Delhi District Court
(Csdj-14924/16) vs Unknown on 14 October, 2016
(CSDJ-14924/16)
IN THE COURT OF MS. DEEPALI SHARMA,
ADDL. DISTRICT JUDGE-14 (CENTRAL), TIS HAZARI
COURTS, DELHI.
CSDJ-14924/16
(Old CS-392/16)
Elektroweld Automations India (P) Ltd
202-203, Kamal House, Plot No.6,
W.H.S. Furniture Block,
Kirti Nagar, New Delhi-110015.
....... Plaintif
Versus
1. Glaves Corporation,
A-406-a, vkia,
4th Road, Jaipur-113.
2. Mr. V.B. Jain,
Managing Director,
Glaves Corporation,
A-406-a, vkia,
4th Road, Jaipur-113.
.... Defendants
Date of Institution of suit: 13.04.2007
Date when reserved for judgment: 07.09.2016
Date of pronouncement of judgment: 14.10.2016
SUIT UNDER ORDER XXXVII of CPC
FOR RECOVERY OF Rs.4,88,000/-
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35)
(CSDJ-14924/16)
JUDGMENT:
1. Plaintiff has instituted the present suit against the Defendants under Order XXXVII of the Code of Civil Procedure, 1908 for recovery of Rs. 4,88,000/- together with interest and costs.
2. Briefly stated, the facts of the case are that the Plaintiff is a Private Limited Company registered with Registrar of Companies. The Plaintiff is engaged in the business of manufacturing, export- import and supply of Welding machines, equipments and its allied products. Shri Vipin Sinha is the Director of the Plaintiff Company and has been authorized vide a resolution dated 27.09.2017. The plaint has been signed and verified by Shri Vipin Sinha.
3. It is averred in the Plaint that Defendant No.2 is the Managing Director of Defendant No.1 and is acting and dealing with day-to-day affairs of Defendant No.1. Defendants placed a purchase order bearing No.5730/2396 dated 16.04.2004 upon the Plaintiffs for supply of one automatic PTA Stellite Deposition System. Payment schedule as agreed between the Plaintiff and Defendants was (1) Rs.2.5 Lacs to be paid as advance with order; (ii) Rs. 11 Lacs plus taxes etc. after inspection; and (iii) Balance Rs.1.5 Lacs (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) within thirty days after successful commissioning and installation.
4. The Defendant paid Rs.2.5 Lacs in advance vide cheque No.636267 dated 14.04.2004 and thereafter Rs. 10 Lacs vide cheque No.636217 dated 05.07.2014. The Plaintiff supplied the said machine to the Defendant vide Invoice No.039 dated 05.07.2004 for a total cost of Rs.15,55,000/- and the Defendant vide undated fax message, acknowledge the receipt of the same and also agreed to send 'C' Form for the said supply once the machine supplied was set right and accounts were verified.
5. The Plaintiff has further averred that the said machine was commissioned to the satisfaction of Defendants at the site of the Defendants on 22.09.2004 and after being satisfied with the work, the Defendant released the 'C' Form dated 04.10.2004 to the Plaintiff acknowledging the entire amount against which the said 'C' Form was issued. However, the Defendant failed to make the payment of the balance amount. Vide its letter dated 13.10.2004, the Plaintiff demanded the balance payment of Rs.3,05,000/- from the Defendants, however, the Defendants did not pay the said amount. Thus the Defendants failed and neglected to (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) fulfil their commitment, hence, it is averred that as agreed between the parties, Defendants are also liable to pay an interest @ 24% per annum on the outstanding dues.
6. The Plaintiff finally sent a legal notice dated 03.10.2006, calling upon the Defendants to make the payment of entire outstanding amount along with interest from the date when the amount became due. Despite service of the said notice, the Defendants failed to pay the outstanding amount.
7. It is further averred in the plaint that as per the Ledger Account, maintained by the Plaintiff, the Plaintiff is entitled to the following amount from the Defendant:
(a) Principal amount : Rs.3,05,000/-
(b) Interest @ 24% on
the Principal amount w.e.f. : Rs.1,83,000/-
1.09.04 to 31.03.07
Total : Rs.4,88,000/-
8. Accordingly, the suit is filed under Order XXXVII of the CPC was filed on the basis of invoices/ bills raised by the Plaintiff and 'C' Form issued by the Defendant acknowledging their admitted liability.
9. The summons of the suit were sent to the Defendants. The Defendants appeared before the (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) court on 27.02.2008 and filed the Application seeking Leave to Defendant. Vide order dated 22.01.2010 of the Ld. Predecessor Court, the said application was allowed and unconditional leave to defend was granted to the Defendants.
10. The Defendants filed their Written Statement taking the preliminary objections that present suit is devoid of cause of action, there has been concealment of material facts and documents and is liable to be dismissed with costs and the present suit has not been instituted by a duly authorized person and as such, same is liable to be dismissed. The Defendants also averred that this Court has no territorial jurisdiction to try and entertain the present suit as the Defendants work for gain at Jaipur.
