Delhi District Court
Mayur Electricals vs Root Cooling System Pvt Ltd on 20 July, 2024
IN THE COURT OF AMIT KUMAR : DISTRICT JUDGE
(COMMERCIAL)-08
TIS HAZARI COURTS, CENTRAL: DELHI
(Commercial Case No. 316/2023)
CNR No. DLCT01-002698-2023
M/S. MAYUR ELECTRICALS
PROP. SH. BHARAT BHUSHAN SACHDEVA
1568, SHOP NO. 2, 1ST FLOOR,
AMAR SACHDEVA BUILDING,
BHAGIRATH PALACE, CHANDANI
CHOWK, DELHI-110006
.....PLAINTIFF
VS
ROOTS COOLING SYSTEM (P) LTD.
THROUGH ITS DIRECTORS/AUTHORIZED
REPRESENTATIVE
B-20, IIND FLOOR, KAILASH COLONY,
NEW DELHI-110048
ALSO AT:
B-53, HOSIERY COMPLEX, PHASE-2,
NOIDA, GAUTAM BUDDHA NAGAR,
UTTAR PRADESH-201305
....DEFENDANT
Date of institution of case : 17.02.2023
Date of arguments : 04.06.2024
Date of pronouncement of judgment : 20.07.2024
JUDGMENT:
1. Present is a suit seeking recovery of Rs. 6,98,845/- along with interest @ 18% per annum and the brief facts necessary for disposal of this suit are averred in the plaint are that the plaintiff is a proprietorship concern dealing in electrical items and from time to time, supplied various kinds of electrical items to the defendant company against invoices. It is claimed -1- that defendant was irregular in payment and issued two cheques on 03.12.2019 and 10.12.2019 in partial discharge of its liability but both the cheques bounced and this suit has been filed seeking recovery of the balance principal amount of Rs. 4,54,836/- due alongwith interest of Rs. 2,44,009/-. As per the suit, last payment was made by the defendant on 27.02.2020 for an amount of Rs. 2,124/-.
2. In the written statement, the defendant took the preliminary objections that the suit is barred by limitation, this court does not have territorial jurisdiction and the pleadings are not in accordance with Order VI Rule 15 A CPC. On merits, it was stated that plaintiff as per ledger filed by the plaintiff, raised total 63 invoices against the defendant but only 13 invoices have been filed in this suit and defendant has made payment against all the invoices and there are no outstanding dues. The defendant did not receive any material against the invoices filed in this case as there is no receiving on the part of the defendant of the goods mentioned therein and the suit is liable to be dismissed.
3. In the replication, the plaintiff denied the contents of the written statement and reiterated the contents of the plaint.
4. On the pleadings of the parties, following issues were framed on 22.11.2023:
1) Whether the plaintiff is entitled to recovery of the suit amount? OPP
2) Whether the plaintiff is entitled to interest. If yes, at what rate and for what period? OPP
3) Whether this court does not have territorial jurisdiction to entertain this suit?OPP
4) Whether the suit is barred by limitation? OPD.-2-
5) Whether the pleadings deserve to be struck out, being not in accordance with Order VI Rule 15A CPC? OPD
6) Who is entitled to the cost of the suit and for what amount? Onus on parties
7) Relief.
5. The plaintiff to prove its case examined himself as the only witness whereas defendant examined its AR as the only witness.
