Delhi District Court
M/S Planet Advertising Pvt. Ltd vs M/S Golf Green Buildcon Pvt. Ltd on 14 December, 2021
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT-02)
SOUTH DISTRICT, SAKET COURTS: NEW DELHI
CS (Comm) 08/2020
M/s Planet Advertising Pvt. Ltd. ........Plaintiff
Through Shri Sudhir Haryal
Having registered office at
G-11, 2nd Floor, Hauz Khas Market,
New Delhi - 110016
Versus
1. M/s Golf Green Buildcon Pvt. Ltd. .......Defendant No. 1
At its registered office : F-1098, Basement,
Chitranjan Park, New Delhi-110019
Through its Managing Director
Also at : S-116, Basement, Greater Kailash-II,
South Delhi, New Delhi-110048.
2. M/s Lotus Green ..... Defendant No. 2
Lotus Business Park, Level 7, Tower B,
Plot No. 8, Sector-127, Noida Expressway,
Noida-201304 (UP)
Through its Managing Director
3. Jain Kumar, ..... Defendant No. 3
Director, M/s Golf Green Buildcon Pvt. Ltd.,
F-1098, Basement, Chitranjan Park,
New Delhi-110019.
4. Bablu Kumar, ..... Defendant No. 4
Director, M/s Golf Green Buildcon Pvt. Ltd.,
F-1098, Basement, Chitranjan Park,
New Delhi-110019.
5. Satish Kumar Tiwari, ..... Defendant No. 5
Director, M/s Golf Green Buildcon Pvt. Ltd.,
F-1098, Basement, Chitranjan Park,
New Delhi-110019.
M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 1 of 15
Date of institution :08.01.2020
Date of arguments :30.11.2021
Date of judgment : 14.12.2021
JUDGMENT
1. This is a suit for recovery of Rs.9,64,662/-. In brief, case of the plaintiff is that the plaintiff, M/s Planet Advertising Pvt. Ltd. is a company registered under the Indian Companies Act, 1956, having its registered office at G-11, 2nd Floor, Hauz Khas Market, New Delhi and Shri Sudhir Haryal is its Chief Executive Officer who is duly authorized by the Board of Directors of the Company to file this suit. It is stated that plaintiff is engaged in the business of providing services relating to the display of advertising of products of various big companies and that defendant no. 1, M/s Golf Green Buildcon Pvt. Ltd. and defendant no. 2, M/s Lotus Green, are the company under the Company Act and defendant nos. 3 to 5 i.e. Shri Jain Kumar, Shri Bablu Kumar and Shri Satish Kumar Tiwari are its directors and they are responsible for the said companies and for conduct of their business.
2. It is stated that defendants approached the plaintiff for displaying their outdoor advertisement in NCR and that defendant no. 1 placed various work orders to plaintiff. Purusant to the same, work was executed by plaintiff to the satisfaction of defendants. It is stated that plaintiff kept defendants updated with the services provided by it by regularly sending the e-mails alongwith the complete set of photographs of the sites displayed and thereafter plaintiff raised invoices. It is stated that defendants failed to make the payment of the following invoices raised by plaintiff :-
M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 2 of 15 Sr. Bill No. Bill dated Amount
No.
1 PA/2016-17/397 11.03.2017 Rs.1,72,460/-
2 PA/2016-17/405 22.03.2017 Rs.11,179/-
3 PA/2016-17/419 25.03.2017 Rs.1,53,334/-
4 PA/2017-18/008 11.04.2017 Rs.11,179/-
5 PA/2017-18/009 11.04.2017 Rs.11,179/-
6 PA/2017-18/024 30.04.2017 Rs.1,30,334/-
Total Rs.6,31,820/-
3. It is further the case of plaintiff that defendants promised to clear the total outstanding payments to plaintiff against the work executed by plaintiff, but has failed to make the payment of balance amount and induced plaintiff to continue the displays and plaintiff has time and again requested the defendants to make the payment but they delayed the payment. It is stated that plaintiff executed the work on the assurance of Mr. Rupanjal Deka, Manager of Lotus Green, since plaintiff has provided media to Lotus Green earlier and payment was duly made at that time. It is stated that the outdoor display design was of Lotus Green.