11. On merits, it has been submitted that Shri V.B. Jain is a qualified Mechanical Engineer from BITS, Pilani, who set up Defendant No.1 in 1977 in Jaipur and it is enganged in the manifucting of very hi-tech equipments used in Polyester and Man made fibre industry. It is further averred that in the process of up-gradation of technology and to execute some export obligations, this very hi-tech plant of "Automatic PTA (Plasma Transferred Act) Stellite Deposition System with PLC Control" (herein-after (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) referred to as the PTA Machine) was considered necessary to be purchased and the Plaintiff was short listed. Technical discussions were held with the Plaintiff Company. The PTA machine was shown by the Plaintiff as its own product. It was however, not disclosed that it would be manufactured by M/s. Mastermind, which was located at Pune. This fact was made clear only after a few meetings at the time of finalization of Order.
12. It is further averred in the Written Statement that a conditional letter of intent was placed on 12.03.2004. Subsequently on 16.04.2004 a formal purchase order was placed on the Plaintiff for complete "Automatic PTA (Plasma Transferred Act) Stelite Deposition System with PLC Control" for Rs.15 Lacs plus taxes etc. with strict terms like delivery etc. An advance sum of Rs.2.5 Lacs was paid with the Order.
13. The date of trial was fixed as 07.05.2004 at M/s. Mastermind Equipments premises at Pune, which was postponed to 16.05.2004 because the machine was not ready which was also ultimately postponed to 25.05.2005. A visit of Defendant No.2 and the Technical Manager of Defendant No.1 was organized on 28.05.2004 at the premises of Masterminds, Pune, but the PTA machine was not complete and a lot of (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) jobs were found incomplete. In spite of Plaintiff's and Mastermind's efforts, the PTA torch failed to ignite and by late night of 30.05.2004, the trial had to be aborted.
14. It is further alleged by the Defendants that after return to Jaipur, they sent a letter dated June 2, 2004 with a list of their observations and a list with 26 main points.
15. It is averred that the second installment of Rs.10 Lacs plus taxes were released on the pretext that Mastermind would not release the machine before getting its full payment. A check-list of 14 points was sent to the Plaintiff on 18.06.2004 so that before dispatch, the said points were checked. Subsequently, the machine was received at Jaipur on 16.07.2004.
16. It is stated that the Plaintiff kept pressing for balance amount which was not at all payable to the plaintiff in view of the defects in the said machine, which the Plaintiff, inspite of repeated reminders failed to rectify and the same caused substantial loss to the Defendants. It is further averred that the services of an Engineer were availed, and the Mechanical problems were handled by the Defendants on their own and the Plaintiff accepted to (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) bear the debit note on account of said expenses borne by the Defendant. A Debit note was sent to the Plaintiff on 29.12.2004 for Rs.3,05,000/- clearing the old account and 'C' form was issued for full bill account on their repeated requests on 04.10.2004 in order to avoid the penalty. The Plaintiff assured to co- operate in getting the said machine commissioned successfully, failing which they would take back the said machine. It is also averred that the Defendants paid for an Automatic Shielding System purchased from the Plaintiff and issued cheque bearing No. 832079 dated 29-12.2004 for Rs.10,000/- promptly and there was no pending dispute with respect to the said item. In August, 2006, the power source broke down and Plaintiff sent the circuit diagram which was not sent earlier by it and also sent the notice through their Advocate even though they had accepted the debit note.
17. In its replication, the Plaintiff has reaffirmed the contents of the plaint and has denied the assertions of the Defendants. It is denied that the PTA machine which was supplied by the Plaintiff to the Defendants was shown as the own production of the Plaintiff. The Plaintiff company is engaged in the marketing of PTA machine which is the product of M/s. Mastermind and (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) this fact was within the knowledge of Defendants from the very beginning as the quotation of Plaintiff also specifies the said details. It is averred that the Plaintiff completed the machine in time and conducted the trial also as per the agreement. It is further averred that on 28.05.2004 when Defendant No.2 alongwith Representative of Defendant No.1 visited to inspect the said machine, it was at the stage of completion and was not fully complete. It is denied that the said machine miserably failed to perform as per satisfaction of the Defendant. It is further averred that had it been the case, the Defendants were at liberty to reject the said machine, but they asked the Plaintiff to continue the competition of the machine. As per the agreement, the payment of Rs.11 Lakhs was to be made after inspection of the machine at work site of plaintiff before dispatch. The Plaintiff performed all the commitments made in the agreement, rather Defendants did not keep their commitments and every time demanded new things to be added in the machine, which was never a part of the agreement. The Plaintiff commissioned the said machine to the satisfaction of the Defendants on 22.09.2004. The machine was working properly from the very (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) beginning and this fact has also been reflected in the minutes of meeting dated 23.08.2004 held between the Representatives of Plaintiffs and Defendants. The C-Form was issued but It is denied that C-form was issued on categorical assurance of the Plaintiff. The acceptance of the debit note by the Plaintiff has been denied.
