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Delhi District Court

Ars Steels Private Limited vs Smt. Abha Jain on 30 September, 2022

 IN THE COURT OF DISTRICT JUDGE, (COMMERCIAL
    COURT (02), SOUTH DISTRICT, SAKET COURT,
                   NEW DELHI

                                 CS (Comm) 145/2020

ARS Steels Private Limited                   .... Plaintiff
Through its AR having registered office at :
Fortuna Tower, 23A, Netaji Subhash Road,
3rd Floor, Room No. 27, Kolkata - 700001,
West Bengal

                    Versus

1. Smt. Abha Jain                     .... Defendant No. 1
Proprietor of M/s Aditya Enterprises,
R/o G-89, 2nd Floor, Saket, New Delhi-110017
and also at : A-169, Basement, Shivalik,
Malviya Nagar, New Delhi - 110017.

2. Shri Raj Kumar Jain                .... Defendant No. 2
Authorized Representative of M/s Aditya Enterprises,
R/o G-89, 2nd Floor, Saket, New Delhi-110017
and also at : A-169, Basement, Shivalik,
Malviya Nagar, New Delhi - 110017.


                                                            Date of Institution : 19.09.2018
                                                            Date of arguments : 16.09.2022
                                                            Date of Judgment : 30.09.2022

                                   JUDGEMENT

1. This is a suit for recovery of Rs.8,08,400/-, filed by the plaintiff.

2. In brief, case of the plaintiff, M/s ARS Steels Pvt. Ltd. is that it is a private limited company, carrying business of manufacturing of steel bars of several types, cement, aluminum and stainless steel and defendant no. 1 is engaged in the business of re-selling/supplying of TMP bars etc. Plaintiff has filed suit ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 1 of 13 through his authorized representative Shri Ankit Aggarwal. Defendant no. 1, Smt. Abha Jain is the proprietor of M/s Aditya Enterprises and defendant no. 2, Shri Raj Kumar Jain is an authorized representative of the said company. It is stated that D- 1 is engaged in the business of re-selling/supplying of TMT bars etc.

3. It is pleaded that in the usual course of business, D-2 as the AR of D-1, used to place orders via emails to the plaintiff at its Calcutta office for supplying construction equipments on the condition that account would be current, running and continuous. Price of the goods was payable by the D-1 within 45 days of the delivery. D-1 had also to pay for the transportation charges and interest @ 24% per annum, in case of default for repayment beyond 45 days.

4. It is further averred in the plaint that pursuant to understanding between the parties, D-1 placed several online purchase orders from time to time at its Calcutta office and the plaintiff sold supplied and transported TMT bars etc to the desired places as per the instructions of D-1 and thereafter raised bills/invoices from time to time. It is stated that plaintiff copy of challan alongwith the bills invoices and relevant consignment note and bill of carrier are enclosed. On 04.06.2016, the goods worth Rs.8,08,400/- and on 10.06.2016, goods worth Rs.8,28,488/- was sold and supplied to D-1 vide two separate invoices dated 04.06.2016 and 10.06.2016 respectively. D-1 accepted the goods and did not raise any doubt about quality of delivered goods at their works premises and even at third party site namely at Siemens Ltd., Sector-153, Noida, UP.

5. It is pleaded that D-1 paid a sum of Rs.8,28,488/-

only and thus, a sum of Rs.8,08,400/- is due and payable by D-1, which she neglected and refused to pay and thus, D-1 is liable to pay interest as well on the said sum @ 24% per annum. Plaintiff reminded D-1 of her liability by oral communications/written letters and vide legal notice dated 26.07.2017 and 22.08.2017 but defendant no. 1 paid no heed to pay the same.

6. It is stated that D-1 is having its office at Malviya Nagar, New Delhi within the jurisdiction of this court, from where orders were placed and goods were delivered to and cause of action arose on 06.04.2016 when orders were placed, on 04 th June and 10th June, 2016 when goods were sold, on 09th August and 10th August, 2016 when part payment was made and lastly on 26th July and 22nd August, 2017 when legal notices were served upon D-1. Plaintiff has prayed a decree in the sum of Rs.8,08,400/- alongwith pendent-lite and future interest @ 24% per annum and costs.

7. The suit is contested by the defendants by filing common written statement. In the written statement, it is admitted that D-1 is the proprietor of M/s Aditya Enterprises and engaged in the business of re-selling/supplying TMT bars and other construction material and D-2 is the authorized person and engaged in taking key decisions for D-1. It is stated that D-1 and plaintiff were business associates and D-1 used to purchase construction equipment like TMT bars from the plaintiff and thereafter sell the materials to others. It is not disputed that on 06th April, 2016, D-1 placed an order to the plaintiff who sold supplied and transported goods to D-1 on 4th June and 10th June, 2016 for Rs.8,08,400/- and Rs.8,28,488/- respectively and raised two bills of the even dated upon D-1. Defendants have admitted ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 3 of 13 raising of two bills by the plaintiff.

