Delhi District Court
Itd Cementation India Ltd vs Armaan Steel on 30 May, 2024
IN THE COURT OF SANJEEV KUMAR MALHOTRA
DISTRICT JUDGE (COMMERCIAL COURT)
NORTH EAST: KARKARDOOMA COURTS:DELHI
CS (Comm) 16/2021
CNR No.DLNE01-000283-2021
M/s Armaan Steel
Proprietor :- Mr. Abdul Gaffar Nabi
S/o Mr. Hasrat Amrulla Haji Nabi
R/o House No. B-571, Block-B, Gali no.6/1,
IInd Pusta, Sonia Vihar, Delhi-110094 ....Plaintiff
Vs
M/s ITD Cementation India Ltd.
Through its Principal Officer,
41116EW, NMRCL, Mondha Road,
Nagpur, Maharashtra, India. .....Defendant
Date of Institution : 15.01.2021
Date of Arguments : 07.05.2024
Date of Judgment : 30.05.2024
AND
CS (Comm) 122/2022
CNR No.DLNE01-003429-2022
M/s ITD Cementation India Ltd.
Through its General Manager,
9th Floor, Tower B, Prima Bay, Gate No.5,
off JVLR, Saki Vihar Road,
Powai, Mumbai-400072. ....Counter Claimant
Vs.
M/s Armaan Steel
Proprietor : Mr. Abdul Gaffar Nabi
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 1 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:35:30 +0530
S/o Mr. Hasrat Amrulla Haji Nabi
R/o House No.B-571, Block-B, Gali No.6/1,
IInd Pusta, Sonia Vihar, Delhi-110094. .....Respondent
Date of Institution : 20.10.2022
Date of Arguments : 07.05.2024
Date of Judgment : 30.05.2024
JUDGMENT
1. By way of present common judgment, I shall decide the main suit i.e. CS (Comm) No.16/2021, as filed by plaintiff for recovery of Rs.22,38,046/- alongwith damages of Rs.5,00,000/- and Counter Claim i.e. CS (Comm) 122/2022, as filed by the defendant/counter claimant for recovery of Rs.48,60,000/- with future interest for the loss incurred due to fraud committed by the respondent/plaintiff, as being cross cases, common questions of facts and law are involved.
Brief facts of main suit i.e. CS (Comm) 16/2021.
2. In brief, the relevant facts as made out in the amended plaint are that plaintiff is the proprietor of M/s Armaan Steel situated at B-571, Block-B, Gali no.6/1, IInd Pusta, Sonia Vihar, Delhi-110094 and used to carry out his business as well as all the commercial activities from the said address. It is averred that plaintiff deals in scrap business and sale & purchase of scrap material and having email ID i.e. [email protected] and this email ID used to be operated from the abovementioned address and CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 2 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:35:38 +0530
plaintiff also used to make the bid from the
abovementioned address.
3. It is stated that on 03.08.2020 at about 10:26 am, plaintiff received one mail from one person namely Mr. Ashok Kumar G (Auction Service / Servicetec/TVS- E)<[email protected] regarding auction for ITD Cementation on 12th August, 2020 for Nagpur Metro region and interested bidders can call them for auction, as this was the invitation to plaintiff. It is averred that on 07.08.2020 at about 12:52 pm, plaintiff sent details through email to Mr. [email protected], [email protected] alongwith attachment of images of his PAN Card, one cancellation cheque of M/s Axis Bank, one letter in the name of proprietorship firm namely M/s Armaan Steel, Adhaar card and screenshot of payment receipt and the email was duly delivered as per the automatic generated system. It is stated that on 10.08.2020 at about 03:41 pm, plaintiff sent an email to Mr. Ashok Kumar G (Auction Service/Servicetec-TVS-E) <[email protected] and shown his interest for participating in the auction and made some more payment in this regard.
4. It is case of the plaintiff that on 12.08.2020, the bid of plaintiff was accepted and the defendant issued one letter containing the description of sale of material as per terms and conditions mentioned therein, which was duly delivered at the office of the plaintiff. It is stated that the said letter was in respect of sale of scrap at their project CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 3 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:35:44 +0530
41116EW, Nagpur Metro-Reach 3, SDA No.010 dated 18.06.2020 regarding the sale of following material:-
Sr. Item Description Qty. UOM Rate Amount Taxes No.