18. On pleading of the parties, vide order dated 30.07.2010, following issues were framed:
i) Whether the suit has not been filed by a duly authorised person ? OPD
ii) Whether this Court has no territorial jurisdiction to entertain the present suit ? OPD.
iii) Whether the Plaintiff is entitled for a decree of Rs.4,88,000/- against the Defendants ? OPP.
iv) Whether the Plaintiff is entitled for pendentelite and future interest, If yes, then at what rate and for what period ? OPP.
v) Relief.
19. In order to prove its case, Plaintiff has examined Shri Vipin Sinha, Director of the Plaintiff Company, as PW-1. He tendered his evidence by (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) way of affidavit Ex.P1/A. PW1 has corroborated the averments mentioned in the Plaint. He has relied upon the letter of authority dated 27.09.2007, Ex.PW1/1, purchase order dated 16.04.2004, Ex.PW1/2, Invoice dated 05.07.2004, Ex.PW1/3, E- mail intimation regarding receipt of invoice dated 05.07.2004, Ex.PW1/4, C-Form dated 17.06.2004 Ex.PW1/5, letter dated 13.10.2014, Mark-A, (which was marked in the affidavit as Ex.PW1/6 and deexhibited), notice dated 03.10.2016, Ex.PW1/7 Postal Receipt, Ex.PW1/8, UPC receipt, Ex.PW1/9, A/D Card, Ex.PW1/10 and ledger account, Ex.PW1/11. While being cross-examined on behalf of the Defendant, PW1 was directed to bring the Minutes Book. He produced the extract of the minutes books and proved the same as Ex.PW1/X. PW1 has also proved a copy of the reply to the communication dated 14.10.2004 as Ex.PW1/B. He further admitted the letter Ex.PW1/D-1 as written by him.
20. Vide separate statement, Shri Vipin Sinha, Director of the Plaintiff closed its evidence.
21. On behalf of Defendants, Shri Vinod Bharti Jain, Sole Proprietor of the Defendant Company was examined as DW1. He led evidence by way of his (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) affidavit Ex.DW1/A. He has relied upon the original letter dated 01.03.2004, Ex.DW1/1, Original Purchase Order dated 16.04..2004, Ex.DW1/2, Office copy of letter dated 12.03.2004 Mark-A (which was mentioned in the affidavit as Ex.DW1/3 and de- exhibited), Copy of letter dated 04.05.2004 Mark-B, (which was mentioned in the affidavit as Ex.DW1/4 and de-exhibited), Letter dated 02.06.2004 Ex.DW1/5, Invoice dated 19.04.2004, as Ex.DW1/6, Extracts of E-mail dated 18.06.2004 Mark-C, (which was mentioned in the affidavit as Ex.DW1/7 and de- exhibited), again Extracts of E-mail dated 18.06.2004 Mark-D, (which was mentioned in the affidavit as Ex.DW1/8 and de-exhibited), Original letter dated 29.07.2004, Ex.DW1/9, & letter dated 03.08.2004 as Mark-E (which was mentioned in the affidavit as Ex.DW1/10 and de-exhibited), Office copy of letter dated 14.10.2004 Mark-G (which was mentioned in the affidavit as Ex.DW1/12 and de- exhibited), Letter dated 19.10.2004. Ex/DW1/13, copy of letter dated 29.12.2004 Mark-H (which was mentioned in the affidavit as Ex.DW1/14 and de- exhibited), Office copy of invoice dated 27.12.2004 Ex.DW1/15, Copy of affidavit of Shri Divesh Singh Tomar Mark-I (which was mentioned in the affidavit (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) as Ex.DW1/16 and de-exhibited), Copy of e-mail dated 14.08.2006, Mark-J (which was mentioned in the affidavit as Ex.DW1/17 and de-exhibited), Original invoice dated 30.11.2004, Ex.DW1/18; Invoices dated 25.11.2004, 19.05.2005, 04.12.2004, 11.11.2004, 09.11.2004 another invoice dated 09.11.2004, Ex.DW1/19 to 24 respectively; Original letters dated 02.06.2004 and 08.03.2004, Ex.DW1/15 & 26 respectively.
22. Vide separate statement, Defendant No.2, Proprietor of Defendant No. 1 closed the DE. Issuewise findings are as under:
23. Issue No. 1:
"Whether the suit has not been filed by a duly authorised person ? OPD."
The onus to prove this issue was upon the Defendants. Ld. Counsel for the Defendants has contended that the present suit has neither been filed by a duly authorized person nor the plaint has been signed and verified in accordance with law by a duly authorized person and as such, the same is liable to be dismissed.
