Bangalore District Court
Magnum Consultancy Services vs Sri.Swamy Packaging on 15 October, 2022
IN THE COURT OF LXXXIX ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU. (CCH-90)
Present: Sri.S.J.Krishna, B.Sc., LL.B.,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
Dated: 15th OCTOBER 2022
Com.O.S.No.175/2021
PLAINTIFF : Magnum Consultancy Services,
A Registered partnership firm
having its office at
Unit No.2201A, Office No.2216,
22nd Floor, Brigade Gate Way,
Malleshwaram,
Bengaluru-560 055.
Represented by its
Power Of Attorney Holder,
Goutham.B.S,
S/o Somashekar.B.N,
Aged about 19 years,
R/at No.5/10, 1st Main road,
Sri.Nanjundeshwara Nilaya,
Govindarajnagar,
Vijayanagar,
Bengaluru-560 040.
(By.Sri.Yeshu Mishra, Advocate)
-Vs-
DEFENDANT : Sri.Swamy Packaging,
No.40/1, 9th Cross,
Pettechanappa Industrial Estate,
Kamakshipalya, Bengaluru-560 079.
(By Sri.Mahesh.M, Advocate)
/2/
Com.O.S.175/2021
Date of Institution of : 19.02.2021
suit
Nature of suit : Money Suit
(suit on pronote, suit for
declaration and
possession suit for
injunction, etc.,)
Date of commencement : 29.07.2022
of recording of evidence
Date of judgment : 15.10.2022
Total duration : Year/s Month/s Day/s
00 07 26
(S.J.KRISHNA)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU.
(CCH-90)
JUDGMENT
The plaintiff has filed this suit praying the Court to pass a Judgment and decree directing the defendants to pay the plaintiff a sum of ₹.8,52,500/- along with interest at 18%p.a. from 17.03.2021 till the date of realization; costs and such other reliefs.
The summary of the case of the plaintiff is as follows:
02. The plaintiff is a partnership firm registered under the provisions of the Indian Partnership Act. The plaintiff firm is into the business of consultancy services in the area of purchase and sale of cutlery and vessels among other allied /3/ Com.O.S.175/2021 activities. As part of its business, the plaintiff firm has been catering to the needs of various reputed customers over the last several years.
03. The defendant manufactures and sells all kinds of packaging machines. As such, the plaintiff has placed purchase orders with the defendant for the purchase of VFFS Machine with 10 head wigher. In pursuance thereof, the defendant has sent several e-mails with video attachments pertaining to the said machine with a view of convince the plaintiff regarding its performance and utility.
04. However, the defendant has not processed the said purchase order in time for reasons best known to the defendant. On the contrary, the defendant has requested the plaintiff to make part payment towards the said purchase order. Accordingly, at the request of the defendant, the plaintiff has paid a sum of ₹.5,00,000/- by issuing a cheque Bg.No.000263 dated 14.04.2017 drawn on ICICI Bank in favor of the defendant. The defendant has got the said cheque duly encashed on 17.04.2017. The said payment made to the defendant is clearly reflected in the bank statement of the plaintiff.
/4/ Com.O.S.175/2021
05. Notwithstanding receipt of a sum of ₹.5,00,000/- from the plaintiff, the defendant has dodged the plaintiff on one pretext or the other without delivering the said machine. The plaintiff was always ready and willing to pay the balance sale price to the defendant and receive delivery of the said machine. The plaintiff has awaited delivery of the said machine from the defendant for a period of more than three years. The delay has occasioned solely due to the lethargic inaction of the defendant, the plaintiff has suffered huge loss.
06. The defendant has substantially benefited by receiving a sum of ₹.5,00,000/- at the cost of the plaintiff. Moreover, the plaintiff was deprived of the benefit of putting the said sum for more lucrative use and as a result make huge profits. Therefore, the defendant is liable to repay the plaintiff a sum of ₹.5,00,000/-. Besides, the defendant is also liable to pay a sum of ₹.3,52,500/- towards interest at the rate of 18%p.a. from 17.04.2017 till 17.03.2021 as the said transaction is commercial in nature. Accordingly, the defendant owes a total sum of ₹.8,52,500/- to the plaintiff.
07. The period of three years from the date of last payment elapsed on 17.04.2020. However, in view of COVID- 19 pandemic, the Hon'ble High Court was pleased to declare closure of Courts for the purpose of Section 4 of the Limitation /5/ Com.O.S.175/2021 Act, 1963 extended from time to time till 31 st January 2021. The plaintiff has initiated pre-institution mediation against the defendant in PIM No.60/2021 before the District Legal Service authority on 16.01.2021. The same has ended as a non- starter. It is pertinent to point out that under Section 12A of the Commercial Court Act, 2015 the period during which the parties are occupied with pre-institution mediation is not to be computed for limitation. Immediately upon becoming aware of the non-starter report, the plaintiff has filed the above suit. Therefore, the suit is in time.
