Delhi District Court
Naveen Gupta vs Vijay Kumar Jha on 27 September, 2024
IN THE COURT OF DISTRICT JUDGE -04,
(PRESIDED OVER BY: ANIL CHANDHEL)
WEST DISTRICT, THC, DELHI
CNR No. DLWT01-002173-2016
Civil DJ No. 612105/2016
&
CNR No. DLWT01-006181-2016
Civil DJ No. 613384/2016
Naveen Gupta
S/o H.P. Gupta
Prop: M/s National Agencies
2151/8-AC-GF, Opp. Shadipur, Depot,
New Patel Nagar, New Delhi-110008. ...Plaintiff.
Versus
Vijay Kumar Jha
Prop: M/s R.V. Enterprises
A-4, Sector-5, DSIDC Industrial Area.
Bawana, New Delhi-110039. ...Defendant.
&
Vijay Kumar Jha
Prop: M/s R.V. Enterprises
A-4, Sector-5,
DSIDC Industrial Area,
Bawana,
New Delhi-110039. ....Counter-Claimant.
Versus
________________________________________________________________
Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016)
&
Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 1 of 44 ANIL
CHANDHEL
Digitally signed by
ANIL CHANDHEL
Date: 2024.09.27
16:32:42 +0530
Naveen Gupta
S/o H.P. Gupta
Prop: M/s National Agencies
2151/8-AC-GF, Opp. Shadipur, Depot,
New Patel Nagar,
New Delhi-110008 ...Counter-Respondent.
SUIT FOR RECOVERY OF RS.7,52,158/-,
ALONGWITH INTEREST
&
COUNTER-CLAIM FOR RECOVERY OF
RS.12,46,512/, ALONGWITH INTEREST
CIVIL SUIT INSTITUTED ON :25.01.2016
COUNTER-CLAIM INSTITUTED ON :11.08.2016
JUDGMENT RESERVED ON :20.09.2024
JUDGMENT PRONOUNCED ON :27.09.2024
Counsel for Plaintiff/Counter-Respondent: Mr. O.P. Aggrawal, Adv.
Counsel for Defendant/Counter-Claimant: Mr. Arvind Kumar, Adv.
JUDGMENT
1. By way of this common judgment, the civil suit and the counter-claim, filed by the parties against each-other, are being decided. The Plaintiff has filed the civil suit, against the Defendants, for recovery of Rs.7,52,158/- alongwith interest. The Defendant has filed the Counter-claim, against ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 2 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:32:50 +0530 the Plaintiff, for recovery of Rs.12,46,512/- alongwith interest. In terms of the suit and counter-claim, both the Plaintiff and the Defendant have been seeking monetary claims against each-other on the basis of the same transaction in question. The facts and evidence to be considered for adjudication of the suit & counter-claim are common and factually overlapping. The evidence was led by the parties in a consolidated manner only in suit, which was agreed to be read in both the suit as well as the Counter-claim. Therefore, it would be appropriate to decide both the suit and the counter-claim by a common judgment. The suit and counter-claim are registered as separate suits, however for the clarity of understanding, the Civ DJ No. 612105/2016 is hereinafter referred to as 'the suit' and the Civ DJ No. 613384/2016 is hereinafter referred to as 'the Counter-claim'. The Plaintiff in the suit, i.e., Civ DJ No. 612105/2016 is hereinafter referred to as the 'Plaintiff/Counter-Respondent' and the Defendant is hereinafter referred to as the 'Defendant/Counter/claimant'.
2. The facts stated in the Plaint of the suit :
The case of the Plaintiff, as set out in plaint, is briefly summed up hereinbelow:
i. The Plaintiff is the proprietor of M/s. National Agencies, whereas the Defendant is the proprietor of M/s. R.V. Enterprises. The Defendant used to purchase ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 3 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:32:56 +0530 the goods/material from the Plaintiff on credit basis from time to time.
ii. As on 21.11.2015, there was a debit balance of Rs.7,52,158/-, against the Defendant, in the Plaintiff's books of account. The Defendant intentionally did not make the payment of the aforementioned outstanding amount to the Plaintiff, despite repeated demands by the Plaintiff.
iii. On 10.11.2015, the Defendant issued the following four Cheques towards the part-payment of the outstanding amount:
a. Cheque No. 077372 dated 18.11.2015 for Rs.1,26,662/-;
b. Cheque No.077373 dated 18.11.2015 for Rs.42,735/-;
c. Cheque No. 077374 dated 20.11.2015 for Rs.65,022/-;
d. Cheque No. 077376 dated 25.11.2015 for Rs.2,96,448/-.
It was assured by the Defendant that the aforesaid cheques would be encashed upon presentation. The Defendant further assured to the Plaintiff that he would pay the balance principal amount by 30.11.2015.
iv. The Plaintiff deposited the Cheques No.077372 and Cheque No. 077373 in his bank account. However, ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 4 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:02 +0530 both the aforementioned Cheques were dishonoured on 19.11.2015, due to the reasons mentioned in the Bank Memo as "Funds Insufficient". On 19.11.2015, the Plaintiff contacted the Defendant and made the demand for the payment of entire balance of two dishonoured Cheques and two remaining Cheques as stated above.
v. On 19.11.2015, the Defendant assured the Plaintiff that he would make the entire payment on or before 30.11.2015 for Rs.7,52,158/-. However, the Defendant did not make the said payment to the Plaintiff and on 30.11.2015, the Defendant clearly refused to make the payment.
vi. The Plaintiff served a legal demand notice dated 01.12.2015 upon the Defendant, however the Defendant neither made any payment nor sent any response, despite the service of the aforesaid legal notice.
vii. The Defendant is liable to pay to the Plaintiff Rs.7,52,158/- towards the balance principal amount along with interest thereon @ 15% p.a. and the Defendant is liable to pay the entire cost of the suit.
