Delhi District Court
Through Its Attorney vs M/S. Sai Baba Overseas on 5 July, 2023
IN THE COURT OF SH. SANJEEV AGGARWAL
DISTRICT JUDGE (COMMERCIAL)-02
PATIALA HOUSE COURTS, NEW DELHI
CS (COMM) 257/2021
CNR NO. DLND010048162021
M/s. Libas Impex
Through its Partner
Sh. Sunil Keshwani
Through its Attorney
Sh. T.P. Roy, S/o. Gaya Nand Roy
(aged about 45 years old)
R/o. E-24/2/10 Flat No. 2, F/F,
Sidhart Nagar, New Delhi-110014
...Plaintiff
Versus
1. M/s. Sai Baba Overseas
2. Sh. Amar ShantBis,
Proprietor M/s. Sai Baba Overseas,
Both at:
a. R/o. E 16/B, S/F Vishwakarma Colony, Prahaladpur
New Delhi-110044
b. GC-112/113, Pul Prahlad Pur, New Delhi-110044
...Defendants
Date of institution of suit : 28.07.2021
Date of reserving judgment : 03.06.2023
Date of pronouncement : 05.07.2023
CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 1 of 32
JUDGMENT
1. Vide this judgment, I shall dispose off the present suit filed by the plaintiff for recovery as well two separate application(s), one filed on behalf of the plaintiff u/O 6 Rule 17 CPC for amending memo of parties as well as another application filed on behalf of the defendant u/O 7 Rule 11 CPC for dismissal of the present suit.
2. Brief facts as stated in the relevant para(s) of the plaint are as under :
1. That the plaintiff is a partnership firm and is having a business of selling ladies kurties etc. under the name and style of "Libas". The plaintiff is doing its business through online only and has earned a great reputation in the market. The plaintiff has been running its business from its registered office, i.e. 239, Upper Ground & 3 rd Floor, Raja Dhir Sain Marg Sant Nagar, East of Kailash, New Delhi-110065.
2. That for running his business, plaintiff has engaged number of fabricators to whom plaintiff supplies raw material for fabricating ladies garments as per the requirements and getting the same fabricated through fabricators.
3. That the defendant approached the plaintiff in the month of March 2018 and expressed his desire to work CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 2 of 32 for plaintiff and represented him as one of the best fabricator for ladies garments/ kurties etc. Believing the words of defendant and after negotiations and other formalities, plaintiff engaged the services of defendant and accordingly executed the agreement dated 14.04.2018.
4. That it was further clarified by the plaintiff to the defendant that he shall fulfill the required orders on time and if services is not completed on time plaintiff shall have right to claim the loss from defendant, suffered on account of non-supplying the orders on time.
5. That initially, the defendant performed his part of job in terms of the agreement but later on he become dishonest and kept on talking the fabric from the plaintiff but no delivered the fabricated product.
6. That for the purpose of fabrication, plaintiff provided raw material to the defendant which was collected by the defendant from the premises of the plaintiff vide job ID no's FG/18-19/01635, FG/18-19/02383, FG/18-19/02547, FG/18-19/02565, FG/18-19/G799, FG/18-19/G990 and FG/18-19/02276. The total value of the raw material and fabricated goods is Rs.9272539/- (Rs. Ninety Two Lacs, Seventy Two Thousand, Five Hundred and Thirty Nine only). All goods/fabric were taken by the representative of the defendant in whose favour CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 3 of 32 authorization letter was issued by the defendant.
7. That the defendant has failed to supply the material on time which resulted into the cancellations of orders of plaintiff and also caused great financial loss to the plaintiff and its reputation.
8. That the plaintiff confronted the defendant and asked to return the product/ goods of plaintiff or to pay recoverable value of the goods. Instead of returning the fabric or fabricated goods, the defendant started making lame excuses. The representative of the plaintiff whenever visited the office of the accused, he was not entertained and was asked by the defendant to come again. The defendant called the representative of the plaintiff several times to get the fabricated produced collected by never handed any product to him nor paid any heed to make the payments towards the goods received by defendant from the plaintiff.
9. That it is important to mention here that when plaintiff repeatedly contacted the defendant and in respect of the loss occurred and return of goods or raw material, the defendant preferred to provide cheque bearing no.000232 dated 13.02.2019, drawn on HDFC Bank, Defence Colony of Rs.92,72,539/- (Rs. Ninety Two Lacs, Seventy Two Thousand, Five Hundred and Thirty Nine only), New Delhi Branch towards the total CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 4 of 32 outstanding liability towards him in lieu of the fabricated goods/ items and further assured the plaintiff that the same shall be positively honored and encashed.