08. The cause of action for the suit arose on 17.04.2017 when the plaintiff made payment to the defendant and on such other dates when the defendant has refused to repay the suit claim and the same is within the jurisdiction of this Hon'ble Court. Hence, the suit.
09. After the service of summons the defendant appeared through its advocate and has filed the Written Statement.
The case of the defendant is as under:
10. The suit filed by the plaintiff is wholly false, vexatious and frivolous. The suit has been filed with the sole intention to cause unlawful loss to the defendant and thereby /6/ Com.O.S.175/2021 harass the defendant for no fault of their and is therefore liable to be dismissed.
11. There is no cause of action for plaintiff to maintain the above suit and on this ground alone the suit is liable to be dismissed.
12. The defendant is not liable to pay any amount much less the amount claimed by the plaintiff. In fact, the plaintiff is liable to pay compensation to the loss caused by him to the defendant company.
13. The plaintiff has not given true facts and is thereby guilty of "Suppressio Veri and Suggestion Falsi" and the above suit is a clear case of abuse of process of law and process of this Hon'ble Court; hence is liable to be dismissed in limine.
14. The suit is hopelessly barred by limitation and the bare perusal of the plaint shows that the suit is barred by limitation, though the plaintiff avers the reasons for delay has not filed any application for condonation of delay. Hence, the suit has to be dismissed in limine.
15. The defendant is a partnership firm engaged in the business of manufacturing and trading of all kinds of /7/ Com.O.S.175/2021 packaging machines and components. The defendant company is having its office at No.127/1, Byraveshwara Industrial Estate, Dasanapura Hobli, Machohalli, Bangalore Rural and Bengaluru-560 091. The defendant is represented by its partner Mr.Jayaprakash.T.R.
16. The plaintiff is a registered partnership firm engaged in the business of consultancy services in the area of purchase and sale of Manufacturing of packaging and vessels and other allied activities. Further, the plaintiff is running group of companies and firms under its umbrella, like Magnum Consultancy Services, M/s Dwarkamai Food and Beverages Pvt.., Ltd., M/s SRV Solutions, M/s.Innovative Marketing Associates and Ogara Foods.
17. During March 2017, the plaintiff herein through its sister concern, M/s.Dwarkamai Food and Beverages Pvt., Ltd., approached the defendant for manufacturing a customized packaging machine for them, accordingly, sought the brochures and demonstrations of various machinery manufactured by the defendant.
18. As requested, the defendant sent the brochures of their business and specimen videos of other machines manufactured by them to the plaintiff.
/8/ Com.O.S.175/2021
19. After perusing the brochures and the specimen videos of machines manufactured by defendant, the plaintiff informed the defendant to manufacture a packaging machinery to pack their food/cutlery products and further instructed to commence the manufacturing process and promised to send the purchase order officially.
20. As per the instructions given by the plaintiff, the defendant assessed and informed the plaintiff that cost of production of machine would be ₹.19,00,000/- and on 22.03.2017, raised a Quotation for the same in the name of M/s Dwarkamai Food and Beverages Pvt., ltd., as per the request of the plaintiff. Further, the defendant requested the plaintiff to send an official purchase order and also advance the amount of ₹.5 lakhs, enabling the defendant to start the production of machine.
21. Thereafter the plaintiff for the best reasons to known to them, made the payment of advance amount of ₹.5,00,000/- for manufacturing the said machine, though the quotation was raised in the name of its sister concern M/s.Dwarkamai Food and Beverages Pvt., Ltd., However, failed to give an official purchase order for the best reasons known to them.
/9/ Com.O.S.175/2021
22. Immediately on receipt of advance amount, the defendant commenced the production of the said machine as requested and completed the machine for trial by July/August 2017. Thereafter the defendant called upon the plaintiff to come and inspect the machinery manufactured and to take trial for their need. Despite repeated requests by the defendants to complete the inspection/trial by the plaintiff, neither responded nor visited the defendant to take the trial/inspection of the machinery.
23. To the surprise and surmise of the defendant the plaintiff through its group company, OGARA Group, represented by Mr.Roshan Shetty sent a mail vide E-mail dated 12.09.2017 informing the defendant about the cancellation of order regarding manufacturing of packaging machines and seeking refund of the advance amount paid. Immediately the defendant called authorised person of the plaintiff and informed that they have already spent the time and money on manufacturing the customized machinery and as such they cannot cancel the order nor refund the advance amount as the same is already spent in manufacturing the machinery as requested by the plaintiff.