4. It is pleaded that the initial offer also mailed to defendant no. 2 only for approval and that the defendants were dealing with plaintiff throughout the compaigns and all the mails and reporting was sent to defendant no. 2. Plaintiff was later on disclosed by Shri Rupanjal Deka that the concerned project is a joint venture of both the defendants. It is further stated that the defendants have time and again assured plaintiff to release the payment of outstanding amount, but failed to make the payment and in this regard, an e-mail was received on 4th October, 2018 from defendant no. 1 that outstanding payment M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 3 of 15 responsibility lies with Lotus Group and there is some issues under discussions with Lotus. It is stated that TDS has been deducted on the outstanding payment of the plaintiff and that the defendants have admitted the liability vide e-mail dated 04.10.2018 and assured plaintiff that payment of entire outstanding amount will be paid, but despite of the e-mails defendants have failed to make the payment and defendants shifted the liability on each other with sole motive to usurp the amount of plaintiff. Plaintiff served legal notice dated 16.10.2018 and called upon the defendant to make the payment, but defendants neither made the payment nor gave any reply, rather on the contrary defendant no. 1 refused to make the payment and alleged that as per the mutual understanding, payment of plaintiff was the sole liability/responsibility of defendant no. 2.
5. It is further stated that till date, Rs.9,64,662/- (Principal amount Rs.6,31,820/- plus interest till date Rs.3,32,842/-) is outstanding which is to be paid by the defendants to the plaintiff. It is stated that defendant is further liable to make the payment of interest @ 24% per annum as defendant has wrongfully withheld the amount of plaintiff. Plaintiff again sent a legal notice dated 12.06.2019 to the defendants and have called upon them to make the payment, but they neither replied to the said notice nor made the payment of the outstanding amount despite of the receipt of legal notice.
6. Defendants failed to file any written statement despite opportunities and accordingly, defence of defendants was struck of vide order dated 22.02.2021. In this case, the following points emerged for determination :-
1. Whether plaintiff is entitled to the recovery of M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 4 of 15 Rs.9,64,662/- which includes interest @ 24% per annum w.e.f. 30th May, 2017 till 10th July, 2019 i.e. filing of application for pre-institution of mediation? OPP
2. Whether plaintiff is entitled to interest as claimed @ 24% per annum? OPP
3. Relief.
7. This court has heard submissions advanced by Shri Kunal Kalra, Ld. counsel for the plaintiff and Shri Jeetender Gupta, Ld. Counsel appearing for the defendant nos. 1, 3, 4 and 5.
8. Point-wise finding of this court are as under :-
ISSUE NO. 1Whether plaintiff is entitled to the recovery of Rs.9,64,662/- which includes interest @ 24% per annum w.e.f. 30th May, 2017 till 10th July, 2019 i.e. filing of application for pre-institution mediation?
9. The onus to prove this issue is on the plaintiff. Plaintiff has claimed non-payment of dues pertaining to the advertisement services for displaying the outdoor advertising for the defendants. It is further its case that invoices for the work done were issued, details of which is specified in para 6 of the plaint and are Ex.PW-1/9 to Ex.PW-1/14. Shri Jeetender Gupta, Ld. Counsel appearing for defendants no. 2 & D-3 to D-5 submitted that plaintiff has failed to establish any cause of action against any of the defendants and that the plaintiff has filed the present suit in collusion with D-2 and has not placed anything on record to suggest that there was a joint venture between D-1 and D-2 as repeatedly alleged by the plaintiff. It is submitted that in para 8, plaintiff has pleaded that plaintiff executed the work on the assurance of M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 5 of 15 Shri Rupanjal Deka, Manager of Lotus Green (D-2) and the outdoor displayed designs were also of Lotus Green and It is further submitted that initial offer was also mailed to D-2 only for approval. Defendants were dealing with plaintiff throughout the campaign and all the mails and reporting were sent to D-2 and all advertisements were also done for D-2 and that the plaintiff later on was disclosed by Manager Shri Deka that the concerned project was a joint venture of both the defendants i.e. D-1 and D-2. It is submitted that earlier also plaintiff had worked for D- 2 and payment was duly made at that time and that the plaintiff was well aware about the legal status of D-2, on the basis of such past transactions between plaintiff and D-2.
10. Shri Gupta submits that plaintiff has not placed or proved on record any document to show the joint venture between D-1 and D-2 and that Shri Rupanjal Deka, Manager has not been produced as a witness by the plaintiff and that PW-1 has failed to establish any communication between plaintiff and any individual/AR on behalf of D- 1 or with D-3 to D-5 personally. It is argued that the plaintiff has failed to prove the purchase order Ex.PW-1/1 to Ex.PW-1/7 and how those purchase orders were issued by D-1 to plaintiff. It is submitted that neither there is any e-mail on record on behalf of D-1 nor PW-1 has identified any individual who had issued these purchase orders are denied.