1. Barricade 65 MT 29730 19,32,450 Ex.GST Board/M.S. /TCS Barricading Board
2. Backup Frame 30 MT 32160 9,64,800 Ex.GST /TCS
3. I Girder Shutter 113 MT 29940 33,83,220 Ex.GST /TCS
4. Fabricated 200 MT 30000 60,00,000 Ex.GST Shutter /TCS Total Value 1,22,80,470/- Ex.GST /TCS
5. It is case of the plaintiff that plaintiff engaged more than 20 persons for lifting the material with his two Ten Tires Trucks from Nagpur site and on 07.09.2020, plaintiff lifted some material from Nagpur site and defendant issued two separate invoices i.e. Invoice No.MH41116EW20SR013 for an amount of Rs.74,643.66 and Invoice No.MH41116EW20R014 for an amount of Rs.67,679.82 in this regard. Further, on 10.09.2020, plaintiff lifted some material from Nagpur site and defendant issued two separate invoices i.e. Invoice No. MH41116EW20SR015 for an amount of Rs.78,618.38 and Invoice No.MH41116EW20R016 for an amount of Rs.85,415.94. Thereafter, on 11.09.2020, plaintiff lifted some material from Nagpur site and defendant issued three CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel Page 4 of 30 Digitally signed by SANJEEV SANJEEV KUMAR KUMAR MALHOTRA MALHOTRA Date: 2024.05.30 16:35:50 +0530 separate invoices i.e. Invoice No. MH41116EW20SR017 for an amount of Rs.80,737.02, Invoice No.MH41116EW20R018 for an amount of Rs.48,631.79 and Invoice No.MH41116EW20SR023 for an amount of Rs.84,763.08. Further, on 14.09.2020, 15.09.2020, 16.09.2020 and 19.09.2020, plaintiff lifted some material from Nagpur site and defendant issued one invoice on each occasion i.e. Invoice No. MH41116EW20SR019 for an amount of Rs.62,440.74, Invoice No. MH41116EW20SR020 for an amount of Rs.77,643.72, Invoice No.MH41116EW20SR021 for an amount of Rs.72,030.92 and Invoice No.MH41116EW20SR0222 for an amount of Rs.60,601/- respectively. It is stated that the defendant issued two e-way bills dated 22.09.2020 i.e. E- way bill No.2612-2371-5500 for Rs.5,22,523.12 and E-way bill No.2512-2371-7420 for Rs.4,96,894.93.
6. It is further case of the plaintiff that on 25.09.2020, when worker of plaintiff loaded the material in two trucks bearing No. MH-49AT-4096 and MH-12-FZ-3075, the officer of defendant made complaint regarding disturbance in the weight machine, on which plaintiff stated that he is using their weight machine for weighing the material, but the officer of defendant did not allow the plaintiff to carry out any work on the site and taken the forceful custody of plaintiff's two trucks. It is averred that plaintiff requested the defendant to release the trucks and arranged a meeting for the same, as plaintiff was facing great hardship to maintain the worker and fair of truck at their site, but CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 5 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:35:54 +0530
unfortunately plaintiff's 20 workers and two ten tire trucks were confined by the defendant for five days and due to this, plaintiff has to bear damages of Rs.5,00,000/- for providing shelter, food and daily wages to the worker and also has to bear the cost of two trucks for their fair.
7. It is further case of the plaintiff that plaintiff made a complaint at PS Hingna, Nagpur City, Maharashtra and his complaint was marked as GD no.30 dated 30.09.2020 time about 21:51 and when the police investigated the matter, thereupon the trucks were released from the custody of defendant. It is submitted that plaintiff has made payment of Rs.84,56,947/- in the bank account of defendant and lifted the material for an amount of Rs.62,18,901/- from Nagpur site and thus an amount of Rs.22,38,046/- is due against the defendant. It is averred that plaintiff has filed pre-institution mediation before DLSA, North-East, Karkardooma Court, Delhi on 07.11.2020, but the defendant did not participate in the said proceedings, therefore, Non-Starter report dated 14.12.2020 was issued. Hence, the present suit is filed.
8. Defendant contested the present suit by filing detailed written statement, while taking preliminary objections that present suit has been filed on false, baseless grounds; that due to breach committed by the plaintiff, the defendant suffered a total loss of Rs.48,60,000/- against an approximate quantity of 162 MT; that plaintiff has deliberately suppressed various vital facts from the court.
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 6 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:36:01 +0530
9. It is submitted that defendant engaged the services of TVS Electronics Ltd. (TVSe) for conducting an e-auction for sale of scrap material at their Nagpur site and the plaintiff participated in the said e-auction and his bid was accepted. It is stated that defendant issued a sale order bearing no.1387 dated 20.08.2020 for a total quantity of 408 MT to the plaintiff for sale of structural steel scrap (shuttering material and barricade board) and subsequently the said order was extended until 30.09.2020 at the request of plaintiff, made through email dated 14.09.2020. It is further submitted that plaintiff lifted scrap material for approximately quantity of 174 MT out of total order quantity of 408 MT. It is further submitted that as per the terms and conditions of the sale order, plaintiff deposited with the defendant a total sum of Rs.84,56,947/- which includes a sum of Rs.12,28,047/- towards the interest free security deposit and Rs.10,09,575.58/- as advance deposit.
10. Defendant has taken a defence that on 25.09.2020, defendant's site personnel observed that plaintiff's representatives appeared to have tampered with the functioning of the weighbridge. It is stated that initially during weighment of one of the scrap loaded vehicle/truck, the weighbridge scale was showing weight as 39.88 MT, however the same suddenly dropped to a drastic low of 21.72 MT. It is further submitted that to clarify the defendant's doubt, the plaintiff's representatives were instructed to get down from the weighbridge area and CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 7 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:08 +0530
loaded truck was weighed once again and weight was found to be 39.88 MT which was the actual/correct weight instead of previously shown manipulated weight of 21.72 MT. Thereafter, plaintiff and his representatives fled away from the spot. The TVSe e-auction service provider made several attempts to get in touch with the plaintiff, but all attempts were in vain.
