Delhi District Court
Through Its Gpa Sh. Omprakash Singh vs Sh. Rajeev Gupta on 26 April, 2023
IN THE COURT OF MS. SHUBHI GUPTA
CIVIL JUDGE ( East), KKD COURTS, DELHI
CS NO.638/17
Date of institution of suit : 11.08.2017
Date of reservation of suit : 19.04.2023
Date of passing of Judgment : 26.04.2023
M/S Genius Heavy Duty Pvt. Ltd.
Through its GPA Sh. Omprakash Singh
307, Crown Heights, Crown Plaza
Sector 10, Rohini
Delhi ..........Plaintiff
Versus
Sh. Rajeev Gupta
Proprietor of M/s Choice Electronics
H-15, Main Vikas Marg
Laxmi Nagar, Delhi-110092
............Defendant
SUIT FOR RECOVERY OF RS. 91,200/- ALONGWITH
PENDENTIE LITE AND FUTURE INTEREST
JUDGMENT
1. Brief facts of the present suit Brief facts of the present case as per plaint are that the plaintiff is a Private Limited Company registered under the Indian Companies Act and is Distributor of the Electronnic and Electric Goods and being the GPA holder of the plaintiff, Sh. Omprakash has been authorized to sign, verify the plaint and adduce the evidence on behalf of the company. It is further stated that defendant namely Rajeev Gupta is managing and controlling the day to day affairs of M/s Choice Electronics. It is further stated that defendant had approached the plaintiff for purchasing the electronics goods at the office of the plaintiff and the defendant had induced and presented to the plaintiff at the time of entering into the commerical and business CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 1/10 transactions that the defendant is having the good financial capacity and capability to clear the dues and liabilities and having the good liquidity. On the representation and trust upon the defendant, the plaintiff had developed the business relationship with the defendant under certain terms and conditions which duly accepted by the defendant. Such terms and conditions agreed by the defendant has also been shown on each invoice/bill through which goods were supplied as per demand and other placed by the defendant. It is further stated that defendant had been placing regular orders upon the plaintiff for supply of electronics goods at the office of the plaintiff, which the plaintiff supplied through invoice/bills duly received and acknowledged by the defendant and the defendant has thus opened mutual and current account with the plaintiff duly maintained in its routine course of business under the condition that payment of each consignment of goods would be made within 2 days after its receipt and for any delay, interest @24% p.a would be charged from the date of the bill and this fact has also been mentioned at serial no. 3 of the bill/invoice through which goods were sent and received and acknowledged by the defendant. It is further stated that as per the mutual current running account maintained by the plaintiff a sum of Rs. 91,200/- is running outstanding against the defendant from 04.05.2017 which the defendant failed and neglected to pay the plaintiff inspite of its repeated demands and request. It is further stated that the plaintiff on several occasions demanded the payment from the defendant but the defendant had averted the matter on one pretext or other. It is further submitted by the defendant has utilized and used the consignment of goods which was sent as per the defendant order, instruction and direction by the plaintiff. The defendant has appropriated the same for his own use. The defendant at the time of placing the order to the plaintiff had assured that the defendant will make the payment immediately but the defendant despite of repetitive requests made by the plaintiff has not paid the same. Resultant thereof CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 2/10 the plaintiff is suffering grave financial hardship and crises. Such conduct on the part of the defendant has caused immense mental torture, pain, agony and set back to the plaintiff. It is further stated that plaintiff had sent a legal notice dated 06.05.2017 through his counsel vide speed post consignment note nos. ED320513890IN & ED320513775IN both dated 09.05.2017 at the correct addresses of the defendant.
2. WRITTEN STATEMENT OF THE DEFENDANT By way of Written statement of defendant, defendant has denied each and every averments made by the plaintiff and has stated the suit of the plaintiff is false and fabricated and without cause of action and liable to be dismissed under Order 7 Rule 11 r/w Section 151 CPC. It is further stated tha the suit of the plaintiff is false and fabricated and has been filed, signed and verififed by unauthorized person without any authority. The plaintiff has not filed the minutes, resolution of board of Directors etc. and the suit is liable to be dismissed under Order 6 Rule 15 CPC.It is further stated that the plaintiff has not come with clean hands and has suppressed the material facts that the plaintiff is guilty of non-supply of the goods despite receipt of payment in advance as well as replacement of faulty stabilizers and the defendant is entitled to get recovery of Rs. 2 Lakhs which is lying with the plaintiff as advance payment and the defendant is filing his counter claim for mandatory injunction seeking direction against the plaintiff to return the amount which is lying with the plaintiff. It is further submitted that the plaintiff used to supply substandard items as well as the old items which are already having expired life supplied to the defendant, the same can be verified as the items were manufactured in the year 2010 which were having label of year 2015/2016. It is further stated CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 3/10 that the plaintiff is having no entity and one Sh. Agosh Jain stated to be the Proprietor of M/s Surya Distributor has filed one other false and fabricated suit against the defendant wherein the written statement and counter claim has been filed by the answering defendant. It is further stated that the plaintiff has filed the forged documents by putting the forged signatures on behalf of the defendant and the alleged signatures on behalf of the defendant are different and forged for which the plaintiff is liable to be prosecuted under Section 340 Cr.P.C. It is further stated that the alleged legal notice dated 06.05.2017 was never served upon the defendant and the contents of the notice as well as the plaint are incorrect and baseless. All other averments made by the plaintiff are denied by the defendants.
