Delhi District Court
Him Logistics P. Ltd vs Laxmi Remote India P. Ltd. And Ors on 4 March, 2024
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (Comm) No. 330/2019
CNR No. DLWT010065482019
04.03.2024
In the matter of:
1. M/s. Him Logistics Pvt. Ltd.
Through its Director
Sh. Ashok Sharma,
Corporate Office 2151/3D,
New Patel Nagar, New Delhi-110008
2. Shri Ashok Sharma,
Director of
M/s. Him Logistics Pvt. Ltd.
Corporate office: 2151/3D,
New Patel Nagar, New Delhi-110008
......Plaintiffs.
Versus.
M/s. Laxmi Remote (India) Pvt. Ltd.
Having its registered office at
19-20/1591, 3rd Floor, M.J. Building,
Bhagirath Place, Delhi-110006
Also at:-
B-134A, Phase-2, Sector-81,
Nangla Charan Dass,
Noida, Gautam Budh Nagar, UP-201305
Both Through its Managing Director,
Sh. Vijay Kumar Sachdeva
....Defendant
Date of institution : 17.08.2019
Date of arguments : 23.02.2024
Date of judgment : 04.03.2024
SUIT FOR RECOVERY OF Rs. 11,47,400/- ALONGWITH
PENDENTE-LITE AND FUTURE INTEREST.
CS (Comm.) No. 330/19 & CC No. 06/2020 -1-
AND
Counter Claim No. 6/2020
04.03.2024
In the matter of:
Laxmi Remote (India) Pvt. Ltd.
An entity duly incorporated under the Companies Act, 1956
Having its registered office at
19-20/1591, 3rd Floor, M.J. Building,
Bhagirath Place, Delhi-110006
Through its Managing Director/ Directors/
CEO/ Authorised Signatory.
... Counter claimant.
Versus.
Him Logistics Pvt. Ltd.
An entity duly incorporated under the Companies Act, 1956
Having its registered office at:
2151/3D, New Patel Nagar,
New Delhi-110008
Through its Managing Director/ Directors/
CEO/ Authorised Signatory. ....Defendant
Date of Filing : 10.02.2020
Date of arguments : 23.02.2024
Date of judgment : 04.03.2024
COUNTER CLAIM FOR RECOVERY OF Rs. 47,98,851/-.
JUDGMENT:
1. Vide this judgment, I am deciding suit for recovery of Rs. 11,47,400/- alongwith pendentelite and future interest filed by the plaintiffs against the defendant.
2. Earlier the present suit was also filed against other defendants no. 2 to 4 but thereafter, in view of judgment titled as CS (Comm.) No. 330/19 & CC No. 06/2020 -2- "Mukesh Hans & Anr. Vs. Smt. Usha Bhasin & Ors.", RFA 14/2010 and CM No. 495/2010 dated 16.08.2010, Ld. Counsel for plaintiffs dropped the names of defendants no. 2 to 4 from the array of parties.
3. It is mentioned in the plaint that the plaintiff no. 2 Sh. Ashok Kumar Sharma is a person of repute and dealing in business of Custom clearance of Import & Export of shipments of various types through plaintiff no. 1 being one of its Director since long and duly authorized to file the present suit on its behalf. The defendant is manufacturer of various types of remote control instruments and dealing with the plaintiffs and taking services of the plaintiffs for custom clearance and transportation requirements of various consignment of Electronic components, plastic injection moulding machine, remote control keypad, spring set wire etc. imported by defendant from China and other places. The directors of the defendant are managing day to day affairs and conduct of defendant. It is mentioned that in the process of business for the defendant, plaintiff no. 1 raised various bills/ debit notes/ tax invoices against the defendant in regard to the services provided to the defendant from West Delhi office of the plaintiffs as ordered by the defendant to the plaintiff company as per the demands and requirement of defendant, which are as under:-
Sl. No. Bill No. Bill dated Amount (Rs.)
1. 010904 13.03.2018 4543/-
2. H/09128 13.03.2018 3846/-
3. 010913 13.03.2018 7361/-
4. 010918 14.03.2018 37,282/-
CS (Comm.) No. 330/19 & CC No. 06/2020 -3-
5. H/09132 14.03.2018 4680/-
6. H/09507 21.03.2018 60,000/-
7. 011496 22.03.2018 8061/-
8. 012045 30.03.2018 68,853/-
9. H/09980 30.03.2018 5860/-
It is also mentioned at the footnote of all the bills/debit notes/ tax invoices issued by the plaintiff company upon the defendant company and there are certain terms and conditions mentioned therein for which the defendants were bound. All the said invoices became final as no dispute qua the said invoices have been brought to the notice of the plaintiff company by the defendant company within 7 days. The plaintiff has further mentioned that plaintiff is maintaining defendant's company running account at his West Delhi office in regular and ordinary course of business with it wherein the various charges of the services rendered and compliances for the same are debited and whatever payments are received by plaintiff from defendant are credited and in this process, an outstanding amount of Rs. 9,13,495.02 paise is due against the defendant company in the books of the plaintiffs as on 31.03.2018 and the same is still lying unpaid in spite of many requests and reminders made by the plaintiffs. The plaintiffs sent legal notice of demand to the defendant through their counsel vide notice dated 05.01.2019 which was duly served upon the defendant. The defendant did not pay any heed to the said legal notice and did not pay the remaining amount within 15 days of receipt of legal notice. The plaintiff initiated pre-mediation on 06.06.2019 in the Mediation Centre (West), Tis Hazari Court but the matter was not settled. The plaintiff has claimed a sum of Rs. 9,13,495.02 paise from the CS (Comm.) No. 330/19 & CC No. 06/2020 -4- defendant. The plaintiff has also claimed interest @ 18% per annum from 01.04.2018 till the date of filing of the suit. Plaintiff has also claimed legal notice charges of Rs. 11,000/-. It is prayed that a decree of Rs. 11,47,400/- be passed in favour of the plaintiffs and against the defendant. The plaintiff is has also claimed pendente-lite and future interest @ 18% per annum the dafe of institution of present suit till realization.
