Delhi District Court
Shri Puneet Jindal vs M/S Cargo Packaging on 20 May, 2013
1
In the Court of Sh. Vivek Kumar Gulia
Commercial Civil Judge cum ARC1 (Central)
Tis Hazari Courts, Delhi.
Suit No. 172/13/08
Unique I.D. No. 02401C0011122008
In the matter of :
Shri Puneet Jindal, Proprietor of
M/s Shri Balaji Packers,
F11, DSIDC Industrial Complex,
Rohtak Road, Nangloi,
Delhi110041. .......... Plaintiff
Versus
1. M/s Cargo Packaging,
301, Chand Nagar,
New Delhi110018.
2. Shri Davinder Kumar, Proprietor of
M/s Cargo Packaging,
301, Chand Nagar,
New Delhi110018. ........ Defendants
SUIT FOR RECOVERY OF RS. 2,40,520/
Page 1 of 13 Suit no. 172/13/08
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Date of Institution : 04.01.2008
Final arguments heard/case reserved for Judgment : 10.04.2013
Date of Judgment : 20.05.2013
Decision : Suit decreed
JUDGMENT:
1. At the outset, it is mentioned that though, as per the title of the plaint, it is a suit for recovery, however, in the prayer clause, plaintiff has claimed additional relief in the form of mandatory injunction.
2. The important facts of the case, as averred in the plaint, are that the plaintiff is carrying on his business of manufacturing and marketing corrugated rolls and defendant no. 1 is proprietorship concern of defendant no. 2, who used to purchase goods of the plaintiff's merchandise on credit basis subject to terms and conditions duly incorporated on each and every invoice of the plaintiff reflecting that "the payment after due date is liable for interest @ 24 % p.a." and that "intimation giving full details of complaints must be made within 24 hours in writing". It is further mentioned that since defendant was his regular customer, he has been maintaining an open and running account of defendant in his books of account during the normal course of his business. Further, it is mentioned that different transactions took place Page 2 of 13 Suit no. 172/13/08 3 between the parties on regular basis and the plaintiff was asked to issue invoices against the price of good only and not to charge sales tax on the pretext that defendant is duly registered under Sales Tax Act and hence, he will release Form ST1 against purchases made by him. Accordingly, plaintiff issued invoices in 200405 without charging sales tax but defendant has not issued Form ST1 against invoices from 21.06.2004 to 28.02.2005 for a total sum of Rs. 3,80,632/. It is also mentioned that in case Form ST1 against said invoices are not delivered by the defendant, the plaintiff shall be burdened with 6% sales tax on the said amount with interest and penalties, etc. It is further stated that as per statement of account maintained by the plaintiff in the name of the defendant, a balance of Rs. 2,12,634/ is outstanding as on 10.01.2007 and since it was not paid by the defendant, the plaintiff has charged interest thereon at the agreed rate of 24 % p.a. Further, defendant paid a sum of Rs. 20,000/ by way of two cheques bearing nos. 705807 and 705816 dated 31.10.2007 for a sum of Rs. 10,000/ each, drawn on SBI, Delhi, and as on 31.10.2007, a sum of Rs. 2,33,747/ is still lying outstanding which the defendant has not paid despite requests and demands. Further, it is mentioned that plaintiff raised demand vide legal notice dated 21.11.2007 but it was not complied with. In view of above, it is prayed that the suit of the plaintiff be decreed for a sum of Rs. 2,40,520/ alongwith Page 3 of 13 Suit no. 172/13/08 4 pendentelite and future interest @ 24 % p.a. and further, for issuing necessary directions to the defendants to release Form ST1 against invoices issued w.e.f. 21.06.2004 to 28.02.2005 for total amount of Rs. 3,80,632/ or in alternative to pay 6% sales tax on the aforesaid purchase amount alongwith interest and penalties likely to be imposed by the concerned department and costs of the suit.
3. Summons was served on defendants and they opted to contest the case by filing written statement wherein preliminary objection has been taken to the effect that plaintiff has not approached with clean hands and suppressed material facts. It is mentioned that parties were known to each other for a long time and the plaintiff requested the defendants that he would issue proforma invoices without supplying any material and this request was acceded to by the defendants and thereafter, plaintiff never supplied any material to the defendants and for this reason no ST Form was supplied to the plaintiff. Further, it is mentioned that plaintiff requested the defendants for a loan to be paid in cheques and in these circumstances, defendants issued two cheques for a sum of Rs. 10,000/ each and in order to avoid payment of Rs. 20,000/ to the defendant and to bring the case within limitation period, the plaintiff falsely adjusted the said loan amount against the alleged outstanding Page 4 of 13 Suit no. 172/13/08 5 balance. Further, it is mentioned that statement of account of the plaintiff is false and fabricated and no legal and valid notice was served upon the defendants prior to filing of the suit. With these submissions, the defendants prayed for dismissal of suit alongwith costs.
