Delhi District Court
Hitkari Industires Limited vs M/S Kmg Milkfood Limited on 22 August, 2013
IN THE COURT OF MS. SHUCHI LALER, ADMINISTRATIVE
CIVIL JUDGE-CUM-ADDITIONAL RENT CONTROLLER- CUM-
COMMERCIAL CIVIL JUDGE (NORTH-EAST),
KARKARDOOMA COURTS, DELHI.
Suit No.47/07
Unique Case ID No.: 02402C0241652011
In the matter of :
Hitkari Industires Limited
having its registered office at
Plot no. 18, Sector-1, Industrial Area,
Parwanoo, H.P.
And its corporate and head offices at
D-13, Sector-2, Noida, U.P.
And Delhi office at
E-44/5, Okhla Industrial Area,
Phase-II, New Delhi-110020 ....Plaintiff
Versus
M/s KMG Milkfood Limited
375, Main Road, Gazipur,
Delhi ....Defendant
Date of Institution : 23.01.2007
Date of Final Argument : 22.08.2013
Date of Pronouncement : 22.08.2013
JUDGMENT
1. Plaintiff has filed the instant suit for recovery of Rs. 1,23,671/- alongwith pendente lite and future interest against the defendant.
2. In short, facts are as under :-
The plaintiff is a company engaged in the business of manufacturing, marketing and distribution of plastic pouches and other allied products. The present suit has been instituted through Sh. Mohinder Bhasin, Asst. Manager (Finance) of the Suit No. 47/07 Page 1 to 13 plaintiff company. The defendant had been placing orders for the purchase of plastic pouches and the plaintiff had been supplying the same to the defendant as per its requirement. It has been stated that the plaintiff had been maintaining the running account of the defendant firm and the defendant is liable to pay to the plaintiff a sum of Rs. 84,036/-. It has been alleged that the defendant wrote a letter dated 15.09.2006 to the plaintiff for the confirmation of account balance as on 31.03.2004 wherein the balance was mentioned to be Rs. 1,54036/-. In response to the defendant's letter, the plaintiff wrote a letter dated 21.11.2006 confirming the balance of Rs. 1,71,839/-. It has been claimed that the defendant is liable to pay Rs. 84,036/- and defendant's sister concern is also liable to pay Rs. 87,803/-.
The plaintiff has averred that the aforesaid balance is outstanding and despite several requests, the defendant failed to repay the amount. The plaintiff wrote a letter dated 05.12.2006 requesting the defendant to pay the outstanding amount, which was duly replied by the defendant vide letter dated 09.12.2006 whereby the defendants absolutely denied their liability and stated that the plaintiff has supplied poor/defective quality of goods. The plaintiff has claimed interest @ 18% p.a w.e.f 17.04.2004 i.e. the date when the last payment was made by the defendant. The plaintiff had also sent a legal notice dated 13.12.2006 to the defendant however, the defendant failed to make the payment. Hence, the present suit.
3. The defendant has contested the present suit by filing the written statement wherein it has taken preliminary objections such as the plaintiff has not approached this court with clean hands, plaint does not disclose any cause of action, present suit is an afterthought and counter blast to the demand of the Suit No. 47/07 Page 2 to 13 defendant for Rs. 2 Lacs as compensation, suit has not been valued properly for the purposes of court fee and jurisdiction and the suit is barred by limitation. The defendant has stated that the plaintiff company had supplied the defective/poor quality of goods to them and the defendant requested the plaintiff to replace the said material but the plaintiff failed to comply with the request of the defendant. It has been stated that the plaintiff company is liable to pay Rs. 2 Lacs as compensation for damages caused to the defendant by reason of supply of inferior quality of goods. It has been denied that the letter dated 15.09.2006 had been sent by the defendant to the plaintiff. In reply on merits, the averments made in the plaint have been denied and it has been prayed that present suit be dismissed with exemplary costs.
4. Rejoinder to the written statement of the defendant has been filed wherein the allegations to the contrary have been controverted and the averments made in the plaint have been reiterated.
5. On the basis of pleadings of the parties, vide order dated 29.08.2007, following issues have been framed by the Ld. Predecessor:
1) Whether the plaintiff is entitled to decree of sum of Rs.
1,23,671/-? OPP
2) Whether the plaintiff is entitled to the interest, if any, at
what rate? OPP
3) Whether the suit is barred on limitation? OPD
4) Relief.
6. Thereafter the matter was listed for plaintiff evidence.
In support of its case, the plaintiff company has examined their Suit No. 47/07 Page 3 to 13 Company Secretary, Ms. Neeta Kamra as PW1 and she has tendered her evidence by way of affidavit which is Ex. P-1. She has relied upon the documents such as Resolution Deed dated 28.06.2010 Ex. PW1/1, Copy of Invoice dated 19.10.2003 Ex. PW1/2, Statement of account Ex. PW1/3 and notice dated 16.12.2006 Ex. PW1/4. The plaintiff evidence was closed by the order of the court dated 17.11.2011.