11. It is submitted that none of the invoices Ex.PW-1/9 to Ex.PW-1/14 have been shown to have been acknowledged on behalf of any of the defendants and the plaintiff has not placed on record any document in support of invoices i.e. advertisement i.e. copy or the photographs of advertisements showing the company name or brand M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 6 of 15 name of defendant no. 1 or D-3 to D-5 i.e. the actual work done by the plaintiff for which they are demanding money. Ld. Counsel for the defendant further argued that mere deduction of TDS by D-1 on the invoice amount does not constitute acknowledgement of liability. It is submitted that it was merely a statutory obligation which D-1 was bound to comply under law. In support, Ld. Counsel appearing for defendants relied upon "Utility Powertech Ltd. Vs. Amit Traders"
(2018) SCC Online Del 9096 to show that TDS can be deducted even on the expectation of estimated liability. It is submitted that even if TDS was deducted by D-1 that would only show an estimated liability and that liability could have only accrued against D-1 and in favour of plaintiff if the advertisements were issued for D-1 towards the invoices in question. It is submitted that the legal entity of D-2 Lotus Greens Developers Pvt. Ltd. was a necessary party.
12. Ld. Counsel for defendant submitted that in the cross- examination, PW-1, Shri Sudhir Haryal could not identify the name of person on the work orders. It is submitted that D-3 to D-5 are the directors of D-1 company and there is no specific liability pleaded by the plaintiff against these individuals and D-1 had clearly informed the plaintiff vide e-mail dated 04.10.2018, Ex.PW-1/16 that the entire liability for subject matter is of D-2 which is a necessary party, however, the plaintiff has deliberately not made the legal entity of D-2 a party and the promoters/directors of D-2 have not been impleaded and when the legal entity M/s Broad Homes Pvt. Ltd. was before this court, the plaintiff did not take necessary steps to make it a party in the present suit.
M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 7 of 1513. Per contra, Shri Kalra, Ld. Counsel appearing for the plaintiff submitted that perusal of work order shows that it has been issued by D-1 company and mentioning of Lotus Greens thereon shows the link and the joint venture between D-1 and D-2. It is approved and signed by authorized signatory of D-1. It is not the case of D-1 that this work order is forged and fabricated. The work orders placed by the defendants have been proved in evidence and the same has gone unrebutted because the defence of defendant was struck of and no cross- examination has been carried out with respect to non-issuance of the work order. It is submitted that the defendants were carrying out joint venture and the entire services was proved by the plaintiff to the defendants.
14. It is further submitted that in the judgment referred by defendant i.e. Utility Powertech case, itself, the court has observed that the factual aspects of the case is to be seen and further in the said judgment itself the court held defendant liable on the basis of totality of facts. In the present case, defendant has placed the work order, invoices were raised and the work was carried out to the entire satisfaction of the defendants and further TDS had been deducted, therefore, the defendants are liable to make the payment of the dues.
15. Plaintiff has also relied upon the e-mails Ex.PW-1/15-A to Ex.PW-1/15-C, Ex.PW-1/8A and Ex.PW-1/8B. In the said e-mails, the plaintiff has requested them to make the payment and has annexed the details of invoices alongwith the amount but despite of said e-mails, neither the payment nor any reply was received. In an e-mail dated 04.10.2018, it has been admitted by the defendant no. 1 that "payment responsibility completed lies with Lotus Group as per our mutual M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 8 of 15 understanding". The said e-mail has been proved and remain unrebutted. E-mail indicates that the liability to make the payment lies with the defendants and there is an arrangement between the defendants but defendants are wrongfully shifting the burden on each other.
16. Shri Kalra, submits that as per the suggestion given by the defendant, admittedly there is relationship between the defendants and the services were provided by the plaintiff to the defendants. It is further submitted that as far as the Lotus Green/D-2 is concerned, the same is in separate legal entity and the work had been carried out by the plaintiff for the defendants pursuant to the work order. It is further submitted by the Ld. Counsel for plaintiff that the legal notice was duly served upon the defendants, however, defendant wants to take advantage of typographical error that the name of plaintiff has not been mentioned properly, however, the address of the plaintiff is clearly mentioned in the said legal notice which is mentioned in the work order. It is submitted that a vague reply has been sent by D-2 and no document has been filed on record to show that D-1 has taken any action against the joint venture company, if they had wrongly deducted the TDS and shown the liability on the part of the defendants. It is submitted that defence raised by defendants is sham.
