Delhi District Court
Crossways Vertical Solutions Pvt Ltd vs Cloudatix Networks Pvt Ltd And Ors on 2 November, 2023
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DLCT010057232021
IN THE COURT OF MS.KAVERI BAWEJA, DISTRICT
JUDGE (COMMERCIAL COURT)-07,
CENTRAL DISTRICT,
TIS HAZARI COURTS, DELHI
CS (Comm.) - 1359/2021
IN THE MATTER OF:
M/s Crossways Vertical Solutions Pvt. Ltd.
Having its registered office at:
405, 1st Floor, FIE,
Patparganj, New Delhi - 110092
(Through its authorized person
Mr. Neeraj Kumar Aggarwal) ..... Plaintiff
Versus
M/s Cloudatix Networks Pvt. Ltd.
Regd. Office: Flat No.493,
Sector - 28, Noida
Gautam Buddh Nagar - 201303 (UP)
Also at:
M/s Cloudatix Networks Pvt. Ltd.
D-12-A, Jalvayu Vihar Road,
D-Block, Pocket-D, Sector-20,
Noida - 201301 (UP)
(Through its Director Mr. Chandan Sharma) .... Defendant
Date of Institution : 08.04.2021
Judgment Reserved on : 21.08.2023
Date of judgment : 02.11.2023
M/s Crossways Vertical Solutions Pvt. Ltd. vs.
M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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JUDGMENT
Brief facts:-
1. The Plaintiff has filed the instant suit through its Director seeking recovery of Rs.3,63,314/- against the Defendant along with future and pendente lite interest and costs.
2. The Plaintiff is stated to be Private Limited Company engaged in the business of trading, supplying, distributing, servicing, manufacturing of industrial electrical goods like, 3M range of products including Tapes, Connectors insulation papers, cable jointing, heat shrinks, sprays, resin, powder resins, electronic solutions, bumpon, cable management, passive fire protection, coatings, oil/chemicals spill control, safety, glass films, dusts trap matting, anti-fatique matting, adhesives, VHB tapes, filtration, cleaning, locator, markers, scanner etc. The Plaintiff is also stated to be an Authorized Distributor for: Hotimann Group, Ideal, Kilews, Hilpress etc. It is submitted that presently the registered office of Plaintiff is situated at 405, First Floor, FIE, Patparganj, New Delhi and prior to 09.04.2019, the registered office was situated at 411, Essel House, 10, Asaf Ali Road, New Delhi-110002.
3. Defendant No.1 is a Private Limited Company having its registered office at Gautam Budh Nagar, Noida, UP and due to the M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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business dealings, the Plaintiff and Defendant were known to each other where Plaintiff is a vendor and the Defendant is purchaser of certain goods.
4. It is the case of the Plaintiff that Defendant placed the following two purchase orders via e-mail which was received by the Plaintiff at its Delhi office situated at Asaf Ali Road, Delhi-110002, wherein the Defendant requested to the Plaintiff to dispatch the products at various locations in India:-
S.No. PO No. PO Date Material Description Amount of PO (inSclusive VAT/CST) in INR
1. PO/CA/2017-18/002 27.03.2017 Visual Fault Locator 73,950.00
2. PO/CA/2017-18/003 27.03.2017 Clamp Meter (Make 4,09,020.00 Fluke), GPS, OTDR, OPTICAL POWER METER
3. TOTAL AMOUNT OF PURCHASE ORDERS 4,82,970.00
5. It is further submitted that in terms of clause (ii) of the aforesaid purchase orders, the payment terms were settled as 10% advance only after acceptance of purchase order, 40% on issuance of performa invoice and delivery challan duly received at the customer site and remaining 50% on the completion of 60 days from the date of delivery of goods in the form of PDC.
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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6. It is contended that after receipt of the aforesaid purchase orders, Plaintiff duly supplied and delivered the goods to the defendant at their desired locations and raised challans and invoices for the same, which were duly received by the defendant after affixing their signature on the Invoices. After delivery of material described in the aforesaid Purchase Orders, Plaintiff, through its authorized representative(s), raised demand for releasing its pending payments and "C" forms.
