Delhi District Court
M/S Luman Auto Light Pvt. Ltd vs M/S Angel Auto Associates on 30 August, 2022
IN THE COURT OF SH. ANKIT KARAN SINGH,
CIVIL JUDGE01 ( WEST), TIS HAZARI COURTS, DELHI
Counter claim No. 8/22 in
CS SCJ No. 610158/16
Date of Institution : 11.01.2010
Date of reservation of judgment : 22.08.2022
Date of pronouncement of Judgment : 30.08.2022
M/s Luman Auto Light Pvt. Ltd.
G10, Udyog Nagar
Main Rohtak Road
Delhi41.
.................Plaintiff
Vs.
M/s Angel Auto Associates
(a registered partnership firm)
220A, Ganj Bazar
Meerut Cantt. 250001
Also at :
11A, Chander Lok
Baghpat Road
Meerut250002.
..............Defendant
COUNTER CLAIM
JUDGMENT
1. Brief facts of the present case as per plaint are that the plaintiff is a company duly incorporated and registered under the CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 1/ 27 Companies Act,1956 and having its officer/factory at G10, Udyog Nagar, Main Rohtak Road, Delhi41.It is stated that plaintiff company is an ISO 9001 certified company and is engaged in the business of automotive components, which forms the backbone of the automobile industry and is in this field for more than two decades. It is further stated that plaintiff company is a leading and eminent manufacturer and exporter of various automotive components including of supplying the products which includes Head Lamp Units, Tractor Lamps, Tail Lamps, Automotive Switches, Combination, Starting, Hazard, Special Black Out Equipments, Alternators & Starter Motors and Parts, Filters Systems and elements etc. and its business is spread nationwide including Europe, MiddleEast, Australia and South East Asian competitors.
2. It is further stated that defendant is a registered partnership firm thus can sue and be sued and engaged in the business of manufacturing and fabricating filter elements/filters etc. It is further stated that defendant firm through its partner approached the plaintiff company in its office/factory at Delhi i.e. at G10, Udyog Nagar, Main Rohtak Road, Delhi41 and it was apprised/represented to the plaintiff company that the defendant firm is engaged in the business of manufacturing and fabricating filter elements/filters etc. and expressed willingness and desires to manufacture and supply the filter elements to the plaintiff company.
3. It is further stated that defendant also represented and CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 2/ 27 assured the plaintiff company that the defendant is having good business and repute in the market. It is further stated that it was apprised and represented to the plaintiff company that the defendant has maintained a good stock at the various products/materials, which are required for the manufacture of the filter elements etc.and it was also represented to plaintiff company that the defendant has been doing business since a long time and there has been no delay/default in manufacturing and supplying the filter elements and the defendant has always manufactured and supplied the filter elements/filters on time whenever demanded/asked by its customers and also the filter elements have always been supplied in good condition and without any defect/default in the same manner as ordered and to the fullest satisfaction of the defendant's customers. It is further stated by the plaintiff that it was represented and apprised to plaintiff company that there will be no delay/default in the delivery of the filter elements to plaintiff company by the defendant and the filter elements will be supplied in good condition and without any defect/default in the same and it was also apprised to plaintiff company if, an order is placed with the defendant then the filter elements shall be made by the defendant for plaintiff company within a period of 15 to 20 days from the date when the order is being placed by plaintiff company to the defendant or on the date specified by plaintiff company and it was also agreed that the finished filter elements shall be supplied by the defendant to the plaintiff company at its office/factory in Delhi i.e. at G 10, Udyog Nagar, Main Rohtak Road, Delhi41.
