Delhi District Court
M/S Madura Coats P. Ltd vs M/S Knitcraft Apparels International ... on 27 September, 2024
IN THE COURT OF SH.AJAY GUPTA
DISTRICT JUDGE (COMMERCIAL COURT)-05
TIS HAZARI COURTS, WEST: DELHI
CNR No. DLWT01-004348-2021
Case No. CS(COMM) No. 287/2021
M/s Madura Coats Pvt.Ltd.
Regd. Office at:
7th Floor, Jupiter 2A, Prestige Technology Park
Sarjapur-Marathahalli Outer Ring Road
Marathahalli
Bangalore-560103, Karnataka
Branch Office at:
B-II/35, Mohan Co-operative Industrial Estate
Badarpur
New Delhi-110044
(Through its AR Sh. Prateek Gupta)
.....PLAINTIFF
Versus
M/s Knitcraft Apparels International Pvt.Ltd
(Through its Director Mr. Sanjay Khurana)
Regd.Office at:
N-49, Kirti Nagar
New Delhi-110015
Branch Office at:
A-81, Naraina Industrial Area Phase-I
New Delhi-110028
....DEFENDANTS
Date of institution of case : 21.06.2021
Date of arguments : 17.09.2024
Date of Pronouncement of Judgment : 27.09.2024
Case No. CS(COMM)/287/2021 Page No. 1 of 29
JUDGMENT
PLAINTIFF'S CASE
1. Plaintiff has filed the present suit for recovery of Rs.6,51,035/-alongwith pendentelite and future against the defendant on the basis of following averments:-
(i) that plaintiff is a manufacturer of all kinds of threads. Defendant company is carrying on business of manufacturing, exporting, importing, buying, selling, distributing, producing, processing, bleaching, dyeing, printing, spinning, knitting and dealing of all kinds of wearing apparels like knitted garments, readymade garments, handicrafts, leather goods, artificial jewelries, precious & semi precious stones and jewellery besides other materials made up of silks, artificial silks, rayon, nylon, polyester, yarns, synthetic yarns, fabrics, cotton, jute, wool and leather. The defendant is having its registered office at Kirti Nagar, Delhi and its branch office at Naraina and its Corporate office at Gurugram, Haryana.
(ii) that defendant through its Directors contacted the plaintiff for supply of goods and assured timely payment of the goods supplied. It was agreed that payment is to be made within 60 days of first day of succeeding month of the invoice. The plaintiff supplied the goods to the defendant at its Gurugram, Haryana address according to the orders and instructions of Case No. CS(COMM)/287/2021 Page No. 2 of 29 defendant. The goods were supplied by the plaintiff to the defendant to its own satisfaction. Defendant made certain payments against the several invoices raised by plaintiff against the defendant but defendant failed to pay the balance amount of Rs.5,28,706/-, the details of the said outstanding amount is as under:-
S.No Document No. Dated Amount E-way Bill No. 1 6008002725 04.03.2019 1327/- 721059234595 2 6008002415 04.03.2019 162135/- 711059082636 3 6008002839 05.03.2019 4568/- 791059234666 4 6008003455 07.03.2019 1442/- 711059651283 5 6008003444 07.03.2019 5307/- 751059651283 6 6008004400 09.03.2019 481/- 771060316692 7 6008004115 09.03.2019 1282/- 741060056489 8 6008004368 09.03.2019 23084/- 701060316675 9 6008004482 11.03.2019 962/- 741060316750 10 6008004507 11.03.2019 962/- 741060316776 11 6008005326 13.03.2019 481/- 741060725183 12 6008005313 13.03.2019 8756/- 711060725171 13 6008005880 15.03.2019 481/- 711061154853 14 6008008618 25.03.2019 3449/- 721062826037 15 6008009307 28.03.2019 2653/- 771063267917 16 6008009343 28.03.2019 20298/- N/A 17 6008009605 29.03.2019 1194/- 711063498986 18 6008009962 30.03.2019 1194/- 701063731680 19 6008009948 30.03.2019 12603/- 741063731666 20 6008010998 04.04.2019 3205/- 741064663566 21 6008013513 11.04.2019 801/- N/A 22 6008016441 20.04.2019 986/- 731067790925 23 6008016587 22.04.2019 2284/- 721067791008 24 6008016556 22.04.2019 44575/- 721067790980 Case No. CS(COMM)/287/2021 Page No. 3 of 29 25 6008016601 22.04.2019 53331/- 781067791022 26 6008017269 24.04.2019 160/- 711068199886 27 6008018557 29.04.2019 160/- N/A 28 6008018879 29.04.2019 321/- N/A 29 6008018562 29.04.2019 1442/- N/A 30 6008020463 06.05.2019 2284/- 751070442978 31 6008020701 06.05.2019 5253/- N/A 32 6008023014 