11. It is submitted that on 28.09.2020, plaintiff sent an email to the defendant acknowledging that there was an issue with the weighment at the site in both vehicle when loaded on 25.09.2020. On 01.10.2020, plaintiff sent an email that they are unable to lift the rest of material and requested to refund the security deposits. In view of admitted fraud committed by plaintiff, the defendant cancelled and terminated the sale order 1387 on 30.10.2020 and forfeited the interest free security deposit and EMD deposited by plaintiff due to the fraud committed by them.
12. On merits, the contents of plaint have been denied as wrong. It is admitted that plaintiff had deposited an amount of Rs.84,56,947/- which is inclusive of interest free security deposit and advance amount deposited against material to be lifted and material sales receipt, however, material worth Rs.62,19,324.52 was lifted by the plaintiff and the same is adjusted by the defendant against the sale of scrap material as per the terms of sale order. It is prayed by defendant that suit of plaintiff be dismissed with costs.
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 8 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:15 +0530
Brief facts of Counter Claim i.e. CS (Comm) 122/2022
13. In brief, relevant facts of counter claim for recovery of Rs.48,60,000/-, as filed by counter claimant/defendant are that counter claimant/plaintiff herein had availed the services of TVS Electronics Limited for conducting an e- auction for the sale of scrap material at their Nagpur Metro Site and the defendant herein participated in the said e- auction conducted by TVSe and his bid was accepted, pursuant to which, sale order bearing 1387 dated 28.02.2020 was issued, which was extended till 30.09.2020. It is stated that as per the terms and conditions of the sale order, defendant deposited with the plaintiff a total sum of Rs.84,56,947/- which includes a sum of Rs.12,28,047/- towards the interest free security deposit, Rs.62,19,324.52 towards sales amount and Rs.10,09,575.52 as advance payment.
14. It is case of the counter claimant that the sale order 1387 was for a total quantity of 408 MT of scrap material and as per defendant, they lifted total scrap material of 174 MT, out of total 408 MT from 07.09.2020 till 22.09.2020, but on 25.09.2020, the counter claimant's site personnel observed that defendant's representatives appeared to have tampered with the functioning of the weighbridge and it was later observed that the gauge cover of one load cell was broken and it was covered with fresh m-seal. It is stated that initially during weighment of one of the scrap loaded vehicle/truck, the weighbridge scale was showing weight as CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 9 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:20 +0530
39.88 MT, however the same suddenly dropped to a drastic low of 21.72 MT. To clarify the counter claimant's doubt, the defendant's representatives were instructed to get down from the weighbridge area and loaded truck was weighed once again and weight was found to be 39.88 MT which was the actual/correct weight instead of previously shown manipulated weight of 21.72 MT. Similar manipulation was found for the other truck also and the defendant cheated the counter claimant on account of illegally taking away extra MT of scrap from the site.
15. It is further case of the counter claimant that after the incident of 25.09.2020, the counter claimant reconciled the scrap material at the site and it was found that only 72 MT of scrap was lying in the yard instead of 234 MT and thus, scrap of 162 MT was missing from the total scrap of 408 MT. It is stated that defendant caused such loss to the plaintiff/counter claimant and an FIR bearing 34/2021 was registered with the PS Hingna, Nagpur City against defendant, proprietor and his employee/labours on 28.01.2021. It is stated that the counter claimant has calculated the loss at the rate of average price of Rs.30,000/- per MT and thus, the total loss of missing 162 MT at the hand of defendant comes to Rs.48,60,000/-. It is stated that on 28.09.2020, defendant sent an email to plaintiff acknowledging that there was an issue with weighment at the site in both vehicles when loaded on 25.09.2020 and in response to this email, TVS informed the defendant that vehicles (trucks) can be released only after CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 10 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:26 +0530
defendant or their representative visit the site and sort out the issue. It is submitted that defendant's conduct even after sending emails dated 28/30.09.2020 proves that defendant in connivance with its accomplices/representative committed the fraud with weighment. Hence, the present counter claim for recovery of Rs.48,60,000/- is filed.
16. In written statement, defendant/respondent has taken preliminary objections that FIR has been lodged just to harass the defendant; every lifting of material has taken place in the presence of official/employee of the counter claimant and that there is clearance on the part of the counter claimant of the vehicle; that all the activity of lifting the MT happened in the presence of official/employee of counter claimant and that the machine was in the possession of counter claimant and was operated by the employee of counter claimant. It is submitted that counter claimant never tried to resolve the issue with the defendant.
17. On merits the contents of counter claim have been denied as wrong. It is submitted that counter claimant has filed the present counter claim just to illegally impound the amount deposited by the defendant. Thus, it is prayed that the counter claim is liable to be dismissed with heavy costs.
