Bangalore District Court
M/S. Rinac India Limited vs M/S. Hotel Radha Pvt. Ltd on 23 June, 2015
Govt. of Karnataka
C.R.P 67
Form No.9 (Civil)
Title Sheet for
Judgment in Suits
(R.P.91)
TITLE SHEET FOR JUDGEMENTS IN SUITS.
IN THE COURT OF THE XXVI ADDL. CITY CIVIL JUDGE
AT MAYOHALL BANGALORE.
(CCH-20)
Present:
Sri. Mallareppa Veerappa Jadar, B.Sc., LL.B., (Spl.)
XXVI Addl. City Civil Judge & Sessions Judge,
Dated this the 23rd day of June, 2014.
O.S.No.25674/2008
Plaintiff: M/s. Rinac India Limited
No.5, Saraswathi Nivas,
Main Channel Road, Ulsoor,
Bangalore - 560 008.
Represented by its
General Manager (Compliance and
Legal) Sri.Akshara B.L. Aged about
40 years.
(By Sri.R.Krishnamurthy, Advocate)
.Vs.
Defendant : M/s. Hotel Radha Pvt. Ltd.,
Registered Office:- No.1,
Fifth Street, Dr.Radhakrishna
Salai, Mylapore, Chennai - 600004
Represented by its Director
2 O.S.25674/2008
(By Sri.H.M.S. Advocate)
Date of Institution of suit: 15/04/2008
Nature of the Suit (Suit Money suit
for Pronote, Suit for
Declaration and
Possession, Suit for
Injunction, etc.):
Date of Commencement 23/07/2010
of recording of evidence:
Date on which the 23/06/2015
Judgment was
pronounced:
Total Duration:
Years Months Days
07 02 08
( MALLAREPPA VEERAPPA JADAR)
XXVI Addl. City Civil Judge
Mayo Hall, Bangalore.
3 O.S.25674/2008
JUDGMENT
1. This suit is filed by the plaintiff company through its General Manager against the defendant represented by its Director, praying for judgment and decree against the defendant directing the defendant to pay sum of Rs.1,95,244/- together with interest at 18% p.a. from the date of filing the suit till the date of realization and for court costs, such other reliefs deems fit to grant under the circumstances of the suit.
2. In the plaint, it is pleaded that -> plaintiff is public limited company registered under the provisions of the Companies Act, 1956, having its registered office at No.5, Saraswathi Nivas, Main Channel Road, Ulsoor, Bangalore. Plaintiff company is represented by its General Manager. Defendant is a private limited company having its registered office at the address shown in the plaint cause title. The plaintiff company is engaged in the business of manufacturing, fabrications, erection, commissioning, supply and installation of sophisticated and special designated cold storage equipments, cold rooms, deep freezers and allied products. 4 O.S.25674/2008 During the course of its business, as per the purchase order of the defendant, the plaintiff has erected/commissioned/supplied :-
i) Prefabricated construction for cold room and freezer room at a total cost of Rs.2,66,140/-
ii) 20 square meters of RPUF Panels of 80 MM thick at a cost of Rs.60,486/-
iii) 2 sets of refrigeration system of modal ACHP 0413 and ACHN 2014 at a total cost of Rs.3,02,432/-
3. The plaintiff has raised the invoice-cum-Excise Gate passes on the defendant in respect of the above supplies. The total value of the supplies works out to Rs.6,29,058/-. Against this amount defendant has paid Rs.2,00,000/- and Rs.2,70,000/- totally Rs.4,70,000/- to the plaintiff leaving an outstanding balance of Rs.1,59,058/-. The plaintiff made several requests through its officials and personally and over phone with the defendant to clear the above outstanding balance. However these requests did not appeal to the defendant. Hence, plaintiff issued legal notice and then filed this suit. With these main averments along with the other averments stated in detail in the plaint prays for judgment and decree as stated above to the sum of Rs.1,95,244/- in which 5 O.S.25674/2008 towards outstanding due sum of Rs.1,59,058/- and interest at 14% from 1/9/2006 to 15/4/2008 of Rs.36,186/- total amount of Rs.1,95,244/- is claimed with future interest at 18% p.a. from the date of filing of this suit till the date of realization.
4. After service of suit summons, defendant appeared through its counsel and has filed the detailed written statement denying the plaint averments which are against its interest. In the written statement containing in all 11 pages stating that -> suit filed by the plaintiff is an abuse of process of this Hon'ble Court, is wholly misconceived, frivolous, not maintainable in law or on facts and deserves to be dismissed in limine, for the reasons that -> the claim of the plaintiff is highly preposterous and arbitrary. This suit is an attempt to make unlawful gains at the expense of the defendant. There is no cause of action for the present suit and the plaint is liable to be rejected. The nonchalant and unresponsive attitude of the plaintiff has led the defendant to get the equipments installed on its own. The loss caused to the defendant due to delay in opening the hotel is solely due to the failure of the plaintiff to install and commission the equipments and the plaintiff is therefore liable to make good the loss caused to the defendant on 6 O.S.25674/2008 this account. In the further para without prejudice to the above said preliminary objections, the defendant has pleaded that -> defendant placed the purchase order dated 15/2/2006 for prefabricated cold room and freezer room and another purchase order dated 28/2/2006 for supply of refrigeration system bearing Model Nos. ACHP 0413 and ACHN 2014 on the branch office of the plaintiff in Chennai. At the time of placing purchase order, the defendant made it clear to the plaintiff, the defendant proposed to purchase the goods against an EPCG license. As per the Foreign Trade policy of Government of India, if an EPCG license holder proposes to source the goods proposed to be imported from a domestic manufacturer, the EPCG License holder is required to obtain an invalidation letter, in duplicate, from the licensing authority and simultaneously obtain permission to procure the capital goods indigenously in lieu of direct import. The defendant assured that it would approach the licensing authority to obtain an invalidation letter and dispatch the same to the plaintiff.