3. The facts stated in the Counter-claim & written statement, filed by the Defendant:
________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 5 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:09 +0530 The Defendant was duly served in the matter and entered appearance through Counsel on 18.05.2016. The Defendant has filed the written statement on 10.06.2016. The Defendant has filed the Counter-claim on 11.08.2016. The Defendant has refuted the contentions of the Plaintiff in his written statement. The Defendant did not deny the transaction in principal, however stated that the goods/material supplied by the Plaintiff were of defective quality, which has resulted in loss to the Defendant. The Defendant has accordingly also filed a counter-claim for recovery of the aforementioned damages/loss. The case, as set out in the written statement and the counter-claim, is summed up in the paras stated in hereinbelow:
i. The Defendant is in the business of coating metal parts supplied by its customers. The Defendant paints the products of its customers for a very small amount of money compared to the value of the products. The plaint job, done by the Defendant, makes the metal parts corrosion resistant and bad conductor of electricity and increases overall life of such parts. The Defendant uses a special powder for the aforesaid purpose, which it sourced from reputed brands. When this power is applied on metal parts in a controlled environment, the same gives long life to the products. As a result of the chemical reaction, the powder sticks ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 6 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:14 +0530 to the metal and makes it non-conductor and corrosion resistance.
ii. The Plaintiff was the distributor of one such reputed brand, namely Magic Coat. The Plaintiff used to sell the same to the Defendant. The relationship between the Plaintiff and Defendant started many years ago and the Defendant used to purchase only Magic Coat powder from the Plaintiff.
iii. In 2014, the Plaintiff visited the Defendant's office and informed that he was setting up a factory for manufacturing of the aforementioned powder. It was represented by the Plaintiff that powder manufactured by him would meet the same standards as that of the Magic Coat powder. It was further assured by the Defendant that if there were any complaints, he would not charge the Defendant. Since the Defendant had a very high reputation in the market and was purchasing the raw material sourced from reputed companies only, the Defendant refused to buy the product manufactured by the Plaintiff. However, on the continuous insistence of the Plaintiff and in view the long-standing relationship between the parties, the Defendant agreed to buy two colours from the Plaintiff.
iv. The Defendant ordered grey and metallic gold colours from the Plaintiff. These colours were manufactured ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 7 of 44 ANIL CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:20 +0530 by the Plaintiff on the instructions of the Defendant and were supposed to meet the quality standards. It was promised by the Plaintiff that the standard of the colours would be equal to the other popular brands in the market. Since, the Defendant was not sure about the outcome of the powder coating, the Defendant delayed the payments and it was so agreed between the parties. As a goodwill gesture, the Defendant issued multiple security cheques of different amounts from No. 077372 to 077377 on 17th November, 2014 and out of these two cheques being 077375 and 077377 were honored.
v. The above-mentioned cheques were not dated and were given as a security. It was assured by the Plaintiff to the Defendant that these cheques would be presented to bank for encashment only after the Defendant certifies the quality of the powder supplied by the Plaintiff. When the coating powder is applied on the metal and heated at a certain temperature, the quality of the coat cannot be tested immediately. Only after few months of the chemical reaction if the quality of the product is not good, the problem starts surfacing. The coat is supposed to last for many years, however, in the present case the coat started coming out of the metal only after few months. When the problems with metal parts were reported by the Defendant's customers, the Defendant intimated the ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 8 of 44 ANIL CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:26 +0530 same to the Plaintiff and advised not to present remaining cheques for encashment. Since these cheques were security cheques and dates were filled by the Plaintiff subsequently, the Plaintiff averred falsely that the cheques were issued in November 2015. When some of the cheques were presented for encasement, there was already a dispute between the parties and the Plaintiff malafidely, in order to harm the Defendant, secretly presented these cheques for encashment.
vi. The Defendant supplied the metal cabinets and other equipment coated with the powder, supplied by the Plaintiff, to its customers. However, after few months, the problem started surfacing and the customers of the Defendant started complaining about the quality and the same was intimated to the Plaintiff verbally. Initially, the coat was peeling off from the cabinets on which it was applied. Thereafter, other problems also surfaced like bubbling, dis-colouring etc. The customers started sending rejection letters to the Defendant. One after another customer of the Defendant started refusing the products sent to them and some of them refused to take delivery and claimed compensation. One such customer, namely Shiv Shakti Metal Industries, sent a written rejection seeking huge damages and did not make payment. These issues, about quality of the product, were duly ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 9 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:33 +0530 communicated to the Plaintiff several times. In addition to same, the Plaintiff was also communicated in categorical terms by a written reply that the material was being rejected by the Defendant's customers due to poor quality of the powder. Since the Plaintiff did not give any proper or appropriate response, the Defendant was constrained to debit his account with Rs.14,98,670/-.
vii. After having so much trouble, the Defendant stopped applying the powder supplied by Plaintiff. Huge quantity of unused powder manufactured by the Plaintiff is still lying at the factory of the Defendant. The Defendant asked the Plaintiff to take back this product and compensate for the damages caused to him, on account of the defective product, supplied by the Plaintiff. Several times negotiations took place between the parties and ultimately the Plaintiff refused to take back his product and sent a demand notice dated 01.12.2015 through its Advocate. This was duly replied by the Defendant on 04.01.2016.
viii. In his reply dated 04.01.2016, the Defendant categorically pointed out that he had debited the Plaintiff's account with Rs.14,98,670/- for rejection of the material by the Defendant's customers. The aforesaid material was coated with the powder supplied by the Respondent during the period of ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 10 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:38 +0530 2013-2014.
ix. The Defendant is in the business for last 11 years and has a huge business goodwill and reputation in the market with its clients & vendors. The Defendant has tie-ups with reputed companies namely Oncra, Elite Certification Pvt. Ltd., Jutun India Pvt. Ltd. and AKZO Nobel India Limited. They have issued certificate of quality to the Defendant. However, believing the promises made by the Plaintiff, the Defendant purchased and applied the powder which was rejected by the customers. The Defendant has a good turnover and is an income tax assessee, who pays all the taxes on time. On account of acts & omissions of the Plaintiff as explained above, the business goodwill and reputation of the Defendant has taken a severe jolt and there is a tremendous loss of goodwill & reputation. The loss of business & old clients, which were made over the period of time due to quality workmanship, cannot be explained and compensated in the monetary terms. However, the Defendant on a very conservation side estimates the loss of goodwill & reputation to the tune of Rs.5,00,000/-.
x. The Defendant was forced to debit the Plaintiff's account with an amount of Rs. 14,98,970/- due to defective material laying in the factory and rejection ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 11 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:44 +0530 of the material and other losses due to non-payment of bills by its clients. The amount of Rs.14,98,970 is computed in the following manner:
Sr. No. Particulars Damages
(in Rupees)
i. Defective material Rs.1,00,000/-
/colour laying at the
factory of the counter
claimant.
ii. Defective metal cabinets Rs.1,50,000/-
laying at the factory of
the Counter Claimant
due to issues with
powder coating.
iii. The total amount which Rs.12,48,670/-
could not be recovered
due to defective powder
of the Respondent.
xi. After making adjustment of accounts, the total
amount payable by the Plaintiff is Rs.7,46,512/-and apart from the headings mentioned above the Defendant is also entitled to receive damages on account of loss of reputation and business goodwill, which has been quantified as Rs.50,000/-. Thus in total, the Defendant/Counter Claimant is entitled to receive an amount of Rs.12,46,512/- towards damages from the Plaintiff.