6. I have heard the submissions and have perused the record and my findings on the issues is as under:
ISSUE NO. 1 & 2:
7. The onus of proving both the issues was on the plaintiff. Plaintiff in his evidence proved on record copies of the 13 invoices as Ex. PW1/1 to Ex. PW1/13, statement of account as Ex. PW1/14, the two cheques with the returning memos as Ex. PW1/15 to Ex. PW1/18 and the master data of the defendant as Ex. PW1/20 and the certificate U/s 65 B of the Indian Evidence Act as Ex. PW1/21. The documents were objected to since the list of documents filed by the plaintiff was not in accordance with Commercial Court Act. In the cross examination, the witness stated that he has paid VAT and GST as applicable at the relevant time on the invoices filed on record but he did not file these documents on record. He stated that defendant used to place orders on phone and some times issued Form 38, which were duly mentioned on the invoices. The goods were received some times by the employees of the defendant and some time were delivered through transport to the defendant. The payments were made by the defendant through cheques, RTGS or in cash for -3- small amounts. He admitted that there is no receiving of the goods on the invoices but clarified voluntarily that details of Form 38 and order numbers are mentioned on the bills. He admitted that the last bill issued to the defendant is of 12.12.2019. He admitted that he did not sign each and every page of the plaint and in the statement of truth, the paragraph numbers as to which are based on his personal knowledge and which are based on legal advice are not mentioned. He admitted that list of documents filed by him is not as per Commercial Court Act. He stated that the ledger account is maintained by his accountant Mr. Handa but Ex. PW1/14 does not bear his signatures. He admitted that he has not filed any document to show the correctness of opening balance against the defendant as on 01.04.2012 of Rs. 52,562.13/- paisa reflected in Ex. PW1/14. He admitted that there is no document to show that any demand was made from the defendant of the alleged dues. He denied the suggestion that cheques were given as security cheques.
8. DW1 in his evidence did not rely on any document except of the board resolution Ex. DW1/1. In the cross examination, he stated that all the orders were received by the defendant at factory and not at the site. The defendant company made payments only through cheques. He denied the suggestion that defendant is liable to pay the suit amount and volunteered that entire payment has been made.
9. It was argued by Ld. Counsel for the plaintiff that defendant deliberately did not file any document as the same would have exposed the liability of the defendant. The plaintiff supplied material from his shop within the jurisdiction of this court and the invoices have been admitted by the defendant and -4- therefore, the plaintiff has proved its case. It was argued that defendant issued the cheques in discharge of its liability and same were dishonoured on presentation and the defendant has failed to prove that the cheques were given as security cheques. All the payments made by the defendant have been duly reflected in the statement of account and plaintiff has proved its case.
10. Ld. Counsel for the defendant on the other hand argued that suit is liable to be dismissed only for the reason that it is not in compliance with Order VI Rule 15A CPC. The each and every page of the plaint has not been signed, the statement of truth & the list of documents is not in accordance with the provisions of Commercial Court Act and cannot be read. On merits, it was argued that plaintiff claims that the goods were supplied but there are no averments in the plaint as to when and how orders were placed by the defendant. The invoices in question do not bear any acknowledgment or receiving of goods on the part of the defendant and the plaintiff has failed to prove the delivery of material. The plaintiff did not examine the material witnesses who have allegedly received the goods. Defendant never made any cash payment as alleged by the plaintiff. In the replication, there is no specific reply to the averments of the written statement. The statement of account Ex. PW1/14 has not been signed or stamped by anyone and cannot be relied. As per Section 34 of the Indian Evidence Act, statement of account alone is not sufficient to hold liability. The plaintiff has failed to show how an opening balance of Rs. 52,562.13/- paisa is reflected in debit in the statement of account. The cheques were not issued in discharge of liability as the payment of one of the -5- cheques was stopped, which was for the reason that it was security cheque. There is no communication by the plaintiff demanding the alleged dues from the defendant. This court does not have territorial jurisdiction as no cause of action accrued in the jurisdiction of this Court. The plaintiff did not file VAT and GST record to prove the delivery and therefore the suit is liable to be dismissed. Ld. Counsel for the defendant in support of his submissions relied upon the following judgments:
i. M/s. Steel Strip Wheels Ltd. Vs. M/s. TATA AIG General Insurance Co. Ltd. passed in OMP (Comm) No. 507/2019 on 13.02.2020 by Hon'ble Delhi High Court ii. AV Industries Vs. Neo Neon Electrical Pvt. Ltd., 2023 SCC Online Delhi 5397 iii. Harish Mansukhani Vs. Ashok Jain, 2009 (109) DRJ 126 (DB) iv. M/s. Gohati Roller Vs. Smt. Premoda Medhi passed by Gauhati High Court in RSA 35/2012 dated 15.02.2022 v. P.D. Verma & Co. Vs. Laxmi Builders, 2014 SCC Online Delhi 2160 vi. Anand Swaroop Data Vs. PNB, 1996 SCC Online Punjab & Haryana 655 vii. Chander Dhar Goswami & Anr. Vs. Guwahati Bank Ltd., AIR 1967 SC 1058 viii. CBI Vs. V.K. Shukla & Anr., (1998) 3 SCC 410 FINDINGS:
11. The defendant has challenged the supply of goods through the invoices placed on record. It was argued that there is no proof of delivery or acknowledgment on behalf of defendant on any of the invoices and therefore, the plaintiff has failed to prove the delivery. Ld. Counsel for the defendant in this regard relied upon the judgment of Hon'ble Delhi High Court given in -6- the case of Harish Mansukhani (supra). In that case before Hon'ble High Court, out of 128 bills, names of third parties were mentioned on the rear of carbon copies on 88 bills and the Hon'ble High Court was of the opinion that mere raising of bill without any receiving is of no help to prove the delivery of goods.