7. As per plaint, various personal meetings were held at the office of defendant and various emails and telecom were exchanged with them, but the defendant did not pay any heed to the just, reasonable, genuine and legal demands of the plaintiff and have not cleared the outstanding balance amount of Rs.3,63,314/- (Rupees Three Lakh Sixty Three Thousand Three Hundred fourteen) [Rs.2,89,782/- outstanding against aforesaid 2 invoices, Rs. 50,712/- sales tax amount due to non - providing of "C" forms by the and Rs. 22,820/- towards interest paid by the plaintiff to sales tax authority for non-furnishing of "C" Forms] against the aforesaid purchase orders.
8. It is further averred in the plaint that the Plaintiff supplied goods and raised bills which were handed over to the Defendant and their official for payments. The said goods were supplied on the assurances of Defendant for timely payment and adhering to agreed terms and M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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9. It is further submitted that the Plaintiff got issued legal notices dated 25.01.2020 and 06.02.2020 calling upon the Defendant to make the outstanding payments, but the Defendant did not pay any heed to the legitimate demands of the Plaintiff and failed to make the payment of the amount, as prayed. Hence, the present suit.
10. Plaintiff further submitted that the cause of action to file the present suit arose when Defendant approached the Plaintiff at its office and placed the aforesaid purchase orders dated 27.03.2017 for supply of goods mentioned therein. It further arose when the orders placed by the Defendant were accepted by the plaintiff at its Asaf Ali Road, Daryaganj, New Delhi office. It further arose when Defendant failed to make payment of legitimate dues of the plaintiff despite numerous personal visits, repeated requests made from time to time. It further arose when Legal Notice dated 25.01.2020 was issued and served upon the Defendant and the Defendant failed to make the payments. It further arose in March, 2020, when the Plaintiff had filed an application under Section 12A of the Commercial Courts Act, 2015 before the Mediation Cell, Central District, Tis Hazari Court, New Delhi, and it further arose M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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Plea of the Defendant:-
11. In his written statement, the Defendant, by way of preliminary objections, contended that the suit of the Plaintiff is not maintainable as the same is without any cause of action. It is further submitted that the suit of the Plaintiff is time barred as the Purchase Orders are of March, 2017 and the materials were supplied in 2017, however, the suit was filed in April, 2021 and therefore the same is liable to be dismissed. It is also submitted that this court has no territorial jurisdiction to try and entertain the present suit because the Defendant has placed the order from Noida only and never visited the office of Plaintiff and that no cause of action ever arose in Delhi. It is also submitted that the Purchase Orders issued itself contain the condition that the courts at Noida shall have jurisdiction and thus the present suit is liable to be dismissed.
12. The Defendant further pleaded that he is an authorized contractor for supplying the material to Railtel and has bid for the open tender of Raitel Corporation of India Limited against the tender No.Raitel/Tender/OT/WR/Wi-Fi/2015-16/39 for the supply installation and commissioning of WiFi at various Railway Stations over western Region. The Defendant had sought the compliance from the Plaintiff M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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a. K Grid Knowledge Ventures Pvt. Ltd.
i. PO/CA/2017-18/001 - 2 Nos Splicing Machine -
Rs.3,16,200/-.
ii. PO/CA/2017 - 18/001 - 2 Nos Splicing machine -
Rs.3,16,200/-.
b. Cloudatix Networks Pvt. Ltd.
i. PO/CA/2017 - 18/002 - 5 Nos Visual fault Locator -
Rs.73,950/-.
ii. PO/CA/2017-18/001 - % Nos. Clamp Meter, 4 Nos GPS, 2 Nos OTDR, 4 Nos Optical Power Meter - Rs.4,09,020/-. c. Cloudatix Networks Pvt. Ltd.
i. PO/CA/2017/-18/002 - 4 Nos. Visual fault Locator -
Rs.59,160/-.
ii. PO/CA/2017/ - 4 Nos Clamp Meter, 2 Nos GPS, 2 Nos OTDR, 2 Nos Optical Power Meter - Rs. 3,43,536/-. d. The Purchase Order was placed with the following conditions:
i. Goods supplied should be as per the specifications. ii. Payment Terms - 10% advance, 40% on issuance of PI and delivery challan received at the customer (M/s Raitel), remaining 50% on completion of 60 days from the date of delivery of goods in the form of PDC.
iii. Terms of Delivery - Maximum two weeks from the date of issuance of PO failing which order will stand cancelled. M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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v. Goods will be liable for rejection in case the performance is not upto the specifications specified in the data sheet. vi. In case of any shortage and damaged items/material all such material will be taken back and replaced by the supplier at his own cost and risk.
vii. Subject to Noida - Uttar Pradesh Jurisdiction.
