Delhi District Court
Nihalsons Jewellers vs Rajesh Rupani And Anr on 30 November, 2023
IN THE COURT OF SH. AJAY PANDEY
DISTRICT JUDGE (COMMERCIAL COURT-10)
CENTRAL, TIS HAZARI COURTS, DELHI
CS Comm 5372/2021
M/s Nihalsons Jewellers
Through its Partner
Mr. Arjun Lal Khanchandani
Having its Shop At:
67/4, Madras House, Dayanand Road,
Darya Ganj, New Delhi-110002
E-mail: [email protected]
Mobile No. 9899077995 .....Plaintiff
Versus
1. Mr. Rajesh Rupani
S/o Not known
R/o 701, 7th Floor,
Dev Ashish, 14A, Road Khar (W)
Mumbai-400052
(Mahavir Hospital Lane)
Also At:
433, 1st Floor, 17th Main Road,
KHB Colony, 5th Block,
Koramangala, Near Krishna Temple
Banglore-560034
Email: [email protected]
Mob.: 9769195727
2. Mr. Prakash Mulchandani,
S/o Sh. Ram Mulchandani
R/o-1101, CM 04,
Supertech Capetown, Sector-74,
Noida, UP-201304
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 1 of 31
CS Comm 5372/21
Email: [email protected]
Mob.: 9650369692
Also At:
Prem CHS Ltd.,
Jaferbhoy Industrial Building,
26, Makwana Road,
Andheri East, Mumbai,
Maharashtra-400059 .....Defendants
Date of Institution : 16.12.2021
Date of Arguments : 18.11.2023
Date of Judgment : 30.11.2023
JUDGMENT:-
SUIT FOR RECOVERY OF Rs. 37,03,578/- (RUPEES THIRTY SEVEN LAKHS THREE THOUSAND FIVE HUNDRED SEVENTY EIGHT ONLY)
1. This is a suit for recovery of price of the jewellery allegedly sold by the plaintiff to the defendant no. 1 on guarantee of defendant no. 2.
PLAINT
2. It is inter alia stated in the plaint that :
2.1 Plaintiff is a registered partnership firm with Mr. Arjun Lal Khanchandani and Mr. Gulab Rai Khanchandani as its partners. Plaintiff is engaged in the manufacturing and trading of gold and diamond jewellery articles/ornaments.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 2 of 31 CS Comm 5372/21 2.2 Present suit has been signed, instituted and verified by Mr. Hemant Khanchandani S/o Mr. Gulab Rai Khanchandani, who is duly authorized through a General Power of Attorney dated 13.12.2021 executed by the plaintiff firm.
2.3 Defendant no. 2 is a relative of Sh. Gulab Rai Khanchandani.
2.4 In last week of June 2021, defendants visited the shop of plaintiff and represented that defendant no. 1 is brother-in-law of defendant no. 2 and that he wanted to purchase some gold and diamond jewellery for himself and his family members on urgent basis as he has to go back to Mumbai.
2.5 The plaintiff firm through Mr. Hemant Khanchandani and Mr. Kamal Khanchandani, sons or partners of the plaintiff firm who are also working in the showroom of plaintiff, showed various jewellery articles to defendant no. 1. Defendant no. 1 finalized some designs and took estimate cost of the same. 2.6 On 07.07.2021, defendants again visited the shop of plaintiff and took the delivery of the jewellery articles of Rs. 34,35,908/- (Rupees Thirty Four Lacs Thirty Five Thousand Nine Hundred and Eight only). The defendant no. 1 also provided his address for preparation of invoice in his name and invoice bearing no. SI21220078 dated 07.07.2021 was generated and goods were handed over to the defendant no. 1 in presence of defendant no. 2. M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 3 of 31 CS Comm 5372/21 2.7 Defendant no. 1 promised the plaintiff to make payment of the aforesaid invoice after reaching Mumbai. The plaintiff was initially reluctant to accept such request. However, considering the relationship with defendant no. 2 and on his assurances and promises, accepted the request of defendant no. 1. Defendant no. 2 stood as guarantor of defendant no. 1 for payment of the amount of aforesaid invoice.
2.8 Thereafter, plaintiff continuously followed with the defendants for the aforesaid payment of Rs. 34,35,908/- but defendants were making one or the other excuse.
2.9 After great persuasions and follow ups, defendant no. 1 approached the plaintiff on 19.07.2021 and apologized for delay in making payment.
2.10 Defendant no. 2 in his capacity of guarantor for and on behalf of defendant no. 1, issued a cheque bearing no. 336431 dated 19.07.2021 drawn on YES Bank, Vaishali Nagar, Ajmer for a sum of Rs. 8 lacs from his own account in favour of plaintiff firm towards part discharge of the aforesaid liability and assured the plaintiff that the remaining balance amount will be paid by the defendant no. 1 or by him, on behalf of defendant no. 1, within a week.