4. Defendant has filed written statement taking preliminary objections that the present suit is an abuse of process of law. The plaintiffs have not approached the court with clean hands. The present suit has been instituted out of oblique motives to blackmail and harass the defendant. The facts narrated by the plaintiffs in the present suit are false and vexatious. The allegations and averments of the plaint are strictly denied by the defendant. It is mentioned that on account of reckless, unbusiness like and unprofessional actions and advices of the plaintiff, the defendant has suffered enormous physical and mental pain and agony, embrassment and above all business and financial losses. The plaintiffs are debarred from filing the present suit on the basis of its own conduct. The plaintiffs have concealed the material facts from this court. The suit is not valued properly for the purpose of court fees and jurisdiction. This court has no territorial jurisdiction to try and entertain the present suit. It is also mentioned that since the year, 2011 the defendant company has been maintaining business relations with the plaintiff no. 1 company being CHA (Custom House Agent) as well as Custom consultant and advisor. During the aforesaid business with the plaintiff no. 1, the company never doubted and questioned CS (Comm.) No. 330/19 & CC No. 06/2020 -5- former's advice and opinion, for which the plaintiff no. 1 was appropriately remunerated. The defendant company has been procuring the raw material i.e. plastic granules/ reprocessed plastic granules ABS (herein after referred as raw material) from local vendors located in Delhi N.C.R. It is mentioned that the defendant's trade is covered under a notification issued by Govt. of India, Ministry of Finance (Department of Revenue) (Central Board of Excise and Customs) i.e. notification no. 25/1999 (formerly), post implementation of GST notification no. 50/2017, under the heading "Import of Goods under Concessional Rates (IGCR), hereinafter referred as "IGCR notification". The aforesaid notification entitles the defendant to derive benefits of rebates and concessions with respect to import of various goods and material used in its even contemporary trade via-a-vis exemption on import on parts, subparts, components and accessories for manufacturing of Set Top Box for Television. The plaintiff no. 1 since being Custom consultant and advisor to the company for the past several years advised the defendant company to avail benefit of the IGCR notification. It is mentioned that the plaintiff no. 1 accordingly, forcefully counseled the defendant company to discontinue making the procurement from the local market and insisted to purchase/ import the same from United Kingdom where the cost of Plastic Granules/ Reprocessed Plastic Granules ABS was much cheaper than any other country. The plaintiff no. 1 convinced the defendant company that its raw material incontrovertibly formed part/ subpart/ component/ accessory for manufacturing of Set Top Box, and due to applicability of the aforesaid IGCR notification the said raw material would cost them much less as compared to CS (Comm.) No. 330/19 & CC No. 06/2020 -6- what the latter had been so far paying out on that account. The plaintiff no. 1 further assured the defendant company that the entire process of importing of material Plastic Granules/ Reprocessed Plastic Granules ABS from United Kingdom would be hassle-free and would not involve any overhead or miscellaneous expenses and it would be Duty Exempted in wake of IGCR notification. Accordingly, believing the versions of the plaintiff no. 1, the defendant company acted on the aforesaid advice and purchased the raw material from United Kingdom. However, to the utmost shock and disbelief of the defendant company, upon the transportation/import of the aforesaid raw material from United Kingdom to India it was found that the aforesaid import had invited heavy custom duty, as opposed to and convincingly claimed and represented by the plaintiff no. 1 to be Duty Exempted. It is mentioned that upon intervention of the common business acquaintances, the concerned representative of plaintiff no. 1 unequivocally admitted its fault and aknowledged that its aforesaid advice was a blatant misadventure. For the sake of business decorum and upon the intervention of the common business acquaintances once again, it was amicably decided that the plaintiff no. 1 would not raise any demand/ invoice towards any charge against the company with respect to the transactions. The defendant company also agreed not to initiate any civil or criminal action against the plaintiff no. 1 for the latter's malafide misadventure. It was also decided that whatever demand towards import/ custom duty or any other ancillary demand so raised by the custom authorities in the even premises, would be paid by the defendant company for the time being. It was agreed between the plaintiff no. 1 and the CS (Comm.) No. 330/19 & CC No. 06/2020 -7- defendant company that 50% of the amount towards import/ custom duty or any other ancillary demand so paid to the custom authorities by the defendant company will be debited to the account of the plaintiff no. 1 and same will be adjusted by plaintiff no. 1 against its future services to be rendered to the defendant company. It is mentioned that the custom authorities raised demand for a sum of Rs. 38,01,642/- alongwith interest @ 15% per annum on the principal demand of Rs. 9,97,209/- against the defendant company. The defendant company discharged its liability and deposited the same with custom authorities. The defendant company also debited 50% of the above principal demand to the open and mutual