5. The receipt of the said purchase orders were confirmed by the plaintiff's branch office at Chennai vide its letter dated 16/2/2006. Upon receipt of the said purchase order, the plaintiff raised two proforma invoices. As per the proforma invoices issued 7 O.S.25674/2008 by the plaintiff, the cost of fabricated cold room and freezer room was Rs.2,20,000/- and the cost of the refrigeration unit was Rs.2,50,000/- based on the proforma invoices issued by the plaintiff on 16/2/2006, the defendant applied for EPCG license and obtained the same on 23/2/2006. Subsequent to the site visit by the sales engineers of the plaintiff and further discussions between the parties, the defendant agreed for an increase in the dimension of the cold room and freezer room. Due to the increase in the dimension of the cold room and freezer room the cost of prefabricated cold room and freezer room increased from Rs.2,20,000/- to Rs.2,70,000/- but the cost of refrigeration unit remained the same. In view of the above, the plaintiff under its letter dated 20/2/2006 submitted its revised proforma invoice for supplying the goods ordered by the defendant and called upon the defendant to amend its purchase order dated 15/2/2006. Since the defendant had already applied for an EPCG license on the basis of proforma invoice dated 16/2/2006, the plaintiff's manager Sri.Kalyanasundaram, agreed to raise an invoice for the difference of Rs.50,000/- in the cost of prefabricated cold room and freezer room, as installation charges.
8 O.S.25674/2008
6. Further, as per the terms contended in the purchase order, defendant paid a sum of Rs.1,00,000/- each in total sum of Rs.2,00,000/- was paid as advance against the purchase orders for prefabricated cold room and freezer room and refrigeration unit. Upon the receipt of invalidated letter dated 10/4/2006 from the defendant, the plaintiff under its letter dated 18/4/2006 raised the proforma invoices of even date, bearing No.PT-003 and indicated that a sum of Rs.3,40,800/- out of the total amount of Rs.5,40,800/- is due before the dispatch.
7. Since the plaintiff failed to supply the goods ordered for even after raising a proforma invoice dated 18/4/2006, the defendant telephoned the Chennai office of the plaintiff to ascertain when it would be delivered. After several telephone calls, the sales engineer of the plaintiff Sri.Antony Jenson informed the defendant by letter dated 3/5/2006 that the supply of the materials was delayed in view of the delay in obtaining clearance from the Sales Tax Department and assured that the materials would be dispatched from the plaintiff's factory on 4/5/2006. When things stood thus, the defendant was somewhat surprised to receive an e- mail forwarded from the Chennai office of the plaintiff to the defendant on 5/5/2006, in which the plaintiff called upon the 9 O.S.25674/2008 defendant to obtain a fresh invalidated letter for Rs.2,70,000/- for prefabricated cold room and freezer room. In response to the defendant's e-mail Sri.N.K.Mohanan, Regional Manager, Cold Room Division sought confirmation to bill the differential amount of Rs.50,000/- with excise duty and taxes. The defendant confirmed the same by e-mail and called upon the plaintiff to supply the goods at the earliest.
8. In the further paragraph i.e. in para No.6 of the written statement it is pleaded that -> the plaintiff ultimately supplied the materials on 6/5/2006. However contrary to the understanding/agreement between the plaintiff and the defendant, the plaintiff has sought to recover the excise duty at 16.32% from the defendant for prefabricated cold room and freezer room and the refrigeration units by suppressing the fact that it is entitled to claim refund of excess duty on furnishing the invoices as per the Foreign Trade Policy of Government of India. Thus plaintiff is seeking to unjustly enrich itself by claiming refund of excise duty from government as well as claiming the same from the defendant as per the agreement between the parties, the defendant is not 10 O.S.25674/2008 liable to pay excise duty. Hence it is submitted that the defendant is not liable to pay excise duty to the plaintiff.
9. The goods that were supplied to the defendant were in unassembled form and the engineers of the plaintiff did not come to the work of erection, installation and commissioning of the unit. The opening of the hotel was inordinately delayed on account of non completion of erection and commissioning work by the plaintiff. The defendant requested the official of the plaintiff to immediately take up the said work. Inspite of promise the plaintiff did not come to the work of erection.
10. Plaintiff took up the work only in August 2006, the plaintiff has not given warranty certificate and operation manual at the time of supply of goods. After the erection was taken up and completed partially. The defendant at the instance of the plaintiff paid sum of Rs.2,70,000/- vide cheque dated 30/8/2006 bearing No.034694. The receipt of which is admitted by the plaintiff. At the time of making payment of Rs.2,70,000/- the engineers of the plaintiff promised to complete the pending work of erection, installation and commissioning of units.
11 O.S.25674/2008
11. Inspite of several telephone requests and reminders the plaintiff did not under take the work of installation and commissioning of the unit and also failed to take up monthly servicing of unit during the subsistence of the warranty period. In view of the plaintiff's failure to undertake the work the defendant is not liable to pay the balance amount of Rs.82,354/- which has been arrived at after deducting a sum of Rs.76,704/- charged towards excise duty which the defendant is not liable to pay as per the terms of contract between the parties. Therefore, the entire claim of the plaintiff is wholly baseless and the same is denied and liable to be rejected with exemplary cost.
12. In the further paragraphs of the written statement i.e., from para No.9 of the written statement the defendant has pleaded regarding the counter claim stating that -> As the plaintiff did not install and commission the unit as required under agreement, the defendant has engaged the service of M/s. KSR Associate, Chennai to complete the same. Due to plaintiff's failure in commissioning and extending warranty. During the warranty period, defendant has been put to heavy loss. 12 O.S.25674/2008
13. The defendant came to know that the size of the goods were not same as ordered only at the time of installation through third party agencies. Though it was communicated to the engineers of the plaintiff company, the plaintiff has failed to rectify the same and as a result of which the defendant had to incur additional expenses for ratification. The warranty period was 12 months from the date of commissioning or 15 months from the date of delivery which is earlier. During the warranty period the goods delivered by the plaintiff were not functioning. The defendant intimated the same to plaintiff several times, plaintiff failed to attend. The defendant under took repairs by itself to keep equipments in running condition and also got the work of erection, installation and commissioning done through third parties and also failed to carry out the service during the warranty period. The defendant was constrained to spend on obtaining an Annual Maintenance Contract for cold room and freezer room towards the same the defendant has incurred total sum of Rs.1,83,000/- (which is stated in detail in the written statement as charge towards institution and commissioning of Rs.60,000/-, AMC charges for cold room and freezer room for the year 2006-2007 of Rs.50,000/- and for year 2007-2008 of Rs.50,000/- in all Rs.1,83,000/-). 13 O.S.25674/2008
14. The additional expenses which the defendant had to incur are solely due to the negligence and unresponsive attitude of the plaintiff in completing the erection, installation, and commissioning work and its failure to provide service during the warranty period. Therefore the plaintiff is liable to pay to the defendant an amount of Rs.1,83,000/- towards the expenses incurred and also liable to pay interest at 14% p.a. from the day of filing of written statement till realization.