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 3/ 27
4. It is further stated that induced by the words of the defendant and in pursuance to the negotiations and discussions between plaintiff company and the defendant and more particularly, in pursuance to the assurances, representations and promises made by the defendant, the plaintiff company was induced and agreed to start its business relationships of filters/filter elements with the defendant and eventually the plaintiff company placed an order to the defendant in its office/factory in Delhi i.e. at G10, Udyog Nagar, Main Rohtak Road, Delhi 41 vide PO No. 1415 dated 17.12.2007 for the supply of the filter elements and as per the terms and conditions of PO NO. 1415 the CAV filters duly packed with rubber seal having quantity of 26,000/ number/pieces @ Rs. 34.50 per filter element were required to be supplied by defendant firm to plaintiff company in its office/factory at Delhi in the following manner :
1st lot of 5,000 pieces on or before 30.12.2007 2nd lot of 21,000 pieces on or before 20.01.2008
5. It is further stated that at the very same time of placing of the order with the defendant, the plaintiff company also paid an advance of Rs. 50,000/ to the defendant firm vide cheque no. 120432 dated 17.12.2007 and on the specific request of the defendant, the plaintiff company also purchased and procured the raw material i.e. filter paper for and on behalf of the defendant and paid an amount of Rs. 2,48,280/ to the supplier of the filter paper for and on behalf of the defendant firm as it was specifically assured and agreed by the defendant that the amount of Rs. 2,48,280/to the supplier of the filter paper for and on behalf of CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 4/ 27 defendant firm as it was specifically assured and agreed by the defendant that amount of Rs. 2,48,280/ be adjusted from the account of the defendant towards the supplies of filter. Thus plaintiff company on 17.12.2007 paid an amount of Rs. 50,000/ to the defendant towards the advance of suppliers and also supplied the filter paper to the defendant for the purposes of manufacturing filter for the value of Rs. 2,48,280/. It is further stated that defendant failed to adhere the terms and conditions of making the supplies and miserably failed to supply any filter in terms of P.O. No. 1415 dated 17.12.2007 and neither supplied 1st Lot of 5000 pieces of filter by 30.12.2007 nor supplied 2nd Lot of 21,000 pieces of filter by 20.01.2008. Surprisingly, the defendant supplied the 9765 pieces of the filter to plaintiff company vide bill no. 2652 dated 01.02.2008, however to the utmost shock and surprise of plaintiff company, the filter supplied to plaintiff company vide bill no. 2652 dated 01.02.2008 were not only defective but were not at all of appropriate quality and standard. Hence, the filters which were supplied by the defendant to plaintiff company under the aforesaid bill no. 2652 were rejected and were returned back to the defendant firm vide plaintiff company's delivery challan no. 105, dated 28.02.2008 under G.R. No. 2745 Truck No. DL1 LD4315.
6. It is further stated that in pursuance to the order placed by plaintiff company with the defendant firm for the purpose of supplying 26,000 number of filter vide PO No. 1415 dated 17.12.2007 and as per the books of accounts duly maintained by plaintiff company in its routine course of CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 5/ 27 business,plaintiff company had purchased 2069 Kgs of filter paper for and on behalf of defendant firm amounting to Rs. 2,48,280/ and supplied/delivered the filter paper to the defendant firm. It is further stated that the plaintiff company had also paid an advance of Rs. 50,000/ to the defendant, thus a total amount of Rs. 2,98,280/ was paid and credited in favour of defendant firm. It is further stated that admittedly the defendant failed to adhere to the terms and conditions of the PO and did not supply the material as per requirement/P.O, thus an amount of Rs. 2,98,280/ is due and payable by the defendant firm to the plaintiff company. It is further stated that the defendant took the order for supply of material and had accepted and taken the delivery of the aforesaid filter elements solely with the purpose to cheat, deceive and play fraud with the plaintiff company and the assurances given by the defendant for supplying the material/filters were totally false. It is further stated that till date, the plaintiff company has not received back any amount from the defendant on account of aforesaid transactions and supplies and total amount of Rs. 2,98,280/ is due and recoverable from the defendant by the plaintiff company.
7. It is further stated that a legal notice dated 24.08.2009 was duly served upon defendant and plaintiff company has received a letter dated 01.09.2009 from the counsel for defendant wherein the liability to pay any kind of amount was denied but the transaction which took place between plaintiff company and defendant firm was admitted.
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 6/ 27
8. By virtue of present suit the plaintiff has prayed for the following reliefs :
(1) Pass a decree for recovery of money in favour of plaintiff and against the defendant in the amount of Rs. 2,98,280/.
(2) Pass a decree for recovery of pendente lite and future interest from the date of filing the present suit till its realization.
(3) Award cost of the present suit.
(4) Pass any other order/direction.
9. Written statement has been filed on behalf of defendant wherein it is stated that plaintiff has not approached this court with clean hands and has suppressed material facts from this court and as such the suit of the plaintiff is liable to be dismissed. It is stated that defendant firm has its office at Meerut and works for gain at Meerut and all the transactions between the plaintiff and defendant took place at Meerut and no cause of action arose in favour of plaintiff to file the present suit against the defendant. In reply to the merits it is denied that the plaintiff is duly incorporated company registered under the Companies Act.