14.05.2019 8680/- 701071993269 33 6008023018 14.05.2019 10964/- 771071993273 34 6008023395 15.05.2019 2284/- 771072188146 35 6008023160 15.05.2019 3205/- 741071993373 (BAL) 36 6008023387 15.05.2019 37231/- 761072188143 37 6008024041 17.05.2019 18045/- 701072576970 38 6008024038 17.05.2019 18273/- 771072575968 39 6008027744 31.05.2019 8638/- 781074877159 40 6008029557 06.06.2019 3045/- N/A 41 6008029602 06.06.2019 3426/- 751076007247 42 6008029832 07.06.2019 2284/- N/A 43 6008030418 10.06.2019 4340/- 791076576950 44 6008030620 11.06.2019 4929/- 721076581940 45 6008031542 14.06.2019 14196/- 731077121496 46 6008032055 15.06.2019 1857/- 711077544460 47 6008031877 15.06.2019 19848/- 781077306551 TOTAL LESS: 528706/-
(iii) that plaintiff served the defendant with a legal notice dated 28.01.2020 for demanding the amount of Rs.6,09,149/- alongwith 18% p.a. interest. The legal notice was served upon the defendant at its Kirti Nagar and Gurugram address, however, the notice sent at its Naraina office received back with the report that Case No. CS(COMM)/287/2021 Page No. 4 of 29 "addressee not found". Defendant did not join the pre- institution mediation proceedings instituted by plaintiff u/s 12-A of the Commercial Courts Act despite service of the notice issued by DLSA West, Tis Hazari, Delhi, thus, on 30.03.2021, a non-starter report was issued.
(iv) that the defendant is liable to pay the following amount qua interest for not making the payment of the due amount:-
S.N Particulars Amount
A. Principal Amount 5,28,706/-
B. INTEREST
1. From 01.06.2019 to 31.03.2021 on Rs.2,52,659/- 55,585/-
@ 12% p.a.
2. From 01.07.2019 to 31.03.2021 on Rs.1,07,265/- 22,526/-
@ 12% p.a.
3. From 01.08.2019 to 31.03.2021 on Rs.1,14,857/- 22,972/-
@ 12% p.a.
4. From 01.09.2019 to 31.03.2021 on Rs.53,925/- 10,246/-
@ 12% p.a.
5. Cost of Legal Notice 11,000/-
TOTAL: 6,51,035/-
Thus, plaintiff has sought a decree for
Rs.6,51,035/- alongwith 12% p.a pre-suit, pendentelite and future interest alongwith cost of the suit.
DEFENDANT'S CASE
2. Defendant has sought dismissal of the claim raised by the plaintiff on the basis of following averments:-
Case No. CS(COMM)/287/2021 Page No. 5 of 29Preliminary Objections
(i) that this court does not have territorial jurisdiction to entertain the present suit as defendant is having its factory cum office at Gurgaon and defendant was handling the transactions held with the plaintiff from its Gurgaon address. The meeting between plaintiff and defendant to discuss the commercial terms etc also happened at Gurugram, Haryana.
(ii) that there is no formal order which is termed as a binding agreement between the parties. Thus, there was no binding contract between the parties. Plaintiff has not filed any evidence regarding the purported supply made by plaintiff.
Preliminary Submissions
(iii) that there were repeated delays in supply made by plaintiff due to which defendant suffered losses as they had to make alternate arrangement at a much higher price. The goods supplied by plaintiff were very poor and defective goods. The plaintiff was in the habit of raising inflated and exaggerated bills. Defendant suffered loss of reputation and also huge loss due to cancellation of various orders due to acts of omissions and commission of the plaintiff.Case No. CS(COMM)/287/2021 Page No. 6 of 29
Reply on Merits
(iv) that while replying on merits, the defendant has stated that the goods supplied by plaintiff were defective and goods were not supplied as per order.
Defendant has denied that an amount of Rs.5,28,706/- is outstanding in regard to the details of bills mentioned in para no.5 of the plaint.
(v) that the defendant has denied the service of the legal notice, however, defendant did not dispute the receipt of the notice of pre-institution mediation. Thus, sought dismissal of the suit of the plaintiff.
3. In replication, plaintiff denied the averments and contentions made by defendant in their written statement and contents of the plaint have been reiterated and reaffirmed by the plaintiff.