2.11 On the same date i.e. on 19.07.2021, plaintiff presented the aforesaid cheque of the defendant no. 2 for encashment through its banker ICICI Bank M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 4 of 31 CS Comm 5372/21 Ltd., Daryaganj, however, the cheque was returned back by the banker of defendant no. 2 with remarks "FUNDS INSUFFICIENT" and a returning memo dated 30.07.2021 was issued.
2.12 Plaintiff firm confronted the defendants for dishonor of cheque and for payment, however, defendants were raising one or other excuse. 2.13 Plaintiff got issued and served through registered post and speed post a notice of demand dated 04.08.2021 through its counsel Sh. Shantanu Aggarwal, Advocate, calling upon the defendants to pay the amount of Rs. 34,35,908/- alongwith interest @ 18% per annum. 2.14 Defendants did not make payment despite service of the demand notice dated 04.08.2021. Defendant no. 1 rather sent a false and frivolous reply dated 21.08.2021, thereby denying purchase of any jewellery or his visit to the showroom of plaintiff.
2.15 Plaintiff has placed on record photographs and CCTV footage of defendants purchasing jewellery articles from the plaintiff alongwith call recording and whatsapp chats of defendant no. 1 with Mr. Kamal Khanchandani. In the whatsapp chat and call recordings, defendant no. 1 admitted the purchase of the abovesaid jewellery articles from the plaintiff firm. 2.16 Plaintiff initiated appropriate legal proceedings under Section 138 of the Negotiable Instruments Act against defendant no. 2.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 5 of 31 CS Comm 5372/21 2.17 Defendants are using the money of plaintiff for their commercial use. Therefore, the plaintiff is entitled to receive interest @ 18% per annum.
2.18 Defendants are jointly and severally liable to pay the principal amount of Rs. 34,35,908/- towards cost of the jewellery alongwith interest calculated @ 18% per annum w.e.f. 07.07.2021 till 13.12.2021 amounting to Rs. 2,67,670/-. Hence, the total liability of the defendant is Rs. 37,03,578/- (Rupees Thirty Seven Lacs Three Thousand Five Hundred and Seventy Eight only). 2.19 Before filing the present suit, plaintiff initiated mandatory pre institution mediation under Section 12-A of Commercial Courts Act 2015 at Delhi Legal Services, Central District on 22.09.2021. Despite issuance of notice, defendants did not appear in the Mediation and a certificate of "Non Starter" dated 30.11.2021 was issued to the plaintiff.
Hence, the plaintiff filed the present suit for recovery of Rs. 37,03,578/- with cost of suit alongwith pendente lite and future interest @ 18% per annum. The plaint is duly supported by the statement of truth of Mr. Hemant Khanchandani, the General Power of Attorney of the plaintiff firm.
WRITTEN STATEMENT
3. Both the defendants were served with summons of suit. Defendant no. 1 filed his written statement M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 6 of 31 CS Comm 5372/21 alongwith documents, but defendant no. 2 did not appear before the court despite service of summons and vide order dated 09.06.2022, defendant no. 2 was proceeded ex-parte. In his written statement, defendant no. 1 took preliminary objections and replied the contents of plaint on merits as follows:
Preliminary Objections:
3.1 Shop/outlet of the plaintiff firm is of the paternal aunt of defendant no. 2 and substantial work received by defendant no. 2 used to be got performed from the plaintiff firm. Therefore, defendant no. 2 and plaintiff firm enjoined trustful and mutual understanding relationship.
3.2 The present suit is filed in connivance with defendant no. 2 as defendant no. 2 is relative of the partners of the plaintiff firm doing similar type of business of selling, purchasing, polishing and stoning jewellery. The entire transaction alleged in the present suit took place between plaintiff firm and the defendant no. 2 and defendant no. 1 has no concern with the alleged transactions.
3.3 Defendant no. 2 is married with the daughter of uncle of defendant no. 1 namely Jiya @ Preeti and defendant no. 2 is carrying out the business of sale, purchase and other activities associated with the jewellers in the name and style of 'Jiya Jewels' annd M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 7 of 31 CS Comm 5372/21 plaintiff has deliberately concealed this fact. 3.4 Defendant no. 1 approached to the defendant no. 2 for polishing, shining, stoning and performance of standard work on old jewelleries of his elder sister-in-
law and wife, to be worn in the marriage ceremony of the maternal daughter of defendant no. 1 fixed to be solemnized in October 2021. Defendant no. 2 proposed defendant no. 1 that his close relative is operating in the name of Nihalsons Jewellers in Delhi, who is having more expertise/experience in respect of polishing, shining, stoning and doing standard work on jewelleries. 3.5 In April 2021, defendant no. 1 visited premises of defendant no. 2 at Noida and found that no work of jewelleries was carried out there. Defendant no. 2 then took the defendant no. 1 to the plaintiff firm to see the workman ship and select the design, stones and finalize the colors of polishing and minor modifications on the old jewellery. Defendant no. 1 then agreed to hand over old jewelleries for polishing, standard work, shining and stoning. To gain trust of the defendant no. 1, defendant no. 2 elaborated structures, designs etc., after performance of polishing, standard work upon the old jewellery from the designs available for display at the plaintiff firm.