4. Plaintiff filed replication to the written statement filed by the defendant wherein he denied the contentions raised by the defendant and reiterated the facts mentioned in the plaint.
5. On the basis of the pleading of the parties, following issues were framed by Ld. Predecessor of this court vide order dated 25.10.2008:
1. Whether the plaintiff is entitled to a decree for a sum of Rs. 2,40,520/ as prayed for? OPP
2. Whether the plaintiff is entitled to interest, if so, at what rate? OPP
3. Whether the plaintiff has concealed material facts from the court, if so, to what extent? OPD
4. Relief.
6. Plaintiff himself stepped into the witness box as PW1 and deposed on the lines of plaint. Further, he relied upon following documents:
a) Sales tax registration certificate : Ex. PW1/1 b) Statement of account : Ex. PW1/2 c) Invoices issued between 21.06.04 to 28.02.05 : Mark 'A' d) Notice demanding ST form : Ex. PW1/4 Page 5 of 13 Suit no. 172/13/08 6 e) Notice dated 21.11.07 : Ex. PW1/5 f) Postal Receipts : Ex.PW1/6 & 7 g) Registered cover : Ex. PW1/8
7. On behalf of the defendants, defendant no. 2 himself stepped into witness box as DW1 and deposed on the lines of written statement.
8. I have heard the arguments advanced by Ld. Counsel for the plaintiff Sh. S.M. Gupta and Ld. Counsel for the defendants Sh. R.K. Uttam. My issuewise findings are as follows:
Issue no. 1.
Whether the plaintiff is entitled to a decree for a sum of Rs. 2,40,520/ as prayed for? OPP
9. Burden to prove this issue was on the plaintiff. PW1 has clearly testified that the defendants used to purchase goods from him on credit basis and he had been maintaining an open, current and running amount in the name of the defendants in books of account prepared during the normal course of business. Further, it is deposed that different transactions took place between the parties and invoices exhibit Mark 'A', Page 6 of 13 Suit no. 172/13/08 7 later marked Ex. DW1/P1, were issued by the plaintiff for different period. Further, it is deposed that as per statement of account, a sum of Rs. 2,12,634/ was outstanding as on 10.01.2007 and since this amount is not cleared, plaintiff charged agreed interest @ 24 % p.a. from 10.01.2007 to 30.10.2007, amounting to Rs. 41,113/, which was duly debited to defendant's account and thus, total outstanding amount was Rs. 2,53,747/, as on 30.10.2007. Further, it is mentioned that defendants paid Rs. 20,000/ by way of two cheques on 31.10.2007 and these were duly credited against the principal amount of Rs. 2,12,634/ and thus, principal amount remained outstanding on 31.10.2007 was Rs. 1,92,634/ and total dues including interest amount comes to be Rs. 2,33,747/. It is also deposed that despite service of demand notice Ex. PW1/5, the payment was not made. During crossexamination, PW1 has testified that he has not filed his balance sheet showing outstanding amount against the defendants and he does not have any challans regarding good supplied to the defendants. Further, he denied the suggestion that he has taken a loan of Rs. 20,000/ by way of two cheques and that notice was not served on the defendants.
10. During crossexamination, DW1 replied that he used to make payment to the plaintiff sometimes billwise and sometimes in lumpsum Page 7 of 13 Suit no. 172/13/08 8 and further, he admitted that bills Mark 'A' placed on record by the plaintiff, subsequently marked Ex. DW1/P1, are the bills against which he purchased goods from the plaintiff. He also admitted that cheques shown in statement of account, i.e., PW1/2 were given by him to the plaintiff. He further admitted that he gave cheques against the materials purchased by the plaintiff. Further, he replied that good were received personally by him and sometimes by his employee. Further, he replied that bills Ex. DW1/P1 (colly.) are mostly signed by him and many a times, he received the bills without getting material by the plaintiff. Further, it is mentioned that he never made complaints against the plaintiff for receiving bills without material. Further, it is admitted that plaintiff was maintaining statement of account in his books of account in his name and earlier no sales tax was charged by the plaintiff in his invoices as he used to issue Form ST1. Further, he replied that he had never given Form ST1 to the plaintiff against the purchases made by him. Further, he admitted that he received a notice Ex. PW1/5 and he did not give its reply because the notice was false.
11. On analyzing the evidence led by both the sides, there remains no doubt that there were business transactions between the parties and defendants purchased goods from the plaintiff from time to time. The Page 8 of 13 Suit no. 172/13/08 9 defendant has also admitted that he has purchased goods against the bills Ex. DW1/P1 and had made part payments through several cheques from time to time as reflected in statement of account Ex. PW1/2. Though, the defendant has alleged that he did not receive the material against all the bills Ex. DW1/P1 but considering the admission of the defendant that most of the bills Ex.DW1/P1 have been signed by him, which can be only for the purpose of acknowledging the delivery of goods, and goods were also received by his employees, I do not see any merit in this plea of defendant side. Furthermore, it is also noteworthy that DW1 has admitted that he had never made any complaint for non supplying of goods by the plaintiff at any point of time. Furthermore, the defendant has not been able to satisfy this court as to why defendant has not filed the statement of account qua transactions in question so as to rebut the plea of plaintiff. At the same time, it is noteworthy that defendant has also admitted that plaintiff was maintaining statement of account in normal course of business. In view of above, it is held that defendant has not been able to raise any doubt on the version of plaintiff that the goods were supplied to the defendant from time to time and principal amount of Rs. 2,12,634/ was outstanding as on 30.10.2007.