18. From the pleadings of the parties following issues were framed in main suit i.e. CS (Comm) 16/2021 vide order dated 05.07.2023:-
i) Whether the plaintiff is entitled to recover a sum CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel Page 11 of 30 Digitally signed by SANJEEV SANJEEV KUMAR KUMAR MALHOTRA Date: 2024.05.30 MALHOTRA 16:36:34 +0530 of Rs.27,38,406/- from the defendant alongwith interest @ 18% per annum ? OPP
ii) Whether this Court has territorial jurisdiction to deal with this case ? OPD
iii) Relief In counter claim i.e. CS (Comm) 122/2022, following issues were framed vide order dated 21.08.2023:-
i) Whether the plaintiff is entitled to decree in its favour and against the defendant for a sum of Rs.48,60,000/-? OPP
ii) Whether the plaintiff is entitled to future interest for the loss incurred due to any fraud committed on the plaintiff by the defendant ? OPP
iii) Whether the plaintiff is entitled to costs of the suit ? OPP
iv) Relief Evidence in main suit i.e. CS (Comm) 16/2021.
19. In support of case, plaintiff examined Sh. Abdul Gaffar Nabi, Proprietor as PW-1 and tendered his examination in chief by way of affidavit i.e. Ex.PW1/A. PW-1 has relied upon following documents:-
i) Copy of e-way bill no.281221492317 dated 27.09.2020 of Rs.3,46,893/-, bill no.251222819938 dated 01.10.2020 of Rs.4,70,906/- and bill no.271220359656 dated 22.09.2020 of Rs.4,74,533/-
i.e. Mark A (Colly).
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 12 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:36:41 +0530
ii) Copy of tax invoices no.MH41116EW20SR013 dated 07.09.2020, MH41116EW20SR014 dated 07.09.2020, MH41116EW20SR015 dated 10.09.2020, MH41116EW20SR016 dated 10.09.2020, MH41116EW20SR017 dated 11.09.2020, MH41116EW20SR018 dated 11.09.2020, MH41116EW20SR019 dated 14.09.2020, MH41116EW20SR020 dated 15.09.2020, MH41116EW20SR021 dated 16.09.2020, MH41116EW20SR022 dated 19.09.2020 and MH41116EW20SR023 dated 11.09.2020 i.e. Mark B (colly).
iii) Copy of e-way bill no.261223715500 dated 04.10.2020 of Rs.4,42,816.20 and bill no.251223717420 dated 04.10.2020 of Rs. 4,21,097.40 i.e. Mark C.
iv) Copy of legal notice dated 05.10.2020 as Ex.PW1/1 and copy of speed post receipt dated 09.10.2020 serial no.SP1100320134 i.e. Mark D.
v) Computer generated copy of tracking report i.e. Ex.PW1/3.
vi) Copy of sale order no.1387 dated 20.08.2020 i.e. Mark D (Colly).
vii) Copy of gate pass number 16769 dated 30.09.2020 and gate pass no. 16770 dated 30.09.2020 i.e. Mark E.
viii) Copy of general diary detail number 030 dated 30.09.2020 i.e. Mark F. CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
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Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:46 +0530
ix) Copy of PAN card no. AEYPN7793R i.e. Mark G.
x) Copy of GST registration certificate No.07AEYPN7793R2ZU i.e. Mark H.
xi) Copy of reply of legal notice dated 28.10.2020 i.e. Mark I.
xii) Copy of non starter report issued by DLSA dated 14.12.2020 i.e. Ex. PW1/7.
Evidence in counter claim i.e. CS (Comm) 122/22.
20. Counter claimant in support of its case, examined Sh.
Debasish Kundu, Senior Manager of counter claimant as PW-1 and tendered his examination in chief by way of affidavit Ex.PW1/A. PW-1 has relied upon following documents:-
1. E-auction customer agreement between plaintiff and TVSe dated 14.07.2020 i.e. Mark A.
2. Original Sale Order no.1387 issued to defendant i.e. Ex.PW1/2.
3. Original extension of validity of sale order no.1387 dated 20.08.2020 i.e Ex.PW1/3.
4. Original termination of sale order no.1387 dated 30.10.2020 i.e. Ex.PW1/4.
5. Original legal notice dated 06.01.2021 i.e. Ex.PW1/5.
6. Print out of e-mail communications between plaintiff and defendant and internal e-mail communications between the officials of the plaintiff company i.e. Ex.PW1/6 (Colly).
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
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Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:36:51 +0530
7. Print out of internal e-mail communications among the officials of the plaintiff company i.e. Ex.PW1/7 (Colly).
8. Original translated copy of FIR no.34/2021, PS Hingna, Distt. Nagpur dated 28.01.2021 i.e. Ex.PW1/8.
9. Copy of sale order dated 11.02.2022 as Mark B and original bills issued for disposal of 72 MT Scrape i.e. Ex.PW1/9 (Colly).
10. Original Board Resolution dated 30.09.2022 i.e. Ex.PW1/10.
11. Certified copy of charge sheet filed in FIR no.34/2021, PS Hingna, Distt. Nagpur dated 28.01.2021 alongwith certified translation i.e. Ex.PW1/11 (Colly).
