230 250 20 37 Mail : [email protected]
-----Original Message------- From : Abhay Gupta [mailto: [email protected]] Sent: Thursday, June 25, 2009 6:02 PM To : Eva Kaiser Subject:***PROBABLY SPAM***Re:***PROBABLY SPAM*** Re:payment Dear eva, I have asked DS to advise me the payment schedule since he directly controls finance department. I will advise you as soon as this is done best regards, Abay
-----Original Message----- From: "Éva Kaiser" <[email protected]> To: "blues abhay" <[email protected]> Sent: Thursday, June 25, 2009 4:19 PM Subject: FW:***PROBABLY SPAM***Re:payment >Dear Abhay, > >Did you receive this email? >Kindly reply >Thank you >Best regards eva >"
12. In none of these emails, the quality of the goods has been objected to. The goods are deemed to have been accepted as no objection to the quality has been raised after more than one year of their acceptance. Moreover, the defendant had got the goods on the basis of reputation and goodwill of the IA No. 8109/2011 in CS(OS) 437/2011 Page 16 of 17 plaintiff in the market as is also admitted in the reply to the notice and further admitted that terms of such a sale i.e. assurance of standard were not recorded in writing. It is thus evident that the defendant admitted the implied guarantee.
13. In view of aforesaid discussion, I find no reason to grant leave to defend to the defendant as no triable issue is raised. Application is consequently dismissed.
CS(OS) No.437/2011
Since the leave to defend application of the defendant stands dismissed, the suit of the plaintiff is decreed in favour of the plaintiff and against the defendant for USD 1,25,468/- with interest @9% per annum from the date of institution of the present suit till realization.
Suit is disposed of accordingly.
(MUKTA GUPTA) JUDGE OCTOBER 21, 2013 'vn' IA No. 8109/2011 in CS(OS) 437/2011 Page 17 of 17