3.6 Thereafter, defendant no. 1 handed over the jewelleries of his elder sister-in-law and of his wife to defendant no. 2 in April 2021, which was supposed to be M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 8 of 31 CS Comm 5372/21 provided back within a period of 15-20 days as per representations of defendant no. 2 and there was no relationship of seller and purchaser between defendant no. 1 and the plaintiff firm.
3.7 Meanwhile, there was lockdown on account of pandemic COVID 19 and it was stated by defendant no. 2 to defendant no. 1 that there might be delay in performance of work on old jewellery and therefore, the defendant no. 1 may visit Delhi in July 2021. As such, defendant no. 1 visited residence of defendant no. 2 on 07.07.2021. Thereafter, defendant no. 2 took defendant no. 1 to the shop of plaintiff. It was then revealed that only part of jewelleries were ready and the remaining jewelleries would be sent to the defendant no. 1. Defendant no. 2 also claimed an amount of Rs. 5 lacs against the work performed on part of the old jewelleries. On insistence of defendant no. 2, defendant no. 1 made payment of Rs. 5 lacs in cash to defendant no. 2 for the work performed on old jewelleries. 3.8 No relationship of guarantee and surety existed between defendant no. 1 and defendant no. 2. No privity of contract existed between plaintiff and defendant no. 1 to give rise to the cause of action in favour of plaintiff or to issue alleged invoice/bills against defendant no. 1.
3.9 In view of the mandatory provisions incorporated under Prevention of Money Laundering Act M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 9 of 31 CS Comm 5372/21 2002 and notification issued from time to time by the Government, in transactions valuing more than Rs. 2 lacs, the seller is bound to obtain KYC from the customer, but plaintiff never complied such mandatory requirement and did not obtain any KYC, therefore, the story of plaintiff is baseless.
3.10 Defendant no. 1 received messages and chats from the partners of the plaintiff firm, after which, he contacted defendant no. 2 in respect of the messages received from Mr. Kamal Khanchandani. Defendant no. 2 committed to the defendant no. 1 that he would resolve all the issues. But defendant no. 1, despite commitment/representation of defendant no. 2, kept on receiving chats from the plaintiff because of which defendant no. 1 decided to visit Delhi in the month of August 2021. After reaching Delhi, defendant no. 1 found that the premises of defendant no. 2 were locked and he further came to know that defendant no. 2 committed serious fraud in Noida and FIR was already lodged against him. Defendant no. 1 felt cheated as despite of giving payment to the defendant no. 2, he did not provide rest of defendant no.1's old gold jewelleries. 3.11 Plaintiff never made any communication/transmission of the invoice to the defendant no. 1 as same was never outstanding against defendant no. 1, whereas defendant no. 2 had previously made defaults with the plaintiff firm and plaintiff in M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 10 of 31 CS Comm 5372/21 connivance with defendant no. 2 arbitrarily issued bill against defendant no. 1.
3.12 No prudent person would believe that defendant no. 2 had issued a cheque of Rs. 8 lacs which got dishonored on its presentation but even then, plaintiff sold goods on his surety and accepted the cheque of only Rs. 8 lacs against the sale of goods valued more than Rs. 34 lacs.
3.13 Defendant no. 2 and Jiya Jewels had transactions with the plaintiff and are closely related with the plaintiff, hence, plaintiff in connivance with defendant no. 2 and Jiya Jewels, by manipulating the facts, filed the present suit against defendant no. 1. 3.14 Mere presence of defendant no. 1 with defendant no. 2 in the outlet of plaintiff firm do not give rise to the cause of action against defendant no. 1 and there existed no contract between plaintiff and defendant no. 1 for the alleged transaction.
3.15 This court do not have appropriate jurisdiction to try and entertain the present suit as neither of the defendants reside within its territorial jurisdiction.
Reply on merits :
3.1.1 It is denied that plaintiff is a partnership firm with Mr. Arjun Lal Khanchandani and Mr. Gulab Rai Khanchandani as its partners. It is also denied that plaintiff is engaged in the business of manufacturing and M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 11 of 31 CS Comm 5372/21 trading of gold jewelleries and ornaments etc. and plaintiff is asked to be put to strict proof of the same. 3.1.2 It is denied that suit has been signed and verified by Mr. Hemant Khanchandani and it is stated that the GPA allegedly authorizing Mr. Hemant Khanchandani has not been validly executed as per law. 3.1.3 It is denied that in the last week of June 2021, defendant visited the shop of plaintiff and made representations as alleged. Reliance is placed upon the contents of preliminary objections.