24. In this connection, it is relevant to note that it has been held in a catena of decisions of the Hon'ble Supreme Court and the Hon'ble Delhi High Court that (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) suits by Companies when filed on behalf of Principal Officers, should be held to be validly instituted in terms of Order 29 Rule 1 CPC. The Hon'ble Supreme Court in Union Bank of India v. Naresh Kumar & Anr, AIR 1997 SC 3, has held that even in absence of any formal letter of Authority or Power of Attorney, having been executed, a person referred to in Rule 1 of Order 29 CPC can, by virtue of the office that he holds, sign and verify the pleadings on behalf of the Corporation.
25. In the matter of "J.K. Synthetics v. Dynamic Cement Traders, 2012 (132) DRJ 333", the Hon'ble Delhi High Court following the above noted judgment of the Hon'ble Supreme Court further observed that the fact that the suit has been pursued by the Plaintiff Company to the hilt and as the witness was the Deputy General Manager in the company, the suit was held to be validly instituted by him.
26. The instant suit has been instituted by Shri Vipin Sinha who is the Director of the Paintiff Company and is stated to be managing all the affairs of Company. The Minutes of the Meeting of Board of Directors, held on 18.02.2007, authorizing Shri Vipin Sinha to sign, verify, institute, defend, lead evidence in the proceedings etc. has been exhibited as Ex.PW1/1. The instant suit has been filed by Shri Vipin Sinha and supporting affidavit to (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) the plaint has also been signed by Shri Vipin Sinha. Accordingly, it is held that the instant suit has been filed by an authorized person and the ground raised by the Defedants in this regard is accordingly untenable.
27. Thus Issue No.1 is decided in favour of Plaintiff and against the Defendants.
Issue No. 2:
"Whether this Court has no territorial jurisdiction to entertain the present suit ? OPD."
28. The onus to prove this issue was also upon the Defendants. The Plaintiff has averred in the plaint that the instant Court has jurisdiction to try and entertain the instant suit and the Defendant has placed the Purchase Order on the Plaintiff at Delhi and payments were made by the Defendants to the Plaintiff in Delhi.
29. Perusal of the Purchase Order dated 16.04.2004, Ex.DW1/2 indicates that the said purchase order has been placed by the Defendant upon the Plaintiff at its Office at Kirti Nagar, Delhi. In such circumstances, a part of cause of action has arisen within the jurisdiction of this Court. Accordingly, this issue is decided in favour of the Plaintiff and against the Defendants.
30. Issue No. 3:
"Whether the Plaintiff is entitled for a decree of Rs.4,88,000/- against the Defendants ? OPP."
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16)
31. The onus to prove this issue was upon the Plaintiff. In support of its contention, the Plaintiff has relied upon the testimony of PW1 Shri Vipin Sinha, Director of the Plaintiff Company. In terms of the Purchase Order dated 16.04.2004, Ex.DW1/2, Rs.2.5 Lacs were to be paid as advance, Rs.11 Lacs were to be paid after inspection of the machinery before it was dispatched and balance Rs.1.5 Lacs were to be paid on successful commission of the machinery. In pursuance of the said Purchase Order, the Defendant admittedly paid an amount of Rs.2.5 Lacs as advance amount alongwith the Purchase Order. Thereafter admittedly, on 05.07.2004, the Defendant made a payment of Rs.10 Lacs subsequent to the inspection of the machinery at the work-place of the Plaintiff. It is stated that the Plaintiff supplied the said machine to the defendant vide Invoice No.039 dated 05.07.2004, Ex,PW1/B for a total cost of Rs.15,55,000/-. Pursuant thereto, the Defendant acknowledged the receipt of Invoice/ Bill No.039 dated 05.07.2004, Ex.PW1/4 from the Plaintiff. It is averred that the machine was commissioned to the satisfaction of the Defendant on 22.09.2004 and the Defendants released the C-Form dated 04.10.2004, acknowledging the entire amount against which the machinery was purchased. The said C-
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) Form is exhibited as Ex.PW1/5 against invoice No.039 dated 05.07.2004. It is averred that on successful commissioning of the machinery to the satisfaction of the Defendant, the Plaintiff demanded balance payment of Rs.3,05,000/- from the Defendant vide its letter dated 13.10.2004 in terms of Purchase Order Ex.DW1/2. However, the Defendant failed to make the payment of outstanding payment and accordingly, legal notice Ex.PW1/7 was sent to the Defendant by the Plaintiff, claiming that the amount of Rs.3,05,000/- alongwith interest @ 24% per annum, amounting to Rs.1,83,000/- on the said amount was due from the Defendants.
32. On the other hand, it has been contended by the Defendants that the machinery supplied by the Plaintiff was defective. It is averred that even though the purchase order was placed upon the Plaintiff, it was only at a later stage that the Defendants were apprised of the fact that the machinery was manufactured by M/s. Mastermind Equipments and the Plaintiff was only marking the said machinery.
33. During his further cross-examination, PW1 Shri Vipin Sinha has denied the suggestion that the Plaintiff had promised to supply an Italian made PTA Torch. He has denied that the PTA Torch supplied by the Plaintiff could (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) not even take 90 Amps and was over-heated on short runs and stops.