statement of accounts of the plaintiff no. 1 maintained by the defendant company in its normal course of business, about which the plaintiff no. 1 was duly apprised of. It is mentioned that the present suit is a deliberate and willfull act of retraction and repatriation by the plaintiff no. 1 from its voluntary promise. The present suit clearly amounts to blatant breach of the aforesaid mutual and voluntary understanding between the parties. The plaintiff had played fraud upon the defendant. The act of the plaintiff had caused the defendant acute embarrassment, harassment and hardship for no fault on its part. The defendant will be justified in recovering from the plaintiff a sum of Rs. 38,01,642/- already paid by the defendant company alongwith interest @ 15% per annum on the principal demand i.e. Rs. 9,97,209/-. The present suit is barred under the provisions of Order II rule 2 as the plaintiffs have also instituted another Civil Suit for recovery encompassing the even claim/ cause of action i.e. C.S. SCJ/1287/2019, titled as "Him Logistics Pvt. Ltd. & CS (Comm.) No. 330/19 & CC No. 06/2020 -8- Anr. Vs. Laxmi Remote (India) Pvt. Ltd. & Ors". which is pending in the court of Ld. Civil Judge, West, Delhi. The present suit is barred as per provisions of Section 12A of the Commercial Court Act, 2015 as the plaintiff had not initiated Pre-Institution Mediation before filing the present suit.
In reply on merits, all the averments of the plaint are denied and similar averments are made in reply on merits by the defendant. It is denied that the defendant ever flouted any business/ trade norm in the even matter. The bills raised by the plaintiffs are illegal and prima facie untenable in view of the above facts and circumstances. It is mentioned that the legal notice dated 05.01.2019 is without any basis. The alleged notices have been issued to the defendant on vague and flimsy grounds. The legal notice dated 05.01.2019 was duly replied by the defendant vide reply dated 31.03.2019. Dismissal of suit is prayed by the defendant.
5. On the basis of pleadings of the parties, following issues were framed by my Ld. Predecessor on 06.03.2021, which are as under:-
1) Whether this court lacks territorial jurisdiction to try the suit ? (OPD)
2) Whether plaintiff is entitled to recover a sum of Rs. 11,47,400/- from defendants ? (OPP)
3) Whether the plaintiff is entitled to recover pendente lite and future interest @ 18% per annum from the date of institution of the suit till realization of the amount in full from defendant ? (OPP)
4) Relief.CS (Comm.) No. 330/19 & CC No. 06/2020 -9-
6. Vide this judgment, I am also deciding Counter claim filed by Laxmi Remote (India) Pvt. Limited against Him Logistics Pvt. Ltd.
7. In the counter claim, it is mentioned by the counter claimant that counter claimant is an entity duly incorporated under the Companies Act, 1956, having its registered office at 19-20/1591, 3rd Floor, M.J. Building, Bhagirath Place, Delhi- 110006. Sh. Vikas Jain, Asstt. Manager Account is duly authorized to sign, institute and file the present counter claim. The counter claimant is pioneer in the trade and business of manufacturing of remote control handsets, set top boxes and other ancillary cable-T.V, related electronic components. The defendant is an entity duly incorporated under the Companies Act, 1956, at RoC, Delhi having its registered office at 2151/3D, New Patel Nagar, New Delhi. The defendant is engaged in the business of catering a range of custom clearance related services to various importers and exporters. It is mentioned that since the year, 2011 the counter claimant has been maintaining business relations with the defendant as CHA (Custom House Agent) as well as Custom consultant and advisor. During the aforesaid business, the counter claimant never doubted and questioned former's advice and opinion and always followed the same. It is mentioned that counter claimant's trade is covered under a notification, issued by Govt. of India, Ministry of finance (Department of Revenue) [Central Board of Excise and Customs], i.e. notification no.25/1999 (formerly), post implementation of GST notification no. 50/2017, under the CS (Comm.) No. 330/19 & CC No. 06/2020 -10- heading "Import of Goods under Concessional Rates (IGCR)", hereinafter referred as "IGCR notification". The aforesaid IGCR notification, vide Sl. No. 431-I, under Section 25(1) of the Custom Act, 1962, (Under Import of Goods Concessional Rate of Duty) through Annexure/Intimation entitles the counter claimant to derive benefits of rebates and concessions with respect to import of various goods and materials used in its even contemporary trade (falling under Tariff Head 85287100), vis-a- vis "Exemption on import duty" on Parts, subparts, Components and Accessories for manufacturing of Set Top Box for Television. The defendant being Custom consultant and advisor, advised the counter claimant to avail benefit of the IGCR notification. The defendant forcefully counseled the counter claimant to discontinue making procurements from the local market and insisted to purchase/ import the same from United Kingdom where the cost of Plastic Granules/ Reprocessed Plastic Granules ABS is much cheaper than any other country. The defendant further assured the counter claimant that the entire process of importing of material 'Plastic Granules/ Reprocessed Plastic Granules ABD' from United Kingdom would be hassle free and would not involve any overhead or miscellaneous expenses of any sort and above all would be 'Duty Exempted' in wake of IGCR notification. Believing the aforesaid assurances and versions of the defendant, the counter claimant acted on the advice and purchased the raw