15. That apart, the plaintiff is liable to pay reimburse the loss of profit to the defendant since the defendant was unable to open the hotel as scheduled. It was proposed to commence the hotel in September 2006. Due to delay in supplying the goods by the plaintiff hotel could be opened in April 2007. The annual profit made by the defendant for the period 2007-2008 was Rs.8,00,00,000/- (Rupees eight crores). As a result of delay in opening the hotel, the defendant has suffered loss. The defendant conservatively estimates the loss incurred by it as a result of delay in opening the hotel at Rs.2,50,000/- from the date of filing of written statement till the date of reimbursement. However, the 14 O.S.25674/2008 defendant is restricted to claim for losses at the rate of Rs.2,00,000/- and the plaintiff is liable to reimburse the same with interest at 14% p.a.
16. In the subsequent paragraphs of the written statement, the defendant denied the plaint averments which are against his interest in paragraph wise and prays to dismiss the suit and to decree the counter claim.
17. It is pleaded that in the counter claim, separate valuation is made and the court fee is paid on it.
18. On the basis of pleadings of both parties, the following issues No.1 to 8 are framed by my predecessor. The said Issues are as follows :-
ISSUES
1. Whether plaintiff proves that defendant is due Rs.1,59,058/- in respect of erection of cold room as ordered by defendant?15 O.S.25674/2008
2. Whether defendant proves that there is delay on the part of plaintiff to supply the goods ordered by him?
3. Whether defendant proves that due to failure on the part of the plaintiff in attending the non-functioning of goods delivered during warranty period he incurred repair charges of Rs.1,83,000/-?
4. Whether plaintiff is entitled for interest at the rate of 14% p.a. as claimed?
5. Whether defendant proves that due to non-performance of cold room he has sustained loss and entitled for Rs.2,00,000/- from the plaintiff?
6. Whether defendant is entitled for interest at the rate of Rs.14% sought for?
7. What are the relief's parties are entitled?
8. What decree or order?16 O.S.25674/2008
19. To prove their respective cases, General Manager by Name Sri.B.C. Akshara of the plaintiff company filed the affidavit by way of examination-in-chief as P.W.1. In the further examination-in-chief has produced in all ten documents marked as Ex.P.1 to Ex.P.10 and two witnesses are examined as P.W.2 and P.W.3. Through P.W.2 three documents are marked as Ex.P.11 to Ex.P.13. Through P.W.3 three documents are marked as Ex.P.14 to Ex.P.16.
20. On the side of the defendant, one of the directors of the defendant company by name Mr.A.R.Ravichandran has filed the affidavit by way of examination-in-chief as D.W.1. In all 27 documents are marked through him as Ex.D.1 to Ex.D.27. After closure of the evidence of both the parties, posted for argument. The counsel for the plaintiff canvassed the argument orally and the counsel for the defendant filed the written argument. Thereafter posted for judgment.
21. My answer for the above issues are as follows :-
ISSUE NO.1 :- In the affirmative,
ISSUE NO.2 :- Redundant,
17 O.S.25674/2008
ISSUE NO.3 :- In the negative,
ISSUE NO.4 :- In the partly affirmative,
ISSUE NO.5 ;- In the negative,
ISSUE NO.6 :- In the negative,
ISSUE NO.7 :- In the partly affirmative,
ISSUE NO.8 :- As per final order
for the following
REASONS
22. ISSUE NO.1 :- This issue is on the plaintiff. In this Issue, the plaintiff has to prove that-> the defendant is in due of Rs.1,59,058/- in respect of erection of cold room as ordered by the defendant. In the plaint para No.5 to 8 the plaintiff pleaded that -> plaintiff company is engaged in the business of manufacturing, fabrication, erection, commissioning etc. of sophisticated and specially designed cold storage equipments, cold rooms, deep freezers and allied products. As per the purchase order of the defendant, the plaintiff supplied the
a) Prefabricated construction for cold room and freezer room at a total cost of Rs.2,66,140/-
b) 20 square meters of RPUF Panels of 80 MM thick at a cost of Rs.60,486/-
18 O.S.25674/2008
c) 2 sets of refrigeration system of modal ACHP 0413 and ACHN 2014 at a total cost of Rs.3,02,432/-
The plaintiff has raised the invoice-cum-Excise Gate passes on the defendant in respect of the above supplies. The total value of the supplies works out to Rs.6,29,058/-. Against this amount defendant has paid Rs.2,00,000/- and Rs.2,70,000/- totally Rs.4,70,000/- to the plaintiff leaving an outstanding balance of Rs.1,59,058/-.
23. On the other hand in the written statement at para No.1(a) (b), (c) the defendant has pleaded that -> The claim of the plaintiff is highly preposterous and arbitrary. The defendant is not liable to pay any of the sums to the plaintiff much less sum claimed in the suit. On the contrary, the plaintiff is liable to pay the defendant. The present suit is an attempt to make an unlawful gains. The nonchalant and responsive attitude of the plaintiff had led the defendant to get the equipments installed on its own. The loss caused to the defendant due to delay in opening the hotel is solely due to the failure of the plaintiff to install and commission the equipments and the plaintiff is therefore liable to make good the loss caused to the defendant on this account.
19 O.S.25674/2008
24. In the affidavit filed by the P.W.1 - Mr.B.L.Akshara, General Manager of the plaintiff has reiterated the above averments of the plaint in the para No.6 to 8 of the affidavit. In the further examination-in-chief the P.W.1 has produced ten documents, got marked as Ex.P.1 to E.xP.10.
25. The P.W.2 - Mr.Tinsley Justin, the Assistant Manager of the plaintiff company, filed affidavit regarding the production of the three documents 1) Commissioning report No.2564 dated 12/6/2006, 2) Commissioning report No.2565 dated 12/6/2006 3) Certified copy of the board resolution dated 23/11/2010. In the further examination-in-chief has produced three documents and got marked as Ex.P.11 to Ex.P.13.