10. It is submitted that the representative of the plaintiff had approached the defendant in November, 2005 for supplying of auto filter and after satisfying itself with the quality of the defendant's goods, the CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 7/ 27 plaintiff had started placing orders to the defendant. It is denied that defendant had approached the plaintiff in the office of plaintiff at Delhi in the year 2007 for supplying the auto filters to the plaintiff.
11. It is further submitted that before dispatching the goods by the defendant to the plaintiff, the plaintiff's representatives always random check the pieces physically and only after their approval, the auto filters were dispatched to the plaintiff by the defendant firm. It is further submitted that the representative of the plaintiff had placed an order for supply of the filter elements at Meerut. It is further submitted that an order was placed for supplying of the filters and in pursuance of the said order defendant had supplied 9765 pieces filter elements for Massy @ Rs. 22.33 p, total worth Rs. 2,24,594/ to the plaintiff.
12. It is further stated that after receipt of Rs. 50,000/ the defendant had supplied the goods i.e. filters worth Rs. 1,22,815/ i.e. 5500 pieces of tractor filters to defendant, by leveling the false charges that the said filters are defective. These goods were not defective as alleged by the plaintiff and even then in order to maintain old business relations and harmony, the defendant did not make any complaint to the plaintiff, but after adjusting a sum of Rs. 1,22,815/ a sum of Rs. 52,589/ is still outstanding against plaintiff towards the supplied goods by the defendant to the plaintiff. It is further stated that before sending the goods, no complaint regarding the alleged defective goods has ever been made by the plaintiff to the defendant.
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 8/ 27
13. It is further stated that on account of the rejection of the goods, the defendant had to suffer to a loss of Rs. 10/ per piece, because these filters were screened in the branch name of the plaintiff and as a consequences of which the defendant had suffered a huge loss of Rs. 55,000/ but even then, the defendant did not claim the same in reply notice in order to maintain harmony and good relations. It is further stated that instead of making balance payment of the defendant, the intention of the plaintiff has become mala fide and they have not issued FormC, sales tax/trade tax to the defendant for the assessment year 2006 07 and as a consequences of which, the defendant had to pay a penalty of trade tax/sales tax of Rs. 12,400/ on 20.11.2008 on account of the negligence committed by the plaintiff. It is further stated that plaintiff has also withheld Form C Trade Tax/Sales Tax for the assessment year 200708 worth Rs. 23,450/ and did not deliver the same to the defendant, in spite of the defendant's repeated demands. It is further stated that besides making payment of Rs. 52,589/ the plaintiff is further liable to pay interest @ 12 % per annum on the aforesaid amount w.e.f 01.03.2008 till its payment in terms of the provisions of the Sales of Goods Act, Interest Act as well as market usage and customs. Prayer is made for dismissal of suit.
14. Vide Order dated 28.01.2012 following issues were framed :
(1) Whether this court has territorial jurisdiction to entertain this suit ? OPP (2) Whether the suit is without cause of action ? OPD CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 9/ 27 (3) Whether the plaintiff is entitled for the recovery of the suit amount ? OPP (4) Whether the plaintiff is entitled for the interest, over the suit amount, if so, at what rate and for what period ? OPP (5) Whether the defendant is entitled for the decree of counter claim ? OPD (6) Whether defendant is entitled for the interest, over the amount of counter claim, if so, at what rate and for what period ? OPD (7) Relief.
15. In order to prove his case plaintiff has examined himself as PW1 and has tendered in evidence his duly sworn in affidavit. Same is Ex. PW 1/A and has relied upon the following documents :
1. Certificate of incorporation Ex. PW 1/1 2. Board Resolution Ex. PW 1/ 2
3. PO No. 1415 dated 17.12.2007 Ex. PW 1/3
4. Delivery challan dated 17.12.2007 Ex. PW 1/ 4 5. GR No. 2745 Ex. PW 1/5
6. Statement of account Ex. PW 1/6
7. Notice dated 24.08.2009 Ex. PW 1/7
8. Postal receipts dated 24.08.2009 Ex. PW 1/8 & Ex. PW 1/9 CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 10/ 27
9. UPC dated 24.08.2009 Ex. PW 1/10
10. Acknowledgement cards Ex. PW 1/11 & Ex. PW 1/1 2
11. Reply of defendant dated 01.09.2009 Ex. PW 1/13
16. Plaintiff has examined another witness namely Mohd. Gulzar Ahmad as PW2 who has tendered in evidence his duly sworn in affidavit. Same is Ex. PW 2/A.