12. Certificate u/s 65B of the Indian Evidence Act i.e. Ex.PW1/12.
21. Counter claimant has also examined Sh. Manjesh Kumar, Service Engineer of Precision Weighing Systems as PW-2 and tendered his examination in chief by way of affidavit i.e. Ex.PW2/A.
22. On an application under Order VIII Rule 6A r/w Section 151 CPC, as filed by plaintiff in the main suit i.e. CS (Comm) 16/2021, with the consent of parties, it was ordered vide order dated 18.12.2023 that the evidence led by parties in main suit i.e. CS (Comm) 16/2021 and in counter claim i.e. CS (Comm) 122/22 shall be read in both the cases.
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
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Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:36:57 +0530
23. Arguments have been advanced by Sh. A. K. Dubey, Ld. Counsel for plaintiff/respondent as also by Sh. Saurabh Bhargavan, Ld. Counsel for defendant/counter claimant. I have given my thoughtful consideration to the rival submissions made by parties and also perused the written arguments, as filed on behalf of both the parties.
My issue wise findings in the main suit i.e. CS (Comm) 16/2021 are as under:-
Issue no.1:-
i) Whether the plaintiff is entitled to recover a sum of Rs.27,38,406/- from the defendant alongwith interest @ 18% per annum ? OPP
24. Onus to prove this issue was upon the plaintiff. The following facts are admitted by the parties:-
(i) That plaintiff participated in the e-auction for the sale of scrap material lying at the Nagpur Metro site of defendant company.
(ii) Plaintiff's bid was accepted and sale order bearing no.1387 dated 20.08.2020 for a total quantity of 408 MT of scrap material i.e. barricade board/backup frame/I girder shutter and fabricated shutter was issued by the defendant company i.e. Ex.PW1/2.
(iii) Defendant/counter claimant in his affidavit of evidence Ex.PW1/A admitted that as per terms and conditions of sale order, plaintiff deposited with the defendant a total sum of Rs.84,56,947/- and the details of said deposit is as under:-
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 16 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:37:03 +0530
Sr. No. Heads Amount
1 Interest-free deposit Rs.12,28,047/-
2 Sales amount Rs.62,19,324.52
3 Advance deposit Rs.10,09,575.58
Total amount Rs.84,56,947/-
(iv) That the plaintiff started lifting the scrap material from the site on 07.09.2020 and by 25.09.2020, plaintiff had lifted scrap material quantity of approximate 174 MT, out of the total order quantity of 408 MT.
(v) On 25.09.2020, two trucks of the plaintiff bearing registration no.MH-49AT-4096 and MH-12FZ-3075, which were engaged for lifting of scrap material were stopped as the defendant's site personnel suspected foul play with regard to functioning of weighbridge and those trucks were released by defendant on 30.09.2020.
25. Sh. Debasish Kundu, Sr. Manager of defendant company in his affidavit of evidence i.e. Ex.PW1/A deposed that on 25.09.2020, the site personnel of the defendant suspected some foul play as the truck of the plaintiff carrying scrap which initially weighed 39.88 MT on the weighbridge scale suddenly dropped to a drastic low of 21.72 MT and to clarify the same, the workers/representatives of the plaintiff were asked to get down from the weight bridge area and in the presence of truck driver, the loaded truck was got weighed once again, CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 17 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:08 +0530
but this time the weight was found to be 39.88 MT which was the actual/correct weight instead of previously shown manipulated weight of 21.72 MT and similar manipulation was found for the other truck also. He further deposed that on 30.10.2020, as per terms of the sale order, the defendant company terminated the sale order 1387 and forfeited the interest free security deposit and EMD (i.e. Rs.22,37,622/-) deposited by plaintiff reason being the fraud committed by the plaintiff.
26. Clause 'V' of Sale Order no.1387 i.e. Ex.PW1/2 is relevant, which reads as under:-
"Company reserves the right to terminate the contract at any time by giving three day's notice on the following grounds. 1. Unsatisfactory execution or performance of the contract by the Buyer. 2. for improper behaviour 3. In the event of the Buyer committing or attempting to commit theft, fraud, dishonesty or gross misbehaviour in connection with the subject matter of ITD Cementation India 4. The Buyer, if found using fake identities, shall be dealt strictly. Appropriate proof of identity has to be produced on request."
27. Termination notice Ex.PW1/4 shows that defendant terminated the sale order on the grounds (i) Failure to lift the material within validity period, (ii) unsatisfactory execution and performance of the contract, (iii) improper behaviour, (iv) for committing theft, fraud, dishonesty and CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 18 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:37:14 +0530
gross misbehaviour in connection with the subject matter of ITD Cementation India Ltd. It further says that representative of plaintiff was caught at ITD Cem site in carrying out fraud practice and was found tampering with the weighbridge system to manipulate the load and as per Clause 'W' of the Sale Order No.1387 Ex.PW1/2, the defendant company forfeited the security deposit of Rs.12,28,047/- and further informed that an amount of Rs.10,09,575.58 deposited as advance shall be adjusted against the cost, expenses and damages incurred by the defendant.
