Delhi District Court
M/S Dcm Shriram Industries Ltd vs M/S Wonder Wears Pvt. Ltd on 6 April, 2010
IN THE COURT OF MS. SEEMA MAINI :
ADDITIONAL DISTRICT JUDGE : DELHI
Civil Suit No. 18/2009
Unique Case ID No: 02401C5155452004
In the matter of:
Civil Suit No. : 18/2009
Date of filing of the petition : 08011998
Date of reservation for judgment : 06042010
Date of award : 06042010
In the matter of:
M/S DCM SHRIRAM INDUSTRIES LTD.,
A Company Incorporated under the
Companies Act, 1956
having its Registered Office at
Kanchanjunga
18 Barakhamba Road
New Delhi
and also having its Unit
M/s Hindon River Mills
at Village and Post Dasna
Tehsil & District Ghaziabad
Through its Constituted Attorney
Shri D.C. Mittal ............... Plaintiff
Versus
1. M/S WONDER WEARS PVT. LTD.,
having its office at
418 1st Cross
9th Main Hall
CS18/09 Page 1/14
2nd Stage,
Indira Nagar
Bangalore
Bangalore560002
2. MR. S. PALANIAPPAN
Managing Director
M/s Wonder Wears Pvt. Ltd.
48 Post Office Road,
Domlur,
Bangalore.
3. MS. VISHALAKSHMI PALANIAPPAN,
Director
M/s Wonder Wears Pvt. Ltd.
48 Post Office Road,
Domlur,
Bangalore.
4. M/S LAXMI CHAND V. SHAH & CO.
B11, Dewan Surappa Lane
Chickpet
Bangalore560053
through its Partner
Sh. Bharat Bhai V. Kapasi .............Defendants
SUIT FOR RECOVERY OF RS. 9,04,797/
APPEARANCE:
Sh. Prakash Baghel, Counsel for Plaintiff.
Defendant No. 1 to 4 are proceeded Exparte.
CS18/09 Page 2/14
J U D G M E N T :
1. The present suit has been filed by the plaintiff M/s DCM Shriram Industries Ltd. against the defendant M/s Wonder Wears Pvt. Ltd. etc. (four defendants) for recovery of Rs. 9,04,797/ alongwith interest @ 18% p.a.
2. The facts in brief, as stated in the plaint are that the plaintiff M/s DCM Shriram Industries Ltd. is a Company incorporated under the Companies Act, 1956, having its registered office at "Kanchanjunga", Barakhamba Road, New Delhi and also having a unit under the name and style of M/s Hindon River Mills, at Village and Post Dasna, Tehsil & District Ghaziabad. The suit has been filed through Sh. D.C. Mittal, the Deputy General Manager, being the duly Constituted Attorney of the Plaintiff Company vide Power of Attorney dated 90691, after the relevant resolution of the Board dated 210590 was passed. It was stated that the Plaintiff Company was dealing with the manufacturing, marketing and distributing of the Yarn and fabrics etc. to various dealers throughout the country.
3. Defendant No. 1 M/s Wonder Wears Pvt. Ltd. is a Private Limited Company with defendant No. 2 Shri S. Palaniappan and defendant No. 3 Ms. Vishalakshmi Palaniappan, being the Managing Director and Director of the Company respectively, are involved and responsible for carrying on the business of the Defendant Company. Defendant No. 4 M/s Laxmi Chand V. Shah & Co. is the agent of the plaintiff and Sh. Bharat Bhai V. Kapasi was its Partner, being CS18/09 Page 3/14 responsible for confirmation of the receipt of the goods and also for securing of the payment for the goods.
4. Defendant Company used to purchase fabrics from the Plaintiff Company from time to time by placing the purchase orders and being regular customers, the plaintiff had given a party code namely G203 to the Defendant Company and this code had been endorsed on all the purchase orders/agreements entered into between the parties. The plaintiff company has been regularly maintaining the books of accounts with respect to the Defendant Company at its unit at M/s Hindon River Mills, Ghaziabad in the regular and ordinary course of business. The Defendant Company, for all its purchases, made from the plaintiff, used to remit the money directly by draft or cheque from time to time.
5. In the middle of 1996, the Defendant Company through the local agent of the Plaintiff, M/s Laxmi Chand V. Shah & Co., Bangalore, i.e Defendant no. 4 placed an order for purchase of Grey fabric (of quality H.R. 1079) from the Plaintiff vide Purchase Orders No. 863 and 868 dated Nil and 240696 respectively, which were accepted by the Marketing Office of the Plaintiff at New Delhi.