13. It is further contended that based on compliance to the tender conditions agreed by the Plaintiff through email dated 28.03.2017, they had to deliver the materials within two weeks except for the Visual fault locator - 4 weeks and meet all the compliance conditions towards the supply of the material including the warranty certificates issued by the OEM.
14. It is further contended that the Plaintiff sent the warranty certificate for splicing machine, power meter, OTDR through email dated 12.04.2017 and that the warranty certificate provided by the Plaintiff was not authentic that was duly informed multiple times and through email dated 15.04.2017 and 16.04.2017. Further, the Plaintiff as per the Purchase Order had to deliver the equipment to the Raitel and get a sign off from the M/s Raitel but they did not deliver the material to M/s M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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15. It is further the plea of the Defendant that the the Defendant issued the payment towards the 40% by way of cheque dated 11.04.2017 for Rs.4,14,038/- under Cloudatix Biz India Ventures Pvt. Ltd. And Rs.1,93,188/- from Cloudatix Networks Pvt. Ltd. and that total payment of 50% (i.e. 10% for Rs.1,51,807/- with the PO and 40% for Rs.6,07,226/- on delivery) was paid with the assurance that Plaintiff shall provide the remaining material - VFL and other pending documents as per the terms and conditions of the Purchase Order. Further, the Defendant through its mail dated 28.04.2017 and 01.05.2017 informed the Plaintiff that delivery of VFL has not happened as per the Purchase Order and until all the material delivery is completed Raitel acceptance process cannot be completed for the material. The Defendant also reiterated to provide the OEM warranty certificate and TEC certificates. Defendant further reiterated to the Plaintiff through its email dated 18.05.2017 that VFL has still not been delivered urging the Plaintiff to make alternate arrangements and also informed that the Defendant's payment is stuck for want of supply of material. Defendant through its emails dated 16.06.2017 and 20.06.2017 had informed the Plaintiff that they haven't received the acceptance of the material by the M/s Raitel as M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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supplying of items are incomplete and until VFL is supplied M/s Raitel will not provide the acceptance and that delaying the material delivery is not serving any purpose and that process of material verification and acceptance will only start once all the material is delivered.
16. Defendant further contended that the Plaintiff vide its email dated 22.06.2017 informed that the delivery of VFL is completed that caused delay of over 9 weeks against the PO. Further, during the process of acceptance M/s Railtel found that two splicing machines supplied were with pirated software with error "time of expired demonstration"
indicating that these were demo machines and that the Defendant informed the issue to the Plaintiff through email dated 26.06.2017.
17. Further, the Plaintiff through its mail dated 29.06.2017 informed that its an issue of updation of new software. However, the Defendant informed through email dated 29.06.2017 that since the machines are in the acceptance phase thus the machines cannot be taken out of M/s Railtel.
18. Defendant also submitted that the Plaintiff had given pirated software of the machines which was not supporting the system and which was not according to OEM. Raitel objected against the same and because of the said defects, work could not be completed. Subsequently, the Defendant issued the notice of default to Plaintiff M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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through various communications and emails but the Plaintiff did not comply and violated the terms of the Purchase Order. The Defendant further received the rejected machines by M/s Raitel due to the pirated software who asked the Defendant to replace with the new machines. This was intimated to the Plaintiff through email dated 13.07.2017 to replace the machines rejected by the customer. Plaintiff was given 15 day's notice to replace the machines, however, the Plaintiff did not act upon it. The Defendant pointed out to the Plaintiff that the Purchase Order contains specific clause that in case of any defect in the machine, the machine shall be replaced by the new one.