28. Ld. Counsel for plaintiff argued that there is no evidence on record to show that plaintiff or any of its representative committed any fraud or had any involvement in alleged manipulation with the weighbridge scale, as it was controlled by the official of the defendant and no electronic device was recovered from the workers of the plaintiff. It was submitted that regarding the two trucks of the plaintiff for which defendant alleged that the scale of weighbridge dropped to a drastic low, same were retained by the defendant company and were released after five days and thus the defendant company had not suffered any loss regarding the scrap loaded in those two trucks on 25.09.2020. It was further argued that as the defendant company impounded the trucks and workers of the plaintiff, it was impossible for plaintiff to lift the remaining material and as there was no breach of terms and conditions of sale order by the plaintiff.
CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 19 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:20 +0530
29. Ld. Counsel for defendant argued that the plaintiff had also acknowledged the issue with the weighment of both of his trucks at the site of defendant on 25.09.2020, which he mentioned in emails Ex.PW1/6 (colly).
30. Sh. Debasish Kundu i.e. PW-1 in counter claim has admitted that the operator of the weighbridge/machine was their employee. He further confirmed that there was no CCTV camera installed just above the weighing bridge/machine. He also produced one pen drive alongwith certificate u/s 65-B of Indian Evidence Act and same was played on the laptop during his cross examination and he admitted that operating system of weighing bridge/machine is not appearing in the CCTV footage and voluntarily deposed that same is not appearing as the view of the operating system is being obstructed by a tree and crane and also admitted that the said crane belongs to them. Thus, the defendant company has failed to show by CCTV footage that there was suddenly drop of weight of the truck on weighbridge scale.
31. PW-1 Sh. Debasish Kundu, Sr. Manager of defendant/counter claimant admitted that weightment machine is lying at their site and under their custody and that their employees used to issue the receipt regarding the material which is lifted from their site and without receipt of the weighing material, no one can go outside from their site. The defendant company has also not proved on record any system generated slip issued through weighbridge CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 20 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:25 +0530
scale/machine to show that there was fluctuation in the scale to the extent of 39.88 MT to 21.72 MT when the truck of the plaintiff was being weighed. Further, PW-2 Sh. Manjesh Kumar, Service Engineer of the Precision Weighing Systems deposed in his affidavit of evidence Ex.PW2/A that on his inspection of the concerned weighing bridge, he found that someone tried to tamper with the weighing system because the gauge cover of one load cell was found broken and it was covered with fresh m-seal.
32. It is also admitted by defendant witness that he had not stated specifically in his complaint to the police that weighing machine was controlled by external device. The weighment machine was lying at the site of the defendant and under their custody. Further, on inspection, PW-2 Sh. Manjesh Kumar found that someone tried to tamper with the weighing system because the gauge cover of one load cell was found broken and it was covered with fresh m-seal, these facts itself shows that tampering in the weighbridge scale cannot be done without the connivance of the employees/workers of the defendant company, who were operating the weighbridge scale/machine. Sh. Debasish Kundu, Sr. Manager of defendant company in his cross examination has also admitted that the plaintiff has not specifically acknowledged his fault in Ex.PW1/6 (colly) but informed to clear the full material at the earliest. It has not been proved on record that plaintiff or any of its representative has any connivance with the CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 21 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:37:30 +0530
employees/workers of the defendant, who were employed on the weighing system at the site of defendant. As the trucks of the plaintiff were detained by the defendant admittedly till 30.09.2020 on account of alleged fluctuation in the reading weighment scale installed and managed by the defendant company, it was not feasible for the plaintiff to clear the remaining material within the validity period which was also upto 30.09.2020, particularly when there were allegations regarding manipulation/theft by the plaintiff. The grounds for termination as mentioned in the termination letter i.e. Ex.PW1/4 have not been proved by the defendant company and as such, defendant company can not forfeit the interest free security deposit of Rs.12,28,047/- or adjust advance amount of Rs.10,09,575/- of plaintiff on account of breach of terms and conditions of the sale order and therefore, plaintiff is entitled for recovery of Rs.22,37,622/- i.e. (Rs.12,28,047/- interest free security deposit and Rs.10,09,575/- EMD) from the defendant.
33. Plaintiff has also claimed Rs.5,00,000/- as damages from the defendant company on account of providing shelter, food and daily wages to the workers and also with regard to bear the cost of two trucks for paying their fair, which were confined by defendant for five days at their site. However, plaintiff has not led any evidence to show that he had paid any fair for two trucks or spent any amount regarding food, shelter and wages to any of his workers. Even detail of the said amount is not mentioned in the CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 22 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:37:35 +0530
plaint or in the evidence. Therefore, plaintiff has failed to prove that he is entitled for damages to the tune of Rs.5,00,000/- from the defendant.