10.That as per the instruction/ assurance of the defendant, plaintiff presented the above said cheque for encashment through his banker branch at HDFC Bank, Sant Nagar Branch (the account of the plaintiff exists and was opened at Vasant Kunj Branch, New Delhi) to the banker of defendant above named i.e. HDFC Bank Defence Colony Branch, but the same was dishonored with remarks "Stop Payment" vide returning memo dated 14.02.2019.
11.That now a sum of of Rs.92,72,539/- (Rs. Ninety Two Lacs, Seventy Two Thousand, Five Hundred and Thirty Nine only) as the settled amount, besides interest is due and legally recoverable by the plaintiff from the accused.
12.That the plaintiff served a legal demand notice dated 26.02.209 upon the defendant by Speed Post dated 28.02.2019 through its counsel thereby calling upon her to pay the amount of aforesaid dishonered cheque to the plaintiff within 15 days from the date of receipt thereof.
The notice has been served on the defendant on 02.03.2019 & 07.03.2019 but despite service of notice defendant as neither replied nor paid the amount of dishonored cheque to the plaintiff within 15 days from CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 5 of 32 the date of receipt thereof. Hence, the plaintiff has to file a criminal complaint against the defendant under the provision of Negotiable Instruments Act, which is pending before Hon'ble Court of Sh. Anshual Singhal (M.M) Patiala House Court, New Delhi.
13.That the defendant has been avoiding its liabilities towards the plaintiff deliberately and intentionally just to cause the economical loss to plaintiff. Hence this suit.
Therefore, the present suit for recovery of Rs. 92,72,539/- along with interest has been filed by the plaintiff against the defendant.
3. Initially the present suit was filed u/O 37 CPC, however, in view of submissions made by Ld. Counsel for the plaintiff, vide order dated 05.08.2021, the same was treated as ordinary suit. Summons of the present suit were issued to the defendants, which were duly served upon them. Written statement was filed by the defendants, the relevant para(s) of which are reproduced as under :
1. That the instant suit as framed is not maintainable and the same has been filed by the plaintiff without any lawful and valid cause of action. Hence, the same liable to be dismissed with costs in favour of the answering defendants.
2. That the instant suit filed by the plaintiff has not been properly valued for the purposes of court fee and CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 6 of 32 jurisdiction. It is humbly stated that the suit of the plaintiff is undervalued and the plaintiff is insufficiently stamped. Therefore, the instant suit is liable to be rejected/dismissed in accordance with law.
3. That the instant suit has been filed by the plaintiff in gross abuse of process of law and is apparently tainted with mala fides. It is humbly stated that the plaintiff had offered the defendants for fabrication of clothes an din order to fabricated clothes, it has supplied raw materials to the defendants and defendant had completed the fabrication work as per the order/ specifications of the plaintiff in time and requested the plaintiff to collect all the fabricated items in the year 2018 itself but the plaintiff did not show the diligent attitude in collecting the fabricated items and stated making pretext after pretext. The defendant requested the plaintiff to make he payment of Rs.1,53,153/- + 2,09,296.50/- + Rs.1,30,158.00/- + Rs.30,408.50/- as the fabrication charges which were determined at the time of the agreement between the parties. The plaintiff neither paid the fabrication charges to the defendant nor paid any heed in collecting the fabricated materials from the defendants. The defendants are still ready to return back all the fabricated items to the plaintiff subject to payment of the fabrication charges as CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 7 of 32 mentioned above.
4. That the plaintiff has not approached this Hon'ble Court with clean hands and he is guilty of deliberately suppressing the relevant and material facts of the case from this Hon'ble Court. The plaintiff is further guilty of intentionally making false and misleading assertions on oath for which he is liable to be dealt with sternly in accordance with the law. Apparently the plaintiff has deliberately concealed the aforesaid material facts from this Hon'ble Court for obtaining favourable orders that the defendants have already returned the fabricated items to the plaintiff against Bill No. FG/18-19/02383, FG/18-19/G799 and FG/18-19/02276 and rest of the fabricated items are still ready and lying with the defendants but the plaintiff is avoiding to collect the same and to pay the fabrication charges thereof for the reason that due to outbreak of covid-19 there is heavy slump in the market. It is humbly stated that the instant suit hs been filed by the plaintiff on the allegations which are false, frivolous and vexatious even to the own knowledge of the plaintiff. Hence, the aforesaid suit is liable to he dismissed with compensatory costs in favour of the answering defendants.