material from United Kingdom. It is mentioned that upon the transportation/ import of the raw material from United Kingdom to India, it was found that the aforesaid import had invited heavy custom duty. The counter claimed conveyed the same to the defendant. It is mentioned that CS (Comm.) No. 330/19 & CC No. 06/2020 -11- upon intervention of the common business acquaintances and negotiations in the matter, the concerned representative of defendant unequivocally admitted its fault and acknowledged that its aforesaid advice was a blatant misadventure aimed purely at revenue gains that somehow went awry. It is further mentioned that for the sake of business decorum, it was amicably decided that the defendant would not raise any demand/ invoice towards any charge against the counter claimant with respect to the even transaction. It was agreed that counter claimant will not initiate any civil or criminal action against the defendant for the malafide misadventure. It was further decided that whatever demand towards import/ custom duty raised by the custom authorities would be paid by the counter claimant. It was also agreed that 50% of the amount towards import/ custom duty and other ancillary demand paid to the custom authorities by the counter claimant will be debited to the account of the defendant and same will be adjusted by defendant against its future services to be rendered to the counter claimant. As per the counter claimant, the custom authorities raised a demand of Rs. 38,01,642/- alongwith interest @ 15% per annum on the principal demand against the counter claimant. The counter claimant discharged its obligation by depositing with the custom authorities. The counter claimant was shocked that defendant issued legal notice dated 05.01.2019 claiming various monies from the counter claimant. It is mentioned that legal notice dated 05.01.2019 of the defendant is without any basis and unfounded. The counter claimant replied the legal notice dated 05.01.2019 vide its reply dated 31.03.2019. In the reply, the counter claimant urged the defendant to pay an amount of Rs.
CS (Comm.) No. 330/19 & CC No. 06/2020 -12-1,00,00,000/- towards liquidated damages on account of losses, tangible and non-tangible so incurred by latter, alongwith interest @ 18% per annum. The defendant filed two recovery suits against the counter claimant. The recovery suit is abuse of process of law. It is prayed by the counter claimant that decree of Rs. 47,98,851/- be passed in favour of counter claimant and against the defendant. The counter claimant has also claimed pendentelite and future interest @ 24% per annum.
8. Defendant has filed written statement to the counter claim denying each and every allegation made in counter claim. It is mentioned that the present counter claim is nothing but a counter blast to the suits for recovery just to harass and exert pressure upon the defendant to withdraw the suits. It is mentioned that prior to issuance of legal notice dated 05.01.2020 by the defendant there was never any issue or problem in the mind of the counter claimant qua the defendant and it is only after this notice the counter claimant has cooked up the story of alleged false facts. In preliminary objections, it is mentioned that the counter claim is not maintainable in the present form as the same has been filed without taking recourse of mandatory pre- mediation as per Section 12 A(1) of The Commercial Court (Pre- institution mediation and settlement) Rules, 2018. The counter claim is not filed by duly authorized person. The counter claimant has not come to the court with clean hands. The counter claim filed by the counter claimant is false, as the averments made in the counter claim are vague and frivolous. In reply on merits, it is denied that Mr. Vikas Jain, Asst. Manager is duly authorized to sign and institute the present proceedings. It is CS (Comm.) No. 330/19 & CC No. 06/2020 -13- mentioned that counter claimant is pioneer in the trade and business of manufacturing of remote control handsets, set top boxes and other ancillary cable-T.V. related electronic components and due to its adherence high degree of professionalism and business ethics. The defendant has denied para no. 1 of the counter claim. It is mentioned that para no. 2 is a matter of record. It is mentioned that defendant is engaged in the business of catering of range of custom clearance related services to various importers and exporters as Customs broker as per the demand and orders placed by the clients of various goods as per the choices and requirements of the clients in their trade. The defendant company is leading company as Custom House Agent (CHA) for the purpose of Customs Clearance and deals with its clients as per clients choice/ requirements. It is mentioned that the defendant has neither knowledge nor expertise for the advice and the counter claimant approached the defendant after their goods from overseas were going to land or have landed at Indian Ports for the Customs clearance on Indian side as per law applicable for various types of goods in respect of applicable duties. The applicable duties are to be paid by the Customers and the role of CHA is to file all the requisite documents with Customs Department after taking the same from the customers. As such the defendant used to raise bills for such services in respect of Customs clearances for its customers. The defendant had neither given any advise nor raised any bill of advice and opinion to the counter claimant so the question of appropriately remunerated by the counter claimant does not arise as no bill has been filed by the counter claimant, so the averments of counter claimant is not only false but also bald.