3. REPLICATION Plaintiff filed replication to the written statement of the defendants, wherein, he has reaffirmed and reiterated the contents of the plaint and has denied the contents of the written statement. On the basis of the pleadings of the parties, following issues have been framed by the Ld. Predecessor of this court for trial on dated 30.08.2018.
(i) Whether the plaintiff is entitled to recovery of Rs. 91,200/- as prayed for? OPP
(ii) If issue no. 1 is decided in favour of the plaintiff, whether plaintiff is entitled to the interest @24 % per annum as prayed for? OPP
(iii) Whether the suit of the plaintiff is filed by unauthorized person? OPD
(iv) Whether the plaintiff has not supplied the goods despite receiving of payment in advance? OPD
(v) Relief.
CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 4/10
4. In order to prove his case, plaintiff has examined himself as PW-1 by way of his affidavit in evidence which is Ex. PW-1/1. He has relied on the following documents:
(i) Ex. PW-1/A (OSR) : Copy of GPA
(ii) Ex. PW-1/B & Ex. PW-1/C : Bills.
(iii) Ex. PW-1/D : Statement of
accounts.
(iv) Ex. PW-1/E : Certificate under
Section 65B of IEA.
(v) Ex. PW-1/F : Legal notice dated
06.05.2017.
(vi) Ex. PW-1/G & Ex. PW-1/H : Speed post receipts.
(vii) Ex. PW-1/I : Delivery Report.
5. Thereafter, the defendant after partly cross examining the plaintiff/PW-1 has stopped appearing despite various opportunities granted by the Ld. Transferor Court and was accordingly proceeded ex-parte by the Ld. Transferor Court and the matter was listed for final arguments.
6. I have heard Ld. Counsel for the plaintiff and have carefully gone through the records.
7. My observation on the above issues as follow:
ISSUE NO. 3Whether the suit of the plaintiff is filed by unauthorized person? OPD The onus to prove this issue was on the defendant. However, no evidence has been led by the defendant in this regard.
The Ld. Counsel for the defendant has cross examined PW-1 i.e. Sh. Om Prakash Singh at length on this issue. Ex. PW-1/A is the GPA which states that Sh. Om Prakash Singh has been authorized by Sh. Vaibhav Jain and Sh. Sanjay Kumar (Directors of the plaintiff CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 5/10 company) to file the present suit.
It is stated by the defendant in the WS that no Board of Resolution has been filed by the plaintiff company which is a Private Limited Company. Therefore, the suit is liable to be dismissed as it has been filed without any authorized person.
Before delving further, it is important to discuss the law for filing of a suit by a Company. A company is a distinct and independent legal person, and its assets are separate from its members, it can sue and be sued in its name. However, it being juristic person needs a natural person to act on his behalf and manage the affairs of the company. Under Order XXIX Rule 1 of CPC, Secretary or any Director or other Principal Officer of the company can sign the pleadings by virtue of his office. A company can ratify the act of signing the pleading, also.
It is held by the Hon'ble Supreme Court of India in the case of "United Bank of India Vs. Naresh Kumar & Ors." AIR 1997 SC 3 decided on 18.09.1996.
"10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of CPC a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of CPC, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of CPC it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of CPC, as a company is a juristic entity, it can duly authorise CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 6/10 any person to sign the plaint or the written statement or its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of CPC. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual."
It is further held in catena of judgments that the defect in filing the suit or in appeal in the absence of a board resolution by a company is a curable defect which can be cured by an express or implied ratification by a board resolution.
Perusal of the record shows that no Board of Resolution has been filed on behalf of the Private Company. In lieu of Board of Resolution, a GPA which is Ex. PW-1/A has been filed authorizing PW-1 to pursue the present matter. Perusal of the Contents of Ex. PW- 1/A show that the Directors of the plaintiff company have authorized Mr. Om Prakash Singh to pursue the present matter. The contents of Ex. PW-1/A are similar to that of Board of Resolution which is a formal decision taken by the Directors at a Board meeting. PW-1 in his cross examination has stated that the plaintiff company is a Private Limited company having two Directors, namely, Vaibhav Jain and Sanjay Kumar. Ex. PW-1/A bears signatures of both the Directors as stated by PW-1/1. The suggestion made by the Ld. Counsel for the defendant regarding the forged and fabricated GPA has been denied by PW-1. Although, PW-1 has stated in his cross examination that he has filed resolution of Board of Directors and minutes in the present case, however, when he was shown the file to identify the resolution of Board of Directors and minutes, no resolution was found in the court record. The suggestion by the Ld. Counsel for the defendant regarding PW-1 has not been authorized by the Directors to represent before this court has been denied by PW-1. The suggestion regarding no Board meeting was also denied by him. PW-1 in his cross examination has stated that the meeting took place at 307, Crown Plaza, Sector-10. It is CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 7/10 further stated by PW-1 that he can disclose the dates after verification of the documents in the office. Thereafter, the cross examination was deferred for the disclosing of the dates. However, the defendant had stopped appearing before this court and was declared ex-parte by the Ld. Predecessor of this court.