7. In rebuttal, the defendant company examined their Company Secretary, Sh. Aditya Dwivedi as DW1 and he tendered his evidence by way of affidavit which is Ex. DW1/A. He has not relied upon any document. The defendant company has not preferred to examine any other witness and closed their evidence on 18.05.2013.
8. I have heard the Ld. counsel for the plaintiff. Written submissions have been filed on behalf of the defendant, which have been perused.
9. My issuewise findings are as under:
Issue No.1 : Whether the plaintiff is entitled to decree of sum of Rs.1,23,671/-? OPP The onus to prove this issue was upon the plaintiff. In order to discharge the onus, the plaintiff examined Ms. Neeta Kamra, Company Secretary of the plaintiff company as PW 1. PW 1 deposed that the defendant had been placing order for purchase of plastic pouches and other allied products which the plaintiff had been supplying to the defendant. PW 1 testified that the plaintiff had been maintaining running account of the defendant firm and there is debt balance in the defendant account, accordingly, the defendant is liable to pay a principal amount of Rs.84,036/- to the plaintiff alongwith interest @ 18% Suit No. 47/07 Page 4 to 13 p.a w.e.f 17.04.2004 i.e. the date when the last payment has made by the defendant and it comes to Rs. 39,635/-.
In rebuttal, the defendant company has examined Sh. Aditya Kumar, Company Secretary as DW 1 and he deposed that the plaintiff company had supplied defective / poor quality of goods to the defendant company and the present suit has been filed as a counter blast to the demand of Rs.2 Lacs as compensation for damages caused to the defendant company.
The admitted case of the parties is that the goods had been supplied by the plaintiff to the defendant. The defendant in the written statement, has not categorically denied the supply of goods by the plaintiff company to them. DW 1, has also admitted, in his cross-examination, that the plaintiff company used to deal with their company and as per the order placed, the goods were duly supplied by the plaintiff company.
The defendant has denied its liability to make the payment of the suit amount on the following grounds:
(A) The defendant has challenged the territorial jurisdiction of this court to entertain and decide the present suit. (B) The defendant has taken the plea that the suit has not been instituted, signed and verified by duly authorized person. (C) The defendant has raised the defence of supply of defective/poor quality of goods by the plaintiffs. (D) Lastly, the defendant has alleged plaintiffs has claimed an exorbitant rate of interest i.e. 18% per annum and the defendant is neither liable to pay the principal amount of Rs. 84,036/- nor interest of Rs. 39,635/-, hence, the total liability of Rs. 1,23,671/-
has been denied.
The aforementioned grounds on which the liability to make the payment of the suit amount has been refuted are discussed Suit No. 47/07 Page 5 to 13 herein below:-
(A) TERRITORIAL JURISDICTION The defendant has challenged the territorial jurisdiction of this court to entertain the present suit on the ground that the plaintiff company has no Head Office at New Delhi and no transaction between the parties took place at Delhi.
It is well settled that it is for the party who seeks to oust the jurisdiction of the court to establish it. The defendant has not adduced any evidence on this aspect. Section 20 of the Civil Procedure Code empowers the plaintiff to choose a forum and he can institute the suit in the court within the local limits of whose jurisdiction, the defendant resides or carries on business or where cause of action partly or wholly arises. Section 20 covers all personal actions relating to person or movable property and the jurisdiction of the court where such a claim can be filed. The principle underlying clause (a) of Section 20 is that the suit be instituted at the place where the defendant is able to defend it without any difficulty or problem.
In the present case, the defendant company works for gain at Delhi as is apparent from the affidavit dated 11 May 2007 filed alongwith the written statement and also from the copy of the board resolution dated 30.01.12. Without going into the controversy, whether the cause of action had arisen in Delhi, as the defendant company is carrying on its business in Delhi, it leaves no room for any doubt that the present suit for recovery of amount lies within the territorial jurisdiction of this court in view of Clause (a) of Section 20 of Civil Procedure Code, 1908.
(B) SUIT NOT INSTITUTED BY AUTHORIZED PERSON:
The defendant has challenged the maintainability of Suit No. 47/07 Page 6 to 13 the present suit on the ground that Sh. Mohinder Bhasin was not the authorized representative of the plaintiff company, hence, the present suit has not been instituted, signed and verified by duly authorized person.
The plaintiff company has filed on record the certified copy of the resolution passed in the meeting of Board of Directors held on 27/10/2006 Mark A, whereby, Mr. Mohinder Bhasin, Assistant Manager (Finance) had been authorized to institute the present suit. By virtue of his office, Mr. Mohinder Bhasin is a Principal Officer of the plaintiff company, thus, under Order 29 CPC, he was competent person to sign, verify and institute the suit.