________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 12 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:49 +0530 xii. On the basis of aforementioned averment, the Defendant has claimed Rs.12,46,512/-, alongwith interest in the Counter claim.
4. The Plaintiff has not filed any replication to the written statement in the suit. The Plaintiff has filed the written statement to the Counter-claim, wherein the contentions of the same are denied. The Defendant has filed the replication to the written statement in the Counter-claim, wherein the averment of written statement are refuted and the averments of the Counter-claim are reiterated.
5. Issues.
5.1. On the basis of the pleadings of the parties, the following issues were framed in the suit on 19.11.208:
i. Whether the cheques given by the Defendant to the Plaintiff were security cheques, if so, its effect? OPD.
ii. Whether the material supplied by the Plaintiff to the Defendant was defective, if so, of what value and its effect? OPD.
iii. Whether the Plaintiff is entitled for recovery of an amount of Rs.7,52,158/- from the Defendant, as prayed for? OPP.
________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 13 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:33:54 +0530 iv. Whether the Plaintiff is entitled to pendente lite and future interest, if so, at what rate? OPP.
5.2. On the basis of the pleadings of the parties, the following issues were framed in the counter claim on 19.11.2018: -
i. Whether the counter-claim is maintainable in the present form as neither filed along with the written statement nor mentioned in the written statement?
ii. Whether the counter claimant is entitled to recover an amount of Rs. 12,46,512/- from the defendant(counter-Respondent), as prayed for?
iii. Whether the counter claimant is entitled to recover pendente lite and future interest, if so, at what rate?
The onus of proof of the above-mentioned three Issues, framed in the Counter-claim, was placed upon the Counter- claimant.
6. Evidence of the parties:
6.1. The Issues were framed separately in the suit and the counter-claim and the evidence commenced in both separately, however the parties did not lead any evidence in ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 14 of 44 ANIL CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:02 +0530 the Counter-claim and proceeded with the evidence in the suit. On 20.09.2019, the Court directed that the Counter-
claim be tagged with the suit. Thereafter on 04.12.2019, Ld. Counsels for the parties submitted that evidence for the purposes of suit and counter-claim be led only once in common, which is also reflected in the subsequent orders of the matters. Therefore, the parties have led evidence only in the suit, which is to be read in the suit as well as in the Counter-claim.
6.2. The Plaintiff/Counter-Respondent has led the evidence first and has examined one witness in support of the case. The Plaintiff himself appeared as the PW-1. The Plaintiff has reiterated the contentions of the plaint in his examination-in- chief. He has exhibited and relied upon the following documents in his examination-in-chief:
i. Exhibit PW-1/1: Legal notice dated 01.12.2015;
ii. Exhibit PW-1/2: Postal receipt;
iii. Exhibit PW-1/3: Statement of account;
iv. Exhibit PW-1/4: Statement of account;
v. Exhibit PW-1/5 to Exhibit PW-1/8: Four
Original cheques;
vi. Exhibit PW-1/9 to Exhibit PW-10(Colly): Two
Original bank memo;
vii. Exhibit PW-1/11 to Ex. PW-1/72: Carbon copy
of 65 invoices.
________________________________________________________________ ANIL
Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL
&
Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 15 of 44
Digitally signed
by ANIL
CHANDHEL
Date:
2024.09.27
16:34:07 +0530
The PW-1 was cross-examined by Ld. Counsel for the Defendant/Counter Claimant and was discharged upon conclusion of his cross examination.
6.3. After conclusion of the Plaintiff's evidence, the Defendant/Counter-claimant has led evidence and has examined two witnesses in support of his case. The Defendant/Counter-claimant has himself appeared as the DW-1. The DW-1 has reiterated the contentions of the counter-claim as well as the written statement of the suit in his examination-in-chief. He has exhibited and relied upon the following documents in his examination-in-chief:
i. Mark DW-1/1: Record slip showing date of issuance of cheque.
ii. Mark DW-1/2: Statement of account. iii. Exhibit DW-1/3: Rejection letter issued by Shiv Shakti Metal Industries.
iv. Exhibit DW-1/4(Colly): Office copy of debit note dated 04.01.2016 issued by Defendant to the Plaintiff along with postal receipt.
v. Mark-DW-1/5(Colly): Copy of certificates issued by the customer in favour of the Defendant.
The DW-1 was cross-examined by Ld. Counsel for the Defendant/Counter Claimant and was discharged upon conclusion of his cross examination. In cross-examination, ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 16 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:12 +0530 the Defendant was confronted with printouts of Whats-App messages, which were collectively marked as Mark- DW1/P-1.
6.4. The Defendant/Counter-claimant has examined Mr. Sanjay Sharma as the DW-2. The DW-2 has relied upon Exhibit-DW1/3 in his examination-in-chief. The DW-2 was cross-examined by the Ld. Counsel for the Plaintiff and was discharged, upon conclusion of his cross-examination.
7. Submissions of the Parties.
7.1. After conclusion of the evidence, Ld. Counsels for the parties have addressed their arguments. Ld. Counsel for the Plaintiff has submitted that the Defendant has admitted the sale and delivery of the material, supplied by the Plaintiff. It is submitted that the Defendant has not disputed the value of the aforesaid material and has further admitted in his cross- examination the amount of Rs.7,52,158/- as being due and outstanding against him. It is submitted that the Counter- claim was not filed alongwith the written statement and therefore, is not maintainable. It is submitted that the Defendant has failed to prove that the material supplied by the Plaintiff was defective and therefore, the suit should be decreed and the counter-claim should be dismissed.