3.1.4 Showing of jewellery to defendant no. 1 and finalizing any designs by him is denied and it is stated that finalizing or taking estimate of the ornaments by any of the party cannot amount to purchasing of the article. 3.1.5 In respect of the alleged visit to the shop of plaintiff on 07.07.2021, it is stated that on the request of defendant no. 2, defendant no. 1 went to take delivery of the polished and stoned old jewelleries handed over by defendant no. 2 to the plaintiff firm, but defendant no. 1 never made purchase of any articles as alleged. 3.1.6 It is thus denied that defendant no. 1 made purchase of jewellery ornaments/articles from the plaintiff. It is also denied that defendant no. 1 provided his address for preparation of invoice in his name and plaintiff raised the invoice and handed over goods to defendant no. 1 in presence of defendant no. 2. It is stated that defendant no. 1 was not provided entire M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 12 of 31 CS Comm 5372/21 polished and stoned ornaments, handed over to defendant no. 2, therefore, the defendant no. 1 provided his address to the defendant no. 2 for sending the old jewelleries on the address provided by defendant no. 1. 3.1.7 Any promise by defendant no. 1 to the plaintiff to make payment of the invoice after reaching Mumbai is denied and it is stated that defendant no. 1 had no occasion to make any such promise. 3.1.8 Any guarantee and surety by defendant no. 2 for payment to plaintiff by defendant no. 1 is denied and reliance is placed upon the contents of preliminary objections.
3.1.9 Facts stated in the plaint that the defendant no. 1 was making one or the other excuse to not to make payment to plaintiff are denied.
3.1.10 It is denied that on 19.07.2021, defendant no. 1 approached the plaintiff and apologized for delay in making payment and it is stated that defendant no. 1 had made entire payment against the polishing and stoning of the old ornaments handed over to the defendant no. 2, who might have defaulted in providing the same to the plaintiff firm. It is denied that defendant no. 2 issued a cheque of Rs. 8 lacs as a guarantor and towards the part discharge of the alleged liability of the plaintiff and it is repeated that no prudent person would have accepted a cheque of Rs. 8 lacs against the transaction of more than Rs. 34 lacs.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 13 of 31 CS Comm 5372/21 3.1.11 Allegations of the plaintiff that he had never asked or told the defendant no.1 to make any payment to defendant no.2 nor authorized the defendant no.2 to receive any payment from defendant no.1, is stated to be concocted and manipulated and it is stated that defendant no.1 is stranger to the transaction between the plaintiff and defendant no.2, whereas defendant no.1 had handed over the jewellery for polishing and stoning to defendant no.2 and hence rightfully made payment to the defendant no.2 which was duly acknowledged by defendant no.2. 3.1.12 Any malafide intention on the part of defendant no.1 is denied and it is repeated that plaintiff, in collusion with defendant no.2, falsely issued a bill which was never transmitted/communicated, though defendant no.1 had diligently made payment to the defendant no.2 to whom jewellery was entrusted. Service of notice of plaintiff dated 04.08.2021 and its reply by defendant no.1, is not denied. It is denied that defendant no.1 had denied his visit to the showroom of the plaintiff and it is stated that defendant no.1 had denied delivery of any ornaments as alleged by the plaintiff. 3.1.13 Contentions of the plaintiff about placing on record the photographs and CCTV footage of defendants are stated to be made to misguide the court by stating "that selling and purchasing is completely different fact from sitting in the showroom". Allegations about placing on record, call recording and whatsapp chat of defendant M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 14 of 31 CS Comm 5372/21 no.1 with Mr. Kamal Khanchandani are replied by saying "The alleged contention of the plaintiff that the call recording and whatsapp chat of the defendant with Mr. Kamal Khanchandani is also placed on record in which defendant no.1 has admitted purchased the above said jewllery articles from the plaintiff, is further made with malafide intention to misguide this Hon'ble Court, as the answering defendant had never purchased any articles as alleged from plaintiff and therefore there does not arise any question of the payment of the purchase of the jewellery" and it is stated that defendant no.1 is placing on record his chat to show that he made the payment to defendant no.2 regarding the polishing and stoning of the old jewellery. Any entitlement of the plaintiff to recover any money from defendant no.1 or to receive any interest is denied. It is stated that no cause of action has arisen in favour of plaintiff and against the defendant no.1 and it is further denied that this court has jurisdiction to try and entertain the present suit and reliance is placed upon preliminary objections. Dismissal of the suit is prayed.
REPLICATION :-
4. Plaintiff filed replication to the written statement of the defendant no.1 and reiterated the allegations of plaint denying contrary allegations of the written statement. It is stated in the replication that CCTV M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 15 of 31 CS Comm 5372/21 footage and photographs filed by the plaintiff are sufficient evidence to prove that defendant no.1 had visited shop and purchased jewellery articles and also took delivery of the same. Alleged admissions of the defendant no.1 in whatsapp chat and voice recordings are again relied upon. Transactions of the plaintiff with firm Jiya Jewels are stated to be having no concern with the transactions with defendant no.1.
ADMISSION/DENIAL OF DOCUMENTS
5. Affidavit of admission/denial of documents of parties were filed by plaintiff and defendant no.1. In its affidavit of admission/denial, plaintiff denied whatsapp chat of defendant no.1 and defendant no.2 and admitted other relevant documents of the defendant no.1 as per the allegations in pleadings of plaint.