/10/ Com.O.S.175/2021
24. Despite the clear categorical information given by defendant to plaintiff, the plaintiff again started requesting for refund of advance amount.
25. Thereafter, during January 2018, the plaintiff and the defendant after much deliberation and negotiation arrived on a mutual settlement that 2 lakhs out of the advance amount paid would be forfeited as compensation for loss suffered by the defendant and manufacturing the machine to the needs of the plaintiff and remaining 3 lakhs out of the advance amount shall be paid to Mr.Ravindra of Sankethi Foods as per the instructions of the plaintiff for the due payable by the plaintiff to the said Ravindra.
26. As per the aforesaid terms of the settlement the defendant paid Mr.Ravindra of Sankethi Foods an amount of ₹.1,50,000/- in April 2018 and ₹.1,50,000/- in May 2018, totally the defendant paid an amount of ₹.3 lakhs in cash to Mr.Ravindra of Sankethi Foods, as per the instructions of the plaintiff to clear the dues of the plaintiff to Mr.Ravindra out of the advance amount paid. The original acknowledgment of payment issued by Mr.Ravindra of Sankethi foods, evidencing the payment of ₹.3 lakhs in cash towards due payment of plaintiff is herewith produced.
/11/ Com.O.S.175/2021
27. Such being the circumstances, the defendant is not liable to pay any amount to the plaintiff much less the amount claimed in the suit.
28. The conduct of the plaintiff despite settling the issues in the year in 2018 itself and have filed this suit after 4 years clearly shows the malafide intention of the plaintiff to harass the defendant and make unlawful gain at the hand of defendant.
29. The averments made in para 1 to 10 are all denied as false and the plaintiffs are put to strict proof of the same. The defendant has prayed for the dismissal of the suit.
30. On the basis of rival pleadings the following Issues are framed by this Court.
ISSUES
01. Whether the Plaintiff proves that the defendant is liable to pay ₹.8,52,500/- along with future interest at 18% p.a. from 17.03.2021 till the date of payment?
02. Whether the defendant proves that the claim of the plaintiff for refund of advance amount with interest is settled between the parties in January 2018 and wherein it is resolved that the defendant is entitled to forfeit ₹.2,00,000/- out of advance of amount of ₹.5,00,000/- and the balance ₹.3,00,000/- shall be paid to Sri.Ravindra of Sankethi Foods as per the instructions of the /12/ Com.O.S.175/2021 Plaintiff as contended in paragraph 8(xi) of the written statement?
03. Whether the defendant proves that it has paid ₹.1,50,000/- in April 2018 and ₹.1,50,000/- in May 2018 to Sri.Ravindra of Sankethi Foods as per the instructions of the plaintiff?
04. Whether the defendant proves that the suit is barred by Limitation?
05. Whether the Plaintiff is entitled for suit reliefs?
06. What Order/decree?
31. The Plaintiff has examined Sri.Goutham B.S. as PW1. The Defendant has examined Sri.Jayaprakash T.R. as DW1. In view of statement of admission and denial of documents filed by the parties the plaintiff exhibited Ex.P1 and Ex.P2 and the defendant exhibited Ex.D1 and D2. The PW1 has exhibited Ex.P3 to Ex.P9 and the DW1 has exhibited Ex.D3 and D4.
32. After the conclusion of the trial I have heard the arguments addressed by the learned counsel on record. They have also submitted their respective written arguments.
33. The learned Counsel for the plaintiff relied on following citations in support of his case:
Sl.No. Party Name Citation
(1) Nagindas Ramdas Vs. 1974 (1) SCC 242
Dalpatram Ichharam Alias
Brijram and Others
/13/
Com.O.S.175/2021
(2) Gopal Krishnaji Ketkar AIR 1968 SC 1413
Appellant V.Mohammed Haji
Latif and others
34. The learned Counsel for the defendant relied on
following citations in support of his case:
Sl.No. Party Name Citation
(1) Nirav Deepak Modi V Najoo 2012 SCC Online
Behram Bhiwandiwala and Bom 147
others
(2) Man Kaur (Dead) by LRs V (2010) SCC Online
Hartar Singh Sangha SC 1125
(3) H.K.Taneja V Bipin Ganatra 2008 SCC OnLine
Bom 1211
(4) Janaki Vashdeo Bhojwani (2005) 2 Supreme
And Another V.Indusind Court Cases 217 Bank Ltd., and Others
35. I have gone through the materials available on record and facts of the case are discussed in the light of the ratio of the precedents relied on by the parties.
