Delhi District Court
Mr. Farhad Ali Choudhary vs M/S Fashion Makers Group on 3 November, 2015
IN THE COURT OF CIVIL JUDGE, SOUTH EAST DISTRICT,
SAKET COURTS COMPLEX, SAKET, NEW DELHI
Presiding Officer: Sh. Dinesh Kumar, DJS
Suit No.291/2014
Unique Id no. 02406C0178552014
In the matter of:
Mr. Farhad Ali Choudhary
Prop. M/s Top Metal Overseas
I52, Abul Fazal Envlave, Okhla
New Delhi110025 ..........Plaintiff.
vs
M/s Fashion Makers Group
C129, Sector63
Noida, 201301, UP
Through its Authorized Signatories
Mr. Rakesh Jain and Ms. Rakhi Jain ..........Defendant.
Date of institution of Suit : 22.07.2014
Date on which order was reserved : 11.09.2015
Date of pronouncement of the order : 03.11.2015
ORDER
1. Vide this order, I shall decide an application moved by the defendant seeking leave to defend the suit. Before discussing the contentions raised by the defendant in the application, it would be relevant to discuss the facts of the case as stated by the plaintiff in the plaint. The plaintiff has filed the present suit under U/o XXXVII, CPC. The plaintiff has stated his case as under:
1.1. The plaintiff is engaged in the business of CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 1 of 11 manufacturing and supply of all kinds of Zip, Alloy Zinc Casting Material, Metal Buttons and all types of garments accessories. The defendant is a partnership firm and Mr. Rakesh Jain and Ms. Rakhi Jain are the authorized signatories of defendant and they are responsible for day to day conduct and affairs of defendant. 1.2. The defendant had placed order for supply of 1055 AGC Metal Buttons of metal colour and 702 pieces Zipper Concealed of rose colour, vide order dated 24.08.2013 and 29.08.2013. The ordered material was duly manufactured and supplied by the plaintiff to the defendant. It was accepted by the defendant to their entire satisfaction.
1.3. The plaintiff raised bills dated 28.08.2013 and 12.09.2013 for a sum of Rs.3,983/ and Rs.73,175/ respectively for the abovesaid supply.
1.4. The defendant, in discharge of the liability of the above said purchases, issued a cheque bearing no.884238 dated 18.10.2013 for a sum of Rs.77,058/ drawn on State Bank of Bikaner & Jaipur, G14/15, Sector18, Noida, Gautam Budh Nagar, U.P., in favour of plaintiff. The defendant had assured that the cheque for good for presentation.
1.5. As per the instructions of the defendant, the plaintiff had deposited the said cheque with his banker for its encashment. CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 2 of 11
However, the same was dishounoured with the reason "payment stopped by drawer". The plaintiff issued a legal notice dated 29.01.2014 under the provisions of Section 138 NI Act, whereby demanding the payment of the dishonoured cheque in question. Notice was duly served. The defendant sent a misleading reply dated 13.02.2014. The plaintiff contacted the defendant personally. The defendant requested to wait for 23 months. However, the defendant has failed to pay the amount. Hence, present suit has been filed undedr Order 37 CPC for recovery of Rs.77058/ along with interest @ 18% P.A.
2. The defendant has moved the present application seeking leave to defend the suit. In the application and the affidavit, the defendant has stated as under:
2.1. This Court does not have territorial jurisdiction. The registered office of the defendant is situated at Noida and it operates its business from Noida and therefore this Court does not have jurisdiction to decide the present suit.
2.2. On merits, it is stated that the defendant had issued purchase orders no.5340 and 5344 dated 24.08.2012 for supply of metal button quantity 1000 gross and rose colour zipper concealed quantity 700 pieces respectively. The defendant had issued the cheque no.884239 for Rs.77,058/ dated 18.10.2013 for the bills raised by the CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 3 of 11 plaintiff. Vide letter dated 23.10.2013 the defendant informed the plaintiff that his material against bill no.021 dated 12.09.2013 had been rejected and he was advised to collect the rejected material. 2.3. The plaintiff had collected the rejected material for which he accepted and signed the debit note no.1613 dated 24.10.2013 at the time of collecting the rejected material. 2.4. The remaining balance of Rs.3893/ against bill no.18 dated 28.08.2013 has been paid to the plaintiff vide cheque no.294737 dated 07.02.2014. Therefore, the plaintiff is not entitled to recover the amount claimed in the suit. The defendant had duly replied to the legal notice. The defendant has a valid defence to defend the suit. Hence, it is prayed that leave may be granted to defend the suit on merits.