34. PW1 has admitted that between the work and the Torch medium of argon reaches to a temperature upt 5000 Degree C. PW1 has admitted the suggestion that the PTA Torch had failed once but he could say whether it was replaced by the Defendant with an imported one. He denied that the Plaintiff was supposed to supply 350 A power source of luftar C-4000 and stated that it was supposed to supply 250 A Power source of Luftar C-4000. He stated that Plaintiff supplied combinwig - 3000 D/C micro processor control system and its capacity was 250 Amps. PW1 has further admitted that the said component combiwig 3000 supplied by Plaintiff was different from the said component i.e. 350 A Luftar 4000. He voluntarily stated that it was supplied with the prior permission of the Defendant and the said component was superior component than the previously agreed upon component and the said component supplied by the Plaintiff was superior and costlier than which Plaintiff was to supply, however, the Plaintiff did not demand any price difference from the Defendant. PW1 further stated that the cooling system provided by the Plaintiff was a Voltas Water Cooler but he did not remember the exact capacity of the same. PW 1 further voluntarily stated that the Plaintiff had (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) carried out modifications by adding various sensors and safety devices to convert the same to an industrial chilling plant. In answer to a specific question, PW1 has stated that there was no question of any warranty given by Voltas because the Plant was purchased by Defendants from the Plaintiff and the Plaintiff gave the warranty to the Defendant. He has denied his knowledge whether a proper industrial water chilling plaint was available in the market. He deposed that the cooling capacity of the cooling system may or may not increase after installing the censors and safety devices.
35. In cross-examination, DW1 Shri Vinod Bharti Jain, has given details of the specifications which were not complied with by the Plaintiff in the supply of PTA Machine / PTA Stellite Deposition System.
36. It is accordingly stated by the Defendant that Defendant had to carry out certain repairs in its machinery supplied by the Plaintiff and figure of expenses in this regard has been shown in the invoices Ex.DW1/18 to Ex.DW1/23 and accordingly, the Defendant sent a debit note on 29.12.2004 to the Plaintiff for an amount of Rs.3,05,000/- towards the expenses incurred in the repair of PTA Machine.
37. It, therefore, appears from the deposition of PW1, that the Defendants have endeavored to point out the (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) discrepancies in the machine and that the Plaintiff had supplied certain components which were not as per the specifications, including the industrial chilling plant.
38. Perusal of the record shows that vide letter dated 01.03.2004, Ex.DW1/1, the Plaintiff sent its quotation for supply of Automatic PTA Stelite Deposition System with PLC Control. The said quotation included the Technical Offer and Commercial Offer along with design of the said machine. It is relevant to note that it is mentioned in the said quotation that the Plaintiff was only marketing the PTA Satellite Deposition System with PLC Control and the drawing was provided by M/s. Mastermind Equipments, who was the manufacturer of the said Machinery. Further, the Defendants never wrote any letter to the Plaintiff objecting to the manufacture of the machine by M/s Mastermind Equipments. Accordingly, the contention of the Defendants in this regard is without any merit.
39. Subsequently, the Defendants placed a Purchase Order on the Plaintiff on 16.04.2004, Ex.DW1/2, which included the Technical details of the said PTA System. A payment of advance amount of Rs.2.5 Lacs was also made alongwith the said Purchase Order. The Defendant informed the Plaintiff vide Letter dated 02.06.2004 Ex. DW-1/5 that the demonstration of the PTA system could not be organized by 30.05.2004 and that PTA torch failed (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) to ignite. The Plaintiff was asked to take the necessary steps in this regard. The Defendant also enclosed a "to do list" alongwith the said letter indicating their general observations with respect to the Machine in question.
40. On 18.06.2004, the Defendant told the Plaintiff vide letter Mark-'C" that successful trial of the Machine has been carried out at Pune and that the same was ready after paint and assembly. Further, the Defendants also brought to the attention of the Plaintiff certain other requirement in the Machinery and also referred to the "to do list" on 02.06.2004 and asked the Plaintiff to make a compliance of the said list to the maximum extent feasible. It also requested the Plaintiff to make certain changes in the Machine that could enable it to do the job/ work of different kinds. Thereafter the Plaintiff raised an Invoice bearing No.039 dated 05.07.2004 Ex. PW-1/3 for an amount of Rs.15,55,000/- and the Defendant vide undated fax message, acknowledged the receipt of the same and also agreed to send 'C' Form for the said supply once the machine supplied is set right and account is verified.
41. On 28.07.2004, the Defendant wrote to the Plaintiff vide letter Mark-'D', (replied to by Plaintiff vide letter dated 29.07.2004) indicating that the PTA torch failed to perform and also asked the Plaintiff to send manuals etc. from Delhi for the purpose of understanding the Machine. In (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) response to the letter dated 28.07.2004, the Plaintiff wrote to the Defendant on 29.07.2004 vide letter Ex.DW1/9, wherein the Plaintiff addressed the concerns of the Defendants in detail and also asked the Defendant to send the payment of Rs.1,55,000/-. In the said letter, the Plaintiff also admitted that a few items broke-away in the commissioning trial due to which the commissioning was suspended. The Plaintiff, accordingly, stated that it would make best efforts to commission the Machine after having received the confirmation from the Defendant.