19. It is submitted that the Defendant in order to resolve the issues mutually agreed through email dated 23.10.2017 that the Plaintiff will provide the PBG for the balance amount (50%) to cover the warranty as per the terms and conditions of the tender and also to ensure that the software would work during the warranty period as without the software the machines are worthless. It was also agreed that Defendant will issue the cheque for pending payments on receiving the PBG. It was also agreed that the Plaintiff will send the service engineer to the Defendant's office to repair the machines however despite the agreement, the Plaintiff neither gave the PBG nor repaired the machines. The Defendant regularly followed up the Plaintiff as all the payments were stuck for the M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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Defendant for supplying faulty machines. Since the project was a turn key project, the payments cannot be made by M/s Railtel till all the material has been fully supplied and associated tasks are completed.
20. It is further contended that the Plaintiff tricked the Defendant by stating that OEMs are busy thus repair cannot happen in the Defendant's office so let the machines be brought to Janpath, Connaught Place thus while trying to repair the two machines tried to snatch the machines from the officials of Defendant and made changes in the configuration setting but did not allow the officials to view the changes being made. The email in this context is dated 01.11.2017. The Defendant highlighted the issue with the Plaintiff and it was agreed that PBG will be provided and all the changes made on the machines along with keys must be transparently provide to the Defendant but Plaintiff failed to comply. It is thus submitted that the Defendant suffered huge loss due to the non supply of the machines as its payment for both the regions in Ahmedabad and Mumbai, it had to bear the loss of over Rs.24 lakhs including the BG which till date has not been paid by M/s Railtel.
21. It is thus submitted that the claim of the Plainiff is not maintainable as the Plaintiff himself vide email dated 25.05.2018 admitted that only a sum of Rs.1,39,033/- is outstanding and that the Plaintiff cannot claim more than that.
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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Replication:-
22. In its replication, the Plaintiff refuted the contentions made in the written statement and reiterated the averments made in the Plaint. It is submitted that the Defendant, earlier made some purchases from, the OEM, but they did not make their some outstanding payments, thus the OEM refused to supply the material to them directly. Thus the Defendant and their associate company approached the Plaintiff to supply material of specific make and designs and placed purchase orders upon the Plaintiff on 27.03.2017. It is further submitted that it is in the knowledge of the Defendant that the machine was purchased from the OEM and they were having full rights and authority to verify the veracity of the machines from OEM and that the Plaintiff is never responsible in any manner for the completion of work of Railtel. It is also submitted that the delay in completion of work of Railtel was only due to the acts of omission and commission on the part of Defendant. It is further submitted that it was never a condition of the purchase order that the Defendant shall make the balance 50% payment on receipt of their bills from Railtel, the Defendant prepared the PDC for balance 50% payment and sent a scan copy thereof to the Plaintiff and mischievously did not hand over the original cheque to the Plaintiff.
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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23. It is further submitted that the goods were supplied on the assurances of Defendant for making timely payment and adhering to agreed terms and conditions, however, the Defendant failed to make the payment. Also the Defendant have not returned any alleged defective material to the Plaintiff till date.
Issues and Evidence :-
24. On the basis of pleadings of the parties, following issues were framed vide order dated 06.10.2022:-
(1) Whether the Plaintiff has not approached this court with clean hands and has concealed the material facts? (OPD) (2) Whether the suit is within limitation? (OPP) (3) Whether this court has territorial jurisdiction to entertain this suit? (OPP) (4) Whether the Plaintiff is entitled to recover the suit amount of Rs.3,63,314/- (OPP) (5) Whether the Plaintiff is entitled to any interest, if so, at what rate? (OPP) (6) Relief
25. In order to prove his case, Plaintiff examined its Director and Authorized Representative Mr. Sunil Kumar Gupta as PW-1 and tendered his affidavit in evidence as Ex.PW-1/A. He more or less reiterated the contents of the plaint and relied upon the following documents forming part of his said affidavit:-
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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(i) Board Resolution dated 17.03.2020 as Ex.PW1/1
(ii) Purchase Order nos.PO/CA/2017-18/002 & PO/CA/2017- 18/003, both dated 27.03.2017 as Ex.PW1/2 & Ex.PW1/3
(iii) Invoices dated 29.04.2017 & 22.05.2017 as Ex.PW1/4 & Ex.PW1/5
(iv) Ledger Account of plaintiff company for the financial year 2017-18, 2018-19, 2019-20 & 2020-21 as Ex.PW1/6, Ex.PW1/7, Ex.PW1/8 & Ex.PW1/9 respectively.