5. That the contents of para no.5 of the plaint are CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 8 of 32 wrong and denied. It is denied that the defendants have become dishonest and kept on taking the fabric from the plaintiff but not delivered the fabricated products as alleged. It is submitted that the defendants had completed the fabrication work as per the order/ specifications of the plaintiff in time and requested plaintiff to collect all the fabricated items in the year 2018 itself but the plaintiff did not show diligent attitude in collecting the fabricated items and started making pretext after pretext. The defendants requested the plaintiff to make the payment of Rs.1,53,153/- + 2,09,296.50/- + Rs.1,30,158.00/- + Rs.30,408.50/- as the fabrication charges which were determined at the time of the agreement between the parties. The plaintiff neither paid the fabrication charges to the defendant nor paid any heed in collecting the fabricated materials from the defendants. The defendants are still ready to return back all the fabricated items to the plaintiff subject to payment of the fabrication charges as mentioned above. The defendants are still ready to return back all the fabricated items to the plaintiff subject to payment of the fabrication charges as mentioned above.
6. That the contents of para no.6 of the plaint are admitted to the extent that plaintiff had provided the CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 9 of 32 raw materials to the defendants vide job ID number mentioned in the para under reply. It is submitted that the defendants have already given the fabricated items against job ID nos. FG/18-19/02383, FG/18-19/G-799 and FG/18-19/02276 to the plaintiff while and rest of the fabricated items are still ready and lying with the defendants but the plaintiff is avoiding to collect the same and pay the fabrication charges thereof.
7. That the contents of para no.7 of the plaint are wrong and denied. It is denied that the defendant has failed to supply the material on time which resulted into the cancellation of orders of the plaintiff and also caused great financial loss to the plaintiff and its reputation as alleged. It is submitted that the defendants have completed the fabrication work on time and delivered back the fabricated items against job ID No. FG-18-
19/02383, FG-18-19/G799 ad FG18-19/02276 to the plaintiff while and rest of the fabricated items are still ready and lying with the defendants but the plaintiff is avoiding to collect.
8. That the contents of para no.8 of the plaint are wrong and denied. It is denied that when the plaintiff confronted the defendants and asked to return the products/goods or to pay the recoverable value of the goods, the defendants started making lame excuses CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 10 of 32 instead of returning the fabric or fabricated goods as alleged. It is further denied that whenever the representative of the plaintiff visited the office of the defendants he was not entertained and was not asked by the defendants to come again. It is also denied that defendant called the representative of the plaintiff several times to get the fabricated products collected but never handed over any product to him nor paid any heed to make the payment towards the goods received by the defendant from the plaintiff. It is submitted that the defendants have completed the fabrication work and delivered back the fabricated items against job ID No. FG/18-19/023873, FG/18-19/G799 and FG/18-19/02276 and whenever the defendant asked the plaintiff to collect the rest of the fabricated items no heed was paid by the plaintiff for the same and the fabricated items are still ready and lying with the defendants.
9. That the contents of para no.9 of the plaint are wrong and denied. It is denied that the cheque in question was handed over by the defendants to the plaintiff as security cheque and the plaintiff has dishonestly misused the said cheque by filing the amount and date in the said cheque. It is further denied that there is any outstanding liability towards the defendant as alleged.
10. That the contents of para no.10 of the plaint are CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 11 of 32 wrong and denied. It is denied that any instruction/ assurance was given by the defendant to he plaintiff for presentation of the said cheque as the same was only a security cheque but when the plaintiff malafidely presented the said security cheque then the defendant was compelled to stop payment against the said cheque.
11.That the contents of para no.11 of the plaint are wrong and denied. It is denied that the alleged amount besides interest is due and recoverable by the plaintiff from the defendant as alleged. No such amount is due or payable by the defendant to the plaintiff.
12. That the contents of para no.12 of the plaint are matter of record. The plaintiff has filed the alleged criminal complaint NI Act by misusing the security cheque given by the defendant to the plaintiff during the course of business.
13. That the contents of para no.13 of the plaint are wrong and denied. It is denied that the defendant has been avoiding its liabilities towards the plaintiff or causing economical loss to the plaintiff as alleged. It is the plaintiff who is not collecting the fabricated items from the defendants lying complete with the defendants and is not paying the fabrication charges to the defendant and has filed the present suit just to harass and humiliate the defendant to extracting money from CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 12 of 32 the defendant.
XXXX XXXX XXXX XXXX
15. That contents of para no.15 of the plaint are wrong and denied. There is no cause of action for filing the present suit against the defendant as alleged in the para under reply. The suit of the plaintiff being without any cause of action is liable to be dismissed u/o VII Rule 11 CPC.
Therefore, it is stated that the suit of the plaintiff is liable to be dismissed.
4. Replication has been filed by the plaintiff to the above written statement of the defendants, in which the averments made in the plaint have been reiterated and those made in the written statement have been denied.
5. From the pleadings of the parties, following issues were framed vide order dated 23.12.2022:-
1. Whether plaintiff is entitled for recovery of Rs. 1,14,00,000/- from defendants as claimed? OPP.
2. Whether plaintiff is entitled for any interest from defendants ? If so, at what rate, for which period and from which of the defendants ? OPP.