7.2. Ld. Counsel for the Defendant has submitted that the Plaintiff has not specifically denied the material contentions ________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 17 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:17 +0530 in the written statement to the Counter-claim and further himself stated that he was ready to take the material back, which is an admission about the material being defective. It is further stated that the Plaintiff has only relied upon the statement of account as basis of the recovery and has failed to prove the contentions of the plaint. It is stated that the DW-1 has been given generic suggestions and his testimony has remained unrebutted in material aspects and therefore, the Defendant has proved that the goods were defective and the Plaintiff was liable to compensate for the damages. Ld. Counsel for the Defendant/Counter-claimant has further relied upon the following judgments:
i. Ashok Kumar Kalra Vs. Wing CDR. Surendra Agnihotri (19.11.2019): SLP(C) No. 23599/2018 (Hon'ble Supreme Court of India);
ii. Harish Mansukhani Vs. Ashok jain(19.11.2008):
RFA No.04/2008(Hon'ble High Court of Delhi) (DB);
8. Conclusions on the Issues in suit (Civ DJ No.612105/2016) and reasons for such Conclusions:
8.1. Issue No.1: Whether the cheques given by the Defendant to the Plaintiff were security cheques, if so, its effect? OPD.
ANIL ________________________________________________________________ CHANDHEL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 18 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:22 +0530 8.1.1. The onus to prove this Issue is upon the Defendant. The Plaintiff has stated in the plaint and in the examination in chief that he has supplied the goods to the Defendant and on 10.11.2015, the Defendant issued the following four Cheques towards the part-payment of the outstanding amount:
a. Cheque No. 077372 dated 18.11.2015 for Rs.1,26,662/-;
b. Cheque No.077373 dated 18.11.2015 for Rs.42,735/-;
c. Cheque No. 077374 dated 20.11.2015 for Rs.65,022/-;
d. Cheque No.077376 for S. 62029 dated 25.11.2015 i.e. for Rs. 2,96,448/-.
It is further stated that the aforementioned two cheques were dishnoured upon presentation and the remaining two were never presented. The Defendant has stated in the written statement and in the counter-claim that the aforementioned cheques were undated security cheques issued in the year, 2014 and it was agreed that the same would be presented for encashment only when the Defendant certified the quality of the material supplied by the Plaintiff. Two of the afore- mentioned cheques are undated and have been filed by the Plaintiff on record.
________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 19 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:28 +0530 8.1.2. The Defendant has admitted in the cross-examination that an amount of Rs.7,52,158/- was payable by him to the Plaintiff, as on the date of presentation of the cheques. The Defendant has failed to prove that the goods/material, supplied by the Plaintiff, was defective or did not meet the specified standards of quality and the same has been discussed in greater detail in the discussion under the Issue No.2. Further, it has been proven in terms of PW-1/3 that the Defendant has made several payments to the Plaintiff towards the material supplied by him. Even after the dishonour of two cheques, the Defendant has not instructed the Plaintiff not to present the remaining cheques. There is no document on record, whereby the factum of the cheques being security cheques could be inferred.
8.1.3. Moreover even in the event of security cheques, a party is entitled to present the same, if the liability in relation to the security cheques has become overdue. Though there is nothing on record to conclude the cheques were security cheques, however, even if they are assumed to be security cheques, the same does not add any value to the defence of the Defendant, as the liability against the Defendant has already become overdue. The Issue No.1 is accordingly decided in favour of the Plaintiff and against the Defendant.
8.2. Issue No.2: Whether material supplied by the ANIL ________________________________________________________________ CHANDHEL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Digitally signed Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 20 of 44 by ANIL CHANDHEL Date: 2024.09.27 16:34:34 +0530 Plaintiff to the Defendant was defective, if so, of what value and its effect? OPD.
8.2.1. The onus to prove the Issue No.2 is upon the Defendant/Counter-claimant. The Defendant has to prove the aforesaid Issue in order to succeed in the suit as well as in the Counter-claim. The case of the Plaintiff is that the Defendant has purchased the material from him on credit basis and issued cheques for payment, which were dishonored. It is stated in para 3 of the plaint that there was an outstanding balance of Rs.7,52,158/- as on 21.11.2015, against the Defendant, in the Plaintiff's books of account.
The Defendant has stated in the written statement that the material supplied by the Plaintiff was defective, which resulted in damages to the Defendant. It is stated that the aforesaid defects were reported by the Defendant's customers and the Defendant intimated the Plaintiff several times about the same.
8.2.2. The case set up by the Defendant with regard to the material being defective, in the written statement and in the counter-claim, can be summed up in brief in the following sub-paras:
i. The Defendant purchased the metal coating powder from the Plaintiff, which was assured to meet the same quality standards as that of Magic Coat Brand and ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 21 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:40 +0530 other popular brands, available in the market. The Plaintiff agreed not to charge in case of any complaint with the material. The undated cheques were given to the Plaintiff in 2014 as security. It was assured by the Plaintiff that these cheques would be presented for encashment only after the Defendant certified the quality of the powder supplied by the Plaintiff.
ii. When the coating powder is applied on the metal and heated at a certain temperature, the quality of the coat cannot be tested immediately. Only after few months of the chemical reaction if the quality of the product is not good, the problem starts surfacing. The coat is supposed to last for many years, however, in the present case the coat started coming out of the metal only after few months. When the problems with metal parts were reported by the Defendant's customers, the Defendant intimated the same to the Plaintiff and advised not to present remaining cheques for encashment.
iii. The customers of the Defendant started complaining about the quality of the coat. Initially the coat was peeling off the cabinets and thereafter, other problems surfaced such as bubbling, discolouring, which were reported by the Shiv Shakti Metal Industries in terms of a rejection letter. These issues were duly communicated to the Plaintiff, but the Plaintiff did not ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 22 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:45 +0530 do anything. One after another customer of the Defendant started refusing the products sent to them and some of them refused to take delivery and claimed compensation. After facing enough trouble, the Defendant stopped applying the powder supplied by the Plaintiff. Huge quantity of unused powder manufactured by the Plaintiff is still laying at the factory of the Defendant. The Defendant asked the Plaintiff to take back the product and compensate him for the damages. Several negotiations took place between the parties and ultimately the Plaintiff refused to take back the material. The Defendant sent a reply dated 04.01.2016 to the demand notice dated 01.12.2015.