All the suggestions regarding fabrication of the GPA have been denied by PW-1/1. The suggestions that PW-1 has no valid authorization has also been denied by him. It is a settled law is that once a suggestion is denied, the onus shifts upon the other party to prove the fact he asserts. Here, the defendant did not lead any evidence regarding the same. No material controversy is seen in the deposition of PW-1 meaning, thereby, the defendant had failed to prove this issue, therefore, this issue is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 4Whether the plaintiff has not supplied the goods despite receiving of payment in advance? OPD The onus to prove this issue was on the defendant. However, no evidence has been led by the defendant in this regard. Therefore, this issue is decided against the defendant and in favour of the plaintiff.
ISSUE NO. 1Whether the plaintiff is entitled to recovery of Rs. 91,200/- as prayed for? OPP The onus to prove this issue was upon the plaintiff. It is stated by the plaintiff that the defendant had been placing orders upon the plaintiff for which the various bills have been raised against him. It is further stated that a sum of Rs. 91,200/- is running outstanding against the defendant from 04.05.2017. It is further stated by the plaintiff that despite several requests no payment has been made by the defendant. Therefore, a legal notice dated 06.05.2017 was sent by the plaintiff which was duly served upon the defendant. However, despite service of the same no payment has been made by the defendant. Per contra, CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 8/10 defendant has stated that the plaintiff is guilty of non supply of goods despite receipt of payment in advance as well as replacement of faulty stabilizers. It has been further stated that defendant has made advance payment to the plaintiff, however, the plaintiff used to supply sub standard and old items to the defendant. It is further stated that the plaintiff has filed the present suit on the basis of forged and fabricated invoices.
It is evident that the defendant has admitted business relations with the plaintiff company. The version of the defendant of non delivery of goods has not been proved as no evidence has been led by the defendant in this regard.
The defendant has also alleged that the plaintiff is having no entity and one Sh. Agosh Jain who is stated to be the proprietor of M/s Surya Distributor has filed one other false and fabricated suit against the defendant. However, this fact has not been proved by the defendant. No question has been asked by PW-1 in this regard.
As per the plaintiff's case, invoices which are exhibited as PW- 1/B and Ex. PW-1/C are raised against the defendant. The statement of account which is Ex. PW-1/D alongwith certificate u/s 65 B Indian Evidence Act exhibited as Ex. PW-1/E show that sum of Rs. 91,200/- is running outstanding against the defendant from 04.05.2017. Ld. Counsel for the defendant has not asked even a single question in this regard. Therefore, it appears that the defendant has admitted the version of the plaintiff. The plaintiff has discharged his burden in proving the aforementioned issue. In view of the same, this issue is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 2If issue no. 1 is decided in favour of the plaintiff, whether plaintiff is entitled to the interest @24 % per annum as prayed for? OPP In the plaint, the interest has been claimed in prayer clause only. The plaintiff has claimed pendente-lite and future interest at the CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 9/10 rate of 24% per annum from filing of the suit till realization and no pre-suit interest has been claimed.
It is trite law as per Section 34 of CPC, a court can grant a rate of interest on the principal sum adjudged from the date of the suit till the date of decree reasonable and is not bound by the interest claimed by the plaintiff. Further, as per the same provision, the future interest i.e. from the decree till realization can be granted at such rate not exceeding 6 % per annum except in case of commercial transactions wherein the rate shall not exceed contractual rate of interest, in default, at a rate at which moneys are lent or advanced by a Nationalized Bank.
In view of the above observations, it is considered reasonable to grant interest at the rate of 6% per annum from the date of the suit till realization.
Hence, the issue is decided in favour of the plaintiff and against the defendant.
8. Relief In view of the observations and findings on issues hereinabove, suit of the plaintiff is decreed for a sum of Rs. 91,200/- with cost of the suit. In these circumstances, plaintiff is also awarded interest at the rate of 6% per annum from the date of filing of the suit till realization of the decreetal amount.
9. Decree sheet be prepared accordingly.
10. File be consigned to Record Room after due compliance.
(this order contains 10 pages and each page has been signed by me.) Pronounced in open court on 26.04.2023.
(Shubhi Gupta) Civil Judge(East)/KKD Courts CS No. 638/17 M/s Genius Heavy Duty Pvt. Ltd. Vs. Sh. Rajeev Gupta 10/10