26. The P.W.3 - Mr.Manikandan Rajalingam, is the Secretary of the plaintiff company. He filed affidavit regarding the production of the three documents. They are all the board resolutions marked as Ex.P.14 to Ex.P.16.
27. On the other hand, one of the director of the defendant company by name Mr.A.R.Ravichandran has filed affidavit by way of examination-in-chief as D.W.1, by admitting the transaction by 20 O.S.25674/2008 pleading in para No.2 to 4 of the written statement stating that-> Defendant placed the purchase order dated 15/2/2006 for manufacture and supply of pre-fabricated cold room and freezer room and another purchase order dated 28/2/2006 for supply of two refrigeration system (Model Nos. ACHP 0413 and ACHN 2014). In para No.3 has sworn that -> Upon receipt of the said purchase order the plaintiff raised two proforma invoices. As per the proforma invoices issued by the plaintiff, the cost of prefabricated cold room and freezer room was Rs.2,20,000/- and the cost of the refrigeration units was Rs.2,50,000/- based on the proforma invoices issued by the plaintiff on 16/2/2006. These materials pleaded in the plaint, written statement and sworn in the affidavit of the P.W.1 and the D.W.1 shows that -> both parties have admitted the transaction/contract entered into between them. In this Issue No.1 it is to be determined whether the plaintiff proved that the defendant is in due of Rs.1,59,058/- in respect of the erection of the cold room as ordered by the defendant.
28. The Ex.P.1 is the copy of the resolution of the plaintiff company dated 31/8/2007 authorising the P.W.1 to represent the company before the court. The Ex.P.2 is the confirmation of the order issued by the defendant regarding the quotation of the 21 O.S.25674/2008 plaintiff dated 15/2/2006 with certain changes in the specification and changes in the terms and conditions. The recital of the Ex.P.2 confirmation order issued by the defendant to the plaintiff is that ->
- - - - - We are pleased to place the order - - - - - - -with changes in the following specifications and changes in the terms and the conditions. . - - - - - - In the last few lines it is mentioned that -> All the specifications are as per your previous quotation except the above changes.
29. These recitals of the Ex.P.2 confirmation letter issued by the defendant manager to the plaintiff's company shows that -> the defendant placed the order by changing the specification and the terms and conditions. When there is change of the specification, then the defendant who placed the purchase order, has to pay the difference amount. In Ex.P.2 - Confirmation order has also placed the order with certain changes in continuation with the refrigerators.
30. The Ex.D.1 is the proforma of invoice No.II regarding the refrigeration system dated 16/2/2006. The total value of two sets of refrigeration system is shown as Rs.2,50,000/- and in the proforma 22 O.S.25674/2008 invoice -I dated 16/2/2006 the value of the constructed cold room and freezer room is shown as Rs.2,70,000/-. In Ex.P.2 the defendant has confirmed the order placed by him to the plaintiff as per the proforma/quotation of the plaintiff No.RIN/30507/03/AJ dated 15th February 2006 and in Ex.P.3 the defendant has confirmed the order placed by him to the plaintiff as Proforma Invoice II/Quotation No.RIN/JTS3/402/DKS dated 16/2/2006 with certain modification.
31. In the written statement at para No.7 the defendant has pleaded that -> - - - - - The defendant at the instance of the plaintiff paid a sum of Rs.2,70,000/- vide cheque dated 30/8/2006 bearing No.034694, the receipts of which is admitted by the plaintiff and agreed to pay the balance after the warranty certificate and operating manual are handed over - - - - - . In para 8 has pleaded that -> - - - - - - Inspite of several telephonic request and reminders from the defendant through letters dated 6/9/2006 and 15/9/2006 the plaintiff did not under take the work of installation and commission of the unit. - - - - In view of plaintiff's failure to under take the work of erection, installation and commissioning of the unit and handing over warranty certificate and operating manual, 23 O.S.25674/2008 the defendant is not liable to pay the balance amount of Rs.82,354/-.
32. In the para No.9 of the written statement at the end of page No.5 the defendant has pleaded that -> during the warranty period, the goods delivered by the plaintiff were not functioning. Though defendant intimated the same, plaintiff failed to attend the work. - - - - - Defendant undertook repairs by itself to keep the equipments in running condition and also got the work of erection, installation and commissioning done through third parties. - - - - - - .
33. This pleading goes to show that -> the defendant has undertaken the work of erection, installation and commissioning done through the third party. But to prove this plea, the defendant has not adduced the evidence of the said third party so as to establish before the court as to when the said erection, installation and commission was done by the third party and who is the said third party is also not forth coming in the evidence of the defendant in the entire affidavit filed by way of examination-in-chief as D.W.1. Even in the affidavit filed by way of examination-in-chief at para No.9 in the middle has sworn that -> - - - - - - - defendant under 24 O.S.25674/2008 took the repair work by itself to keep the equipment in running condition and also got the work of erection, installation and commissioning done through third party. - - - - - - - As observed in the above paras, the said third party is not examined before the court. On the other hand the P.W.2 - Tinsley, the Assistant Manager of the plaintiff company has produced commission reports No.2564 and 2565 dated 12/6/2006 marked as Ex.P.12 and Ex.P.13. In both the copies there are signature at the end in the place Sig/Date, one is of client and another one is of (SER.PERS). In the cross-examination suggestion is made to this witness stating that the Ex.P.12 and Ex.P.13 are concocted. The said suggestion is denied by the witness. It is in page No.2 of the cross-examination of the P.W.2 on dated 3/6/2011, it is as follows -> - - - - - - -It is incorrect to say that Ex.P.12 and Ex.P.13 are concocted for the purpose of this suit. - - - - - - When such being the case, the principles laid down in the citation given in AIR 1981 Karnataka at page 40 is applicable in this citation. -> In para No.19 Hon'ble High Court has held that -> - - - - - Mere suggestion made in cross- examination and denied is no evidence at all. - - - - -