CS (Comm.) No. 330/19 & CC No. 06/2020 -14-The defendant has no knowledge about the plastic granules as it is a big separate chapter as the same is of various compositions, properties, types and sizes for its various uses. It is mentioned that the counter claimant imported reprocessed plastic granules from UK, for processing and manufacturing of various television related plastic items as such imported reprocessed plastic granules does not cover under said notification as not being parts, subparts, components and accessories for manufacturing of Set Top Box for Television and the Custom department levied custom duty upon the same. As per the defendant, it never advised the counter claimant as alleged in para no. 5 of the counter claim. The counter claimant itself purchased the raw material i.e. plastic granules of its choice as per its requirements from the foreign country of its choice i.e. United Kingdom. It is mentioned that now a days the whole world has been shrunk by internet and Google, where all the informations were readily available and can be easily explored. So the averment of counter claimant who itself is having knowledge and expertise about its raw materials and its used applications place of import can never be forced as alleged. It is mentioned that the counter claimant was well aware of the Custom duty to be imposed upon the types of goods imported by the Counter claimant from United Kingdom to India. It is further mentioned that the penalties and interest imposed upon the counter claimant was on account of financial problems being faced by the counter claimant during that period, which is well evident from the documents filed on record by the Counter claimant in Suit No. 330/2019 titled as "Him Logistics Pvt. Ltd. Vs. Laxmi Remote India Pvt. Ltd. The counter claimant has not filed any other document except a copy CS (Comm.) No. 330/19 & CC No. 06/2020 -15- of Board Resolution of alleged meeting held on 03.02.2020. The defendant never admitted its fault and all the averments in para no. 8 of the counter claim are denied by the defendant. The present counter claim is nothing but counter blast to the suit filed by the defendant against the counter claimant. It is mentioned that defendant never agreed for any alleged 50% debit of the Custom duty. It is admitted that legal notice was sent to the counter claimant and reply dated 31.03.2019 was sent by the counter claimant. Dismissal of counter claim is prayed by the defendant.
9. On 06.03.2021 following issues were framed by my Ld. Predecessor, which are as under:-
1) Whether Counter claimant is entitled to recover a sum of Rs. 47,98,851/- from defendant/ plaintiff ? (O.P.C.C)
2) Whether Counter claimant is entitled to recover pendentelite and future interest @ 24% per annum from defendant/ plaintiff ? (O.P.C.C)
3) Relief.
10. Perusal of file reveals that on 01.12.2023, it is submitted by Ld. Counsels for both the parties that defendant has also filed counter claim and issues in respect of counter claim and present suit were framed on the same date. It is submitted by Ld. Counsel for plaintiff that he has no objection if the evidence recorded in Suit No. 330/2019 be read in Counter claim No. 6/2020.
CS (Comm.) No. 330/19 & CC No. 06/2020 -16-11. In evidence in CS (Comm) No. 330/2019, the plaintiff has examined Sh. Ashok Sharma S/o Sh. Jagdish Chand Sharma as PW-1. This witness has filed affidavit on the lines of the plaint. This witness has proved true copy of resolution dated 18.12.2015 as Ex. PW-1/1, original non starter report as Ex. PW-1/2, copy of Aadhar card as Ex. PW-1/3, copy of Memorandum of Articles of Association of plaintiff company as Ex. PW-1/4, computer generated signatory details of defendant company as Ex. PW- 1/5, computer generated copy of bills tax invoices/ debit note as Ex. PW-1/6 to Ex. PW-1/14, the ledger account of the defendant company as Ex. PW-1/15, copy of legal notice of demand as Ex. PW-1/16, original postal receipts are Ex. PW-1/17 (colly), professional charges bill dated 15.02.2019 for legal notice as Ex. PW-1/18, the certificate under S. 65-B of Indian Evidence Act as Ex. PW-1/19 and affidavit of statement of truth as Ex. PW- 1/20.
On the other hand, defendant has examined Sh. Vikas Jain S/o Sh. P.C. Jain as DW-1. This witness has filed evidence by way of affidavit on the lines of written statement. This wintess has proved true copies of five invoices as Mark A1 to A5, attested true copy of electronically generated extract of statement of account as Ex. DW-1/6, attested true copy of electronically generated interest calculation sheet as Ex. DW-1/7, certified true copy of Board of Resolution as Ex. DW-1/8, copy of reply dated 31.03.2019 and postal receipt as Mark A6 and A7, certificate u/s 65-B of Indian Evidence Act as Ex. PW-1/10. Defendant has also examined Sh. Kamala Kanta Biswal as DW-2. This witness has proved documents marked as Mark- A to Mark- S. CS (Comm.) No. 330/19 & CC No. 06/2020 -17-
12. I have heard Ld. Counsels for both the parties at length and perused the record carefully.
13. Now, I am deciding issues framed in CS (Comm) No. 330/2019.
14. ISSUE NO. 1 - Whether this court lacks territorial jurisdiction to try the suit ? (OPD) The burden to prove this issue is upon the defendant. It is contended by Ld. Counsel for defendant that this Court lacks territorial jurisdiction to try the suit.