8.2.3. Thus, the Defendant has not disputed the delivery, the quantum or the description of the material and set up the defence of the material being defective. It was stated by the Defendant that he has orally as well as in writing reported the issues of quality to the Plaintiff. The DW-1 has reiterated the aforementioned averments of written statement and counter-claim in his examination in chief.
8.2.4. The afore-mentioned defence of the Defendant is required to be examined in terms of Section 41 and 42 of the Sale of Goods Act, 1930, which prescribe about the right of the buyer to inspection, mode of rejection by the buyer and ________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 23 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:50 +0530 deemed acceptance of the goods on part of the buyer. Section 41 and 42 of the Sale of Goods Act, 1930 are being reproduced hereinbelow:
"41. Buyer's right of examining the goods.-
(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
42. Acceptance.-
The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."
8.2.5. The Hon'ble High Court of Delhi has examined and explained the scope of Section 41 and 42 of the Sale of Goods Act, 1932 in, "Lohmann Rausher Gmbh Vs. Medisphere Marketing Pvt. Ltd.: 117 (2005) DLT 95", and the relevant observations of the Hon'ble Court are being ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 24 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:34:55 +0530 reproduced hereinbelow:
"21. As per the mandate of Section 41 of the Sale of Goods Act, the defendant not having inspected the goods in question prior to delivery, had a right to inspect the case on delivery and report defects within a reasonable time of delivery. If not rejected within reasonable time, mandate of Section 42 stipulates that the defendant would be deemed to have accepted the goods.
22. Undisputably, goods under first invoice were received in the month of May, 2000 and under the second invoice in the month of September, 2000. Defendant, on receipt of the goods, did not indicate to the plaintiff that the goods were defective till as late as 31.12.2001. This was when the plaintiff had served upon the defendant a legal notice in the month of October, 2001.
23. Rejection of the goods predicated on a stand that the goods were sub-standard and defective on 31st December, 2001 is not within a reasonable period of time considering the fact that the goods under the first invoice were received in the month of May, 2000 and under the second invoice were received in the month of September, 2000. Rejection indicated on 31st December, 2001 was after one year and seven months of receipt of goods under the first invoice and one year and three months after receipt of goods under the second invoice. Defendant, as per mandate of Section 42 of the Sale of Goods Act is, therefore, deemed to have accepted the goods."
8.2.6. Thus the Hon'ble High Court has held that the rejection not communicated within a reasonable period amounts to deemed acceptance of the goods in terms of Section 42 of ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 25 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:01 +0530 the Sale of Goods Act, 1930. The aforesaid view has further been followed by the Hon'ble High Court of Delhi in "Park Side Limited Vs. Blues Luxury Impex Pvt. Ltd.
(21.10.2013): CS(OS) No. 437/2011:
MANU/DE/3759/2013." The Judgment in Park Side (supra) was challenged in the appeal and affirmed by the Hon'ble Division Bench of High Court of Delhi. In the appeal, the Hon'ble Division Bench has further held that the defects in the goods only entitle the buyer to return the goods within agreed time or reasonable time and further the defence of defects in the goods is no defence, if other particulars such as agreed standards of quality are not pleaded. The relevant observations of the Hon'ble Division Bench of the Hon'ble High Court of Delhi in " M/s. Blues Luxury Impex Pvt. Ltd. Vs. M/s Parkside Ltd. (05.02.2014): RFA(OS) No. 148/2013", are being reproduced hereinbelow:
"9. As per Section 42 of the Sale of Goods Act, 1930 a buyer is deemed to have accepted the goods when he either intimates to the seller that he has accepted them or within a reasonable time of receipt of goods intimates rejection thereof.
10. Now, a reasonable time to inspect a consignment of garments could at best be a month; surely not 14 months.
11. Thus, the appellant has no defence at all in law.
12. Besides, if the goods did not meet the specifications, the same had to be rejected. Concededly, the ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 26 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:06 +0530 appellant has appropriated the goods. It is pleaded in the application seeking leave to defend that the appellant has sold the goods offering heavy discounts.
13. As per the Sale of Goods Act, 1930 a buyer has to reject goods if they do not conform to the standard or the specification. The buyer cannot appropriate the goods and claim entitlement not to pay the price on the plea that the buyer had to sell the goods at a discount. Further, the plea that the good did not meet the minimum quality standard is no plea in the eyes of law unless it is accompanied by a further pleading as to what is the minimum quality standard and how was the same breached. We do not understand what appellant means by pleading that the goods were in the nature of non-
confirming goods. Indeed, learned counsel for the appellant, except for scratching his head and hoping for divine help to assist him in telling us as to what would be meant by labelling goods as non-
confirming goods, can do no better. The plea that the goods were not as per description is neither here nor there unless it is accompanied by pleadings as to what was the description of goods to be and in what manner the same has not been achieved."
(Highlighting added) 8.2.7. The averments made and evidence led by the Defendant is to be examined in view of the law discussed hereinabove. The only written evidence of the transaction are the invoices. The aforesaid invoices are filed by the Plaintiff and were relied upon by the PW-1 as Exhibit PW-1/11 to Exhibit PW-1/72. It is evident from the Exhibit PW1/11 to Exhibit PW1/72 that the Plaintiff supplied the material to the Defendant ________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 27 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:11 +0530 between April 2014 to March, 2015. The aforesaid invoices have not been challenged by the Defendant either in the written statement or in the cross-examination of the PW-1 or in the testimony of the DW-1. Therefore, the same have been proved against the Defendant. The terms and conditions of sale are written on the aforementioned invoices and the condition no. 3 prescribes that 'any shortage, rejection must be intimated within 15 days from the date of receipt of material and late complaints would not be entertained'. The period of credit or the date of payment is mentioned as 30 days.
8.2.8. The Defendant has stated that the Plaintiff agreed about the payment to be made once the quality of the material is certified by him. It is the case of the Defendant that cheques were agreed to be presented, when he would certify the quality of the material. It is also stated that the defects in the material would not be noticed immediately and the same were noticeable after few months. However besides oral averments, there is no evidence of the afore-mentioned contentions and further the aforementioned averments are in contradiction with the Exhibit PW1/11 to Exhibit PW1/72.