3. The plaintiff has filed reply to the application. It is stated in the reply that application is not maintainable. The defendant has failed to raise any triable issue. The defendant is trying to mislead the Court on the basis of forged and fabricated debit note. No debit note was issued. The goods were supplied to the defendant to proper satisfaction qua their quality and standard and the defendant had issued the cheque after satisfaction. The defendant never sent any letter dated 23.10.2013 as stated in the application. The alleged debit note is a forged and fabricated document. The defendant has withheld the payment deliberately. The defendant did not make any payment of Rs. CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 4 of 11
3893/ by way of cheque as mentioned in the application. The plaintiff never received back any material as alleged in the application. All the allegations are false. Hence, it is prayed that the application may be dismissed and suit may be decreed.
4. I have heard the rival submission of Ld. counsels of the parties and carefully perused the material available on record.
5. The law relating to grant leave to defend is well settled. Hon'ble Supreme Court of India in Mechalec Engineers and Manufacturers, M/s. v. M/s. Basic Equipment Corporation AIR 1977 SC 577 has held as under:
"8. In S. Kiranmoyee Dassi v. Dr. J. Chatterjee, (1945) 49 Cal WN 246 at p. 253, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 37, C.P.C. in the form of the following propositions (at p. 253):
"(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 5 of 11 immediately make it clear that he had a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence." (emphasis supplied)
6. In the present case, Ld. counsel for the defendant has argued that the defendant had returned the substantial material to the plaintiff which was collected by the plaintiff. The plaintiff had also issued a debit note to this effect. The balance payment has already been made by way of a cheque and therefore nothing has remained due against the defendant. Further, this Court does not have territorial jurisdiction to decide the present suit. Ld. counsel for defendant has CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 6 of 11 drawn my attention towards the documents, namely, a debit note dated 24.10.2013 shown to be issued by defendant to the plaintiff. No other document has been filed by the defendant.
7. Ld. counsel for the plaintiff, on the other hand, has argued that the defendant never returned any goods as alleged. The plaintiff never issued any credit note to the defendant. The alleged debit note is a document of the defendant and it does not bear any signature or seal / stamp of the plaintiff. The plaintiff did not receive any other payment from the defendant as alleged. It is also argued that this Court has jurisdiction to decide the present suit as the goods were supplied to the defendant from its office within the jurisdiction of this Court. Further, the cheque was presented by the plaintiff with his banker within the jurisdiction of this Court. The cheque was handed over to the plaintiff within the jurisdiction of this Court. Ld. counsel for plaintiff has drawn my attention towards the documents, namely, purchase orders dated 25.08.2013, tax invoice for Rs.3983/ dated 28.08.2013 and tax invoice for Rs.73175/ dated 12.09.2013. The cheque for amount of Rs.77058/, cheque return memo, copy of legal notice, postal receipt, reply to legal notice sent by defendant and statement of account.
8. Perusal of the record would show that it is an admitted fact that the plaintiff and the defendant are having business relationship. It is also admitted that the defendant had issued two CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 7 of 11 purchase orders to the plaintiff for supply of material as contended in the plaint. It is also admitted fact that the entire material had been supplied by the plaintiff to the defendant. Further, it is also admitted fact that the defendant had issued the cheque for Rs.77058/ which was dishonoured on presentation. The defendant, however has contended that he had rejected the goods and asked the plaintiff to collect the same. The goods were collected by the plaintiff and debit note was issued. The balance payment was made through a cheque. All these contentions of the defendant have been denied by the plaintiff.
