Delhi District Court
M/S Ata Freight Line India (I) Pvt. Ltd vs Dzire Freight Solution Pvt Ltd And Ors on 9 August, 2023
IN THE COURT OF SH. RAKESH SYAL,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
SOUTH-WEST DISTRICT, DWARKA COURTS,
NEW DELHI.
CS (COMM) 166/2022
M/s ATA Freight Line India (I) Pvt. Ltd.
Through Managing Director / Secretary / Authorized
Representative,
Having its office at:
Ground Floor, A-294,
Road No. 6, Mahipalpur, Delhi.
Registered Office at:
704, B Wing, 7th Floor, Times Square,
Andherikurla Road, Marol, Andheri East,
Mumbai - 400059.
... Plaintiff
vs.
1. M/s Dzire Freight Solution Pvt. Ltd.
Through Managing Director / Secretary / Authorized
Representative,
Having its Registered Office at:
Plot 7, 8 F/F, 15/23, E - Block,
Qutub Vihar, Phase 1,
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 1/15
New Delhi-110071.
2. Mr. Gyanesh Thakur Kumar
Director,
Dzire Freight Solution Private Limited.
3. Ms. Laxmi Kumari
Director,
Dzire Freight Solution Private Limited.
All at
Plot 7, 8 F/F, 15/23, E - Block,
Qutub Vihar, Phase 1,
New Delhi-110071.
Also At:
Plot No. 7-8, Kh. No. 15/26,
E - Block, Phase-I,
Qutub Vihar, Goyla Dairy,
New Delhi-110071.
... Defendants
Date of Institution : 13.04.2022
Date of final arguments : 26.07.2023
Date of decision : 09.08.2023
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 2/15
JUDGMENT
1.1 The plaintiff has filed the present suit, through its authorized representative Sh. Amitosh Kumar, against the defendants for recovery of Rs. 40,73,441/- (Rupees forty lac seventy three thousand four hundred forty one only), alongwith pendente-lite and future interest @ 18.00%, per annum, till realization, and costs of the suit.
2.1 The plaintiff's case is that the plaintiff company is engaged in providing logistics and freight services for inward and outward cargo, through a global network of agents and through its own offices worldwide. Defendant nos. 2 and 3 are the directors of defendant no. 1 and are responsible for its day to day operation. Defendant no. 1 is running like a quasi partnership and the amount due and payable to the plaintiff has been siphoned off for gain by defendant nos. 2 and 3. Thus, piercing of corporate veil is required. Defendant nos. 2 and 3 are personally liable and are necessary parties to the suit. It is stated that in the year, 2019, defendant no. 1 approached the plaintiff for availing its services for shipment of their products to different destinations. Defendant no. 1 represented itself as a reputed company and assured that it would continually use the services of the plaintiff and provide regular business. Defendant no. 1 further represented that it would continually make on account payments, the parties would maintain a continuous, open, running and mutual account and the parties can mutually settle accounts from time to time CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 3/15 and the business would run on credit basis. The parties agreed that the debit notes, payments due/received, interest paid/payable shall be adjusted in the reconciliation of accounts.
2.2 It is further stated that on 02.07.2019, defendant no. 1 and the plaintiff executed a KYC Form and a Credit Request Form, in which the maximum allowable credit facility given by the plaintiff company to defendant no. 1 was Rs 5,00,000/- (Rupees five lac only). The credit was to be cleared in maximum 30 days and after which interest @ 18.00% was to be charged. Since the credit period was agreed in the credit request form, the credit period mentioned as a standard clause in the invoice was not to apply in addition. Since, 29.08.2019, the business dealings between defendant no. 1 and the plaintiff commenced and the plaintiff regularly raised invoices upon defendant no. 1. Defendant no. 1 availed the credit, as agreed.
2.3 It is also stated that the plaintiff has provided timely services, as required by defendant no. 1, which the latter has accepted without demur. The invoices raised by the plaintiff upon defendant no. 1 are as under:-
SL. No. Date Invoice No. Amount (Rs.)