(v) Certificate u/s.65-B of Indian Evidence Act as Ex.PW1/10
(vi) Legal Notice, Postal Receipts and Postal Tracking Reports as Ex.PW1/11(colly)
(vii) Non-Starter Report dated 10.03.2021 as Ex.PW1/12
(viii) Copy of Master data of plaintiff company downloaded from the official website of the Ministry of Corporate Affairs, Govt of India as Mark PW1/A.
(ix) Copy of Form INC 22 along with copy of challan regarding the shifting of registered office of the plaintiff company from 411, Essel House, 10, Asaf Ali Road, New Delhi-110002 to 405, First Floor, FIE, Patparganj, New Delhi- 110092 as Mark PW1/B.
(x) Copy of Registration Certificate as Mark PW1/C.
26. It is pertinent to note that during the course of proceedings, Defendant failed to appear before the court since after the framing of issues in this case i.e. 06.10.2022 and consequently vide order dated 16.02.2023, the Defendant was proceeded against ex parte. M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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27. I have heard the arguments advanced before me and also gone through the written submissions filed by the learned counsel for the Plaintiff and the judgments relied upon during the course of his arguments.
28. Having gone through the material on record and the submissions made, my issue wise findings are as under:-
Issue No. (3) Whether this court has territorial jurisdiction to entertain this suit? (OPP)
29. It is the case of the Plaintiff that this court has the territorial jurisdiction to try an entertain the suit inasmuch as the cause of action for filing the present suit arose out of the territorial jurisdiction of this court. It is further submitted that prior to 2019, the registered office of the Plaintiff Company was situated at 411, Essel House, 10, Asaf Ali Road, New Delhi-110002.
30. During the course of arguments, learned counsel for the Plaintiff submitted that the Purchase Orders Ex.PW-1/2 and Ex.PW-1/3 as well as invoices Ex.PW-1/4 and Ex.PW-1/5 clearly reflect that the Defendant placed order for supply of the aforesaid goods at the aforesaid address of the Plaintiff. The goods were supplied by the Plaintiff from the said office to the desired location of the Defendant and the payment was to be made by the Defendant on the said address of the Plaintiff. Thus, it is M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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submitted that keeping in view the provision of Section 20(c) of CPC since the cause of action wholly or in part arose within the territorial jurisdiction, as aforesaid, this court has the territorial jurisdiction to entertain the present suit. Learned counsel for the Plaintiff has also relied upon the following judgments in support of his arguments:-
(i) M/s Auto Movers vs. Luminous Power Technologies Pvt.
Ltd. in CM(M) No.604/2020 decided on 16.09.2021 (Delhi High Court) and
(ii) Shanti Devi Alias Shanti Mishra vs. Union of India & Ors. in Civil Appeal No.3630 of 2020 decided on 05.11.2020 (Supreme Court)
31. Though no evidence has been led on behalf of the Defendant on the aspect of territorial jurisdiction, however, from the written statement it can be deduced that the Defendant opposed the case of the Plaintiff on the ground inter alia that this court does not have the territorial jurisdiction to entertain the present suit since the Defendant had placed the orders from Noida only and never visited the office of the Plaintiff and as such no cause of action ever arose in Delhi. To this effect, the Defendant, as aforesaid, did not lead any evidence whatsoever. The Defendant has also taken the plea that the purchase orders themselves contain the condition that the courts at Noida shall have the jurisdiction to try the suit in case of dispute.
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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32. On the other hand, it is the case of the Plaintiff that the Defendant approached the Plaintiff at its office and placed the purchase orders for other goods mentioned therein at its office at Daryaganj. The said orders were accepted by the Plaintiff at its Daryaganj office and hence this court has the territorial jurisdiction to try the present suit.