12. In the present case, though there is no receiving of goods on the part of the defendant but the plaintiff has clarified that order numbers and details of form no. 38 issued by the defendant are mentioned on the bills Ex. PW1/1 to PW1/3 and further the bills Ex. PW1/4 to PW1/11 and Ex. PW1/13 bears the GST number of the defendant and there is receiving on certain bills. The witness PW1 admitted that these details were filled by the plaintiff himself but there is no suggestion to the witness that the form 38 details were not given by the defendant or that the orders numbers mentioned on the bills were not given by the defendant. It is important to note that defendant did not file any document relating to transactions between the parties despite claiming that all the payments have been cleared by the defendant. If the defendant has cleared all the dues of the plaintiff then why defendant shied away from filing the documents or proof of alleged payments.
13. Further, in the written statement, the defendant in para 8 of the reply on merits admitted that after the return of the cheques on 17.02.2020, the defendant made a payment of Rs. 2124/- on 27.02.2020 duly reflected in the statement of account filed by the plaintiff. It means that the defendant has admitted the bill Ex. PW1/13 dated 27.02.2020. It is the case of the plaintiff that payment of the bills of lesser amount were made in cash. The -7- statement of account Ex. PW1/14 shows this payment was made on 27.02.2020 itself by the defendant in cash, which has been duly admitted in the written statement. If the plaintiff misused the security cheques on 17/02/2020 as alleged by defendant, then why defendant again purchased goods from plaintiff on 27.02.2020 remains unanswered. No prudent person shall purchase again or will have business dealing with a vendor who has misused the security cheque. Coming back to bill Ex. PW1/13, there is no receiving on the part of defendant in this bill, which means that there was no practice between parties of obtaining acknowledgment on the bills as argued by the defendant. The GST number mentioned on the bill Ex. PW1/13 is the same, which is mentioned in all other bills Ex. PW1/4 to Ex. PW1/11. It was argued by Ld. Counsel for the defendant that PW1 stated that the goods were received by one Ramesh on behalf of defendant on invoices Ex. PW1/6 , PW1/7, PW1/10 & PW1/11 and by one Arif Raja on Ex. PW1/12 but the plaintiff did not examine these witnesses. As per plaintiff, they were the employees of the defendant, who received the goods and it was for the defendant to examine these witnesses to rebut the claim of plaintiff. There is no suggestion in the cross examination to PW1 that Ramesh and Arif Raja are/were not the employees of defendant, which clearly proves that Ramesh and Arif Raja received goods on behalf of the defendant against these invoices and in facts, the judgment relied upon is not applicable to the facts of the case.