6. Defendant no.1 denied the alleged address written by him on note paper. He however admitted the notice of demand dated 04.08.2021 issued by the plaintiff and its reply by defendant no.1 on dated 24.08.2021. Photographs of the defendants in the showroom of plaintiff as well as whatsapp chat of defendant no.1 with Mr. Kamal Khanchandani are admitted. Pen drive containing video-recording and call recording of defendant no.1 and Mr. Kamal Khanchandani, ledger account maintained by plaintiff, invoice dated 07.07.2021, GPA in favour of Mr. Hemant Khanchandani M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 16 of 31 CS Comm 5372/21 are denied whereas non-starter report from Delhi Mediation Center is admitted.
ISSUES
7. Following issues were framed on 20.04.2023 by my learned predecessor:-
1) Whether the present suit has been filed by the plaintiff in connivance with defendant no.2, as alleged by the defendant no.1? (OPD1).
2) Whether the plaintiff is guilty of concealment of fact, as alleged by the defendant no.1? (OPD1).
3) Whether the present suit is liable to be dismissed against defendant no.1, as there never existed any valid contract between the plaintiff and the defendant no.1 for the alleged transaction, as alleged by the defendant no.1?(OPD1).
4) Whether the plaintiff is entitled for recovery of the decreetal amount, as prayed? (OPP).
5) Whether the plaintiff is entitled for the interest, if any. If so, at what rate and which period?
(OPP)
6) Relief.
EVIDENCE
8. In support of its case plaintiff examined 03 witnesses.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 17 of 31 CS Comm 5372/21
9. PW-1 Mr. Hemant Khanchandani, is the GPA holder of the plaintiff firm through whom the present suit is filed. He is also one of the son of the plaintiff firm's partner Mr. Gulab Rai Khanchandani. He stated that he was personally involved in the transaction with the defendants. He proved GPA in his favour as Ex.PW1/1 and deposed on the lines of plaint about visit of the defendants to the showroom of plaintiff and purchase of jewellery by defendant no.1. The invoice dated 07.07.2021 is proved by him as Ex.PW1/2. The photographs of defendant no.1 in the showroom of the plaintiff are proved as Ex.PW1/3. Cheque no. 336431 dated 19.07.2021 drawn on Yes Bank, Vaishali Nagar, Ajmer, Rajasthan for the sum of Rs.8.00 lakhs and its returning memo is proved as Ex.PW1/4 and Ex.PW1/5. Notice of demand by the plaintiff and its reply by defendant are exhibited as Ex.PW1/6 and Ex.PW1/7.
10. PW-2 Shri Arjun Lal Khanchandani, is one of the partners of plaintiff firm. He testified that plaintiff is a registered partnership firm and that Form A and B exhibited as Ex.PW2/1 were issued by the Registrar of Firms. He also testified that GPA dated 13.12.2021 was executed in favour of PW-1 Mr. Hemant Khanchandani, who was also personally involved in the transaction in question with the defendants.
11. PW-3 Mr. Kamal Khanchandani also testified by way of affidavit in evidence that he had personal M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 18 of 31 CS Comm 5372/21 knowledge of the present case as he was personally involved in the transaction with the defendant; that plaintiff arranged jewellery as per the taste and requirement of defendant no.1; that he followed-up with the defendant no.1 for making the payment of jewellery article purchased by him on 07.07.2021 vide invoice no. SI2122 0078 Ex.PW1/2. He also proved CCTV footage dated 07.07.2021 of the showroom of plaintiff in pen drive as Ex.PW3/1. Whatsapp chat of defendant no.1 with him are proved as Ex.PW3/2. Telephonic conversation between him and defendant no.1 is stated to be contained in the pen drive Ex.PW3/1 and the transcript of the said audio conversation is exhibited as Ex.PW3/3. The relevant affidavit/certificate under section 65A and B of the Indian Evidence Act is proved as Ex.PW3/4.
12. Plaintiff's witnesses were cross-examined by learned counsel for the defendant.
13. Defendant also filed his evidence by way of affidavit stating inter-alia that partners of the plaintiff firm and their children had close relation with defendant no.2 and defendant no.2 is married to the first cousin of defendant no.1. It is also stated that marriage of daughter of sister of defendant no.1 was fixed in October 2021 for which he wanted the jewellery belonging to his wife and elder sister in law to be remade, refurbished and repaired and that on the advice of defendant no.2, he went to M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 19 of 31 CS Comm 5372/21 plaintiff's showroom in Daryaganj along with defendant no.2 in 2021 and handed over the old jewellery to Mr. Kamal Khanchandani. He further stated that he was given no repair slips for the old jewellery and did not insist for the same due to the good relations between the plaintiff firm and defendant no.2. Moreover he was also impressed by the showroom of the plaintiff firm. He further stated that plaintiff firm gave an estimated cost of about Rs.7-8 lakhs to him depending upon on the quantity of extra gold, precious stones, diamonds, emeralds etc. being placed in the jewellery given by him. He further stated that he again visited the shop of plaintiff firm on 07.07.2021 along with defendant no.2 where a saleswoman of plaintiff firm handed him over remade, refurbished and repaired jewellery in two maroon colour boxes having logo of plaintiff firm. He also stated that cost of remaking, repairing and refurbishing of the said old jewellery worked out to Rs.8,13,000/- only and he had already paid cash to defendant no.2. Defendant no.2 gave a post-dated cheque of Rs.8.00 lakhs in favour of plaintiff firm towards full and final discharge of defendant no.1's liability towards remaking, repairing and refurbishing etc. of the old jewellery. He also stated that no invoice was ever given to him by the plaintiff firm.