34. In the suit on hand the suggestion made by the defendant counsel to the P.W.2 in the cross-examination stating 25 O.S.25674/2008 that -> Ex.P.12 and Ex.P.13 are concocted for the purpose of the suit it is denied by the P.W.2. Hence the mere suggestion to the witness and the denial of the same by the witness is no positive evidence in favour of the party who made suggestion. In the suit on hand the specific defence of the defendant is that -> he got the installation work by engaging the third party. But who is the said third party is not disclosed and the said third party is not got examined by the defendant. On the other hand the Ex.P.12 and Ex.P.13 documents prove that -> the plaintiff has completed the commissioning work. Further the plaintiff has produced the statement of account marked as Ex.P.7 in which the total value of the goods supplied is shown as Rs.6,29,058/- out of which the sum of Rs.2,66,140/- towards the construction of cold room and Rs.60,486/- towards sale of RPUF panel and Rs.3,02,432/- being the sale of refrigeration and also shown the payment by the defendant vide cheque No.034694/30/8/2006 drawn at UTI Bank of Rs.2,70,000/- and arrived the balance payable as Rs.1,59,058/-. This ledger account is kept by the plaintiff in its ordinary course of business. Further the defendant has not denied the receipt of the goods supplied by the plaintiff. His only allegation is that -> the plaintiff has made the excess claim. But, his own document which 26 O.S.25674/2008 are produced by the plaintiff and got marked as Ex.P.2 and Ex.P.3 which are the supply order for the cold room and refrigeration system. In which he has (defendant has) made certain changes in the specification of the goods ordered by him. When such being the case the plea raised by the defendant stating that -> the plaintiff has imposed the excess value is not sustainable one. Though the defendant has pleaded that -> the plaintiff has not attended the installation and the commissioning work and he got completed the installation and the commissioning work by appointing the third party. But the defendant has not adduced the evidence of the said third party. On the other hand, the evidence adduced by the P.W.2 shows that -> he has produced the commission report marked as Ex.P.12 and Ex.p.13 over which there are signatures of the client and the service person. Though suggestion is made to P.W.2 stating that -> the Ex.P.12 and Ex.P.13 are concocted, the said suggestion is denied by the P.W.2. Further, mere suggestion to the witness and the denial of the same by the said witness is no positive evidence in favour of the party who made suggestion as per the citation given in AIR 1981 Karnataka page 40 at page 19 referred above. On all these grounds there are ample materials to hold that -> plaintiff has proved that -> the defendant is in due of the sum of 27 O.S.25674/2008 Rs.1,59,058/- towards the installation of the cold room and the refrigeration unit.
35. Though the counsel for the defendant in his written argument has submitted by denying the claim of the plaintiff in para No.19 and in the other paragraphs stating that -> defense urged by the defendant is that the plaintiff is not entitle to claim the balance amount of Rs.1,59,058/- as the plaintiff was unable to complete the installation, erection and commission of the cold room, freezer room and the refrigeration unit. But the evidence of P.W.1 and P.W2 as well as the contents of Ex.P.12 and Ex.P.13 proves that -> plaintiff has attended the said installation work, commissioning work. Further submission of the counsel for the defendant in the written argument at para No.19 is that -> Plaintiff was unable to complete the installation, erection and commissioning of the cold room, freezer room and the refrigeration unit. From the documents available on record, it becomes clear that equipments were supplied on 6/5/2006 as against the agreed date of supply and commissioning by 10th March 2006. After supply, the plaintiff was required to erect, install and commission the unit. However the plaintiff failed to commence the work of erection, installation and 28 O.S.25674/2008 commissioning of the unit. A site meeting was held on 19/5/2006 and the plaintiff's employee Mr.John Jacob vide letter dated "nil" promised to commence the installation works on 20/5/2006. Inspite of the promise, the plaintiff did not commence the work of erection, installation and commissioning of the unit. Below this para No.19 of the written argument, counsel for the defendant has submitted in para No.22 (ought to be para No.20) that -> plaintiff took up erection, installation and commissioning works and completed the same partially in August 2006. On 31/8/2006 the defendant has made a further payment of Rs.2,70,000/- to the plaintiff, before the trial run of the machine was completed by the plaintiff. The plaintiff does not dispute the receipt of the said amount. Further, there is an endorsement by the engineer of the plaintiff Mr.Jacob John, which clearly indicates that the plaintiff was entitled to the balance payment only after the plaintiff furnishes the warranty certificates and operating manuals. At the time of making payment of Rs.2,70,000/- the engineers of the plaintiff promised to complete the pending works of erection, installation and commissioning of the units.
29 O.S.25674/2008
36. In the subsequent para of the written argument, the counsel for the defendant has submitted that -> defendant has got completed the installation work through the third party agency M/s.KSK associates towards the repairs and maintenance charges of cold room and freezer which makes it abundantly clear that the defendant had to incur an additional expenditure of Rs.1,83,000/- to maintain the equipments during the warranty period on account of the plaintiff's failure to maintain the same. To prove that -> defendant has got the work through the third party agency, no evidence of the said third party agency is adduced before the court. On the other hand, the very above referred submission of the counsel for the defendant goes to show that -> though the date of supply of equipments were 10th March 2006, though the equipments were supplied on 6/5/2006, but the subsequent conduct of the parties goes to show that -> in the site meeting held on 19/5/2006, there was a promise to commence installation work on 20/5/2006. This is made by the plaintiff's employee Mr.John Jacob. This shows that -> the parties intended to continue the said contract even after expiry of the date fixed for supplying and commenced commissioning of the work by the plaintiff on 10/3/2006. As defendant has accepted the supply of equipments 30 O.S.25674/2008 on 6/5/2006 and has accepted the promise made by the plaintiff's employee Mr.John Jacob regarding the commencement of installation work on 20/5/2006. Under the circumstances, both parties have agreed to extend the period of execution of the installation work. Under such circumstances, the plea raised by the defendant in his written statement at para No.11 in page No.7 stating that -> - - - - - It was proposed to commence the operation of hotel in September, 2006. However, due to delay in supply of goods ordered for by the plaintiff and on failure on part of the plaintiff to complete the work of erection, installation and commissioning of units, the hotel could be opened in April 2007- - - - cannot be a sustainable grounds to hold that -> there is delay by the plaintiff only. Because the defendant has agreed for continuation of the work even after expiry of the period fixed for execution on his act of consenting to receive the goods supplied to him after 10/3/2006 i.e., on 6/5/2006 and by accepting the promise of the plaintiff's employee Mr.John Jacob in the last site meeting held on 19/5/2006.