1. 29.08.2019 DI192001652 2,51,662.92
2. 29.08.2019 DI192001653 1,08,472.75
3. 30.08.2019 DI192001680 1,28,940.57
4. 30.08.2019 DI192001681 5,31,075.61
5. 06.09.2019 DI192001728 1,05,514.68
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 4/15
6. 06.09.2019 DI192001729 3,24,137.43
7. 19.09.2019 DI192001927 1,56,502.21
8. 19.09.2019 DI192001928 76,163.51
9. 19.09.2019 DI192001929 1,38,387.47
10. 19.09.2019 DI192001930 1,15,130.06
11. 30.09.2019 DI192002002 6,55,912.00
12. 30.09.2019 DI192002003 1,79,300.16
13. 30.09.2019 DI192002004 2,78,353.07
14. 30.09.2019 DI192002005 15,70,892.73
2.4 It is further stated that the plaintiff performed his
obligation to the satisfaction of defendant no. 1 and raised the invoices regularly. Since no payment was forthcoming, the plaintiff sought payments from defendant no. 1 vide e-mails since 02.01.2020. It is also stated that despite repeated reminders from the plaintiff, the defendants only gave assurance and sought time to make payment. Even the cheques issued by the defendant towards the discharge of the outstanding debt, got dishonored due to insufficient funds. The same was informed by the plaintiff to the defendants. Despite admitting the outstanding amounts, in the e-mail dated 27.02.2021, and assuring the plaintiff to clear the outstanding payments under the settled accounts, the defendants have failed to clear the outstanding amount.
2.5 It is further stated that the defendants are liable to pay to the plaintiff Rs. 28,26,630/- (Rupees twenty eight lac twenty six thousand six hundred thirty only), along with interest @ 18.00% for the period 29.08.2019 to December, 2021, as per CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 5/15 the Statement of Account/Ledger maintained by the plaintiff in the ordinary course of business. The defendants are also liable to pay penal interest @ 18.00%, per annum, till the date of filing of the suit on the outstanding sum of Rs. 28,20,630/- (Rupees twenty eight lac twenty thousand six hundred and thirty only). The defendants are also liable to pay interest @ 18.00%, per annum, on the outstanding amount from the date of filing of the suit till its actual payment made by the defendants. The plaintiff has, thus, prayed for a decree, against the defendants, for Rs. 40,73,441/- (Rupees forty lac seventy three thousand four hundred forty one only), with pendente-lite and future interest @ 18.00%, per annum, from the date of filing of suit till its realization, and costs of the suit.
3.1 Summonses of the suit were served upon the defendants on 14.12.2022 through one Ankit, employee of the defendants. However, neither anybody appeared on behalf of the defendants, nor written statement was filed. Thus, vide order dated 02.02.2023, the right of the defendants to file the written statement was closed, and vide order dated 21.04.2023, the defendants were proceeded against ex-parte.
4.1 On 13.04.2023, the plaintiff has moved an application dated 12.04.2023 under Section 151 CPC, seeking directions in terms of order passed by Hon'ble High Court of Delhi in Parsvnath Developer Limited vs. Vikram Khosla, 2021 SCC OnLine Del 3147. In the application, it is stated that the CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 6/15 defendants were served through their employee Mr. Ankit on 14.12.2022, but they have failed to appear before this court despite several opportunities. Vide order dated 02.02.2023, the right of the defendants to file written statement was closed. The plaintiff has prayed that its' evidence may be dispensed with and judgment may be passed in terms of order passed by Hon'ble High Court of Delhi in "Parsvnath Developer Limited vs. Vikram Khosla" (Supra).
5.1 Sh. Sushant Singhal, Ld. Counsel for the plaintiff has generally argued on the lines of the application. He has also submitted that though he has moved an application under Section 151 CPC, his application may be treated under Order VIII Rule 10 CPC. He has also relied upon Satya Infrastructure Ltd. and Ors. vs. Satya Infra and Estates Pvt. Ltd., 2013 (54) PTC 419 (Del.) and Parsvnath Developer Limited vs. Vikram Khosla (Supra).
6.1 I have heard Sh. Sushant Singhal, Ld. Counsel for the plaintiff and also perused the record.
7.1 As requested by the Ld. Counsel for the plaintiff, his application is being treated as an application under Order VIII Rule 10 CPC. It is pertinent to refer to Rule 10 of Order VIII CPC, which stipulates as under:-
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 7/15 "10. Procedure when party fails to present written statement called for by Court.- "Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up."
7.2 It is well settled that in a case where written statement has not been filed, the court has to be more cautious in proceeding under Order VIII Rule 10 CPC. However, if the court is fully satisfied that there is no fact which needs to be proved at the instance of the plaintiff in view of the deemed admission by the defendant, it can pass a judgment against the defendant who has not filed the written statement. In this regard, a reference can be made to C.N. Ramappa Gowda v. C.C. Chandregowda, (2012) 5 SCC 265.