42. Thereafter, on 03.08.2004, the Defendants allegedly wrote to the Plaintiff (Mark-E) wherein the Defendants indicated the reservation it had as regards to Machine. It is further stated therein that a payment of Rs.10 lacs was made on confirmation from the Plaintiff that the Machine/ system has been thoroughly checked and found OK. The Defendants have stated therein that Defendants paid Rs.10 Lacs on the request of the Plaintiff, stating that M/s. Mastermind Equipment would not release the Machine unless the payment was made to them. The Defendants further stated that the Machine/ System has failed, therefore, there is no reason to pay any additional amount and, therefore, the said amount shall be paid only on successful trial of the Machine.
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16)
43. In their letter dated 25.09.2004, marked as Mark-'F'(acknowledged in the letter dated 19.10.2004 sent by Plaintiff to the Defendants Ex DW1/13), the Defendant acknowledged that the new PTA Torch was of a better quality and hoped that there would be no problem in its functioning. The Defendants also mentioned therein that they would be undertaking repairs/ replacement of Manipulator components/ PLC etc themselves on cost basis as agreed to by the Plaintiff telephonically.
44. Subsequently, on 13.10.2004 the Plaintiff wrote to the Defendants that the machine has been commissioned on 22.09.2004 by the Plaintiff and the Defendant was requested to release the balance amount. The said letter was duly acknowledged by the Defendants in their letter dated 14.10.2004 (Mark-G).
45. In reply to the said letter dated 13.10.2004, the Defendant wrote to the Plaintiff on 14.10.2004, Mark G (replied to by the Plaintiff vide letter dated 19.10.2004, hence stands proved) stating that Machinery had certain defects and commissioning alone could not be adequate to enable full payment and accordingly, the Defendant has no alternative but to reject the complete machine which had failed on all grounds. The Plaintiff was asked to refund the advance money amounting to (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) Rs.12,68,321/-. It is stated in the said letter that if any suitable action was not taken within 15 days, the Defendants would have no option but to dispose of the machine in the open market and to recover the balance amount through legal recourse.
46. In response to the letter dated 14.10.2004, the Plaintiff addressed a letter dated 19.10.2004 to the Defendants (Ex. DW-1/13) wherein the Plaintiff stated that from their side, the machine stood fully commissioned . The Plaintiff further stated therein that all the functions in mechanical portion were perfectly alright and manipulator was capable of taking the load as per the job details in the Purchase Order. It was also mentioned therein that the Helix angle was being programmed by the PLC even though there was no discussion and mention in the Purchase order. It is further stated in the said letter that there was no need to alter or modify any system or part thereof which would lead to deterioration of the performance of the machine for which the plaintiff should not be held responsible. Accordingly, it was stated by the Plaintiff that there was no reason to accept the rejection of the machine. It is was also stated that the Plaintiff had provided much more in the machine as per the requirement of the Defendant which asked for only after the Purchase Order was placed and financial terms (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) agreed. It is also mentioned therein that in the event the additional requirements were discussed at the time of Purchase Order stage, the price of the machine would have been nearly 15 to 20 percent higher. However, the additional requirements were stated to have been provided to the Defendants by the Plaintiff as a goodwill gesture. The Plaintiff also requested that the extra power source model Luftig-1700DC, which was provided to the Defendants for the purpose of trial, be returned to the Plaintiff. The Defendant was again requested to make payment of balance due to the Plaintiff.
47. Thereafter, on December 29, 2004, the Defendant allegedly issued a Debit Note for the PTA machine supplied by the Plaintiff, of the value of Rs.3,05,000/- in lieu of the repairs carried out by the Defendant in the said PTA machine.
48. Admittedly, the machine was commissioned by the Plaintiff at the Defendants' premises on 22.09.2004 which is reflected in the Plaintiff's letter dated 13.10.2004. The said letter dated 13.10.2004 was replied to by the Defendants on 14.10.2004 wherein the Defendants stated that the PTA machine supplied by the Plaintiff was rejected since there were certain defects in the machine. The Plaintiff was also asked to remove the machine from the Defendants' premises and in the event, no action was (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) taken by the Plaintiff, the Defendant would dispose of the machine. Subsequent to this, the Plaintiff wrote to the Defendants on 19.10.2014 vide Ex.DW1/13.
49. It is also relevant to note that on 22.09.2004, the Representative of the Plaintiff visited the Defendants for the purpose of commissioning of the PTA system. The said meeting was attended to by the Representative of the Plaintiff and the Defendant. The minutes of the said meeting, Ex.DW1/P1 record that the machine was working in an auto and manual mode properly.