34. Plaintiff has claimed 18 % interest on the suit amount.
There is no agreed rate of interest between the parties for breach of any terms and conditions of sale order Ex.PW1/2. Admittedly the transactions between the parties are commercial in nature and therefore as per Section 34 CPC, plaintiff is entitled for interest at which moneys are lent by the nationalized bank in relation to commercial transactions i.e. @ 9% per annum from the date of filing of suit till realization. Accordingly, it is held that plaintiff is entitled for recovery of Rs.22,37,622/- from the defendant alongwith interest @ 9 % per annum from the date of filing of suit till realization. Accordingly, this issue is decided in favour of plaintiff and against the plaintiff.
Issue no. 2:-
ii) Whether this Court has territorial jurisdiction to deal with this case ? OPD
35. Onus to prove this issue was upon the defendant. Ld. Counsel for defendant argued that the sale order was issued in Mumbai and the performance of obligations and liabilities under the sale order was required to be done in Nagpur and therefore, no cause of action arose within the jurisdiction of this Court. Ld. Counsel for defendant further argued that plaintiff in his cross examination has admitted that he has filed the present suit in Delhi because his CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 23 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:40 +0530
proprietorship firm is registered in Delhi and the payments were made to the defendant through his bank, which is situated in Sonia Vihar, Delhi. It is submitted that merely by claiming that payments were made from the bank account of the plaintiff situated at Delhi, same cannot confer jurisdiction of Delhi Courts as it must include some act done by the defendant. My attention is drawn in respect of an authority titled as South East Asia Shipping Co. Ltd. vs. Nav Bharat Enterprises Pvt. Ltd. and Ors., 1996 III AD (SC) 453.
36. Per contra, Ld. Counsel for plaintiff argued that communication regarding acceptance of the bid of plaintiff was delivered to him at his office situated at Sonia Vihar, Delhi and the termination of sale order due to alleged breach of terms and conditions was also communicated to the plaintiff at his office address i.e. Sonia Vihar, Delhi through email. Ld. Counsel for plaintiff further argued that payments through RTGS were made and to be received at the bank account of plaintiff having its branch at Sonia Vihar, Delhi. Ld. Counsel for plaintiff further argued that defendant had not taken the objection of territorial jurisdiction in his written statement and later on also invoked the jurisdiction of this Court by filing counter claim.
37. Section 20 (c) CPC provides that other suits to be instituted where the cause of action, wholly or in part, arises. Cause of action is bundle of facts, which is to be CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 24 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:45 +0530
proved by plaintiff in order to succeed in the suit. PW-1 Mr. Abdul Gaffar, Proprietor of M/s Armaan Steel in his affidavit of evidence Ex.PW1/A has deposed that he used to operate his email ID i.e. [email protected] from his office situated at B-571, Block B, Gali no.6/1, IInd Pusta, Sonia Vihar, Delhi and that on 12.08.2020 the bid of plaintiff was accepted and defendant issued sale letter which was delivered at his office. Thus, as per plaintiff, the acceptance of his bid was communicated to him at his office situated at Sonia Vihar, Delhi. This fact is not disputed by Ld. Counsel for defendant and even a suggestion was not given to PW-1 when he was in the witness box. The termination of the sale order due to breach of terms and conditions i.e. Ex.PW1/4 was sent to the plaintiff through email at his address B-571, Gali no.6/1, IInd pusta, Sonia Vihar, Delhi. Hon'ble Supreme Court in a case titled as Bhagwandas Goverdhandas Kedia vs M/s Girdharilal Parshottamdas And Co., 1966 AIR 543 held as under:-
"The trial Court was therefore right in the view which it has taken that a part of the cause of action arose within the jurisdiction of the City Civil Court, Ahmedabad, where acceptance was communicated by telephone to the plaintiffs."
38. In the present case also the acceptance of the bid of plaintiff was communicated to him by delivering the sale letter at his office situated at Sonia Vihar, Delhi and thereafter, the communication of termination of sale order was also communicated to the plaintiff at his Sonia Vihar CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 25 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:37:50 +0530
address at Delhi, therefore, I am of the view that part of cause of action also arose within the jurisdiction of this Court. The authority as relied upon by Ld. Counsel for defendant i.e. South East Asia Shipping Co. Ltd. vs. Nav Bharat Enterprises Pvt. Ltd. & Ors (supra) is not helpful in the facts and cirumstances of the present case as in that case, merely a bank guarantee was executed at Delhi and transmitted for performance to Bombay, while in the present case, acceptance of bid of the plaintiff was communicated by delivering sale letter to the plaintiff at Delhi and the termination of sale order was also communicated to the plaintiff at its Delhi address. Accordingly, this issue is decided against the defendant and in favour of plaintiff.
Relief
39. In view of my findings on abovesaid issues, the suit of plaintiff is decreed for a sum of Rs.22,37,622/- alongwith interest @ 9 % per annum from the date of filing of suit till realization in favour of plaintiff and against the defendant. Decree sheet be prepared accordingly.