7.3 In Parsvnath Developers Ltd. vs Vikram Khosla, (Supra), the Hon'ble High Court of Delhi has held, "9. ....... Further, I am in agreement with the judgments of the Coordinate Benches of this Court as relied upon by the plaintiff in paragraph 8 on the issue that in ex-parte matters no purpose would be served if evidence is directed to be led. There being no written statement filed, the averments in the Plaint being unrebutted, the same are deemed to be correct."
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 8/15 8.1 It can be seen that along with the plaint, the plaintiff has filed copy of Board Resolution dated 14.09.2020, authorizing Sh. Amitosh Kumar to represent the plaintiff company, copy of company master data giving the details of the defendant company including the name of the directors viz. Gyanesh Kumar Thakur, defendant no. 2 and Ms. Laxmi Kumari, defendant no. 3, copies of 14 invoices from 29.08.2019 to 30.09.2019 raised by the plaintiff, KYC Form and Credit Request Form of defendant no. 1, e-mails exchanged between plaintiff and defendant no. 1 and copy of Statement of Account/Ledger Account of defendant no. 1, for the period August, 2018 to December, 2021, maintained by the plaintiff.
8.2 As per the plaint, in the year 2019, defendant no. 1 has approached for availing the services of the plaintiff for shipment of their products to different destinations. The plaintiff has provided the required services to defendant no. 1 and raised the following invoices:-
SL. No. Date Invoice Bearing No. Amount (Rs.)
1. 29.08.2019 DI192001652 2,51,662.92
2. 29.08.2019 DI192001653 1,08,472.75
3. 30.08.2019 DI192001680 1,28,940.57
4. 30.08.2019 DI192001681 5,31,075.61
5. 06.09.2019 DI192001728 1,05,514.68
6. 06.09.2019 DI192001729 3,24,137.43
7. 19.09.2019 DI192001927 1,56,502.21
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 9/15
8. 19.09.2019 DI192001928 76,163.51
9. 19.09.2019 DI192001929 1,38,387.47
10. 19.09.2019 DI192001930 1,15,130.06
11. 30.09.2019 DI192002002 6,55,912.00
12. 30.09.2019 DI192002003 1,79,300.16
13. 30.09.2019 DI192002004 2,78,353.07
14. 30.09.2019 DI192002005 15,70,892.73
The said invoices are also reflected in the Statement of Account of Defendant no. 1 maintained by the plaintiff. The total amount of invoices is Rs. 46,20,446/- (Rupees forty six lac twenty thousand four hundred forty six only). As per the Statement of Account, defendant no. 1 has made payment of Rs. 17,99,816/- (Rupees seventeen lac ninety nine thousand eight hundred sixteen only). Thus, as on 19.03.2021, a sum of Rs. 28,20,630/- (Rupees twenty eight lac twenty thousand six hundred thirty only) is outstanding against defendant no. 1. The defendants have also admitted their liability to make payment to the plaintiff in e-mails sent by them to the plaintiff. In e-mail dated 27.02.2021 of Sh. Gyanesh Thakur, Director of defendant no. 1 sent to the plaintiff, it is written:-
"... Sorry for the delayed reply, as discussed we are facing a deep financial problem due to corona epidemic and also as discussed we did not get payment from our customer also, but as promised to you we did not hold your single paisa, although it will take time to release and we definitely clear your all outstanding.
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 10/15 From now onwards we regularly make your payment of every Month between dated 10-15 every Month of the amount approx 100000 - 150000. So request you to kindly support us. Starting on a good note we are making the payment of 20000/- with the reference id-kkbkh21058772351. And remaining 30Kas per our first commitment will release on Monday."
8.3 The plaint is duly verified by Sh. Amitosh Kumar, AR of the plaintiff. It is also supported by affidavit and Statement of Truth of Sh. Amitosh Kumar. Written statement has not been filed. The defendants have also not put in appearance. From the plaint, there does not appear to be any disputed question of facts involved in this case. The plaintiff's case even without any evidence is prima facie impeachable.
8.4 Ld. Counsel for the plaintiff has argued that defendant no. 1 is run like quasi partnership and the amount payable to the plaintiff has been siphoned off for gain by defendant nos. 2 & 3. Thus, piercing of corporate veil is required and defendant nos. 2 & 3 are personally liable.
