Calcutta High Court
Surya Alloy Industries vs Jay Prestressed Products Limited on 7 March, 2018
Equivalent citations: AIRONLINE 2018 CAL 223
Author: Sahidullah Munshi
Bench: Sahidullah Munshi
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
C.S. No.16 of 2017
SURYA ALLOY INDUSTRIES
... Plaintiff
-Versus-
JAY PRESTRESSED PRODUCTS LIMITED
... Defendant
BEFORE:
THE HON'BLE JUSTICE SAHIDULLAH MUNSHI
March 7, 2018.
Mr. Raja Basu Chowdhury,
Mr. Tanoy Chakraborty,
Mr. Abhishek Singh
... for the plaintiff
The Court : This is a suit filed by plaintiff company, Surya Alloy
Industries Limited, praying for a decree against the defendant for a
sum of Rs.84,98,224/- together with pendentelite interest and interest
on judgment @ 18% per annum and also for other consequential
reliefs. Plaintiff has claimed above-mentioned decree for goods sold
and delivered by it to the defendant. In a nutshell, the plaint case is as
follows :-
a) Since inception of the plaintiff company it has been
carrying on business of manufacturing diverse railway
stores items including SGCI Inserts and metal liners of
various specifications.
b) The defendant is engaged in a business of
manufacturing of mono block concrete sleepers and
represented it to be a Part-I approved vendor by
Research Design and Standard Organization (RDSO)
for manufacturing and supply of the aforesaid sleepers
to Indian Railways.
c) Defendant approached the plaintiff at its registered
office at Kolkata within the jurisdiction of this Court for
supply of diverse quantities of SGCI Inserts, a material
used for manufacturing of railway track items. The
defendant represented that it had entered into an
agreement dated 6th December, 2013 with the
Engineer/TPS, Northern Railway for manufacturing
and supply of pre-stressed mono block concrete sleeper
(pre-tension type) for broad gauge (1673 mm.) to Drg
No.T-2496 to suit 60 kg. UIC rail as per RDSO design
and IRS specification No.T-39-85 (Third Revision May,
1996) (hereinafter referred to as the stores).
d) Pursuant to a negotiation that followed, at the office of
the plaintiff, it agreed to supply and the defendant
agreed to accept, SGCI Inserts of agreed size and
specifications. It was further agreed that the supply
would be effected on the basis of specific orders to be
placed by the defendant upon the same being pre-
inspected by RITES and that payment, therefore, would
be released by the defendant as per invoice raised by
the plaintiff immediately after 30 days from the date of
dispatch of materials.
e) Defendant placed three separate purchase orders dated
9th November, 2015, 8th February, 2016 and 17th June,
2016 on the plaintiff for supply of 30,000, 60,000 and
1,00,000 pieces respectively of SGCI Inserts to the said
defendant at the rates and on the terms as per
purchase orders. The said purchase orders were placed
at the registered office of the plaintiff at 1/1, Camac
Street, 3rd Floor, Kolkata - 700016.
f) In order to execute the purchase orders from time to
time the plaintiff invited RITES Limited by issuing call
letters for inspection of SGCI Inserts once they are
ready for supply to the defendant.
g) RITES duly inspected the said goods and on passing
the same issued inspection certificate in respect of
such goods.
h) In terms of the purchase order and upon having pre-
inspected by RITES Limited the plaintiff supplied
1,23,710 pieces of SGCI Inserts under eight several
invoices to the defendant which the defendant received,
acknowledged and accepted without any dispute or
demur on any count.
i) Against the total supply of Rs.1,08,10,686/- the
defendant, from time to time, made part-payment to
the tune of Rs.34,00,000/- to the plaintiff on account
of the aforesaid supply. All such payments were made
through RTGS/NEFT at the plaintiff's Banker, State
Bank of India.
j) Instead of making payment of the entire value of the
supplies the defendant kept silent over the matter and
inasmuch as the same in excess of Rs.74,10,686/- had
fallen due, the plaintiff issued reminders requesting it
to clear the balance sum of Rs.74,10,686/- by its
letters dated 19th October, 2016 and 2nd December,
2016. It neglected to act on such reminders.
k) Therefore, the plaintiff is entitled to a total sum of
Rs.84,98,224/-, that is, a sum of Rs.74,10,686/- being
the amount outstanding on account of price of goods
sold and delivered and Rs.10,87,538/- being interest
thereon calculated till 31.01.2017.
l) The dealings and transactions being commercial in
nature, the plaintiff has also demanded interest @18%
per annum and, according to the plaintiff, it is entitled
to such interest under Section 34 of the Code of Civil
Procedure, 1908.