4. On the basis of the pleadings of the parties following issues were framed on 02.01.2024:-
ISSUES
1. Whether this Court does not have any territorial jurisdiction to entertain and try the present suit? OPD
2. Whether the goods received by the defendant were defective? OPD
3. Whether the plaintiff is entitled to recovery of the amount claimed? OPP Case No. CS(COMM)/287/2021 Page No. 7 of 29
4. Whether the plaintiff is entitled to interest, if so, at what rate? OPP
5. Whether the goods supplied by the plaintiff to the defendant were not as per the requirement of the defendant? OPD
6. Relief.
PLAINTIFF'S EVIDENCE
5. After framing of issues, matter was fixed for plaintiff's evidence. Plaintiff has examined its AR Sh. Arvind Kumar as PW1. PW1 filed his affidavit Ex.PW1/A on the similar lines of the averments of the plaint. Besides, his affidavit (Ex.PW1/A), PW1 has tendered the following documents in his evidence:-
i) Certificate of incorporation of plaintiff as Ex.PW1/1.
ii) Board Resolution dated 25.05.2020 as Mark A.
iii) Company Master data of defendant as Ex.PW1/3.
iv) Bills raised by the plaintiff (receipt of goods acknowledged by the defendant in its affidavit of admission and denial) as Ex.PW1/4 to Ex.PW1/50 (Colly.).
v) E-way bills as Ex.PW1/51 to Ex.PW1/89 (Colly.).
vi) Statement of account (for the period 01.04.2018 to 31.03.2019, 01.04.2019 to 31.03.2020, 01.04.2020 to 31.03.2021 as Ex.PW1/90 to Ex.PW1/92 (Colly.).
vii) Legal notice as Ex.PW1/93.
Case No. CS(COMM)/287/2021 Page No. 8 of 29viii) Postal receipts of legal notice as Ex.PW1/94 to Ex.PW1/99.
ix) Copy of 6 tracking reports as Ex.PW1/100 (colly.)
x) Two returned envelopes with legal notice dated 28.01.2021 as Ex.PW1/101 (Colly.).
xi) Non-starter report as Ex.PW1/102.
xii) Certificate u/s 65-B of Indian Evidence Act as Ex.PW1/103.
6. Defendant did not lead any defence evidence in this matter.
7. I have heard the Ld. Counsel for the plaintiff as well as the Ld. Counsel for the defendant and gone through the record as well as written submissions filed on behalf of the defendant.
8. Ld.Counsel for the defendant has relied upon the following case law:-
(i) Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal (AIR 2020 Supreme Court 4908 AIRONLINE 2020 SC 641) and
(ii) Patel Roadways Ltd.Bombay Vs. Prasad Trading Company.
9. Ld. Counsel for the plaintiff has relied upon the following case laws:-
Case No. CS(COMM)/287/2021 Page No. 9 of 29(i) Iswar Bhai C. Patel & Bachu Bhai Patel Vs. Harihar Behera & Anr. (MANU/SC/0173/1999.
(ii) Bela Goyal Proprietor of Ispat Sangrah (India) Vs. VIIPL -MIPL JV (Jaipur) & Ors (MANU/DE/0036/2018.
(iii) A.B.C. Laminart Pvt.Ltd. & Ors Vs. A.P.Agencies Salem (MANU/SC/0001/1989).
(iv) Lohmann Rausher Gmbh Vs Medisphere Marketing Pvt.LLtd.
(v) Union Bank of India Vs. Milkfood Ltd (MANU/DE/2078/2012.
(vi) TKW Management Solutions Pvt.Ltd. Vs. Sherif Cargo & Ors (MANU/DE/0511/2023).
(vii) R.V.E Venkatachala Gounder Vs. Arulmigu Viswesaraswami Vs. V.P Temple (2003) 8 SCC 752.
(viii) Sidharth Kumar Vs. Alok Kumar
(MANU/DE/2679/2017).
(ix) Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal (MANU/SC/0521/2020) &
(x) Pawan Kumar Dalmia & Ors Vs. HCL Infosystems Ltd and Ors (MANU/DE/1162/2012).
My issue wise findings is as under:-
ISSUE NO.1
1. Whether this court does not have any territorial jurisdiction to entertain and try the present suit?
OPD Case No. CS(COMM)/287/2021 Page No. 10 of 29 10.1 The onus to prove Issue no.1 was on the defendant, however, defendant has not led any evidence in this regard. It is undisputed that defendant is a private limited company and having its registered office at Kirti Nagar. It is also undisputed that defendant is having a branch office at Naraina, Delhi. It is also contended by the plaintiff that the purchase orders were placed by the defendant from their registered office and the payment was also made from the registered office. Thus, it was stated that the cause of action arose within the West Delhi jurisdiction. The relevant para where plaintiff has made the aforesaid averments is reproduced as under:-
"13. That the Plaintiff Company works for gain at Delhi from its Branch Office, and the Defendant Company also works for gain within the territorial jurisdiction of this Hon'ble Court, having its Registered Office at Kirti Nagar, Delhi. It is submitted that since the purchase orders for goods to be supplied were placed by the Plaintiff from its Registered Office, and also since the payment for goods supplied by the Plaintiff from its Delhi Branch Office was also to be made by the Plaintiff from its Registered Office. therefore, the cause of action for filing the present suit has also arisen within the territorial jurisdiction of this Hon'ble Court. It is further submitted that the valuation of the present suit is less than Rs.2.00 Crores, hence this Hon'ble Court has also got the pecuniary jurisdiction to adjudicate the present suit".