8.2.9. The Defendant accepted the material under Invoices, i.e., Exhibit PW1/11 to Exhibit PW1/72, which prescribe that the rejection has to be communicated within a period of 15 days. The Defendant has not objected to the aforesaid condition in ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 28 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:16 +0530 any manner. Further, it is case of the Defendant himself that few cheques were dishonoured and others were encashed. The amount of transaction, between the Plaintiff and the Defendant, as stated in the Invoices, is in excess of Rs.16,00,000/-, which is also supported by the statement of account, i.e., Exhibit PW1/3. The Plaintiff has mentioned the amount received from the Defendant in the statement of account, i.e., Exhibit PW1/3. The Defendant is shown to have made payment of a substantial amount, which has not been disputed or challenged by the Defendant. It is completely inconceivable that the Defendant would have continued to make the payment, had he found such persistent issues of quality. It also leads to an irresistible conclusion that the Defendant has certified the quality of the material, for which he has made the payment. If that be so, then it becomes imperative on the Defendant to explain as to which of the material was defective and which was not. No such segregation has been pointed/made out either in the pleadings or in the evidence and the Defendant appears to have termed the entire material as defective.
8.2.10. The foundational fact of agreed standards of quality has not been effectively established on record. Barring few examples of defects, as stated in the written statement, there is nothing on record to conclude as to the agreed standards of quality. Even the standards of quality of so called Magic Coat Brand have also not been proven on record for drawing a ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 29 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:22 +0530 comparison with the powder supplied by the Plaintiff.
8.2.11. In order to prove the averments of the material being defective, the DW-1 has relied upon Exhibit-DW-1/3, which is a letter of rejection issued by Shiv Shakti Metal Industries. The aforenamed Shiv Shakti Metal Industries is stated to be the Defendant's customer, which has rejected the goods coated with the Plaintiff's powder on account of defects in the same. The aforesaid letter is being reproduced hereinbelow:
"Date: 12/11/2015 To R.V. ENTERPRISES A-4, SECTOR-5, DSIDC BAWANA, DELHI-110039 +91-991094335 Subject: Rejection Letter.
This letter is in the reference to the metal products which we gave you for powder coating. Unfortunately, the coating is below the required standard and the quality of service provided by you is poor. We have been receiving complaints from our customers like adhesion loss failure, pinholes, observed on the coated surface, bubbling and blisters are also observed, peeling surfactant leaching, powder separating into layers of fine and coarse particles, poor corrosion resistance, incorrect paint system, discoloration yellowing and wrinkling of paint. Customers are rejecting products. This is causing loss to our business ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 30 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:27 +0530 and many of commercial customers have rejected and returned the products which has coated by your firm. In view of the above stated you are requested to redo the paint job and give compensation for the loss of business. The relevant particulars are provided below.
Sr. Details Quantity Rate Amount
1 M/s 5000 100 500000
Cabinet
Box
2 50 KVA 500 1000 500000
VPS
Cabinet
3 100 KVA 250 2000 500000
VPS
Cabinet
Yours sincerely,
[sd/- ]"
The Defendant has also examined the DW-2 in order to prove the aforesaid letter. The DW-2 is stated to be the proprietor of M/s Shiv Shakti Metal Industries, who has issued the aforesaid letter. In the cross-examination, he has stated that he has not brought any document to show that he was the proprietor of the aforesaid entity. He has further stated that he has not filed any inward or outward bill in respect of transactions with the Defendant. The DW-2 has denied the other suggestions.
ANIL CHANDHEL ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Digitally signed by ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 31 of 44 CHANDHEL Date: 2024.09.27 16:35:33 +0530 8.2.12. In the opinion of this Court, the testimony of DW-2 and the documents Exhibit DW-1/3 does not effectively prove the factum of the material being defective. The aforesaid letter refers to the complaints by the customers of Shiv Shakti Metal Industries in a generic manner. The Defendant states that M/s. Shiv Shakti Metal Industries made complaint about the quality and M/s. Shiv Shakti Metal Industries states that its customers had made the complaints. The aforesaid contention does prove the complaints in the absence of any effective evidence such as the names, the details of customers, the details of transaction or the documents pertaining to the transaction. Merely stating that unknown and undisclosed customers of M/s Shiv Shakti Metal Industries have raised complaints, about the goods/ or the material being defective, would not on its own be sufficient to conclude that the material was defective. Besides the aforementioned letter, nothing has been brought on record to establish as to whether the aforesaid Shiv Shakti Metal Industries was a customer of the Defendant. No details of transactions, such as purchase orders, terms of purchase, Invoices, proof of delivery etc. has been brought on record. In the absence of further documents or corroboration, the Exhibit DW1/3 alone can be made basis of the conclusion that the material supplied by the Plaintiff was defective. The Defendant has also to prove that the contract between the Plaintiff and the Defendant was subject to contract between him and his customers. No evidence has been produced to ANIL ________________________________________________________________ CHANDHEL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Digitally signed by ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 32 of 44 CHANDHEL Date: 2024.09.27 16:35:37 +0530 establish the same.
8.2.13. The DW-1 has also relied upon another document, i.e., Debit Note dated 04.01.2016, i.e., Exhibit DW-1/4. The aforesaid letter is being reproduced hereinbelow:
"DATED:- 04/01/2016 TO, THE ACCOUNTS DEPT NATIONAL ANGENCIES 2151/8 AC, NEW PATEL NAGAR DEAR SIR I have debited a/c of Rs.1498670/- due to material finishing rejection from our client after using your material during the period 2013- 2014, I personally complaint to you in this regard time to time but no action taken by you, finally I am debited your account.
Please note that I am suffering heavy loss due to your material finishing rejection, rejected by our client.
Hence I have debited parts of such losses against you.
Thanks For R. V. ENTERPRISES."
The aforesaid letter is challenged by the Plaintiff as have never been sent. Though the letter is dated 04.01.2016, however the postal receipt bears the date as 20.02.2016, ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 33 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:42 +0530 which is a date subsequent to the institution of the present suit. No explanation has been furnished as to why the aforesaid letter was posted after a gap of one and half months from the date appearing on the letter. No explanation has been furnished as to why the Defendant waited for three months for intimating the Plaintiff about the rejection, if he has received the letter Exhibit DW1/3 on 12.11.2015. Further even assuming, if the letter Exhibit DW1/4(colly) has been served, the same does not contain any material information, from which the rejection on the basis of defects in the material can be ascertained. The aforesaid letter does not contain the reason of the rejection or anything about the aforesaid rejection, being informed by the Defendant's customers. The aforesaid letter is stated to be issued in a response to the legal notice of the Plaintiff, however the aforesaid letter does not even refer to the legal notice. Last but not the least, no proof of delivery of Exhibit DW- 1/4(colly) has been produced or proved on record and therefore the Defendant has failed to prove that the Defendant has served the Plaintiff with the aforesaid letter.