8. The case of the defendants is that they received complaint from Siemens Limited to the effect that the supplied goods were defective and under weight and communicated the same to the plaintiff on receipt of informations from Siemens Limited. It is submitted that although plaintiff assured to replace the defective material but till date has not taken any action to do the same. D-1 continuously followed up with the plaintiff to know the status of the replacement but response of plaintiff was unsatisfactory. It I submitted that defendants suffered huge loss in the business and his business relations with Siemens Ltd got strained. Defendants have denied about the existing of any agreement between plaintiff and defendants with respect to the paying interest @ 24% per annum and the period of payment. It is stated that plaintiff is not entitled to recover any amount from the defendants, and have prayed for dismissal of the suit.

9. In replication, plaintiff has reiterated the averments made in the plaint and denied the allegations made by the defendants in the written statement. It is stated that defendants have not returned the goods to the plaintiff but rather consumed it for their benefit. It is denied that defendants did any follow up regarding the replacement of defective materials as alleged.

10. From the pleadings of the parties, following issues arise for consideration :-

1. Whether plaintiff is entitled to the recovery of an amount of Rs.8,08,400/- from the defendants? OPP

2. Whether plaintiff is entitled to interest as claimed @ 24% per annum? OPP ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 4 of 13

3. Whether the material supplied by the plaintiff to the defendants was defective and underweight which plaintiff failed to replace despite assurance and due to which defendants suffered losses of business? OPD

4. Relief.

11. In support of its claim, plaintiff has examined Shri Ankit Aggarwal, AR of the plaintiff, as PW-1, whereas Shri Raj Kumar Jain appeared as a witness on behalf of the defendants and he has been examined as DW-1.

12. This court has heard submissions advanced by Shri Navlendu Kumar, Ld. Counsel appearing for the plaintiff and Shri Lokesh Sharma, Ld. Counsel appearing for the defendants and perused the material placed on record.

13. Issue-wise findings of the court are as under :-

Issue No. 3 is taken up first "Whether the material supplied by the plaintiff to the defendants was defective and underweight which plaintiff failed to replace despite assurance and due to which defendants suffered losses of business?" OPD

14. The onus to prove this issue was upon the defendants. Ld. Counsel for the defendants submitted that the material supplied by the plaintiff was defective and underweight i.e. lesser in quantity by 3.5 metric tons and was also rusted and that after knowing this fact, defendant no. 2 immediately informed the plaintiff regarding the same and plaintiff assured that the same will be replaced. It is submitted that plaintiff raised two bills/invoices bearing no. ARSSPL/16-17/UP/CS/3-1 dated 04.06.2016 (Ex.PW-1/2) and ARSSPL-16-17/HR/E1/3-3 dated 10.06.2016 valued at Rs.8,08,400/- and Rs.8,28,488/-

respectively upon defendant no. 1 and on the basis of a healthy relationship with plaintiff, defendant no. 1 duly paid amount of Rs.8,28,488/- to the plaintiff.

15. It is submitted that defendant no. 2 continuously followed up with the plaintiff in respect of bill/invoice, Ex.PW- 1/2 but it turned out to be of no use. It is submitted that plaintiff asked defendant no. 2 to meet him personally during his visit in Delhi which defendant no. 2 agreed, however, plaintiff never informed defendant no. 2 regarding his visit to Delhi and did not contact him. It is submitted that due to supply of defective and underweight material by the plaintiff to defendants, business relation of defendant no. 1 with his client Siemens Ltd got strained. Siemens Ltd. removed the defendants from the project on which the defendants were working and defendant no. 1 suffered huge losses and therefore, plaintiff does not owe any amount.

16. Ld. Counsel for the defendant submitted that after two months from being removed, defendant no. 2 asked M/s Siemens Ltd for the cost price of TMT bars as well as for reconciliation about the balance payment/charges and in September, 2016, Siemens Ltd by foreclosing the contract with defendants paid a lump sum amount after deducting a specified amount for defective and underweight material. It is submitted that plaintiff instead of resolving the issue with the defendants, sent legal notices in order to recover the remaining amount against the supply of defective and underweight material. It is submitted that contention of plaintiff that defendant received the Mechanical Test Certificate (MTC) as MTC is supplied by manufacturer of TMT to the retailer/distributor who in turn ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 6 of 13 supplies the same to end-user and in the present case, defendant no. 2 was supplied MTC which was issued by the company after the dispute had already arisen between Siemens Ltd. and the defendants. It is submitted that it is not clear where the said TMT/saria was stored by the plaintiff which becomes rusted due to moisture/rain/soil and that rusting of the material supplied is not certified by the company and only chemical/component is certified. It is submitted that the MTC can even display a specified period after which TMT would become rusted.