10.2 It seems that there are some clerical errors in para no.13 of the plaint as in place of defendant, plaintiff has mentioned the word plaintiff as the purchase orders as well as Case No. CS(COMM)/287/2021 Page No. 11 of 29 payment to the plaintiff could have only been made by defendant as indisputably it was the plaintiff company which was a seller and defendant was a purchaser in the present case.
10.3 Defendant did not specifically deny the aforesaid averments made by the plaintiff and gave the following reply in its WS to the para 13 of the plaint:-
"13. The contents of paragraph 13 of the plaint are wrong and denied, save and except which are matter of record".
10.4 In this regard the contents of Para no.12 of the W.S are also important which are reproduced as under:-
"The contents of Paragraph 12 of the Plaint are wrong and denied, save and except which are matter of record. It is submitted that no cause of action arose within the territorial jurisdiction of this Hon'ble Court. It is wrong to suggest that this Hon'ble Court has got jurisdiction to try the suit on the ground of place of work of the Plaintiff. The alleged delivery was made by the Plaintiff to the Answering Defendant's office-factory situated at Gurugram and therefore the alleged cause of action to file the instant suit, if at all, arose in Gurugram and the Courts in Delhi do not have jurisdiction to entertain the present suit. The contents of preliminary objections and replies in the above para are reiterated".
10.5 Further, perusal of the record shows that the defendant has raised the issue of jurisdiction mainly on the ground that the factory of the plaintiff is situated in Case No. CS(COMM)/287/2021 Page No. 12 of 29 Ballabhgarh from where goods were supplied and it was also submitted by Ld.defence counsel that during cross examination PW1 also admitted that plaintiff supplied the goods from Ballabhgarh, Faridabad, Haryana. It is undisputed that the orders related to the subject invoices were placed by the defendant at plaintiff's Badarpur, New Delhi address. It is also clear from the invoices Ex.PW1/4 to Ex.PW1/50 that the goods were dispatched by the plaintiff to the defendant from their aforesaid address. Thus, it is clear that the substantial part of cause of action arose within the jurisdiction of Delhi. As far as the jurisdiction of West Delhi is concerned, it is clear from the record that defendant did not specifically deny the claim of the plaintiff that defendant had given purchase orders from their registered office and also made payments from their registered office, thus, in view of the provision of order 8 rule 5 CPC, the above contents of the plaint should be assumed to be correct. It is also undisputed that both the parties were having business dealings and defendant was purchasing the goods from the plaintiff, thus, even if it is assumed (as claimed by defendant) that defendant did not place any written order, however, in order to purchase the goods, defendant must have placed purchase orders with the plaintiff and only thereafter, plaintiff would have sent the goods to the defendant. Thus, even if the orders were orally placed by the defendant yet defendant ought to have cross examined PW1 in this regard and ought to have rebutted the claim of the plaintiff that orders were not placed by the defendant from their registered office.
Case No. CS(COMM)/287/2021 Page No. 13 of 29Likewise, PW1 should have been cross examined by the defendant that they did not make any payment from their registered office. Besides, defendant was also required to bring on record the relevant evidence regarding the place from where the orders to supply the goods were placed if not from their registered office and similar is the position regarding payment of the goods purchased. As far as the place of supply of goods is concerned, there also does not seem to be any substance in the submissions of Ld. Defence Counsel as it is clear from the bills Ex.PW1/4 to Ex.PW1/50 that the goods were dispatched by the plaintiff from their Badarpur, New Delhi office. Thus, under these circumstances, in the absence any evidence to the contrary, the claim of the plaintiff that they were given orders as well as payment from the registered office of the defendant is to be assumed to be correct. It is well settled law that the part cause of action also arises at the place where payment has been made or supposed to be made or where the order is placed. In this regard this Court is supported by the Judgment of Hon'ble Delhi High Court reported as (2008) 147 DLT 624 titled as Rameshwar Das Dwarka Das (P) Ltd. Vs. Deepak Puematics (P) Ltd. Thus, similar will be the situation about the place from where the orders are placed and payment is made. In view of these discussions, it is held that this court has territorial jurisdiction to try and entertain the present suit. This issue is decided accordingly. It is most respectfully observed that the case laws cited by the Ld. Counsel for the defendant is not applicable as Case No. CS(COMM)/287/2021 Page No. 14 of 29 present case falls within the provisions of Section 20(c) of CPC as part cause of action also arose within the jurisdiction of this Court.