3. Whether the plaintiff did not pay fabrication charges to defendants nor collected fabricated materials from CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 13 of 32 defendants, as alleged in preliminary objection no. 3 in written statement of defendants ? OPD
4. Whether defendants have returned the fabricated items to the plaintiff against bills bearing nos. FG/18-
19/02383, FG/18-19/G799 and FG/18-19/02276 as alleged in preliminary objection no. 4 in written statement of defendants ? OPD
5. Whether the defendants had given cheque bearing no. 000232 dated 13.02.2019 drawn on HDFC Bank, Defence Colony of Rs. 92,72,539/- as security cheque and plaintiff misused it, as alleged ? OPD
6. Relief.
6. Thereafter, the plaintiff in support of his case has examined one Sh. T. P. Roy as PW1 and Sh. Rajender Kumar as PW2, whereas, in defence, the defendant has examined one Sh. Amar ShantBis as DW1.
7. I have heard Sh. Sandeep Sharma, Ld. Counsel for the plaintiff, Sh. Mohit Aggarwal, Ld. Counsel for the defendants and perused the record. I have also gone through the written submissions filed on behalf of both the parties.
8. Ld. Counsel for the plaintiff has relied upon the following judgment(s) in support of his contentions :
a) Metropolis Travels & Resorts(I) Pvt. Ltd. VS. Sumit Kalra and Ors CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 14 of 32 MANU/DE/0562/2022;
b) Basalingappa Vs. Mudibasappa Criminal Appeal No. 636 of 2019, decided on 09.04.2019;
c) Bir Singh VS. Mukesh Kumar Criminal Appeal Nos. 230-231 of 2019, decided on 06.02.2019;
d) M/s. Hindustan Infrastructure Construction Corporation Limited & Anr. VS. M/s. R. S. Woods International & Ors., CRP No.19/2018 & CM Nos. 4276-4277/2018, decided on 13.12.2018;
e) Life Insurance Corporation of India Vs. Sanjeev Builders Private Limited & Anr., Civil Appeal No. 5909 of 2022, decided on 01.09.2022.
On the other hand, Ld. Counsel for the defendant has relied upon the following judgment in support of his contentions :
a) M/s. Hindustan Infrastructure Construction Corporation Limited & Anr. VS. M/s. R. S. Woods International & Ors., CRP No.19/2018 & CM Nos. 4276-4277/2018, decided on 13.12.2018.
9. Taking up the application u/O 6 Rule 17 CPC filed by the plaintiff first, it is stated in the application that the plaintiff is a partnership firm and Sh. Sunil Keshwani is one of the partner of the said firm M/s. Libas Impex, however, in the pleadings, due to typographical mistake Sh. Sunil Keshwani has been shown as proprietor instead of partner. It is stated that same is only a typographical error, which requires to be rectified.
10. Reply has been filed by the defendants stating that the said CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 15 of 32 application is frivolous and is gross abuse of process of law and same cannot be filed at this belated final stage. It is denied that same is typographical mistake and same can be rectified at this stage.
11. I have perused the record.
12. In para 1 of the plaint, it is stated as under :
1. That the plaintiff is a partnership firm and is having a business of selling ladies kurties etc. under the name and style of "Libas". The plaintiff is doing its business through online only and has earned a great reputation in the market. The plaintiff has been running its business from its registered office, i.e. 239, Upper Ground & 3 rd Floor, Raja Dhir Sain Marg Sant Nagar, East of Kailash, New Delhi-110065.
Therefore, it appears that the case of the plaintiff from the very beginning is that the plaintiff is a partnership firm. Though in the memo of parties, it has been written as proprietorship firm. Though the plaintiff should have been vigilant and should have filed the application at much earlier stage i.e. before the pleadings in this case were complete. However, the defendants from the very beginning were aware about the case set up by the plaintiff and the plaintiff by way of amendment(s) sought for is not setting up a new case.
13. In fact in reply to the para 1 of the plaint in corresponding para CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 16 of 32 of the written statement on merits, the defendants have not denied the contents of the same and have stated that it is only a matter on record. Therefore, this amendment sought for by the plaintiff may be though at belated stage can be allowed, as no prejudice has been caused to the case of the defendants in view of the judgment relied upon by Ld. Counsel for the plaintiff titled as Life Insurance Corporation of India Vs. Sanjeev Builders Private Limited & Anr. (supra), the said amendment is allowed, as the same is necessary for determining the real controversy of dispute between the parties. The afore application u/O 6 Rule 17 CPC stands disposed off accordingly.