6. Pursuant to Agreements No. 30/263 and 30/524 dated 180596 and 250696 respectively, entered into between Plaintiff and Defendant Company, the Plaintiff was required to supply fabrics of quality H.R. 1079 to the Defendant CS18/09 Page 4/14 Company at the rate of Rs. 42/ per meter and the Defendant Company was to make the necessary payment of the goods to Plaintiff immediately on the receipt of the same.
7. As per the requirement of the Defendant Company, the Plaintiff duly despatched the requisite quantity/bales of fabrics from Ghaziabad as well as from its Godown at Mori Gate, Delhi, to the Dfendant Company at Bangalore and raised the invoices against which an amount of Rs. 7,20,954/ was outstanding and payable by the Defendant Company to the Plaintiff as per the details given in the plaint.
8. The said goods were partly despatched from Ghaziabad as well as from the Godown of the Plaintiff at Delhi through the Transporters namely; M/s Green Carrier & Contractors Ltd. The relevant details of the Lorry receipts have been given in the plaint.
9. The invoices and Lorry receipts were sent to M/s Laxmi Chand Vs. Shah and Co., the agent at Bangalore for its collection by the Defendant Company.
10. The Defendant Company subsequently collected the said invoices and Lorry receipts from the Defendant No. 4/Agent on 80696 and 60796 and thereafter, took complete delivery of all the goods from the Transporters namely M/s Green Carrier and Contractors Ltd.
CS18/09 Page 5/14
11. However, the Defendant Company despite the receipt of all the goods th on or around 6 July, 1996 from the Transporters failed and neglected to make the due payment to the Plaintiff. The officials of the plaintiff approached the Defendant Company a number of times for securing the payment of the outstanding sum and also sent letters dated 51296, 140197 and 300597 through registered post demanding the payment of the outstanding amount of Rs. 7,20,954/ with interest but no response was received. The Plaintiff thereafter, issued a legal demand notice dated 61197 to the Defendant Company as well as to the Directors, requesting them to make the requisite payment alongwith interest w.e.f. 60796 but yet again, no response was received.
12. It was, therefore, stated that the defendant company and its M.D. and Director were legally bound and liable to pay the outstanding amount of Rs. 7,20,954/ along with interest @ 18% p.a. on the said amount from the date of institution of the suit.
13. Thus, it was stated that the cause of action arose in favour of the plaintiff and against the defendant on 180596 and 250696 when the two purchase orders were placed by the defendant company and were accepted by the plaintiff and thereafter, on 80697 and 60797 when the delivery of the consignment was taken by the defendant company. It also arose on 51296, 140197, 300597 and 61197 when the demand notice was sent to the defendant and the defendant failed to make the payment of the goods. CS18/09 Page 6/14
14. It was stated that the suit had been valued at Rs. 9,04,797/ on which the requisite court fee had been affixed. This court has the jurisdiction to dry the suit and it was, therefore, prayed that a decree of Rs. 9,04,797/ be passed in favour of the plaintiff and against all the defendants jointly and severally along with an interest @ 18% from the date of institution of the suit till the date of realization. It was also prayed that the cost of the suit be also awarded.
15. Summons were duly issued to defendant No. 1 to 3 at all the addresses including the Madurai address which was received back with a report in a vernacular language, as mentioned in the proceedings dated 250500, conducted by the Joint Registrar of the Hon'ble High Court (as initially the plaint was filed before the Hon'ble High Court but thereafter, due to increase of the pecuniary jurisdiction of the District Courts, the matter was transferred to the District Courts). However, since as per the forwarding report, the notices had been affixed and therefore, while the notice sent by registered post to defendant No. 1 at the Madurai address, were received back unserved, the summons for settlement of issues were ordered to be served by way of publication in the newspaper "Hindu" from Madurai and "Indian Express", published from "Bangalore", as well as by affixation at their last known address and on the notice board of the court. The defendant No. 1 to 3 were served in the edition of "Hindu" dated 310807 and in the edition of the "Indian Express", published from Bangalore dated 310800 while they were served by way of affixation on the notice board, as observed in the order dated 21101. After the matter was transferred to the District Courts, the predecessor of this court ordered CS18/09 Page 7/14 defendant No. 1 to 3 to be served by way of publication once again in the newspaper "Indian Express" and they were so served for 60105. However, despite service, none appeared on behalf of defendant No. 1 to 3 either on 60105 or for any of the subsequent dates thereafter and they were proceeded exparte by the predecessor of this court, vide order dated 270406.