ISSUE NO.2 & 5Whether the goods received by the defendant were defective? OPD Whether the goods supplied by the plaintiff to the defendant were not as per the requirement of the defendant? OPD
11. These issues were framed as defendant has taken the aforesaid pleas in their WS that goods supplied by the plaintiff were defective and not at as per their requirements. Both these issues are interconnected and thus, both the issues are taken up together. The onus to prove these issues was on the defendant but defendant did not lead any evidence. Furthermore, it is clear from the cross examination of PW1 that PW1 was not cross examined in regard to the aforesaid defence taken by the defendant. There is nothing on record to show that goods received by the defendant were defective and not as per their requirement. Thus, it is held that defendant has failed to prove both these issues.
ISSUE NO.3 Whether the plaintiff is entitled to recovery of the amount claimed? OPP Case No. CS(COMM)/287/2021 Page No. 15 of 29 12.1 The onus to prove this issue was on plaintiff and in order to prove their entitlement qua the recovery sought, plaintiff examined their AR Sh. Arvind Kumar. During arguments, Ld. Defence Counsel submitted that the evidence of PW1 cannot be considered as PW1 was neither properly authorized nor properly substituted. Thus, before making discussions on the merits of this issue, the objections raised by Ld. Defence Counsel regarding the appointment of PW1 is required to be dealt with. Ld. Defence Counsel submitted that in the present matter, the previous AR has not been properly replaced. It was also submitted that PW1 Sh. Arvind Kumar has not been authorized to give evidence in the present case and also that he has not been appointed by the Director concerned of plaintiff and instead Board Resolution has been signed by Director (Finance) and thus, the Board Resolution is not proper. It was also submitted that PW1 has not identified the signatures of Mr.Prateek Gupta who filed the present suit, thus, institution of the present case has not been proved.
12.2 As far as replacement of PW1 with previous AR is concerned, it is clear from the record that in order to replace Sh.Prateek Gupta with Mr. Nitesh Srivastav, an application was filed, however, before, he could be brought on record, another application for replacing him with PW1 was filed and it is also clear from the order dated 01.07.2024 that no objection whatsoever regarding his (Sh. Arvind Kumar/PW1) appointment was raised on behalf of the defendant and this Case No. CS(COMM)/287/2021 Page No. 16 of 29 application was allowed and name of Sh.Arvind Kumar was taken on record as new AR of the plaintiff. It is clear from the record that application for replacement of Sh.Prateek Gupta was filed, however, before application was disposed off, plaintiff sought to bring on record PW1 Sh. Arvind Gupta, thus, only because in this application name of Mr. Prateek Gupta was not mentioned, it cannot be said that he was not properly substituted. Even though his name was not mentioned in the application but the facts of the application remain the same. The moment this application was allowed and PW1 was permitted to prosecute the case on behalf of the plaintiff in place of Sh Prateek Gupta PW1, the name of Sh. Arvind Kumar as new AR of plaintiff stood properly brought on record.
12.3 As far as Board resolution is concerned, it is clear from the Board resolution that PW1 was authorized by the plaintiff company through Board Resolution to depose in the present case. Furthermore, it is clear from the order dated 01.07.2024 as well as cross examination of PW1 that neither authorization of PW1 nor the authenticity of the Board Resolution was assailed during cross examination of PW1 as no question whatsover was asked in regard to the Board Resolution and all these points have been raised only during the course of arguments. Furthermore, it is well settled law that a case should not be dismissed on this kind of technical objection. It is well settled law that if the case is contested by Case No. CS(COMM)/287/2021 Page No. 17 of 29 the plaintiff till the final stage, it has to be assumed that the plaintiff company had authorized the AR concerned and thus, all the acts of the AR concerned is to be assumed to have been ratified by the plaintiff company. In this regard, Ld. Counsel for the plaintiff has cited the Judgement of Hon'ble High titled Pawan Kumar Dalmia & Ors. Vs. HCL Infosystems Ltd. & Ors. (MANU/DE/1162/2012).
12.4 In regard to non identification of signature of Mr. Prateek Gupta, the AR, through whom the present suit has been filed is concerned, it is clear from the evidence of PW1 that no question with regard to the identity of his signature was asked from PW1. Further, it is also clear that PW1 has already stepped into the shoes of Mr.Prateek Gupta therefore, under these circumstances even otherwise, the authenticity of signatures of Mr. Prateek Gupta, the erstwhile AR of plaintiff cannot be disputed at this stage. In view of these discussions, it is held that PW1 Sh. Arvind Kumar was duly authorized by the plaintiff company.