Hon'ble Delhi High Court in the case titled as United India Insurance Company Ltd. Vs. Okara Trade Parcel Carriage, RFA No.160/1991 decided on 17/12/2010, held that a General Manager of a company is indeed a Principal Officer within the meaning of Order 29 rule 1 CPC. Similarly, in the case of MTNL Vs. Bharat Bhushan Sharma, RFA No.343/2001 decided on 06/12/2010, the Hon'ble Delhi High Court held that an Accounts Officer (Legal) is also definitely a Principal Officer within the meaning of Order 29 rule 1 CPC and Section 2 (30) of the Companies Act, 1956.
In the case of United Bank of India Vs. Naresh Kumar (1996) 6 SCC 660, it has been held that there is a presumption of valid institution of suit once the same is prosecuted for number of years.
In the present case, the suit has been prosecuted for last many years. It has been held by Hon'ble Supreme Court and Hon'ble Delhi High Court that even a defective plaint can be ratified, which may even be an implied ratification. Thus, the Suit No. 47/07 Page 7 to 13 signatory of the plaint is not only the Principal Officer of the plaintiff company, but there is also a copy of the resolution passed by the Board of Directors of the plaintiff company authorizing Mr. Mohinder Bhasin to institute the present suit. (C) INFERIOR QUALITY OF GOODS PW 1 deposed, in her examination-in-chief, that the defendant had been placing order for purchase of plastic pouches and other allied products which the plaintiff had been supplying to the defendant as per its requirements. DW 1 has also admitted, in his cross-examination, that the goods were duly supplied by the plaintiff.
The question, which requires adjudication now, is whether the goods which were supplied by the plaintiff company to the defendant company were defective or of inferior quality. It was for the defendant to prove that the standard of goods supplied by the plaintiff was not up-to-the mark and inferior in quality. The said claim does not find support from any documentary proof from the defendant to the plaintiff prior to institution of the suit.
DW 1, testified in his cross-examination, that the plaintiff had supplied defective goods which are in their godown and their company is claiming compensation of Rs.2 Lacs from the plaintiff company. DW 1, admitted that, till date their company has not initiated any proceedings against the plaintiff company for compensation of Rs.2 Lacs. DW 1, further admitted, that their company has not issued any letter or notice complaining about the defective supply of goods. DW 1, stated that the complaints in respect of the defective goods supplied by the plaintiff company were sent through E-mail, but the same have not been placed on record.
Suit No. 47/07 Page 8 to 13 The deposition of DW 1 itself suggests that the claim of poor quality of goods is nothing, but false. The defendant has not placed any material on record to show that he had made any complaint to the plaintiff company after receiving the goods in damaged condition. There was no agreement between the parties to the effect that in case, the goods are received in damaged conditions, the defendant would be justified in with- holding the payment of the goods supplied by the plaintiff to the defendant. The defendant did not make any request to the plaintiff for survey and for assessment of loss of Rs. 2,00,000/- alleged to be suffered by it. Except the bald averment made in the written statement regarding poor quality of goods supplied, there is no documentary evidence to support the said version.
For the reasons recorded herein above, I am of the considered opinion that the defendant has miserably failed to prove that the goods which were supplied to them by the plaintiff were defective or of inferior quality.
(D) EXTENT OF LIABILITY OF DEFENDANT The defendant has categorically admitted that the goods were supplied to them by the plaintiff. As already discussed, the defendant could not establish their defence that the goods supplied to them were inferior in quality. Thus, the defendant cannot escape from their liability to make the payment for the goods supplied to them.
The plaintiffs has filed the present suit for recovery of an amount of Rs. 1,23,671/- i.e. Rs. 84,036/- as principle amount and Rs. 39,635/- as interest calculated @ 18% p.a w.e.f 17.04.2004 when the last payment was made by the defendant.
In support of its case, the plaintiff has relied upon the entry in the ledger account Ex. PW1/3. This document was Suit No. 47/07 Page 9 to 13 exhibited by PW1 in her testimony. The document Ex. PW1/3 was objected to as mode of proof by the defendant at the time of its exhibition. PW1 is not the person who was responsible for maintaining the statement and PW1 has also not deposed whether the ledger was maintained properly during the course of business and correctly mentioned all the transactions that took place between the parties. Therefore, the document Ex. PW1/3 has not been proved in accordance with law. Reference in this regard may be made to the judgment titled as Narayanan Vs. Indian Handloom Traders (Kerala) 1999 (2) RCR (Civil) 275 & P.Sood & Company Vs. Peer Chand MisriMalji Bhansali (Madras) (DB) 2005 (3) RCR (Civil) 64.