17. In response, Ld. Counsel for the plaintiff submitted that defendant has not been able to discharge the onus. On asking, whether any written complaint qua the defective and under weight product was received by the defendant, answer was in negative and thus, the defense of defendant is moonshine, who has failed to prove their version. It is submitted that plaintiff company had sold, supplied and transported various construction equipment viz. TMT Bars etc. to the desired places as per the instructions of the defendant no. 1, not to do so gratuitously and the defendant, having received such goods is liable to compensate to the plaintiff company. It is submitted that plaintiff is entitled to the claimed amount along-with with cost of suit including Legal fee @ of Rs 95,000/-. This court finds that defendants have failed to prove that defective and underweight material were supplied to them by the plaintiff. No witness from Siemens Ltd or from any other authority has been examined by the defendants to prove that the supplied material was defective and underweight. DW-1 stated that Ms. Abha Jain is his and since she was not keeping well, he was managing the affairs of proprietorship firm for the last 7-8 years. DW-1 admitted in the ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 7 of 13 cross-examination that the goods mentioned in Ex.PW-1/2 i.e. challan-cum-tax invoices were received. He voluntarily stated that the goods saria/TMT bar were delivered at the Noida site of Siemens Ltd, which on verification by Siemens Ltd later on was found to be lesser in quantity by 3.5 metric ton and was also rusted. Siemens Ltd had deducted charges for the deficient quantity of 3.5 metric tone. Thereupon, on asking, DW-1 stated that he had not taken any photograph of the rusted saria at the site of Siemens Ltd and had not made any videography by using any electronic machine. He deposed that he was the sub-contractor of the Siemens Ltd and was not returned the rusted saria by Siemens Ltd. DW-1 referred about manufacturing test services. He stated that he was supplied MTC issued by the company after the dispute had already arisen between him and Siemens Ltd. However, it was not clear when and where the said TMP saria was stored by the plaintiff which became rusted due to moisture, rain and soil. DW-1 stated that he has not filed on record the said MTC and rusting was not certified by the company and the only chemical/component were certified by the company.

18. On asking, how much lesser amount, was received by him from Siemens Ltd in lieu of 3.5 metric tons lesser quantity stated by him, DW-1 deposed that he will have to check the record. He stated that rate of one metric tone charged by them was @ Rs.55,000/- per metric tone and the amount which was received lesser by them was about Rs.1,75,000/-. On asking, if he had filed any document or had pleaded the same in written statement, his answer was in negative. Thus, admittedly, defendant has not filed any such document to show that he had received any lesser amount or Rs.1,75,000/-. At one point, he ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 8 of 13 stated that he received balance amount after deduction of the aforementioned amount and on other point, certain penalty imposed upon him for supply of defective material, he could not tell which type of TMT bar was of lesser quantity.

19. DW-1 stated that he visited the site after four days and so saria was rusted and the engineer of Siemens Ltd informed him verbally that the said TMT saria was not usable. DW-1 admitted that employee of Siemens Ltd had not informed or complained him in writing about the rusted saria and he had not informed the plaintiff about the rusted TMP supplied by them to him vide Ex.PW-1/2. He admitted that he had not filed any suit against the plaintiff. He stated that he hardly received an amount of Rs. Six Lakhs towards foreclosing of contract in September, 2016. DW-1 admitted that he had not mentioned whatever had been stated by him in the court in his written statement or in his affidavit in evidence. He stated that he had mentioned in short. He admitted that he had not filed any document about his contract with Siemens Ltd. During cross- examination, PW-1 Shri Ankit Aggarwal denied the suggestion that there would be a dispute regarding quality or quantity of the material between him and the defendant. If the material supplied was defective and underweight, as alleged, defendants could have communicated to plaintiff or at least replied to the legal demand notice, Ex.PW-1/6A. PW-1 deposed that the period of payment i.e. 45 days is mentioned in the invoice dated 04.06.2016, Ex.PW-1/2 and all the details i.e. invoice number, delivery note, name and address of the transporter and assignee, description of the goods have been described in the challan, Ex.PW-1/2.

20. In his deposition, PW-1 admitted that there used to be a telephonic communication between the parties as regards the transaction in question and after telephonic conversation, on asking, emails used to be sent on behalf of the defendant and he had telephonically informed Shri R.K. Jain (D-2) regarding the outstanding dues. On consideration of the entire material on record, this court finds that there is nothing in the cross- examination of PW-1 to impeach his veracity in material particular and PW-1 has stood the test of cross-examination. This court finds that defendant has failed to establish that material supplied by plaintiff to the defendant was defective and underweight. Accordingly, this issue no. 3 is decided in favour of the plaintiff and against the defendants.