50. Vide letter dated 19.10.2004, Ex.DW1/13, the Plaintiff informed the Defendant that there was no reason for the Defendants to reject the machine as the Plaintiff had provided much more in the machine than was envisaged in the Purchase Order. Therefore, the Defendant was asked to return the machine or else pay for it. Thereafter, there was no communication from the Defendants to the Plaintiff nor was the machine returned by the Defendants. It is only on 29.12.2014 that a Debit Note was allegedly sent by the Defendant to the Plaintiff (not exhibited/marked and reciept thereof is denied by the Plaintiff) and whereby the Defendants detailed the cost incurred by the Defendants in replacing the defective parts in the machine with the new parts.
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16)
51. In this regard, it is relevant to note that after the commissioning of the machine on 22.09.2004, as mentioned in the letter dated 13.10.2004, and despite writing to the Plaintiff, on 14.10.2004, that the Defendants were rejecting the machine, the Defendant neither returned the machine nor paid the remaining price of the machine. In fact, the Plaintiff vide its letter dated 19.10.2004, Ex.DW-1/3 addressed all the concerns of the Defendant and stated that Plaintiff had provided much more in the PTA Machine than was mentioned in the Purchase Order. Thereafter, the Defendant remained silent and did not voice any concern as regards the PTA Machine and it is only in December 29,2004 that the Defendants allegedly raised a Debit Note for an amount of Rs.3,05,000/- which is exactly the amount which was due from the Defendants to the Plaintiff.
52. In so far as the alleged defects in respect of which the Plaintiff has been cross examined it is observed as follows:
(i) PTA torch : As per the Technical Offer of The PTA torch, the same was to have a current capacity of 200A at 100 percent (with duty cycles 350A at 60%).
It is also stated in letter dated 25.9.2004 written by Defendants to the Plaintiff that the Defendants were thankful for supply of new PTA Torch in smaller (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) length and hoped that there would be no problem in its functioning;
(ii) Chilling plant: the said issue was never raised earlier by the Defendant in any of its earlier correspondence with the Plaintiff and the same has been raised only as an afterthought;
(iii) PLC: The offer letter does not specify that the PLC to be supplied was to be of the make of Siemens Company. The minutes of the meeting dated 23.8.2004 Ex DW1/P1, attended by the representatives of the Plaintiff and Defendants record that wiring of Messung PLC was done properly and the machine is working in auto and manual mode properly.
The aforesaid indicates that the concerns raised by the Defendants were addressed by the Plaintiff.
53. Be that as it may, significantly, the Defendant remained silent after the Plaintiff's letter dated 19.10.2004, wherein the Plaintiff had categorically mentioned that it had addressed all the concerns as regards the PTA machine and, therefore, there was no obligation remaining on the part of the Plaintiff. In absence of any reply thereto and no further reply/action being taken by the Defendants it can be safely concluded that the defendants did not deny the contents of the said (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) letter. In this regard, reference is made Section 42 of the Sale of Goods Act,1930, which reads as under:
"42. Acceptance.--The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."
54. Accordingly, even though the Defendants herein- above had written to the Plaintiff on 14.10.2004 that the PTA Machine stood rejected by it and that the Defendant would sell the said Machine in order to recover its price amount / amount already paid to the Plaintiff, nothing of that sort was done by the Defendants. Moreover, subsequent to the letter of rejection dated 19.10.2004 (Ex.DW1/13), written by the Plaintiff to the Defendant, whereby the Plaintiff is stated to have provided much more in the said PTA Machine than was envisaged in the Purchase Order and also stated that there was no reason to reject the Machine, the Defendant continued to retain the PTA Machine. No communication was sent by the Defendants to the Plaintiff thereafter, complaining about any defect in the machine. After two months, on 28.12.2004 that the Defendants allegedly issued the Debit Note to the Plaintiff for exactly the same amount as (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) was due to the Plaintiff against the Defendant. The defendants have failed to prove the said document and thus it cannot be read in evidence. In such circumstances, it can be inferred that the Plaintiff was able to establish that the PTA machine was duly commissioned by it and the fact that no complaint was sent by the Defendant to the Plaintiff after the letter dated 19.10.2004. Admittedly, the Defendant did not return the machine and accordingly, it is deemed that the PTA machine stood accepted by the Defendant in terms of section 42 of the Sale of goods Act,1930.
55. The basis of not paying the consideration of Rs.3,05,000/-, is the issuance of Debit Note dated December 29, 2004 for an amount of Rs.3,05,000/-, wherein the Defendant has detailed the deduction made by it. As stated above, the Plaintiff has denied the receipt of the said Debit Note. The said document has not been proved by the Defendant. The same has neither been marked/exhibited by the Defendant. The Defendant has also relied Ex.DW1/18 to Ex.DW1/24 which are the invoices vide which the Defendant had removed the defects in the said PTA System. However, the said invoices do not tally with the Debit Note allegedly issued by the Defendant. The said invoices have also not been proved in accordance with law in as much as the author (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) of the bills have not been called as a witness to prove them. Moreover, the Defendant did not intimate to the Plaintiff that it would cause/ contract such repairs in the PTA Machine at the cost of the Plaintiff. Between 19.10.2004 till 16.04.2007 (i.e. date of filing of suit), there is no communication by the Defendants to the Plaintiff indicating that there were defects in the PTA Machine, except the Debit Note dated 29.12.2004, which has been denied by the Plaintiff. The said document has not been proved by the Defendant. Once the PTA Machine stood accepted by the Defendants and no further documentary evidence as regards any defect, is on record, it can be safely concluded that no further defect remained in the machinery and the Defendants accepted the PTA Machinery as it is.