12.5 Now it is to be seen whether plaintiff is entitled to the recovery sought in the present case. The plaintiff has claimed that defendant has not paid the amount of 47 invoices amounting to Rs.5,28,706/- and details of these invoices have been specified in para no.5 of the plaint. PW1 has also deposed about the same in para no. 6 of his affidavit. As far as the stand of defendant qua these invoices is concerned, the Case No. CS(COMM)/287/2021 Page No. 18 of 29 contents of corresponding para of WS are required to be mentioned here with are as follows:-
"5. The contents of Paragraph 5 of the Plaint are wrong and denied. It is denied that the Plaintiff supplied goods to the Defendant at its Gurugram, Haryana, address, according to the orders/ instructions given by the Defendant from time to time, and the Defendant duly received the goods supplied by the Plaintiff to its own satisfaction, through local delivery vans of the Plaintiff as mentioned in each invoice/bill and E-way Bill generated from GST E-way portal www.ewaybillgst.gov.in. It is submitted that the goods supplied by the Plaintiff was defective and Defendant paid to the Plaintiff for the due and payable Invoices. It is denied that the Defendant has failed to remit the balance due payment to the Plaintiff, and hence it is further denied sum of Rs. 5,28,706/- (Rs. Five Lacs Twenty Eight Thousand Seven Hundred and Six only) is still unpaid from the Defendant to the Plaintiff, as alleged or at all. The details of the outstanding given in this paragraph are denied. It is submitted that the goods were defective and it was not supplied as per the order".
12.6 It is clear from the contents of Para No.5 of the WS that defendant did not take any specific stand regarding the claim of the plaintiff qua supply of the goods of these 47 invoices as on one hand defendant has denied the details of the outstanding amount mentioned in para no. 5 of the plaint, however, on the other hand and in the same breath, defendant has stated that the goods supplied by plaintiff were defective and were not supplied as per order. Thus, in case the defendant was not supplied with the goods of the aforesaid bills, the Case No. CS(COMM)/287/2021 Page No. 19 of 29 defendant ought to have taken a specific stand qua the same thereby denying the receipt of goods through these 47 invoices and in case, defendant wanted to claim that they had received the goods of these invoices also, however, same were defective and not as per the specifications of their order then defendant ought to have come with this clear and specific plea, however, it is clear from the contents of the WS that the defendant has not taken any stand qua the supply of goods by the plaintiff against these 47 invoices. Therefore, in view of the provisions of order 8 rule 5 CPC, it is held that the defence raised by defendant is evasive and therefore, in view of the settled law, it should be assumed that defendant was supplied with these goods.
12.7 PW1 has brought on record all the 47 invoices as Ex.PW1/4 to Ex.PW1/50 (Colly.) and it is clear from all these invoices that the goods mentioned in these invoices had been received by the defendant. It is clear from the bills that receipt of goods has been acknowledged on the bills itself. All these invoices bears the seal of the defendant company alongwith initials of the officials concerned qua receipt of the goods. It is clear from the WS that defendant has neither disputed the authenticity of the seal of the defendant company appended on these invoices nor the signature of the person concerned who had received the goods. Furthermore, it is clear from the record that defendant has filed the affidavit of admission denial of plaintiff's documents and it is clear from the affidavit Case No. CS(COMM)/287/2021 Page No. 20 of 29 of AR of the defendant that defendant has admitted receipt of the goods against all these invoices. It is further clear that even during cross examination of PW1, the authenticity of the seal (of defendant company) as well as signature (of employee of defendant company) appended on these invoices have not been disputed. Thus, it is clear from these discussions that plaintiff has brought on record the sufficient evidence to establish that it had supplied the goods to the defendant through these 47 invoices and receipt of the goods through all these invoices has been acknowledged on behalf of the defendant. Further, factum of delivery of the goods and the receipt of the goods have also been reaffirmed and confirmed by the AR of the defendant through their affidavit of admission, denial of documents. Thus, in view of these circumstances, it is held that plaintiff through their positive evidence established on record that it had supplied the goods to the defendant against aforementioned 47 invoices and besides that plaintiff has also proved this fact through the admissions of defendant. Thus, it is held that plaintiff has discharged the initial onus to prove the transactions of sale of goods through these 47 invoices and as far as the defence of supply of defective goods as well as non- supply of goods as per orders of defendant (though no specific defence has been taken qua these 47 invoices) is concerned, the onus was on the defendant to establish that the goods were defective and not in terms of their orders.
Case No. CS(COMM)/287/2021 Page No. 21 of 2912.8 Since the defendant has admitted the receipt of goods against these invoices, therefore, defendant either ought to have established on record that they have already made the payment of these invoices or ought to have established their defence of supply of defective goods and also that goods were not as per specifications of their orders and also that if the goods were defective and not in terms of their order they timely acted in terms of the provisions of Section 41 and 42 of Sales of Goods Act.