17. To establish its case, plaintiff has examined PW-1, Shri Sudhir Haryal, Chief Executive Officer of the plaintiff, who has proved resolution dated 22.07.2019, passed by plaintiff company bearing signature of Ms. Aruna Haryal, Director of plaintiff company as Ex.PW-1/1; Six Work orders dated 13.04.2017, 10.04.2017, 06.04.2017, 07.03.2017, 01.03.2017 and 14.02.2017 issued under the letter head of D-1/Golf Green as Ex.PW-1/2 to Ex.PW-1/7; Copies of M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 9 of 15 e-mails dated 04.10.2018 and 24.08.2018, sent by plaintiff to defendants as Ex.PW-1/8-A and Ex.PW-1/8-B respectively; Six Office copies of invoices dated 30.04.2017, 11.04.2017, 11.04.2017, 25.03.2017, 22.03.2017 and 11.03.2017 as Ex.PW-1/9 to Ex.PW-1/14; Copies of e-mail dated 23.05.2018, 07.06.2018 and 11.07.2018 sent by plaintiff company to defendants as Ex.PW-1/15-A, Ex.PW-1/15-B and Ex.PW-1/15-C respectively; Copy of e-mail dated 04.10.2018 sent by plaintiff to defendants as Ex.PW-1/16; TDS certificate of D-1, showing the admitted liability of the plaintiff as Ex.PW-1/17; Office copy of statement, prepared by plaintiff as Ex.PW-1/18, (depicting the details of purchase order, bill number, bill date, gross amount, service taxes and other taxes and the amount of interest calculated thereon); Office copy of legal notice dated 12.06.2019 sent by plaintiff to defendants as Ex.PW-1/19; Postal receipts as Ex.PW-1/20 and Ex.PW-1/21; Copy of reply to the legal notice, sent by D-1, as Ex.PW-1/22 and Certificate U/s 65-B of Indian Evidence Act as Ex.PW-1/23.
18. This court finds that - Work order were issued by D-1 and invoices were also raised to them and thus, non-payment of the invoices is an accrual of cause of action in favour of the plaintiff against the defendant. This court finds non need of producing Mr. Deka as a witness by the plaintiff because Deka was an AR of defendants and it is not difficult to understand that he would not have supported the plaintiff's version. Invoices had been acknowledged by the defendants and there is no document on record to show or even any suggestion has been made that the work was not been carried out by the plaintiff, therefore, there is no question of proving the question that the work was carried out or not as admittedly the work was carried out to the entire satisfaction of the M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 10 of 15 defendants.
19. It is pertinent to note that all the invoices issued by the plaintiff mentions the name of location, size, period and amount and have been received. The invoices issued pursuant to the work order are exhibited as Ex.PW-1/9 to Ex.PW-1/14, are in the name of defendant no. 1, where in the display, it is stated "Lotus Green" which establish that advertisement was done for the defendants and the display was also at the instance of defendants. Defendant No. 1 has admitted the deduction of TDS. The TDS certificate showing the liability duly proved on record is Ex.PW-1/17. Case referred by the defendants i.e. Utility Powertech Ltd. Vs. Amit Traders" is not applicable in the facts of the present case as in the said case, the liability had been shown as estimated liability, however, in the present case, invoices had been raised and the liability has been shown in the said year itself, when the work was carried out and TDS has been deducted. In cross- examination, PW-1 Shri Sudhir Haryal, on asking the suggestion that "I put it to you that is there anything on record that suggest any communication or correspondence between plaintiff and D-1/Golf Green Buildcon Pvt. Ltd. during the period (i.e. 14.02.2017 to 13.04.2017) when orders in questions were placed, deposed that "All work orders (Ex.PW-1/2 to Ex.PW-1/7) were issued by D-1/Golf Green Buildcon Pvt. Ltd, during the period (i.e. 14.02.2017 to 13.04.2017) when work orders in questions were placed."
20. PW-1 Shri Sudhir Haryal, on asking if he could identify the name of person on the work orders Ex.PW-1/2 to Ex.PW-1/7 deposed that "The bills issued by the plaintiff were accepted by D-1 and the TDS was deducted and certificate was duly issued by D-1/Company which is M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 11 of 15 already Ex.PW-1/17." PW-1 Shri Sudhir Haryal, on asking affirmed that the name of company was Planet Advertising Pvt. Ltd and has further deposed that in "Legal notice, Ex.PW-1/19 the word "Planet" has not been written due to typographical error, however, the registered address of plaintiff company is mentioned in the said notice and the said registered office address is also mentioned in the work orders Ex.PW- 1/2 to Ex.PW-1/7.