17. Both the witnesses were crossexamined by counsel for defendant. Thereafter on 19.04.2018 PE was closed and the matter was listed for DE.
18. In defendant evidence defendant has examined Sh. Sanjeev Walia as DW1 who has tendered in evidence his duly sworn in affidavit. Same is Ex. DW 1/A. In his testimony following documents were exhibited :
1. Copy of the partnership deed Mark C
2. Purchase order dated 10.11.2005 Ex. DW 1/ 2 issued by the plaintiff to the defendant
3. Invoice No. 2280 dated 31.12.2005 Ex. DW 1/ 3
4. Invoice No. 2293 dated 10.01.2006 Ex. DW 1/ 4
5. Invoice No. 2307 dated 04.02.2006 Ex. DW 1/ 5
6.Invoice No. 2346 dated 06.04.2006 Ex. DW 1/ 6 CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 11/ 27
7.Invoice No. 2408 dated 12.08.2006 Ex. DW 1/ 7
8. Invoice No. 2416 dated 22.08.2006 Ex. DW 1/ 8
9.Invoice No. 2466 dated 29.11.2006 Ex. DW 1/ 9
10. Invoice No. 2479 dated 18.12.2006 Ex. DW 1/ 10
11.Invoice No. 2529 dated 28.03.2007 Ex. DW 1/ 11
12.Invoice No. 2565 dated 05.06.2007 Ex. DW 1/ 12
13. Invoice No. 2608 dated 23.08.2007 Ex. DW 1/ 13
14. Invoice No. 2652 dated 01.02.2008 Ex. DW 1/ 14
15. Original challan dated 28.02.2008 Ex. DW 1/ 15
16. Copy of recovery certificate Mark D dated 10.11.2008 for the period w.e.f.
01.04.2006 till 31.03.2007 for Rs. 498/
17. Copy of recovery certificate Mark E dated 10.11.2008 for the period w.e.f.
01.04.2006 till 31.03.2007 for Rs. 38527/
18. Copy of letter of plaintiff address to Mark F defendant dated 27.03.2007
19. Copy of the statement of account Ex. DW 1/ 19
20. Certificate u/s 65B of the Indian Ex. DW 1/ 20 Evidence Act
21. Copy of declaration letter of import Mark G CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 12/ 27 (second copy) bearing No. 4114638
19. DW1 was crossexamined and discharged.
Vide separate statement made on 19.04.2018 on behalf of defendant by its partner Sh. Sanjeev Walia, DE was closed and the matter was listed for final arguments.
20. ISSUE NO.1 Whether this court has territorial jurisdiction to entertain this suit ?
The onus to prove this issue was upon the plaintiff.
It is submitted that by counsel for defendant that defendant has its office at Meerut and works for gain at Meerut and all the transactions between the plaintiff and defendant took place at Meerut and no cause of action ever arises in favour of the plaintiff to file the present suit against the defendant at Delhi and as such this court has no territorial jurisdiction to try the suit.
21. Counsel for the plaintiff has submitted that submitted that this court has jurisdiction over the matter as cause of action has arisen within the jurisdiction of the court.
22. In BCI Optical Disc Ltd vs Spinks India, 245 (2017) Delhi Law Times 472, Hon'ble High Court of Delhi has held that:
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 13/ 27 "7. As regards the argument urged before this Court as also before the trial court as regards the lack of territorial jurisdiction of the courts at Delhi, the same was subject matter of issue no.1, and the trial court has rightly held that courts at Delhi would have territorial jurisdiction inasmuch as payment was made in Delhi. Before me also it is not disputed on behalf of the appellant/defendant that cheque was issued by the appellant/defendant at Delhi and realized at Delhi, and therefore, once payment is made at Delhi, the courts where payment is made is a court where part of cause of action arises and therefore there is jurisdiction on the courts at Delhi to try the suit in view of subsection (c) of Section 20 CPC and the ratio of the judgment of the Supreme Court in the case of A.B.C. Laminart (P) Ltd. Vs. A.P. Agencies, Salem (1989) 2 SCC 163 and which holds that in contractual matters part of cause of action arises where either the contract is executed or the contract has to be performed or where the payment has to be or is made or where breach occurs with respect to the contract. Accordingly I reject the argument urged on behalf of the appellant/defendant that courts at Delhi no territorial jurisdiction."