14. Another important aspect is the cheques issued by the defendant Ex. PW1/15 and PW1/16 for Rs. 75,520/- and Rs. 1,11,338/- respectively. The cheque Ex. PW1/15 bounced with -8- the report "Funds Insufficient" and the cheque Ex. PW1/16 with the report "Payment stopped by drawer". Both the returning memo are of 17.02.2020, which shows that both the cheques were presented simultaneously and the argument of the Ld. Counsel for the defendant that cheques were security cheques and therefore the payment was stopped is without any force. If the cheques were security cheques, then the payments of both the cheques should have been stopped. Further the pleadings in written statement in respect of these cheques show that the defendant claimed that the cheques were given as security cheques but it has not been pleaded that blank undated signed cheques were given. It means that the defendant gave duly filled cheques but allegedly for security. If the cheques were for security, then how the amount of the cheques were mentioned as Rs. 75,520/- and Rs. 1,11,338/-. The security cheques are not issued for such figures and therefore, the defendant has failed to prove that the cheques are security cheques as argued. As a matter of record, the affidavit of evidence of DW1 does not say that the cheques were given as security cheque. What has been pleaded in the written statement regarding these cheques has not been proved by the defendant as the affidavit of evidence is silent on this aspect. In facts, it cannot be said that the cheques were security cheques and the plaintiff has proved that the cheques were issued by the defendant in partial discharge of liability and defendant has failed to prove that the cheques were security cheques.
15. Coming to the argument that no demand was raised by the plaintiff till filing of the suit, PW1 in the cross examination stated that he made demands on phone and there is no suggestion -9- contrary to it. The demands made on phone for the orders placed on telephone are sufficient and there is no reason to disbelieve the plaintiff only because no demand in writing was made. It was also argued for the defendant that the plaintiff did not file all the 63 invoices raised as shown in the ledger and therefore, has concealed the remaining invoices. It is sufficient to note in this regard that defendant has not filed any of the invoices of which defendant claimed that the payment has been made. Why the defendant chose not to file any document except of the board resolution remains unclear.
16. It was also argued for the defendant that plaintiff did not file the VAT and GST record to prove the delivery. As already said that none of the invoices bear any acknowledgment or receipt on the part of defendant yet defendant has admitted the payment of bill Ex. PW1/13 in cash and therefore, there was no reason for the plaintiff to file GST and VAT record. It is also relevant to note that DW1 stated in his cross examination that all the payments were made by the defendant only through cheques but the written statement read with ledger account Ex. PW1/14 shows that the defendant made payment of the bills of lesser amount in cash and therefore, payments were also made in cash by the defendant contrary to the stand taken in cross examination by DW1.
17. In facts, plaintiff has proved that there are dues payable by the defendant. As far as the argument regarding the opening balance in the statement of account Ex. PW1/14 of Rs. 52,562.13/- paisa is concerned, it is correct that there is no document on record filed by the plaintiff to show that how these opening balance was arrived and the defendant at best will be -10- entitled to get benefit of this amount from the amount recoverable from the defendant.
18. Another argument raised by Ld. Counsel for the defendant was that this statement of account does not bear signature of any concern. It is sufficient to note that certificate U/s 65 B has been filed in this regard by the plaintiff as Ex. PW1/21 and in view of this certificate, the computer generated statement of account need not bear signature of any person.
19. The plaintiff is therefore, entitled to principal amount of Rs. 4,54,836/- from the defendant minus the amount of Rs. 52,562/- shown as opening balance in statement Ex. PW1/14. As far as the interest is concerned, the invoices show that the unpaid amount will carry an interest of 18% per annum. Though the term and condition of the invoice stipulate this interest but plaintiff shall be entitled to interest @ 9% per annum against 18% as claimed in the suit. Both the issues are decided accordingly. ISSUE NO. 3:
20. The onus of proving this issue was on the defendant. Counsel for the defendant argued that plaintiff did not file any document to show registered address of the plaintiff is at Delhi or that the goods are supplied from the Delhi and therefore, this court does not have jurisdiction. The invoices filed by the plaintiff show that the plaintiff is having its office at Chandni Chowk, Delhi-06, which is in jurisdiction of this court. Even if the plaintiff did not file any document to show that its registered office is within the jurisdiction of this court yet the bills reflect from where the goods were supplied. The goods were supplied from Chandni Chowk, Delhi office of plaintiff and a part of cause of action accrued in jurisdiction of this court and therefore, -11- this court has jurisdiction to entertain this case. The issue is decided against the defendant.