37. On perusal of the evidence of the D.W.1 deposed in the cross-examination it is seen that -> he has admitted Ex.P.2 and 31 O.S.25674/2008 Ex.P.3 which are the confirmation order issued by the defendant in favour of the plaintiff in connection with the supply of fabricated room and refrigeration system with modification. Further, the evidence of D.W.1 referred above goes to show that -> they have not paid the entire sum payable to the plaintiff stating that -> he has not completed the work. But, whereas the contents of Ex.P.12 and Ex.P.13 goes to show that -> the plaintiff has completed the work. Hence, on all these grounds, plaintiff has established that -> defendant is in due of Rs.1,59,058/- in respect of erection of the cold room, refrigeration system to the defendant by the plaintiff. Accordingly, I answered Issue No.1 in the affirmative.
38. ISSUE NO.2 :- In this Issue, defendant has to prove that -> there is a delay on the part of the plaintiff to supply the goods ordered by him to the plaintiff. In the written statement the defendant has raised this plea. Even in the written argument filed by the counsel for the defendant, this plea is raised. But the submission of the counsel for the defendant made in para No.19 of the written argument, goes to show that -> even after expiry of period of commissioning of work, which was fixed on 10/3/2006, defendant has accepted the goods supplied by the plaintiff on dated 32 O.S.25674/2008 6/5/2006 and also has accepted the promise made by the employees of the plaintiff Mr. John Jacob in the site meeting held on 19/5/2006 in which according to the defendant, the plaintiff's employee Mr.John Jacob has promised to commence the installation work on 20/5/2006. Hence the subsequent conduct of the parties goes to show that -> though time is fixed, it was mutually extended by the parties. Apart from this, the contents of Ex.P.2 and Ex.P.3, confirmation order issued by the defendant goes to show that -> he has made certain changes in the subsequent order and confirmed the order placed for pre-fabricated room, completed RPUF panels and refrigeration systems. When there is a change of specification, naturally it takes time for making such changes in the system to be installed. Further the act of the parties goes to show that -> even after the expiry of the period for delivery, the defendant has consented for execution of the work by the plaintiff. If the defendant was so much particular about the date of execution of installation work of the said cold room and refrigeration system, he ought to have refused to allow the plaintiff to execute the future work after expiry of said time. On the other hand, he allowed the very act of allowing to work the plaintiff unit to get complete the defendant's project is an act of giving 33 O.S.25674/2008 opportunity with consent for execution of the work after stipulated period fixed for execution of the work. Under such circumstances, the contrary plea raised by the defendant is hit by principles of estoppel by conduct, as defendant's men allowed the plaintiff employees to execute the work after expiry of the period. Under such circumstances, subsequently, he cannot take contrary plea against his act. Though it is established that -> there is a delay on the part of the plaintiff to supply the goods ordered by him. But, to this delay there is a contribution of the defendant also as he has made certain changes in the subsequent order as mentioned in Ex.P.2 and Ex.P.3. Further, he has accepted the goods after expiry of the time fixed for supply of goods which is on 10/3/2006.
39. Further the averments made in the para No.5 of the written statement goes to show that -> sale engineer of the plaintiff Sri.Anthony Jenson informed the defendant by letter dated 3/5/2006 that the supply of the materials was delayed in view of the delay in obtaining clearance from the Sales Tax Department and assured that the materials would be discharged from the plaintiff's factory on 4/5/2006. The evidence referred above goes to show that -> the defendant has received the goods after expiry of 34 O.S.25674/2008 the period fixed. When he received the goods after the expiry of the period i.e., after delay, subsequently, he cannot raise the plea of delay as his subsequent conduct in receiving the goods even after delay amounts consent to extend the period ordered for supply. Hence subsequent plea contrary to his act of receiving the goods after the delay is hit by principles of estoppel, governed under Section 115 of the Evidence Act. When such being the case, this Issue is to be held as redundant.
40. ISSUE NO.3 :- This Issue is on the defendant. In this Issue, defendant has to prove that-> due to failure on the part of the plaintiff in attending the non functioning of the goods delivered during warranty period he incurred repair charges of Rs.1,83,000/- . In the written statement at para No.9 the defendant has pleaded that -> - - - - - - Defendant came to know that size of the goods were not same as ordered only at the time of installation through third party agencies. Though the same was intimated to the engineer of the plaintiff company, the plaintiff failed to rectify the same and as a result of which the defendant had to incur additional expenses for rectification. Further in the same para at page No.6he has sought for amount of Rs.23,000/- towards the supply and erection 35 O.S.25674/2008 charges, Rs.60,000/- towards installation and commissioning of freezer room, cold room and Rs.50,000/- as AMC charges for cold room and freezer room for the year 2006-08 and for Rs.50,000/- towards AMC charges for cold room and freezer room for the year 2007-08, totally sought for Rs.1,83,000/- as additional expenses stated to be incurred by him.
41. The D.W.2 in his affidavit filed by way of examination- in-chief has reiterated the above averments of the written statement in para No.9 of the affidavit. In the further examination- in-chief he has produced in all 27 documents marked as Ex.D.1 to Ex.D.27. IN the cross-examination on dated 15/2/2012 the D.W.1 has deposed stating that -> - - - - ¤.¦.2 ªÀÄvÀÄÛ ¤.¦.3 zÁR¯ÁwUÀ¼À£ÀÄß £Á£ÀÄ M¦àzÉÝÃ£É ¤.¦.4 jAzÀ 6 E£ïªÁAiÀiïìUÀ¼À£ÀÄß £ÁªÀÅ ªÁ¢¬ÄAzÀ ¥ÀqÉ¢gÀÄvÉÛêÉAzÀgÉ ¸Àj - - - - - - - ¨ÁQ ºÀt £ÁªÀÅ PÉÆnÖ®è. KPÉAzÀgÉ ªÁ¢ vÀ£Àß PÉ®¸ÀªÀ£ÀÄß ¥ÀÇwðUÉƽ¹®è. £ÁªÀÅ 3£Éà ªÀåQÛUÉ PÉ®¸À PÉÆqÀĪÀ ¥ÀǪÀðzÀ°è mÉAqÀgï ªÀÄÆ®PÀ DºÁ餹®è.
42. On perusal of this evidence of the D.W.1 deposed in the cross-examination it is seen that -> he has admitted Ex.P.2 and 36 O.S.25674/2008 Ex.P.3 which are the confirmation order issued by the defendant in favour of the plaintiff in connection with the supply of fabricated room and refrigeration system with modification. Further, the evidence of D.W.1 referred above goes to show that -> they have not paid the entire sum payable to the plaintiff stating that -> he has not completed the work. But, whereas the contents of Ex.P.12 and Ex.P.13 goes to show that -> the plaintiff has completed the work.