8.2.14. The edifice of the Defendant's case crumbles completely, if the cross-examination of DW-1 is perused. The Defendant has admitted in the cross-examination that an amount of Rs.7,52,158/- was due and payable by him to the Plaintiff as on 21.11.2015 and the Plaintiff was pursuing him for the ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 34 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:48 +0530 payment. He further admits that he has requested the Plaintiff to wait for payment and has never issued any letter in writing about the quality of the material. The relevant part of the cross-examination dated 02.03.2020 is reproduced hereinbelow:
"It is correct that as on 21.11.2015, an amount of Rs.7,52,158/- was due from my side towards the plaintiff as per the ledger account. It is correct that in this regard, the plaintiff used to communicate with me telephonically as well as through messages/SMS."
"At this stage, printout of certain screenshots of the telephonic messages stated to have been exchanged between the plaintiff and the defendant are shown to the witness. The same are Mark DW-1/P1 (colly 12 pages)."
"It is wrong to suggest that the goods supplied by the plaintiff were of good quality and that I used to take delivery of the goods only after checking the same. I never sent any written complaint to the plaintiff regarding the goods being defective."
The DW-1 has been confronted with the printouts of the Whats-App messages, exchanged between the Plaintiff and the Defendant, i.e., Mark DW1/P1 (colly). The DW-1 does not dispute that the aforesaid messages were not exchanged between the parties. Ld. Counsel for the Defendant has submitted that the aforesaid document is only marked in the cross-examination and therefore the aforesaid messages have not been proved. It has been held by the Hon'ble High Court of Delhi in "Sudhir Engineering Company Vs. Nitco ________________________________________________________________ ANIL CHANDHEL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 35 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:35:53 +0530 Roadway: 1995IIAD(Delhi)189" that the objective of exhibition of a document in the examination in chief is identification of the document for the purpose of trial and is not indicative of or conclusive of its proof. Secondly, the Defendant has not raised any objection with regard to mode of proof of Mark-DW-1/P-1 (colly) at the time, when the DW-1 was confronted with the same. It has been held by the Hon'ble Supreme Court of India in "R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami:
AIR2003SC4548" that objection with regard to the mode of proof, if not taken at the appropriate time, the same stands to be waived by the parties.
8.2.15. The Defendant in the above-mentioned cross-examination has admitted that the Plaintiff and the Defendant used to exchange the messages. The Defendant was confronted with the exchanged messages, i.e., Mark DW-1/P1 (colly), and he does not dispute the same, which amounts to an admission on his part that these were the messages exchanged between the parties. Further in the cross-
examination dated 29.07.2022, the Defendant has admitted that the Plaintiff has requested through various messages for payment and he has asked the Plaintiff to wait. The cross- examination dated 29.07.2022 is reproduced hereinbelow:
"It is correct that I never made any complaint in writing in respect of any defective goods to the plaintiff Naveen Gupta. Vol. I was having very ________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 36 of 44 Digitally signed by ANIL CHANDHEL Date:
2024.09.27 16:35:58 +0530 cordial relations with the plaintiff, that is why I have not lodged any complaint in writing with the plaintiff." (para 1 of page 1) "It is correct that I have sent various messages and Whatsapp messages to the plaintiff Naveen Gupta by requesting him to wait, that I would make the payment later on."(para 2 of page 2) If the Mark-DW-1/P1 (colly) is examined, the same only corroborates the admissions of the Defendant, as made in the above referred cross-examination and therefore, Mark-DW- 1/P1 (colly) has been proved against the Defendant. If the aforesaid communications are examined, the same would reveal that the Plaintiff has constantly been pursuing with the Defendant about the payment and the Defendant has been repeatedly making assurances of the same. The Defendant has not raised any objection about the quality or about the amount even once. The Defendant has constantly been assuring and avoiding the payment. There are about 40 messages, exchanged between the Plaintiff and the Defendant from 01.06.2015 to 30.12.2015, wherein the Defendant can be seen avoiding and seeking time for payment. Even if the aforesaid communications are ignored, the Defendant has admitted in the cross-examination that the Plaintiff has pursued with him for the payment and he has been requesting the Plaintiff to wait for payment.
8.2.16. The above-mentioned discussion proves that the Defendant ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 37 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:36:03 +0530 has accepted the goods without demur and no defect has been intimated to the Plaintiff in the material till the filing of the written statement and the Counter-claim in the present case. The Defendant has used/appropriated the material, which is a step inconsistent with the ownership of the Plaintiff. Even the unused material would not stand rejected automatically unless such rejection is communicated. The aforesaid rejection has to be communicated either within 15 days, in terms of the invoices or within reasonable time. The rejection intimated first time in the written statement and the counter-claim, after 3 years of supply of the material is not a rejection as envisaged by Section 42 of the Sale of Goods Act, 1930. Therefore, in view of the Section 42 of the Act and in view of law discussed in Lohmann Rausher (supra) & in Blues Luxury Impex (supra), the Defendant is deemed to have accepted the goods and is liable to pay for the same.
8.2.17. Ld. Counsel for the Defendant has submitted that the Defendant has stated in the written statement to the counter-
claim that he is ready to take the material back and the same amounts to an admission of the goods being defective. The aforesaid offer, stated in the written statement, is not an unconditional offer to receive the material and has to be read in conjunction with the other averments of the same. Therefore, the aforesaid contentions cannot be termed to be the sole basis of goods being defective when the Defendant ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 38 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date:
2024.09.27 16:36:08 +0530 has otherwise failed to prove the same. The Issue No.2 is accordingly decided against the Defendant and in favour of the Plaintiff.
8.3. Issue No. 3: Whether the Plaintiff is entitled for recovery of an amount of Rs.7,52,158/-
from the Defendant, as prayed for?
OPP.