36. My findings on the above Issues are as under:
ISSUE No.1 : In the Affirmative
ISSUE No.2 to 4 : In the Negative
ISSUE No.5 : In the Affirmative
ISSUE No.6 : As per final Order
for the following
/14/
Com.O.S.175/2021
REASONS
37. ISSUE No.1, 2 and 3: The plaintiff has filed this suit praying the Court to pass a Judgment and decree directing the defendants to pay the plaintiff a sum of ₹.8,52,500/- along with interest at 18%p.a. from 17.03.2021 till the date of realization; costs and such other reliefs.
38. The Plaintiff has examined Sri.Goutham B.S. as PW1. The Particulars of Ex.P1 to Ex.P9 is as under:
Sl.No. Particulars of documents Ex.P.
1. Statement of account extract (Exhibited Ex.P.1 on 09.11.2021 in view of admission of documents by the defendant)
2. Copy of cheque bearing No.560229071 Ex.P.2 dated 14.04.2017/ICICI Bank for Rs.5,00,000/- (Exhibited on 09.11.2021 in view of admission of documents by the defendant)
3. General Power of Attorney issued by the Ex.P.3 plaintiff dated 16.02.2021
4. Partnership deed dated 05.04.2014 Ex.P.4
5. Acknowledgment issued by registrar of Ex.P.5 firms dated 08.04.2014
6. Copy of emails sent by defendant (5 Ex.P.6(1) to No.s) (5)
7. Non-starter report issued in PIM Ex.P.7 60/2021 /15/ Com.O.S.175/2021
8. Certificate U/sec. 65B of Evidence Act Ex.P.8
9. Copy of Purchase Order dated 04-05- Ex.P.9 2017
39. The Defendant has examined Sri.Jayaprakash T.R. as DW1. The particulars of Ex.D1 to Ex.D4 is as under:
Sl.
Particulars of Documents Ex.D.
No.
1. Email copy dated 24.09.2019 Ex.D1
2 Copy of reply notice dated 22.07.2019 Ex.D2
sent through Email by the defendant to termination notice dated 11th July 2019 issued by the plaintiff
3. Copy of the resolution of Board dt 30-12- Ex.D3 2019
4. Authorization letter dt 30-12-2019 Ex.D4 issued by defendant company in favor of DW-1
5. Authorization letter Ex.D.5
40. The PW1 and DW1 have reiterated the averments made in the plaint and written statement in their respective affidavit evidence.
41. The plaintiff has examined Sri.B.S.Goutham as PW.1. the PW.1 has exhibited Ex.P.3 the General Power of Attorney executed by the plaintiff partnership firm in favor of PW.1 authorising him to depose in the present case on behalf of the plaintiff firm.
/16/ Com.O.S.175/2021
42. The defendant is disputing the authority of PW.1 to depose on behalf of the plaintiff on various grounds.
43. The PW.1 in para 4 of the cross-examination deposed that Sri.Dayananda.H.P and myself went to the notary public to get GPA executed as per Ex.P3. Subsequently the witnesses have subscribed their signatures to GPA. The notary public has entered the serial number of the documents in his register. I do not remember the said number. It is false to suggest that Ex.P.3 is a created document.
44. The defendant is contending that the Power of Attorney is executed by one of the partners in favor of PW.1 as such it is not a valid document.
45. The plaintiff has exhibited Ex.P.4 the partnership deed of plaintiff firm. Ex.P.4 shows that the plaintiff is consisting of two partners namely Sri.Dayananda.H.P, and Sri.Sriharsha.G.Y. Clause 16 of Ex.P4 shows that any legal statutory and any requirement which is beneficial and a must firm as per Indian law partnership Act, 1932 and any other Law which may be applicable prospectively shall be carried on by the partners within the prescribed time and both the partners shall be responsible for all the compliance and consequences and any one shall carry on the statutory management responsibility for an on behalf of all the partners.
/17/ Com.O.S.175/2021
46. In view of Clause 16 of partnership deed/Ex.P.4 it is clear that Sri.Dayananda.H.P one of the partners is competent to execute power of attorney on behalf of the partnership firm in favor of PW.1.
47. The PW.1 has deposed that subsequent to the execution of the power of attorney Ex.P.3 the witnesses have subscribed their signatures to Ex.P.3.
48. The defendant is contending that since the witnesses have not witnessed the executant and the Power of Attorney holder subscribing their signatures before the notary public the document is invalid.
49. The very word execution connotes that it is not necessary for the witnesses to present personally while the executant and power of attorney holder were subscribing their signatures to the document before the notary public. It is suffice if the executant and the power of attorney holder acknowledges before the witnesses that they have subscribed their signatures to the document in question.
50. If the witnesses after gaining information or knowledge of subscription of the document by the executant and the power of attorney holder subscribe their signatures it is sufficient compliance of law.