12. Another plea of the defendant has been that on demand of Page 9 of 13 Suit no. 172/13/08 10 plaintiff, a loan of Rs. 20,000/ was given to him by way of two cheques and these have been unauthorizedly reflected by the plaintiff in his statement of account pertaining to business dealings between the parties to bring the suit within limitation period. I do not see any substance in this plea also since the defendant has admitted the payment made through cheques from time to time, as reflected in statement of account Ex. PW1/2, and the last payment before the payment made through aforesaid two controversial cheques has been shown in the month of January, 2007 of Rs. 10,000/ and since present suit has been filed in January, 2008, the suit is well within limitation period in view of Section 19 of Limitation Act. Moreover, it is noteworthy that defendant had made different payments through cheques from time to time and most of these cheques were of Rs. 10,000/. Furthermore, the defendant failed to convince this court as to why alleged small loan amount of Rs. 20,000/ was paid by way of two cheques. In view of this, it is held that defendants made part payment against outstanding debt by way of two cheques credited in the statement of account on 31.10.2007. In view of this, it is held that defendant was liable to pay the principal amount of Rs. 1,92,634/ as on 31.10.2007. The plaintiff has further claimed a sum of Rs. 41,113/ as interest calculated @ 24 % p.a. w.e.f. 10.01.2007 to 30.10.2007. The claim as to interest would be dealt with under issue no. Page 10 of 13 Suit no. 172/13/08 11
2. Hence, in view of findings given above, this issue is decided in favour of plaintiff and against the defendants.
Issue no. 2.
Whether the plaintiff is entitled to interest, if so, at what rate? OPP
13. Burden to prove this issue was on the plaintiff. PW1 has testified that defendant is liable to pay interest at the agreed rate of interest @ 24 % p.a. from 10.01.2007 to 30.10.2007, total amounting to Rs. 41,113/ on the principal amount of Rs. 2,12,634/ outstanding as on 10.01.2007. The plaintiff has also claimed pendentelite and future interest @ 24 % per annum. In the facts and circumstances of the case, I am of the view that the interest claimed is exorbitant and is on higher side. Considering that the nature of transaction was commercial, I am of the view that interest of justice would be served, if the plaintiff is awarded an interest @ 15 % p.a. from date of first demand. Thus, it is held that the plaintiff is entitled to interest @ 15 % p.a. on the principal amount of Rs. 1,92,634/ w.e.f. date of demand notice Ex. PW1/5, i.e., 21.11.2007 till realization. Accordingly, this issue is decided in favour of the plaintiff and against the defendants. Page 11 of 13 Suit no. 172/13/08 12 Issue no. 3.
Whether the plaintiff has concealed material facts from the court, if so, to what extent? OPD
14. Burden to prove this issue was on the defendants. The defendants have not led any evidence to prove this issue. Moreover, considering the findings given in respect of issue no. 1, I do not see any substance in the plea of defendants that plaintiff has concealed material facts from this court. Accordingly, this issue is decided against the defendants and in favour of the plaintiff.
15. It is pertinent to mention here that plaintiff has also claimed relief in the form of mandatory injunction to issue necessary directions to the defendants to release Form ST1 against the invoices issued in the year 200405 for a sum total of Rs. 3,80,632/ or in alternative pay 6% sales tax amount on the said purchase plus interest and penalties likely to be imposed by the concerned department. Considering that neither any issue was framed on this aspect nor plaintiff has valued the suit nor paid court fee for this additional claim, I am of the view that plaintiff can't be granted this relief. However, if concerned department imposes penalties on plaintiff in any form for nonpayment of sales tax on concerned bills, Page 12 of 13 Suit no. 172/13/08 13 he shall have separate cause of action for recovering that amount from defendant.
RELIEF:
16. In view of issuewise findings given above, suit of the plaintiff is decreed in favour of the plaintiff and against the defendants whereby, the plaintiff is held entitled for recovery of sum of Rs. 1,92,634/ alongwith interest @ 15% p.a. from 21.11.2007 till realization. In the facts and circumstances of the case, the plaintiff is also entitled for the costs of the suit.
Announced in open Court (Vivek Kumar Gulia)
on 20 Day of May, 2013. CCJ cum ARC1 (Central)
th
[This judgment contains 13 pages.] Tis Hazari Courts, Delhi
Page 13 of 13 Suit no. 172/13/08