16. Defendant No. 4 was duly served with the summons and it entered an appearance and filed its WS wherein the preliminary objections were taken that the plaintiff had concealed the material facts from the court and had not approached the court with clean hands. It was also stated that the suit was not maintainable against the defendant No. 4 as it was neither personally indebted nor liable to make any payment to the plaintiff. However, It was admitted that defendant No. 4 was an agent of the plaintiff and being an agent, was responsible for confirmation of the receipt of the goods and securing orders and was entitled to receive only the contractual commission towards the orders secured. It was stated that defendant No. 4 was not in any way responsible for collecting the payments from the purchaser of the goods or the guarantor for the purchaser.
17. On merits, defendant No. 4 again admitted that it was the agent of the plaintiff and had handed over the orders to the purchasers as per the details given in the plaint but denied that it was responsible for collecting any payment towards the goods supplied and further making the said payment to the plaintiff. It was further stated that no cause of action ever arose in favour of the plaintiff CS18/09 Page 8/14 and against the defendant No. 4. It was prayed that there being no cause of action or liability of defendant No. 4 to make any payment to the plaintiff. The suit qua defendant No. 4 be dismissed.
18. It may be mentioned that after the matter was transferred by the Hon'ble High Court to the District Court due to increase of the pecuniary jurisdiction of the District Court, a court notice was issued by the predecessor of this court to defendant No. 4 but since he could not be served, an application u/o 5 rule 20 CPC was moved on behalf of plaintiff and defendant No. 4 was served once again by way of publication in the newspaper "New Indian Express"
dated 291106. However, since none appeared on behalf of defendant No. 4 on 26022007, defendant No. 4 was also proceeded exparte.
19. Replication was filed by the plaintiff to the WS filed on behalf of defendant No. 4 wherein the averments made in the plaint were reiterated while the assertions made by defendant No. 4 in the WS were denied. However, subsequently on 30909, Sh. Prakash Baghel, Ld. counsel for the plaintiff firm, made a statement in the court that he had an instruction from the plaintiff firm to make a statement in the court to the effect that no relief was pressed, by plaintiff against the defendant No. 4 i.e. M/s Laxmi Chand V. Shah & Co.
20. In support of its case, the plaintiff adduced exparte evidence examining Sh. Y.D. Gupta, authorized representative of M/s DCM Shriram Industries Ltd. as PW1 on affidavit which he proved as Ex. PW1/1. He deposed CS18/09 Page 9/14 that he was the Deputy General Manager with the plaintiff company and had been duly authorized representative and the constitute attorney of the plaintiff company vide the power of attorney dated 150605, given vide the board resolution dated 290405. He testified on oath the averments made in the plaint. He brought on record the attested copy of the power of attorney dated 150605 as Ex. PW1/A, the original purchase order dated 180596 as Ex. PW1/B and the copy of the purchase order is Mark 'A'. The relevant details of the purchase orders are Ex. PW1/C. He deposed that all the goods which had been ordered by the defendant No. 1 were duly dispatched against the invoices, copies of which are colly. Mark 'B'. Copies of the lorry receipts vide which the goods were dispatched through the transporter M/s Green Carrier & Contractors Ltd. are Mark 'C' colly. and it was stated that the original invoices and the lorry receipts were sent to the defendant No. 4 for their collection by the defendant No. 1. The original Peon Book reflecting the dispatch/delivery of the goods through the transporter M/s Green Carrier & Contractors Ltd. from the godown of the plaintiff company to defendant No. 1is ex. PW1/D. The office copy of the letter dated 40796 is Ex. PW 1/E. It was deposed that the defendant No. 1 collected the invoices and the lorry receipts from defendant No. 4 on 80696 and 70796 and thereafter, took the complete delivery of all the goods but did not make the payment in lieu of the goods despite repeated demand letters and notices. The office copy of the letters dated 51296, 140197 and 29/300597 are Ex. PW1/F, Ex. PW1/G and Ex. PW1/H respectively. The attested copy of the ledger/statement of account for the period from 10495 to 310397 is Ex. PW1/I while the office copy of the legal notice CS18/09 Page 10/14 dated 61197 is Ex. PW1/J. It was prayed that the suit be decreed against the respondent and in favour of the plaintiff for a sum of Rs. 9,04,797/ along with interest @ 18% p.a. along with cost of the suit.
21. I have heard Sh. Prakash Baghel, counsel for the plaintiff, perused the record, scrutinized the evidence adduced by the plaintiff and have also gone through the relevant case law.