ISSUE NO. 4:
21. The onus of proving this issue was on the defendant. The last bill between the parties on credit basis is dated 12.12.2019 and in cash is dated 27.02.2020. The cheques given by the defendant were dishonoured on 17.02.2020. The present suit was filed on 17.02.2023. The plaintiff filed pre institution mediation application on 09.02.2022, which was disposed off as non starter on 11.04.2022 and the certificate was issued on 02.05.2022. The plaintiff is entitled to deduct this period from the period of limitation as per Section 12A of the Commercial Court Act. The suit, therefore, is in time and is not barred by limitation. The issue is decided against the defendant. ISSUE NO. 5:
22. The onus of proving this issue was on the defendant.
Ld. Counsel for the defendant argued that each and every page of the plaint as well as replication has not been signed by the plaintiff, the list of documents is not in accordance with Commercial Court Act and further the statement of truth is not in accordance with Commercial Court Act as it does not specify the paragraphs which are based on the personal knowledge of the plaintiff and which are based on the legal advice and the suit is liable to be dismissed on these facts. In support of his submission, the counsel has relied upon the judgment of M/s. Steel Stripes (supra) and AV Industries (supra).
23. As far as the judgment of M/s. Steel Stripes is concerned, the same was set aside by the Hon'ble Division -12- Bench in FAO (OS) (Comm) 178/2020 vide order dated 06.02.2023.
24. Coming to the judgment of AV Industries (supra), in that case, no statement of truth at all was filed by the plaintiff and in those circumstances, the Hon'ble High Court held that the plaint itself is non est and could not have been read in evidence. In the present case, the plaintiff did file the statement of truth though it does not specify the paragraphs, which are true to the knowledge and which are based on information received. It cannot be said that there was no statement of truth at all. The facts are distinguishable from the facts of AV Industries (supra). Non mentioning of the paragraphs in the statement of truth, not signing of each and every page of the pleadings and not filing the list of documents as per Commercial Court Act is because of the improper legal advice and the plaintiff cannot be made to suffer because of that. The procedures of law are hand-maid of justice and parties cannot be made to suffer for technical reasons when the case on merits is proved. The statement of truth shows that below the statement of truth the plaintiff has mentioned as "Affidavit of admission/denial U/o XI Sub Rule 4 CPC". The same is mistake of the counsel and not of the plaintiff. The counsel should have been careful while preparing the statement of truth and the list of documents and in obtaining the signatures of the plaintiff on the pleadings. It will be too harsh to dismiss the suit on this technical ground when actually the statement of truth has been filed. The plaint cannot be dismissed on this ground. The issue is decided accordingly.
-13-ISSUE NO. 6:
25. The onus of proving this issue was on both the parties. In view of my finding given on the issues, the plaintiff shall be entitled to the actual cost of the suit.
RELIEF:
26. In view of my finding given on above said issues, the suit is decreed and decree for a sum of Rs. 4,02,274/- (Rs. 4,54,836/- minus Rs. 52,562/-) is passed in favour of the plaintiff and against the defendant. The plaintiff shall also be entitled to interest @ 9% per annum on this amount from 27.02.2020 till realization.
27. The plaintiff shall also be entitled to the cost of the suit. Plaintiff is directed to pay deficient court fees, if any, on the amount of interest granted.
28. Copy of the judgment be sent to both the parties by electronic mode, if available or otherwise.
29. Decree sheet be prepared after the plaintiff pays the deficient court fees, if any, on the interest awarded.
30. File be consigned to Record Room.
Digitally signed by AMITAMIT KUMAR Date: KUMAR 2024.07.22 12:22:48 +0530 (AMIT KUMAR) District Judge, Comm. Court-08 Central, Tis Hazari Courts Extension Block, Delhi/20.07.2024 -14-