33. I also place reliance on the case of A.B.C. Laminart Pvt. Ltd. vs. A.P. Agencies (1989) 2 SCC 163, wherein the aspect of territorial jurisdiction has been categorically dealt with by the Hon'ble Apex Court. The said ruling was also followed subsequently by the Hon'ble High Court of Delhi in the case of Bela Goyal, Proprietor of ISPAT SANGRAH (India) vs. VIIPL - MIPL JV (Jaipur) & Ors., in CS(Comm.) decided on 03.01.2022.
34. In the present case it has been established by the Plaintiff that part of the cause of action arose at Daryaganj office, which falls within the territorial jurisdiction of this court. Further, in the case of Bela Goyal (Supra), it has been held that "Merely by mentioning on the invoices viz., the disputes shall be subject to the jurisdiction at Jaipur would not snatch away the jurisdiction of this Court as there was no exclusion clause in the invoices."
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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35. In the present case also the purchase orders did not have any exclusion clause. Considering the facts and circumstances of the case, it cannot be said that the territorial jurisdiction of this court is barred.
36. Accordingly, this issue is hereby decided in favour of the Plaintiff and against the Defendant.
Issue No.(2) Whether the suit is within limitation? (OPP)
37. It is submitted by learned counsel for the Plaintiff that the Defendant placed two purchase orders upon the Plaintiff vide Purchase Order No.PO/CA/2017-18/002 and PO/CA/2017-18/003, both dated 27.03.2017 exhibited as Ex.PW-1/2 and Ex.PW-1/3 respectively. Further, on 12.04.2017 the Defendant made payment of Rs.1,93,188/- for the aforesaid two purchase orders, which is evident from the statement of account Ex.PW-1/6.
38. It is further submitted that in compliance of Section 12A of the Commercial Courts Act, the Plaintiff in March, 2020 had filed an application for pre-litigation mediation for recovery of a sum of Rs.3,63,314/- along with costs and interest before the Mediation Cell, Central District, Tis Hazari Courts, Delhi and with effect from March, 25, 2020 due to the COVID 19 pandemic, nation wise lock-down was declared by the Government, thus the said application was taken up by the concerned Authority in January, 2021 and thereafter statutory notices M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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were issued to the Defendant, but none appeared on its behalf. The Non Starter Report was issued vide their letter dated 10.03.2021, which was collected by the Plaintiff from the Authority on 24.03.2021.
39. Learned counsel also submitted that the Hon'ble Supreme Court on 23rd March, 2020 in Suo Moto Civil Writ Petition (Civil) No.3 of 2020 directed extension of the period of limitation irrespective of period of limitation prescribed under the special or general law whether condonable or not or not in all proceedings before courts and tribunal including the Hon'ble Supreme Court with effect from March, 15, 2020 upto 28.02.2022. It is further submitted that the Plaintiff has filed the present suit before this court on 07.04.2021 and the same is within limitation prescribed under the provisions of Limitation Act.
40. In view of the aforesaid submissions and the material on record, this issue is decided in favour of the Plaintiff and against the Defendant. Issue No. (1) Whether the Plaintiff has not approached this court with clean hands and has concealed the material facts? (OPD) and Issue No. (4) Whether the Plaintiff is entitled to recover the suit amount of Rs.3,63,314/- (OPP)
41. The onus to prove that the Plaintiff has not approached this court with clean hands and thus is not entitled to recover the suit amount as he has concealed the material facts was upon the Defendant. No evidence M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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has led by the Defendant as stated in the preceding paragraphs of this judgment.
42. In the written statement, however, a plea has been raised on behalf of Defendant that the Plaintiff had admitted vide email dated 25.05.2018 that only a sum of Rs.1,39,033/- is outstanding and thus the Plaintiff cannot claim more than the said amount. Learned counsel for the Plaintiff clarified in the course of his arguments that the said email dated 25.05.2018 was admitted by the Plaintiff to the extent that it relates to the purchase orders relating to the present case i.e. purchase orders No.PO/CA/2017-18/002 and PO/CA/2017-18/003, both dated 27.03.2017.