I have perused the plaint. The plaintiff in para no. 4 of the plaint has mentioned that in the process of business dealings with the defendant no. 1 company, the plaintiff no. 2 on behalf of plaintiff no. 1 company has raised various bills/debit notes/ tax invoices against the defendant no. 1 company i.e. M/s. Laxmi Remote (India) Pvt. Ltd., in regard to the service provided to defendants from West Delhi office of the plaintiffs, as ordered by the defendants to the plaintiff company as per the demands and requirement of the defendant no. 1 company. The defendant has no where denied that plaintiff is not having any office in West District and services were not provided by the plaintiff to the defendant from the West Delhi address of the plaintiff. I am of the view that this court has jurisdiction to try and entertain the present suit as office of plaintiff is within jurisdiction of this court. Accordingly, issue no. 1 is decided in favour of the plaintiff and against the defendant.
CS (Comm.) No. 330/19 & CC No. 06/2020 -18-15. ISSUE NO. 2 - Whether the plaintiff is entitled to recover a sum of Rs. 11,47,400/- from defendants ? (OPP) The burden to prove this issue is upon the plaintiff.
16. At the very Outset, I may observe that the provisions of Section 2 (1) (c)(xviii) of Commercial Courts Act, 2015 are very clear which reads as under:-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce.
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreement;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreement for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;CS (Comm.) No. 330/19 & CC No. 06/2020 -19-
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
17. The provisions of Section 2 (1) (c) (xviii) of Commercial Courts Act as above are very much clear. Sale of goods are governed by Sale of Goods Act, they pertain to movable properties, any dispute of sale or agreement to sale of goods of specified value do come within the jurisdiction of Commercial Courts Act. The clause also includes the services and guarantee given for the goods sold. The service or guarantee may be oral or written. Therefore, the facts which alleged in the plaint comes under the Commercial disputes.
18. Secondly, now the question is whether this Court has the pecuniary jurisdiction to adjudicate the matter which is dispute. In this regard, the provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3 : Constitution of Commercial Courts:
(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not CS (Comm.) No. 330/19 & CC No. 06/2020 -20- more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary. ] 3[1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
19. Admittedly, the Commercial Court Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the notification, the pecuniary value of the Commercial Courts Act shall not be less than Rs. 3,00,000/-. In the present case, the claim amount which is shown in the plaint is of Rs. 11,47,400/- and this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute.
20. To prove this issue, Sh. Ashok Sharma, Director/ AR of the plaintiff company appeared as PW-1. This witness has proved documents Ex. PW-1/1 to Ex. PW-1/20. The defendant has not denied that it had not availed the services of plaintiff company. The defendant has also not disputed the invoices raised by the plaintiff company. The only defence taken by the defendant is that the plaintiff has wrongly advised the defendant company to import plastic Granules/ Reprocessed Plastic Granules ABS from United Kingdom and earlier to this defendant company was purchasing material from local market. It is also case of the defendant that due to wrong advise of the plaintiff company, the defendant company had made payment of Customs Duty. PW-1 during cross examination has clearly stated that defendant company is its old customer. This witness has admitted that the CS (Comm.) No. 330/19 & CC No. 06/2020 -21- plaintiff company was aware of the facts that the product to be imported by the defendant company was not duty free at the relevant time. This witness has stated that defendant company was duly informed that goods to be imported were subject to custom duty. The defendant company has not placed on record any letter to show that goods imported from United Kingdom were exempted from Custom duty at any point of time. DW-1 during cross examination has admitted that defendant company had not sent any notice/letter or email to the plaintiff regarding deficiency of any service. This witness has admitted that it was verbally communicated to Mr. Sharma, one employee of the plaintiff company. This witness denied the suggestion that due to documents filed for import purpose submitted with the custom department did not match with the goods imported by the defendant company by the custom department. This witness has admitted that custom department had issued a show cause notice in this regard to the defendant company. This witness has also admitted that on the basis of show cause notice, the defendant company had deposited duty with the custom department. During cross examination a question was put to this witness that in para no. 5 of affidavit in evidence he has mentioned about notification No. 25/199 in respect of import of good under concessional rates but the goods imported by him were not covered under this exemption according to customer department. This witness admitted the same to be correct.