Further Ld. Counsel for the defendants made a statement at Bar on 25.03.2023 that he is not pressing his application u/O 7 Rule 11 CPC at this stage of the trial and it may be disposed off at the final stage of the case.
14. In the application, the main ground which has been taken is that the suit is liable to be dismissed due to non compliance of Section 69 of the Indian Partnership Act 1932. It is stated that as per the documents and the averments made by the plaintiff, the partnership firm is unregistered, therefore, due to lack of the said compliance, the suit is liable to be rejected.
On the other hand, reply has been filed by the plaintiff stating that the plaintiff firm is a duly registered partnership firm under the Indian Partnership Act and has also relied upon the document in this regard, which is Mark PW1/B. Therefore, it is stated that the said CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 17 of 32 objection is without any substance.
15. The perusal of the documents filed by the parties reveal that the plaintiff has relied upon one partnership deed executed between Sh. Sunil Keshwani and Sh. Sidhant Keshwani executed on 10.12.2012. The stamp paper for the same has been purchased on 03.11.2012, the date from which it is stated to be effective is 10.12.2012, the said document was got notarized on 15.12.2012. The perusal of 'Form M' from the Registrar of Firms reveals that the name of the said firm has been named in the said Register of Firms at No. 1618/95, having the address C-18 (Second Floor) Lajpat Nagar-II, New Delhi-110024.
16. Further perusal of 'Form C' reveals that the said address has been changed to D-6, Second Floor, Lajpat Nagar IV, New Delhi-24. However, the said documents does not inspire confidence, as no witness from the Registrar of Firms has been summoned to prove the authenticity of the said documents to show that the said firm had been registered since 1995. In fact the 'Form M' dated 14.08.1995 issued by the Registrar of Firms is contradictory to the date of incorporation of the partnership firm, which is effective from 10.12.2012. Therefore, the plaintiff is not able to prove that the firm is duly registered under the Partnership Act, therefore, the bar u/S 69 of The Partnership Act will apply. However, at the same time, Ld. Counsel for the defendant has relied upon the judgment M/s. Hindustan Infrastructure Construction Corporation Limited & Anr. VS. M/s. R. S. Woods International & Ors. (supra), in which in para 6, it CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 18 of 32 has been held as under:
6. Admittedly the respondents/plaintiff has filed a Civil Suit for recovery of Rs.24,41,967/- against the petitioners/defendant on account of dishonour of cheques bearing no.482933 dated 18.11.2013 for Rs.5 lacs, no.482934 dated 19.11.2013 for Rs.5 lacs, no.482935 dated 20.11.2013 for Rs.5 lacs , no.709846 dated 18.11.2013 for Rs.5 lacs and no.709845 dated 20.11.2013 for Rs.4,41,967/-, total of which comes to Rs.24,41,967/-, which is the suit amount.
7. The Kerala High Court in Afsal Baker (surpa) observed as under :-
"10. In the instant case, as noticed above, by virtue of Section 30 and 37 of the Negotiable Instruments Act, on the dishonour of a cheque, the statute creates a liability on the drawer, apart from the general law of contracts. The right to sue on the contract is available and open to the party. However, apart from that, the statute creates a liability as against the drawer of the instrument. If the suit is on the original cause of action based on the original contract between the parties, there is no doubt, the suit would be hit by Section 69 (2) of the Indian Partnership Act. But, in the instant case, what is sought to be enforced is the liability created under the Negotiable Instruments Act. It is not a case where suit is filed on the original cause of action by producing the cheques as a piece of evidence to prove the liability under the original contract. Here, the suit itself is laid on the instrument. A reading of the plaint leaves no room for doubt regarding that. The bar under Section 69(2)of the Indian Partnership Act would apply only where the suit is sought to be laid on a contract and not in a case where statutory right/liability is sought to be enforced. In the instant case, the suit being purely based on the liability under Section 30 and 37of the Negotiable Instruments Act, it is a suit based on statutory liability dehors the contract between the parties. The suit cannot be held to be barred under Section 69(2) of the Indian Partnership Act.
11. In the circumstances, I find no reason to differ from the conclusion arrived at by the court below to the effect that the suit is not barred under Section 69(2) of the Indian Partnership Act and that it is maintainable."
8. In the instant case, the respondent is seeking enforcement of the liability of the petitioners created under Section 30 and 37 of the Negotiable Instruments Act, 1881 as the cause of action for the plaint is based on the dishonour of CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 19 of 32 the said cheques. Since, the suit is not based on any contract between the parties, the bar under Section 69 (2) of the Act would not apply.