/18/ Com.O.S.175/2021
51. The defendant is contending that Ex.P3 does not bear the serial number and the registration number of the document. As such Ex.P.3 is an invalid document. In this regard it is useful to refer to the following decision of the Hon'ble High Court of Karnataka M/S.Diya Energy V M/S.National Pipe Allied Products Crl.P 5337 of 2022 dated: July 22,2022
7. The afore-narrated facts are not in dispute. The only submission being made by the learned counsel for the petitioners is that, non-notarization of general power of attorney would vitiate the complaint and all further proceedings. The issue whether non-notarization of the general power of attorney would by itself vitiate entire proceedings as the complaint is filed by the power of attorney holder, need not detain this Court for long or delve deep into the matter as the Co-ordinate Bench of this Court considering the very submission in the case of AMIT ROY (supra) has held as follows:
"19. Section 196 of the Contract Act provides for the ratification of the acts done by one person on behalf of the other. If the principal ratifies the agent's acts, the same effect will follow as if they had been performed by his authority. Section 197 of the Contract Act states that the ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done.
/19/ Com.O.S.175/2021
20. Such being the scheme of Chapter X of the said Act, there is nothing to indicate that the power of attorney document has to be compulsorily notarized or registered. If the power of attorney documents were to contain the clause enabling the agent to sell the principal's property, it is then that it becomes a compulsorily registerable document.
21. As observed by the Apex Court in the case of Tmt. Kasthuri (supra), the grant of power of attorney is essentially governed by Chapter X of Contract Act. A power of attorney holder or the agent derives the right to use the principal's name and perform certain acts, deeds and things on behalf of the principal, subject of course, to the limitations contained in the said deed; the same shall be treated as if they are done by the principal. A power of attorney is a document of convenience. If the power of attorney is notarized, the presumption is raised in favour of its execution. But it cannot be contended with any rate of success that if the power of attorney document is not notarized, it is not executed at all. In the instant case, the respondent-plaintiff appeared before the Trial Court and stated that he executed the previous power of attorney (of the year 2000) in favour of Vallabhai Radhanapura and that recently, on 3.6.2015, he executed another general power of attorney in favour of said Vallabhai Radhanapura. It meets the requirements of section 197 of the said Act.
22. If the petitioner - defendant proposes to dispute the genuineness and authenticity of power of attorney /20/ Com.O.S.175/2021 documents in question, it shall be open to him to do so in the course of his evidence.
On the ground of lack of territorial jurisdiction or of the not mentioning of the serial number of the Notarial Register on the document, I am not persuaded to reject the marking of the general power of attorney document, dated 3.6.2015. What evidentiary value can be attached to the said document is for the Trial Court to decide on hearing both the sides.
23. On the ground of limitation also, the marking of the power of attorney document cannot be rejected. Section 196 of the said Act itself does not prescribe any limitation or time-frame within which the principal has to ratify the agent's acts. What is the effect of the allegedly belated production of a document can be shown in the course of evidence and argumentation." (Emphasis supplied) Since the solitary submission of the learned counsel is with regard to the issue whether a non- notarised power of attorney can be accepted and such non-notarisation of the power of attorney would not vitiate the proceedings, being the law laid down by the Division Bench as afore-quoted, the petition deserves to be rejected. The other judgments relied on by the learned counsel appearing for the petitioner, the one rendered by the Madras High Court, would be inapplicable to the facts of the case at hand.
/21/ Com.O.S.175/2021
52. In view of the observations made by the Hon'ble High Court of Karnataka it is clear that even if the document Ex.P.3 is treated as not notarised nevertheless it will not lose its significance in view of Section 196 of Contract Act. It is not necessary that a general power of attorney is required to be registered or notarised to depose on behalf of the plaintiff. Hence, the objections raised by the defendant with respect to validity of the GPA/Ex.P3 are rejected.
53. It is the case of plaintiff that it has placed order for manufacture of customised VFFS machine with 10 head wigher with the defendant after mutual negotiation, the plaintiff has paid a sum of ₹.5,00,000/- to the defendant as advance. The plaintiff has exhited Ex.P.1 Statement of Account extract and copy of cheque bg.No.560229071/000263 dated 14.04.2017 drawn on ICICI Bank for ₹.5,00,000/- in favor of defendant. The defendant has admitted Ex.P1 and P2. The defendant is not disputing the receipt of ₹.5,00,000/- from the plaintiff.
54. The plaintiff is contending that due to inordinate delay caused by the defendant in delivering the VFFS machine it has canceled the order and requested the defendant to refund ₹.5,00,000/-. The plaintiff has exhibited Ex.P9 the Purchase Order. The defendant has exhibited Ex.D.2. Ex.D2 is a email communication made by Sri.Roshan /22/ Com.O.S.175/2021 Shetty, Professional Consultant, Accounts and Finance, OGARA Group informing the defendant that they have canceled the order placed with the defendant and sought for refund of ₹.5,00,000/- paid as advance. The defendant has not replied to the email communication made by Sri.Roshan Shetty.