43. The above referred evidence goes to show that -> the plaintiff has executed the work and submitted the commissioning report marked as Ex.P.12 and Ex.P.13 dated 12/6/2006. When there is an ample evidence before the court regarding the completion of the work by the plaintiff which is supported by the contents of Ex.P.12 and Ex.P.13, the plea raised in the written statement that -> defendant has undertaken the work by the third party and sustained loss of Rs.1,83,000/- is not sustainable plea as defendant has not adduced the evidence of said third party and also not produced any relevant documentary evidence regarding the expenses stated to be incurred of the total sum of Rs.1,83,000/- towards the completion of the alleged balance work and to show that -> on account of failure of the plaintiff to execute the work 37 O.S.25674/2008 completely he sustained that much of loss. Mere plea in the notice is not sufficient to hold that the defendant has sustained said loss unless it is established with cogent documentary evidence. On all these grounds I answered Issue No.3 in the negative.
44. ISSUE NO.5 :- In this Issue, defendant has to prove that -> due to non performance of cold room he has sustained loss and entitled for Rs.2,00,000/- from the plaintiff. In the written statement of para No.7 the defendant has pleaded that -> It was proposed to commence the operations of the hotel in September 2006. However, due to the delay in supplying the goods ordered for by the plaintiff and the failure on the part of the plaintiff to complete the work of erection, installation and commissioning of units, the hotel could be opened in April 2007. The annual profits made by the defendant during 2007-08 after opening the hotel was Rs.8,00,00,000/- (Rupees eight crores) As a result of the delay in opening the hotel, the defendant has suffered loss of business and profits. On the basis of the profits made by the defendant for the period 2007-08, the defendant conservatively estimates the losses, incurred by it as a result of delay in opening the hotel at Rs.2,50,00,000/- (Rupees two crores fifty lakhs only). However, the 38 O.S.25674/2008 defendant is restricting its claim for losses at Rs.2,00,000/- and the plaintiff is liable to reimburse the same with interest at 14% per annum from this day till the date of realization. From the narration of above facts, it is plain and clear that the plaintiff is liable to pay the defendant a sum of Rs.3,83,000/- with interest at 14% per annum from this day till the date of realization. . . . .. . .. . . This is the plea in the written statement para No.7 regarding the alleged loss.
45. Though he has pleaded that -> on account of delay in supplying the goods he sustained loss of Rs.2,50,00,000/- (Rupees two crores fifty thousand) and he restricted his claim only for Rs.2,00,000/-, the defendant has not established before the court that-> only on account of delay in installation he sustained the loss in the business. The loss in the business may occur on various reasons. When such being the case, the defendant who put forth the claim against the plaintiff claiming for damage, he has to establish the claim of damage and also establish that the said damage was occurred only due to the act of the plaintiff. But, in this case, no such acceptable evidence is produced by the defendant to hold that -> during 2007-08 defendant's profit was Rs.8,00,00,000/-. On account of delay in installation, he sustained 39 O.S.25674/2008 loss of Rs.2,50,00,000/-. As the defendant has failed to prove this aspect. Question of restricting his claim towards the loss to Rs.2,00,000/- does not arises. On all these grounds I hold that -> defendant has failed to prove that -> he sustained loss of Rs.2,50,00,000/- in the business on account of delay in supply of goods by the plaintiff. Apart from this, by his own act, he has consented for supply even after the said expiry period. As his plea raised in the written statement at para No.5 goes to show that-> the Sales Engineer of the plaintiff Mr.Antony Jenson informed the defendant by letter dated 3/5/2006 that the supply of the materials was delayed in view of the delay in obtaining the clearance from the Sales Tax Department and assured that -> the materials would be dispatched from the plaintiff's factory on 4/5/2006. In para No.6 has pleaded that -> plaintiff ultimately supplied the materials on 6/5/2006, those were received by the defendant. When the materials were supplied on 6/5/2006 and when the installation work is completed on 12/6/2006 in view of the commission report marked as Ex.P.12 and Ex.P.13, the question of sustaining loss in the hotel business of the defendant which is opened in April 2007 cannot be attributed to the plaintiff stating that -> the said loss is only on account of the act of the 40 O.S.25674/2008 plaintiff supplying the goods by making delay. As per the defendant's written statement averments, he commenced the hotel business in April 2007. Much earlier to that -> on 12/6/2006 the plaintiff has completed the commissioning work and submitted the report under Ex.P.12 and Ex.P.13. When such being the case, defendant has failed to prove that -> he sustained loss on account of the delayed supply of Rs.2,50,00,000/-. Under such circumstances of fixing the limit of loss to the sum of Rs.2,00,000/- does not arises. On all these grounds, I hold that -> defendant has failed to prove Issue No.5 casted on him. Hence, I answered Issue No.5 in the negative.
46. ISSUE NO.4 AND ISSUE NO.6 :- These two issues are regarding the entitlement of the interest. In Issue No.4, plaintiff has to prove that he is entitled for interest at the rate of 14% per annum. In Issue No.6 defendant has to prove that -> he is entitled for interest at 14% per annum. For the reasons stated to Issue No.3 and 5, defendant has failed to establish his claim on Rs.1,83,000/- and Rs.2,00,000/-. Under such circumstances, question of entitlement of defendant to the interest at 14% does not arises. Hence, Issue No.6 casted on the defendant regarding his 41 O.S.25674/2008 entitlement to interest at 14% per annum is to be held in negative. Accordingly, answered this Issue No.6 in the negative. So far as regards the Issue No.4 is concerned, the plaintiff has established that -> he is entitled for sum of Rs.1,59,058/- for the reasons stated to Issue No.1. But, he has failed to prove that -> he is entitled for 14% interest per annum, as there is no contract to pay the interest in case of default of payment. As there is nothing in this regard in any of the documents produced by the plaintiff marked as exhibits on his behalf. No doubt, there is a due of Rs.1,59,058/-. In absence of the contract to pay the specific rate of interest, reasonable rate of interest is required to be granted by considering the prevailing rate of interest in the nationalized bank during the said period. Hence, on all these grounds I hold that -> plaintiff is entitled for reasonable rate of interest at 10% p.a. from the date of due on 12/6/2006 on which the Ex.P.12 and Ex.P.13 - Commissioning report came into existence till realization. Accordingly, answered Issue No.4 in the partly affirmative.