17. The said judgment is fully applicable to the facts of the present case, as the case of the plaintiff is not only based upon written invoices / contract between the parties dated 14.04.2018, but also based upon a dishonoured cheque dated 13.02.2019 for Rs. 92,72,539/- therefore, the case of the plaintiff is not only based on written contract, but also based upon a negotiable instrument and the dishonour of the said cheque. Therefore, the present suit is not only based on contract of the parties, but also based upon dishonour of the negotiable instrument under Negotiable Instruments Act, therefore, the bar u/S 69 of The Partnership Act will not apply. Consequently, the application of the defendant on this ground is not tenable, same is dismissed.
18. Now adverting to the main suit, my issuewise findings are :
Issue(s) no. (1), (2), (3), (4) & (5)
1. Whether plaintiff is entitled for recovery of Rs. 1,14,00,000/- from defendants as claimed? OPP.
2. Whether plaintiff is entitled for any interest from defendants ? If so, at what rate, for which period and from which of the defendants ? OPP.
3. Whether the plaintiff did not pay fabrication charges to defendants nor collected fabricated materials from defendants, as alleged in preliminary objection no. 3 in CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 20 of 32 written statement of defendants ? OPD
4. Whether defendants have returned the fabricated items to the plaintiff against bills bearing nos. FG/18-
19/02383, FG/18-19/G799 and FG/18-19/02276 as alleged in preliminary objection no. 4 in written statement of defendants ? OPD
5. Whether the defendants had given cheque bearing no. 000232 dated 13.02.2019 drawn on HDFC Bank, Defence Colony of Rs. 92,72,539/- as security cheque and plaintiff misused it, as alleged ? OPD
19. All these issue(s) are taken up together, as they are all interconnected with each other and are being disposed off vide common discussion.
20. The plaintiff Sh T. P. Roy had appeared in the witness box and has proved various documents which are Ex. PW1/A, Ex. PW1/C and Ex. PW1/Q. However, since the originals of the document Ex. PW1/D (colly) to Ex. PW1/P were not brought when the affidavit of PW1 was tendered in evidence on 20.02.2023, the same were marked as Mark PW1/D (colly) to Mark PW1/P. Thereafter, on 28.02.2023, the originals of the said documents were requisitioned from the record of criminal complaint case bearing CC No. 4884/2019, titled "M/s. Libas Ipex Vs. M/s. Sai Baba Overseas & Anr." u/S. 138 of the Negotiable Instrument Act, which were produced by PW2 Sh. Rajender Kumar and the same seems CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 21 of 32 to have been exhibited on the said date.
21. DW1 Sh. AmarShant Bis in his affidavit has relied upon various documents Ex. DW1/1 to Ex. DW1/24, but all of them were de- exhibited for want of originals / requisite certificate / affidavit / declaration compliant of Order XI rule 6(3)(a) to (I) CPC. Therefore, none of the documents relied upon by the defendant can be read in evidence, as the same have not been proved, as per law.
22. Both the parties are relying upon written contract, though marked as Mark PW1/C, but the original(s) was produced by PW2, therefore, the same can be read in evidence. Regarding the agreement between the parties for fabrication of ladies garments / kurties on the basis of raw material and clothes to be provided by the plaintiff and fabrication / job work to be performed by the defendant. In para 6 of the plaint, the plaintiff has pleaded as under :
6. That for the purpose of fabrication, plaintiff provided raw material to the defendant which was collected by the defendant from the premises of the plaintiff vide job ID no's FG/18-19/01635, FG/18-19/02383, FG/18-19/02547, FG/18-19/02565, FG/18-19/G799, FG/18-19/G990 and FG/18-19/02276. The total value of the raw material and fabricated goods is Rs.9272539/- (Rs. Ninety Two Lacs, Seventy Two Thousand, Five Hundred and Thirty Nine only). All goods/fabric were taken by the representative CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 22 of 32 of the defendant in whose favour authorization letter was issued by the defendant.
23. However, it is the case of the plaintiff that the defendants have failed to supply the material on time, which resulted into cancellation of order of the plaintiff causing grave financial loss. The plaintiff also asked the defendant to return the product / goods of the plaintiff or to pay the value of the goods, instead of doing the same, the defendant kept on delaying the matter and finally in consideration thereof, issued a cheque bearing no. 000232 dated 13.02.2019, drawn on HDFC Bank, Defence Colony of Rs. 92,72,539/-, which was dishonoured on presentation.
24. Further the case of the defendant, as per the pleadings in the written statement in para 6 is as under :
6. That the contents of para no.6 of the plaint are admitted to the extent that plaintiff had provided the raw materials to the defendants vide job ID number mentioned in the para under reply. It is submitted that the defendants have already given the fabricated items against job ID nos. FG/18-19/02383, FG/18-19/G-799 and FG/18-19/02276 to the plaintiff while and rest of the fabricated items are still ready and lying with the defendants but the plaintiff is avoiding to collect the same and pay the fabrication charges thereof.
CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 23 of 32
25. It is denied that the defendant had failed to supply the material on time, which resulted into cancellation of order of the plaintiff, causing grave financial loss. It is stated that the defendant had completed the fabrication work on time with regard to the three jobs ID nos. as mentioned in para 6 of the written statement on merits and rest of the fabricated items are lying with the defendant, but the plaintiff failed to collect the same.
Regarding the cheque, it is stated that the said cheque was given as a security during the course of the business and has been misused by the plaintiff.
26. The relevant evidence of both the parties is being discussed to adjudicate the issues in dispute between the parties. In the cross- examination of PW1, he has admitted the clause D in Ex. PW1/C at the bottom of page 2 bears credit period of 15 days, which is the period in which plaintiff was to make payment to the defendants. He further stated the terms of payment to be made by plaintiff to defendants for the job work done are not there in the documents of the plaintiff and those terms are there in the invoices which have been raised by the defendants upon the plaintiff. He further stated as under :
Challan dated 29/08/2018, part of Mark PW1/D (Colly) at page 32 of documents of plaintiff; is with respect to dress material given by plaintiff to defendants for job work. Taxable amount of Rs.344791.20 mentioned therein reflects cost of the CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 24 of 32 raw material i.e., dress material so given by plaintiff to defendants.
My answers with respect to various facets above said for all challans filed by plaintiff on record are the same as above said for challan dated 29/08/2018.
Dispute between plaintiff and defendants is only with respect to the material supplied by plaintiff to defendants detailed in the 7 challans filed and not beyond that.
Plaintiff used to deliver goods to defendants through challans. Defendants used to deliver finished products after doing job work. Multiple challans were issued by plaintiff to defendants for delivery of goods by plaintiff to defendants. Defendants used to provide finished products after doing job work as per urgency or requirement of plaintiff.
XXXX XXXX XXXX XXXX It is incorrect to suggest that the total value of raw material and fabricated goods is not Rs 92,72,539/- as mentioned in para 7 of Ex PW1/1.
I am not aware who wrote the text of cheque Mark PW1/M. Defendant no. 2 gave cheque Mark PW1/M on 13/02/2019 at his factory at Pul Prahlad Pur, MB Road.
CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 25 of 32 XXXX XXXX XXXX XXXX I do not remember what was the amount outstanding and payable by defendants as on 13/02/2019 as per ledger account of defendants in the books of plaintiff.
27. Similarly, the relevant cross-examination of DW1 is reproduced as under :
I have been doing the business under name of defendant no. 1 for last 15-16 years but for last one year my factory is closed. I have been doing job work for others and not manufacturing goods for sale.
Since year 2019 I have been selling goods on amazon, flipkart and myntra on the name of defendant no. 1 concern.
It is incorrect to suggest that I have sold the materials/goods of plaintiff on amazon, flipkart and myntra as goods of defendant no. 1. Vol. My Manager had got some goods of plaintiff photographed to put for sale online when I was hospitalized but on coming back I got it stopped to be done.
It is incorrect to suggest that in order to sell the products of plaintiff on amazon, flipkart and myntra with an intention to earn more income, I have settled the CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 26 of 32 accounts with the plaintiff by handing over the cheque Ex PW1/M of Rs. 92,72,539/-.
XXXX XXXX XXXX XXXX Around Rs. 20 lacs or Rs. 22 lacs were received by me from plaintiff in the period between May, 2018 to Jan- uary, 2019 by bank transfer. It is incorrect to suggest that in the period between May, 2018 to January, 2019 by bank transfer, a sum of Rs.44,67,498/- was received by bank transfer in account of defendant no. 1.
28. The plaintiff has also relied upon the attested copy of the job work account dated 12.02.2019 Ex. PW1/L. PW1 has admitted in his cross-examination, as reproduced above that the dispute between the plaintiff and the defendants is only with respect to the material supplied by the plaintiff to the defendants detailed in the 07 challans filed and not beyond that. Therefore, in view of the admission made by PW1, it appears that the dispute between the parties is limited to 07 challans (which are marked as Mark PW1/D to PW1/K), which seems to have been exhibited after the originals of the same had been produced in the examination of PW2.
29. In the written submissions filed by the defendants with regard to the job work account Ex. PW1/L for instance with regard to the first challan Mark PW1/D (which seems to have been exhibited during the testimony of PW2, who produced the original thereof), as per the said CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 27 of 32 challan, the total value of the invoice / challan is Rs. 3,44,791.20 and number of pieces given for fabrication work are 1032 and as per the statement of job work account Ex. PW1/L, out of these 628 + 178 pieces were received back after due fabrication by the plaintiff. The rest of the pending pieces were 226, as per the calculation sheet appended with the written submissions. The defendants have calculated the unit price for per piece i.e. by dividing 3,44,791.20 by total number of pieces 1032, the unit price per piece comes to be Rs. 334 per piece and the remaining amount which would be due to the plaintiff with regard to the pending pieces which were 226 would be 334 X 226, which as per the calculation sheet submitted by the defendant is Rs. 75,484/-.