14. DW-1 was also cross-examined by learned counsel for plaintiff.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 20 of 31 CS Comm 5372/21 ARGUMENTS
15. Learned counsels for parties addressed their respective arguments.
16. Learned counsel for plaintiff argued that the defendant no.1 has taken four different stands in respect of the transaction between the parties. He submitted that first stand was taken by the defendant no.1 in his reply dated 24.08.2021 to the demand notice of plaintiff, wherein he denied that he ever visited the plaintiff's showroom in last week of June 2021 for purchase of any jewellery and that in the same reply he stated that on 07.07.2021 he might have visited the showroom along with defendant no.2 but he never entered into any transaction with the plaintiff. He further stated that second stand of the defendant no.1 in the written statement is that he approached defendant no.2 for polishing, shining and stoning of his gold jewellery and defendant no.2 had taken him to the showroom of plaintiff in April 2021 and that in July 2021 he was delivered back part jewellery by defendant no.2, whereas rest of the jewellery was to be returned lateron. He also stated that he gave Rs.5.00 lakhs to the defendant no.2 for the job work and that there was no privity between him and the plaintiff. The third stand taken by the defendant no.1 as per his affidavit in evidence is in para no.5 of the affidavit in which it is M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 21 of 31 CS Comm 5372/21 stated that he handed over the old jewellery to the plaintiff and was given estimate of Rs.7-8 lakhs for remaking, refurbishing and repairing the jewellery and he paid the amount of job work in cash to defendant no.2. However, in his cross-examination by learned counsel for plaintiff, defendant no.1 took fourth stand that a cash of Rs.5.00 lakhs was received by the official of plaintiff from the house of defendant no.1 at Mumbai on 07.07.2021 from his wife and another repayment of Rs.3.00 lakhs was made by him in cash to defendant no.2 at Noida. It is thus argued by learned Sh. Naresh Gupta on behalf of plaintiff, that the stands taken by the defendant no.1 are not trustworthy and that the plaintiff has successfully proved its case against both the defendants and is therefore entitled to a decree as prayed.
17. On the other hand learned Ms. Shikha Sapra argued on behalf of defendant no.1 submitting that plaintiff has to prove its case on the basis of his own testimony and documents and he cannot take benefit of weaknesses of the defence. She argued that plaintiff has to stand on its own legs and different stands of the defendant no.1 may not entitle the plaintiff to get a decree. She argued that as per Government of India guidelines no financial transaction for any amount above Rs.2.00 lakhs can be done without obtaining KYC (Know Your Customer) documents including PAN card of defendant no.1. In the present case plaintiff did not M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 22 of 31 CS Comm 5372/21 obtain any KYC documents from the defendant no.1 and therefore the invoice of Rs.34,35,908/- is fabricated. She also argued that no shop keeper or goldsmith would hand over the jewellery worth huge amount of Rs.34.00 lakhs without receiving payment. She further argued that the plaintiff has withheld the CCTV footage of the first visit of defendant no.1 in its showroom, because the same would have reflected that the defendant no.1 had handed over the old jewellery for remaking, refurbishing and stoning etc. She also argued that the alleged invoice dated 07.07.2021 do not contain any signature of defendant no.1 which further proves that the same is fabricated. She also argued that no new jewellery is given or handed over by a jewellery showroom in the kind of boxes handed over to defendant no.1 and in small puriyas as shown in CCTV footage and the way the jewellery was being handed over to defendant no.1 after keeping one over the other explicitly reflect that they were old jewelleries remade and refurbished by the plaintiff. She further argued that the cost for the work done by the plaintiff was Rs.8.00 lakhs which was paid by defendant no.2 by way of cheque of Rs.8.00 lakhs to the plaintiff and defendant no.1 had already paid the amount of Rs.8.00 lakhs in cash to defendant no.2. She also argued that the testimony of witnesses of plaintiff is full of contradictions and that PW-1 had categorically stated that in cases of over the counter sale, the goods are M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 23 of 31 CS Comm 5372/21 delivered on payment of price of goods. PW-3 also stated that normally the payment is taken hand to hand while giving delivery of the jewellery. She thus submitted that there is no reason that the plaintiff would hand over the jewellery worth more than Rs.34.00 lakhs to defendant no.1 without receiving any payment and therefore the only probability is that the plaintiff had returned old jewellery of the defendant no.1.