The case of the Plaintiff is that the Defendant has purchased the material from him on credit basis and issued cheques for payment which were dishonored. It is stated in para 3 of the plaint that there was an outstanding balance of Rs.7,52,158/- in the books of the Plaintiff. The PW-1 has reiterated the contentions of the plaint in the examination in chief. The Plaintiff besides the statement of account, i.e., Exhibit-PW-1/3, has also relied upon the carbon copies of the invoices, i.e., Exhibit PW-1/11 to Exhibit PW-1/17. The aforesaid invoices are for the period of 07.04.2014 to 20.03.2015. The Defendant has not disputed the quantum, delivery or price of the material. The only defence raised in the written statement is the defective quality of the material. The Defendant has failed to prove the aforesaid defence in terms of discussion under Issue No.2. Further, the Defendant in the cross-examination has admitted that an amount of Rs.7,52,158/- was due and payable by him to the Plaintiff. It ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL & CHANDHEL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 39 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:36:13 +0530 is also admitted by the Defendant that the Plaintiff has been pursuing him about the payment and he has been seeking time to make the payment. Therefore, the Plaintiff has proven his entitlement for an amount of Rs.7,52,158/-, on account of preponderance of probabilities. The Issue No.3 is accordingly decided in favour of the Plaintiff and against the Defendant.
8.4. Issue No. 4: Whether the Plaintiff is entitled to pendente lite and future interest, if so, at what rate? OPP.
The Plaintiff has claimed interest @ 15% per annum. The rate of interest mentioned in the invoices, i.e,. Exhibit PW- 1/11 to Exhibit PW-1/72 is 24% per annum. However, the interest @ 24% or 15% per annum is apparently excessive and exorbitant. Therefore, the Plaintiff is entitled to reasonable interest and in view of the rate of interest charged upon lending by the Nationalized Banks, the Plaintiff is awarded interest @ 9% per annum upon the amount of Rs.7,52,158/-, from the date of institution of the suit till realization of the amount. The Issue No.4 is accordingly decided in favour of the Plaintiff and against the Defendant.
9. Conclusion on Issues in the Counter-claim (Civ DJ No.613384/2016) and reasons for such conclusions:
________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 40 of 44 CHANDHEL Digitally signed by ANIL CHANDHEL Date:
2024.09.27 16:36:19 +0530 9.1. Issue No. 1: Whether the counter-claim is maintainable in the present form as neither filed along with the written statement nor mentioned in the written statement ?
The onus to prove this Issue is upon the Counter-Claimant. Ld. Counsel for the Plaintiff has submitted that the counter-claim is not maintainable as the same is not contained in the written statement and has been filed belatedly and therefore is not maintainable. The record reflects that on 18.05.2016, the Civ DJ No. 612105/2016 was adjourned for filing of the written statement for 24.08.2016. The Defendant has filed the written statement on 10.06.2016 and counter-claim on 11.08.2016. Thus, the Defendant has filed the counter-claim before the next date of hearing and the matter has not proceeded from the stage of the pleadings, when the counter-claim was filed. It has been held by the Hon'ble Supreme Court of India in, "Ashok Kumar Kalra Vs. Wing CDR. Surendra Agnihotri (19.11.2019): SLP(C) No. 23599/2018" that the counter-claim can be filed till the stage of framing of issues. Therefore, the counter-claim filed, in terms of a separate plaint, subsequent to filing of the written statement can be entertained. Such a counter-claim is maintainable if the same is filed prior to the stage of framing of the issues and the same has to be decided on its ANIL ________________________________________________________________ CHANDHEL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Digitally signed by ANIL Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 41 of 44 CHANDHEL Date: 2024.09.27 16:36:24 +0530 merits, Accordingly, this Issue is decided in favour of the Defendant/Counter-Claimant and against the Plaintiff/Counter-Respondent.
9.2. Issue No.2: Whether the counter claimant is entitled to recover an amount of Rs.12,46,512/-
from the Counter-respondent, as prayed for?
The onus to prove this Issue is upon the Counter-Claimant The basis of the counter-claim is that the material supplied by the Plaintiff was defective and the aforesaid defects have resulted in losses/damages to the Defendant. In terms of the detailed discussion under Issue No.2 of the Civ DJ No.612105/2016, this Court has concluded that the Defendant has failed to prove that the material supplied by the Plaintiff was defective. Therefore, the Defendant has failed to prove the basis of the counter-claim. Moreover, the Defendant has failed to prove the quantum of the counter-claim. The computation given in the table is inexplicable as the same does not take into account the amount due and payable by the Defendant. Further, the Defendant has not proved the damages, by leading evidence. Besides oral averments, there is nothing on record to conclude that the aforesaid damages have actually arisen. Though the aforesaid discussion about the damages becomes completely academic, once the Defendant has failed to prove the plea of material being ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) ANIL CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 42 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:36:29 +0530 defective. Accordingly, the Issue No.2 is being decided against the Defendant/Counter-Claimant and in favour of the Plaintiff/Counter-Respondent.
9.3. Issue No. 3: Whether the counter claimant is entitled
to recover pendente-lite and future
interest, if so, at what rate ?
Since the Defendant has failed to prove his entitlement to the counter-claim, therefore, the Defendant is not entitled to claim any interest. Accordingly, the Issue No.3 is being decided against the Defendant/Counter-Claimant and in favour of the Plaintiff/Counter-Respondent.
10. Relief:
i. The suit of the Plaintiff, i.e., Civ DJ No. 612105/2016 is decreed against the Defendant for an amount of Rs.7,52,158/- (Rupees Seven Lakhs Fifty Two Thousand One Hundred & Fifty Eight Only) along with pendente-lite and future interest @ 9% per annum from the date of institution of the present suit till realization of the amount. The decree sheet be drawn accordingly.
________________________________________________________________ ANIL Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) CHANDHEL & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 43 of 44 Digitally signed by ANIL CHANDHEL Date: 2024.09.27 16:36:47 +0530 ii. The Counter-claim of the Defendant/Counter-Claimant, i.e. , Civ DJ No. 613384/2016 is dismissed with costs. The Decree sheet be drawn accordingly.Digitally signed by ANIL CHANDHEL
ANIL Date: CHANDHEL 2024.09.27 16:37:06 +0530 Announced in the open Court (ANIL CHANDHEL) today on 27th of September, 2024 DISTRICT JUDGE-04 WEST DISTRICT THC/DELHI/27.09.2024 ________________________________________________________________ Naveen Gupta Vs. Vijay Kumar Jha (CIV DJ NO. 612105/2016) & Vijay Kumar Jha Vs. Naveen Gupta (CIV DJ No.613384/2016) Page No. 44 of 44