23. In A.B.C. Laminart Pvt. Ltd and Anr. Vs A. P. Agencies, Salem, (1989) 2 SCC 163, Hon'ble Supreme Court held that, "11. The jurisdiction of the court in the matter of a contract will depend on the situs of the contract and the cause of action arising through connecting factors.
12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 14/ 27
13. Under Section 20(c) of the Code of Civil Procedure subject to the limitation stated theretofore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part arises. It may be remembered that earlier Section 7 of Act 7 of 1888 added Explanation III as under:
"Explanation III.--In suits arising out of contract the cause of action arises within the meaning of this section at any of the following places, namely:
(1) the place where the contract was made; (2) the place where the contract was to be performed or performance thereof completed;
(3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable."
14. The above Explanation III has now been omitted but nevertheless it may serve as a guide. There must be a connecting factor.
15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors.
16. So long as the parties to a contract do not oust the jurisdiction of all the courts which would otherwise have jurisdiction to decide the cause of action CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 15/ 27 under the law it cannot be said that the parties have by their contract ousted the jurisdiction of the court. If under the law several courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is total ouster of jurisdiction. In other words, where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy. Would this be the position in the instant case?"
24. In the present case goods were to be supplied by defendant at Delhi. Payment of Rs. 50,000/ was made by plaintiff to defendant from Delhi. Balance payment was also supposed to be made by plaintiff from Delhi. Filter papers were allegedly procured by plaintiff at Delhi. Goods were returned by plaintiff from Delhi. It is clear that part of cause of action has arisen in Delhi. Hence, this issue is decided in favour of the plaintiff.
25. ISSUE NO.2 Whether the suit is without cause of action ?
The onus to prove this issue was upon defendant.
While deciding this issue, this court will confine itself to plaint and supporting documents only. Plaintiff has filed the present suit claiming recovery of Rs. 2,98,280/ from the defendant along with interest and cost. Cause of action of plaintiff is based upon advance payment of Rs. 50,000/ made to defendant vide cheque no. 120432 dated CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 16/ 27
17.12.2007 for supply of filters. Cause of action is further based upon recovery of purchased filter paper amounting to Rs. 2,48,280/.
26. Plaintiff had filed delivery challan (Ex PW 1/ 4) to show delivery of paper filter to defendant. Plaintiff had also filed Mark B showing return of goods to defendant. Plaintiff had also filed ledger account. The material facts in the plaint disclose cause of action in favour of the plaintiff. On the basis of plaint and documents filed along with the plaint, this court does not find that there was no cause of action in favour of plaintiff for filing the present suit.
This issue is decided against defendant.
27. ISSUE NO.3 & 43. Whether the plaintiff is entitled for the recovery of the suit amount ?
4. Whether the plaintiff is entitled for the interest, over the suit amount, if so, at what rate and for what period ? OPP The onus to prove both these issues is upon the plaintiff. Both the issues are taken up together.
Counsel for the defendant has submitted that the present suit has been filed by unauthorized person. It is further submitted that plaintiff has failed to prove the board resolution despite asking for Minutes Book, PW1 has intentionally not produced the same. In this regard, counsel for the defendant has relied upon the judgement of Hon'ble High Court of CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 17/ 27 Delhi in M/s Sangat Printers Pvt. Ltd vs M/s Wimpy International Ltd.
28. Counsel for the plaintiff has submitted that plaintiff company is duly incorporated and registered under Companies Act. It is further argued that Shri. J.S. Sethi, one of the director, is entitled to file the suit. It is further argued that resolution dated 25.09.2009 of Board of Directors is in its favour.