18. She submitted that there is connivance of plaintiff with defendant no.2 as all plaintiff's witnesses admitted that they knew defendant no.2 being a relative. She also argued that plaintiff concealed material facts as he did not file CCTV footage of the first visit of defendant no.1, when he handed over his old jewellery to the plaintiff. She further argued that the witnesses of plaintiff miserably failed to prove their case and therefore the suit is liable to be dismissed with cost in favour of defendant no.1.
19. Arguments considered. Record perused.
FINDINGS Issue wise findings of the court are as under:-
Issue no.1:- Whether the present suit has been filed by the plaintiff in connivance with defendant no.2, as alleged by the defendant no.1? (OPD1)
20. Onus to prove this issue was upon defendant no.1. Court is not in agreement with the submissions of M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 24 of 31 CS Comm 5372/21 learned Ms. Shikha Sapra that just because defendant no.2 is in relation with the partners of plaintiff's firm, it can be inferred that the suit is filed by the plaintiff in connivance with defendant no.2. In fact defendant no.2 is even in relation with defendant no.1. In his written statement defendant no.1 categorically stated that defendant no.2 has been married with the daughter Jiya @ Preeti of the uncle of defendant no.1. Hence, the court cannot conclude that just because of the relation of defendant no.2 with the partners of plaintiff, the present suit can be said to be filed in connivance of plaintiff with defendant no.2. This issue is accordingly decided against the defendant no.1.
Issue no.2:- Whether the plaintiff is guilty of concealment of fact, as alleged by the defendant no.1? (OPD1):-
21. Again the onus to prove this issue was upon defendant no.1. Court is not in agreement with the submissions of learned Ms. Shikha that the non-filing of the CCTV footage of the first visit of defendants amounts to material concealment of facts. The plaintiff has filed relevant photographs and CCTV footage to show delivery of articles to the defendant no.1. At no point of time even the defendant no.1 has applied for calling the CCTV footage of his first visit to the showroom of plaintiff. Plaintiff has to chose the M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 25 of 31 CS Comm 5372/21 documents on the basis of which, he has to prove his case. All documents showing the visit of the defendant no.1 to the showroom of plaintiff, need not be filed. The court do not see any material concealment of facts by the plaintiff. This issue is accordingly decided against the defendant no.1.
Issue no.3:- Whether the present suit is liable to be dismissed against defendant no.1, as there never existed any valid contract between the plaintiff and the defendant no.1 for the alleged transaction, as alleged by the defendant no.1?(OPD1)
22. Again the onus to prove this issue was upon the defendant no.1. This issue was framed on pleadings of defendant no.1, in his written statement that he had no direct transactions with the plaintiff and had dealings with defendant no.2 alone. This stand of the defendant no.1 has been contradicted by him in his affidavit as well as in his cross-examination wherein he categorically stated that he handed over the old jewellery to PW-3 Sh. Kamal Khanchandani and that plaintiff firm had given him an estimated cost of about Rs.7-8 lakhs for refurbishing and remaking etc. of the old jewellery. Hence, the stand taken by the defendant no.1 in his written statement is not trustworthy. In addition thereto the plaintiff's witnesses i.e. PW-1 and PW-2 have categorically stated that the defendant no.1 purchased M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 26 of 31 CS Comm 5372/21 jewellery from the plaintiff. They also proved the invoice dated 07.07.2021 Ex.PW1/2 through which the jewellery was sold to the defendant no.1. This issue is accordingly decided against the defendant no.1.
Issue no.4:- Whether the plaintiff is entitled for recovery of the decreetal amount, as prayed? (OPP).