43. Learned counsel for Plaintiff submitted that the Defendant had placed some other purchase orders as well on the Plaintiff which related to supply of Splicing Machines and the said email dated 25.05.2018 pertained to the material i.e. Splicing Machines supplied by the Plaintiff against the said other purchase orders and the balance confirmation of 1,39,033/- mentioned in the said email also relates to the aforesaid purchase orders and not to the purchase orders in the present case.
44. Having considered the submissions made and on going through the purchase orders Ex.PW-1/1 in respect whereof the present suit has M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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been instituted, it is apparent that the purchase orders in the present case relate to the following articles:-
i) Visual Fault Locator
(ii) Clamp Meter (Make Fluke), GPS, OTDR, Optical Power
Meter
45. Thus apparently the email dated 25.05.2018 does not pertain to the goods supplied to the Defendant by way of the purchase orders in question.
46. The Defendant, as aforesaid, has not led any evidence whatsoever to discharge the onus of Issue No.(4) or to establish that the Plaintiff is not entitled to recover the suit amount on account of the fact that he has either concealed the material facts or has not approached the court with clean hands.
47. On the other hand, the Plaintiff has examined PW-1 Mr. Sunil Kumar Gupta, Director and Authorized Representative of the Plaintiff. Since the testimony of Plaintiff's witness is unrebutted and uncontroverted inasmuch as the Defendant did not cross-examine the Plaintiff's witness despite opportunity, and had been proceeded against ex parte.
48. By way of his unrebutted testimony, PW-1 has been able to establish that the Plaintiff had supplied and delivered the goods to M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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Defendant and raised challans and invoices for the same which were duly received and accepted by Defendant after affixing their signatures on the invoices Ex.PW-1/4 and Ex.PW-1/5. Further, as per the purchase orders, the Defendant were to made the payment of balance amount of Rs.3,63,314/- through post dated cheques, however, due to their ill intentions, the Defendant did not make the payment of the outstanding amount and also unauthorizedly withheld the legitimate payment of the Plaintiff besides not handing over the requisite 'C' forms to the Plaintiff.
49. Further, the deposition of PW-1 to the effect that the Defendant despite being fully satisfied about the quality and quantity of the goods detailed in the aforesaid invoices which were actually consumed and used by the Defendant, is unrebutted. Defendant neither returned the alleged defective material to the Plaintiff nor made payment of the outstanding amount which is due as per the ledger account of the Plaintiff company Ex.PW-1/6 to Ex.PW-1/9 for the financial years 2017- 18, 2018-19, 2019-20 and 2020-21 respectively.
50. Accordingly, as per the unrebutted testimony of PW-1, a sum of Rs.2,89,782/- is outstanding and due and payable by the Defendant against the invoices Ex.PW-1/4 and Ex.PW-1/5.
51. Further, the Plaintiff has claimed amount of Rs.50,712/- which is due and payable on account of Sales Tax due to non- providing of "C" M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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forms by the Defendant and Rs.22,820/- is due and payable as the said interest is to be paid by the Plaintiff to the Sales Tax Authority for non- furnishing of "C" forms against the purchase orders. Hence, it is contended that the Defendant are liable to pay the suit amount of Rs.3,63,314/- in addition to interest thereof, as claimed.
52. During the course of arguments, learned counsel for the Plaintiff submitted that in accordance with the provisions of Section 73 & 74 of Indian Contract Act, 1872, the Plaintiff is entitled to recover the additional amount with Service Tax and interest thereon from the Defendant, as claimed.