29. In M/s Sangat Printers Pvt. Ltd vs M/s Wimpy International Ltd, RFA No.657/2003, Hon'ble High Court of Delhi, held that "4. In my opinion, the Trial Court has clearly erred in dismissing the suit on the ground that the suit has not been validly instituted. Firstly, the finding is wrong, because the Board of Directors' resolution was proved and exhibited as Ex.PW1/A. Before the commencement of crossexamination, the respondent/defendant did not object to the exhibition of this document, and therefore, in view of the decision of the Supreme Court in the case of R.V.E.Venkatachala Gounder vs. Arulmigu Viswesaraswami & V.P.Temple 2003 (8) SCC 752, the respondent/defendant is estopped from objecting to the proof of the document. The Supreme Court in the case of R.V.E.Venkatachala Gounder(supra) has held that if objection is taken by the objecting party at the relevant point of time, then, the litigant which wrongly exhibits/proves the documents, can thereafter take corrective action to ensure proper mode and manner of proof. Therefore once objection is not taken at the appropriate point of time, subsequently, no benefit can be derived of the same by the party subsequently objecting. In the present case, evidence was filed by way of affidavit and therefore since objection to the exhibiting/proof was not taken before commencement of the crossexamination, the objection is deemed to have been waived inasmuch as if crossexamination would not have begun and objection would have been taken to exhibiting/proof of document, then the appellant would have preferred to lead other evidences to ensure proof of the resolution, Ex.PW1/A. I therefore hold that the resolution Ex.PW1/A duly showed the entitlement of CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 18/ 27 Sh. Parvinder Singh to file the suit. Secondly, the objection raised by the respondent/defendant is fully answered against the respondent/defendant as per the celebrated decision of the Supreme Court in the case of United Bank of India vs. Naresh Kumar, 1996(6) SCC 660; AIR 1997 SC 3, in which judgment the Supreme Court has said that the cases filed by the companies should not be dismissed on technical ground with respect to validity of institution, and in fact the Supreme Court went on further to hold that as long as the suit is contested to the hilt, it ought to be held that the suit was validly instituted and filed. I therefore hold that the Trial Court erred in dismissing the suit on the technical ground by returning the finding on issue no.1 that the suit was not validly instituted and filed.
5. Learned counsel for the respondent relied upon the judgment in the case of State Bank of Travancore vs M/s. Kingston computers (I) Pvt. Ltd. 2011 (3) Scale 33 to argue that it should be held that the suit was not validly instituted. The Supreme Court in the case of State Bank of Travancore (supra) has held that once there is no resolution which has been filed, then, because no resolution is filed, a person who claims to have instituted the suit, cannot be said to have validly instituted the suit, more so, because the person who claimed to have instituted the suit as a Director, did not file any proof that he was the Director of the Company. This judgment therefore has no application to facts of the case where the resolution was filed on record and also exhibited/proved thereafter. I must also mention that this judgment of the Supreme Court does not make reference to the earlier binding judgment in the case of United Bank of India(supra) and which goes to the extent of saying that the suits should not be dismissed on the technical grounds once the legal entity which files the case, contests the case to the hilt, i.e. till the stage of the final arguments."
30. No objection was taken by the defendant while exhibiting Ex PW 1/ 1 i.e. certificate of incorporation. While exhibiting Ex PW 1/ 2 i.e. the board resolution, objection was taken by the counsel for the defendant as to mode of proof. On 21.01.2017, PW1 during his crossexamination stated that "I can bring the minutes of the board meeting dated 25.09.2009." On 05.02.2018, PW1 during his crossexamination stated that "The minutes form a part of the board of resolution by which I am CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 19/ 27 authorized to file and depose on behalf of the plaintiff. It is wrong to suggest that I am not bringing the minutes book since no resolution has been passed on 25.09.2009 or that no board meeting was held on that date. (Vol. There is no requirement to bring the minutes book.)"
31. Counsel for the defendant objected exhibition of Ex PW 1/ 2 during examination of PW1. Counsel for defendant further asked PW1 during crossexamination to bring the minutes of the board meeting dated 25.09.2009. Still plaintiff did not produce the minutes of the board meeting.
32. In Escorts Ltd. vs. Sai Auto and Others, 42 (1990) Delhi Law Times 446, Hon'ble High Court of Delhi has held that "(14) The manner in which such a resolution of the Board of Directors of Companies are to be proved, is clearly stated by Hardayal Hardy, J. in a judgment passed in Suit No. 469 of 1986 in M/s. Oberoi Hotels (India) Pvt.
Ltd. v. M/s. Observer Publications (P) Ltd. and others. In this judgment it has been stated that "the only way to prove that a particular resolution was passed at a meeting of the Board of Directors of a company is that the minutes book in which the said resolution was recorded as having been passed should be produced in Court as that alone can form evidence of the fact under section 194 of the Act". Section 194 of the Companies Act reads as under :
"194.Minutes of meetings kept in accordance with the provisions of section 193 shall be evidence of the proceedings recorded therein"."