55. It is the case of defendant that after mutual settlement the plaintiff has agreed to settle the dispute. As per the said settlement the defendant has retained ₹.2,00,000/- towards compensation and as per the instructions of the plaintiff the defendant has paid ₹.3,00,000/- in two installments as per Ex.D3 to Sri.Ravindra of Sankethi Foods. As such there is no liability on the part of defendant to pay any amount much less ₹.5,00,000/- as claimed by the plaintiff.
56. The PW.1 in his cross-examination has deposed that he has been working as a supervisor in plaintiff firm since 4 years. The plaintiff and OGARA foods are group of concerns, Dwarkamai Food and Beverages, SRV Solutions and Innovative Marketing Associates are the concerns of same group. The PW.1 deposed that Sri.Roshan Shetty was working as Accounts Officer in plaintiff group of companies. Sri.Ravindra has worked as consultant in respect of food products during 2015 and 2016.
/23/ Com.O.S.175/2021
57. The defendant is contending that the plaintiff has not placed purchase Order. However, in his cross-examination DW.1 deposed that Quotation No.VFFS/10/073/1617 in Ex.D.1 matches with Quotation number in Ex.P9.
58. He has deposed that he has not received purchase order as per Ex.P9. They have issued quotation wherein all the specification of the equipment mentioned. In view of the admission made by the defendant in his written statement and in his affidavit, it is clear that the defendant has received ₹.5,00,000/- from the plaintiff as per Ex.P.2.
59. The objections raised by the defendant that the plaintiff has not placed a formal purchase order loses its significance in view of the admission made by the defendant.
60. PW.1 in his cross-examination deposed that we have no business transaction with Sankethi Foods. Sankethi Foods belong to Sri.Ravindra who had worked with the plaintiff for some time. He denied that the defendant after deducting ₹.2,00,000/- towards losses has paid balance amount of ₹.3,00,000/- to Sri.Ravindra of Sankethi Foods as per the instructions of the plaintiff.
/24/ Com.O.S.175/2021
61. PW.1 further deposed that no notice was issued by the plaintiff company after sending intimation as per Ex.D.2. Separate accounts are maintained in respect of each of the constituent companies or their group.
62. The DW.1 in his cross-examination deposed that Sri.Ramesh on behalf of plaintiff was present in negotiation in respect of suit transaction. On behalf of defendant Mr.Rangaprasad, Marketing Head participated in the negotiation. He has not participated personally in the negotiation. The defendant has manufactured the product ordered by the plaintiff. The plaintiff has not issued purchase order. The evidence of DW.1 shows that the defendant did not insist for formal issuance of purchase order by the plaintiff.
63. The plaintiff has exhibited Ex.P9. The PW.1 was subjected to cross-examination regarding the authenticity of Ex.P9. PW.1 has deposed in his cross-examination that Mr.Ravindra was working with the plaintiff at the time of raising purchase order. He used to take acknowledgment on purchase order itself. In this case, we have furnished purchase order by hand. We have obtained acknowledgment on 04.05.2016. In Ex.P.9 some one has signed on behalf of Sri.Rangaprasad. It is true that below the acknowledgment the date is mentioned as 11.04.2017.
/25/ Com.O.S.175/2021
64. In purchase order the authorised person of the company has to sign in the column authorised person. It is true that the accounts department will endorse on purchase order that they have verified the purchase order. It is true that Sri.R.R.Shetty has verified the purchase order. It is false to suggest that official of our company has signed the purchase order in authorised person column and it is false that we have not obtained any acknowledgment. Ex.P.9 was available with us at the time of filing the suit. We have not filed Ex.P.9 at the time of filing the suit. It is false to suggest that we have created Ex.P9 and we have not raised purchase order against defendant for supply of any materials. The defendant has not issued quotation to Magnum Consultancy Services.
65. A perusal of Ex.D1 goes to show that the defendant has addressed a letter to Dwarakamai Food and Beverages Pvt., Ltd., one of the group of companies of plaintiff stating that with reference to the discussions with Mr.Rangaprasad they are offering best offer with technical specifications of the machine for the evaluation and requested M/s.Dwarakamai Food and Beverages Pvt., Ltd., to contact the defendant for any additional information that they may require.