21. DW-2 has proved the communications between the defendant company and custom department. Mark-A is letter issued by Sh. Raj Kumar Dacoliya, Superintendent of Customs CS (Comm.) No. 330/19 & CC No. 06/2020 -22- (SIIB) and this letter is dated 15.06.2018. In reply dated 12.09.2018 which is proved on record as Mark-B, the defendant company has mentioned that the material imported by it were of Silicon and not of rubber and request was made by DW-2 to the Custom authorities to investigate the matter. The defendant has also placed on record letters Mark-D, Mark-E, Mark-H, Mark-K, Mark-P, Mark-Q and Mark-S and in all these letters, the defendant has no where mentioned that plaintiff has wrongly advised the defendant company and on the wrong advise of the plaintiff company, it had imported the goods from United Kingdom. It is no where written in any of the communication that custom duty is to be levied on the goods to be imported from the United Kingdom was due to wrong advice of the plaintiff. In one the letter Mark-E, it is mentioned that defendant is facing financial problems. It is not the case of the defendant that it only imported Plastic Granules/ Reprocessed plastic granules ABS from United Kingdom and they were not aware about the custom duty levied on the import of goods. DW-1 has admitted during cross examination that there are about 1300 to 1400 employees working for defendant no. 1 and defendant no. 1 is having a turn over of approximately Rs. 140 crores. I am of the view that it cannot be said that defendant company was not aware that custom will be levied on the goods to be imported from the United Kingdom. It is not the defence that defendant no. 1 acted on the wrong advise of the plaintiff and there is no written communication in this regard. DW-2 in cross examination has admitted that the turn over of defendant company is about Rs. 140 crores. During cross examination this witness has stated that Mr. Anuj, Manager of the plaintiff no. 1 had forced the defendant CS (Comm.) No. 330/19 & CC No. 06/2020 -23- to import the raw material from United Kingdom and not from local market. This fact is not mentioned by DW-1 & DW-2 in the affidavit in evidence nor in the written statement/counter claim. DW-2 has categorically stated that the Production Head of defendant no. 1 company takes the decision after discussions with the Purchase Department about the purchase of raw material in the defendant company. This witness has also admitted that plaintiff company had raised the bills in respect of the services provided to the defendant company. This witness has also admitted that a person who import the goods had to pay custom duty.
22. It is contended by Ld. Counsel for defendant that on the invoices Ex. PW-1/6, Ex. PW-1/7 to Ex. PW-1/10 & Ex. PW- 1/12, the port of loading is mentioned as Shanghai and items are Electronic components. On the other hand, on the invoice Ex. PW-1/11 the port of loading is mentioned as Ningbo and items are plastic injection moulding machines. Similarly, on the invoices Ex. PW-1/13 & Ex. PW-1/14 the port of loading is mentioned as Shanghai and items are Remote Control Keypad, Spring Set Wire. It is contended by Ld. Counsel for defendant that plaintiff is not able to prove the case as all the invoices show that only electronic items were supplied from Shanghai and Ningbo and not from United Kingdom. I am not inclined to accept the contention of Ld. Counsel for defendant as defendant has no where denied that it has not availed the services of the plaintiff. Rather, it is stand of the defendant that due to wrong advice of the plaintiff, it had suffered loss. The defendant has also not denied that ledger account Ex. PW-1/15 filed by the CS (Comm.) No. 330/19 & CC No. 06/2020 -24- plaintiff is false and fabricated. As the defendant has not raised any objection qua the material imported from United Kingdom to India, I am of the view that this contention of Ld. Counsel for defendant carries no force.
23. It is the case of the plaintiff company that plaintiff was only working as Custom House Agent and not doing any consultancy service. In the invoices raised by the plaintiff, it is no where mentioned that plaintiff is working as Consultant. It is contended by Ld. Counsel for plaintiff that defendant no. 1 used to hand over all the papers in respect of goods imported from foreign country and this fact is admitted by DW-2 during cross examination. DW-2 has also admitted that custom department used to inspect the goods which are to be imported from the Foreign country. The plaintiff has placed on record ledger to show that a sum of Rs. 9,13,495.02 paise is due on 31.03.2018. DW-1 has stated that this was settled between the account official of the plaintiff and defendant company at their Noida office in the year, 2017. But, if we peruse the invoices filed by the plaintiff. The invoices are for the period from March, 2018 onwards and all the communications show that these communications are after the period of 2017. So, DW-1 is telling lie that it was settled between the plaintiff and defendant in the year, 2017. The ledger account shows that various dealing were made between the parties. I am of the view that plaintiff is able to prove this issue and accordingly, issue no. 2 is decided in favour of the plaintiff and against the defendant.
CS (Comm.) No. 330/19 & CC No. 06/2020 -25-24. ISSUE NO. 3- Whether the plaintiff is entitled to recover pendente lite and future interest @ 18% per annum from the date of institution of the suit till realization of the amount in full from defendant ? (OPP) Now the question arise as to what rate of interest plaintiff is entitled. Counsel for plaintiff submits that plaintiff is entitled to interest @ 18% per annum. Reliance can be placed in this regard on the judgment of Central Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed by Hon'ble Supreme Court of India. In this judgment it is held that according to stroud's Judicial dictionary of Words and Pharases interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Department, Government of Orissa & Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is held that the constitution bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This is the principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon wherein it is held that interest is paid for the deprivation of the use of the money. In this judgment it is also held that in whatever category "interest in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or CS (Comm.) No. 330/19 & CC No. 06/2020 -26- permitted by customs or usage, for use of money, belonging to another, or of the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of
Aditya Mass Communication (P) Ltd Vs APSRTC
MANU/SC/0759/2003 wherein Hon'ble Supreme Court
granted interest @ 12% per annum. Reliance can also be placed on the judgment of "M/s IHT Network Limited Vs. Sachin Bhardwaj" in RFA No. 835/2016 & CM Appl.14617/2020 wherein the Hon'ble High Court of Delhi has granted interest @12% per annum. I have perused the invoices placed on record by the plaintiff. It is no where mentioned in the invoices that interest @ 18% per annum will be charged. I am of the view that interest claimed by the plaintiff is very excessive and interest of justice will be met if the plaintiff is granted interest @ 12% per annum which is usually prevailing market rate of interest.