33. In United Bank of India vs Naresh Kumar, 1996 (6) SCC 660, Hon'ble Supreme Court of India has held that "In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 20/ 27 mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer."
34. This court comes to the conclusion that adverse inference should be drawn against PW1 for not bringing the minutes of board meetings despite giving assurance that he can produce the same. In view of the judgement of Hon'ble Supreme Court of India suit of the plaintiff CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 21/ 27 is not liable to be rejected on this technical ground alone.
35. Plaintiff alleged in the plaint that there was agreement with the defendant for supply of 26,000 pieces of CAV filters @ Rs. 34.50 per filter. It is further pleaded that supplies were to be made in two lots of 5,000 and 21,000 pieces on or before 30.12.2007 and on or before 20.01.2008 respectively. Counsel for the defendant on the other hand submitted that there was agreement to supply only 9765 fuel filter in one go. There is only one document i.e. Mark A to prove the alleged agreement terms of the plaintiff. Mark A is merely a photocopy document. Its original was not produced before the court nor any circumstances were shown to lead secondary evidence as per section 65 of Evidence Act. Defendant has denied the signature of Mr. Sanjeev Walia on Mark A during crossexamination of PW1. Thereafter plaintiff did not produce the original for proving the signature of Mr. Sanjeev Walia. No other document was filed by the plaintiff to prove alleged supply in two lots. Moreover, plaintiff did not even seek permission to send Mark A and Ex PW 1/ 4 to expert handing opinion. Even comparing the signatures of Mr. Sanjeev Walia on his affidavit, examination and crossexamination with Ex PW 1/ 4, this court comes to the conclusion that signatures of Mr. Sanjeev Walia differ materially.
36. PW1 during his crossexamination conceded that he did not place on record purchase of filter paper as mentioned in para 6 of Ex PW1/A. Plaintiff has not been able to prove signatures of Mr. Sanjeev CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 22/ 27 Walia at point B on Ex. PW 1/ 4.
37 In para 5 of the W.S., it is pleaded that an order was placed for supplying filters and in pursuance of the said order defendant had supplies 9765 pieces filter elements for Massey @ Rs. 22.33p, total worth Rs. 2,24,594/ to the plaintiff. DW1 during his cross examination conceded that filters ordered to be supplies were 10,000. There is discrepancy in the crossexamination of DW1 with respect to supply of quantity compared with what is stated in the W.S. and Ex. DW 1/14.
38. In the present case, plaintiff has been unable to prove the alleged agreement either by oral testimony or through documentary proof, that there was P.O. No 1415 dated 17.12.2007 for supply of filter elements of 26,000 quantity in two lots @ 34.50 per filter. No suggestion was put to DW1 that Ex DW1/3 to DW1/14 are false and fabricated. DW1 has also relied upon DW1/2 by which plaintiff asked defendant to supply filters. DW1/2 nullifies the stand taken in the plaint that it was defendant who approached plaintiff for making purchases. The plaint does not even disclose the past transactions with the defendant. DW1/15 and PW1/D1 show return of goods by plaintiff. PW1 during his cross examination also conceded that plaintiff has returned only 5500 pieces to the defendant on 28.02.2008. Ex. DW 1/19 shows payment of Rs. 50,000/ made by plaintiff to defendant on 20122007. Ex. DW 1/19 also shows balance payment due against plaintiff of Rs. 52,589/. It is settled law that mere ledger account will not entitle a party to claim recovery of CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 23/ 27 closing balance. Mark D, E, F and G have not been proved by the defendant in the present case. Neither originals are produced nor circumstances were shown to lead secondary lead.
39. Plaintiff has also filed ledger account vide Ex. PW 1/6 which shows closing balance due against defendant as Rs. 2,98,280 being sum of advance payment and purchase of paper filters. Mark B has not been proved by the plaintiff either through primary or through secondary evidence by showing circumstances. Plaintiff returned 5500 pieces of goods to the defendant. Plaintiff has not lead any evidence to show that those pieces were actually defective. In any case, since defendant accepted the defective goods this court will not determine where goods were actually defective or not. It is settled law that a person coming before the court should come with clean hands. Plaintiff has admitted that he received 9765 pieces of filter out of which 5500 pieces were returned. Plaintiff has not accounted for payment of receipt of remaining filters. The agreement as alleged in para 7 of the plaint has not been proved by the plaintiff. Plaintiff has received 4265 filters vide Ex DW 1/14. Costs of supplying 4265 filters @ Rs. 34.50 comes to Rs. 1,47,142.5/ and @ Rs. 22.33 comes down to Rs. 95,237.45/. Plaintiff has not filed any document to prove that he actually paid for the supplies kept by it except for the ledger account. Even after deducting the advance amount paid by the plaintiff, there still appears to be amount due against the plaintiff.