12.9 Though, the defendant has not specifically taken the defence in their WS regarding supply of the defective/different goods against these invoices, however, since the defendant has taken this defence in para no.5 of reply on merit of their WS, therefore, it is deemed necessary to deal with this defence raised by the defendant. The defendant has not led any evidence in this regard, therefore, it has been held while deciding the Issues no.2&5 that defendant has failed to prove that they were supplied with the defective goods or goods with different specifications. Furthermore, in case, the goods were defective or were of different specifications then the defendant ought to have conducted themselves in terms of provisions of Section 41 of the Sales of Goods Act. Thus, at the time of taking delivery of the aforesaid goods the officials of the defendant ought to have properly inspected the goods regarding quality, quantity as well as specifications and in case, there was any deviation from the agreed specifications Case No. CS(COMM)/287/2021 Page No. 22 of 29 the defendant had a right to reject the goods after inspection, however, it is clear from the acknowledgment given by the official of defendant company that official concerned had properly checked the goods and accepted the goods and also gave acknowledgment of receipt of the goods mentioned in the invoices. Thus, in case the goods would not be in terms of the orders placed by the defendant, the concerned official of the defendant company would not have accepted the goods and rejected the same then and there. Even if it is assumed that goods were inadvertently received by the said officials then the same could have been rejected by the defendant within a reasonable time, however, it is clear that defendant has not brought on record any evidence to show that they had ever rejected the goods of these invoices. Thus, under these circumstances, it has to be assumed that the goods were not defective and same were in terms the orders of the defendant, therefore, the same were accepted and acknowledged.
12.10 Furthermore, as per plaintiff, they had demanded the due amount from the defendant through a legal notice (Ex.PW1/93) which was sent to the defendant at its all three addresses and it was delivered upon the defendant at all the addresses except its Naraina Delhi address. It is clear from the record that the legal notice was issued at the correct addresses of the defendant. Defendant has not disputed the correctness of any of its addresses. Thus, it should be assumed that the legal notice was served upon the defendant at its two addresses.
Case No. CS(COMM)/287/2021 Page No. 23 of 29Besides, it also clear that plaintiff has brought on record the tracking reports of the service of legal notice Ex.PW1/100 (colly.) which also shows that the legal notice was served upon the defendant. PW1 has also deposed about the same in his affidavit Ex.PW1/A, however, it is clear from the cross examination that service of the legal notice has not been disputed. Thus, it is clear that the legal notice was duly served upon the defendant. It is also admitted position of fact that defendant did not send any reply to the legal notice. It is clear from the perusal of the legal notice that plaintiff had demanded the amount of 48 invoices through the said legal notice, however, defendant neither disputed the supply of the goods through the said invoices nor regarding its quality, quantity or specifications. Thus, in view of the settled law an adverse inference should be drawn against the defendant that defendant chose not to reply to the legal notice as plaintiff had mentioned the correct facts and raised the genuine claim. Thus, the defendant has failed to establish their aforesaid defence. Furthermore, plaintiff has brought on record its statement of account as Ex.PW1/90 to Ex.PW1/92 (Colly.) as per which defendant is liable to pay a sum of Rs.5,28,706/- which is also the total amount of aforesaid 47 invoices. The defendant has disputed the authenticity of statement of account filed by the plaintiff, however, defendant has neither filed its statement of account nor established that they had paid the amount of these 47 invoices. Defendant is also a private limited company and must be maintaining its proper accounts in terms of rules and Case No. CS(COMM)/287/2021 Page No. 24 of 29 regulations of companies act, thus, in case, defendant had already made the payment of all these invoices, then defendant ought to have brought its authentic statement of account on record, however, defendant did not bring on record any document to establish the same.
12.11 Ld. Defence Counsel also submitted that plaintiff did not properly prove the statement of account as firstly the complete statement of account has not been filed and secondly, the proper certificate u/s 65B of IE Act has not been filed qua the statement of account as well as in regard to the invoices. It was also submitted that since new AR was appointed, therefore, a fresh certificate u/s 65-B IE Act qua statement of account ought to have been filed. There seems to be not much substance in this argument of Ld.Defence Counsel as it is clear that the present suit was filed through Sh Prateek Gupta, authorized AR who has given certificate u/s 65-B IE Act in support of statement of account and the perusal of the record show that this certificate is a proper certificate and fulfills the requirement of law. It is well settled law that objection to the admissibility and proof of a document is to be taken at the time of tendering of the document by the witness as subsequently the aforesaid objection is not legally permissible. In this regard, Ld. Counsel for plaintiff has cited the Judgement of Hon'ble High Court reported as MANU/DE/2679/2017 and titled as Sidharth Kumar Vs. Alok Kumar. Similar is the position in the present case. It is clear that at the time of Case No. CS(COMM)/287/2021 Page No. 25 of 29 tendering of the invoices, statement of account as well as certificate u/s 65B of IE Act, no objection was raised by Ld. Defence counsel to the admissibility and proof of these documents. Besides, it is also clear that the authenticity of statement of account has been simply assailed, however, what is the discrepancy in the statement has not been pointed out. In case, the statement of account filed by plaintiff is not reflecting the correct position of the transactions took place between the parties, then the defendant ought to have filed their statement of account to prove the falsity of the statement of account of plaintiff, however, defendant has simply raised this defence but defendant has not brought on record any document in this regard. Furthermore, the case of the plaintiff is not only based upon the statement of account but is also independently based upon invoices. Plaintiff has only claimed amount of these 47 invoices and plaintiff has proved these invoices through their positive evidence as well as through the admissions of defendant. Furthermore, these invoices contains the acknowledgement given by the defendant, therefore, it is clear that these invoices have been independently proved by the plaintiff, thus, even if it is assumed that these invoices are not supported by a proper certificate u/s 65B of Evidence Act yet the same can be taken into consideration as stood clearly proved. Thus, it is held that plaintiff has also proved its entitlement to claim the recovery of the aforesaid amount on the basis of invoices. As far as genuineness of e-way bills is Case No. CS(COMM)/287/2021 Page No. 26 of 29 concerned, same remains of no relevance, once the invoices as well as delivery of goods is admitted by the defendant.