53. It is contended by learned counsel for the Plaintiff that vide purchase orders dated 27.03.2017 Ex.PW-1/2 and Ex.PW-1/3, the Defendant clearly stated that they are making purchase of the material on which CST shall be leviable @ 2% (against Form-C). The Plaintiff on the written assurances, promises and undertakings given by the Defendant supplied the material and issued invoices dated 22.05.2017 charged CST @ 2% against C Form. The Defendant after receipt of the goods/material from the Plaintiff did not supply Form "C", for which the Plaintiff made several requests to Defendant and also got issued a legal notice upon the Defendant. Non-providing of Form 'C' by the Defendant amounts to clear breach of the terms and conditions of the purchase M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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order, for which in accordance with the provisions of the CST Act and DVAT Act, the liability of the differential amount of CST Rs.50,712/- and interest thereon of Rs.22,280/- shall be fastened upon the Plaintiff, which the Plaintiff is bound to pay at the time of assessment. Due to non providing of "C" Forms by the Defendant, the differential CST amount of Rs.50,712/- and the interest Rs.22,820/- shall constitute the cost of the material as similar to the charging /levy of CST @2%. Therefore, in accordance with the provisions of Section 73 & 74 of the Indian Contract Act, 1872, the Plaintiff is fully entitled to claim and recover the said differential amount of CST and interest thereon from the Defendant in the present suit.
54. Considering the arguments advanced by learned counsel for the Plaintiff, the unrebutted evidence on record and in the light of the relevant statutory provision and case law as discussed above, I am of the opinion that the Plaintiff is entitled to recover the suit amount of Rs.3,63,314/- from the Defendant.
55. Both the issues are accordingly decided in favour of the Plaintiff and against the Defendant.
Issue No. (5) Whether the Plaintiff is entitled to any interest, if so, at what rate? (OPP) M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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56. In addition to the suit amount of 3,63,314/-, the Plaintiff has claimed interest @ 24% per annum from the date of institution of suit till actual realization thereof.
57. In the course of arguments, learned counsel for the Plaintiff relied upon the terms of the contract as incorporated in the purchase orders and the tax invoices, as per which the Plaintiff would be entitled to charge interest @ 12% per annum for the delay in payment. Further, as per the invoices in question, 50% of the amount was to be paid as advance and the remaining against delivery. Plaintiff has been able to prove by way of unrebutted evidence that the goods in question were duly delivered to the Defendant as discussed hereinabove. Plaintiff is thus hereby held entitled to recover interest @ 12% per annum on the aforesaid decretal amount from the date of filing of the suit till realization. Issue No.(5) is decided accordingly.
Relief :-
58. Considering the foregoing discussion and the totality of the facts and circumstances of the case, the suit of the Plaintiff is decreed for a sum of Rs.3,63,314/- in addition to interest @ 12% per annum from the date of filing of the suit till realization of the decretal amount. In addition thereto, costs of the suit, including the cost of pre-litigation mediation, are also awarded in favour of the Plaintiff and against the Defendant as M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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the Defendant did not join the pre-institution mediation proceedings despite service of notice, which resulted in the proceedings being 'Non- Starter'.
59. Decree sheet be drawn up accordingly. File be consigned to record room after due compliance.
Announced in open (Kaveri Baweja)
court on 02.11.2023 District Judge (Commercial Court)-07
Central District, THC, Delhi
'ns'
M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021
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M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors.
CS (Comm.) 1359/2021
02.11.2023
Present : None
The Plaintiff has impleaded Ms. Meetu Chawla, Director of Defendant No.1 i.e. M/s Cloudatix Networks Pvt. Ltd. & Ors. as Defendant No.2 in the plaint. However, as per settled law she being a Director of a Private Limited Company is not liable to be prosecuted in her personal capacity. Accordingly having regard to the facts of the case, Defendant No.2 is hereby ordered to be deleted from the array of parties.
Vide separate judgment of even date, the suit of the Plaintiff is decreed for a sum of Rs.3,63,314/- in addition to interest @ 12% per annum from the date of filing of the suit till realization of the decretal amount. In addition thereto, costs of the suit, including the cost of pre-litigation mediation, are also awarded in favour of the Plaintiff and against the Defendant as the Defendant did not join the pre-institution mediation proceedings despite service of notice, which resulted in the proceedings being 'Non-Starter'.
Decree sheet be drawn up accordingly. File be consigned to record room after due compliance.
(Kaveri Baweja) District Judge (Commercial Court)-07 Central District, THC, Delhi 02.11.2023 'ns' M/s Crossways Vertical Solutions Pvt. Ltd. vs. M/s Cloudatix Networks Pvt. Ltd. & Ors. CS (Comm.) 1359/2021