47. ISSUE NO.7 :- In this Issue, it is to be determined, for what reliefs parties are entitle to. For the reasons stated to Issue No.3, 5 and 6, defendant has failed to prove that he is entitled for 42 O.S.25674/2008 sum of Rs.1,83,000/- towards the additional expenses and Rs.2,00,000/- towards the loss incurred by him. Under such circumstances, defendant is not entitled for any of the relief. For the reasons stated to issue No.1 plaintiff has established that -> he is entitled for sum of Rs.1,59,058/- and for the reasons stated to Issue No.4 plaintiff is entitled for interest at 10% on the amount due. On all these grounds, I hold that -> plaintiff is entitled for part of the relief claimed in the suit to the extent of Rs.1,59,058/- with interest at 10% per annum from the date of due i.e., from the date of completion of work mentioned at Ex.P.12 and Ex.P.13 till the date of realization and accordingly answered partly in the affirmative.
48. ISSUE NO.8 :- In this suit, the plaintiff has sought for judgment and decree to the sum of Rs.1,59,058/- with interest at 14%. On the other hand, defendant has sought for counter claim to the sum of Rs.1,83,000/- towards the additional expenses and sum of Rs.2,00,000/- towards the loss stated to be incurred by him with interest at 14% p.a. For the reasons stated to Issue No.3, 5, and 6, defendant has failed to prove his counter claim to the said sum. Under such circumstances, the suit filed by the plaintiff is to 43 O.S.25674/2008 be decreed in part and the counter claim made by the defendant is to be dismissed. Hence, I proceed to pass the following :-
ORDER In the result, suit of the plaintiff is partly allowed.
In the consequences, it is held that -> plaintiff is entitled for a sum of Rs.1,59,058/- (Rupees one lakh fifty nine thousand fifty eight only) with interest at 10% p.a. from the date of commissioning report marked as Ex.P.12 and Ex.P.13 till the date of realization.
The defendant is directed to pay the above said sum with interest within three months from the date of this judgment and decree. In the event of failure of defendant to pay the above said sum, plaintiff is at liberty to proceed against the property of the defendant to recover the decretal amount.
The plaintiff is not entitled to the other reliefs claimed in the suit i.e., cost.44 O.S.25674/2008
So far as regards the counter claim made by the defendant to the sum of Rs.3,83,000/- (Rupees three lakhs eighty three thousand only) with interest is hereby dismissed, devoid of merits.
Under the circumstances, parties to bear their respective cost of the proceedings.
Draw decree accordingly.
(Dictated to the Judgment-Writer, transcript thereof, is corrected and then pronounced by me in the open court on this the 23rd day of June, 2014) ( Mallareppa Veerappa Jadar ) XXVI Addl. City Civil and Sessions Judge Mayo Hall, Bangalore.
ANNEXURE
1. List of witnesses examined for the plaintiff/s:
P.W.1 Sri. B.L.Akshara P.W.2 Sri. Tinsley Justin P.W.3 Sri. Manikandan Rajalingam
2. List of witnesses examined for defendant/s:
D.W.1 Sri.A.R.Ravichandran 45 O.S.25674/2008
3. List of documents exhibited for the plaintiff/s:
Ex.P.1 Board resolution dt. 31/8/2007
Ex.P.2 confirmation order dt. 15/2/2006
Ex.P.3 Confirmation order dt. 28/2/2006
Ex.P.4 to Invoice-Cum-Excise Gate pass
Ex.P.6
Ex.P.7 Statement of account
Ex.P.8 Notice dt. 15/10/2007
Ex.P.9 Postal acknowledgment
Ex.P.10 Development Credit Bank Letter
dated 6/1/2010
Ex.P.11 Board Resolution dt. 23/11/2010
Ex.P.12 & 13 Commissioning report
Ex.P.14 Board Resolution dt. 31/8/2007
Ex.P.15 Board Resolution copy dt.
23/11/2010
Ex.P.16 Board resolution dt. 2/12/2011
4. List of documents exhibited for defendant/s:
Ex.D.1 Copy of Proforma Invoice - II dt.
16/2/2006
Ex.D.1(a) Proforma Invoice- II dt. 16/2/2006
Ex.D.2 Copy of Proforma Invoice No.PT-003
dt. 18/4/2005
Ex.D.2(a) Proforma invoice No.PT-003 dt.
18/4/2005
Ex.D.3 E-mail letter
Ex.D.4 True copy of plaintiff's letter
Ex.D.4(a) Plaintiff's letter
Ex.D.5 True copy of defendant's letter
Ex.D.5(a) Defendant's letter dt. 6/9/2006
Ex.D.6 Confirmation order dt. 15/2/2006
Ex.D.7 Defendant's letter dt. 16/2/2006
Ex.D.8 Plaintiff's letter dt. 16/2/2006
Ex.D.9 Proforma Invoice -I, dt. 16/2/2006
Ex.D.10 Purchase order amendment dt.
46 O.S.25674/2008
20/2/2006
Ex.D.11 Proforma Invoice - I, dt. 20/2/2006
Ex.D.12 Proforma Invoice - II, dt. 20/2/2006
Ex.D.13 Defendant's letter dt. 10/4/2006
Ex.D.14 Plaintiff's letter dt. 18/4/2006
Ex.D.15 Voucher dt. 31/8/2006
Ex.D.16 Defendant's letter dt. 15/9/2006
Ex.D.17 KSK Associates's invoice dt
15/11/2006
Ex.D.18 KSK Associates's invoice dt.
10/12/2006
Ex.D.19 KSK Associates's invoice
dt.30/3/2007
Ex.D.20 KSK Associates's invoice
dt.30/3/2008
Ex.D.21 Postal acknowledgment
Ex.D.22 Courier docket dt. 16/9
Ex.D.23 Letter dt. 3/5/2006 from Plaintiff's
Sales Engineer
Ex.D.24 & 25 Copy of drawing / sketch
Ex.D.26 Copy of liabilities
Ex.D.27 Copy of Profit and loss account for
the year ending 31st March 2008 for
defendant's company
( MALLAREPPA VEERAPPA JADAR)
XXVI Addl. City Civil Judge
Mayo Hall, Bangalore.