"Whether plaintiff is entitled to the recovery of an amount of Rs.8,08,400/- from the defendants?" OPP

21. The onus to prove this issue is upon the plaintiff. PW-1 has proved the documents placed on record i.e. printouts of emails of purchase order TMT FE 500D dated 06.04.2016 and 01.06.2016, issued by D-1 to plaintiff, Ex.PW-1/1; printout of email of challan-cum-tax invoice ARSSPL/16-17/UP/CS/3-1 dated 04.06.2016 issued by plaintiff to defendant, Ex.PW-1/2; packing list relating to invoice no. 038/16-17 dated 04.06.2016 issued by plaintiff to defendant, Ex.PW-1/3; LR No. 815 dated 04.06.2016, Ex.PW-1/4; Kanta/weight slip of steel no. 001561 dated 05.06.2016, Ex.PW-1/5; courier receipt no. K88290020 dated 12.06.2016, Ex.PW-1/B; legal notices dated 26.07.2017 and 22.08.2017 issued by counsel for the plaintiff to defendant no. 1, Ex.PW-1/6 and Ex.PW-1/6A and envelope and track ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 10 of 13 consignment dated 27.07.2017, Ex.PW-1/6B; printout of outstanding claim of plaintiff w.e.f. 01.04.2016 to 09.06.2017, Ex.PW-1/7; certificate issued by Shri Vaibhav Khandelwal dated 04.06.2018 regarding outstanding payment of Rs.8,08,400/- due against defendant, Ex.PW-1/8. During cross-examination, PW-1, Shri Ankit Aggarwal, defendant could not cull out any relevant facts in support of his version or could not impeach the veracity of the facts mentioned in the plaint. It is notworthy that in his cross-examination, DW-1 admitted that he had not paid the demanded amount of Rs.8,08,400/- to the plaintiff despite demand of service of demand notice till date.

22. The contention of plaintiff about supplying defective and underweight material to the defendants or defendants suffered huge loss has no merits and has already been dealt with in issue no. 3 above.

23. In Ex.PW-1/8 i.e. certificate dated 04.06.2018, issued by Shri Vaibhav Khandelwal, Chartered Accountant of the defendants, it is clearly admitted that an amount of Rs.8,08,400/- is outstanding from Aditya Enterprises. It has already been noted that DW-1, Shri Raj Kumar Jain in his deposition has categorically admitted the liability of the defendants after receiving the goods. On appreciation of evidence on record, this court finds that plaintiff has proved its entitleement for recovery of Rs.8,08,400/- from the plaintiff. Accordingly, this issue no. 1 is decided in favour of the plaintiff and against the defendants.

"Whether plaintiff is entitled to interest as claimed @ 24% per annum?" OPP

24. The onus to prove this issue was upon the plaintiff.

Ld. Counsel for the plaintiff submitted that PW-1 in his cross- examination in para no 8 categorically mentioned that he had informed qua imposition of interest @ 24 % since the defendants are not paying the suit amount after 45 days. It is further submitted that defendants had failed to make payment, therefore, the plaintiff is well within its right as per the invoices which were never disputed and have been proved.

25. As per Section 34 CPC, when a decree is for payment of money, the court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% per annum at Court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the Court deems thinks. As per proviso to sec 34 CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.

26. Having regard to the totality of aforenoted facts and the prevailing market rate at which interest is charged, this Court is of the view that grant of 12% per annum pendente lite and future interest would serve the ends of restitutive justice. Thus, plaintiff is held entitled to the interest @ 12% per annum since after 45 days of the date of last bill issued in this case i.e. (w.e.f.

26.07.2017) till the realization of the entire amount). This issue no. 2 is decided accordingly.

Relief

27. Learned counsel submitted that plaintiff has spent time, energy and costs in filing and prosecuting this suit. In the interest of restitutive justice, plaintiff shall also be entitled to costs. The present suit was filed on 19.09.2018. Having regard to hearings in this case till date, pleader's fee and litigation expenses are assess as Rs.33,000/- and court fee deposited by the plaintiff is Rs.10,210/-. This Court finds that plaintiff is entitled to a total costs of Rs.43,210/- (inclusive of Court fees).

28. In the result, a decree is hereby passed in favour of plaintiff and against defendants jointly and severally in the sum of Rs.8,08,400/- alongwith interest @ 12% per annum w.e.f. 26.07.2017, till the realization of entire amount and costs (inclusive of court fees) of Rs.43,210/-. Decree sheet be prepared accordingly. Suit stands disposed of accordingly. File be consigned to record room.

(Announced in the open court today i.e. on 30.09.2022) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi/30.09.2022 ARS Steel Pvt Ltd. Vs. Abha Jain & Anr. {CS(Comm) 145/20} Page 13 of 13