m) Agreement for sale of SGCI Inserts was concluded by
and between the plaintiff and the defendant at the
registered office of the plaintiff at 1/1, Camac Street,
3rd Floor, Kolkata - 700016.
n) Although, goods were supplied by it to the defendant
outside the aforesaid jurisdiction, the defendant as
debtor became obliged to sue their creditor, that is, the
plaintiff at their registered office at 1/1, Camac Street,
3rd Floor, Kolkata - 700016, which falls within the
jurisdiction of this Court. However, the orders for
supply were made and received by the plaintiff at its
said office within the jurisdiction of this Hon'ble Court.
o) It is also evident that part-payments were made and/or
routed through the plaintiff's banker within the
jurisdiction of this Hon'ble Court. Accordingly, the
plaintiff, in its plaint, has stated that part of the cause
of action in the suit arose within the jurisdiction of this
Court, however, part thereof arose outside the
aforesaid jurisdiction.
p) While presenting the plaint this Court granted leave to
the plaintiff under Clause 12 of the Letters Patent.
Before going to the real dispute in question I have checked
whether the suit is maintainable or not. Material disclosed in the
plaint shows that the suit is well maintainable in law as the plaintiff's
claim for the dues against the defendant has not yet been barred.
Cause of action for the suit arose partly within and partly outside the
jurisdiction and having regard to the leave granted under Clause 12 of
the Letters Patent, this Court is vested with the jurisdiction to try the
instant suit.
In this suit, despite service of writ of summons in due course,
no one appeared for the defendant to contest the suit. Considering the
report of the Deputy Registrar (Court) and (Judicial) dated 16th June,
2017, the matter was placed under the 'undefended' category and it
was heard as an 'undefended suit'.
In order to prove his case the plaintiff has produced various
documents those were marked as Exhibits. Such documents are as
follows :-
Ext. A (collectively) - photocopies of letters addressed to Mr.
Gautam Chatterjee for M/s. Surya Alloy Industries Ltd. being
purchase orders dated 09.11.2015, 08.02.2016 and 17.06.2016
respectively.
Ext. B (collectively) - letters dated 09.11.2015 addressed to M/s.
RITES Ltd. being Inspection Charges against Jay Prestressed Products
Ltd. and Inspection Call letter respectively. An original Money Receipt
being No.39281 dated 12.11.2015.
Ext. C - An Inspection Certificate being Book No.3641 by RITES
Ltd. dated 30.11.2015.
Ext. D (collectively) - letters dated 18.03.2016 addressed to M/s.
RITES Ltd. being Inspection Charges against Jay Prestressed Products
Ltd. and Inspection Call letter respectively. An original Money Receipt
being No.41108 dated 18.03.2016. An Inspection Certificate being
Book No.3727 by RITES Ltd. dated 09.04.2016.
Ext. E (collectively) - letter dated 29.03.2016 addressed to the
General Manager/Insp., RITES Ltd. being an Inspection Call letter. An
original Money Receipt being No.41196 dated 29.03.2016. An
Inspection Certificate being Book No.3721 by RITES Ltd. dated
15.04.2016. Letters dated 12.08.2016 being Inspection Charges against M/s. Jay Prestressed Products Ltd. and an Inspection Call letter respectively. An original Money Receipt No.43024 dated 12.08.2016. An Inspection Certificate being Book No.3795 by RITES Ltd. dated 25.08.2016.
Ext. F (collectively) - Several Tax Invoices and consignment challans of Radha Krishna Roadways.
Ext. G (collectively) - Two letters written by Mr. Subhas Chandra Jana, Advocate for Surya Alloy Industries Limited dated 19th October, 2016 and 2nd December, 2016 regarding Non-payment of his client's dues with Postal Receipts.