30. Similarly in this manner, analysing the challan marked as Mark PW1/E with respect to the total invoice / challan is Rs. 58,840.60 and number of pieces pending 212 and calculating the said amount with pending pieces of 212, the said amount comes to be 58440.60 and since the dispute is limited to 07 invoices and has been admitted by PW1 Sh. T.P. Roy, the total amount calculated or worked out to be Rs.15,58,644/-.
31. As elaborated above, it is the admitted case of the plaintiff that the dispute in question is limited to seven invoices placed on the record. It is not the case of the plaintiff that any more invoices are involved with regard to the dispute with the defendants. The total amount calculated in this manner due against the invoices relied upon by CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 28 of 32 the plaintiff towards the unreturned and unfabricated items comes to be Rs.15,58,644/-, which does not gel with the cheque amount of Rs.92,72,539/-, which appears to be much more than the invoices of the goods exchanged between the parties. The same in no way can be rec- onciled with the cheque amount of Rs.92,72,539/-.
32. At the same time, the defendants have not proved that he has returned the fabricated goods for the job work for any of the invoices other than the three invoices admitted by him in his written statement, as the defendant has failed to produce any evidence in this regard in the Court. His testimony is only a bald statement, not supported by any doc- uments, as all the documents relied upon by him were de-exhibited for the reasons stated above.
33. Therefore, the defendants have not proved that he has re- turned the goods / fabricated items / clothes to the plaintiff and as per the averments made by the defendant, the same are lying with him, if that was so, as claimed by him, he should have returned the same in the Court it- self by moving an appropriate application in this regard. The vague de- fence taken by the defendants has not been proved. Further the defen- dants have not produced any document, which could have proved that the defendants had returned the fabricated items to the plaintiff at any point of time or wrote any letter to him stating that the same were lying with CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 29 of 32 him and same may be returned. In these circumstances, the said plea of the defendants has no probative force.
34. As discussed above, the value of the invoice(s) / challans, as relied upon by the plaintiff does not gel or can be reconciled with the amount of the cheque, which the defendant says was given as a security during the business deal done between the parties. There is a huge gap in the cheque amount and the invoices relied upon by the plaintiff on the record. Due presumption for issuance of the cheque is rebuttable, which presumption has been rebutted in this case, as there are no back up bills / invoices to support consideration qua this cheque, as volume of transactions between the parties does not support such large amount, as mentioned in the said cheque. The plaintiff has already filed a cheque bounce case u/S. 138 of Negotiable Instruments Act, which is pending adjudication and which is where the criminal liability of the defendants will be adjudicated as per law. Therefore, this Court will refrain from commenting anything further in this regard on the said cheque or the circumstances under which it may have been given.
35. Further the probative force of the plaintiff's evidence with regard the transaction in question i.e. with regard to the agreement Ex. PW1/C i.e. the agreement for fabricated / job work is only proved to the extent mentioned above on broad probabilities taking the probative force/weight of the entire mass of the evidence lead by the parties in their CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 30 of 32 case and the defence of the defendants, whereby the defendants have been able to pull down the probative force of the plaintiff's case to some extent, but overall, the plaintiff has been able to prove that he is only entitled for Rs.15,58,644/-, as discussed above. Issue nos. 1 & 2 are answered accordingly.
36. Regarding the fabrication charges, DW1 in his cross- examination has admitted that an amount of Rs. 22 Lakhs was received by him from the plaintiff in the period between May, 2018 to January, 2019 by bank transfer. The defendants on the contrary have failed to prove that they have returned the fabricated items to the plaintiff, which were lying with them. They have also failed to prove that the plaintiff did not collect the fabricated material from the defendants despite being ready. Therefore, issue nos. 3 & 4 are also decided against the defendants and in favour of the plaintiff to the extent, as discussed above.
Issue no. 5 is also answered to the extent as discussed above.
37. Issue No. 6Relief In view of my findings on the above issues, the plaintiff is entitled to the decree of an amount of Rs.15,58,644/- along with simple interest @ 12% p.a. in its favour and against the defendants from the date of filing of the suit till realization along with proportionate cost(s) of the suit.
CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 31 of 32 Decree be made, as above.
File be consigned to record room.
Announced in the open court today on 05.07.2023.
(Sanjeev Aggarwal) District Judge (Commercial)-02 Patiala House Courts, New Delhi CS(COMM) 257/2021 (CNR No. DLND010048162021) Page No. 32 of 32