22. The instant case has been filed by the plaintiff for recovery of Rs. 9,04,797/ against the defendant No. 1 M/s Wonder Wears Pvt. Ltd. through its Managing Director and Director i.e. defendant No. 2 and defendant No. 3 respectively. Though, defendant No. 4 had been arrayed as a defendant, but vide statement of the Ld. counsel for defendant, made in the court on 30909, no relief has been pressed against the defendant No. 4, since defendant No. 4 was merely the transporter/agent of the plaintiff firm, who was to handover the consignment along with the invoices and lorry receipts to the defendant No. 1. It is the unrebutted and uncontroverted testimony of PW1 that defendant No. 1 was a regular customer of the plaintiff company and that purchase orders were received in the natural course of business and against the purchase orders, the invoices were prepared and the goods that were demanded were dispatched through the defendant No. 4. The purchase order dated 180596 Ex. PW1/B clearly shows that the purchase order was placed by defendant No. 1 to M/s Hindon River Mills, a unit of the plaintiff firm. The standard contract entered into CS18/09 Page 11/14 between the defendant No. 1 and M/s Hindon River Mills is Ex. PW1/C. The Peon Book Ex. PW1/D clearly shows the dispatch of the consignment on 60796 vide the invoices which have been detailed in the plaint as well as through the letter dated 40796 to defendant No. 4, which is Ex. PW1/E, also giving the total amount due from the defendant No. 1. The letter dated 51296, 140197 and 300597, giving the details of the payment due to the plaintiff against the dispatched goods while the legal demand notice Ex. PW1/J dated 61197 clearly raises the demand of Rs. 7,20,954/ which was the outstanding amount payable by defendant No. 1 to M/s Hindon River Mills, a unit of M/s DCM Shriram Industries Ltd. The details of the 9 invoices number vide cheques were dispatched and the lorry receipts through which the consignment was sent and was collected by the defendant No. 1 is detailed. It was the unrebutted testimony of PW1 that despite the service of the legal demand notice, the amount has not been paid. The copies of the individual invoices which is colly. Mark 'B', clearly given the details of the consigned goods sent to defendant No. 1 through M/s Hindon River Mills which is a unit of the plaintiff company M/s DCM Shriram Industries Ltd., the originals obviously being in the possession of the defendant. The power of attorney Ex. PW1/A executed by the Board of Directors of the plaintiff firm in favour of PW1 Sh. Y.D. Gupta, clearly authorizes him to appear on behalf of the plaintiff in the instant case and deposed in respect of the claim.
CS18/09 Page 12/14
23. In view of the uncontroverted testimony of PW1, the claim of the plaintiff is established against the defendant No. 1 M/s Wonder Wears Pvt. Ltd. It is the uncontroverted testimony of PW1 that the defendant No. 2 is the Managing Director of the plaintiff firm while defendant No. 3 is the Director who was incharge of the business of the defendant company in the ordinary course of business.
24. Accordingly, suit of the plaintiff is decreed for a sum of Rs. 7,20,954/ in favour of the plaintiff and against the defendant No. 1 M/s Wonder Wears Pvt. Ltd. which is a legal entity. Since defendant No. 2 and 3, being the Managing Director and Director of the defendant No. 1 and did not have any individual liability to pay the outstanding dues of the company, the decree is not passed against them.
25. The plaintiff has sought interest on the decretal amount @ 18% per annum but has not led any evidence or brought forth any contract which stipulates that the interest, if any, would be payable @ 18% per annum since the transaction between the plaintiff company and the defendant no. 1 was a commercial transaction, the prevalent rate of interest in such commercial transactions, is awarded.
26. Accordingly, the suit of the plaintiff is decreed in favour of the plaintiff and against the defendant No. 1 for a sum of Rs. 7,20,954/ along with interest @ 12% per annum from the date of institution of the suit till the date of CS18/09 Page 13/14 realization of the amount. No order as to costs. A decree sheet be prepared accordingly. File be consigned to the Record Room.
ANNOUNCED IN THE OPEN COURT on 6th of April, 2010 (SEEMA MAINI) Additional District Judge:Delhi CS18/09 Page 14/14 CS18/09 060410 Present: Sh. Prakash Baghel, counsel for petitioner.
Defendant No. 1 to 4 are already exparte.
Vide my separate judgment announced today, the suit is decreed. A decree sheet be prepared accordingly. File be consigned to the Record Room.
(Seema Maini) Add. Distt. Judge/Delhi CS18/09 Page 15/14