In support of the plaint case plaintiff has examined one Arun Agarwal, who is Associated with the plaintiff, Surya Alloy Industries Limited, since August, 2015 as its Senior Executive and he knew the defendant. In the box the plaintiff has proved the original purchase orders dated 9th November, 2015, 8th February, 2016 and 17th June, 2016 being Exhibit 'A' (collectively). Witness has also identified and proved three several documents dated 9th November, 2015, 12th November, 2015 and 30th November, 2015. The first being a letter addressed to RITES limited mentioning the purchase order details and calculation of inspection charges; the second letter being the inspection call letter giving complete purchase order details; the third being the money receipt issued by RITES limited. The documents have been marked Exhibit 'B' (collectively). The witness also identified the inspection certificate issued by the RITES which certificate has been issued by RITES after inspection of goods and the Engineer being fully satisfied about the quality of the same. He identified the signature appearing on the said document which is marked Exhibit 'C'. The witness further identified several other documents being letter dated 18th March, 2016, a money receipt dated 18th March, 2016, a document dated 9th April, 2016 and a copy of letter dated 29th March, 2016. The first letter dated 18th March, 2016 was addressed to RITES limited giving details of purchase order and calculation of inspection fees; second letter written to RITES limited mentioning details of purchase order; the third one is the money receipt on account of inspection charges paid; and the fourth one is the inspection certificate issued by RITES after verification of quality of the goods. The witness deposed that the original of the first two letters are with the RITES whereas the money receipt and inspection certificate shown to him are in original. The said documents have been marked Exhibit 'D' (collectively). The witness was shown several other documents being letter dated 29th March, 2016 which are inspection call letter addressed to RITES mentioning the details of purchase order. Another document shown to the witness was a money receipt dated 29th March, 2016; next document being an inspection certificate dated 15th April, 2016 issued by RITES after being satisfied about its quality; letter dated 12th August, 2016 addressed to RITES giving details of purchase order and calculation of inspection charges; a letter being inspection call letter dated 12th August, 2016 addressed to RITES mentioning therein details of purchase order; the other document being original money receipt dated 12th August, 2016 and the last one is the inspection certificate dated 25th August, 2016 issued by the RITES, the originals whereof are lying with RITES. The witness identified the signature appearing on these documents those were marked Exhibit 'E' (collectively).
In question no.27, the witness deposed that the goods were dispatched at the factory of the defendant. In question no.28, when the witness was shown 15 documents, he identified those to be tax invoices issued after the goods were loaded into the trucks and that the goods were accompanied by consignment note issued by the transport company 'Radhakrishna Roadways'. The witness also deposed that consignment note shows that the materials were delivered at the defendant's factory. The consignment note bears the seal and signature of the consignee. However, at no point of time was there any objection or dispute raised by the defendant. The witness confirmed in the box that plaintiff was required to supply under four several purchase orders, 1,90,000 number of SGCI Inserts and out of which record shows that 1,23,000 numbers were supplied by the plaintiff to the defendant and identifying the documents marked Exhibit 'F' the plaintiff asserts that the plaintiff supplied 1,23,710 number of Inserts to the defendant. The witness deposed that because the defendant was unable to pay the agreed amount, the plaintiff discontinued to supply further materials of SGCI Inserts. However, according to the witness, part-payment has been made to the extent of Rs.34,00,000/- and for the balance amount the plaintiff issued demand notices on 19th October, 2016 and 2nd December, 2016 written by the plaintiff's Advocate, Mr. Subho Chand Jana. Letters were sent on the instruction of the plaintiff demanding dues on their behalf from the defendant. The letters were sent under registered cover with acknowledgment due but the defendant never responded to the said letter. On perusal of the demand letter and the postal receipts being Exhibit 'G' (collectively), it is seen that the letters were sent under registered cover and even after expiry of 30 days, the acknowledgement due cards were not received back. On a scrutiny of the postal receipts it further appears that the postal envelopes were properly addressed, prepaid and duly sent by registered post with acknowledgment due. In such circumstances, drawing analogy to the provisions of proviso to sub-Rule (5) of Rule 9 of Order V, Court can presume that the letters of demand were received by the defendant but they did not respond to the same in order to avoid payment of the dues to the plaintiff. In such circumstances, the documentary proof made available before this Court together with the unchallenged oral testimony of the plaintiff establishes that the plaintiff is entitled to the claim as made out in the plaint, that is, the claim for a sum of Rs.74,10,686/- (Rupees Seventy Four Lakh Ten Thousand Six Hundred Eighty Six) only, being the principal amount outstanding on account of price of goods sold and delivered to the defendant by the plaintiff. The plaintiff has, however, claimed that there was an understanding between the plaintiff and the defendant that in case of any default, the defendant would be liable to pay interest on any sum due and payable by it, would be charged @ 18% per annum. However, in absence of any agreement or proof that the defendant is liable to pay interest @ 18% per annum, this Court holds that the defendant, in any case, should make payment of some interest on the admitted dues and in this case, in exercise of discretion, this Court holds that plaintiff is entitled to interest @ 9% per annum from 31.01.2017 as mentioned in paragraph 16 of the plaint. Therefore, the interest would be Rs.7,24,393/- (Rupees Seven Lakh Twenty Four Thousand Three Hundred Ninety Three) only, till the date of disposal of this suit. The defendant is directed to make payment of the entire sum together with interest as indicated above, within a period of three months from the date of communication of the decree failing which the defendant shall be liable to pay further interest @ 9% per annum on the entire decretal amount till realization thereof.
Suit is decreed for a sum as indicated above.
Department is directed to draw up and complete the decree as expeditiously as possible.
Urgent Photostat certified copy of this judgment, if applied for, be delivered to the learned counsel for the parties, upon compliance of all usual formalities.
(Sahidullah Munshi, J.)