21. Court has to consider totality of the facts and material placed on record. The relevant period of the work done is 11.03.2017 to 30.04.2017. Lotus Group is Umbrella brand which includes D-2 company and several other companies. The advertisement bears the logo and name of D-2/Lotus Green. Work orders Ex.PW-1/2 to Ex.PW- 1/7 of D-1 company bear the logo of D-2/Lotus Green on the left tow portion which is stated to be the trade name of D-2. Admittedly, D-1 had replied vide reply dated 18.07.2019 Ex.PW-1/22 to the legal notice dated 12.06.2019, Ex.PW-1/19. The address i.e. G-11, Hauz Khas Market, Second Floor, New Delhi has been mentioned in the notice and the reply and the same address is mentioned in the work order and the invoices. On perusal of material on record, this court finds no merits in the submissions advanced on behalf of the defendants. This Court finds that plaintiff is entitled to recovery of Rs. 6,31,820/- towards the payment as per invoices noted above in para -2. The issue is accordingly decided in favour of plaintiff and against all the defendants.
ISSUE NO. 2Whether plaintiff is entitled to interest as claimed @ 24% per annum?
M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 12 of 1522. It is submitted by Ld. Counsel for plaintiff that in the invoices specifically, the rate of interest @ 24% per month has been mentioned in case of non-payment of the dues. It is further submitted that defendants had failed to make payment, therefore, the plaintiff is well within its right as per the invoices which were never disputed and have been proved.
23. On behalf of defendants, it is submitted that in case interest is mentioned in invoices, the Hon'ble High Court in the case of "Shri Rathi Steel Limited Vs. M/s S & S Technocrats (P) Ltd., IA No. 13981/2013 in CS (OS) No. 1009/2013 decided on 10.10.2014 and Sasumorov Enterprises Pvt. Ltd. Vs. Odeon Builders Pvt. Ltd., CS (Comm) 927/2016 & IA No. 11845/2018 decided on 16.11.2018 has observed that though undoubtedly, the invoices of plaintiff contain a clause for higher interest but considering present rate of interest, even the commercial transactions, the claim for interest @ 24% is excessive.
24. On the invoices, Ex.PW-1/9 to Ex.PW-1/14 in term no. 2 (to be reproduced), interest @ 2% per month has been mentioned. Shri Kunal Kalra, Ld. Counsel appearing for plaintiff submits that judgments referred by the defendants on interest are under Order XXXVII CPC and have no bearing in the facts of the present case.
25. As per Section 34 CPC, when a decree is for payment of money, the court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% per M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 13 of 15 annum at Court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the Court deems thinks. As per proviso to sec 34 CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
26. Having regard to the totality of aforenoted facts and the prevailing market rate at which interest is charged, this Court is of the view that grant of 12% per annum pendente lite and future interest would serve the ends of restitutive justice. Thus, plaintiff is held entitled to the interest @ 12% per annum since after 30 days of the date of last bill issued in this case i.e. (w.e.f. 01.06.2017 till the realization of the entire amount). This issue no.2 is answered accordingly. Relief
27. Learned counsel submitted that plaintiff has spent time, energy and costs in filing and prosecuting this suit. In the interest of restitutive justice, plaintiff shall also be entitled to costs. The present suit was filed in January 2020. Total 16 dates of hearings have taken place in this case till date. In the circumstances, pleader's fee and litigation expenses are assessed as Rs.24,000/- and Court fee deposited by the plaintiff is Rs.11,812/-. This Court finds that plaintiff is entitled to a total costs of Rs.35,812/- (inclusive of Court fees).
28. In the result, a decree is hereby passed in favour of plaintiff and against defendants jointly and severally in the sum of Rs.6,31,820/- alongwith interest @ 12% per annum w.e.f. 01.06.2017 till the M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 14 of 15 realization of entire amount and costs (inclusive of court fees) of Rs.35,812/-. Decree sheet be prepared accordingly. Suit stands disposed of. File be consigned to record room.
(Dictated and announced on 14th December, 2021) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South District, Saket, New Delhi M/s Planet Advertising Pvt. Ltd. Vs. M/s Golf Green Buildcon Pvt. Ltd. & Ors. - CS (Comm) 8/20 Page 15 of 15