56. The Defendant has contended that the Plaintiff has admitted in its evidence that there were certain defects in the PTA Machine. However, there is no documentary evidence to show that subsequent to the Plaintiff's letter dated 19.10.2004 and the acceptance of the Machinery by the Defendants, such defects were brought to the notice of the Plaintiff. Assuming that there were certain defects in the Machinery, the same not having been brought to the attention of the Plaintiff after 19.10.2004 and acceptance thereof, the said defects are deemed to (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) have been waived. The Defendant is now raising the issue vis-à-vis such defects at this stage of Evidence, without any documentary proof to show that the defects were brought to the knowledge of the Plaintiff after 19.10.2004 and the acceptance of the machinery and hence the evidence led in this regard is an afterthought and cannot be taken into consideration and therefore, the contention of the Defendant in this regard, in its Written Statement, is also an afterthought.
57. Pertinently, after the commissioning of the Machinery on 22.09.2004, the Defendant also issued C- Form to the Plaintiff for entire purchase amount of Rs.15,55,000/- against the invoice No.039 dated 05.07.2004. The C Form was issued on 4.10.2004. The fact that the Defendants issued C-Form to the plaintiff after commissioning of the machinery indicates that the Defendants had accepted the machinery otherwise, there was no reason as to why the C-Form was issued for the entire amount. The Minutes of the Meeting recorded on 23.08.2004, Ex.DW1/P1 also indicate that the machine was working properly in auto and manual mode. Had the Defendant been dis-satisfied with PTA Machine, it would not have issued C-Form to the Plaintiff on 04.10.2004 for the machinery supplied by the Plaintiff to the Defendant. Accordingly, it emerges that the Plaintiff was able to duly (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) commission the machinery on 22.09.2004 pursuant to which the Defendant issued C-Form to the Plaintiff on 04.10.2004 with respect to the entire sale consideration.
58. However, as stated above, when the Plaintiff demanded payment of balance consideration on 13.10.2004, on 14.10.2004 the Defendant replied stating that it was rejecting the Machinery. No further step in this regard was taken by the Defendant and on 19.10.2004, the Plaintiff wrote to the Defendant that there was no reason to reject the machinery and also addressed the concerns of the Defendant in connection with the machine and further stated that the Plaintiff had supplied more than what was contracted for vide the Purchase Order dated 16.04.2004. The Defendant did not send any communication thereafter and also did not return the said machinery, and therefore, it is deemed to have accepted the same and the also the fact that no further defects remained in the PTA Machine.
59. Therefore, once the buyer accepted the goods and there was no further communication as regards any defect, subsequent to its acceptance, the buyer (the Defendants herein) cannot raise the issue of such defects as an after thought in its Written Statement/evidence or the Debit Note, allegedly issued by it. Accordingly, the (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) Plaintiff is entitled to the balance sale consideration of Rs.3,05,000/-.
Issue No.3 is accordingly, decided in favour of the Plaintiff and against the Defendants.
60. ISSUE NO.4:
"Whether the Plaintiff is entitled for pendentelite and future interest, If yes, then at what rate and for what period ? OPP. ."
61. Since issue No. 3 has been decided in favour of the Plaintiff and against the Defendants and it is held that the Plaintiff is entitled to recovery of Rs. Rs.3,05,000/- from the Defendants, therefore, the Plaintiff is also entitled to the interest. Keeping in view the fact that the nature of transaction between the parties is a commercial one and considering the prevailing rate of interest, the end of justice would be met if the Plaintiff is granted simple interest @ 9 % p.a from the date of filing of the suit till realization. Accordingly, this issue is decided in favour of the Plaintiff and against the Defendants.
RELIEF:
62. In view of the foregoing, the suit filed by the Plaintiff is decreed. A Decree of recovery of Rs. Rs.3,05,000/- is passed in favour of the Plaintiff and against the Defendants alongwith interest @ 9 % p.a ( simple) from (Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35) (CSDJ-14924/16) the date of filing of the suit till actual realization. Parties are left to bear their own costs. Decree sheet be prepared accordingly. File be consigned to record room after due compliance.
Announced in open Court on 14.10.2016.
(DEEPALI SHARMA) ADDL. DISTRICT JUDGE (CENTRAL) :
TIS HAZARI COURTS, DELHI.
(Elektroweld Auto v. Claves Corpn. & Anr.) (Page 17 of 35)