12.12 During arguments, Ld. Counsel for defendant referred to the cross examination of PW1 and submitted that PW1 is not a reliable witness as it is clear from his evidence that he was not aware that which bills are paid/unpaid or what goods were supplied. Again there is no substance in this argument in view of the peculiar facts and circumstances of the present case. In the present case, as already discussed that the entire claim of the plaintiff regarding receipt of the goods has been admitted by the defendant through their affidavit of admission denial thus, under these circumstances entire onus to prove their defence as well as that they have already made payment of the goods was on the shoulder of the defendant. Therefore, under these circumstances, even if PW1 failed to specify as to which of these bills were paid/unpaid or what goods were supplied will be of no benefit to the defendant.
12.13 Thus, in view of these discussions, it is held that the plaintiff through its positive evidence as well as through the admissions of defendant has established that it had also supplied the goods to the defendant against 47 invoices Ex.PW1/4 to Ex.PW1/50 (Colly.) and also that defendant failed to pay the amount of the same despite demand, thus, it is held that plaintiff is entitled to recovery of Rs.5,28,506/-. This issue is decided accordingly.
Case No. CS(COMM)/287/2021 Page No. 27 of 29ISSUE NO.4 Whether the plaintiff is entitled to interest if so, at what rate? OPP 13.1 In view of the aforesaid discussions, it is clear that defendant has withheld the due amount of plaintiff without any justifiable reasons and did not pay the same despite demand, therefore, defendant is liable to compensate the plaintiff qua the same by paying the due amount alongwith interest. The plaintiff has claimed 12% p.a. pre-suit interest on the due amount (Rs.5,28,706/-) besides pendentelite and future interest at the same rate of interest. In view of the provisions of Section 3 of Interest Act, the pre-suit interest can be awarded as per contract between the parties if the same is not found unreasonable, however, in view of the provisions of Section 4 and 5 of Interest Act as well as Section 34 CPC, the pendentelite and future interest is the discretion of the Court. It is clear from Ex.PW1/4 to Ex.PW1/50 (Colly.) (invoices) that plaintiff was entitled to claim 18% p.a. interest on unpaid invoices from due date of payment. As per plaintiff/PW1, the payment of each invoices was to be made within 60 days of the 1st day of succeeding month and this part of the statement of PW1 remained unrebutted. Accordingly, plaintiff has claimed the 12% p.a. interest on the due amount w.e.f. 01.06.2019 and necessary calculations has been mentioned in para 11 of the affidavit of PW1 correctness of which has also not been assailed. Since plaintiff has claimed interest @ 12% Case No. CS(COMM)/287/2021 Page No. 28 of 29 p.a., the same does not seem to be unreasonable, therefore, plaintiff is awarded 12% p.a. pre-suit interest on the aforesaid due amount (Rs.5,28,706/-) w.e.f. 01.6.2019 till filing of the present suit i.e. .21.06.2021. As far as pendentelite and future interest is concerned, plaintiff is awarded 9% p.a. pendentelite and future interest. This issue is decided accordingly.
13.2 Thus, in view of the facts and circumstances discussed above, it is most respectfully observed that the case laws cited by the Ld. Defence Counsel are not applicable to the present case.
RELIEF
14. In view of my issues wise findings, the suit of the plaintiff is decreed for recovery of Rs.5,28,706/- against the defendant alongwith costs. Plaintiff is awarded pre-suit interest of Rs.1,11,329/- and pendentelite and future interest @ 9% per annum. Decree sheet be prepared. File be consigned to Record Room.
Announced in the Open Digitally
signed by
Court on 27.09.2024 AJAY AJAY GUPTA
Date:
GUPTA 2024.09.27
17:05:55
+0530
(Ajay Gupta)
District Judge (Commercial Court)-05
West, Tis Hazari Courts Extension
Block, Delhi/27.09.2024
Case No. CS(COMM)/287/2021 Page No. 29 of 29