40. In view of the above discussion and findings, both the issues CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 24/ 27 are decided against the plaintiff.
41. ISSUE NO. 5 & 65. Whether the defendant is entitled for the decree of counter claim ?
6. Whether defendant is entitled for the interest, over the amount of counter claim, if so, at what rate and for what period ?
The onus to prove these issue was upon the defendant Both the issues are taken up together.
It is relevant to note that defendant is a partnership concern. Defendant has filed Mark C i.e. copy of partnership deed. Section 69 of Partnership Act provides that "69. Effect of nonregistration.--(1) No suit to enforce a right arising from a contract or conferred by this Act shall be institutes in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
(3) The provisions of subsections (1) and (2) shall apply also to a claim of set off or other proceeding to enforce a right arising from a contract, but shall not affect--
(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or a ay right or power to realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or Court under the Presidency towns Insolvency Act, 1909 (2 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realise the property of an insolvent partner. (4) This section shall not apply--
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 25/ 27
(a) to firms or to partners in firms which have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which, by notification under section 56, this Chapter does not apply, or
(b) to any suit or claim of setoff not exceeding one hundred rupees in value which, in the Presidencytowns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882 (15 of 1882), or, outside the Presidencytowns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim."
42. Order 8 Rule 6A of CPC provides that "6A. Counterclaim by defendant.--(1) A defendant in a suit may, in addition to his right of pleading a setoff under rule 6, set up, by way of counterclaim against the claim of the plaintiff, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the filing of the suit but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counterclaim is in the nature of a claim for damages or not:
Provided that such counterclaim shall not exceed the pecuniary limits of the jurisdiction of the court.
(2) Such counterclaim shall have the same effect as a crosssuit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counterclaim.
(3) The plaintiff shall be at liberty to file a written statement in answer to the counterclaim of the defendant within such period as may be fixed by the court.
(4) The counterclaim shall be treated as a plaint and governed by the rules applicable to plaints."
43. In Shiv Developers vs. Aksharay Developers & Ors, 2022 SCC OnLine SC 114, Hon'ble Supreme Court has held that, "15. In our view, the questions arising in this matter could be directly answered with reference to the principles enunciated by this Court in the case of Raptakos Brett & Co. Ltd. v. Ganesh Property: (1998) 7 SCC 184, which have further been explained and applied by this Court in the cases of Haldiram CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 26/ 27 Bhujiawala and Purushottam (supra). We may take note of the principles vividly exposited in the case of Haldiram Bhujiawala (supra) that to attract the bar of Section 69(2) of the Act of 1932, the contract in question must be the one entered into by firm with the thirdparty defendant and must also be the one entered into by the plaintiff firm in the course of its business dealings; and that Section 69(2) of the Act of 1932 is not a bar to a suit filed by an unregistered firm, if the same is for enforcement of a statutory right or a common law right."
44. Order 8 Rule 6A (2) of CPC states that counter claim shall have same effect as a crosssuit. Further Rule 6A (4) states that counter claim shall be treated as a plaint. Mark C filed by the defendant is an unregistered Partnership Deed. The name of the partners mentioned in Mark C are shown to be stated in Register of Firms. The bar of section 69 (2) of Partnership Act clearly applies to the counter claim of the defendant. It is not a case, where statutory right or common law right is claimed by the defendant. Counter claim of the plaintiff arises out of contractual relations with the plaintiff.
Thus, issue no 5 and 6 stand decided against the defendant.
45. In view of the above, suit of the plaintiff and counter claim of the defendant stand dismissed. No order as to costs.
Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Digitally signed ANKIT by ANKIT
KARAN KARAN SINGH
Date: 2022.08.30
SINGH 18:45:12 +0530
Pronounced in the open court (Ankit Karan Singh)
today i.e. on 30.08.2022 Civil Judge01(West)/Delhi
CS SCJ NO.610158/16 M/s Luman Auto Light Pvt. Ltd. vs. M/s Angel Auto Associates 27/ 27