23. Onus to prove this issue was upon the plaintiff.
PW-1 and PW-3 were directly involved in the transaction between the parties. The defendant no.1 in reply to the legal demand notice had denied any transaction with the plaintiff. PW-1 and PW-3 have however specifically deposed about receiving of the jewellery by defendant no.1. Their testimony is corroborated by the photographs and the CCTV footage proved by plaintiff. In the CCTV footage the defendant no.1 is seen receiving the jewellery in the showroom of the plaintiff and keeping the same in his bag. Submissions of learned Ms. Shikha that the manner of handing over of jewellery to defendant no.1, after keeping them one over the other, clearly reflect that same was old jewellery remade and refurbished, do not inspire confidence. Admittedly defendant no.1 is a resident of Mumbai. He visited the showroom of the plaintiff at Daryaganj Delhi. It is not stated that he is having any abode at Delhi. In such circumstances, any person would keep the jewellery in a manner to occupy least space. Therefore it was natural to M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 27 of 31 CS Comm 5372/21 keep the jewellery one over the other in the boxes so that it may be easy to carry back to Mumbai. Hence, just because of the manner, in which jewellery was handed over to the defendant no.1, it cannot be concluded that the defendant no.1 received old jewelleries, remade and refurbished for him. In addition thereto there is whatsapp chat and the telephonic conversation of the defendant no.1 with PW-3 Kamal Khanchandani in which defendant no.1 is categorically admitting delivery of jewellery and payment due to the plaintiff. The defendant no.1 in its reply dated 24.08.2021, to the legal demand notice of the plaintiff denied any privity of contract with the plaintiff, which is contradicted by the whatsapp chat and the telephonic conversation with PW-3. Different stands of the defendant no.1 about payment to the defendant no.2 and to the officials of the plaintiff are self-contradictory. Initially the defendant no.1 stated that he had made payment to defendant no.2. Lateron in his cross-examination dated 04.11.2023 at page no.2, he stated that an official of the plaintiff collected an amount of Rs.5.00 lakhs from his house at Mumbai on 07.07.2021 in cash from his wife Mr. Simran Rupani. It is unimaginable that the defendant no.1 is sitting in showroom of plaintiff at Delhi on 07.07.2021, whereas the payment is being made by his wife at Mumbai to an official of plaintiff in cash without any receipt. Moreover such stand was never taken by the M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 28 of 31 CS Comm 5372/21 defendant no.1 in his earlier pleadings and is therefore an afterthought. In fact the defendant no.1 keep on making one story after the other and any ordinary prudent person cannot believe on his stories.
24. Per-contra witnesses of the plaintiff have proved the delivery of the articles to the defendant no.1 through their oral testimony as well as by way of documents including the invoice Ex.PW1/2 and electronic evidence.
25. If the plaintiff has not complied with any mandatory requirements of obtaining KYC, the concerned authority may take appropriate legal action against them, however the same would not absolve the defendant no.1 from his liability to pay cost of the jewelleries received by him. The plaintiff is thus entitled to recovery of the price of the jewelleries worth Rs.34,35,908/- supplied by him to defendant no.1 vide invoice Ex.PW1/2.
26. This court is however not in agreement with the submissions of learned counsel for plaintiff that defendant no.2 is also liable for payment of entire amount to the plaintiff as a guarantor of defendant no.1. There is no written gurantee agreement between the plaintiff and defendant no.2. It may however be considered that by issuance of the cheque of Rs.8.00 lakhs towards part payment of the price of goods, defendant no.2 had himself taken the liability for at-least Rs.8.00 lakhs. The defendant no.2 can be thus be made M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 29 of 31 CS Comm 5372/21 liable to pay Rs.8.00 lakhs to the plaintiff and his alleged guarantee cannot be extended beyond Rs.8.00 lakhs.
27. In addition to the principal amount of Rs.34,35,908/-, the plaintiff has also prayed interest @ 18% per annum from the date of invoice i.e. 07.07.2021 till 13.12.2021 amounting to Rs.2,67,670/-. The total amount for recovery thus comes out to be Rs.37,03,578/-. The interest calculated till the filing of the suit seems to be reasonable. This issue is accordingly decided in favour of plaintiff and it is held that the defendant no.1 is liable to make payment of Rs.37,03,578/- on the date of filing of suit to the plaintiff. The defendant no.2 is also jointly and severely liable to make payment of Rs.8.00 lakhs to the plaintiff. The payment, made by defendant no.2 shall be adjusted out of the payment due from defendant no.1. It is clarified that the adjustable payment may be received by the plaintiff from the defendant no.2 in the proceedings under section 138 Negotiable Instruments Act also whether by way of compensation or penalty.
Issue no.5:- Whether the plaintiff is entitled for the interest, if any. If so, at what rate and which period?(OPP)
28. The transaction between the parties is commercial transaction of the plaintiff. Defendant no.1 wrongfully withheld the payment to the plaintiff. Plaintiff would M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 30 of 31 CS Comm 5372/21 have invested the money received from the defendant no.1 in his business and might have earned profit from the same. Plaintiff is thus held entitled to recovery of pendentelite and future interest @ 15% per annum. This issue is decided accordingly.
Relief:-
29. Suit of the plaintiff is accordingly decreed for recovery of Rs.37,03,578/- with cost and pendentelite & future interest @ 15% per annum against both the defendants. The joint and several liability of defendant no.2 shall however be limited to Rs.8.00 lakhs only and any payment by him would be adjustable in the payment to be made by defendant no.1. It is clarified that the adjustable payment may be received by the plaintiff from the defendant no.2 directly or indirectly or in the proceedings under section 138 Negotiable Instruments Act whether by way of compensation or penalty.
30. Decree-sheet be prepared accordingly.
31. File be consigned to record room.
Digitally
Announced in the open court AJAY
signed by
AJAY PANDEY
Date:
on the 30th day of November, 2023 PANDEY 2023.11.30
16:36:07
+0530
(Ajay Pandey)
District Judge
(Commercial Court-10)
Central, Tis Hazari Courts, Delhi.
M/s Nihalsons Jewellers Vs. Mr. Rajesh Rupani & Anr. Page no. 31 of 31
CS Comm 5372/21