My issue wise findings in the Counter Claim i.e. CS (Comm) 122/2022 are as under:-
Issue No.1:-
i) Whether the plaintiff is entitled to decree in its favour and against the defendant for a sum of Rs.48,60,000/-? OPP
40. Onus to prove this issue was upon the counter CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 26 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
Date: 2024.05.30
MALHOTRA 16:37:56 +0530
claimant. PW-1 Sh. Debasish Kundu in his affidavit of evidence deposed that a sale order 1387 dated 20.08.2020 Ex.PW1/2 was issued to the defendant for a total quantity of 408 MT of scrap material and the defendant started lifting the scrap material from the site on 07.09.2020 and on 25.09.2020, the plaintiff's company site personnel observed that the defendant's workers/representatives had tampered with the functioning of weighbridge and it was observed that gauge cover of one load cell was broken and it was covered with fresh m-seal. It is admitted by PW-1 Sh. Debasish Kundu that weighment machine is lying at their site and under their custody. It is also admitted by PW-1 that whenever the defendant used to lift the material from the site, their employees used to issue the receipt for the same and without the receipt of weighing material, no one can go outside from their site. PW-2 Sh. Manjesh, who examined the weighing machine deposed that someone tried to tamper with the weighing machine because the gauge cover of one load cell was found broken and it was covered with fresh m-seal. No CCTV footage or computer generated receipts regarding the change in the weight of the trucks of defendant have been proved on record. Counter claimant has failed to prove that the defendant or his employees were involved in tampering of the weighing machine which was under the control of their employees.
41. PW-1 Sh. Debasish Kundu, in his affidavit of evidence deposed that after the incident that happened on CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 27 of 30
Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:38:01 +0530
25.09.2020, the plaintiff's personnel recompiled the scrap materials at the site and found that only 72 MT instead of 234 MT of scrap was lying in the yard and thus the scrap material weighing 162 MT was found missing from the total scrap of 408 MT and thus the Counter claimant has claimed loss incurred due to fraud i.e. 162 MT x 30000 amounting to Rs.48,60,000/-. In this regard, PW-1 admitted that there is a document Ex.PW1/7 (colly) on record which reflects that there was 162 MT material loss on the site and that the material was assessed by the Site Inventory team consisting of Late Mr. Pankaj Singh, Mr. Sanjay Saxena and their sub-ordinates. He further confirmed that the report Ex.PW1/7 (colly) does not bear any signature of the inventory team members. To a specific question, as put by Ld. Counsel for defendant, PW-1 deposed that he has checked the company record and came to know that the record pertaining to weighment and engaged employees of their company has been weeded out and therefore, he is unable to produce the same. The Counter claimant has not examined any member of the Inventory Team, who found that 162 MT material was lost at their site. It is very strange to note that although counter claimant lodged an FIR, but they weeded out the record pertaining to the weighment and engaged employees of their company, who were having the custody of the weighment machine. Counter claimant has failed to prove that there was loss of 162 MT of scrap material at their site as no such person who was engaged in the process of verifying the scrap material is examined CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND
CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel
Page 28 of 30
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR MALHOTRA
MALHOTRA Date: 2024.05.30
16:38:06 +0530
before the Court. Further, there is no evidence that prior to 25.09.2020 it was the defendant who had taken the scrap fraudulently from their site when the weighment machine having tampering was under the control of employees of counter claimant. Therefore, it is held that counter claimant is not entitled to recover a sum of Rs.48,60,000/- from the defendant/plaintiff. Accordingly, this issue is decided against the counter claimant and in favour of defendant/plaintiff.
Issue no. 2:-
ii) Whether the plaintiff is entitled to future interest for the loss incurred due to any fraud committed on the plaintiff by the defendant ? OPP
42. Onus to prove this issue was upon the plaintiff. In view of my findings on issue no.1 that counter claimant is not entitled to recover a sum of Rs.48,60,000/- from the defendant/plaintiff and that any fraud was committed upon the counter claimant by the defendant/plaintiff, no question for future interest arises. Accordingly, this issue is also decided against the counter claimant and in favour of defendant/plaintiff.
Issue no.3:-
iii) Whether the plaintiff is entitled to costs of the suit ? OPP
43. Onus to prove this issue was upon the plaintiff. In view of my findings on issue no.1 that counter claimant is not entitled to recover a sum of Rs.48,60,000/- from the CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd.
AND CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel Page 29 of 30 Digitally signed by SANJEEV SANJEEV KUMAR KUMAR MALHOTRA Date: 2024.05.30 MALHOTRA 16:38:12 +0530 defendant/plaintiff, counter claimant is also not entitled for costs of the suit. Accordingly, this issue is also decided against the counter claimant and in favour of defendant/plaintiff.
Relief
44. In view my findings on abovesaid issues, present counter claim is dismissed with no order as to costs. Decree sheet be prepared accordingly.
45. Both files be consigned to Record Room.
Digitally signed SANJEEV by SANJEEV Announced in the open court KUMAR KUMAR MALHOTRA MALHOTRA Date: 2024.05.30 on 30th May, 2024 16:38:19 +0530 (Sanjeev Kumar Malhotra) District Judge (Commercial Court) North-East District Karkardooma Courts, Delhi CS (Comm) 16/2021 M/s Armaan Steel vs. M/s ITD Cementation India Ltd. AND CS (Comm) 122/2022 M/s ITD Cementation India Ltd. vs. M/s Armaan Steel Page 30 of 30