66. As observed above, the quotation number shown in Ex.D.1 and Ex.P9 are one and the same. The defendant has /26/ Com.O.S.175/2021 revived ₹.5,00,000/- cheque from the plaintiff and not from Dwarakamai Food and Beverages Pvt., Ltd.,
67. When the defendant is not disputing the receipt of advance of ₹.5,00,000/- from the plaintiff now it is not open for the defendant that the plaintiff has not placed purchase order. Even the defendant is contending that it has settled the dispute by paying ₹.3,00,000/- to Sankethi Foods., The DW1 in his cross-examination has deposed that we have not paid ₹.3,00,000/- to Magnum Consultancy Services, we have paid ₹.3,00,000/- to Sankethi Foods as per the instructions of Mr.Ramesh. It is not true to suggest that the payment of ₹.3,00,000/- made by us to Sankethi Foods shall not discharge our liability towards plaintiff.
68. The above evidence shows that the plaintiff has placed an order for customised VFFS machine with the defendant and the defendant has received ₹.5,00,000/- as advance. In such circumstances the objections raised by the defendant regarding non issuance of purchase order has no bearing on the merits of the case.
69. The DW.1 in his cross-examination deposed that after settlement of the dispute with the plaintiff we have paid ₹.3,00,000/- to Sankethi Foods. We have reassembled and /27/ Com.O.S.175/2021 repainted the equipment and sold to some other person. He has volunteered to depose that after 3 years he has sold the equipment to somebody else. He do not remember the name of person to whom the defendant has sold the equipment. There was defect in the product. It is a customised equipment as such it is not generally available in the market. Hence, it took 3 years to find out a purchaser.
70. The DW.1 voluntarily deposed that out of ₹.5,00,000/- paid by Magnum Consultancy Services, the plaintiff has asked the defendant to retain the balance amount of ₹.2,00,000 he has no document to evidence the same. He denied that the Magnum Constancy Services has not asked the defendant to retain ₹.2,00,000 during May -June 2017. The equipment was kept ready. The defendant had informed Sri.Raju and Sri.,Ramesh of the plaintiff through telephone that the equipment is kept ready and inspect the same. He denied that the defendant has not informed the plaintiff at any point of time.
71. The defendant has exhibited Ex.D3 in support of its contentions that the defendant has paid ₹.3,00,000 to Mr.Ravindra of Sankethi Foods. The recitals of Ex.D3 show that Mr.Ravindra of Sankethi Food Products has confirmed the receipt of ₹.3,00,000 from the defendant.
/28/ Com.O.S.175/2021
72. It is specifically stated in Ex.D3 that "this payment was made to clear the dues receivable from M/s.Innovative Marketing Associates, Malleshwarm, Bengaluru, GST NO.29AX1AXIPES27144120 towards the supply of food products during September 2017. This firm is one of the firms belonging to OGARA Foods. The payments were made on the following dates:
1. ₹.1,50,000/- received on April 2018.
2.₹.1,500,000/- received on May 2018.
73. Thus it is clear from the recitals of Ex.D3 that the defendant has paid ₹.3,00,000/- to Mr.Ravindra of Sankethi Food Products. However there is no reference to the dues payable to Magnum Consultancy Services.
74. The Ex.D3 is not supported by any other document or documents to show that Mr.Ravindra was authorised to receive ₹.3,00,000/- from the defendant in respect of suit transaction. DW.1 in his cross-examination clearly deposed that there is no settlement deed between Mr.Ravindra and the defendant. In such circumstances, the payment made by the defendant to Sri.Ravindra of Sankethi Food Products cannot absolve the liability of the defendant.
/29/ Com.O.S.175/2021
75. From the materials available on record it is clear that the defendant has not cleared the dues of plaintiff. The defendant is contending that it has paid ₹.3,00,000 to Mr.Ravindra of Sankethi Foods and retained ₹.2,00,000/- toward alleged losses. Without furnishing any documents in support of its claim. Hence, the contentions raised by the defendant deserves to be rejected.
76. The DW.1 in his cross-examination has clearly admitted that the defendant has sold the machine allegedly manufactured by it to some one else. The defendant has failed to furnish details of the alleged sale transactions. However, it is clear that the defendant has failed to establish the loss alleged to have suffered by it for non-performance of the contract between the plaintiff and defendant.
77. The defendant having admitted the receipt of ₹.5,00,000/- from the plaintiff is bound to refund the same. Instead of refunding the amount received by the plaintiff the defendant has weaned a story of discharge but miserably failed to prove the discharge plea.
78. The transaction between the plaintiff and defendant is a commercial transaction. The plaintiff has paid ₹.5,00,000/-
/30/ Com.O.S.175/2021 on 14.04.2017 through a cheque as per Ex.P.2 and the cheque was realised on 17.04.2017. The defendant has retained the amount unnecessarily without there being any good grounds. In such circumstances the plaintiff is entitled to claim interest from the defendant on ₹.5,00,000/- from the date of encashment of cheque i.e. 17.04.2017 till the date of payment of entire amount. As this is a commercial transaction, the defendant is liable to pay interest at 18% p.a.