25. Now I deciding the issues framed in Counter claim No. 06/202 filed Laxmi Remote India Pvt. Ltd. Against Him Logistic Pvt. Ltd.
26. ISSUE NO. 1- Whether Counter claimant is entitled to recover a sum of Rs. 47,98,851/- from defendant/ plaintiff ? (O.P.C.C) The burden to prove this issue is upon the Counter claimant. It is the contention of Ld. Counsel for counter claimant that due to wrong advise by the defendant, the counter claimant had to pay Custom duty to the Custom Department and as the wrong advise was given by the defendant, counter claimant is CS (Comm.) No. 330/19 & CC No. 06/2020 -27- entitled to recover the custom duty from the plaintiff. To prove this issue, DW-2 has filed various communications between the Custom Department and counter claimant. In any of the communication, the counter claimant has no where mentioned that defendant had given wrong advise to it. It is not the case of the Counter claimant that it had imported goods from United Kingdom for the first time and they were not aware that custom duty will be levied on the import of goods from United Kingdom. In communication Mark-E, it is mentioned that Counter claimant is facing financial problem. DW-1 has admitted that he had mentioned about notification No. 25/199 in respect of import of goods under concessional rates but the goods imported by him were not covered under this exemption. I am of the view that counter claimant was aware about the custom duty to be levied on the goods to be imported from any Foreign country and it has wrongly claimed concessional rate vide notification no. 25/199. Perusal of file reveals that various communications were made by DW-2 and Custom department and in any of the communication, the counter claimant has not where stated that due to wrong advise of the plaintiff they had to pay Custom duty amounting to Rs. 38,01,642/-. Rather in Mark-E, it is clearly mentioned that counter claimant is seeking the benefit of exemption of customs duty under the Customs (Import of Goods at Concessional Rate of Duty for Manufacturing of Goods) Rules, 2017, in terms of notification No. 25/99-Cus dated 28.02.1999 as amended, on the strength of Intimations/ Annexure issued/ forwarded by the concerned then Central Excise/GST Authorities. Even in document Mark-B, it is mentioned that Counter claimant also got tested the goods/ material which was CS (Comm.) No. 330/19 & CC No. 06/2020 -28- imported from United Kingdom and it is certified from lab report that this is the material of Silicon and not of rubber. No written communication has been placed on record by the counter claimant to show that any wrong advice was given by the defendant to the counter claimant. Moreover, the counter claimant has not placed on record any document executed between the parties to show that the defendant agreed to give 50% of the Custom duty to the counter claimant. I am of the view that in view of admission by DW-1 & DW-2, counter claimant is not able to prove this issue. Accordingly, issue no. 1 is decided in favour of the defendant and against the counter claimant.
27. It is contended by Ld. Counsel for defendant that counter claim filed by the counter claimant is counter blast to the legal notice sent by defendant to the counter claimant.
It is true that the counter claimant has not sent reply to the legal notice prior to the filing of the suit by the defendant. I am of the view that there is strength in the arguments of Ld. Counsel for defendant as counter claimant has not initiated any proceedings qua the counter claim and counter claim is filed after filing of legal notice.
28. ISSUE NO. 2- Whether Counter claimant is entitled to recover pendentelite and future interest @ 24% per annum from defendant/ plaintiff ? (O.P.C.C) The burden to prove this issue is upon the counter claimant. As issue no. 1 is decided in favour of the defendant and CS (Comm.) No. 330/19 & CC No. 06/2020 -29- against the counter claimant, this issue is also decided in favour of the defendant and against the counter claimant.
29. RELIEF:
In view of my above discussions, the counter claim bearing no. 06/20 filed by Laxmi Remote India Pvt. Limited is without any merits and same is hereby dismissed. The suit bearing no. 330/2019 filed by Him Logistics P. Ltd. Against Laxmi Remote India P. Ltd. & Anr. is decreed and a decree of Rs. 9,13,495/- is passed in favour of the plaintiff and against the defendant. Plaintiff is also entitled to interest @ 12% per annum on the amount of Rs. 9,13,495/- from 31.03.2018 till realization. Plaintiff is also entitled to the cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA) open court on 04.03.24. District Judge, Comm. Court-06 West, Tis Hazari Courts Extension Block, Delhi/04.03.2024 CS (Comm.) No. 330/19 & CC No. 06/2020 -30-