8.5 It is well settled that a company is a legal entity, separate and distinct from its shareholders and directors, with its own legal rights and obligations. It is pertinent to refer to Life Insurance Corporation vs. Escorts Ltd. & Ors., (1986) 1 SCC, wherein a Constitution Bench of the Supreme Court has held, CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 11/15 "90.... Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of the public interest, the effect on parties who may be affected etc."
8.6 In Tristar Consultants vs. Customer Services India Pvt. Ltd. And Anr., 139 (2007) DLT 688, the Hon'ble High Court of Delhi has held, "28. To interpret the law as is sought to be projected by the petitioner would mean negation of the concept of a company being limited by its liability as per the memorandum and articles of association of the company. Other than where directors have made themselves personally liable i.e. by way of guarantee, indemnity, etc. liabilities of directors of a company, under common law, are confined to cases of malfeasance and misfeasance i.e. where they have been guilty of tort towards those to whom they owe a duty of care i.e. discharge fiduciary obligations. Additionally, qua third parties, where directors have committed tort. To the third party, they may be personally liable.
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 12/15
29. For example by making false representations about a company, a director induces a third party to advance a loan to the company. On proof of fraudulent misrepresentation, a director may be personally liable to the third party.
30. But this liability would not flow from a contract but would flow in an action at tort. The tort being of misrepresentation of inducement and causing injury to the third party having induced the third party to part with money."
8.7 It is pertinent to observe that the plaintiff has raised invoices in the name of defendant no. 1. The Ledger Account maintained by the plaintiff is also in the name of defendant no. 1. There is no averment of any contract between the plaintiff and defendant no. 2 or defendant no. 3 or the said directors having given any personal guarantee. Thus, the averment of the plaintiff that defendant nos. 2 and 3 have siphoned off the amount payable to the plaintiff is a bald allegation. There are no specific allegation of misrepresentation or fraud or malfeasance or misfeasance against defendant nos. 2 or defendant no. 3. As per Order VII Rule 4 CPC, where a party relies on misrepresentation, fraud etc., particulars thereof, with date and items are required to be stated in the pleadings. The same has not been done in this case. In view of the above, averments made in the plaint do not justify the lifting of the veil to make defendant nos. 2 & 3 personally liable.
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 13/15 9.1 In view of the aforesaid, it is considered that the plaintiff is entitled to recover from defendant no. 1, a sum of Rs. 28,20,630/- (Rupees twenty eight lac twenty thousand six hundred thirty only). The plaintiff has also claimed interest @ 18%, per annum, for the period 29.08.2019 to December, 2021, after adjusting the payment made by defendant no. 1, and penal interest @ 18.00%, per annum, on the outstanding sum of Rs. 28,20,630/- (Rupees twenty eight lac twenty thousand six hundred thirty only), till the date of filing of the suit. The plaintiff has, thus, claimed a total sum of Rs. 40,73,441/- (Rupees forty lac seventy three thousand four hundred forty one only). However, such high rate of interest does not appear to be justified. In the facts and circumstances of the case, it is considered that interest @ 9.00%, per annum, for the period 19.03.2021, when the last payment was made by defendant no. 1, till the date of filing of the suit i.e. 13.04.2022, as well as pendente lite and future interest @ 9.00%, per annum, would be just and reasonable. Accordingly, the application moved by the plaintiff is allowed. Suit is decreed in favour of plaintiff and against defendant no. 1 for a sum of Rs. 28,20,630/- (Rupees twenty eight lac twenty thousand six hundred thirty only), along with interest @ 9.00%, per annum for the period 19.03.2021 to 13.04.2022, and pendente lite and future interest @ 9.00%, per annum, till realization of the entire amount.
10.1 The plaintiff is also awarded costs of the suit.
11.1 Decree be drawn accordingly.
CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 14/15 12.1 A copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise, in terms of Order XX Rule 1 of the Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015).
13.1 File be consigned to Record Room.
Announced in open Court on 09.08.2023.
(Rakesh Syal) District Judge (Commercial Court)-03, South-West, Dwarka Courts, New Delhi 09.08.2023 CS(COMM) 166/2022 M/s ATA Freight Line India (I) Pvt. Ltd. vs. Dzire Freight Solution Pvt. Ltd. & Ors. 15/15