79. In view of the above discussion I answer Issue No.1 in the Affirmative and Issue No.2 and 3 in the Negative.
80. ISSUE No.4: The plaintiff has stated that the period of three years from the date of last payment elapsed on 17.04.2020. However, in view of COVID-19 pandemic, the Hon'ble High Court was pleased to declare closure of Courts for the purpose of Section 4 of the Limitation Act, 1963 extended from time to time till 31st January 2021. The plaintiff has initiated pre-institution mediation against the defendant in PIM No.60/2021 before the District Legal Service authority on 16.01.2021. The same has ended as a non-starter. It is pertinent to point out that under Section 12A of the Commercial Court Act, 2015 the period during which the parties are occupied with pre-institution mediation is not to be computed for limitation. Immediately upon becoming aware of /31/ Com.O.S.175/2021 the non-starter report, the plaintiff has filed the above suit.
81. The defendant is contending that the suit is hopelessly barred by limitation.
The Hon'ble Supreme Court of India IN RE: Vs. Cognizance LAWS(SC) 2022 1 35SUPREME COURT OF INDIA has passed the order dated 10/01/2022 holding that The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings.
82. The plaintiff has filed the suit on 19.02.2021. In view of exclusion of limitation period from 15.03.2020 to 28.02.2022 as per the orders of the Hon'ble Supreme Court of India, the suit filed on 19.02.2021 during the suspended period of limitation is not barred by limitation. Accordingly, Issue No.4 is answered in the NEGATIVE.
83. Issue No.5: In view of the discussions and findings on Issue No.1 to 4, I am of the opinion that the plaintiff is entitled to recover ₹.8,52,500/- along with interest at 18% p.a. /32/ Com.O.S.175/2021 on ₹.5,00,000/- from 17.03.2021 till the date of realization. Accordingly, issue No.5 is answered in the Affirmative.
84. ISSUE No.6: In view of the above discussion and findings on Issues No.1 to 5, I pass the following ORDER The suit filed by plaintiff is hereby decreed with costs.
The defendant is liable to pay the plaintiff a sum of ₹.8,52,500/- (Rupees Eight Lakhs Fifty two Thousand Five Hundred only) along with interest at 18% p.a. on ₹.5,00,000/- (Rupees Five Lakhs only) from 17.03.2021 till the date of realization.
Draw decree accordingly.
The office is hereby directed to send a copy of the judgment to the plaintiff and defendant through e-mail as per Order XX Rule 1 CPC as amended by Section 16 of Commercial Courts Act, 2015.
(Dictated to the Stenographer, corrected, signed and then pronounced by me in the open court on 15th day of October 2022) (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU.
(CCH-90) /33/ Com.O.S.175/2021 ANNEXURES List of witnesses examined for the plaintiffs:
P.W.1 : Sri.Goutham B.S. List of documents exhibited on behalf of the plaintiffs:
Sl.No. Particulars of documents Ex.P.
1. Statement of account extract (Exhibited Ex.P.1 on 09.11.2021 in view of admission of documents by the defendant)
2. Copy of cheque bearing No.560229071 Ex.P.2 dated 14.04.2017/ICICI Bank for Rs.5,00,000/- (Exhibited on 09.11.2021 in view of admission of documents by the defendant)
3. General Power of Attorney issued by the Ex.P.3 plaintiff dated 16.02.2021
4. Partnership deed dated 05.04.2014 Ex.P.4
5. Acknowledgment issued by registrar of Ex.P.5 firms dated 08.04.2014
6. Copy of emails sent by defendant (5 Ex.P.6(1) to No.s) (5)
7. Non-starter report issued in PIM Ex.P.7 60/2021
8. Certificate U/sec. 65B of Evidence Act Ex.P.8
9. Copy of Purchase Order dated 04-05- Ex.P.9 2017 /34/ Com.O.S.175/2021 List of witnesses examined for the defendant/s:
DW1 : Sri.Jayaprakash.T.R. List of documents marked for the defendant/s:
Sl. Particulars of Documents Ex.D. No. 1. Email copy dated 24.09.2019 Ex.D1 2. Copy of reply notice dated 22.07.2019 Ex.D2
sent through Email by the defendant to termination notice dated 11th July 2019 issued by the plaintiff
3. Certificate issued by Sankeethi Foods Ex.D3 products along with memo of calculation
4. Partnership deed dt 17-06-2010 Ex.D.4
5. Authorization letter Ex.D.5 (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU.
(CCH-90) **** Digitally signed SJ by S J KRISHNA KRISHNA Date: 2022.10.17 02:35:45 -0400