9. As discussed hereinabove, the defendant has admitted that he had received the goods supplied by the plaintiff as mentioned in the plaint. His contention, however, is that the goods were rejected. However, no date of rejection of goods is mentioned in the application. There is no document filed by the defendant to show as to how the intimation of rejection was made to the plaintiff. In the application, it has been stated that on 23.10.2013 the defendant had informed the plaintiff that the goods against bill no.021 dated 12.09.2013 had been rejected. However, no document has been filed in support of this contention to show prima facie that the plaintiff was informed about the said rejection. Section 42 of the Sales of Good Act 1930 defines the acceptance of goods. It reads as under:
"42. Acceptance.The buyer is deemed to have CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 8 of 11 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."
10. Perusal of the Section would show that a purchaser has to reject the goods within a reasonable period. If he retains the goods after lapse of reasonable time without intimating the seller that he has rejected them he is deemed to have accepted those goods. The reasonable time has not been defined. It depends on the facts and circumstances of each case.
11. In the present case, the goods are shown to be supplied to the defendant on 13.09.2013. As per the defendant himself, he did not inform the plaintiff about rejection of goods till 23.10.2013. Thus, for more than 40 days, no intimation was sent to the plaintiff thereby informing him that the goods were rejected. The goods are stated to be metal buttons. The nature of the goods is such that 40 days time goes beyond the limit of reasonable time. Therefore, even if it is presumed at this stage that the defendant can prove by evidence that he had sent the intimation to the plaintiff on 23.10.2013, the intimation of rejection of goods cannot be said to have been issued within reasonable time. Further, the defendant himself has admitted that he had issued the CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 9 of 11 cheque dated 18.10.2013 for Rs.77058/ i.e. after expiry of more than one month from the day of receiving of the goods. Thus, his act of issuing the cheque is sufficient to show that he had accepted the goods and that the goods were never rejected by the defendant.
12. Further, the alleged debit note is a document created by the defendant only on 24.10.2013. It does not bear any seal, stamp or signatures of the plaintiff. The plaintiff had to issue a credit note and not a debit note to the defendant. Therefore, this document is of no use to decide the controversy in issue.
13. The defendant has also taken the objection that this Court does not have jurisdiction to decide the present suit as office of the defendant is situated at Noida, U. P. I have considered this objection. However, I am of the considered opinion that this Court has jurisdiction to decide the present suit. Admittedly, the material has been supplied by the plaintiff to the defendant from its office at Okhla, New Delhi which is situated within the territorial jurisdiction of this Court. Therefore, part cause of action has arisen within the territorial jurisdiction of this Court. Therefore, this Court has jurisdiction to decide the present suit as provided under Section 20 (c) CPC.
14. There is no document on Court record filed by the defendant to show that he had made payment of Rs.3893/ by way of cheque no.294737 dated 07.02.2014 for Rs.3893/. The statement of CS No.291/2014 Farhad Ali Choudhary Vs. M/s Fashion Makers Group Page 10 of 11 account reflecting the said amount is not filed. However, I am of the considered opinion that opportunity must be granted to the defendant to prove this fact by leading evidence. Decree for partial amount cannot be passed under Order 37 CPC.
15. In the light of discussion hereinabove, I am of the considered opinion that even though the defendant has failed to show that he has a probable defence with respect to the rejection of goods, he has shown that he has a defence to show that he had made payment of Rs.3893/ to the plaintiff. The defendant has disclosed such facts which are sufficient to entitle him to defend the suit. I am of the opinion that the defendant is able to show that at the trial of the action he may be able to establish a defence to the part of the plaintiff's claim. Therefore, the opportunity is granted to the defendant to defend the suit on merits. However, this opportunity is granted to the defendant subject to his depositing amount of Rs.77,058/ by way of an FDR in the name of the Court within 30 days of this order.
16. With abovesaid condition application stands disposed of.
Pronounced in the open court (Dinesh Kumar)
on this 03rd day of November, 2015 Civil Judge, South East
Saket Courts, New Delhi
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