Even otherwise, this statement of account Ex. PW2/3 is a computer generated statement and necessary conditions of Section 65B of the Indian Evidence Act have not been complied with. In the present case, admittedly, no certificate in terms of Section 65 B (4) has been issued. The testimony of PW1 also does not fulfill the conditions prescribed under Section 65 B of Evidence Act. Reliance is placed upon the judgment titled as Rakesh Kumar & Others Vs. State (2009) 163 DLT 658.
No doubt, the plaintiff has not been able to prove the ledger account Ex. PW1/3 in accordance with the mandate of law. However, the express admission of the defendant of his liability contained in the letter dated 15.09.2006 Ex. DW1/P-1 cannot be ignored.
DW1 admitted, in his cross-examination that the document Ex. DW1/1 was issued by the defendant company. Admission is the best evidence against the party making it. Admission is a strong evidence of the facts admitted and the burden of proving the contrary is upon the party making the Suit No. 47/07 Page 10 to 13 admission. He can do so only when he gives a satisfactory explanation that the admission was wrong or made under circumstances which render it unfit to be relied upon. A duty is cast upon him to offer an explanation of the circumstances under which a wrong admission was made. If he does not offer an explanation, the burden is not discharged.
DW1, categorically admitted in his cross-examination, that the document Ex. DW1/P-1 was issued by the defendant company. Perusal of document Ex. DW1/P-1 reveals that the defendant company has acknowledged that their account shows a credit balance of Rs. 1,54,036/-. Having admitted the execution of documents Ex. DW1/P-1, the onus was upon the defendant to explain that the admission of liability of Rs. 1,54,036/- was wrong or was made under circumstance which render it unfit to be relied upon. No such explanation or circumstances have been disclosed by the defendant. Thus, the defendant has failed to discharge the onus to prove that the admission of liability contained in the document Ex. PW1/D-1 is wrong.
In view of the specific admission of liability made by the defendant, the plaintiff is entitled to the principal amount of Rs. 84,036/- as prayed.
As regards, the amount of Rs. 39,635/- which has been claimed as interest @ 18% p.a w.e.f. 17.04.2004 when the last payment was made by the defendant, the plaintiff has failed to substantiate its claim for interest. Admittedly, there is no agreement between the parties regarding payment of interest in case of delay in making the payment. However, the court cannot overlook the fact that the transaction between the parties was of commercial nature and the defendant has withheld the money of Suit No. 47/07 Page 11 to 13 the plaintiff without any just and sufficient cause. Hence, the plaintiff is entitled to recover interest on the aforesaid principal amount.
Section 34 of the Civil Procedure Code, 1908 empowers the court to order interest in a money as the court deems reasonable for any period prior to institution of the suit and in case of commercial transaction, the rate of interest may exceed 6% per annum but shall not exceed the rate at which moneys are lend or advanced by nationalised bank in relation to commercial transactions.
In the present case, this court is of the opinion that the end of justice would be met if the plaintiff is awarded interest @ 9% p.a on the sum of Rs. 84,036/- w.e.f. 15.09.2006 till the date of institution of the present suit.
Issue no. 1 is accordingly decided in favour of the plaintiff and against the defendant.
Issue No. 2 : Whether the plaintiff is entitled to the interest, if any, at what rate? OPP The onus to prove this issue was upon the plaintiff. The plaintiff has claimed pendente lite interest @ 18% p.a on the principal amount.
Perusal of the documents relied upon by the plaintiff show that there was no written contract between the parties with regard to the rate of interest payable on the delayed payment. In the absence of written contract between the parties and keeping in view the fact that the transaction between the parties was a commercial transaction, the plaintiff is awarded pendente lite and future interest @ 9% p.a. Issue no. 2 is accordingly decided in favour of the plaintiff and against the defendant.
Suit No. 47/07 Page 12 to 13 ISSUE NO. 3: Whether the suit is barred on limitation? OPD The onus to prove this issue was upon the defendant. The said issue was treated as preliminary issue and has already been decided in favour of the plaintiff and against the defendant by the Ld. Predecessor Judge vide order dated 30.03.2009. RELIEF In view of the findings on the aforementioned issues, the present suit is decreed in favour of the plaintiff and against the defendant . The plaintiff is held entitled to recover an amount of Rs. 84,036/- alongwith simple interest @ 9% p.a w.e.f. 15.09.2006 till its realisation. Costs of the suit are also awarded in favour of the plaintiff. Decree Sheet be prepared accordingly. File be consigned to Record Room.
Announced in the open court (SHUCHI LALER)
on 22.08.2013 ACJ/ARC/CCJ (NE),
KKD COURTS,DELHI.
Suit No. 47/07 Page 13 to 13